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Rich vs Wealthy: Which Should I Aim For?

26th March 2019

rich vs wealthy

So you want to be rich. 💸

That’s pretty cool. But what does being rich really mean? Having a lot of money? Making a lot of money? Passive income? Many times we dream of becoming rich, when really that isn’t the best thing to be – especially if you don’t know how to manage money! As we can see from lottery winners, money goes down the drain pretty quickly, and next thing you know you’re worse off than you were at the beginning. Being rich is different to being wealthy. Rich means high income, it means accumulation. Wealth means sustainability.  Yeah, rich sounds good, but really you want to be wealthy. 

In this post we’ll be digging a bit deeper into the rich vs wealthy, and what you need to get started 😛

 

What is ‘rich’?

The rich are those who receive a large paycheck at the end of the month. People who make large amounts of money from their income such as doctors, diplomats, programmers, investment bankers, etc. Many times these careers take experience and quite a lot of upfront investment (degree!). A doctor needs many years of training, and programmers need to be pretty brainy to know what they’re doing. Rich is measured by a number – your paycheck.

This is what many people believe to be success – earning a lot at your job. But the truth is, having a high income does not always mean actually having a lot of money. A huge portion goes to taxes, and then if you’ve fallen trap to lifestyle inflation most of it is spent on things. You’re also more likely to surround yourself with people who spend a lot. Soon you’ll also want that snazzy car, the big house and the cool watch ⌚. And because you think you’re earning a lot, you think ‘I’ve got the money, might as well spend it!’. Well, my friend, I got some news for you.

Unless you’re saving and investing part of that paycheck, then you’re part of the rat race, just like everyone else. You need that income to sustain your lifestyle, and if you’re out of a job, you’re out of a life. You may be rich, but it all disappears pretty quickly once the income goes. Doesn’t sound very sustainable, does it?

It’s when those rich people discover financial independence that their world goes crazy – what if I didn’t buy the snazzy car? Or spent 500€ month on restaurants? I could use this money for a grander purpose: to buy time. And then they get on their journey to financial independence, start investing and retire early (or do something else). But that only happens if you have the right mentality. And of course, the higher your income, the faster you exit the rat race. 🐀

But what if I don’t want to go through that whole process just to have something which is sustainable? Let me present you with: wealth. 

Just to quickly summarise, a rich person is basically someone who has a high job income and likely goes to work every day. This is what people typically see as being rich. Although it may seem like the most sensible path, getting a high income job isn’t always easy, and it’s likely you’ll fall for lifestyle inflation ☠. So that’s great if you wanted to be a doctor/diplomat/programmer anyway, but what if I don’t? What do wealthy people do? 

rich vs wealthy
is it really a snazzy car if you don’t even have the time to drive it? 🤔

 

What is ‘wealthy’?

Wealth is not measured on the number in your bank account, it’s measured by your free time. If you have free time and a sustainable lifestyle, then you are wealthy. Congrats! 🎉

But where does one even start with wealth – how can I have more free time if I’m tied to a job? What would allow you to have more free time? Separating yourself from exchanging time for money.

When the amount you earn is not correlated with the time you spend on it, that’s when the magic happens. Call it passive income, financial independence, or simply having multiple income streams. When you can earn the same amount of money in less time, that is when you start to become wealthy.

Wealth might not be something you can achieve in your twenties, but it is certainly something you start building now. How? By building skills and sources that will generate money in a sustainable way in the future. And by knowing a thing or two about personal finance.

To give you a bit of an idea, here are some examples you can start with in your early twenties – taking into account the fact that you don’t have any experience in other fields.

