I was reading CNN Money and ran across an article titled
'What it takes to be rich'.Of the 4 people profiled, 3 were business owners and the 4th invested in real estate to become rich.
Although I agree that entrepreneurism and real estate offer some great opportunities to build wealth, I don't think you have to be a business owner or invest in real estate to become wealthy.
As a financial planner I have met many people who are traditional wage earners, who have become wealthy (millionaires even) by saving money and investing wisely (most did so using just their 401K).
I think that 'what it takes to be rich' is good money habits and making good decisions with your money more so than how you earn it.
What do you guys think?
December 27th, 2006 at 02:29 pm 1167229789
When you listen to some "financial gurus" out there, you only hear the positive side of owning a business of some sort. However, anyone who has tried knows how difficult and risk-prone businesses can be as well.
Saving and investing can work as well, but I think the trouble there is that people don't want to wait that long. More accurately, they don't want to do it "right", they want to do it "right now"! And hence the allure of anything from opening your own businesses to timing the market.
The simple reality is that there is no big gain without big risk, but some people- especially ones that are selling you something- won't tell you about those risks. I'm not personally opposed to the running your own business, or even speculating the market, but in all that we do in life, we must proceed with our eyes wide open.
On a separate but related note, even when you do have a lot of income, some will still find a way to let it slip through their fingers. We like to think that if we need more money, we'll simply work more. It is not without some truth, but it's only a small of the whole truth.
I believe the large part of the truth is the ability to manage it well. I believe the secret to financial health lies in the ability to generate a positive cashflow at the end of every month, take a small percentage of that to celebrate and reward yourself for a job well done, and then take the rest of that and save or invest it in the best way possible.
It's no good to make a lot of money if you're also spending so much that you have nothing to show for at the end of the day. Having said that, it is also important to increase our income whenever possible.
Anyways, I'm rambling, but as you can see, I believe this very strongly. So much so that you could say that this is the foundation to my financial life. I harp on it in real life whenever the opportunity arises.
December 27th, 2006 at 02:44 pm 1167230647
I'm pondering the word "rich". Is rich more than you make no matter how much you make? Or is rich attainable? Hmmm. I have to ponder this...
December 27th, 2006 at 03:40 pm 1167234056
Otherwise, it can also be discouraging to see how much father we have to climb sometimes... if we are too fixated on trying to get "rich".
December 27th, 2006 at 04:47 pm 1167238042
December 27th, 2006 at 05:35 pm 1167240937
My dad always ask me how my clients that are rich got there,and I Always say owning a business and real estate. But there were plenty that fell flat on their face.
I know plenty of people who got there by simply living below their wage. Most of them will not get as far as the sucessful business owners and real estate investors. But they will get far enough, and with a lot less risk!
December 27th, 2006 at 08:18 pm 1167250699
December 28th, 2006 at 12:26 am 1167265582
December 28th, 2006 at 01:35 am 1167269739
I don't go so far as to name myself as a business, but I definitely look at it as though I am one!
December 28th, 2006 at 03:46 am 1167277617
Thinking of your own finances like a business cash flow is helpful - and very helpful when you start to invest, too.
December 28th, 2006 at 05:39 pm 1167327541
I keep going back to the comments about the word "rich". Probably not the best choice of words for the title of this article. Wealth or building wealth would have been more appropriate.
Regardless, "rich" means different things to different people. The people in the article are rich in terms of money, but what about the rest of their lives? Do they get to spend time with their family? Do they get to enjoy the hobbies, sports, or other activities that they love doing?
Although I definitely like money and the things it can bring, "rich" means much more to me than money.
December 28th, 2006 at 05:44 pm 1167327890
Ima brings up a good point. Just because you make a lot of money doesn't mean you're wealthy. I've met many people who earn a substantial income, but are not wealthy because they spend what they earn - oftentimes more than they earn - instead of saving and accumulating wealth.