Words by Georgie Loxton, CFA, Founder, Liberty Wealth Partners.
What does being wealthy mean to you? It means different things to different people. For some, it might mean covering the cost of living with a little bit leftover. For others, it might mean looking past oneself and focusing on creating a legacy and leaving the world a better place.
I define true wealth as having control over your life – being able to wake up and decide how you spend the day: where you are, what you do, who you do it with, how long you do it for. True wealth is having autonomy over your life whilst not worrying about money anymore. You are not truly wealthy if you still worry.
What I find fascinating is how many of us, whilst wanting that freedom, are unconsciously moving in the opposite direction. We are striving for more – more money, more possessions, more status – hoping that it will make us freer and ultimately happier. Instead, what it does is leads to overwhelm, a feeling of being out of control, and more stress. We are stretched too thin. Other people’s agendas start to control our lives. Life starts happening to us.
Sometimes a life event gives us the jolt we need to re-examine where we are and what we are doing. A realisation comes that whilst we might want more, it’s not the more we thought. So we start to prioritise our own life and find that it is more time, connection and living that we need.
Greg McKeown coined the term ‘essentialism’ (and wrote a book about it). He explains it as a systematic discipline for discerning what is absolutely essential and then eliminating everything that is not.
As John Maxwell wrote: “You cannot overestimate the unimportance of practically everything.” By being disciplined about what we choose to do, where we focus our attention, time and money, we remove the clutter and stress from our lives. We create a life by design instead of by default. Or in the words of Greg McKeown, “The ability to choose can never be taken away – it can only be forgotten.”
Essentialists are wonderful at saying no. They can say no without the fear of missing out because they understand that everything they say ‘yes’ to means saying ‘no’ to something else. So there is a trade-off to everything we do. Economist Thomas Sowell wrote: “There are no solutions. There are only trade-offs.” Saying yes to that coffee meeting means saying no to the precious family time at the end of the day. Saying yes to another late re-run of the mindless TV show means saying no to the productive early morning you planned.
This mindset translates beautifully into our financial life. I once wrote about how with each passing year that I spend immersed in financial markets and human psychology, the fewer things I want to own in my portfolio and my client’s portfolios. It’s the Essentialist way – a discipline based on only owning what is needed to achieve a well-diversified portfolio, and saying no to everything else.
There is no fear of missing out on this investment or that hot deal when we embrace it this way. We understand the trade-offs. We are clear on the path and clear on what funds that path. We feel in control. And because of that, we find ourselves effortlessly moving towards true wealth – the point where we can live our lives on our terms without thinking or worrying about money.
Remember, freedom comes from simplicity and focus. It comes from no, not yes. As Anne Lamott wrote: “NO is a complete sentence”.
To learn more, contact Georgie Loxton, Founder of Liberty Wealth Partners at:
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