Episode 4: What Is Wealth?

In this fourth episode of the Melby Money Show, host Shaun Melby explores the true meaning of wealth, emphasizing that it extends beyond financial stability to encompass physical, mental, and emotional well-being. The episode discusses the importance of aligning financial goals with personal values and how wealth can contribute to overall health, happiness, and family well-being. Shaun also addresses the impact of the Federal Reserve's potential interest rate cuts and the role of basis points in financial decisions. Drawing parallels with the character Don Draper from 'Mad Men,' the episode illustrates the hollowness of wealth when it lacks purpose and fulfillment, encouraging listeners to focus on a balanced, rich life that's more than just monetary gain.

00:00 Introduction to the Melby Money Show
00:52 Exploring the True Meaning of Wealth
01:26 Current Events: Federal Reserve Meeting
03:25 Understanding Basis Points
04:47 Lessons from Mad Men
07:24 Aligning Wealth with Personal Values
13:44 Conclusion and Final Thoughts

This podcast is for informational and educational purposes only.  This podcast is not financial advice.

Transcript

Shaun 0:22

Welcome to the fourth episode of the Melby money show. I'm your host, Shaun Melby. In today's episode, we're going to build on the prior episode and explore the true meaning of wealth and how it extends far beyond just the numbers in your bank account. We'll dive into the concept of wealth and discuss why building financial stability. While important is not the most important aspect of life. Instead, we'll focus on the reasons behind building wealth and how it can contribute to your overall health, happiness and the wellbeing of your family. When most people think of wealth, they immediately associated with money, the accumulation of financial assets, investments, and material possessions. And rightfully so. As a financial planner, my job is to do just that. Grow your net worth. But it's also to do a little more than that. Because that narrow definition fails to capture the essence of what it truly means to be wealthy. True wealth encompasses not only financial security, but also physical, mental, and emotional wellbeing. It's about having the freedom and the resources to live a fulfilling life, pursue your passions and create meaningful experiences with the people you love. But first let's talk about what's in the news with current events. In today's current event, we're tackling a topic that has been making headlines and has been the subject of speculation for a few months now. The federal reserves meeting in September, 2024. Now at the time of this recording, the meeting hasn't taken place yet, but probably well, by the time it's released. While the feds decisions on interest rates can seem like a big deal. The reality is that for most people, the direct impact on their finances will be minimal. That said it's still important to understand what's going on and how it could affect the broader economy. So let's break it down in a way that's easy to understand and actionable for your financial life. You might be wondering what does all this mean for my finances? And the truth is, whether the fed cuts rates in September or not. And it does look like they are going to cut them. The direct impact on your day-to-day financial life will likely be small. If you have a fixed rate, mortgage car loan, or student loan, your payments won't change. If you have a variable rate loan or a credit card, you might see a small decrease in interest changes if the fed cuts rates, but it's not likely to be a game changer. The bigger impact of fed rate decisions is on the overall economy. If rate cuts, help stimulate growth and keep the expansion going. That's good news for job security and wage growth. On the flip side, if the economy weakens too much could lead to layoffs and income disruptions. The best thing you can do is focus on the financial fundamentals. Live below your means. Save regularly, pay down high interest debt and invest for the long-term in a diversified portfolio. These tried and true strategies will serve you well, no matter what the fed does. While it's important to stay informed about big picture economic events like fed meetings, don't let them distract you from what really matters for your finances. Stay focused on your own goals and stick to a sound financial plan. If you do that, you'll be well positioned to weather, any storms and thrive over the long-term. Control what you can control. Now a word from today's sponsor. Today's episode is brought to you by the financial concept of basis points. Now I know that might sound like boring finance jargon, but trust me, understanding basis points is crucial for navigating the world of investing in personal finance. So what exactly are basis points? In simple terms, a basis point is a unit of measurement that equals 0.01%. It's commonly used to express changes in interest rates, bond yields, and other financial percentages. For example, if your bank tells you the raising the interest rate on your savings account by 25 basis points. That means your rate is going up by 0.25%. While that might not seem like much basis points can add up quickly, especially when we're talking about big financial decisions like mortgages or investments. Another area you'll hear the term basis points is with how financial advisors charge their fee and their clients. Many advisors have their fee tied to how much money they're managing for you known as assets under management. If your advisor's charging you a hundred basis points to manage your portfolio, they are getting paid 1%. Knowing the language of basis points allows you to accurately compare financial products, understand economic changes and make informed decisions about your money. So the next time you hear someone mentioned basis points, you'll be in the know. Basis points, a secret weapon for financial success. Now let's dive into today's episode and put that knowledge to work. One of my all time favorite TV shows is Madmen. I found the character arc and development of Don Draper to be fascinating along with many other aspects of the