Wealth Beyond Money – Part 1: Why you’re already richer than you knew

This is Part 1 of the chapter I wrote for Pearler’s book Aussie FIRE: The Ultimate Guide to Financial Independence for Australians.

I felt privileged to work on this project, compiling the writing of 20 co-authors for this 290-page epic guide. This comprehensive (and FREE) resource is excellent for newbies and seasoned FIRE folk alike. Download here and find me at Chapter 24 and the Conclusion.

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What do you think about when you consider the idea of wealth?

Money and financial resources are generally what quickly spring to mind – whether it be cash, shares, bonds, or even gold. Perhaps material goods like houses or cars soon after, or assets such as businesses that provide you income.

With all our talk of Financial Independence, it’s easy to get fixated on the “F word” – Finances – as the all-important measure of wealth and resources to create our desired lifestyle.

However, when you start to look deeper, you’ll understand there are many other resources you already have and can grow for your abundant, fulfilled life – no matter your bank balance.

In this chapter, I’ll highlight different aspects of wealth beyond only money, reasons you may be far wealthier than you knew, and why appreciating these alternatives could mean lowering the amount you need for financial independence.

Later, we’ll explore using our resources to help create the world we want to live in on the way to financial independence and beyond.

Your wealth is more than your money

I’m sure you’ve heard the expression, “The best things in life are free”. This is hinting that not every aspect of a fulfilled and abundant life is tied up with money.

While this book has mainly been discussing money as the tool for creating our ideal lifestyles, this is only a single piece of the puzzle.

In fact, you actually have a much broader “portfolio” of wealth already at your disposal – such as your skills, connections, knowledge, culture, society and environment around you.

While these can seem abstract, understanding and investing in these actually has practical applications on the path to financial independence, as we’ll discuss below.

You have multiple forms of capital

The Oxford Dictionary defines “Capital” as “Wealth in the form of money or other assets”. It is this “other assets” component that has underestimated potential in creating your ideal lifestyle and fast-tracking your financial independence.

I came across the idea of “multiple forms of capital” from US-based FI blogger Rich and Resilient Living. She often discusses the 8 Forms of Capital expressed by Ethan Roland and Gregory Landua, which present a more rounded view of our resources – with financial capital only one part of a bigger whole.

These 8 Forms of Capital are:

Financial capital	Monetary wealth, such as cash, savings, shares, credit access, bonds, term deposits and other financial vehicles.
Material capital	Physical assets and tools you own or have access to. Houses, cars, equipment, kitchen goods, computers, garden tools, furniture and other items that make your life comfortable or bring you usefulness.
Social capital	The benefits enjoyed from your relationships and being part of your wider society. Having high social capital can bring you satisfaction through friendships or allow you to access help through your personal connections
Living capital	The wealth you have in the living environment around you, such as having a garden for food or pleasure, access to parks or nature, or quality air for good health.
Intellectual capital	The knowledge you gain through schooling or self-education.
Experiential capital	Your wealth of hands-on experience and skills, such as cooking, basic car maintenance, or DIY know-how.
Cultural capital	The wealth you feel in relation to culture and traditions, such as through your heritage or community.
Spiritual capital	The richness in your sense of spiritual well-being, whatever form that takes for you. You may feel peace and abundance from connection to religion or practices such as mindfulness and meditation.

When you take this broader view of wealth and consider these other components, you may find:

• You increase your sense of abundance and well-roundedness in your life, even if your financial net worth is low.
• You feel peace of mind from lowering your risk and diversifying your wealth into forms beyond only money,
• You feel empowered by growing your overall wealth through investing in these other areas of capital, especially if growth in financial income or savings is a struggle.
• You reduce your stress around money by acknowledging these other resources you have to help support yourself.
• You get a boost of self-satisfaction from learning and increasing your skills.
• You might not need as much financial capital to achieve overall financial independence, if you boost your wealth in other areas.

You can reduce your FI number through other wealth

This last point is worth repeating: You can lower your overall “FI number” – the financial stash you need to achieve financial independence – by growing your wealth in these other forms of capital.

