What does wealth look like to you?

The definition of wealth is subjective.

Your dreams are yours…it’s highly customizable according to what you want.

Financial freedom doesn’t come with an assigned dollar amount. We have known some famous billionaires who are stinking rich yet miserable (What does a billion mean anyway?).

We have seen people who make 1,000,000 pesos a year who describe themselves as financially free. There are also people who make 1,000,000 dollars a year who are struggling to make ends meet.

Wealth is not just a high financial status. Wealth is a net sum of a lot of factors: financial stability, contentment, social security and overall well-being.

Table Of Contents

Components of Financial Wealth

Table Of Contents

1. Zero Debt

Financial freedom means zero or minimal debt. This goes without saying, the debt you can afford is to buy assets that increase in value (such as home mortgage)

The best-case scenario is zero debt. Eliminate bad debt completely–especially on high-interest credit cards.

2. Savings for Threats

The right amount of savings for threats; a.k.a.: an emergency fund. Emergency funds cover for the unexpected: a safety net to cover for unforeseen circumstances: medical emergencies, unemployment, calamities, as well as health crisis and epidemics (such as the latest COVID-19 pandemic).

3. Funds for Future

Right amount of savings for your future; funds separate from your emergency fund. Make different nest eggs for your retirement, for your kids’ education, for long travel, etc.

4. Liquidity for Opportunities

The right amount of liquidity for opportunities. Just like in corporate finance, having too much cash lying around can be a bad thing. It means you are not allocating your assets right and you’re not investing them enough.

Having the optimal amount of liquidity is key. If there’s a really good investment opportunity presents itself, you don’t want to be in a situation where you are illiquid.

(P.S., it’s never a good idea to pawn or mortgage something for, air quotes, “once-in-a-lifetime deals”)

5. Multiple Income Streams

Successful wealthy people have multiple revenue streams.

If you’re serious about getting rich, you need to build multiple streams of income. Have a side-hustle. Take a part-time job. Or start a home-based business. Build a brand and sell products online. Monetize through your blog, Youtube or podcast. Do research on how other people were able to do it.

6. Passive Income

Wealthy people love passive income (or royalty income), because you get paid for little to no work. Passive income is key to generating wealth over time because you don’t need to lift a finger. Make the money work for you.

Examples of income include royalty income from books you’ve written, blog ads, selling digital products like courses and workshops; Dividends you receive from stocks; Rental income from apartments or properties you own, etc.

Building Wealth

It’s Like Baking a Pie

Let’s use a baking analogy. Building wealth is like you’re baking a pie. You need to put in work and preparation. It requires time, patience and dedication.

Baking requires key ingredients for your dough to rise. Baking requires proper measured steps.

KEY INGREDIENTS	WEALTH PIE
WHY Personal Commitment Pro-Money Attitude Pro-Money Team Simple and Frugal Lifestyle Curiosity and Growth Mindset Valuable Resources Sound Judgment	Zero Debt Savings for Emergencies Savings for Future Liquidity for Opportunities Multiple Income Streams Passive Income