How rich are you? Most people are reluctant to answer, because there are only 1% of the population are rich!
Anyway, if you are to answer such a question honestly, what would it be? Would you answer “I have 2 houses, 3 cars, a few FD etc”, or “I am worth RM300,000”, or “I earn RM20,000 a month” etc.
There are many ways to state our wealth. In fact, wealth is more appropriate to be stated by “time”, not the amount of “asset” we have.
This is the formula:
Wealth = How long we can continue and maintain our lifestyle without working?
According to the above formula, this is how we should state our wealth:
I can continue and maintain my current lifestyle for 10 years without working.
How long would it be for you? How wealthy are you? 3 months? 1 year?
There are 3 elements that determine how wealthy we are:
1. Expenses – the lower the wealthier we are
2. Passive income – the higher the wealthier we are
3. Saving – the higher the wealthier we are