Money

The Best Job

The Best Job To Have

Money Maroon

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need.

Your Early Career

It is highly unlikely that you will love your job early in your career. The fact is, for many of us, the first job serves a very specific purpose. First, to pay the bills and second, to gain experience. For the most part, you do not want to stay in the same passion for 5, 10 or 15 years. To learn and gain experience, a lot of what you  will be doing is grunt work. For your first few jobs, it is likely that you will be doing the tedious and repetitive tasks that those above you do not want to do.

As you gain experience, you begin to do more of the fun things. This could generically be strategy, interacting with clients, or running deals. But with more experience comes more money and responsibilities.

You Can Have Your Best Job In 10 Years Or Less

If you play your cards right, it will take maybe 10 years to get to your best job. If you work hard, save, live below your means and diligently invest, there is a high likelihood that in 10 to 15 years you can be financially free or at least be a good way there. 

Financial freedom brings the best. While it is great to be fully financially independent,  you do not need to entirely have financial independence to get the best job of your life. Imagine the following scenario. You have expenditures of about $50K per year. Over the first 10-15 years of your working life you happen to amass let’s say $500,000. Based on the 4% rule, if you are able to live on $20K per year, you are financially independent. 

Not many folks can live on $20K. But if you have $50K expenditure per year, and have cover for $20K because of the $500K you have, you really need only a $30K per year salary to make your expenditures. Which then means that if you do not like your job, you can get another one that you truly love so long as it brings home at least $30K per year. This is the benefit of having financial independence.

This calculation works at all levels. The more you save and invest, the less you rely on the job you have. Therefore, you can actually do a job that you truly like and be the absolute best at it. Further, with financial independence you have no need to put up with BS from superiors or colleagues. You are able to true do what you love.

Financial Independence

Generally, financial independence is when you enough money to live the life you want without income from a job. If you do not need to rely on a job and you are working, you will only continue to do that job if you actually love it. This is why one of the side effects of financial independence is that then you are able to have the best job.

Think about it. If you did not need the money from your job, would you continue to do it. If the answer is yes, the reason is typically that you actually love your job. You love the people you are working with and the work that you are doing. Here, it is not about the money.

On the other hand, if your answer is no, once you have financial independence or your are close to it, why continue to do work you hate. Quit and find something that you love to do. Life is short, you owe it to your self to spend the limited lime you have on this rock doing something that impacts the world and that you love to do.

Conclusion

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need. Financial independence allows you to do what you love.

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Financial Experts

Be Wary Of So-Called Financial Experts

Money Maroon

There is a reason why Warren Buffet said to be “fearful when others are greedy, and greedy when others are fearful.” The reason is simple, so-called financial experts do not necessarily know what they are talking about most of the time. In effect, it has been shown that a monkey can pick stocks better than a financial expert. Yes, a monkey is a better stock picker than an institution paid a percentage of your portfolio. If financial experts were foolproof, they would beat the market every year, but this is simply not the case. This is also the reason why index funds are the safest bet to have consistent growth over time. So-called financial experts of the stock market are typically no better than you and I at gaging what will happen next.

Stop & Think

In life, whenever a large group is running to the left, stop and ask why. Do your due diligence and investigate whether or not these individuals are going that way in view of reason or an irrational drive to follow the heard. In most circumstances, the answer is herd mentality. Someone with name recognition will make a statement, others will be too lazy to do their due diligence and instead parrot the earlier person’s statement. This then occurs over and over again and soon you have a group of individuals moving in the same direction without a concrete reason to do so. This is particularly problematic when the individuals that are irrationally moving are also in positions of power. You end up with irrational acts leading to longterm detrimental effects.

Economic Movements

Just think back. How many financial experts called the great recession? How many financial experts predicted the sustained bull market following covid lock downs? The answer is not too many individuals. If you go back and take a look, most so-called experts where shouting from the roof tops about a sustained bull market back in 2007. When covid-19 hit, many financial experts were calling for a massive recession as a result of the lock downs. In both cases, the opposite actually occurred. 

