Rich
Introduction
"Poverty has limited our imagination." This is a saying that I like a lot.
We may have dreamed to be rich, to travel the world, to own a half million bungalow, to own a luxury sport car.
- However, we may not understand the hidden value to own a land in a virtual world, or the need to buy a 10k luxury watch.
- Personally, the main reason I want to be rich is to have greater freedom of choice in the future. I dislike feeling financially constrained and limited in my options.
The Lifestyle Creep
My colleague and I recently discussed this. While our current salaries place us in the M40 category (middle 40% income group) in Malaysia, there are just as many dreams that we sacrifice for living.
- Through financial planning, we give up things we love (e.g. the latest gadgets) to prioritize things we value more, like our children's education or a comfortable retirement.
Compared to 5 years ago, our salaries have doubled, but so has our standard of living.
- With a RM 3000 income, a Perodua Myvi and a mid-range Android Phone felt perfectly fine.
- However, with greater income comes the opportunity to upgrade - a bigger house, a newer car, perhaps even more travel.
- Additionally, there is annual inflation and some people wish to purchase assets for their children.
Therefore, humans will never feel they are too rich.
The Truth
The subject of money is not taught in school.
- While curriculums might cover resume writing or even touch on starting a business, there is no guarantee for you to be rich in 5 years' time.
- As a result, many students pay a huge sum of money, study hard and graduate with a bachelor's degree, but lacking the financial skills and mindset to navigate the real world. Then, we end up working primarily for the pay cheque.
Afterall, private university can be considered as an entity of business.
- They are producing trained workers needed by different industries.
I believe, even those "masters" over the internet may also be struggling with their life. If they are already rich enough, why would they spend time to share the golden secret with others?
- Yes, they are selling you a dream.
- Nonetheless, whether someone's motives are purely altruistic or not, there is value to be gained from learning from successful people.
A Change in Mindset
A key difference between rich and poor people lies in their mindsets towards money.
- Rich people tend to focus on growing their wealth, while poor people often prioritize saving money.
- Poor people might frequently say, "I cannot afford it", while rich people ask, "How can I afford it?". This shift in perspective open doors to creative solutions and strategies for financial growth.
- A poor people might say, " The reason I am not rich is because I have kids.". Conversely, a rich person might say, "The reason I must be rich is because I have kids."
- Rich people understand that managing risk is crucial for financial success, while poor people often prioritize playing it safe with their money.
Summary
Remember, richness starts from mindset!
- Financial planning is not about limiting dreams; it is about creating a roadmap to achieve them.
- Only talk and dream of getting rich does not make you rich by any extent.
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