FLOW

Everyone wants financial abundance.  It’s only natural to want to have enough wealth to support your family and afford a decent lifestyle.  I like to think that my vision for our financial situation isn’t drastically different from others.  It includes both active and passive income.  A “job free” lifestyle, supported by our investments, indefinitely.  The amount made in annual income is arbitrary as long as it covers the appropriate expenses.  Suppose for example my current lifestyle costs $5,000 a month (between the mortgage, insurance premiums, car payments, groceries, cable and utility bills, etc.).  What if your passive income streams each month covered all of those expenses and any active income (from a regular job) was just a bonus?  That is my ideal vision for our finances. More specifically:

The Financials:

• What is your annual income?  Passive income that supports all monthly expenses and active income that is not needed, but allows for additional discretionary spending.
• What does your cash flow look like?  Continuous passive income and as much active income as I’m interested in
• How much money do you have in savings?  Enough to pay off all liabilities if needed and cover expenses for a rainy day.
• What is your total net worth?  The amount of money needed for “job free” lifestyle (and a stress free retirement)

The Home:

• What does your home look like?  An old craftsman style home that has been fully restored and modernized.  Large porch on the exterior and painted in earth tones.  The interior will have very detailed moulding, hand scraped hardwood floors, an upgraded kitchen and contemporary furnishings.  Here’s a good example:
  

• Where is it located? In an old neighborhood with homes of similar architecture and restaurants and amenities within a short walking distance.
• Does it have a view?  A view of water (ocean, lake, etc.) or urban skyline.
• What kind of yard or landscaping does it have? Highly manicured lawn and professional landscaping architecture throughout the property (both front and back).
• Does it have a pool? Yes, one that accommodates friends and family, but also works for swimming laps.

Other Items:

• List what kind of car you drive and any other possessions your finances have provided for you.  I’m not a car guy, so anything that is fuel-efficient works for me.  Other possessions: an upgraded road bicycle and kick ass laptop.

After going through this process for the second time, the first time being my vision for work and career, it definitely helps to define what your ideal world looks like.  It’s difficult to conceptualize some of these things, but taking the time to think it through will help as life progresses.