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joy20's avatar

If you're financially wealthy, how did you become that way?

Asked by joy20 (106 points ) December 30th, 2009

I grew up with financial struggles. I still have them. I’m young but I want to start saving for my future!

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25 Answers

stranger_in_a_strange_land's avatar

The old fashioned way…inheritance.

Simone_De_Beauvoir's avatar

It’s all relative – some would say I’m well off with my 60K job but it doesn’t feel that way as I’m the only one that works and have 2 young children and 3 elderly family members to take care of. The way I got here was education.

EgaoNoGenki's avatar

If I can’t join the Air Force, then I suppose I’ll build websites. (Future-tense.)

If one website idea doesn’t work, I’ll try another, and keep trying until I find the golden one; the one that catalyzes something new in the social fabric of the Web, and makes me a decent living.

joehobbes's avatar

I guess it depends on what you define as “wealthy”.
But starting your own business on the side of school/day job has worked well for me.
It can be a lot of work, but if its something you enjoy, it’s not a huge deal.

Judi's avatar

It is really hard to make the transition form poverty to wealth. It is a completely different mindset. I never would have been able to do it if I had not married into a family that taught me how to think differently. The goal is not so much to work hard and save. The goal is to take what you have and make it grow. My father in law used to talk about fattening his goose, and keeping it healthy. You want to find something that produces income even while you are not working. For my father in law it was manufacturing a product people wanted and setting up the systems so it kept producing even when he was gone.
For my husband and I it was real estate.
You have to push away your pride, and not be so pretentious when your young. You may be able to afford $200,000 house, but that money isn’t earning you a dime. You are better off living in a 100,000.00 house and using the rest of the money to fatten your goose.
A good read is “Rich Dad Poor Dad.” It helps you get out of the worker bee mind set and into the wealthy mind set.

jeffgoldblumsprivatefacilities's avatar

I wouldn’t consider myself wealthy, but I would say that I’m doing pretty well for two reasons. First of all, my parents (my dad especially) taught me how to be smart with my money. I’m not an impulse buyer, and I learned how to save money because of them. And secondly, I recieved an inheritance that covered my college expenses, so I have no student loan debt. This is one of the things I’m most thankful for in my life, as I probably wouldn’t have been able to afford college without it.

EgaoNoGenki's avatar

@Judi I hope I can find a downloadable version so I can have a text-to-speech program read it to me.

Or a recorded audio CD of RDPD would be even more ideal, as the vocals would sound far more natural. (Although it’d be kinda hard to speed up the speech on that one.)

CyanoticWasp's avatar

Wealth is a state of mind more than it is a number on an account statement. By most standards I’m not “rich”, but I have some money in the bank for emergencies, work at a job (and with people) that I like and enjoy, and have fairly simple needs and wants. If I wanted a great deal more than I have, then I might be miserable because I can’t have that. I choose not to be miserable: I’m happy with what I have, and therefore wealthy enough.

Judi's avatar

@EgaoNoGenki ; I had it on CD. I’m sure you can get it on iTunes audio-books as well.

Zen_Again's avatar

@joy20 Welcome to fluther – and GQ for one of the best questions I’ve seen in a long time.

I cannot contribute to it, unfortunately, as I am not “wealthy” per se, but I look forward to all the Gates-eque answers. Good job!

shilolo's avatar

Education, (very) hard work, determination, ambition, frugality.

casheroo's avatar

My parents could be considered wealthy, not millionaires by any means, but upper middle class which is a good place to be, in my opinion.

We had nothing when I was a child. Apparently we would barely make it by, but my parents never really let on. I knew we didn’t have a lot of excess money…my brother and I never really asked for much. I would help my mother clean houses while she was in school to be a paralegal. My father was always and is still the breadwinner, and in his field, experience and skill takes years.
My mother got a crappy paying job, with amazing insurance at one of the largest financial groups in the US. She has worked her way up to a high level, well paying position, and they are currently paying for her to get her bachelors and most likely law degree.
I’m not wealthy, but one day I know my husband and I will be in a much better place than we are now. I think it takes a lot of work, sacrifice, and determination. (as @shilolo said.)

Cruiser's avatar

Get a job and save money and invest in real estate and long term stock!! Also never buy anything you can’t pay back in 30 days (except with lines of credit or mortgages of course) and NEVER loan money to anyone!!

