This truth is self-evident: it sucks to be poor. I mean, it sucks so obviously that even the kids know it.
I’ve felt poor many times in my life. When I was little and I desperately wanted a Barbie. When I was graduating high-school and didn’t want to go to prom because dressing up would be too expensive. When I was in university and only came home once in 6 weeks because that’s how long I needed to save for the train. When my dad died and I had all this debt to pay back.
I’ve been thinking a lot about the ways we spend our money lately. And I came to wonder how we look to other people.
If you look at me in my casual, slightly worn-out clothes on my way to the grocery, and you notice the wind playing with the cloth bag in my hand, you’d think I don’t look very classy. You’d see old trainers on my feet, and maybe you’d catch a glimpse of my shopping list as I put it in my pocket – a shopping list that’s written on the back of a calendar sheet reading “GUST”. (When I tear off calendar sheets, I cut them into really small pieceds and then staple the little ones together to later use for notes… or shopping lists.) Judging by what you saw when I walked past you, you’d think I look like someone who counts the pennies in their hand. (Which I do.)
Let’s say you follow me to the store and watch me shop. You’d see me regularly check my shopping list and only take the items which go there. Those would be things like meat, fruit, white cheese, bread – and usually no potato chips, instant meals or pre-cooked food. In other words, I only buy meal ingredients, stuff that’s used for cooking and no junk or lazy food. Seeing that, you’d again think I look like someone who is… well… poor.
The phrase “The rich buy assets, the poor buy liabilities” became famous with the book Rich Dad Poor Dad as it was one of the lessons Rich Dad allegedly taught to author Robert Kiyosaki. The book is a worldwide bestseller, but it’s been criticized on many of the points it advocates.
I’ve been thinking about that phrase – Rich buy assets, poor buy liabilites – I’ve been thinking about it quite a lot. Especially since our newlywed money and finance is not in a great shape. Is the secret key to getting rich that simple – just buy assets instead of liabilities?
It makes perfect sense to put your money into stuff that pays you back – like a rental property or a stock portfolio; investing is all about putting money into stuff that will help you make more money later. But us humans are so gullible! We have a hard time saying “no” to that seductive, shiny, brand new flat screen that is way cooler than the flat screen Peter bought last month (and made rounds at the office bragging to everyone about it). So we buy it and do a little Tarzan-style victory dance in front of Peter’s desk. Take that, Peter!
According to Kiyosaki, the rich invest their money by buying things called “assets” – things that put money in your pocket like rental properties or stock portfolios. The poorspend their money on things called “liabilities” – things that are basically money-pits and never put money in your pocket. Like that flat screen we were eager to rub in Peter’s face.
After I googled “should I start a business,” it felt like the whole internet was trying to persuade me that indeed I should; that whatever job I had couldn’t possibly be better than running my own business, and that if I wasn’t working on a start-up already then obviously I had to “stop making excuses.”
My husband and I like the idea of having our own business one day. But currently, starting a business right now is not a good idea. We don’t have the money, and with a baby girl coming in Jan 2014, we’ll have a lot on our plate. We just recently got married (planned a wedding in three months which definitely soaked up all our energy during that time) and we’re still finishing up our apartment remodel. Don’t anyone dare tell me that we “should” be working on a startup or that if we’re not, we’re “making excuses.”
So I sat down to write you guys a post, but while researching some stuff online, I came upon these three AWESOME articles. And instead of giving you a mediocre, rushed, must-post-something kind of post, I decided to do you a favor and bring your attention to these gems here.
Seriously, it’s great stuff. Maybe even revolutionary. I wish more people knew this.
The bell rang as I pushed the door of the local convenience store. There was a big mirror placed below the ceiling, tilted so that the cashier could keep an eye on the visitors in the store – in case somebody got the hots for shoplifting. My eyes would always accidentally lock on the mirror, and this time I saw a 40-year old man with a darling little girl standing at the register.
I kept checking the mirror – couldn’t help it – as I was browsing the snacks. The man and his daughter couldn’t see me (unless they looked up in the mirror) because there was a shelf between us, but I could hear their every word.
“Will that be all?”, said the cashier. The man had placed a 300 ml bottle of vodka in front of the register.
“Daddy, can I have this?” – she was holding a mini-chocolate, the kind they make half the size of a regular chocolate bar.
“No baby, I don’t have that much money with me.”
Think about the rich people you know… Did ALL of them achieve their fortune by themselves? No. But even if they did it all by themselves, their CHILDREN will be rich without lifting a finger. So, simple mathematics say that at least 50% of all rich people were simply born rich. (Thus the expression “born with a golden spoon in their mouth”).