After 8 years of writing this blog, I decided to write a post borrowing our title: How to Become Rich?
No, it didn’t take me 8 years to figure out what it takes to achieve wealth, but it did take me time to come to my current view of money.
I certainly think differently from a few years ago. I haven’t changed my mind, but my thinking has evolved.
Already in 2009, I had written a post on the meaning of wealth, but at the time I did not understand what to do to achieve my goal.
Today, however, I see very clearly that being rich does not mean having 1 million, 2 million, 10 million, or simply a lot of money but:
- Earning more money than you need to live ;
- Having investments or activities that produce income even when we sleep or are on vacation;
- You don’t necessarily need to work and have your own time.
One of my bosses told me one day that he realized he was rich when he stopped counting how much money he had.
The obsession with money does not generate anything because it only increases the desire to accumulate new money. I still count my money, but more and more automatically and thinking about the above objective.
So let’s see if you are on the road to wealth.
# 1 – Earn more money than you need to live
I’ve always been pretty good at math and believe me the calculation here is very simple: Income – Expenses = Savings.
To become rich you have to spend less than you earn and be able to save constantly and importantly.
We all want many things, but to feel good and have a balanced relationship with money, learn to save and put your expenses at a lower level than your income.
Do you want to spend more? Do you have so many needs that you cannot satisfy?
You don’t have to get into debt or despair, just earn more and keep your savings% unchanged.
# 2 – Create activities that go automatically
No innovative activities are needed, even traditional investments are enough to ensure that the accumulated money does not lose value, but rather generates it again.
Investment in real estate or financial instruments is for us.
Surely money under the mattress is not a solution.
Prudent investments, on the other hand, magically generate new money that can be spent or reinvested according to the criterion of compound interest.
# 3 – Stop working when you want
Being able to do what you want is not an option for everyone.
Tomorrow I could not stop doing the work I do because I have a mortgage, two children, and above all because I would not have the money to meet my needs.
This does not mean that I do not cultivate alternatives and that I aspire to free myself from this obligation before retirement.
Do I think I can do it? YES
When? According to my calculations by the age of 50.
It doesn’t necessarily mean that I have to stop doing what I do because I like it, but being able to think about changing my life is a stimulus and a demonstration of having become rich.
To do this you must have passed points 1 and 2 and be clear about what you want to do in your life, how much you need to live, and how much those around you need.
Above all you must be free from the desire to have more and more money and fall into the trap well described by Arthur Schopenhauer:
“Wealth is like seawater: the more you drink, the more thirsty you are”
In conclusion, are you ready to get rich? You can do it and set this realistic goal but the sooner you start, the sooner you will be able to achieve it.