I was recently talking to a close friend of mine… who happens to be very rich. And I mean very very rich.
He is not into investing – so no investment Gyan here. But he has a business of his own and has done tremendously well in the last 10+ years. He is sane and practical and hence, I do listen to him a lot.
During our casual discussion (which almost invariably moves towards money quite often), he asked:
“Dev, do you know what most people get wrong about money?”
I had answers of my own in my head. But I still asked him what it was.
He said it’s simply their inability to stay within their means.
That’s 80% of the problem.
These people define being wealthy by how much they are able to spend. It’s very easy to do. But it’s not correct. And if the income doesn’t justify that kind of spending, then there is a big problem.
If you have a look at the spending people have, the vacations they take and compare it with their savings and investments, you will know where the problem exactly is. Even high earners can be living paycheck-to-paycheck.
In reality, buying things doesn’t make someone wealthy. Having money is what makes you wealthy.
And this made sense.
People want to find the next big stock, the next big investment idea when the foundation of their financial building (life) is rotten. It just doesn’t work that way.
You have to get the basics right.
You have to spend less than you earn. Everything else… comes after that.
At the end of the day, almost anyone can become wealthy. Ofcourse the definition of being wealthy differs from one person to another. But you don’t have to earn tons of money to be able to become rich (though no doubt it helps).
What do you think?