One of the reasons for building financial wealth is that it increases your mental and emotional bandwidth.
By this, I refer to “bandwidth” in terms of mental and emotional space to think about things clearly, and spend your life focusing on the things that matter to you.
Imagine you are living paycheck-to-paycheck. Your household has one car and you rely on it. If that car breaks down, the effect can be catastrophic. You’ll be very stressed; your attention will narrow to the car: how to fix it, how to get the money to fix it, and how to adjust your day-to-day life to work around this issue.
Change a variable, and your experience will be radically different. You might be inconvenienced, but you know that you can afford to service the car. You might have a second car that is convenient but you don’t rely on. Or you can rent a car while it is being serviced. Your life will go on.
This is a narrow example of how having wealth can significantly improve the quality of your life.
But it manifests broadly. If your resources are limited, the experience of going to the supermarket is more stressful because you need to worry about every dollar. If you want or need to buy something, your focus is going to be on cost. When you have money, you can start to focus on broader considerations, such as quality, whether additional features are useful to you, and the total cost of owning the asset.
You can take more risks. If you buy something and it turns out that it’s not especially useful, it isn’t the end of the world. You can substitute it.
Having wealth means that certain external events will impact you less.
Because of this, it expands the things that you can think about. That is, your mental and emotional bandwidth. It enables you to give more energy to your loved ones, and focus more on your profession. Which in turn puts you in the virtuous cycle of increasing the quality of your life, and puts you in a better position to build the really valuable type of wealth – a life filled with the things you care about.
This blog is made possible by Fairhaven Wealth and its wonderful clients.