Book Review: The 5 Types of Wealth

In his book The 5 Types of Wealth, Sahil Bloom makes the case that there is more to life than money, and that it is a mistake to sacrifice too much to get more money.  To most of us, this is so obvious that it’s not worth saying.  But a minority of us need to think about this message.

Bloom lists the 5 types of wealth as “time, people, purpose, health,” and money.  Like much writing on this subject, the author presents the insight that there’s more to life than money as though it’s a new idea: “Where the old, default scoreboard was entirely based on financial wealth, the new scoreboard is grounded in the diverse pillars that define a truly wealthy existence.”  This isn’t news to the majority of people.  This majority never needed this insight, because they have never over-valued money.

But for those who toil away for most of their waking hours at their jobs or running their businesses, Bloom’s ideas are important.  Perhaps for them, when they realize they’ve been wasting their lives, it feels like they’ve invented something new.  Most of the rest of us can just roll our eyes.

I’ve worked with many people whose lives were defined by money and their careers.  These people aggressively sought promotions and raises.  In contrast, the rest of us (including me), tried to make reasonable compromises between earning money and living a good life.

The bulk of the book is aimed at defining the 5 types of wealth and showing people how to improve each one.  It is filled with strategies, checklists, spreadsheets, and action plans that would appeal to those who have trouble living balanced lives.  To measure progress, Bloom has a “wealth score quiz.”  Maybe I’m just happy with my life right now, but I scored 94 out of 100.  I suspect most of my retired friends would have high scores as well.  I don’t know how my workaholic former colleagues would score on this quiz.

Much of the advice and strategies offered in this book is just too intense for most people, but maybe it works for those who need this advice most.  A small example of this intensity: “Prior to sitting down for a deep work session, I either go for a five-minute walk outside or take a three-minute cold plunge.”

I’ll comment on a few points in the section discussing financial wealth.  Bloom tells us to “create (and stick to) a budget.”  Few people find success this way.  Some version of ‘pay yourself first and spend the rest’ works better for most people.  Only some personality types seem to be able to work with budgets consistently.

The author gives an example of a 22-year old in 1980 saving $1000 per month.  The median family income in the U.S. in 1980 was about $1750 per month before taxes.  Incomes for 22-year olds would have been much lower.  I see these silly examples everywhere.  People are just not wired to understand inflation.

Bloom has a good financial insight when he observes that “your definition of enough will increase over time.”  We tend to demonize lifestyle creep, but it’s normal and reasonable to want more as you age.  The problem comes when wants grow too quickly.

In conclusion, I don’t think most people need what this book offers, but those who pursue money above all else could certainly benefit.