The Pursuit Of Financial Stability

There is a reason why people crave for stability. When things are balanced, harmony reigns and there is no need for worry. The Chinese Tao symbol perfectly illustrates it. But this is not a philosophical post. I’m just trying to give some context.

With the volatility in the markets , The average person experiences frequent fluctuations on their wealth portfolio. In the crypto markets, one can reach millionaire status overnight and lose it the next morning. In extremes cases like the Celsius bankruptcy, Decamillionaires (more than 10m) did lose it all in just a few days.

Can one achieve financial stability during this crazy time we’re in? Is it even possible? Why are we constantly worried about the markets and how it will affect us?

Financial stability will mean different things to different people. Some want to live the ‘good life’ while there are some who prefer a simple life. Others (like myself) want both. However, it generally means not having to worry about money. The irony is that those who have the most money tend to worry more about money than those who have little or no money. Of course, there are exceptions!

It Takes Time And Effort

Achieving anything worthwhile takes time. Reaching financial stability is a great achievement. However, this doesn’t only entail a person’s finances. There is also an emotional and mental aspect to it. We have to understand the difference between needs and wants. We want many things but we necessarily don’t need most of them.

It wouldn’t take time and effort to make the decision because deep down we all have an intuitive knowing of what we need (and want). What would take time and effort is sticking to it until it comes to fruition or becomes a reality. For example, living the ‘good life’ will require atleast becoming a millionaire to cover the lifestyle. Let’s say living that lifestyle costs $300k per year, earning more than $900k per year will enable you to achieve financial stability on the finance side.

Mentally, that might not be the case because you also want a private jet or a yacht. This is the situation with most people, it’s never enough and we always want more. Real financial stability happens when both parts are in complete sync.

What Is Your ‘Financial Cushion’ And How Strong Is It?

There are videogames you play where each time you fail in the game, you start from a certain checkpoint instead of starting from scratch. The same thing more or less is the definition of a financial cushion. How soft will be your landing if you experience a fall?

The inexperienced (myself included) don’t give much thought to this but it is very important. Financial cushion is a valuable asset(s) that you can fall back on when things go sideways. This varies between the digital world and physical world. Digital assets (crypto, stocks etc.) always experience sudden and massive fluctuations or price movements making it a near unstable financial cushion. Whereas physical assets (precious metals, real estate etc) don’t normally experience sudden price movements which makes them an ideal financial cushion. That's why many wealth building veterans prefer them over digital assets.

A balance way will be to have both class of assets on your portfolio. The main upside with digital assets is that they are easily movable and return profits in a short period of time.

Conclusion

Pursuing financial stability is a worthwhile endeavor considering the crazy times we're living in. Isn’t not having to worry about money a good feeling?

There are two parts that entail financial stability, achieving the number itself (finances) and your mental or emotional attitude towards it. What do you really want? A simple life or the 'good life'?

The more valuable an asset is the more strong a financial cushion it becomes. Seek undervalued assets with infrequent price movements. Remember, stability is what we're looking for.

Thanks for reading!

Profile: Young Kedar

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