From ‘middle class’ to ‘rich’

September 1st, 2009 by admin Leave a reply »
In the Lighthearted Land
Image by Pensiero via Flickr

Want to be rich, not middle class anymore? All you need do is decide to be rich.

For starters, let’s get some definitions clear. ‘Rich’ means you do not spend your time to earn money. ‘Middle class’ means you do not abuse your body to earn money (but you are not rich). And ‘How to’ means a method, a way of doing things.

Let us also assume that a ‘middle class’ person is so because of his upbringing… not because he was a ‘rich’ gone broke.

Now there is a lot to be said about this ‘upbringing’ because it is often the main reason we stay middle class. The root lies in “conformity”. Do what the neighbors do! What will our friends think? Here’s news… hang out with rich friends and conformity will pull you up rather than keep you where you are.

So how do you make rich friends or get in a rich neighborhood? The internet comes to the rescue! More about this in conclusion…

Today, because of the multitude of choices we all have, it is easy to get distracted from where we want to go in life. Robert Kiyosaki, the guru of financial intelligence, says, the first step is to ‘Decide to Be Rich ’.

Stop feeling sorry for yourself and start coming in awareness. Watch your words. You will stay middle class if you say…“We’re setting a few dollars aside every month, so we can afford the down payment on our dream home.” Or if you are focused on comfort. “I don’t want to be rich. I just want to be comfortable.”

However, the rich use the vocabulary found in the asset column. The rich are rich because they are not focused on comfort and the acquisition of liabilities using credit, as the middle class is.

The rich are rich because they focus on the long-term acquisition of assets… assets such as stocks, bonds, system-based businesses and income producing real estate. Many times the rich will forsake meals, a steady pay check, a vacation, or the comfort of a nice home, to build or acquire real assets.

Here’s how a Canadian teacher-couple I know stated it in their personal middle-class-to-rich story… I quote 2 gems of their exemplary advice:

"If you’re a renter looking for a new place, don’t just accept what the market has to offer. Instead, put the word out about your good qualities. Great tenants are hard to find. My wife and I placed an ad in the local paper stating that we were two responsible teachers looking for a quality long-term rental. We mentioned the price we’d pay and the exact specifications we sought. Another teacher answered the ad, and offered her place for $180 per month less than nearby apartments. That saved us more than $8,000 over four years – equivalent to a $12,000 pre-tax bonus.’

Notice what they focused on? Their Assets… Themselves!

"Low-cost index funds beat most actively managed mutual funds over the long haul. So when financial planners try to put you into an actively managed fund, tell them thanks, but no. Sure, you might get lucky and pick an actively managed fund that does beat the market, but it’s nearly impossible to pick winners ahead of time. Looking at past performance doesn’t help: the top performing funds of one decade usually lag in the next decade. Pick a guru who buys and holds stocks for long periods (so you don’t end up buying after the guru has sold) then emulate what he’s doing. Warren Buffett would be my choice. His most recent large investments have been in Anheuser-Busch and Wal-Mart. Once you buy, hold on and be patient."

Once again, their focus has been to follow the rich on asset-linked investments.

Now I’d mentioned early on in this article, the internet is a great place to get in a rich neighborhood or make rich friends. Why? Because many forums, and facebook too, house communities of rich-minded people. And entry for anyone is at par. Soon you will learn how to professionally network .

Networks, by definition, are assets for their owners and you can own your part of the world’s biggest network, the Internet!

So snap out of the middle class and ‘decide to be rich’. Join some successful business owners . Watch what they do. Ask questions earnestly. Emulate. And you shall be on your way!

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3 comments

  1. Jennifer Coy says:

    Great article Sandeep. I think you really touched on an important topic when you mentioned “conformity.” This is a subject that in my opinion has not been talked about enough. “The opposite of courage in our society is not cowardice, it’s conformity” – Rollo May. Basically people live their lives conforming – acting like everyone else without knowing why or where they are heading in life. Let’s take America for example: we are one of the richest lands to have ever existed, and yet by the ripe age of 65 – 95% of Americans have failed to figure out how to achieve financial independence simply because they conformed. As Earl Nightingale points out – the only person who succeeds is the person who says “I’m going to be/do this” and then works toward it. You are already a failure and have already conformed by accepting and being comfortable with where you are. As my father-in-law stated once – always be happy with where you are but never be satisfied.

    However, success – in my opinion – doesn’t necessarily mean that you have to be rich or “well to do” financially. You could be a middle class worker who is a success because you stepped up from the “poor”. Success is different for everyone, it is the process of working toward something more/better than you already have.

  2. Rajat Mathur says:

    Hi Sandeep,
    A very thought provoking article. What you have brought out(conformity) is very true and since it is true it is really difficult to break out of it (catch 22 situation!).
    The article certainly inspires one to try or atleat think of trying!!
    Regards
    Rajat

  3. While we’re on the subject of What the middle class don’t know, With the number of existing scams these days, it can be rather difficult to trust an opportunity when you find one. Some will promise you thousands of dollars each month for a minimal fee but end up going incognito once you make that investment.

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