The New Rich
The New Rich – what does it even mean?
For most people in the western world there was a shift in the reason that we go to work. At some point in history we laboured and worked for the basics, for food and shelter. Today we work for consumerism and not ourselves. There is a new generation discovering that the old style of wealth doesn’t work. The New Rich have a different definition.
When did this happen? All I know is that this is the current reality.
I would challenge you to figure out how much of your take home pay goes towards food, basic shelter and clothing. Then if you take this and convert it to the number of hours of work this represents. For me, it’s about 3-4 hours a week. The rest is just for luxury. A Larger house than we really need, electronics, entertainment, more clothes than we really wear.
There’s nothing wrong with this in itself, but it does beg the question that if you’re wealthy in terms of possessions, but poor in time because of how many hours you’re working for consumerism – then are you really rich at all ?
This is where the term New Rich comes in, The New Rich may or may not be wealthy in terms of how much money they have in the bank. Their wealth is a function of freedom. How much choice do they have over where the spend their time. Freedom to chose who they spend time with and what they’re doing at any moment in the day. That is what the new Rich strive for.
How do the New Rich achieve their goals?
There are several different ways to get to the same place. I’ve outlined three different methods here. These can be contrasted against the normal western choice to work from your late teens until you’re in your 70’s then retire. The argument against this is that most of your adult life you have no choice in what you do with most of your time.
Saving your way into early retirement
One of the ways is documented by a blogger called Mr Money Moustache. His blog, linked here shows how he worked out what level he needed to save to retire permanently. The point he retired at, ensured that his money would grow faster than he was spending it. That’s a great place to be. Don’t get me wrong though, he does spend less than most Americans. Much of his guidance is focussed around spending less. The argument here is that he only spends money on things that help make him happy, so he’s in no way deprived.
This method is closer to the traditional method of working your whole life before you retire. The key difference here, is that rather than waiting until later in your life when you may not be as physically able to enjoy it – you stage mini retirements when you’re young and able.
This method is becoming easier. Decades ago, people worked for the same company most of their lives and changing jobs was risky. Now, showing that you only work for a company for 2 years on your Resume is not viewed in the same negative light.
When you really think about it, how much sense does it make to work hard to put money away for a time in your life when you may not even be around to enjoy it. Then even if you are, there’s a chance that disease or illness may make it more difficult to make the most of your retirement.
A Sideline job that doesn’t exchange time for money
Time is your most valuable asset. The concept is that you want something where you don’t exchange time for money. Remove yourself from having to work more to earn more. You can theoretically scale whatever is making you money without a large increase in time spent.
The beauty of this method is that you’re removing yourself as the bottle neck for earning money. Once you achieve this you will have time freedom, location freedom and ultimately freedom to do whatever you want with your life.
This method does result in more work early on in your life. If successful could easily make you part of the new emerging class “The New Rich”.
Tim Ferriss refers to this type of work as a Muse in his book the Four hour work week. (Review coming soon)
James Altucher refers to this as a side hussle. One of the messages that really resonated for me from Altucher, is that if you’re relying on one person for your entire income, then that person has power over you. Not only that, but if anything changes, then your income will change completely. If you have five sources of income and one of them disappears, it’s not ideal but it’s not catastrophic like it is with your only source of income going.