If experts are calling for a specific economic activity to occur, the more fervor they have, the more likely it seems that the event will not occur. When the majority is looking for a recession, there may be a dip, but just wait for the bull market. When the majority is calling for a bull market, it is only a matter of time before the market falls. The point is, it is your money that you are playing with, do your own due diligence. Make informed money decisions by doing your own investigation into the matters at hand. 

Do not be a lemming. Do not turn over your life savings to an expert and sit back in the hopes that they will do what is right for you. It is your money. No matter who you choose to manage your money, you should also play an active roll in the actions taken with your money and how it is allocated. If you do not take an active roll in your financial security, do no be surprise to find that your money is not being managed in the way that you would want or like.

Financial Experts

This is not to say that experts should be ignored. If qualified, they are experts for a reason. They have the requisite knowledge and qualifications. This is to say that while experts may know more than you do about a subject, you should still take an active role in your money management. Trust but verify. In the end, it is your money.

Conclusion

Warren Buffet said to be “fearful when others are greedy, and greedy when others are fearful.” The reason for this statement is simple, do not follow the herd. A blindfolded monkey beats humans with stock picks. As such, keep in mind that some financial experts do not necessarily know what they are talking about most of the time. Be an active participant in the management of your money. Trust but verify. Educate yourself and do your due diligence. Do not be a lemming when it comes to how your money is managed. Actively participate in the management of your money and your journey to financial independence.

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Video Summary

The racial wealth gap

Closing The Racial Wealth Gap

Money Maroon

You would have to be living under a rock to have not noticed or heard of the racial wealth gap in the United States. This article will not address biases or racism, implicit or explicit. The focus of this article will be on high level ways to address the racial wealth gap. More specifically, what can minority groups do to increase their wealth.

Racial Wealth Gap Explained

The Federal Reserve reports that “In the United States, the average Black and Hispanic or Latino households earn about half as much as the average White household and own only about 15 to 20 percent as much net wealth.” White households hold 87% of the wealth and account for only 68% of the population. Blacks account for 16% of the population, but owns only 2.9% of the wealth. Hispanics hold about 2.8% of the wealth and accounts for about 11% of the population. These numbers are very telling. 

A striking stat is that the 400 richest American billionaires have more total wealth than all 10 million Black American households combined.

On average, the net worth of a typical White family is about 10 times greater than the average net worth of a typical Black family. Based on some calculations, Black families are expected to have $0 net worth by 2053. The same is expected for Hispanic families just 20 years later.

All things being equal, we would expect the proportion of the population to equal the proportion of the wealth. This is however not the case. 

Wealth Building

To really look at the wealth gap, let us take a look at the wealth drivers in the United States. Huge wealth generation traditionally comes from entrepreneurship, ownership of real estate and stock market returns. 

To address the racial wealth gap, these three areas are prime targets.

Entrepreneurship

When we look at businesses, and entrepreneurship generally in the United States, Whites owns about 70% of businesses, Hispanics 14% and Blacks 6%. In view of the wealth statistics, this is not surprising. Additionally, for all the amazing work being done in the start-up space, less than 3% of total venture capital funding went to Black and Hispanic founders.

The industries that minorities operate in further exacerbates the racial wealth gap. Minorities generally own firms in the service and retail industry, many serving low-income and minority communities. Therefore, many minority enterprises have missed out and are missing out on the boom happening in the high skill sectors and the tech industry.

To combat the racial wealth gap, increase minority representation in entrepreneurship, the high skill workforce and the tech industry.

Stocks

On average, about half of Americans are investing in the stock market. For the most part, stock ownership is highly concentrated in the upper class and the highly educated. Greater than 90% of those in the top 10% based on income owns stocks. Looking at the top 10% in wealth, 94% of those individuals own stocks. Minorities are not well represented in the top 10% in wealth and income.

Looking at the racial breakdown, about 64% of Whites own stocks. Only 35% of Blacks and 24% of Hispanics owns stocks. Looking specifically at wealth, for Whites, 24% of assets are in the stock market. On the other-hand, only 13% of Blacks and 10% of Hispanics’ assets are in stocks. This have huge implications. 