Here are examples of how investing time and effort towards other forms of capital can reduce your FI number through lowered living expenses – or get you to your goal more quickly by raising your financial income potential.

• Increasing your experiential capital can reduce the need to hire others or pay a premium for convenience – such as building hands-on skills in minor renovations, cooking your favourite cuisine, or making clothing adjustments. You could turn these skills into a money-earning side hustle, or boost your social capital by providing these skills as a favour to others.
• Increasing your living capital by growing an edible garden means you could increase food security and lower your food bill, so you need less for this budget line in your FI stash. Again, you could offer the excess fruit and vegetables to others for income or good will.
• Increasing your social capital with shared history and reciprocity over time could mean you’re invited to holiday at a friend’s beach house for free which reduces your travel costs. You could have neighbours share some babysitting with you and you can eliminate that expense. Or a fellow social club member could recommend you for a new job which boosts your salary.
• Increasing your material capital could lower expenses in the long-run, such as buying a slow cooker which makes meals easier and reduces your takeaway purchases; or owning a trailer you use regularly means avoiding the need to hire one and can allow you to rent or lend it out.

You can find a “multiple forms of capital” approach in play by looking at many FI enthusiasts out there. A few examples are:

Jacob from Early Retirement Extreme famously lives on US$7,000 a year, having reduced the financial capital he needs through “in-sourcing” many activities. As a self-described “renaissance man”, he has a strong focus on building experiential capital, with skills such as doing repairs, building and gardening.

Vicki Robin of Your Money or Your Life talks about the social capital she’d built through friendships and community, and how well she was looked after by those in her network at a time of medical need – reducing her care costs.

Others such as Financial Mechanic decide to invest in their intellectual capital, taking on specific courses or self-study in areas that level up their earning potential.

As you can see, there are immense benefits from considering these alternative forms of capital on your journey to financial independence.

On the flipside, if you neglect these other aspects, I’d argue that you won’t really be wealthy even once you’ve crossed your financial independence number. For example, if you don’t have social capital of friendships, the material resource of a home you enjoy, experiential skills or intellectual knowledge for self-actualisation, or the living capital of a healthy environment – you’ve missed the essence of what being FI really means.

Identifying the extra wealth you already have

I’d encourage you to give some thought to these different forms of wealth and how they apply in your own life.

• Take some time to brainstorm the specific assets you have in each category, so you can see the different ways you are wealthy.
• Next, consider areas you’d like to invest in and what benefits these will bring to you.
• Make a plan for how you are going to invest in these other areas – such as learning something new via a YouTube video or reaching out to make a new friendship.
• While we are aiming to disconnect our idea of wealth from only money, old habits die hard (!) so you may wish to put a dollar estimate to help quantify the increase in other forms of capital. Examples using the ’25x Rule’ to estimate your FI stash needed:
  • Eg. Experiential capital: Learning to cook your favourite takeaway meal: $30 saved per month x12 = $360 saved in annual expenses x 25 = $9,000 less needed for FI
  • Eg. Social capital: Taking up a friend on their offer to use their beach house for a weekend each year: $400 saved annually x 25 = $10,000 less needed for FI

This post continues next week in Wealth Beyond Money – Part 2: Creating the World You Want to See.

Photo by Sebastian Voortman from Pexels

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About Michelle from Frugality and Freedom | frugalityandfreedom.com

Michelle is a mid-30s semi-retiree, sharing her journey towards financial independence on her blog at FrugalityandFreedom.com. Michelle alternates between seasonal events work, online freelancing and long-term travel – visiting 40 countries so far. She writes with the perspective of pursuing FI as a single person on a modest income, emphasising lifestyle design and enjoying the FI journey as much as the destination.

Michelle writes about frugal hacks, solo travel, housesitting, minimalism, sustainability, and ethical investing. She is passionate about connecting with others in the financial independence community, including highlighting different voices through the Australian FI Weekly series.