Alexander the Great was busy conquering the known world once, when he saw, on the banks of the Indus river in today’s Pakistan, a naked guy sitting in the Lotus position and contemplating the dirt. “Gymnosophists” (gumnos = naked, sophistes = philosopher) the Greeks called these men. We would call them yogis — as in Patanjali, say
“What are you doing?”, asked Alexander.
“Experiencing nothingness” answered the yogi.
“What are you doing?”, asked the yogi.
“Conquering the world,” said Alexander.
Then both men laughed, each thinking that the other must be a fool.
“Why is he conquering the world?”, thought the yogi. “It’s pointless.”
“Why is he sitting around doing nothing?”, thought Alexander. “What a waste of a life.”
I want you to pause for a moment and recollect all the beliefs you carry about money and try to really question each one of them.
- Do you consider building wealth as a worthy pursuit or do you despise it?
- Do you believe money will solve all your problems or do you think money is the root cause of all of your problems?
- Are people who are wealthy crooks or are they good?
Did you find anything interesting about why you carried a certain perspective about building wealth? It can really help you know yourself better and your relationship with money before you start working on building wealth. It’s almost like a precondition to this whole process.
Now let’s get back to the story and find out who was right.
1. You live only once, so make it count
2. Make it count by being spectacular!
The yogi grew up on up on different stories — the Mahabharata and Ramayana and so forth. His heroes, such as Krishna and Rama, were not distinct individuals who lived once and made it count, but different lifetimes of the same hero.
The yogi’s stories told him that:
You get to live — nay, must live — infinite lives until you get the point, so
stop wasting your time by conquering things that have been and will be conquered countless times, and try to see the point.
Why Context Is Everything
Now that you have more background about the upbringing of the 2 characters, does your POV of who is the right change? Or Do you see these characters in a new light? Who do you think is right here?
When I first read this story on this blog, it got me thinking and questioning about everything that’s written about in the personal finance space. It made me question my own beliefs about money while at the same time appreciate a perspective that’s different than mine. Nonetheless, I wanted to dig deeper to understand why we carry these beliefs.
This post is my attempt to question some of the beliefs that are out there about building wealth, career and other money beliefs. Let’s go over a few such beliefs and explore why they exist.
1. Building Wealth Is A Selfish Pursuit
We’ve often read about how the rich keep getting richer and the poor keep getting poorer. Every time I read this, a part of me feels really bad for the poor since it reinforces the fact that their chance at breaking the cycle of poverty just got slimmer and slimmer.
If you look at wealth building as a zero sum game, the poor will never have a chance to build wealth. The only way for them to win is for the rich to lose. That’s not true! But if we stopped looking wealth as a finite resource and the process of building wealth as a zero sum game, you’ll notice that anyone who is ready to work hard and fight the odds stacked against them in the society can have a shot at building wealth. It’s not going to be easy, it’s not going to be straightforward but it’s not impossible!
The wealth inequality has always been there since time immemorial. Our society has always had the rich and the poor. The reason someone was rich or poor didn’t depend on one single factor but was the result of all the decisions somebody chose to make. It was also influenced to a certain degree by external factors which are beyond one’s control.
People were able to build wealth for a lot of reasons. It could be the profession or skillset they acquired, along with how favorable their status was in the society that helped them build wealth. Were they able to pass on this wealth to the next generation? What knowledge did they have about money that the poor didn’t? Did they educate their kids about how to handle money? How did they relate to money?
Once you explore the answers to these questions, you’ll realize that not everyone who built wealth was a crook (sure they could be some who were) and not all of them were selfish. For what it is worth a vast majority of these wealthy people were all first-generation millionaires. The wealth they built was not a windfall.
If you grew up in a certain household (rich or poor) and the stories you listened to reinforced the belief that anyone who is wealthy is a crook or building wealth is not a noble pursuit, what do you think would be your relationship with money? Let me guess, you’ll most likely think that everybody who is wealthy is a crook and you’d never want to be one!
The story you listened to growing up makes you either want to build wealth or despise it?
