Circle of Wealth
Your Circle of Wealth represents all the money that you will accumulate in your lifetime. Some have a bigger circle of wealth than you. You have a bigger circle of wealth than others. One thing we all have in common is the desire to increase our circle of wealth as much as possible. There are basically three types of money: Accumulated Money, Lifestyle Money, and Transferred Money.
Accumulated Money represents what your current savings and investment dollars. This is where most people focus their time managing their money. Yet, for the first time in history America has a negative savings rate. We spend more than we make.
Lifestyle Money represents what you have to spend to maintain your standard of living: your home, the car you drive, etc. For many, lifestyle can be the #1 factor in influencing our ability to save. While we understand we should be saving more, few of us are willing to reduce our lifestyle to do so.
Transferred Money is a major problem for most of us. Transferred Money represents money you may be transferring away from your Circle of Wealth unknowingly and unnecessarily. Examples of wealth transfer can include: income Tax and other Taxes; Financing Cars; Credit Cards; How You Pay Your Mortgage; Term Insurance; Long Term Care.
Since most people focus their attention on Accumulated Money to increase their Circle of Wealth, the focus is usually on finding better investments that pay a higher rate of return. The problem with this approach is that it often requires increasing the level of risk in the process, something that many are trying to avoid as a result of the last few financial meltdowns, where people lost as much as 40% or more of their retirement savings in very short period.
Because using Lifestyle Money assumes that one must necessarily cut back on their standard of living and up up luxuries they currently enjoy, few are interested in this strategy.
Therefore, focusing on Transferred Money can uncover a treasure chest of hidden wealth that can be put back towards Accumulated Money and Lifestyle Money for retirement with no additional out of pocket cost.
Accumulated Money represents what your current savings and investment dollars. This is where most people focus their time managing their money. Yet, for the first time in history America has a negative savings rate. We spend more than we make.
Lifestyle Money represents what you have to spend to maintain your standard of living: your home, the car you drive, etc. For many, lifestyle can be the #1 factor in influencing our ability to save. While we understand we should be saving more, few of us are willing to reduce our lifestyle to do so.
Transferred Money is a major problem for most of us. Transferred Money represents money you may be transferring away from your Circle of Wealth unknowingly and unnecessarily. Examples of wealth transfer can include: income Tax and other Taxes; Financing Cars; Credit Cards; How You Pay Your Mortgage; Term Insurance; Long Term Care.
Since most people focus their attention on Accumulated Money to increase their Circle of Wealth, the focus is usually on finding better investments that pay a higher rate of return. The problem with this approach is that it often requires increasing the level of risk in the process, something that many are trying to avoid as a result of the last few financial meltdowns, where people lost as much as 40% or more of their retirement savings in very short period.
Because using Lifestyle Money assumes that one must necessarily cut back on their standard of living and up up luxuries they currently enjoy, few are interested in this strategy.
Therefore, focusing on Transferred Money can uncover a treasure chest of hidden wealth that can be put back towards Accumulated Money and Lifestyle Money for retirement with no additional out of pocket cost.