Skills to build:

  1. Translation
  2. Teaching
  3. Programming
  4. Digital Marketing
  5. Design
  6. Writing

Income streams to build:

  1. Side hustle
  2. Investment capital gains
  3. Investment dividends
  4. Real estate
  5. Business
  6. Online products

Check out these two posts for more info on getting started 🔥

  • How to Build Income Streams in your Twenties
  • Master 2 of these 6 Skills and You’ll Always be Able to Make Money

The good news about becoming wealthy is that you do not need a ton of time or experience to reach that point, but you do need to be smart about it. You don’t need to be a millionaire to be wealthy. A girl who makes £500 per month, spends a couple hours a week selling products and has £300 in expenses (unlikely) is wealthy. A guy who makes 1,500€ from his real estate property and has 1,000€ in expenses is wealthy. Increase your free time and keep the same income – that’s wealth. Oh, and if it’s sustainable, then you can buy your snazzy car – you’ll actually have the time to enjoy it now 😎.

 

rich vs wealthy
for all you know, they’re wealthy af

 

Rich vs wealthy: which do I aim for?

At the end of the day, which is better?

It depends on what you value and what your interests are. Obviously everyone wants to be wealthy in order to have the freedom and free time to pursue interests. But don’t let that stop you from going down a high-income career path. If you know you won’t fall trap to lifestyle inflation, that you’ll use the power of compounding interest to your advantage and that this career path is something you enjoy, then you’re on your path to building wealth – and maybe even financial freedom.

If you’re unsure what you want to do (like most people in their twenties), then simply start building those income streams and skills so that you have something to work with when you do know what you want to do. And if in the end you end up in a job, well you’ll have all those income streams to back you up 😉.

Personal example: I am nor rich nor wealthy. However, as a 20 year old I am currently building several streams of income which I know will take care of me in the future. I’m still in my exploration and skill building phase – I don’t know what I want to dedicate my life to, I don’t know what my life will look like in 5 years. So at the moment I build skills while I continue trying things out. 💁‍♀️

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I started Financially Mint to help other 20 something year olds learn about money and fix their finances early in life 💪

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Financially Mint is on another break! ☕ I will Financially Mint is on another break! ☕

I will be living in Kuala Lumpur, Malaysia for the next few months, and then hopefully heading to Australia. 
My plans for the next year:

I'm putting the career testing theory into practice. My next career test is working for an NGO here in Kuala Lumpur. This week will be my first week. I will be working with sex trafficking survivors and I've also been asked to do some financial education presentations to help the staff.

After that the plan is to move to Melbourne, Australia, and do my next career test: consulting. If that doesn't work out I will try another career test which may be more achievable: business development in a startup. Thanks to the amazing career books that I've read, I'm pretty confident I can get an interesting job. We'll see how it rolls. 🏀

How am I funding this? I'm very excited to say that I've managed to grow my part-time freelancing income to a full-time income that can sustain me in South East Asia (I would need to work full-time in Europe). I'm calling myself a 'Freelance FinTech Writer'. Rent is crazy cheap (like 300€/month) and it's literally cheaper to eat out than cook. I'm still able to save 15% of my income. 🎉🎉 The increase in clients and pay has been thanks to all the effort I put into Financially Mint, and to some crazy cold emailing and networking in the past few months. 
After some thought, I concluded that learning mark-up language (HTML + CSS) was a more efficient use of my time than writing blog posts and working on FM... so I am now taking a break to learn some basic coding and decide what to do next.

I will still be podcasting and taking part in the FI community on Twitter and everywhere else... so I'll still be seeing you around 😉

To our success 🎉🎉
Only 30% of jobs are posted online. 🙄 Let's sa Only 30% of jobs are posted online. 🙄

Let's say you've got a list of career paths to test. You've figured out a direction, you know which sector you want to work in and you've got some cool companies in mind.

