Life Wealth Map

 

What’s your story?

If you ever played a role playing game like Dungeons & Dragons (D&D), read Choose Your Own Adventure or even watched a fantasy film like Lord of The Rings, each hero’s or heroine’s story is unique to them. Same thing holds true on your path to financial independence or FIRE! There are so many amazing unique paths and stories to offer guidance and inspiration. One thing I like about role playing games is that you get to create your own story. The same really holds true for our lives and finances in many ways. Sure, there are things outside our control and some things we only influence. But we also have opportunities to make choices along the way, like a Choose Your Own Adventure book. In other words, we all have a unique financial and life journey and we are the star of our saga. But how can we map this journey out to increase our chance at success? How can we illustrate and remind ourselves of our higher values and priorities?

Maps as important tools

In D&D it typically helps to have a map. In other words, a representation of where we are trying to go and a sense of the “monsters” we will encounter along the way. A financial map is also important and can help flesh out your particular “money journey”. I propose a different kind of financial/life map. This map is beyond the concept of a spreadsheet with specific numbers on it and a list of investment accounts. Those types of “maps” are important, but I am talking about a “Life Wealth Map” that aligns your higher values with your spending and your future. The Money Vikings Life Wealth map takes into account a holistic approach to achieving a life of True Wealth.

Past, Present and Future

My grandmother always used to say that a persons past, present and future are important. We must make peace with our past and understand how it has shaped who we are today. The present is a gift and where life is lived and action can be taken. And it is important to dream about the future and respect our future selves. Sounds like a difficult thing to do all this, but the below map has helped me make sense of these concepts:  

The map illustrates 3 important circles of thought and action:

  • Higher values
  • Present needs
  • Future needs
  • Balance the 3 and achieve “True Wealth”

Higher values (circle of influence #1)

The top circle represents our “higher values”, the why we are pursuing financial independence and life in general. In this circle I think about:
  • Why do we spend money on different things?
  • How can we use our consciousness to use money as a tool for higher purposes?
  • Prioritize categories of spending: is it more important for you to have a fancy car or fancy house? Or neither? Is it more important for you to have more of your time back? Do you highly value high quality food? Entertainment? travel, giving back, etc.?

Present needs (circle of influence #2)

The left circle represents all those present needs. This is the money required for the fundamentals of life. The goal here would be to pair this down to the essentials that help you achieve your goals, sustain your health and allow you to live the life of your choosing. A person’s money journey can be divided into 5 stages, each with it’s challenges and joys. We identify the “monsters” along the way and present a concept called “your money map.”

The future (circle of influence #3)

Anyone who is investing in a 401k or IRA is basically trading present consumption for future consumption. And the goal is twofold: Firstly, accumulate enough assets that the income from those assets supports present needs. Secondly, earn some relatively good return on investment so that your money keeps pace with inflation or the rising cost of everything.

5 stages of the money journey, Develop your money map

1. Dependence and Humble Beginnings

In the first stage of our money journey, we are dependent on others (usually our parents or other caregiver). At this stage we are fortunate if we have loving caregivers who are doing the best they can to provide shelter, quality food, some structure, guidance and of course love. In this stage we are observing others with money. We may see our parents fight about money and resource allocation. We may witness our parents lose a job or deal with financial stress of some kind. These experiences for better or worse shape our relationship with resources and money. For better or worse, these experiences shape our future use of money as a tool. Some people mimic their parents behavior and others reject it either way. KEY STRATEGY: The key strategy from this period in my opinion is to analyze it a bit, ask questions and make peace. Analyzing is the process of thinking back to some memories that stand out for us as we grew up. How did we feel? What did we learn or pick up from that? Next, how can we make peace with whatever was so we can move forward confidently and develop sound habits and behaviors that align with our higher interests?

2. Education Years

Usually around 18 we leave home and go to school or start studying a trade of some kind. This can be an exciting time of development as we venture into the world further, are exposed to new ideas and thinking outside the immediate family/communal unit. Hopefully our education is providing us the foundation for critical thinking, advanced knowledge, social networks needed to launch into a career. This is typically an idealistic period. We are idealistic about the world, justice, knowledge, etc. and can still be inside a kind of intellectual and social bubble. But it provides a nice progression and opportunity to expand our knowledge and contacts. This can be a critical period for launching stable careers and somewhat well paying work that requires some advanced skills. KEY STRATEGY: Find a field of study that is a balance between something one enjoys and is somewhat practical. The reality is that we must have stable employment in a somewhat well paying field in order to achieve FIRE. The other key aspect is to manage the school loan debt. High school loan debt becomes a drag on wealth building potential in the first 10-15 years of work.

3. Early Work Years, finding a partner, starting a family

This can be a challenging time from the early 20’s through 30’s, but is a critical time for personal finance success. We are trying to establish ourselves in some kind of career or vocation. We are typically trying to find a partner and perhaps a person to have children with. It is an exciting time but can also be a time of stress as we navigate what people call the “real world”. From a personal finance perspective there are two critical actions: Firstly, we must develop sound financial habits and an financial educational foundation. This consists of leaving within our means, understanding debt, learning about investing and compounding. Secondly, we should take the first steps into saving and investing. Money that is saved in and IRA, Roth IRA or 401k at this stage has decades to grow on itself.

4. Late stage career, career evolutions, acquiring assets

Before you know it, 15 years has whizzed by and you are in your mid-career. This can be a funny time because some things came to be that you might have imagined, but many things did not. You realize some realities of the world and the behavior of others. Quite simply, some people act horribly towards others and are petty minded. Others you bond with and become friends. By now you may have developed some skills to navigate the work environment and world in general. Here are a few thoughts from things I realized in my 40’s: 40 Life Things I Learned In My 40’s

5. Financial Freedom, retirement, hobbies, other pursuits, quality family time, etc.

Each person pursuing FIRE (Financial Independence Retire Early) reaches their tipping point at a different stage and age. There is no one way to do this and it is up to each individual. But when you have amassed enough assets, tamed expenses and calculated for health care costs; then you are financially free. Determine how to focus on your priorities in each circle of influence in order to map your path to FI. Like any good quest, there will be dragons and goblins along the way. With the right mindset, fortitude and habits you can successfully face these challenges and build a strong Money Viking future!

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