What this states is that over the past decades of growth in the stock market, minorities participated less and have less of their funds in the stock market. The end result is that minorities have reaped and continues to reap significantly less benefits from the stock market boom. The losses are significant. 

Therefore, to close the wealth gap, increase minority participation in the stock market.

Real Estate

You cannot approach the effects of real estate on the wealth gap and not appreciate the effects of governmental policies such as redlining. The past policies of redlining have detrimentally affected the wealth of many in the United States to the benefit of others.

Today, Americans have a home ownership rate of about 65%. However, 73% of Whites own the home they live in. Only 48% of Hispanics and 42% of Blacks own their homes. But owning a home is not enough. Where you live matters. The value of the home you own matters. For minorities, it is a double whammy. Not only do minorities own less homes, minorities homes are less valuable.

It is no secret that home prices have been on an astronomical rise since the housing crash of 2008. Based on the above, this raise in prices and in turn equity benefits those who own, more specifically those who own high priced properties. 

To close the wealth gap, increase real estate ownership in minority communities.

Conclusion

To close the racial wealth gap will take a multi-pronged approach and it is a more complex issue than we have addressed. We have not addressed the effects of slavery, and Jim Crow segregation. We however, identify three areas that are the foundation for wealth generation in the United States. These areas are entrepreneurship, ownership of real estate and participation in the stock market.  By increasing minority participation in these areas, we can begin to address the racial wealth gap.

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Video Summary

Just say no

Now, Just Say No

Money Maroon

When was the last time that you suck it up and just say no to your children? As we move toward the next year, again we enter the season of spending. One of the major driving force behind the excessive spending during this time of the year is the effort to please our children. However, spending money that you do not have not only hurts you, it also hurts your children. By saying no and living within your needs, you will be teaching your children delayed gratification, self control and impact their future for the better.

Saying One Thing And Doing Another

It is always amazing how the same folks who announce that they do not have the funds typically have the latest and greatest. It is amazing how the co-worker who is struggling financially has the required funds to take a vacation. It is also interesting how not only do they have the latest toys and gadgets, but so do their children. Where are they getting it from? 

Let us not speculate. However, it does offer an interesting view into other people’s habits. This is not new, the act of saying one thing, yet doing another. With this in mind, why are we surprise when our children act in a similar manner?

Just Say No To Your Children

It is always difficult to tell our children no. It is difficult for us to punish them. However, at a certain point we must perform our roles as parents for their growth and development. Just as you work with your children with their school work, teaching them how to play a sport or how to be a contributing part of society, so must we say no when it is required.  Financial literacy should be apart of their development.

In the holiday season, just say no. Whenever you are asked to spend what you do not have, just say no. We understand that this is easy to say but difficult to do. This is especially the case when your children have friends who are receiving the new and latest toys. In some cases we satisfy our children’s wants to prevent a tantrum or a melt down. For many parents, it is also a matter of ensuring that their children fit in socially. However, if we are teaching our children to have what others have no matter the cost, financially and otherwise, are we really doing them a service?

If our children’s friends have the newest and most expensive phones or other electronic devices, should your children also have those items? If you cannot afford it, you must have a conversation with your children. It may be the most opportune time to discuss money and how money works.

saying no
saying no

Think Long Term

If we are purchasing material items that we cannot afford, we are not only putting our financial future in jeopardy. Our acts are also putting our children’s financial future in jeopardy as well. We are essentially teaching our children that they can purchase things that they cannot afford.  Do not be surprise by our children’s decision to put things on credit and overspend in the future. Note that our children are watching. Our children model their behaviors after what they see and hear. Believe it our not, we can have a huge influence on their future spending habits. Consider the current state of finance today, it is no wonder we have so many finically illiterate folks. 

Let us make our children’s financial literacy apart of what we are teaching. Let us act as parents. Like with school and so many other tasks, we are the parent and not your children’s friend. Let us aim to try and find a way to teach them such that they can in the future be better than we are. Let us give them the tools to make better decisions.