show. Donna's a very complicated figure to say the least and much of his stories about finding himself and who he really is. In the early seasons, it appears that Don has it all he has a super successful career. Making great money. A Wife and kids. A big house in the suburbs. He is living the American dream. But he's always wanting more and does a lot of self sabotaging behavior along the way. In season one, he has a pitch meeting with a client and is talking about happiness, quote. Advertising is based on one thing, happiness. And do you know what happiness is? Happiness is the smell of a new car. It's freedom from fear. It's a billboard on the side of the road that screams with reassurance that whatever you're doing is okay. You are okay. All things considered. While it's very surface level. It seems like a somewhat healthy view of happiness to me. He very well may have been, just BS-ing a client. But overall, it's not unhealthy in my opinion. And you'll see why in a moment when comparing against his other view of happiness. Now let's move to season five. Don has gone through a divorce is remarried. But he's already detaching himself from his new wife. He's becoming detached from work. But is likely making more money than he ever has. His focus is solely on getting bigger clients that will pay more money. And this focus is what lines up has this meeting with a big potential client Dow chemical. That was currently happy with their advertising agency. And this is Don's pitch quote, are you. You're happy with 50% you're on top and you don't have enough. You're happy because you're successful for now, but what is happiness? It's a moment before you need more happiness. I won't settle for 50% of anything. I want a hundred percent. You're happy with your agency. You're not happy with anything. You don't want most of it. You want all of it. And I won't stop until you get all of it. While that may be a compelling pitch to a client. You're trying to drive more business to personally. It's a very unhealthy way to look at life and achieving there's zero sense of fulfillment. The only important thing is the next thing to achieve. I could probably do an entire season of podcast episodes on Mad Men, which is not what this podcast is about. But I think this exploration is a nice way to lead into this episode. Don Draper by all fiscal measures is a wealthy man. But inside and emotionally he's empty, unsatisfied, always looking at the next thing and never living in the present moment. So given that information. Would you say he's a wealthy person? Is he living a rich and fulfilling life. Building wealth is undeniably important as it provides a foundation for a stable and secure future. Financial stability allows you to meet your basic needs, support your family and plan for the longterm. However it's vital to recognize that money is merely a tool. It means to an end, rather than the end itself, as we explored in the last podcast episode. The real value of wealth lies in how you choose to use it, to enhance your life and the lives of those around you. Instead of solely focusing on accumulating more money, consider why you are building wealth in the first place. What are the goals and aspirations that drive you? How can your wealth contribute to your health, happiness and the wellbeing of your loved ones? Perhaps you want to create a comfortable home environment, provide your children with a quality education. Or have the freedom to travel and explore new cultures, maybe you aspire to give back to your community support causes you believe in or leave a lasting legacy for future generations. By shifting your perspective and understanding that wealth is more than just money. You can begin to align your financial goals with your values and priorities. This mindset allows you to make more meaningful decisions about how you earn, save, and invest your money. Ensuring that your wealth building efforts are in harmony with what matters most to you. True wealth is a holistic concept that includes physical, mental, and emotional wellbeing. In addition to financial security. Physical health is a vital component of wealth that often gets overlooked in the pursuit of financial success without good health. It becomes challenging to enjoy the fruits of your labor and fully experienced life joys. Investing in your physical wellbeing through regular exercise, a balanced diet and adequate rest is just as important as investing in your financial future. When you prioritize your health. You increase your energy levels, reduce stress, and enhance your overall quality of life. Allowing you to be present engaged in the moments that matter most. Mental and emotional wellbeing are equally vital aspects of true wealth. Having a positive mindset, cultivating meaningful relationships and finding purpose in your daily life contributes significantly to your overall happiness and satisfaction. Building wealth should not come at the cost of your mental health or personal relationships. It's important to find a balance between working towards your financial goals and nurturing the connections that bring joy and fulfillment to your life. Fundamentally the true meaning of all flies and the experiences and memories you create, what the people you love. While money can provide comfort and security. It's the moment spent with family and friends laughter shared, and the adventures embarked upon that genuinely enrich our lives. Building wealth should be a means to facilitate these experiences, not the end goal itself. By finding balance between financial stability and enjoying life's precious moments, you can cultivate a sense of wealth that extends far beyond your bank account. One of the most significant advantages to building wealth is a sense of financial security. That goes without saying. When you have a strong financial foundation, you're better equipped to handle life's unexpected challenges, such as job loss, medical emergencies, or economic downturns. And if you have kids or own a house, you know, these unexpected challenges happen often. This security allows you to face these situations with greater confidence and resilience, knowing that