Category Archives: Building Wealth

Rich vs Wealthy

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Being Rich vs Being Wealthy

Wealth is often hidden and not as visible as riches which can be flashy and showy.

In the book “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”, authors Thomas J. Stanley and William D. Danko reveal that many millionaires live modest lifestyles and don’t flaunt their wealth. They call this “stealth wealth” and it’s a way for millionaires to avoid drawing attention to themselves and their wealth.

The difference between being rich and being wealthy, according to Kiplinger Magazine, is being rich means adding more zeros to your bank account while being wealthy is about living your life with zero regrets and zero jealousy.

In terms of net worth in the US in 2022:

The top 1% had a net worth had of $10,815,000.

The top 2% had a net worth of $2,472,000.

The top 5% had $1,030,000.

The top 10% had $854,900.

Source:
(1) Are You Rich? U.S. Wealth Percentiles Might Provide Answers. https://www.kiplinger.com/personal-finance/605075/are-you-rich.
(2) Being Rich vs. Being Wealthy: What’s the Difference? | Kiplinger. https://www.kiplinger.com/personal-finance/being-rich-vs-being-wealthy-whats-the-difference.
(3)The Millionaire Next Door: The Surprising Secrets of America’s Wealthy ….

Investing Lessons Re-Learned

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Recently, I came across a story that is both sad, but worth sharing in case somone else might learn from an investor’s mistakes and avoid repeating them. Here’s a summary of the story:

A investor was convinced by a coworker to invest in cryptocurrency, but unfortunately, they ended up losing around $20,000 before deciding to sell and cutting their losses. Then, they took the remaining money and put it into a popular stock (LCID), only to lose an additional $12,000.

In just two months, they blew three years worth of their savings.

Here are the lessons for readers to learn:

  • Do not invest in things that you don’t fully understand.
  • Just because someone has a good track record doesn’t mean you should blindly trust them with your money. Do your own research and carefully consider your options before making investment decisions.
  • Slow and steady, and thinking long term wins the race.
  • Behavior matters a lot. Morgan Housel, the author of the book “The Psychology of Money: Timeless lessons on wealth, greed, and happiness”, said that, “Doing well with money has a little to do with how smart you are and a lot to do with how you behave.”

Top Five Regrets of the Dying

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Bronnie Ware, an Australian palliative care nurse, recorded patients’ dying epiphanies and put her observations into a book called The Top Five Regrets of the Dying.

Ware wrote of the phenomenal clarity of vision that people gain at the end of their lives, and how you might learn from her patients’ wisdom. “When questioned about any regrets they had or anything they would do differently,” she says, “common themes surfaced again and again.”

Here are the top five regrets of the dying, as witnessed by Bonnie Ware:

1. I wish I’d had the courage to live a life true to myself, not the life others expected of me.

“This was the most common regret of all. When people realize that their life is almost over and look back clearly on it, it is easy to see how many dreams have gone unfulfilled. Most people had not honored even a half of their dreams and had to die knowing that it was due to choices they had made, or not made. Health brings a freedom very few realize, until they no longer have it.”

2. I wish I hadn’t worked so hard.

“This came from every male patient that I nursed. They missed their children’s youth and their partner’s companionship. Women also spoke of this regret, but as most were from an older generation, many of the female patients had not been breadwinners. All of the men I nursed deeply regretted spending so much of their lives on the treadmill of a work existence.”

3. I wish I’d had the courage to express my feelings.

“Many people suppressed their feelings in order to keep peace with others. As a result, they settled for a mediocre existence and never became who they were truly capable of becoming. Many developed illnesses relating to the bitterness and resentment they carried as a result.”

4. I wish I had stayed in touch with my friends.

“Often they would not truly realize the full benefits of old friends until their dying weeks and it was not always possible to track them down. Many had become so caught up in their own lives that they had let golden friendships slip by over the years. There were many deep regrets about not giving friendships the time and effort that they deserved. Everyone misses their friends when they are dying.”

5. I wish that I had let myself be happier.

“This is a surprisingly common one. Many did not realize until the end that happiness is a choice. They had stayed stuck in old patterns and habits. The so-called ‘comfort’ of familiarity overflowed into their emotions, as well as their physical lives. Fear of change had them pretending to others, and to their selves, that they were content, when deep within, they longed to laugh properly and have silliness in their life again.”

References:

  1. Susie Steiner, Top five regrets of the dying, The Guardian, February 1, 2012.  https://www.theguardian.com/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying

Faith is You Imagining a Higher Purpose

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Let me, Tony Robbins, ask you a question:

Do you believe that there’s something greater, something beyond ourselves?

Whatever you want to call that —God, or the universe, or infinite intelligence, or the divine mind, or energy—I truly believe God is a loving energy. And I believe that it only responds to absolute FAITH. Another word for absolute CERTAINTY.