Conclusion

When was the last time that you suck it up and just say no to your children? As we move toward another year, again we enter the season of spending. One of the major driving force behind the excessive spending during this time of the year is the effort to please our children. However, spending money that you do not have not only hurts you, it also hurts your children. By saying no and living within your needs, you will be teaching your children delayed gratification, self control and impact their future for the better.

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Father's Day

Have The Father’s Day Money Talk

Money Maroon

For father’s day, instead of falling into the commercialization trend, let’s make our fathers proud. Have a father’s day money talk. This talk will not only impact your father and show him that you are thinking about his future, but will also help you organize yourself to better care for him.  Buying shirts, cards, or tools is a nice gesture. But having a financial chat with dad is impactful. Be impactful on this father’s day and show dad how much you truly care.

The Sacrifice

On this father’s day, remember the financial sacrifices that your father has made over time. Think back to how much your father worked and his pains. Yet, he continued on. While you are at it, it should become very clear why some people stay at jobs that they hate. At times, some people will stay at jobs that they hate in the name of love and responsibility. He did it for you.

Father’s Day And Financial Education

Many have the luck of having a dad that inspires. For some, this is manifested in financial success or the search for financial success based on lessons learned. For example, save, invest, live below your means. It may be in the form of literal education or an education based on observation. Was it his struggle or was it his drive and position as an authoritative figure who did what was best for the family that motivates you to become financially independent? For some, it was the unfortunate mismanagement of finances that provided the teaching lessons that motivates today. Whatever your reason, I am confident that your father contributed and continues to contribute to your reasons for reading a financial independence blog and this article.

While your father may not be your biological father in the context of the man who took care of you, we all have a father, show him that you care.

Father's Day
Happy Father’s Day

Having The Father’s Day Talk

With all that your father has done to influence your financial life, it is time to have a father’s day money talk. Check on his current financial situation and his future plans. Although it may be difficult to talk to family about money, it is important to start.

Previous generations had the now acclaimed three legs to their retirement stool: (1) personal savings, (2) social security and (3) a company pension. Over the years, the three legs have been significantly weakened.

First, many have very little to no personal savings; second, as it currently stands, the social security program is teetering on the edge of insolvency; and  third, for the most part, company pensions are a thing of the past. Taken together, the baby boomer generation have little saved for retirement, no pension plan and are dependent on social security. This is the reason for the talk.

The Talk

To have the money talk with dad, there is no reason to be aggressive. Do not forget that it is father’s day. If you approach your father’s finances aggressively, your father is likely to get defensive. The point here is to begin a conversation or continue the conversation such that you know where your dad is financially. More importantly, these conversations will aid your financial planing.

We cannot control what another person does, especially our parents. However, if we can make them aware of potential issues that may be on the horizon, maybe they can and will take action to change course. 

The fact is, you as the child may be responsible for your parents during retirement. It is important that you begin taking steps to mitigate the impact on your financial future by talking to your dad this father’s day. 

The Best Father’s Day Gift

For most of us, as adults, it becomes a struggle to get the perfect gift for dad. Guess what, you have most likely provided a lot of his material wants over the years. There are only so may cruises, trips, tools, shirt or gadgets that you can gift dad. At this point, the best father’s day gift may be just showing that you care by having an important conversation. Instead of gifting something that will be used for only a day or a month, have an impactful financial conversation.

Conclusion

For father’s day, instead of falling into the commercialization trend, let’s make our fathers proud. Have a father’s day money talk with dad. This talk will not only impact your father and show him that you are thinking about his future, but will also help you organize yourself to better care for him.  Buying shirts, cards, or tools is a nice gesture. But having a financial chat with dad is impactful. Be impactful on this father’s day and show dad how much you truly care.

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Summer time

Summer Time Is Money Time

Money Maroon

It is summer time again. While this time of the year is not packed with costly holidays where you risk over spending to impress another with presents, be careful. Summer can easily become a time of the year where you overspend. Summer is the time for grilling, summer vacations and out door activities. In a year of pent up demand for leaving home, the costs of this year’s summer time activities can add up very fast. Stay focus and keep your financial goals in view.

