Happy Friday DINKS. As we get ready for this hot and sunny end of July weekend we will discuss our money; how we save it and how we spend it. As I look over my bank account and investment account balances at the end of this month I find myself thinking…Why am I saving money?
As a DINK we have (in most cases) made the choice not to have children. Therefore, who are we going to leave all this money for when we pass on to bigger and better things? On Tuesday James wrote a post titled “Wealth Building Strategies for 2010″ about building wealth. Although the post was very informative, it made me think…if I don’t have children do I really need to save all of my extra money?
As a financial planner I always advise my clients to save for their retirement. I also advise them to either save, or to buy life insurance for their estate, to cover the cost of all final expenses. However, if our monthly expenses are paid, and we don’t need to leave an estate legacy for our children, is it ok to spend and not save our disposable monthly income?
This brings me to ask the question…If you are a DINK should we be rich or wealthy? Although the two may be interchangeable by some, please don’t let them be confused with each other. Being rich means that your income substantially surpasses your expenses, and you have an excessive disposable monthly income. But, it also means that you spend most of it. Being rich is about enjoying life, by spending your hard earned money.
Wealth on the other hand is all about preservation, and growing your wealth. Many wealthy people live simple lives. They choose to invest their money on personal assets that appreciate in value over time; such as collectable art and real estate. Wealthy people do spend money, but usually they get something in return. They don’t necessarily spend it on personal material goods with nothing to show for it afterwards.
I have a client who has over 5 million dollars invested in various term deposits. However, when he comes to see me at the bank, he refuses to pay more than .25 for his parking meter. My client has 6 children. Although they are all successful professionals, he still feels the need to preserve his wealth to leave a legacy for his children and grandchildren.
As we head into the weekend I ask you DINKS, would you rather be rich or wealthy?
Here are some other articles that we found around the net this week. Enjoy!
- Beware when trying to find deals @ Clever Dude
- Blippy.com: Are you what you buy? @ My Money Blog
- The first million is the hardest to make @ Free Money Finance
- Would you buy a house that someone died in? @ Budgets Are Sexy
- Motivational Story: From Dog Walking to Ivy League @ Sweating The Big Stuff
- Earning more money: Finding the right idea @ I Will Teach You To Be Rich
- Carnival of Money Stories – Starting A Sideline ed. @ The Financial Blogger
- Carnival of Personal Finance – Gettin’ Hot in Here ed. @ Nerd Wallet
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(Photo By RicardoDiaz)
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{ 4 comments… read them below or add one }
i guess it’s a lexicon thing, but I wouldn’t say that being rich is all about materialism, which is implied in your definition. normally we associate rich with fullness in ones life (e.g. he lived a rich and full life). To me that implies intangible attributes of living ones life, which does not necessarily mean spending lots of money or all of your money or even most of your money; whereas, wealth is specifically associated with amassing tangible assets (e.g. wealth preservation and wealth management).
I do not believe there is an either or here.
Kristina,
Thanks for referencing my post earlier.
If you ever want to get beyond just being financially comfortable, you have to save your money and invest it. Thats the bottom line.
Thanks,
James
Tim, that is a great way to look at the difference between rich and wealthy. Travelling the world and learning about different cultures, and experience new things, would fulfill a rich life (for me). However, I will need my wealth to pay for the travels.
Kristina, not necessarily, b/c you can always pick up work as you travel. It will depend on what your financial goals are and the lifestyle with which you want to live that life