Being RICH would invite health issues!

Being RICH would invite health issues!

One of my recent meetings with a Young Manager in a reputed company in Dubai was really a unique one. While we both were designing the financial blue print, I asked him “So, you want to be rich?”

And to my surprise his answer was really unique that inspired me to write this article today.

He replied “Being rich would invite health issues for me” When I heard his answer I was very relaxed as I could sense his financial literacy. That means, I need not explain him about the financial planning in details as he was himself thorough. And end of the day my job shall be smooth.

But still I asked what makes you say that “Being rich would invite health issues for you”?

“You are in the financial industry so you should know” he said.

“I normally do not get this kind of answers from people” I replied.

And he started explaining me his point of view about money and its usefulness.

“Many people think that being rich and being wealthy is the same thing. But there is a difference between the two: The rich may have lots of money but the wealthy never worry about money.  So I want to be wealthy not rich.”

“True Sir, I really appreciate your thoughts. These are few points to be noted while thinking about creating an asset or saving money. Rich have lots of money; and  they also have  lots of expenses that keep them up at night. Or they might have a high paying job but have do not have job security. The wealthy, on the other hand, don’t have these worries.” I said.

Wondering…Why? What’s the difference?

1) Wealth = Time

How many days/ months you can survive without physically working and still maintain your standard of living?

For example, your monthly expenses are $5,000 and you have $50,000 in savings, your wealth is approximately 10 months or 300 days.

Wealth is measured in time, not dollars.

2) It’s not what you earn

 It’s not how much money you earn that matters but how much money you save—and till how long that money may work for you. Will you able to take a break from work?

3) How about a second Income?

Rich often miss this concept as they are busy in creating long term assets like multiple properties and involve in fire fighting (Home Loans, EMI and Debt). On the other hand wealthy always look for assets which give immediate income or cash inflows without risking their wealth. Now you have a choice full life to live.

4) Is Income a percentage game?

Of course yes, each asset and individual has a value. It’s needless to say that an asset which has features like easy to handle, zero maintenance or zero tax implications would have higher percentage of return.

For example: When someone holds a masters degree from a very reputed college the chances of getting higher pay cheque is very high versus someone holding a masters degree from a mediocre college.

When you only own properties worth 1 million USD and earn $30,000 as rent, then its only 3 % earning versus capital. On the other hand there would be ample opportunity to earn more than 6% -7% with the same capital investment. This concept may draw a thin line between rich and wealthy.

Many people can become rich. But only financially intelligent people can become wealthy—and that takes a strong financial education and proper mindset that allows you to build cash-flowing businesses and assets.

In the end what matters is peaceful sleep and good health.