How to Become Wealthy

wealthyHow to Define Wealth
Before discussing how to become wealthy it might make sense to discuss what the definition of wealthy really is. Is it 2 million in the bank? A salary of 1 million per year? In my opinion being wealthy is having enough money to allow yourself to never have to work again if you don’t want to. The funny part is that will be somewhat different for everyone, although I will say that it would have to be enough to cover basic necessities no matter the person.

By this I mean you will need enough money so that your investment income will cover the cost of your living standards. For nearly anyone living in the US, this will be roughly 600k. Given that the yield on the 30 year US treasury is 3% currently, one could invest 600k and earn roughly $1000 per month after taxes. Now this assumes that you really have no care for any extra expenses for other than food water and basic shelter (very cheap place to live). For almost all of us that would be ambitious enough to earn and save 500k, this would not cut it. For this reason, most say roughly double this amount, around 1 million or slightly above that would be considered wealthy.

Why Would I Want To Be Wealthy?
Most people will tell you they would love to be wealthy right? But have you ever thought of why that is? Do people really want to be wealthy or do they simply like the idea of being wealthy. Sometimes I think that people are actually chasing the dream of being someone special and they know that would come with a lot of money, but who knows right. Anyways…

Some people will tell you money is everything in life.

Some people will say money doesn’t matter and that family and general happiness are more important. So who’s right?

This is my opinion: Money is very important, but only to a certain extent. In the end, overall happiness and amazing feelings are what people are truly chasing. Up to that “certain extent” though, money is indeed very important.

We have all heard the phrase that money does not buy happiness right? How about a different perspective on that cliche phrase. What makes you happy? Well, I would argue most people are happy with a roof over their head, food to eat and feed their family with, and other basic necessities. Some may be satisfied with just that, others will want to travel the world, seeing everything they possibly can. Others will want to see their children grow and rise them to up to play sports and go to college. Others will want to solve world peace, or end poverty. Others will want to start companies and create inventions that solve the worlds problems.

The truth in all of these aspirations is that they all require money, to a certain extent. You cannot own a home without paying for it, you cannot feed your family without buying groceries, you cannot travel the world without paying for flights, and you cannot create an invention without investment capital. These are the realities of the world.

So it’s true that money matters to some extent but there’s something that should be cleared up here.

A dose of reality – please, DO NOT live your entire life for money. There is too much beauty in the world to spend all your time on this rock chasing money. Do find out how you can earn and make a comfortable living, but also find out what you absolutely love doing in the process of that.

The funny trick at the end of it all is this: the people who find out what they are great at, and go after it endlessly, tend to become the wealthiest in the world.

Next up we’ll discuss the best ways to realistically make this money.

 

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Comments

  1. I think buying assets instead of liabilities with your money helps in two ways. One, you’re not focused on spending your money on more and more consumption (which we all should know is unfulfilling), and second, you inadvertently build massive amounts of wealth and income. How can you go wrong with that?

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