I’ve seen in every aspect of life—whether its sports, performance, relationships, health—bringing certainty, a faith beyond what you see, to a situation that is uncertain, is one of the greatest resources you can have.

And of course, there are still no guarantees in life.

There’s always a test of faith. Every one of us, regardless of your age, gender, wealth or lack thereof, every one of us will be tested in ways we’re not ready for, multiple times, true or false?

Life tests us to see if we can find certainty in uncertain times. And the ultimate certainty is not that you get what you want. The ultimate certainty is the FAITH that life is benevolent, even when it looks like it’s not. It’s trust & patience to give it time to show us. It’s knowing that somehow everything has a higher meaning.

And I believe it’s our job to find it… If we can find the higher meaning in the midst of our pain & in spite of our fear, we become a source of love & inspiration for others. A source of certainty & safety for others, and that strengthens us for our own journey and service.

Life is always happening for us. If you develop that level of faith, you have an advantage in this game. We don’t get big muscles from the easy stuff. We become more because we’ve been through life’s difficulties.

So what’s the difference between fear & faith? Well, they are both made up—they are both energies in our imagination. The only difference is, FEAR is imagination undirected, running to the worst case scenario. FAITH is when our imagination is directed to higher purpose.

So, I choose faith. When you realize grace is always there, no matter what the outcome, that gives you a different level of faith in life itself, & a different love & appreciation for life and for every day we get on this earth.

Mindset and Financial Freedom

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Your mindset is a set of beliefs that shape how you make sense of and the filter through which you see the world and yourself. It is composed of your beliefs, attitudes, emotions, and perceptions that inform your thoughts, habits and decisions. It influences how you think, feel, and behave in any given situation. It means that what you believe about yourself impacts your success or failure.

Mindset encompasses both your conscious and unconscious thoughts as well as how you view yourself. Your mindset determines how you spend your time, who you spend your time with, what decisions you make, and where you invest your resources (time, talent and treasure). “The most important opinion you have is the one you have of yourself, and the most significant things you say all day are those things you say to yourself, “ argues author and self-help guru Zig Ziglar.

Choosing not to spend money on goods or services you ‘want’ when you have the financial means to do so is a transformative change in mindset.

A positive financial mindset sets you on a path towards greater aspirations, such as achieving financial freed or retiring early. By prioritizing your financial health through savings over frivolous spending, the opportunities available to you become limitless.

 

Go For It

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“What will you create? Whatever it is, run after it like we [Nvidia] did. Run. Don’t walk.

Remember: Either you’re running for food, or you are running from becoming food!

And oftentimes, you can’t tell which. Either way, run.”

Jensen Huang, the founder and CEO of Nvidia. He encouraged students to be agile for the opportunities brought by the AI revolution, to have the humility to admit failure and ask for help as well as to endure the needed pain and sacrifice for realizing their dreams in his commencement speech at National Taiwan University (NTU) on May 27 in Taipei.

Popular Financial Advice

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Here are some of the most liked comments for personal finance:

  1. Most money issues have less to do with saving and investing money, and more to do with your mindset, your lack of patience and discipline, and your poor financial behavior and literacy. Too many people focus on what’s shiny rather than actually thinking long-term.
  2. If the housing prices where you live are too expensive and keep you from saving/investing money for the long term, you need to move and reduce your expenses.
  3. You should be able to enjoy your money. Once you have built strong financial habits and your saving/investing 20%+ on a monthly basis, you should take the vacation or buy the car you have been wanting (as long as you are able to pay with cash and still hit savings targets/sufficient emergency fund). Some focus too much on minimalism that they forget to enjoy life in the process. No one is guaranteed tomorrow!
  4. The most important financial decisions you make is who you marry and building wealth over the long term.
  5. Debt, taxes and excess spending destroy wealth. 
  6. You should spend less money than you earn.  Living within your means is crucial for financial freedom. Avoid debt by spending only what you’ve already earned, and prioritize saving and investing. This mindset promotes discipline, reduces stress, and sets you on a path to a financially secure and prosperous future.
  7. You should have an emergency fund for the unexpected expenses that will arise.  
  8. Utility bills are debt and a liability. Treat them that way. Get an asset to pay them.
  9. Don’t focus all your time, talent and treasure on investing by sacrificing living. There’s a lot more to invest in than finances. Be smart and plan for your future, learn from the past, and enjoy today. The most valuable asset you have is your time and your health, The only time that is guaranteed was yesterday. And, your health is an essential aspect of wealth.
  10. Patience is essential when investing in order to build long-term wealth. Markets are volatile in the short term, but staying the course and maintaining a disciplined approach will often lead to the power of compounding returns and greater rewards. Trust the process and watch your wealth grow.

The rich and the wealthy have different mindsets regarding building wealth. The rich and others think about how to make money, while the wealthy think about how to keep it and managing risk.