Wealth = Earning – Spending

It’s pretty obvious, isn’t it?

But sometimes it’s the really basic things that we forget.

Even though the equation

and all it’s implications

are pretty easy to understand,

using it to it’s full potential can be really hard.

The first question is:

What is wealth (for me)?

Does it mean to

  • have exactly what I need to live?
  • having paid off my house, car and childrens tuition?
  • Owning an island in the caribean and a casino in Las Vegas on top?

For me it means

having enough capital to live off the interest. [GOAL]

But even that is not precise enough.

(What does “living” mean?)

What Earning is is pretty easy for most people.

We have a job that pays a fixed amount each month.

(Plus maybe the odd bonus now and then.)

I know what I got paid last month,

but what did I earn?

There is always things like

  • taxes
  • insurances
  • money I spend in order to be able to work

Yes, you might consider that spending,
but I think since I was never able to decide how to spend it,
I never earned it in the first place.

Looks like the border between Earning and Spending is pretty thin.

How much do I spend?

The truth?
I don’t know.

I know some of my spending, like

  • rent
  • (some) insurance
  • phone bills
  • utilities (at least the average)
  • the 5 Euro budget for my lunch

But there is so much stuff where I know some ballpark figures,

but even these are totally off:

  • Money spend on gadgets? (The new keyboard, harddisk, game?)
  • Eating out and going out on weekends?
  • Concert tickets?
  • Financing my GFs fashion label?
  • Subscriptions for websites and services?


Looks like I have a few [GOALS] that I’ll have to work on:

  • What is my wealth target?
  • How much do I (really) earn?
  • How much do I spend? (Down to the last penny.)


I’m not sure yet, how to tackle these problems,
but being aware of them is surely the first step.

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