you have the resources to weather the storm. Another key benefit to building wealth is the ability provide for your family and ensure their wellbeing. Financial stability enables you to create a comfortable home environment. Provide your children with a quality education and support your loved ones in times of need. By building wealth, you can create a legacy that extends beyond your lifetime positively impacting future generations and providing them with opportunities and resources they need to thrive. Also building wealth can grant you the freedom to pursue your passions and live life on your terms. When you have financial security, you have the flexibility to make choices that align with your values and goals rather than being solely driven by financial necessity. This freedom can manifest in various ways, such as having the ability to start your own business, travel the world, or dedicate time to volunteering and giving back to your community. By having the financial means to pursue your passions, you can experience a greater sense of fulfillment and satisfaction in life. As you embark on building wealth, it's important to ensure that your financial goals and strategies align with your personal values and life aspirations. Building wealth should not be an end in itself, but rather a means to live a fulfilling life that reflects what matters most to you. By aligning your wealth with your values, you can create a sense of purpose and meaning that extends far beyond the numbers in your bank account. One of the most important aspects of aligning your wealth with your values is to use your financial resources to create meaningful experiences and memories with your loved ones. Instead of focusing solely on accumulating more money, consider how your wealth can be used to strengthen your relationships, support your family, and create lasting memories. This could mean investing in family vacations, supporting your children's education. Or simply setting aside time and resources for regular family gatherings and activities. By prioritizing experiences over material possessions. In cultivate a sense of connection and belonging that as important to your overall wellbeing. Another way to align your wealth with your values is to use your financial resources, to support causes and organizations that resonate with your beliefs and passions. Whether it's contributing to a charitable foundation investing in socially responsible companies. Or volunteering your time and skills using your wealth to make a positive impact on the world can bring a deep sense of fulfillment purpose. By aligning your financial decisions with your values, you can ensure that your wealth serves your personal needs and contributes to the greater good. At its core. True wealth is about living a life that aligns with your values brings you joy. And allows you to make a positive impact on the world, around you. It's about having the freedom to pursue your passions. The health to enjoy your achievements and the love and support of those who matter most. By embracing this holistic view of wealth, you can create a life that is rich. In every sense of the word. Aligning your wealth with your values and goals requires a shift in mindset from a focus on accumulation to focus on purpose and meaning. It involves taking the time to reflect on what really matters to you. And then making intentional choices about how you earn, save and invest your money. By doing so in create a life filled with love, joy, and purpose that's supported by a strong financial foundation. As you continue to build wealth. Remember that true prosperity lies not in the size of your bank account, but in the quality of your relationships, the depth of your experiences and the positive impact you make on the world around you. As we conclude today's episode, we've explored the true meaning of Walden, how it extends far beyond the realm of financial assets. We've seen that genuine wealth encompasses not only monetary stability, but also physical, mental, and emotional wellbeing. It's about having the freedom and resources to live a fulfilling life, pursue your passions and create meaningful experiences with the people you love. While building financial stability is undoubtedly important. It's quite literally my job to do that. It's vital to recognize that it's not the Supreme goal in itself. Instead, the focus should be on Y. You are building wealth and how it can contribute to your overall health, happiness and the wellbeing of your family. By aligning your wealth building efforts with your personal values and life goals. You can ensure that your financial journey is not only successful, but profoundly gratifying. As you move forward on your path to building wealth, I encourage you to take a moment to reflect on your own definition of wealth. What does true prosperity mean to you? How can you use financial resources to create a life that's rich in love, joy, and purpose? Remember wealth is usually measured by the size of your bank account and investments. But the real measurement of wealth is the quality of your life and the positive impact you have on the world around you. By embracing this holistic view of wealth, you can create a legacy that extends far beyond your lifetime, positively influencing the lives of those who love. And the communities who serve. Thank you for joining me on this episode of the Melby money show. And we look forward to continuing the conversations and future episodes. If you have any questions, you'd like me to answer on the show. You can email them to shaun@melbymoney.com. It would really be an honor if you subscribe to the podcast so future episode show up in your feed. And if you feel compelled to leave a review or rating, I'd appreciate that as getting feedback will only help make this podcast the best it can be. If you've enjoyed the episode so far, feel free to tell a friend about the show. As a parting thought, I'd like to remind you that true wealth lies and living a life that is rich in every sense of the word, not just what your net worth is on your balance sheet. Farewell and I'll see you on the next episode of the Melby money show.