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Finance > Wealth Building > What it Means to be Rich
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Article rating : 0.00, 0 votes. Author : Michael Press
Many people have a false understanding of what it actually means to be rich. If you were to ask a stranger what makes a person rich, he or she would say "A person is rich if they have a lot of money and can buy whatever they want!". But that isn't what it means to be rich. This is what it means when a person is rich: The person's assets create enough cashflow every month, to cover his or her expenses. So basically being rich means that whether you work or not, money will still be flowing into your pockets.
Creating assets is the key to becoming rich. The rich have many different assets, which provide them with a monthly income. The truly rich people are those who don't work for a paycheck because their assets provide them with a lot cashflow. So if your assets make more than enough money to cover your expenses, you're rich. Having a large sum of money in your hands may cover your expenses for a while, but it isn't going to last forever.
When you're rich, you're making your money work for you. You send your money off into bonds, stocks, businesses, gold, or real estate, so that it'll make more money. You don't really have a job, because you don't need one. The rich let their money do all the work, so that they don't have to. But many of the people who became rich weren't born with a silver spoon in their mouth. It takes hard work and dedication to become rich. We
grew up believing that if we don't get paid by the hour during a job, then we shouldn't do it. The rich aren't addicted to an hourly wage. They'll work for hours, days, months, and years without pay in order to create their assests. Once the assets are created, little or no more work is required, and the cash just flows in.
During high school, we're taught that you can only make a lot of money by getting a good job. Because of this, many of us become addicted to an hourly wage. When a friend or relative gets a new job, we congratulate them and then ask, "So, how much do you make an hour?". Once in a while you may ask your boss for a raise, because you feel you work really hard and deserve it. The rich don't ask, "How much do you make an hour?", or, "Can I have a raise?" they ask "What's your monthly cash flow from your assets?", and "What's the dividend yield on your favorite income stock?". Many employees say "I'm going to retire with $700,000.00 in my 401K!". The rich say "I'm going to retire with $30,000.00 a month coming from my assets".
So it's easy to tell when a person is rich or not. If a persons assets produce enough money every month to cover his or her expenses, then that person is rich.
Michael Press is an investor and teenage entrepreneur. He currently owns and operates PassiveIncomeInfo.com, a free website with articles about how to build wealth.
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