How to get rich – What does it all mean?
Submitted by Matthew Needham on 18 Comments
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photo credit: mynameisharsha
We have all heard the term rich. But what does it all mean?
There are books on how to get rich, classes or internet articles on how to get rich that are headed by someone who can show you an easy way to get rich, rich people willing to drop advice on how to get rich, and many other schemes that guarantee you will get rich fast.
Getting rich is one of the main goals of most people, and while it is never easy, there are some sensible techniques that will increase your chances of getting rich.
To become rich, first of all you have to start with understanding what it all means. Here are the steps to uncovering what rich means to you.
Steps
- Define “rich”. It’s one of those subjective words that everyone uses but no one defines. What are your standards for being rich? In other words, what do you envision when you think about being rich? This can be different for everyone. Usually it whittles down to a few common goals:
- Prestige. For many people, the idea of getting rich is tied to getting respect. It’s not so much about how much money you have, but about maintaining a luxurious standard of living–exotic vacations, nice cars, swimming pools, etc.
- Retirement. Some people want to get rich so that they never have to work another day in their lives. In this case, the standard of life one wishes to maintain once retired is critical to understanding how much money is needed to get rich.
- Keep your eyes and ears open. All the time interesting people and chances appear and disappear. Get a feeling when to step forward and when to wait.
- Delay purchases. If you’re looking for information on how to get rich, then you’re probably not rich right now, and there’s a reason for that.Are you spending money on things that won’t get you rich? Are you sticking with a job that doesn’t make that much money to begin with? In order to get rich, you’re going to have to give up some of the things you enjoy doing now, so that you can enjoy those things without restriction later. For example, you might like having free time, so you give yourself a few hours a day to do nothing. But if you were to invest those few hours into getting rich, you could work towards having 20 years of free time (24 hours a day!) with early retirement. What can you give up now in exchange for being rich later?
- Cut expenses
- Get a job that pays more or get a promotion
- Downgrade or give up your car
- Downgrade your apartment or house
- Reallocate your spare time
- Invest. Once you’ve stockpiled your savings, start thinking of ways to invest it. This is where your definition of “rich” really comes in handy. If you’re looking for prestige, for example, a good investment would be education. Save up enough money to attend an Ivy League school and obtain a degree in something that will make decent money but, more importantly, earn great respect (doctor, lawyer, dentist, any kind of professional). If your goal is to retire early, on the other hand, invest that money in stocks, bonds, or other vehicles of investment that will give you an annual return on investment (ROI) that’s enough to maintain you in your retirement.For instance, if you have one million dollars invested and you get a reliable 7% ROI, that’s $70,000 per year! Invest in relatively stable assets – rental properties or potential development land in steadily growing areas is a good example. Put your money not in luxuries that will be worth nothing in a couple of years (a fancy car, for example), but in things that will increase in value over time, and that will earn you supplementary income in the interim.
- Stay rich. It’s hard to get rich, but it’s even harder to stay rich. Your wealth is always going to be affected by the market, and the market has its ups and downs. If you get too comfortable when times are good, you’ll quickly drop back to square one when the market hits a slump. If you get a promotion or a raise, or if your ROI goes up a percentage point, don’t spend the extra–save it for when business is slow and your ROI goes down two percentage points.
At the Big Red Tomato Company, we recommend to all our clients the ebook Think and Grow Rich which gives an excellent insight into how millionaires think and what you can do to change your mindset to think like a millionaire. You can purchase the eboook Think and Grow Rich for only $7 which is downloaded instantly as a PDF.
- Surround yourself with self-made millionaires. Learn from them. It’s been said that “like attracts like”. Get all the information you can about how rich people started making big money and what they are doing now. You can learn the secrets of millionaires in Think and Grow Rich.
- Every night before you go to bed, empty all of your spare change (coins in particular) into a jar. This takes time but after about one year you may have at least $150 saved up in coins.
