The 5 Types of Wealth

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The 5 Types of Wealth

The 5 Types of Wealth

You’ve been told that money is the only type of wealth. So, let’s have a look at the five types of wealth.

This is a lie. So, let’s figure out what wealth is.

What is wealth?

Wealth is about more than money.
Wealth measures the value of all the assets owned by a person, community, company, or country.
Wealth is determined by taking the total market value of all physical and intangible assets and subtracting all debts. Essentially, wealth is the accumulation of scarce resources.

There are five types of wealth:

Financial
Social
Physical
Mental
Time

But if you’re not careful, the blind pursuit of financial wealth can rob you of others.

The Five Types of Wealth

Let’s walk through each to form a more comprehensive view of wealth:

Financial Wealth

This is the most understood type of wealth.
It’s generally what people mean when they say someone is wealthy.
Financial wealth is all about money—the money or financial assets an individual has accumulated.
Financial wealth is an alluring measuring stick for success.
Net Worth = Value of All Assets – Value of All Liabilities
For those with a competitive streak, net worth offers a simple scoreboard.
Most people assume that financial wealth creates happiness.
It’s wrong to see people with money and assume everything in their life must be excellent.
Money is scientifically correlated with happiness—but only up to a baseline level of life lower than you think.
Once above this baseline, total financial wealth does not create incremental happiness.

So, if your goal is happiness:

Focus on getting above this baseline
Focus on other drivers of happiness

Picture yourself when you never have to worry about money again.

Imagine how that would make you feel and how that would change your relationship with the world, the people around you and your family situation. This brings us to our other types of wealth.

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Social Wealth

A social connection can be defined as a person you have the potential to interact with, whether face-to-face, on the phone, internet, etc. This would include family members, relatives, co-workers, friends, pets, etc.
Just like economic wealth, you inherit some of these connections (family, relatives, etc.), and others you earn (spouse, friends, etc.).
Each connection also has a different value, depending on its depth.
You can invest the effort to increase the value of any connection or make new connections.
A social connection can also be negative (hateful relationships, enemies, etc.).
These negative connections are social debt.
To get the total net value of your social wealth, you add the full value of your positive connections and subtract the total value of your negative associations.
Social wealth is used during social interaction and is mainly used to provide these two things:
- Meet your ongoing emotional necessities. Daily interactions with people provide this. The more positive deep social connections you have, the more opportunities you will have for daily positive interactions, and overall, you will feel emotionally well.
- Provide confidence in the ability to meet emotional needs into the future. The more social wealth you have, the more secure you feel about meeting your emotional needs in the future and in times of emotional distress. This allows you to live confidently and improves your quality of life.
Social wealth primarily comes down to how we interact within the world.
Yes, it also deals with luxury cars, houses, and our appearance, but it mainly deals with what kind of character we create and how others interact with this character and perceives it.

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Physical Wealth

Physical wealth is about your health, fitness, and vitality.
It is perhaps the most critical—and under-appreciated—type of wealth.
Without physical wealth, it is impossible to experience and enjoy the benefits of any other type of wealth.
Physical health is built through the long-term compounding of daily actions.

There are three broad buckets:

Exercise: daily movement
Nutrition: mostly natural foods
Sleep: good sleep habits
It’s never too late to start building, or restoring, physical wealth.

Health is wealth.

With the right mindset, we can easily enhance our health.
Simple changes to our nutrition, sleep and activity levels can significantly impact us.
If we couple that with understanding more about our body and minds through reading and surrounding ourselves with the right people, it can be a real game changer for our overall sense of wealth.

Mental Wealth

Mental wealth is about mental health, mental fitness, and an ability to wrestle with the tangible and intangible questions in life.

It may include (but isn’t limited to):

- Mental Health
- Knowledge / Wisdom
- Mindfulness
- Spirituality / Faith
Mental health is often overlooked, particularly by those pursuing world-changing endeavours, but it is essential.
Talk to someone, ask others for help, and take action to improve your mental health daily.
Never sacrifice mental health for any reason.
Mental wealth also includes the long-term accumulation of knowledge and wisdom.
I think of this as “mental fitness”—the flexing of your brain as a muscle and the continued growth of that muscle over time.
It’s the most important muscle to flex daily!

Read, write, talk, learn.

Mental wealth also covers an ability to wrestle with the intangible or unanswerable questions in life.

Generally achieved through:

Mindfulness—an awareness of oneself built through meditation, breathing, or other practice.
Spirituality and faith—formal or informal.
Time Wealth
Time wealth is about the freedom to choose:
How to spend your time
Who to spend it with
Where to spend it
When to trade it for other types of wealth

Time wealth

Time wealth is also about an appreciation for the precious nature of time—its value and importance.
When you’re young, you are a “time billionaire”—rich with time.
Too many people fail to realise the value of this precious asset until it is gone.
Treat time as your ultimate currency—it’s all you have, and you can never get it back.

Time is cruel.

You’ll love it with all your being, but the reality is that time doesn’t care about you.
It is the ultimate unrequited love.
By accepting our time as finite, we can live.
NEVER let the pursuit of financial wealth rob you of your time wealth.
This is a dangerous trap that far too many people fall into.
Learn to use financial wealth as a tool—to increase your freedom to choose.
Time is what most of us know deep down crave.
However, time is rare today because we spend much time dedicating ourselves to earning money and building our status.

In conclusion, there are five types of wealth:

- Financial (money)
- Social (relationships)
- Physical (health)
- Mental (health, spirituality)
- Time (freedom)
We all can achieve all five types of wealth within our lives, and only when we get to this point can we begin to feel the wealth of fulfilment. This occurs when all four types of wealth are at play simultaneously and in the right balance. This is the place where we should all strive to be.
Each type of wealth requires years of dedication, practice, humility, learning and understanding. It should be viewed as a lifelong process that doesn’t end because there is no destination.

The pursuit of financial wealth can rob you of others. Don’t let that happen.

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