22 Oct Podcast #001 – Rich Is Overrated, Wealth Is Not
Podcast #001 – Rich Is Overrated, Wealth Is Not
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Start with Challenge Question: What number means you are rich? What threshold has to be crossed in your opinion for you to call yourself “rich”?
Financial brokerage firm Charles Schwab has people between ages of 21 and 75 surveyed to find out what it means to be considered wealthy. The magic number across everyone who surveyed said $2.6M. BUT, since COVID-19 hit, people have seemed to readjust their thinking of what’s essential and in a new poll taken after COVID-19, that number has dropped to $2M!
Point #1 – What’s the difference between “rich” and “wealth”?
These are the definitions of “rich” and “wealth” from Merriam-Webster’s dictionary.
Quote – “Not all treasure is silver and gold, mate.” – Captain Jack Sparrow
Rich – Having a great deal of money or assets.
Wealth – Plentiful supplies of a particular resource.
The differences are subtle but massively important. Wealth isn’t defined in terms of currency though it can be used that way. It can be measured in other important resources such as time.
Point #2 – Rich isn’t what you think it is!
Before we ever get into the fundamentals of money, we have to understand what we are chasing after!
I know a lot of unhappy, rich people. Most of them work so much they can’t enjoy life or they’ve built business and positions that can’t operate without them (or at least that’s how they feel).
Quote – “Wealth is not his that has it, but his that enjoys it.” – Benjamin Franklin
Who has more?
The person who makes $100,000/year working 80 hours a week or the person who makes $60,000/year working 36 hours a week?
The person who makes $200,000/year but lives in LA or NYC where higher costs of living and taxes bring their take-home-pay down significantly or the person who lives in Nashville, Gainesville or Huntsville and makes $80,000/year and lower costs of living and taxes give them a higher level take-home-pay equivalent to that NYC $200k.
The person who puts $24,000 in savings every year or the person who earns $2000/mo. from investments?
Money is not created equal.
Data Point – Only 13% of people with a net worth of $1M think they are rich. https://www.statista.com/statistics/1126001/millionaires-self-perception-wealth-us/
Point #3 – The higher your standard, the longer your journey to wealthy.
I’m not a minimalist, but I’ve learned the importance of living with less. It starts with prioritizing what material things actually matter to you. Nice house? Sweet car? Fat bank account? Closet full of the coolest shoes? It’s okay to things. But no one needs all the things.
The lower your bar of what you consider “essential”, the easier it will be for you to reach true wealth. Not only will you have lower monthly expenses to cover, but you will find the most important state of being during your financial journey. Contentment.
Quote
“No one wants to be rich. They just want to be richer than the next person.”