- If money is burning a hole in your pocket for something specific (a new car, for instance, when your current model works fine), force yourself to wait a month before buying. Ask a family member or very trusted friend to hold your money for you if it’s that much of a temptation. Spend time considering the real cost of what you want to buy, the pro’s and con’s, how much it will set you back in your aspirations versus the immediate satisfaction, and how that money might be put to better use. If you still can’t live without it after a waiting period, it’s yours, but often you will find that an immediate desire looks less and less attractive once you stop and think about it.
- If you find yourself wanting something big to gratify you immediately, divert yourself with a small indulgence rather than giving in to the large one. Walk away from the designer suit or purse, but on your way home, buy an ice cream cone or catch a movie instead. The $8 cinema ticket is a lot less expensive than the $800 handbag, but gives you the same feeling of doing something “just for you.”
Warnings
- Get rich quick schemes are invariably scams. Avoid them. There is no such thing as free money unless you inherit it. Then you must handle it wisely, or you will lose that as well.As there is no free lunch, nothing can be obtained without struggling for it.The best way to get rich quickly is having a plan and able to implement the plan successfully, if possible with a team that is well experienced and interested in helping you.
Original article provided by wikiHow, a wiki how-to manual and edited by The Big Red Tomato Company. Please edit this article and find author credits at the original wikiHow article on How to Get Rich. All content on wikiHow can be shared under a Creative Commons license.
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I want to get rich
You hit it right on the head here. There is no get rich quick unless you inherit it and even then, if you’re not wise about how you’re using the money you have, you’ll just lose it anyway.
Getting money isn’t even the hardest part. Anyone with a job can learn to get more money and budget the money. That’s where it becomes a bit more complicated… Or so people think. It’s learning how to handle their money and spend it on the right things to acquire what they are after in life that makes them or breaks them.
Good stuff!
.-= Eric´s last blog ..Lets Help Each Other =-.
Matthew Needham Reply:
February 1st, 2010 at 9:31 pm
Thanks Eric great comments. To be honest, most people don’t need anywhere near as much money as they think they need. It’s about balancing your income with your lifestyle (or more accurately managing your lifestyle to suit your income). Many lottery winners run out of cash in a couple of years because they don’t understand the importance of cashflow.
Eric Reply:
March 4th, 2010 at 12:09 am
Exactly!
I just had to say something on the importance of cash flow here. If you can learn how money really works and then use it that way, you could be set for life. Not saying things won’t happen but learn how to handle money wisely from those who can happily show you results of their doings of the same things.
And my personal opinion on this is, if someone has truly made it work for them and continues to do so, regardless of how they got the money in the first place, if they’re the real deal they’ll have no problem happily showing you how it’s done as long as they think you’re worthy of their time.
.-= Eric´s last blog ..Build Your Blog With Fire In Mind =-.
I’m glad you brought up that one should define being rich before going out to achieve it. I’ve heard many of my friends say that want a yacht, or a house in Vail, but they really didn’t have a clue what their final outcome was or what rich really meant to them. It’s a long and hard road to get to the end and realize it was all for naught.
At what point financially would you consider yourself rich?
.-= Ryan @ Planting Dollars´s last blog ..Why Ideas are Like Sperm =-.
Matthew Needham Reply:
March 1st, 2010 at 10:15 pm
Hi Ryan, thanks for your comment. It’s very important to define what you want first before you go out to get it. Hence starting with this post. Many lottery millionaires run out of money as they confuse cash with cashflow. Having a million may make you rich at the time it’s cash but when you spend it on cars or houses it’s illiquid and consequently you can’t convert it to cash quickly. Therefore, to my mind having the cashflow to fund a lifestyle for wife, myself and our baby (when it’s born) will be the point I consider us to be rich. Thanks for stopping by!
Hi Matthew,
I think a large part of getting or wanting to be rich is about having choice and that is why ‘being rich’ means so many different things to different people.
What do you think?
Adrian
.-= Adrian Swinscoe´s last blog ..Business growth funding up for grabs =-.
