As mentioned in my previous review of the book, the full name of Getting Rich is ““. But also as I mentioned before, don’t be fooled by the title! It’s a good book!!!
Today, I’m going to talk about a portion of the book that I identified with and which influenced the way I approached my financial habits with respect to wealth creation! The most powerful portion of the book for me was “The Five Levels of Wealth“ (also called Waschka’s Wealth Levels).
Before reading these levels, let me explain the book’s definition of TSG.
Target Savings Goal (TSG) is simply the amount invested yearly, so that after so many number of years of continual contributions, your investment nest egg will last (an hopefully outlast) you when you retire (or for some other goal).
The Five Levels of Wealth
Wealth Level 1
You are able to maintain your standard of living and at the same time, save enough money to achieve your Target Savings Goal (TSG), the annual amount you need to save to meet your needs at retirement.
Wealth Level 2
Your portfolio is large enough to produce, on its own, a total return each year equal to your TSG, as well as keep up with the inflation.
Wealth Level 3
Your portfolio produces a total return large enough to cover your desired lifestyle and inflation.
Wealth Level 4
You have accumulated enough assets to produce a total return sufficient enough to substantially increase your current and future lifestyle while at the same time keeping up with inflation.
Wealth Level 5
You have accumulated enough assets to produce a total return well beyond what you would ever spend. You now have the option not to work, raise your standard of living, and bestow large charitable gifts.
Some level (especially Level 2) has sub levels within them. Currently I am withing Level 2, my got is Level 3! Anything above Level 3 is just gravy
Wealth level 2 is special because it has sublevels until you get to Wealth Level 3!
Thanks for listening to me take a small trip down memory lane…
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