Rich man, poor man is not intended to leave out women! I am really trying to examine the difference between rich and poor and help you achieve what you say is a goal. Most 18-25 year old say getting rich and becoming famous are important goals for them. I am not sure if it is limited to just that age group either! Do you want to know how to get rich?
Invest in Yourself
It takes a long time to acquire skills and experience to become rich. It may be formal education K-12, college or professional school. There is no magic formula when it comes to skills, you can acquire them in a variety of ways. One thing for sure is you need training beyond secondary school. Your K-12 education is varied enough to develop most people’s skills. In college, you have an opportunity to spend more time on the area of academics you think will demonstrate your skills. When you ultimately enter the work world, you grades should indicate your ability to learn in an area you express an interest.
Your next step is to take what you learned and turn it into a profession. Let’s say you majored in English. Your skills may be writing or analyzing complex information, but more importantly you construct and defend an argument. Are these transferable skills? Most employers want someone who is motivated, intelligent and works hard which describes successful people versus a particular degree. You won’t get the highest starting salary, but you will move up based on your skills.
A lot of people say you need to pick the right profession! You know one where you will make a lot of money. I believe you should pick a profession you like because you will be good at it. If you are good at it, the money follows. Teaching for example, is one of the lowest paid professions, but that should not stop you. There are teachers who do very well, perhaps not millionaires, but that is up to you! The Millionaire Next Door show that ordinary people who do not look like our image of a millionaire live next door. One thing they all have in common, they like what they do and are good at it.
How do the rich live?
It starts a long time ago when they were young. Whether they started out poor or they are just frugal. They learn to save and live on less then they earn. If you spend all that you earn, you cannot generate wealth. Rich people invest their money generally in their business or investments that grow to accumulate wealth. Rich people think about the future versus spending their money frivolously in the present. Never mind spending future money in the present. You won’t see rich people racking up credit card debt and paying 20 something percent. That does not make sense!
When we see an expensive car or a big house, we presume they are rich. Most rich people do not live like that. People like Steve Jobs and Warren Buffet live in nice homes, but comparatively cheap compared to their net worth. The important factor is they own the home without a mortgage. Most of the rich people I know live in nice homes and drive nice cars, but not what you would expect. One of my friends lives in a home worth over a million dollars, but drives a Toyota. I have known a lot of rich people and you would be surprised how they live. They are not showy rich! The jewels are kept in the safe; they drive ordinary cars, in many cases perform ordinary jobs and live in a nice home, but not a mansion.
People who are not rich presume the rich do all the things you see in the movies. Not everyone is flying in private jets, shop at Tiffany & Co or constantly traveling. My wife’s uncle lived on Fifth Avenue (NYC). It was a ten (10) room apartment (condominium) worth tens of millions. They drove an ordinary car and flew coach. They were in the fashion business (designer dresses) and knew the likes of Yves Saint Laurent, Givenchy, Dior and Chanel. They certainly could afford the Concorde or first class travel, but never saw the value. They invested their money in assets that increased over time such as his business or investments. Getting rich is hard and you don’t want to waste it.
Whether you just worked hard, started a company, went public or made great investments, success is not easy! Making it takes time and effort. You can lose it, if you make poor choices or take your eye off the ball! This is one of the reasons rich people do not change their lifestyle just because you are rich. Ted Turner (founder of CNN) took over his father’s billboard company and turned it into a billion dollar media company. Much of his wealth is invested in real estate. He is the largest private landowner in the United States! Being rich means you have investments in your company, stock market and real estate.
If you think the rich just accumulate a lot of possessions, you are wrong! It doesn’t mean they live without, but it generally more ordinary than you would think. Spending less (significantly less) than you earn is the key to getting rich. Poor people tend to make bad choices because they want possessions. I see some of my students waste money on bad food choices when they are hungry, iPods, iPhones, new cars they cannot afford. The irony is that rich people who can easily afford these possessions, but do not buy it unless they really need it. They think about their purchases in term of value.
“The rich are different from you and me.” (F. Scott Fitzgerald) “Yes, they have more money”. (Hemingway) This quote was attributed to Fitzgerald and Hemingway although it is a myth, but stays alive because it symbolizes the rich! The rich are different from the rest of us; they put more of their money to work! I know an ordinary janitor at school who has a few rental homes. He started out small by buying a small home in the local area and fixed it up. He lives very frugally, but is building a real estate empire. You do not have to be rich to get rich. What is stopping you?
When I started out, I just invested some of my savings in income property and worked to make it into a business. My first investment was small (just $25K), reinvesting, acquiring more properties and in seven (7) years, it generated enough income for me to give up my day job. I lived modestly and still do putting my money to work. Yes, the rich are different they see money differently! You are on your way to getting rich, but stay focused on what is important and don’t accumulate possessions. Rich man, poor man which are you?
Photo by: puuikibeach
Carn. of Financial Camaraderie at Vanessa’s Money
Carnival of Retirement at Good Financial Cents
Carnival of MoneyPros at CashNetUSA Credit Resourc
Carnival of Financial Planning at Term Life Insurance, Inc
Rich man, poor man which are you?