From Mark Ford, founder, Palm Beach Research Group: Making money is not the most important thing in life. And getting rich doesn’t have to be your No. 1 goal.

But whether you’re a young person embarking on a career or middle aged or at or near retirement, wealth building should be on your priority list. Why? Because—like it or not—your financial situation will affect your ability to enjoy every other aspect of your life.

When I’ve asked readers to define wealth in the past, here are a few of the hundreds of answers I’ve received:

  • Having everything you want

  • Having more than you need

  • A million dollars in the bank

  • $10 million in savings

  • Making a million bucks per year

  • Making $100,000 per year

  • Living the life of a rock star

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Even experts disagree on what it takes to be wealthy. Here are just two examples:

To Blanche Lark Christerson, director of the Wealth Planning Group at Deutsche Bank, wealthy is a net worth of $15 million. Christerson figures that for married couples with two young kids, today’s “pricey lifestyle” costs about $375,000 a year. If you are single with no dependents, Christerson says $10 million will do. (She’s assuming that you’d have 45 years ahead of you and that you’d want to preserve capital and leave it to your heirs or charities. She’s calculating a conservative 3.5% return on investments.)

To certified financial planner Jon Duncan, it’s a net worth of $7.5 million. Duncan is making the same assumptions as Christerson in terms of kids and life span, but he thinks it only takes about $200,000 a year to live rich. And because the stock market has historically yielded about 10%, he’s figuring on you getting a much better return on your savings.

So, yes, wealth is a relative concept. But in order to talk about it productively, we must agree on a definition. For the purposes of this essay, then, I’m going to ask you to accept this one:

Wealth is a store of something valuable, something you can use or enjoy later. Financial wealth, therefore, is the money you have put aside for spending in the future. I call this your “net investable wealth.”

Your net investable wealth (NIW) is the money you have saved that doesn’t need to be used for any current needs or any current debts. That is to say, your NIW is the amount of money you have put aside that is free and clear for future use. (I recommend you invest a good portion of it in these ways.) If I had to put a formula to it, it would look like this:

NIW= Your Total Assets Minus Your Expenses/Debts
Minus the Value of Assets You Want to Hold

Some financial experts (such as Christerson and Duncan) classify wealth as your net worth. Net worth is the total of all your financial assets (e.g., cash, house, car, jewelry, etc.) minus all your debts (e.g., mortgage, credit card debt, etc.).

My definition—using your net investable wealth—is a little more stringent. I’m not letting you count the financial value of your house, your car, or any other key possessions that you wouldn’t be willing to get rid of someday.

The reason for this stricter definition is simple: You are always going to need a house and a car, so you can’t really count them as part of your wealth. (This is an oversimplification. If you figure your wealth this way, you will be erring on the side of conservativeness. That’s a good thing. It means you will always be richer than your numbers say you are.)

The truth is, when I decided to retire for the first time at 39, I was confronted with this distinction. As I stopped bringing in active income and began spending down my wealth, I quickly realized there were many assets I would be unwilling to give up in retirement: my valuable art collection, my cars, my house, my wife’s jewelry…

Therefore, I determined to keep some assets outside of my overall financial picture.

If you accept this definition—or even if you would rather count your wealth using the standard net worth formula—you must still recognize one important fact: You need more than a high income to be wealthy. It’s amazing how many people, young and old, don’t understand this. Too many folks equate making “mucho dinero” with being rich.

To be truly rich, you need lots of money set aside in a variety of safe, mostly income-producing assets.

A big income can give you a great lifestyle. But if you’re spending it as fast as you’re making it, when you stop working, or when a financial emergency arises, you’ll very quickly find out how un-rich you really are.

If you want to become wealthy—in terms of having lots of money put away for a rainy day or money to spend after you stop working for it—you are going to have to learn how to save and invest a significant portion of your income.

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But here’s the good news: This is a really good time for you to start saving money. No matter where you are in your life, it’s not too late to break bad spending habits and start good saving habits. If you start now, you’ll be rich before you know it.

But let’s get back to this idea of stored value, which—in financial terms—translates into savings.

The purpose of saving money is so that if and when you stop working, you can draw on your savings to pay for your living expenses.

But that would require you to have to “guesstimate” how much time you have left after you retire (and before you pass). You would have to apportion it such that you spend your final pennies on your final day on this Earth… unless you wanted to leave some behind.

Perfectly calculating how much time you have left and budgeting accordingly is absurd. That’s why, for many people, the ideal situation is to have enough money saved that they can live off the interest they are making on that savings.

Let’s say, for example, your lifestyle (including paying your debts) costs you $70,000 per year. You have $1 million in savings generating 7% interest (or $70,000 in income). In this scenario, you are free of financial worry.

Another, rather crude, way of saying this is that you have “Get Lost” money.

“Get Lost” money. Isn’t that a good objective? Wouldn’t you like to have the ability to not work, tell your boss off, and yet continue to pay for all your living expenses? Wouldn’t it be great to spend your time focusing on the activities that give you the greatest satisfaction in life, without worrying about money?

That’s exactly what I show you how to do in the Wealth Builders Club: Create a plan to get you from where you are today to a state of financial stability—which requires having a comfortable level of “Get Lost” money. (I’m assuming you are broke and saddled with debt now. If you are better off than that, my plan will work much faster for you.)

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