Money, happiness, and more. Part II.

September 20, 2020 0 By admin

OK, folks, let’s continue the conversation about wealth and how to obtain it. If you did not have the chance to read the first part of this discussion, please see this post.

But first, do you know the answer to a question: Can “9 to 5” job make you wealthy?

I have an answer for you below.

If you read this post, I assume you have been reading many others. If you spend just 30 minutes of your day reviewing 5–6 different finance blogs, you will feel like your head is spinning and you’ll probably believe that you need at least 20 years of advanced economics and calculus to even begin to understand the information required to achieve financial freedom.

But you don’t… People like to make it complicated because it helps them sell things.

Financial freedom (which is what I’m assuming you’re after) is simple. The wealth itself means nothing if you don’t have the freedom to do whatever you love to do. Financial freedom should make you comfortable and secure. So, your goal should be not the wealth itself but the financial freedom that would allow you to make your own choices and be able to afford it.

Financial independence requires only three things:

  1. A basic understanding of what happens when money compounds
  2. A resolution to save and invest regularly
  3. The discipline to follow through.

There are few approaches (or call them the rules) that will help you to achieve your goal.

But let me press the brake pedal here before I will proceed further.

If you think having enough money will make you happy you are dead wrong. So, let’s discuss a different type of wealth, I bet, something you have never considered.

When we speak of being rich, we usually mean financial wealth: having lots of money – i.e., all the money you want and/or need.

But there are other ways of being rich – three of which can improve your life immensely:

  1. You can be rich in relationships: with friends, family and the community in general.
  2. You can be rich in health: having a robust immune system, strong muscles, flexible joints and abundant energy.
  3. You can be rich mentally: knowledgeable and skillful but also curious, excited, and always eager to learn more.

All mentioned above types of wealth are indispensable for making you happy. It's as cliché as they come, but it's true: Money doesn't buy happiness.

Just go back to your own history and recall when you had the first kiss with a girl, when you met your future wife, when you have explored the world and its wonders, when you have lost in the book, when you hiked in the forest…

These moments are what make your life worth living. Not money.

We invest, hopefully not because we think we'll magically be happier, but because we know it'll provide us the freedom and security to do what we want, to live a life of our choosing.

Warren Buffett still lives in the house he bought in 1958 for $31,500. When asked why he hasn't upgraded, he simply said, "I'm happy there. I'd move if I thought I'd be happier somewhere else." The freedom is his.

Now, let’s continue our journey and discuss several rules that lead to creating wealth.


Rule #1: Accept Minimalism and Avoid Consumerism

When most people hear the word “Minimalist” they immediately envision an empty 300 sq.f. apartment with two pieces of furniture and no dishes.

But this is not what minimalism truly is…

Only spend money on the things that you need or that bring real value to your life.

The guy I know drives a BMW sedan ($90k) and lives in $1M worth house who I would consider to be a minimalist.

How is this possible?

Because he only spends money on the things that bring value to his life. He loves cars and savor driving their BMW to their office. (He has tried convincing me to buy better car than Subaru but I have different priorities in life, and driving Subaru still keeps me happy, so, why should I overspend?)

His house is located close to his job and the schools for kids are the best in the area. So, he thinks that the cost of the house is justified. He doesn’t fill his house with crap from QVC or goes on random Walmart shopping sprees. He has intentionally spent his money in a way that makes him happy WITHOUT spending it on things that bring no value to his life.

This is the single most important financial principle you can ever learn. Before you make any purchase, ask yourself two questions.

  1. Do I really need this?
  2. Will it improve the quality of my life in the long term?


For example, dropping $300 on one of those stupid hover boards will do little more than drain your bank account and leave you with bloody knees.

However, investing $2,000 into the most comfortable mattress you can find will improve your sleep quality and have a positive impact on your life for the next 10 years.

Do you see the difference?

If you want to be financially free, you must avoid consumerism. Don’t buy things “just because”. Make sure every purchase has a purpose and you will do just fine.

Rule #2: YOU Are the Most Valuable Asset

Invest in as much of yourself as you can. You are your own biggest asset by far. ~Warren Buffet

I have been asked a lot of questions like “I have $500. How can I invest it?” or “I want to become wealthy. Where do I start?” or “I have $1,000 and I am the student. How to invest it better: in stocks or funds?”

My answer is always the same… Start educating yourself. Spend those $500 to get training that will bring valuable knowledge. To start with investments, you need an education. It’s not just two days training. I am investing for more than 23 years, and still learning every day!

When you invest in yourself by buying books, hiring a coach, attending seminars, learning new skills, or other forms of personal development you are making an investment that will have a 100–1,000% return over the course of your life.

If you spend $10 on a book and you learn just ONE thing that helps you improve the quality of your work (your income) by 15% each year and you earn $50,000 a year now, in just 5 years you will double it ($100,568)!

I remember I bought the book about Real Estate Investment. It has turned my naïve perceptions about paying off the mortgage faster upside down. It has helped me to buy 5 investment properties without spending a lot of money. This is what you should look for: valuable knowledge!

Learn how to make more money and bring more value to your business or company.

Learn how to manage money better and automatically have your income go to work for you.

Learn how to manage your time and energy more effectively so that you can earn more money.

Learn, learn, learn and your life will change for better. I promise!

Rule #3: Pay Yourself First and Do It Automatically

I found this text in one of the recent articles that literally forced me to write this blog. With a little editing, here it is:

If you want to become financially successful, then you must STOP paying other people first. You should not forget about yourself!

