Most people assume that in order to be rich, you need to have high income. Guess what? That is not true. Earning a high income helps, but that isn’t the pivotal deciding factor.
You could have a high income. But if you have equally high expenses, then you cannot be rich. Because you are spending beyond your means. A businessman could very well earn $30,000 in a month, but if he spends $35,000 from that, he is essentially $5,000 poorer after each month, which amounts to a deficit of $60,000 a year!
The reason why high income doesn’t equate to richness is because people tend to adjust their expenses according to their level of income. It happens. When people get a pay rise, they become intoxicated with thoughts of getting a new car, a new TV, a bigger house etc. which are all liabilities. Toys to bring you joy? Nah. When you get a pay rise, you should be buying assets; not liabilities. Even if you can’t afford to buy certain assets, never ever splurge on liabilities!
Now, don’t get me wrong. I’m not implying that it is easier to get rich with low income. But, the truth is, a person who knows how to manage his finances, even if his income is in the low-middle range, is way better off than than the financially-illiterate businessman above.
I agree with Robert Kiyosaki (author of Rich Dad Poor Dad and other groundbreaking books) that too many people have the wrong ideas of money, which comes down to misguided advice from teachers, parents and other people who have no clue about money themselves, who pretend that they know it all.
From young, we are told to study hard in school to get a safe job, work hard and get promoted etc. It is really sad that we are programmed to work for other people, it’s as if we don’t have a choice. When that notion gets repeated again and again, people become convinced that it’s true. Conversely, if a child is continuously exposed to entrepreneurship skills and taught to think out of the box, they will do wonders in life!
It is not surprising that only 10% of the population make 90% of all the money in this world; because the other 90% are clueless when it comes to money. Well, the 90% might say that it’s unfair, but if you do not put in effort to achieve financial enlightenment, then you don’t deserve to be in that 10%. These 10% are not necessarily the smartest, most technical or knowledgeable, but they are smart in hiring smarter people to work for them. If you are a boss and you hire people who are not smarter, or not equally smart as you, then you have issues with your ego.
The real secret of the 10% group is to generate passive income. Which means money keeps coming in even if they do not work. They don’t chase the money; the money chases them. Which is why out of all the job offers which I had, I chose an e-commerce company even though it is the worst offer from a salary viewpoint. I’m not chasing the money. Rather, I’m deciding which company can offer me the best education in terms of enhancing my skills in business (other than allowing me to utilise my writing, advertising and marketing expertise), even more so with online business, which hasn’t hit the boom yet in Malaysia. I see this as a big opportunity.
While I’m still young, I want to take up a challenge. I don’t want to join companies which are already the big players in their industry. I want to join an uprising company that is hungry, that tries to stand on equal footing with the big players. I want to be part of a revolution. After that, I will try to get into self-employment, so that I can be my own boss!
And, this brings me to my last point. I plan to retire at the age of 40, and let passive income do its work. Some may laugh. Some may say it’s impossible. Or whatever. Even if I fail to do so, at least I made efforts to steer towards the 10% group; and not be stuck with the
losers in the 90% group.
If you think that you can get rich by being an employee, you might as well go buy a nice, big kite and fly it during every sunset. At least you have a priceless moment to look forward to every day. Which may be on par with being rich!
* The ideas which I am presenting here have to be credited to Mr Kiyosaki. The world needs more people like him to educate fools like us, to make us less money-blind.