• Ryan Himes

Wealth In A Nutshell

Updated: Aug 21

The truth is that very few people understand what wealth even is. So let me define it for you: wealth is the ownership of assets. And assets for most people, including myself, are simply real estate and stocks. And the key word is ownership. And this is the key part of understanding wealth, someone who holds lots of cash, either in a pile or in their bank account is not wealthy. Because cash is not an asset, and the value of currency will only ever go down. They should budget their expenses, keep a checking and emergency savings accounts, and then keep all money that's not being used in assets poised for long term growth; real estate and stocks.

And that's it, that's the whole principle of wealth in one paragraph. Why should someone become wealthy? Because salary income doesn't compound over the years, but assets do. The earlier you can begin compounding, the sooner you can stop working. At some point, your assets will produce enough income to cover your living expenses.

Once someone has enough assets that produce money for them, they usually stop working for money. And a person who no longer needs to exchange their labor for money is a person who is free.