Only The Richest People Can Afford To Do This
Our society pressures us to look richer than we are. Don’t do it
Everywhere you look (online and real life) you will see people with nicer cars, bigger houses and more expensive possessions. It doesn’t matter how rich you are, your eye will always be drawn to someone who is seemingly richer.
STOP STRESSING ABOUT IT.
People are happy to show off their gains but will never share their losses. That family member with the two $100k cars and private number plates on their driveway will not be posting pictures of the credit card debt required to create the illusion of wealth. Nobody shares details of their mortgages or debts because we are ashamed of them and we all know deep down that we could be doing better. Equally no one shares pictures of their investment holdings or stock portfolios because then we would know exactly how much they are worth. It’s all about the illusion
10 Steps That Rich People Do to Get & Stay Rich
1 - Budget
Sounds stupid but people only ever sit down to do a personal budget when they are in trouble financially. Do not be in that category. Working out your income and expenditure is a wonderful exercise for your finances and your mental health. Once you know what you have coming in and going out you can start making changes to free up more cash for the things you need
2 - Invest your money
Everyone needs investments and savings. You cannot rely on anyone else to look after you (especially the government).
Start thinking about investing over the following timescales:
Money I will need over the next 0-6 months (Immediate)
Money I will need over the next 5 years (Short Term)
Money I will need over the next 5-15 years (Medium Term)
Money I can lock away for 15+ years (Long Term)
Immediate Term money is your play money and emergency fund. This should be cash or near cash. Yes this pot is vulnerable to inflation but that’s ok because you will be spending it.
Short Term reserves should be invested in liquid assets (stuff you can sell fairly easily). Crypto can be included in this category as the typical market cycle is currently less than 5 years.
Medium Term Money will make up a lot of your savings. If you can afford not to touch this money for 5+ years you really need to make sure its invested in the markets. An ISA or general investment account would make an ideal wrapper for this category.
Long Term would naturally be your pension monies and any other tax efficient wrappers (ISA again) that you have. This is your long-term saving pot and therefore the pot you can afford to take the most risk with. Bitcoin and other long term crypto HODL’s can also sit in this category
The longer you are investing the more risk you can afford to be taking. It should be a criminal offence to invest your long-term savings in a low risk portfolio. People will choose low risk stuff because they are afraid of the markets because they don’t understand them. Here are two catchphrases to help you through this mental conundrum.
80% of the time markets go up
Time in the markets is better than timing the markets
If your sitting on a wedge of cash and you don’t know what to do with it for the love of god see a financial adviser. We promise it’s worth your time.
3 - Plan for future expenses
Is your boiler getting on? Start saving for a replacement now. A new boiler will set you back at least $3k and that’s a tough stomach in one hit. Plan ahead for predictable big-ticket costs.
4 - Invest in your Relationships
Your family and friends are the most important people in your life. Invest your time in keeping those relationships strong. A divorce is a fast route to financial ruin (for both parties). Keep that spark alight. Even if the love eventually fades you need that friendship and support
5 - Do High Value Work
A safe secure job working for the government is unfortunately not going to help you get rich (those days are over). It is also hard demanding work in the rat race. You need to do work where there is always something new to learn. Do as many exams as you can stomach, say yes to new opportunities. If you are comfortable at work it’s time to do something else.
6 - Take Risks With Your Time & Money
In this modern world of zero interest rates and money printers going Brrrrrrr the biggest risk to your success is not actually taking any risk! Standing still will only cause you to go backwards.
7 - Don’t Buy Things You Can’t Afford
You may think you look cool and gaining some social credit but in reality no one cares what crap you have and they can’t wait to see you lose it all because you over spent or borrowed to fund a stupid lifestyle.
8 - Learn About Money
This is a big one. First and foremost you must keep following the Wealth Gap as we drip feed you knowledge using meme power. Bit by bit our knowledge will get into your thick head. Failing that you can always go a utilise this thing called Google and YouTube to spend time looking into stuff… who would have thought all it takes is a bit of interest!
If you don’t understand Google then start with a couple of films. Watch ‘A Bug’s Life’ by Disney. Following that watch ‘The Big Short’.
9 - Gamble Only What you can afford to lose
Gambling is fun and we understand there is no greater thrill than gambling the money you need to survive but this not a good long term strategy. Only gamble what you can afford to lose.
10 - Stay Disciplined
It involves plenty of friction but if you remained disciplined and do what you need to do eventually you will earn your rewards!
Until Next Time
The Wealth Gap