Vaccines And Summer

With covid19, the summer of 2020 was unlike any other. For the most part, we all stayed in and only mingled with those in our household. Not a lot of traveling, and not a lot of vacations. Lots of unintentional savings were made in 2020 as we spent significant time with our immediate families. For some, financial plans were derailed because of loss jobs. However, this year is a bit different when compared to last year. With the roll out of covid19 vaccines, we are moving closer and closer to normal. Mask mandates are relaxed and traveling is picking up.

As we return to normal, so will our spending. Our overspending will also likely return to  normal or accelerate. With more to spend and the deviation from the norm that was 2020, it is only natural for us to want to get back out there and enjoy this summer. But this can get very costly.

Sumer, put your feet up
Summer Time – Money Time

Cost Of Summer

If you are planning to travel, I would encourage you to take a look at airline fares and plan ahead. Travel related prices have increased significantly. While the airline industry lost  billions last year, you better believe that they are looking to profit this year. Further, with increased demand, it is likely that your travel costs will be significantly more expensive than years prior.

Hotels, are operating similarly to airlines. This year, there will be increase demand compare to 2020. Many families will try to hit the road and get out and away from home.  Overall, supply may be lower because of those business who have gone out of business due to covid19, but demand will significantly increase over last year. As supplies decrease and demand increase, prices will also increase. Further, take into account that hotels will try to make up for last year’s short fall and you will be paying a heavy price.

Now, if you are not traveling and want to stay home, the cost of meats for grilling has increased, the price of gas has increased. Again, because a number of business went out of business because of covid19, the supply chain has been disrupted. Again, the law of supply and demand means as we go back to normal, prices will rise as demand rises.

Save This Summer

You have survived covid19 and for the lucky ones, you have saved if you were able to keep employment. As we return to normal, do not forget your financial goals. While your financial goals may have been derailed or accelerated in view of the covid 19 pandemic, do not lose focus. Your actions today will be amplified tomorrow. The financial decisions you make today will affect your finical life in the future. Take steps today to rein in your spending and continue on a journey to financial independence.

If you were able to save during 2020, save during 2021. Do not stop. Maintain or increase your saving/investing rate. Know that  you are in control and if you were able to do it in 2020, you can do it in 2021. You are in control.

Conclusion

It is summer time again. While this time of the year is not packed with costly holidays where you risk over spending to impress another with presents, be careful. Summer can easily become a time of the year where you overspend. Summer is the time for grilling, summer vacations and out door activities. In a year of pent up demand for leaving home, the costs of this year’s summer time activities can add up very fast. Stay focus and keep your financial goals in view.

Life is what you make it. If you were able to take the steps to survive covid19, this summer, take the steps to secure your financial future and achieve financial independence.

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Pay yourself first

It’s Best To Pay Yourself First

Money Maroon

If you are working and cannot afford to save, it may be time to take a step back and pay yourself first. From any pay check, no matter the value, it is incumbent upon you to ensure that a first portion of your pay check goes into your personal account. If you cannot trust yourself to perform this task consistently, automate. The simple fact is, if you are not paying yourself,  you are working to pay others. You are essentially building another person’s empire while neglecting your own.

Why Pay Yourself First

You should pay yourself first because if you do not, you run the risk of not paying yourself at all. Have you ever received a paycheck and after paying all your bills, you have a zero or a negative balance? Have you had money in your account after paying your bills, and that money quickly disappears due to frivolous spending? 

These situations occur when you do not pay yourself first. If you do not pay yourself first, it is likely that you will end up not budgeting and over spending, or you will simply spend what you have because you have not assign a task to that money.

By paying yourself first, it forces you to budget. For example, if your monthly salary is  $5000, and you automatically pay yourself by saving $1000, you really have $4000 to spend for that month. That $1000 makes a huge difference. You will no doubt adjust to having $4000 and will stop thinking about making $5000 per month. By having this mindset shift, you will live on $4000 and not $5000. By paying yourself first, you will force yourself to live below your means and budget accordingly.