RedPowerLady's avatar

@Judi That is really good information. Both me and hubby come from low-income families. I can honestly say I have never heard of anyone talk of investing or making their money grow. In fact even though I trust you that it is possible to me it seems like something that is too hard to achieve or unreachable perhaps because I don’t have enough education on it. But then on another note for those who are living paycheck to paycheck what investment choices are there? Hmmm.. maybe something I will have to look more into.

Judi's avatar

@RedPowerLady ; Yes. You have to overcome the urge to “get out of poverty at any cost” and stay living as frugally as you did when you were poor, in order to have the resources to invest in your goose. Your goose has to be more important than your house. Once you get your goose producing, you can enjoy the golden eggs. The the goal is to keep your goose healthy so it can produce more golden eggs. The biggest mistake people make is that they get greedy and start eating their goose!

CyanoticWasp's avatar

@RedPowerLady, I know several people who have gotten at least “comfortable” through investing. I’ve gotten there, too. I may never be able to retire and live off my investments, but I do have them, and what I have there is from growth, and not just because I kept squirreling it away.

Google the term “compound interest” and observe what Ben Franklin said about it (“the eighth wonder of the world”). If you understand it, pick your investments wisely (and widely—I don’t generally agree with “all eggs in one basket”), stay with that program and let it grow then growth is almost inevitable.

You can do this by starting small. The key thing is to start. The second key thing is to keep on track.

RedPowerLady's avatar

@Judi Great analogy (and good laugh at the end). Wow, what a difficult mindset to overcome.

@CyanoticWasp Will google it. Thanks for the advice.

shilolo's avatar

One way to get started is to allocate a small sum to automatically invest monthly (i.e. $20–50) in a mutual fund or other investment vehicle. Many fund companies and brokerages allow individuals to bypass the minimum initial investment if they set up an automatic account. This takes advantage of dollar cost averaging, a technique for balancing risk and taking advantage of the market when stock prices drop. Also, by making it automatic, you alleviate the inertia that prevents people from investing (i.e. because the $20 comes out of your checking monthly, it’s like you never had it in the first place, but at the end of the year, you’ve invested $240). Those small sums eventually add up to much bigger sums, and the habit of investing is formed. Once you can afford to invest more, you can up the monthly investment accordingly.

Judi's avatar

Here’s some info from the web page of Rich Dad Poor Dad. I will give the link, But I am not posting the part where he’s trying to sell personal coaching:

“If you want to be rich you need to learn to think like the rich, learn what the rich know and most importantly do what the rich do. The rich teach their children how to convert earned income into either passive income or portfolio income that will provide the cash flow to live the life they want to live.

To become rich you need to first change the way you think about money because your thoughts lead to your actions that lead to results. If you were raised poor or middle-class, chances are that you were not taught the fundamentals you need to become financially free for life.”
link

RedPowerLady's avatar

Looking at the links. This is a great question. Good information for me.

CyanoticWasp's avatar

@Judi, you’re giving good answers.

The basics to investing are the same as “business in general”:

1. Know the business you’re in.
2. Use whatever “force multipliers” you can.

In other words, learn about investing—even as you’re doing it. No one would ever invest if they felt they had to kknow “all there is to know about investing” before starting. So it’s okay to say “I don’t know anything about investing!” ... but that’s not an excuse not to start, to try it out, and to learn as you go.

And to expound on the second point, if you have the greatest idea in the world for a business, you’ll never get rich if you “try to do it all yourself.” This is why people hire and train others to work for them. Your salary will probably never make you rich, either. But “train” it to work for you and it can do a lot more than feed you just this week. The point is, let your dollars earn dollars of their own, and so on.

Definitely invest.

Judi's avatar

Here’s a fun little video (trying to sell an expensive board game) That simplifies things a bit.
Cashflow

jctennis123's avatar

great @judi ! Read kiyosaki everyone!

wundayatta's avatar

Get as much education as you can, Get a job doing something you enjoy, Live thriftily. Buy second hand cars, and us grad student furniture. Buy a home. Save every cent you can.

In 20 or 30 years, you’ll have an upper middle class net worth.

It’s not hard unless you want to get rich quick.

YARNLADY's avatar

I was raised to be very frugal, I worked at various jobs from the age of 16, I married a very smart man from a good family, with a good education in the IT field. We waited until his career was stable before having our son (5 years after we were married), after which, I became a homemaker. We are very good at saving, finding bargains and investing well. Our income puts us in the upper 10% of the general population.

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