If you are still on the fence wondering if you should pursue building wealth, take a look at this stat – The Millionaire Next Door cites that the percentage of first-generation millionaires is 80 percent, dispelling the idea that most millionaires just inherit their money from a prior generation.
Source – Millionaire Foundry
2. You Should Be Loyal To Your Employer
We live in a world that’s so competitive and interconnected that the last thing you’d want to do is to have a laid back attitude. We are heavily influenced by our parents and we often pick up habits from them which can dictate our choices in life in very subtle ways.
E.g. If you had parents who worked with a single employer and had a solid pension to cover their retirement. You could have formed an opinion about the lifestyle you’d like to have when you grow up. It might be centered around working for a single employer is good! It gives you stability and loyalty to employer is good.
But what if that’s not the case any more? I am not exaggerating. Just look at a generation of workers employed by the manufacturing sector that were left to fend for themselves when these jobs suddenly disappeared and they had no chance to respond. They could either get retrained or if they didn’t like it, they had to find alternative employment that may or not have provided them the same lifestyle. Someone had moved their cheese!
The reason why I say this is that a lot of goals we try to achieve around what is the best education to acquire or what is a “safe career”, is a moving target. What worked for your parents might be totally irrelevant to you. So you got to question if a certain degree or a career is right for you and not get into something that really doesn’t have any value in the market place. With the ever increasing automation of jobs in almost all aspects of our lives, I even question the existence of some of the jobs in the near future.
Since income is one of the most powerful wealth building tools, a bad move in choosing a career that doesn’t pay well can literally put your financial goals on the back burner. So be very careful what you invest your time, money and energy into. Choose a profession that has the maximum overlap between your passion and something that pays well. That’s the sweet spot!
Ninety-one percent of Millennials (born between 1977-1997) expect to stay in a job for less than three years, according to the Future Workplace “Multiple Generations @ Work” survey of 1,189 employees and 150 managers. That means they would have 15 – 20 jobs over the course of their working lives!Source: The Future Of Work: Job Hopping Is the ‘New Normal’ for Millennials.
3. Being In Debt Is Normal
In a world where every company is trying to get its share of your wallet, there is no shortage of “influencers” who constantly bombard you with their views on what your life should look like. Just hop onto Instagram or any other social media platform and you’ll notice how you are exposed to a curated version of the “best moments” of other people’s lives. The perfect vacation, the perfect family, the perfect house, the perfect hobby, the perfect kids, etc.
According to this article on BBC, about 3 billion people, around 40% of the world’s population, use online social media – and we’re spending an average of two hours every day sharing, liking, tweeting and updating on these platforms, according to some reports. That breaks down to around half a million tweets and Snapchat photos shared every minute.
The articles provides all the ways in which social media is causing – Stress, Anxiety, Depression, Sleep Disturbance, Addiction, Low Self Esteem, etc. It’s no wonder that when you are into social media every day, you’ll be exposed to a world that’s constantly influencing you to make money moves that might not be in your best interest.
So if you find yourself making a money move because someone you know did that, stop and question if that makes sense to your personal situation. You might not know their situation, their finances or what they want out of their lives; so basing your decision on a curated version of the life on social media would be detrimental to your well being.
I would caution you to not trust everything you see on social media and accept them at face value. There is more to it than what meets the eye. Always do your due diligence. Don’t let the pop culture influence you into habits you don’t associate with yourself.
If you look at the lifestyle of those who are on Instagram or other social media platforms, you’ll not be able to tell if they are living that lifestyle because they can afford it or because they are in debt up to their eyeballs, while chasing such a lifestyle.
In a society which has normalized debt, being debt free makes you an outlier. We don’t despise debt anymore. We are more than happy to accumulate debt and even flaunt all the toys we buy on credit. The flashy new car, the big house, the expensive vacations, etc, all on a financed lifestyle. The easy accessibility to credit and lenient underwriting standards when dispatching credit to consumers is going to backfire. Being in debt is not normal. The fact that I am even writing about it speaks how much we’ve been desensitized to debt.
