As humans, we tend to set ourselves the next financial goal or compare ourselves to others.
As a result we forget to enjoy the journey along the way and celebrate our existing successes.
We must reflect on the signs that we’re doing well financially, even if it doesn’t feel like it:
- Sign 1: Pensions – You’re contributing to your 401k/pension, setting you up for retirement.
- Sign 2: Investments – You’re setting aside money for other investments, not just pensions.
- Sign 3: Property – You have purchased your own home or some sort of investment property.
- Sign 4: Side Hustle – You have a side business that earns you some sort of (passive) income.
In this article, we talk about a few key signs as a reminder that you are doing well financially.
This is not an exhaustive list, there are indeed other things that could be included on the list.
Even if you don’t tick all the boxes, they are still reminders that you’re on your way to wealth.
Sign 1: You have a 401k/Pension that You are Contributing to
Do not underestimate the fact that you have a 401k/pension – a lot of people don’t have one.
Therefore, by contributing to one from an early age is a sign that you’re doing well financially.
A pension is just a fancy name for a type of investment account, with certain tax benefits.
A pension is by nature a tax deferred account meaning that you don’t pay tax on the way in.
As well as that, if you’re an employee, your employer would also be paying into your pension.
Employers like to match/exceed your monthly contribution, hence growing your investment.
Pensions are invested in the stock market with potential for great performance and low fees.
However, they can also be invested in other assets such a property depending on the broker.
As you can see, the fact you’re invested into a pension is already a sign that you’re doing well.
By contributing regularly and for a long time, you’re on your way to a comfortable retirement.
Sign 2: You Invest in Other Assets outside of your Pensions
If you invest in assets other than your pension, this is also a sign you’re doing well financially.
Pensions are good but they can only be accessed from a certain age which increases regularly.
Therefore, we should invest in other assets in order to potentially retire early in the future.
Pensions are funded with money that’s taken from your salary before it arrives to your bank.
Therefore, other investments are funded with your take home pay (the money you receive).
Your take home pay is used to pay your bills, pay your usual expenses, save for spending, etc.
Therefore it takes a lot of skill and discipline to put money aside from your THP for investing.
Whether you’re investing $100 or $1000 every month, consistency is the key to success.
The majority of people only rely on their pensions for retirement, which may not be enough.
The fact you’re invested in other assets is a great sign that you’re doing well financially.
Sign 3: You have Purchased your own Home or Investment Property
Another sign that you’re doing well financially is if you’ve purchased your own property.
And I don’t mean from a cultural point of view, but financially speaking: a house is an asset.
This is controversial: some say a house is an asset and some say that a house is not an asset.
A house is not an asset in the sense that it doesn’t give you cash flow unless you rent it out.
However, on average house prices double every 10 years, meaning it is an appreciating asset.
Although it may not seem like it now, but having a property really increases your net worth.
At first it won’t seem like it as you’ve just added a new liability in the form of a mortgage.
But as you pay off the mortgage and your house value increases, so does your net worth.
Getting on the property ladder is one of the biggest challenges for young people so well done.
By simply owning a few properties, you would be considered a millionaire by your net worth!
Sign 4: You’re Working on a Side Hustle that’s Generating (Passive) Income
The thing about side hustles are – they always take longer to be successful in than we think.
But the fact that you have one outside your main job is another sign that you’re doing well.
This is even the case if you’re not making that much money currently (or any money even).
Side hustles take time, especially if you’re working on something you have no experience in.
Through determination and commitment, you will be achieve financial success at some point.
You may not have thought of it prior but your side hustle is a business and therefore an asset.
This means that it cannot only provide you with income, but it will also appreciate in value.
This means that one day when the time comes, you could sell your business for a big pay day.
So although it may not seem like it now, you’re doing a whole lot better than you may think.
You’re not only developing a business but also developing yourself into a great entrepreneur.
Stay Calm and Carry On
In summary, you’re doing way better financially than you think, even if it doesn’t feel like it.
It’s easy to think you’re unsuccessful if you haven’t achieved a milestone by a certain time.
However, it’s important to stop and reflect on what you have achieved so far and celebrate.
If you have a 401k/pension, other investments, a property, and a business – you’re amazing!
Even if you had only one of those, you’d still be doing better than the majority of people.
The key isn’t to work on them all at once, but one after the other, as all of these take time.
Some take less time: pensions/stock investments; others take longer: property and business.
Whatever state you’re currently at, take note and celebrate where you currently are: hurray!
Over the next year, work on one or two things that will help you get to where you want to be.
The important thing is not to compare ourselves to others: we’re all running our own race.
To find out more about early retirement, check out our articles on retirement and investing.
Do you know what your FIRE Score is? Take our FIRE Quiz to see how close you are to FIRE.
Are you on the path to early retirement? How is it going? Feel free share in the comments!
To get the latest tips early retirement, make sure to subscribe to the MYB Retirement Club.
