Wednesday, March 29, 2006

$1,000,000 follow up to Deymond Lashley

You have to love the internet, the blogosphere especially. I received a very colorful reply to my what makes one rich rant of a couple of days ago. In the response Deymond Lashley goes on to tear apart my entire posting as being less than critically thought.

Deymond goes on to say, "Don't quit your day job, unless it involves critical thinking (not your strong suit). "

Ok to be honest I often soften blows from my truest opinion because i feel that if I were to say what I really felt, I would offend too many people and be deemed too radical. Well Deymond, congratulations you have caused me to come out of my shell and I dedicate this to you:

Rich in 2006:

1. Owning a mortgage(home) does not make you rich. I dont care how much equity you have in the home, unless that money is working for you, all you have is a cash flow from your pocket into the bankers pocket.

2. Petty salaries does not make you rich in 2006. No matter if you do it by yourself or with a partner, making $150K a year does not make you rich. Dont even mention your salary until you cross $175K by yourself and have your company afford you a housing and car allowance.

3. Savings of $350K or less does not qualify you as rich. Money in the bank, is the same as money in the tank.

4. The legal definition for wealth "and these definitions are outdated"
  1. a natural person who has individual net worth, or joint net worth with the personĂ‚’s spouse, that exceeds $1 million
  2. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
How do I define wealth? Simply, speaking from a purely financial standpoint, when you have the means to leave your everyday life tomorrow, without making any apologies or preparationss to do so and settle in another country for more than a year, then you are rich. This means you don't need to sell your house, it will just be. You don't need to cash in your 401K, that money was for your grandkids graduation gift. You don't have to sell your business, it will run with or without you. Until you have the capacity to do these things, you are not rich in America you are simply above average.

The overall point I am trying to stress is stop thinking of wealth as the number, $1,000,000. Think past that mental roadblock. For years it had given me problems until I begin to study wealth and lifestyles. $1,000,000 is a number, don't think of it as a goal, think bigger or at least more quantifiable. We are often limited to our own minds. I hope this helps.


Deymond Lashley said...

We are indeed limited to our own minds. Some minds impose more stringent limits than others, apparently. Seriously though, I appreciate your clarification. But I do believe your 'legal definition of wealth' is actually the definition of an Accredited Investor as defined by Rule 501 of Regulation D in the Securities Act of 1933.

Anonymous said...

I like your definition and your statement about getting your head out of the $1 million figure. My personal definition of rich is being able to live off the interest of the interest.

Javier Marti said...

(Don't worry about other's criticism, and be as radical as you have to be in your opinions.
That will make the blog more interesting and real.)
It happens all the time...the web, as life, is full of misinformed people, and sometimes plain idiots who don't think twice before talking.
I am publishing an article soon on "Robotization, immigration and offshore outsourcing" in the blog in the coming days. It is clear that hardly anyone will get rich working for others, unless as a top executive for a massive company.For the rest of people, the options to pay a mortgage -let alone get rich- are thining up every year...