How do you accurately measure wealth? That is a question I’m still trying to answer. But I’m pretty sure it is much more than dollar signs. Measuring wealth is an interesting concept. Some individuals try to measure wealth in relationships. Some countries measure it by the amount of children you are able to have and care for. Another way to measure it may be how well you are able to sleep. Hey, you can even measure it by the amount you have in a 401k. What we all know, however, is that money alone is not a full measure of wealth.
So, why is ‘hours worked’ a better measurement than simply the amount of money in the bank? Because it encapsulates more variables. If you make $200 an hour, but you need to work 90+ hours a week to maintain your family’s lifestyle- are you ok? If you make 1m a year but your health is gone, are you really wealthy?
A Better Measurement
So, I purpose a new metric for evaluating wealth. Hours Needed to Work = Maintaining Current Lifestyle. This simple equation makes for an interesting discussion. This works across all income levels and also is useful for measuring personal progress over time. Most of us will make more money five years from now, but will we actually be making progress towards a well designed lifestyle? I think the goal of financial independence or ‘early retirement’ is to move hours worked to 0. That is the goal. Does that mean we will stop doing everything, sit on the beach all day and be lazy? Not necessarily, but it does mean we will have the freedom to do what we want, try new things, help other people, take care of our bodies, and spend time with the people who are important in our lives. I really enjoy helping people. I also enjoy fixing things. I also have a family to care for including my wife and kids. Even though I enjoy my work immensely, I still wish at times I had more flexibility to do other things with my life. Continue reading Measuring Wealth: Hours Worked To Maintain Lifestyle