4. I Don’t Need To Diversify My Income Streams
According to this article from CNN Money, nearly 44 Million Americans have a side hustle. It says, “Younger Millennials are more likely to have a side hustle,” says Berger. And it not surprising: “they know how to use the gig economy and turn their mobile phone into a money-making machine.” The gig economy is here to stay and will only become more and more ubiquitous. The idea that you’ll have just one job and be done with it, will eventually fade away. This is going to be even more commonplace when we see more automation take over the jobs that once existed.
If you wish to reach FI or FIRE goal and believe you can do it with just your day job income, you might have to put in extra efforts to earn a lot or save a lot. What happens if you don’t have a high income? Your savings rate doesn’t allow you to reach your goals in the desired time? What do you do?
We live in a knowledge-based economy and thanks to the internet, many of the skills you use in your day job can also be easily transferred to other areas of your life. E.g. If you are a web developer, not only can you not work at your day job and make a living, you can also pick up some freelance work and make some decent earning. Although it is purely up to the individual to choose if this makes sense, I feel the fact that this is even a possibility is what makes this a big deal.
I want you to recognize this wonderful opportunity and make the best use of it. You’ll be a dinosaur if you stick with the same employer for years without adding any new skills. Focus on adding new skills to your armory all the time and be prepared to move on. The ability to be employed or start a business of your own using your skills is your new secret superpower. It is also your key to building multiple streams of income.
While you work on your day job, also explore your interests. Pursue a hobby or a side hustle while you are still employed. It can someday turn into a full-time business. If not for anything, it can be something you can retire into.
Check out this excellent piece from Accidental Fire – Save Energy For Something Besides Your Job While You’re Still Working. It talks about the importance of exploring your interests during your working years.
I think this is a good sign since it only reinforces what we have already been doing with our investments. We strive for diversification of our investments into stocks, bonds and other investments, so why not do the same with your income stream? If you have held a belief that single income is the best way to build wealth, I invite you to challenge this belief.
You got to be the CEO of your own career. As a millennial myself, I feel the need to diversify my income streams and not piggy back on one single source. So you see the rise of this phenomenon that people having multiple jobs along with their day job.
5. A High Net Worth Is An Indicator Of Your Self Worth
This one can come as a surprise to you. You might question, “Isn’t personal finance all about building a high net worth? Aren’t we supposed to build
There is no second opinion about the need to build wealth. If you want to achieve FI or FIRE, you’ve got to hit a certain number before you could call it a day. I am not questioning that.
However, in pursuit of building high net worth, don’t let it define your self-worth. Like the Yogi in the story I mentioned above, if you are not someone who is chasing a high net worth or FI or FIRE, you can still reach your financial goals in your life, but at a different pace. Make peace with it and don’t feel out of place for not having the goals I mentioned above as your goals!
So when you read about people‘s net worth who have retired early or those that have hit a certain net worth by a certain age, you might be tempted to compare that with your own numbers and feel you’re left behind. I can totally empathize with the feeling. It can be easy to feel inadequate and beat yourself up for not doing enough.
Always remember that wealth building is not a linear process and nor does it come with a defined timeline or specific number. It’s totally up to you. E.g. Someone who lives on $100,000 per year might need an investment portfolio of 2.5 Million Dollars (going by the 4% rule) vs someone living on $40,000 per year might need just 1/4 of that. So does it mean one is better than the other? Definitely not. So I would encourage you to never tie your net worth to your self worth.
Remember that it’s your race. You don’t have to compete with anyone and let others define how much net worth should you aspire to achieve. It’s totally up to you to decide:
- How fast you are going to run?
- How far you are going to run?
- How long are you going to run?
So never let others make you feel ashamed of your net worth since it doesn’t define your self-worth.
If you think that FI or FIRE isn’t for you, don’t worry. It’s perfectly fine to achieve your financial goals at the pace of your choice. Don’t treat everything written about FI or FIRE on personal finance blogs as the Gospel Of Truth. A high net worth or otherwise, don’t let it ever impact your self-worth. Remember you are not your net worth!
What stories did you grow up with and have you analyzed how it has impacted your money beliefs? Pleas share your thoughts in comments. I would love to hear them.