Matthew Needham Reply:
March 1st, 2010 at 10:12 pm
Hi Adrian, I agree. Being rich isn’t necessarily about money, but money does allow choice. Depending on where you are in the world you can be “rich” on a whole lot less than if you were in New York or London.
Thanks for your comment Adrian!
Everyone has their own definition of what “rich” means to them. Let me start by saying there is no price for my healthy. Above money, I want my health to be great, as well for my family and friends.
In a perfect world, being “rich” for me would be earning $100,000, traveling (freedom from locations), spending half my time one east coast amongst loved ones, enjoying west coast the other half… helping family and friends, and so on.
It’s not all about money, but things would definitely be a bit easier if we didn’t have to worry about $$.
.-= Moon Hussain´s last blog ..My Massive Passive Income Brain Dump: What Do You Think? =-.
Matthew Needham Reply:
March 1st, 2010 at 10:09 pm
Hi Moon, thanks for your comment. I think you’re right. Rich means different things to different people depending on where you are. A later post in the series will talk about the cashflow and assets. So stay tuned.
Hi Matthew,
As great and wise as the article is, I was fascinated by the fact that it came from WikiHow. I appreciate that you did the work of editing it. I’m not trying to take the credit away from you. I just found it really interesting that this was available under CCL.
All the stuff about not spending too much and investing your time etc. I agree with. I just got sidetracked my learning something new about Wiki
One thing that struck a chord though was the suggestion to wait a month before buying something big. I’d really like an Apple laptop. My current Windows laptop works fine (albeit rather slowly) so I’m having a hard time persuading my husband
He works full time. I look after the children full time and seeing the pay in my job is rubbish, he gets more of a say in how income is spent 
.-= Eleanor Edwards´s last blog ..Legislation for a weapon? You can help! =-.
Matthew Needham Reply:
March 3rd, 2010 at 10:55 am
Hi Eleanor, thanks for your comment. Another thing that I do with Amazon is to put the things I’d like to buy onto my wishlist. If I still want it a month later then I’ll buy it or otherwise delete it. Good luck persuading your husband!
Although being rich doesn’t bring people happiness, I think it brings a lot of freedom which allows people to spend more time doing the things they love (leading to happiness…)
Think and Grow Rich is a great book for opening the mind, another one that’s a good read is Rich Dad Poor Dad by Kiyosaki although it has a lot of conflicting views about it.
.-= Jason Pereira´s last blog ..How I Plan To Take This Blog To 10,000 Subscribers =-.
Matthew Needham Reply:
March 3rd, 2010 at 9:37 pm
Hi Jason, thanks for your comment. Funny you should mention those books they are going to be the subject of the Wednesday Wisdom’s for the next couple of weeks!
I like how you split rich down, for me I don’t want millions it’s about having the freedom to spend more time with my family, but there are material things I want too, namely a 911 turbo and mortgage free !
Investing and saving for the future is a great way to future proof your freedom, top work brother
.-= TheInfoPreneur´s last blog ..Are You Taking Advice On The Back Foot? + Video =-.
Matthew Needham Reply:
March 3rd, 2010 at 9:38 pm
Having the monthly cashflow to fund the lifestyle you want is indeed being wealthy. If you want the 911, then you just need a bigger monthly cashflow! Simple!! Thanks for your comment James!
Love the advice here Matthew. Really helpful to me as money is shall we say a bit tight at the moment.
I think a big part of it as well is thinking your rich or not rich. If you go around with the mindset of I can’t afford that or I don’t have the money for this then you’ll acutally end up never trying to get something because you’ll never try and find the money to do it.
.-= Ben´s last blog ..How to step up in an emergency =-.
Matthew Needham Reply:
March 8th, 2010 at 12:12 pm
Thanks Ben. That’s a great point you make here (which I’ll cover more in a later post) if you don’t have a goal for what you’re saving for or spending on, then invariably you’ll save less and spend more.
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