I’ve gone through the process of setting financial goals with hundreds of clients. To this date not one has stated they would like X dollars in their bank account.
Money isn’t usually the end game, money is the utility used to live the life that you want to live.
Let’s unpack this thought
“Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.” Morgan Housel – The Psychology of Money
How can you gain control over your time?
By having the flexibility in your financial situation to make the decisions you want
Have a savings buffer, a minimum of 3 months living expenses
Having financial flexibility will provide you with the opportunity to make decisions on your terms
Let’s say you work a job that you hate and you feel like you can’t leave because of the financial ramifications
By having a savings buffer, you could make the decision to quit or take time off and give yourself time to think about your next career path
Or what if an amazing investment became available, but you needed to make the investment immediately
The savings buffer can act as your ability to take advantage of opportunities
Start to build a passive income stream, which is making income which either doesn’t require your time or takes little time
The more passive income you have, the less your income relies on your time
Every retirement strategy revolves around this concept
Before retiring you trade your time in for money, then in retirement you’ll want to trade your money in for time
Most of the time, the end goal is freedom of time
So build yourself a savings buffer to be able to give yourself time & take advantage of opportunities in the short term
Then start to build a passive income stream to allow you to pay for life, without needing to trade your time for money