Pay yourself first
If you are not paying yourself first,  you are working to pay others. Stop building another person’s empire while neglecting your own.

Force Budgeting

For many of us, budgeting can be difficult. It is difficult not because it is a mentally difficult task. It is typically difficult because if forces us to track our spending over a long period of time. Budgeting forces us to itemize what we are doing and forces us to be conscious of every purchasing decision. 

By paying yourself first, we are pushed to budget without actually making a budget. In the example above, if you are paying yourself $1000 per month on a $5000 monthly salary, you must now live on $4000 per month. You are in a force budget situation. You are forced to curb your lifestyle from one that spends $5000 per month to one that spends $4000 per month. This is not an easy feat for many, but it can be done. By cutting out a few items, you will be surprise by how much you can save.

If you do not budget and live beyond your means, paying yourself first becomes a moot point. The interest on your debts will easily out pace your savings. To get ahead on your financial journey, it is important to live below your means. Paying yourself first helps facilitate this mindset change.

Pay Yourself First And Build Your Empire

Let us not forget, if you pay yourself first, you are building your financial legacy and not someone else’s. Think about shopping at Walmart, buying a car, or any other consumer goods, by making that purchase your are making someone else’s family rich. If it is not the Waltons, it’s the Porsche’s or the Cargill’s, by spending you may be enriching the Dell’s or the Knight’s. You may get a fleeting enjoyment from your purchase, but someone else’s family just got your money. Your temporary satisfaction is building another family’s permanent wealth.

However, if you pay yourself first, your are building your own empire and not someone else’s. Pay yourself first and you are growing wealth. Money that you typically spend on consumer goods go to your investment/savings account. You are growing, you are opening up opportunities and will be afforded all the advantages that comes with being financially secure. Pay yourself first and lay the foundation for a financially secure future.

Conclusion

If you are working and cannot afford to save, it may be time to take a step back and pay yourself first. From any pay check, no matter the value, it is incumbent upon you to ensure that a first portion of your pay check goes into your personal account. If you cannot trust yourself to perform this task consistently, automate. The simple fact is, if you are not paying yourself,  you are working to pay others. You are essentially building another person’s empire while neglecting your own.

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Billionaire

The Billionaire And You

Money Maroon

The word billionaire is thrown around daily. But have you actually stop to think about what it really means. Yes, being a billionaire is having more than being a millionaire and who would not want to be that wealthy. But by comparison, what is the billionaire status compared to the average person. When you look at a comparison, it is truly mind boggling.

The Billionaire Compared To The Average Person

To get a full and clear understanding of what it means to be a billionaire, let us compare to the average household. In this comparison, we use the median household income because the median provides a better representation of central tendency as compared to the mean. Essentially, the median income gives us a better view of the average household income because the mean can be skewed by those in the super rich/super poor.

The median household income was $68,703 in 2019. In most parts of the US, the cost of rent/mortgage + child care would easily exceed this amount. But let us put this total in the context of a billionaire. If we do the simple math of $1 billion divided by $68,703, it tells us that it would take a person/family making $68,703 a year 14555 years to earn $1 billion. To be clear, it would take a household making the median income over 14 thousand years to earn a billion dollars. This is absolutely eye opening.

This further demonstrates why it is so financially dangerous to try and keep up with the Jones. The wealth disparity between you and the Jones can be so vast that it can take thousands of life times to amass comparable resources.

Billionaires

When we talk about billionaires, we must acknowledge those who have risen to this level of wealth. This includes Jeff Bezos, Elon Musk, Mark Zuckerberg, Warren Buffet and Bill Gates. These individuals have done extraordinary things and do deserve their wealth. But you can’t help but ask, when is enough, enough? With such accumulation of wealth, what is the plan? We know that if these individuals try, it would be a monumental task to try and succeed in spending all this money. No matter the interest rate or the return on investment, a billion dollars will accumulate so much on a yearly basis that it is really almost impossible to dispose of such sums of money. Not too many billionaires go broke.

