Tag Archives: wealthy

I Will Teach — Me — to Be Rich

Earlier today on my lunch break I opened up the PDF first chapter of Ramit Sethi’s “I Will Teach You To Be Rich” and read through it quickly.

One part that stuck out was early on when he poses the question “what do you define as rich?” He argues that you first must figure out what rich means to you in order to get there.

What does “rich” mean to me?

It means…

  1. Having enough passive income to not have to work.
  2. Having enough passive income to fund my own business.
  3. Having enough passive income to fund my own business and fail. Maybe 3 times.
  4. Being able to work when I want, for who I want.
  5. Having enough money to donate large sums each year without feeling like it hurts my ability to achieve above goals.
  6. Manage to do this while also having a family with 2-3 kids and supporting an upper middle class lifestyle and occasional splurges.

A few years ago, I would have said “making over $50k a year.” Well, that was never rich in my mind, but it sure came close. I recently reviewed my social security statement for the past six years and realized that with the exception of last year, my largest yearly income to date was $25k. Last year I made about $63k. This year, I should hit $80k-$100k. And that still doesn’t feel rich. I feel less rich now than I did when I was making $25k because instead of wealth being impossible, it instead is a hard, yet achievable road of long hours, late nights, working for ‘the man’, or finding the right startup to get lucky at.

If I never have kids, never buy a house, avoid graduate school, and maintain my current level of saving ($50k per year) with a 5% rate of return on average, I’ll have over $1 million by the time I’m 40.

But is that rich? Not at all.

What does “being rich” mean to you?

Traits that Top Billionaires Share

Forbes.com put up a great post on Friday titled “A Recipe for Riches.” It looks at whether billionaires are born or made.

They analyzed 400 top self-made billionaires on their richest people in the world list and determined the following:

1. “A significant percentage of them had parents with a high aptitude for math. The ability to crunch numbers is crucial to becoming a billionaire, and mathematical prowess is hereditary. Some of the most common professions among the parents of Forbes 400 members (for whom we could find the information) were engineer, accountant and small-business owner.”

My dad is a math man. He was an actuary. Mom, not so much. But my dad’s side are all math brains.

2. “Consistent with the rest of the population, more American billionaires and near-billionaires were born in the fall than in any other season. However, relatively few of them were born in December, historically the month with the eighth-highest birth rate. Of the 380 self-made American tycoons who have appeared on the Forbes list of the World’s Billionaires in the past three years, 42 were born in September–more than in any other month.”

Well, I’m November. At least I got fall right. I wonder if birth month really has anything to do with ability to succeed. One could say that the fall season is when people get “back to work / back to school,” but aren’t yet overwhelmed by winter. Maybe babies born in Sept experience a certain kind of parenting and early months that help gear them towards mental growth and success later on? Just a guess.

3. “Of the 274 self-made tycoons on the Forbes 400, 14% either never started or never completed college. The number of precocious college dropouts is highest among those who forged careers as technology entrepreneurs: Bill Gates of Microsoft (MSFT), Steve Jobs of Apple (AAPL), Michael Dell of Dell (DELL), Larry Ellison of Oracle (ORCL) and Mark Zuckerberg of Facebook.”

That makes sense. Who has time to invent brilliant products when you’re busy studying for 4-5 final exams?

Other commonalities of the self-made richest people in the world? If they weren’t college dropouts, they had degrees – MBAs, etc – from top schools. That’s not a surprise. Roughly 70% of those with M.B.A.s obtained their master’s degrees from one of three Ivy League schools: Harvard, Columbia or the University of Pennsylvania’s Wharton School of Business.

Well, I guess I better get cracking at becoming a programming genius then. There’s now way I’m getting into any of those schools, nor do I want to devote my life to Wall Street.

Read the full article here.