You probably read blogs like Mr. Money Mustache that say the best way to get rich is by saving money. I believe that’s so wrong it makes me laugh. The thought that saving money is “wiser” than making more money or borrowing the “right” kind of money… wow. That’s like saying braking during a race is more important than accelerating. If you have massive brakes but a tiny engine, you’ll never win.
You Can Make Good Money but You’ll Never Become Rich
Now, I enjoy the Mr. Money Mustache blog. I would even say I’m a quasi-Mustachian. But good ol’ Pete says a person should work a 9-5 for about 10 years and then retire rich. If you didn’t already assume, I’m laughing again right now.
Even if you hoard all your money like Mr. Mustache did, you can’t become rich. You can make a good income and maybe even retire comfortably. To create an impressive treasure chest, you’ve got to think bigger.
The Problem with a Day Job
Most people are oblivious to the obvious problem with working for someone else. I suppose it’s because people are accustomed to the rat race. Their parents were rats (sounds horrible), so they will be rats.
The obvious problem with this is that you are trading time for money. You may as well be a slave. Hence the term ‘wage slave’. You only have a finite amount of time. You need to earn a massive amount of money every hour of the day in order to become wealthy.
There’s a less obvious problem than the clock. The second problem is that you’re providing more value to someone else than you are receiving yourself. That’s the only way someone can afford to employ you. You must make more money for them than they are paying you. This means you’re always coming in second.
Taxes are another concern. Being self-employed can cost more in taxes but it’s not always true. For smart people, it’s never true. For instance, my parents own a farm. The farm owns their house, car, pays for their groceries, etc. This means they don’t need to draw a large salary and are thus are taxed personally at a low rate.
How to Get Rich
This is meant to be a happy post! So now I’ll get onto talking about how you can get rich!
Of the top 400 richest people in the United States, only 8.6% earned their income through wages and salaries. Even if you’re a tech employee, banker or doctor, you still can’t get rich (proof). You’re best bet is to become self-employed – or be one of the 8.6% who are probably drawing a salary from a company they own.
40% of employees want to start their own business. A primary reason they want a business is so they can pursue their passion. What I really believe is that creating wealth is a byproduct of doing what you love.
Without passion, a business won’t succeed. But once you have passion, everything else can fall into place.
I left my 9-5 at age 24 to pursue my passion. I will be rich someday. What I teach is what I believe.
If you want to get rich as well (and not merely “getting by” or “comfortable”), you have to think differently from the masses.