Billionaire Fortunes Since The Pandemic

As our conversation about billionaires continue, it becomes factually crazy that many of these individuals have increased their wealth during the pandemic. For example, Jeff Bezos is reported to have increased his wealth by about $70 billion and Elon Musk has reportedly increased his wealth by about $132 billion. While the math is simple, the more you have the more you can make, it is mind blowing to imagine the difference between someone of Jeff Bezos’s wealth and that of the median household. It is a matter of $187 billion vs $69 thousand ($187,000,000,000 vs $69,000). The difference is a lot of zeros.

While the average household is thinking about mortgage/rent and child care, billionaires are thinking about legacy. And why not, the financial difference is truly a sight to see. The simple fact is, the purchase of a mega yacht to a billionaire may be comparable to you purchasing a shoe. While the cost matters, it does not change your life financially. Keep this in mind the next time you hear of someone purchasing a mega yacht, helicopter or an island. The billionaires can afford it.

Billionaire
I want to be a billionaire, don’t you?

Conclusion

The word billionaire is thrown around daily. But have you actually stop to think about what it really means. Yes, being a billionaire is having more than being a millionaire and who would not want to be that wealthy. But by comparison, what is the billionaire status compared to the average person. When you look at a comparison, it is truly mind boggling.

So why did we write this article. We wrote this article to show that we sometimes do not truly appreciate the sums of money that we discuss on a daily basis. It is only when we break it down and compare do we begin to see the full scope. Next time you hear/see the term “billionaire” realize that it would take the average household over 14 thousand years to earn that sum. 

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Wealth vs Rich

Wealth vs Rich: Do You Know The Difference?

Money Maroon

We throw the words “rich” and “wealthy” around on a daily basis. But have you stopped to think about the differences between the two words? Have you really thought about what it means: wealth vs rich? Which would you rather be, wealthy or rich? Your answer to these questions provide an instant reflection on your true understanding of these words.

Wealth vs Rich
Wealth vs Rich

Wealth vs Rich

Daily, you will hear someone say that they want to be rich. This person may even be you. However, rarely will you hear the pronouncement “I want to be wealthy.”  Why is this the case? I suspect that most people use these words rich and wealth interchangeably. Further, most folks are familiar with the term “rich “ and as such, they use the term as a default.

But the terms are not the same, and should not be used interchangeably. One of the biggest error people make is not noticing the subtle difference between being rich and being wealthy. Wealth vs rich, you must know the difference.

By Definition

According to Merriam Webster’s online dictionary, rich is “having abundant possessions and especially material wealth.” Notice that that definition says nothing about time and can but not necessarily reflect value. As such, you can be rich but financially poor. However, wealth according to Merriam Webster’s online dictionary is “abundance of valuable material possessions or resources.” Do you see the difference? The difference is the term “valuable.” It is a matter of having abundant possessions vs having an abundance of valuable material possessions. Which would you rather?

Wealth vs Rich, Know the difference
Wealth vs Rich, Know the difference

Value

Based on the definitions provided, to be rich you necessarily need an abundance of possessions. However, these possessions need not have value. As such, I may have my riches in air, ice or grass for example. All of which have little value in today’s economy. To be rich, your riches need not project great financial value. 

Wealth, on the other hand, is by definition an abundances of valuable possessions or resources. To be wealthy, you must have possessions rich in value. 

So again I ask the question, wealth vs rich? I hope that by this point your aim is to be wealthy, to have possessions rich in value. This may be reflected in your time, or a material possession such as money or property. But, on a basic level, aim to be more than rich. So stop saying that you want to be rich and instead tell the world that you want to be wealthy.

Conclusion

We throw the words “rich” and “wealthy” around on a daily basis. Think about what the words truly mean: wealth vs rich. If you really appreciate the differences between the two words, you will stop saying that you want to be rich and instead proclaim that you want to be wealthy. Aim to be wealthy and have a richness of value on your journey to financial independence.

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