Huw JonesEveryone needs to know their wealth window. It the time expressed in months (because years feels like an eternity) that you have left to accumulate all the wealth that you need to achieve financial independence.
Financial independence is that magical moment when you no longer have to work for the income you need to support your ideal lifestyle for the rest of your days.
Your wealth window is simply the number of salary payments that you can use to fund your future lifestyle. Knowing this number can create the necessary sense of urgency to do something that your future self will thank you for.
During your wealth window you will need to commit to follow a deferred spending plan. This is where you defer spending (when your income is high) so that you can spend the money when your income is lower (like in retirement). I know that deferred spending is saving, but sometimes re-framing it can help people to see it in a positive light.
Your lifetime income, the amount of money that you can earn in your working life, is fixed (for you). Mine will be different to yours, a premier league footballer will be a bit more than both us put together! You can get a pay rise, a secure better job or work for longer but that’s still just your lifetime income. It will be the amount it will be. Whatever you earn in your lifetime will be your maximum lifetime income. Yes you could have earned more but you didn’t. Now’s not the time for shoulda, woulda, coulda.
But what you do with it in your wealth window, that is entirely down to you. It’s a ball that is most definitely in your court. You can only spend each pound of income once. Today (when your income is high) or later (when you’re income is lower). Your choice. Choose wisely. Your future self will thank you.
Once you’ve spent it, you don’t get to spend it again. You’re stuck with whatever you bought with it (usually stuff or memories). Make sure you don’t add regret to that list of stuff you’re stuck with.
The meaning of financial life is all about managing the conflict between pleasure for your current self and happiness for your future self. Striking the right balance between enjoying now and planning for then is the essential ingredient for your financial wellbeing.