Who Cares About How Much Money You Make?

I’m going to tell you a classic story of working-class mind set.

It’s the kind of mindset that only cares about how much you make, but never gives a thought to what really matters…their net worth.

My coworker was telling me a story today about someone she knows who is always bragging about how much money she makes. The individual in question earns $80,000 a year, which is a very respectable income that is higher than the national average.

There is one very important caveat, however. The $80,000 is earned from two separate jobs, each paying around $40,000.

This mentality is classic working class thinking, for a few reasons:

1. Her income is not earned by having two careers – it is earned by having two jobs.

You could practice law during the day and teach at a university in the evening – this would be an example of having two careers as opposed to two jobs.

If this person loses one of her two jobs, her income would immediately be cut in half.

2. Bragging to your friends about how much money you make is classless! It’s something working-class people do.

And unfortunately, it’s a symptom of not understanding anything about wealth.

Wealthy people talk about money in terms of net worth – not salary.

I know someone personally that currently earns less than $50,000 a year and has a net worth of $200,000. That may not be on the level of anyone on the Forbes 400…but it’s more than the majority of the country.

The reason someone with such a humble income has a six figure net worth? Ownership.

She purchased two condos years ago when she was doing well, and held on to them while they appreciated in value.

Don’t get me wrong – we all want to generate as much income as possible. But your net worth is the key.

The next time someone brags to you about how much money they make…ask them how much their net worth is!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page. 

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

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This Could Be The Investment Of Your Lifetime!!

When you make an investment, no matter how big or small, there is always the chance that this investment could be the investment of your lifetime.

Whether it is likely or not is irrelevant. Because none of us has a crystal ball.

What’s important is that it very well could be.

Here’s a great example of what I’m talking about…

One of the best investors in the world is a firm called Baillie Gifford. Baillie Gifford primarily invests in founder-led, disruptive companies that come to market as well as those that have been around for years.

In the early 2000’s, right after the dot.com bubble, Baillie Gifford invested in eBay (NASDAQ: EBAY) and Amazon (NASDAQ: AMZN). At the time of their investment, they had more confidence in eBay than Amazon.

Over the next 20 years, of course, Amazon would turn out to be the far superior investment – up over 17,000% since 2002, while eBay is up a little over 400%.

In 2002 I was a market maker working on a trading desk. I don’t recall one person there who felt Amazon would be the better investment over time. Not one.

As investors, we become owners. You may not look at it that way, but we are owners when we buy shares in a company. Our goal is to find the best investment opportunities we can.

We try to find first movers in an industry that is evolving, and take a partial ownership stake.

When we buy, our timeframe is long. Ten, twenty, thirty years or longer.

If you can do this, truly great companies will reward you handsomely over time.

Here is a list of quality companies that became the greatest investment of a lifetime for some people:

1. Home Depot (NYSE: HD) disrupted hardware stores by having everything under one roof, as well as low prices.

2. Walmart (NYSE: WMT) disrupted brick and mortar retail by offering the lowest prices.

3. Southwest Airlines (NYSE: LUV) disrupted air travel by offering the lowest prices and great customer service.

4. Costco (NASDAQ: COST) created a new business model in which you pay for the privilege to shop in their store.

5. Monster Beverage (NASDAQ: MNST) became the lead dog in the energy drink space.

None of these are companies that anybody thought would turn out to be investments of a lifetime.

Just find a business you like and get invested today.

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)