When most people receive their paycheck every other week, ~30% of it goes to their landlord, ~20% of it goes to the local grocery store, ~30% goes to random bars, stores, and eCommerce sites, and the remaining ~20% is eaten up by their bills and obligations.

This is the WRONG way to do things. Instead, pay yourself first.

As soon as you get a paycheck, set up your accounts so that 10% of your income is AUTOMATICALLY deposited into a long term retirement account (IRA, 401k etc.) or personal investment account (the money you will use for books, trainings, seminars, etc.) or save for future investment deals.

Then live off the rest.

This will force you to cut costs where they don’t matter and prioritize your FUTURE self over your PRESENT pleasure.

It’s difficult to implement but it’s essential to your financial success.

When you have enough cash that will cover your emergency needs (at least 6 months of your living expenses), invest the rest in education, real estate, or stock market. Money should make money – don’t allow your cash to be lazy!”

It cannot be said better!

Rule #4: Money should make more money

Any money you make should NOT be idle. We live now in a time where having a pile of idle cash is looked upon favorably. Yet, often we let our money be lazy while we work our heads off trying to earn it. Money earned through hard work should be expected to do the same.

Here is a story from the Bible. A parable is told referred to the Parable of the Talents. It is located in Matthew 25:14-30 for those wanting to read it in full. Whether religious or not it teaches the same principle.

Essentially a master of three men was going away and he entrusted them with a portion of his funds. Two of the men put the money to work and gained a positive return. The last man in fear of his master buried it. He preserved his master's capital but did not put it to work.

The master was extremely displeased. He rewarded those who put the money to work and punished the one who did not.

The only reason to save money: you are going to invest it into an asset in the future. Keeping your cash in the bank with ridiculous interest below 1% makes no sense. It won’t help you to reach your goal toward financial independence.

In one of my articles in the Investment Category, I have mentioned that I have picked up $20,000 from my saving account and have invested into the stock market. Withing few months, I had around 9% gain. Compare it to the return of any saving account with 0.06% yearly yield. Some of the foreign countries’ banks have a negative yield!

It doesn’t matter how many books you read, podcasts you listen to, motivational videos you watch. You will lose every time because if you have a small saving account which will not allow you to buy more assets that will further build your cash reserve to buy more assets and so on… If you invest $500 and I invest $5000, with 7% return, you will make $35 while I will make 10 times more ($350) with the same investment.

You will be forced to work inside someone else’s assets. This is more commonly known as a 9-to-5 job.

If you’re not buying assets then you are not playing the game of Capitalism. You are inside of someone else’s game.

So, what to do if you still have 9-to-5 job only?

Rule #5: Passive Income is Worth 10X Working Income

What I have learned over the years, that at all costs, you should start building passive income assets as soon as possible.

Whether you sell anything on eBay or Amazon, run an eCommerce business and run paid ads automatically, or purchase a single family home and hire someone to manage and rent it out, you need to have at least 1 (preferably more) streams of passive income that generates you money whether you are working or not.

For me, the real estate was a game changer. Some part-time work to build and manage the computer network in a medical office was still a game changer. Part-time electrical work, painting job, fixing failed computers… all of it was a game changer because I was earning extra money that could be invested to make MORE money.

Imagine how your life would change if you earned $2-3K a month WITHOUT clocking in or doing any work on a daily basis (i.e. renting your property).

I can tell you from personal experience that building passive income is the #1 way to achieve lasting financial success. I would not be able to become financially independent without passive income (especially from real estate).

Pick an income stream and pursue it tirelessly until all of your basic living expenses are paid by passive assets.

Rule #6: Understand Your Problem

As one fellow writer has mentioned, there are two types of people in this world.

  1. Those who have an INCOME problem
  2. Those who have a SPENDING problem

If you are earning less than $70,000 (or $100,000 depending on where you live – I am talking about the U.S.) then you have an INCOME problem. Until you hit these milestones it’s very difficult to live a financially secure life.

You simply don’t have enough funds to cover your living expenses AND to put aside 10% of your after-tax money.

However, if you are earning $70,000+ a year and don’t have any money leftover in your savings or retirement fund, you have a SPENDING problem. You should cut your unneeded expenses, and save the difference.

This is an important distinction!

I’ve seen people who even did not have any freelance jobs in mind to fix their financial problems. Yes, it will take your free time for a while. Yes, it is required your efforts. But you know why you do it, right?

By starting a side freelancing you could easily earn an extra $10,000-$20,000 a year and be able to enjoy many more things.

Conversely, I’ve seen guys making $500,000 a year spending every last cent and constantly working to earn more money (while increasing their expenses with their income). By downsizing their life, they could easily put away $100,000+ per year in a savings or investment account and retire within a decade.

Do you see the difference?

If you are attempting to become financially free, you must identify whether you have an income or spending problem and then take action to remedy the situation.

Never confuse one for the other or you will get caught in a game of constantly trying to earn more money or cut more costs without ever achieving the freedom you desire.

Follow those 6 rules, and you will be on your won way to financial independence.


This site is for informational and educational purposes only and should not be construed to constitute professional advice. Nothing contained herein shall constitute a solicitation or endorsement. I am not affiliated with, nor do receive compensation from, any company. My apologies for any spelling mistakes (although, I have used the spell checker) or my writing style if it is not up to your taste. I am going to use my numerous notes from various articles, and if I did not specify the source, my big-big kudos to all those authors whose thoughts I have added on the pages.

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