But then what? How do you get an internship in the company you really want to work for? How do you get a job in that specific NGO? How do you get them to notice you? 🤔

In FM's latest post I share a strategy that I am still testing but seems to work - copied from a book titled 'Designing your Life' by Bill Burnett and Dave Evans:

The strategy: Conducting 'Life Design' Interviews. .
A Life Design Interview is basically meeting the person that has your 'dream career' for coffee. ☕

You find someone who is working at the company you want to work for, in the sector you want to work for or simply has a position you're interested in, and you reach out to them (LinkedIn helps). You ask about their story, their position, how they got to where they are and their advice to people starting out. 
This is what I've been doing for the past month in Edinburgh, and of the 40 people I contacted, I met 8 of them for coffee, my goal to simply learn about their story.

With an added bonus: Trust. ✅

Not only did I learn stuff about working in a startup, or as a content writer or working in an NGO, but I also built a trusted connection. It's those connections that help you find the hidden jobs, the dream careers and the best opportunities.

Check out FM's latest post for a proper run down on Life Design interviews. 💪 (Last week we organised the FI Europe podcast retreat! An amazing 4 days doing speeches, masterminds, debates, boat trips, beach and surfing. Post on this coming soon 🔥)
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #careerbuilding #skillbuilding #career #selfimprovement #inspiring #fieurope #lifedesign #interviews
Investing in yourself now will return bucket loads Investing in yourself now will return bucket loads in the future. 🔮

I talk a lot about this on Financially Mint - how taking the time to build career capital and explore career paths will allow you to find a career of best personal fit, which will then make you the money you need.

But it is true that I am personally at the very start of this journey, and so can't offer many examples of this working. 🤷‍♀️ Well today, this changes as I interview the Financial Gladiator, who did exactly that.

He went to university to study business in Poland, and finished his masters in Australia. In the meantime, he was doing internships, making connections, building skills and beefing up his portfolio. 
He says it himself: ' I always looked to add experience and skills to my repertoire rather than dollars' 💸.
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7 internships later in several different countries and industries and a lot of hustling, moving around and learning about what career fitted him best, FG ended up in a job that paid him a six figure salary. This kept on snowballing, and in his early thirties he hit a salary of over $500,000. .
That goes to show how much investing in yourself can return in the future.
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$500,000 annual salary doesn't need to be your goal, but it still goes to show that you'll make the bulk of your money after investing in your own career. 📈

A great interview filled with actionable career advice and FG's complete story, check out FM's latest blog post! (Edinburgh castle 🔥)
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #studentmoney #studenthacks #studentlife #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #careerbuilding #skillbuilding #career #selfimprovement #inspiring #work
Most of us don't know what we want to do in our tw Most of us don't know what we want to do in our twenties 🤷‍♀️. And that's absolutely normal.

But that's why we don't want to be committing to one thing - who know what you might want to do in 5 years? 🧐

Instead of committing, why not be exploring, investigating and testing career paths. But how can you do this cleverly without being a typical 'millennial-career-hopper'? By building career capital at the same time.

This means that every career test you do will help you build skills, connections and a more solid portfolio. If you have no idea where to start, here are some examples of jobs/activities that can help you build career capital:

1. Working for a growing organisation with a growing performance: this could be consulting, a startup - anywhere with a good mentor and team 👨‍👩‍👧‍👦
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2. Graduate studies - for those who want to work in research, a think tank, etc.
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3. Building a valuable and transferable skill - skills such as writing, programming, designing, data science, etc will always be useful in the future 💻
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4. Creating content - you don't always need a shiny piece of paper or a medal to show that you've done something. Creating your own thing can be just as useful.
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And much more amazing career advice... in FM's latest blog post 🤓
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(I’m running out of pictures to post so here’s one of a beautiful evening in Edinburgh) .
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#financiallymint #budget #budgeting #personalfinance #savinghacks #makemoney #savemoney #money #studentmoney #studenthacks #studentlife #shoestringbudget #moneyhacks #moneysavinghacks #financialeducation #financialfreedom #adulting #savingtricks #earnmoney #lifeadvice #counsel #careeradvice #retirement #investing #peoplemanagement #skillbuilding #career #selfimprovement #inspiring #work
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