Working Smart, Not Just Hard: The Path to Relative Wealth

How does a life like this sound? You currently are spending your time in the Florida Keys, bouncing around to different coastal towns on your brand new sparkling white yacht. Life seems great, you have big expensive parties and everyone knows your name. The only catch is that this lifestyle only happens a couple of times a year say 2 or 3 times. The rest of your time is spent working 70-hour weeks from one office in Wisconsin. Did this last bit of information change your mind at all? It sure did for me! In this post, I’d like to share a little bit of information on this powerful thing called relative wealth and how it can drastically change your life for the better.

So I began this post proposing a lifestyle that seems rather lavish. It is one that a lot of people might dream of until they understand at what cost it may come at. Relative wealth proposes a different lifestyle, one with with a balance of money, time, and mobility. I want to ask you a simple question. Who is more wealthy, the person described earlier with the fancy yacht working 70 hours a week in Wisconsin most days of the year, or a person making $50k only working 2 days a week from wherever they want in the world? I would argue that this second person has more relative wealth through the freedom and mobility that their life consists of.

Being rich doesn’t solve all of your problems. In fact, being rich may actually cause you a lot of problems. It may force you to work a high paying job that requires you to be there for more than 40 hours in the week. It may require you to spend money on luxury goods like fancy cars and a fancy house, only forcing you to work longer hours to pay off those goods. Although a lot of these things seem really great, I think I would rather have a lifestyle where relative wealth is abundant.

I’d like to share a real estate example with you. There are two investors. Both are comfortably making six figures however the way they make this money differs greatly. One has 300 units and is working long hours. The other has 20 well performing assets that require him to spend a couple of hours per week to manage. Although the one with 300 units is likely making more, I would rather have the 20 unit portfolio that provides me with the time freedom to do other things.

These examples have shifted my thinking and approach to real estate investing. Yes, I want to make a great income from my investments but I also want to be “rich” in both time and mobility. I want to have true freedom to do what I want and to help others. How do these ideas sit with you? Would you rather just be rich or have true relative wealth?