Hello Grasshoppa,

Many people have a different way of defining wealth in life. Most of them link it to having a lot of money & but some may define it by having a Financial Independence Retire Early (FIRE) life. Some of them even link it to being rich with knowledge & skills. No matter how we define it, at end of the day it will always link back to having money or ability to generate income in the long term. Agree? Generally speaking, we equate wealth by how expensive their car is, the size of their house or maybe even by the watch they are wearing. Are they really rich, though? For some of them, they may fall into debts via loans or credit cards just to obtain that lifestyle. They may look rich in your eyes but they are not actually that rich.

To help you understand better, I have listed down on What Makes You Rich & What Makes You Poor.

What Makes You Rich?

1. Assets
Cash, Properties, Gold, Collectibles, Stocks, Business or other investment can be considered as part of your asset. It will help you to convert it into cash or generate you a long term income. Many people started to build their asset when they started to work usually by the age of 25 & started to struggle to catch up with balancing their assets & lifestyle. Is it a bit too late? The answer is no but it requires adjustment & longer planning for them to build those asset base. The earlier you start, the better it is for you. If you are 18 & you are reading this post, you can also read my previous post on What Can You Invest With RM100 or Lesser to kickstart your investment journey. If you are doing your own business, it can be also your long term asset to generate long term income.

2. Knowledge & Skills
Many people stop acquiring new knowledge the moment they graduate or reach a certain point in their lives. Knowledge should be something that we have to acquire from the day we were born until the day we die. It can be from reading, learning from the internet or even learning from others. Last year, I had the chance to go on a trishaw ride, the explanation by the trishaw rider of Penang history really shows how little knowledge I have towards my favourite island. Aside from knowledge, having useful skills is also essential for you to generate long term income. Those skills can be obtained while you study or it can be acquired based on your passion & hobby. I always ask myself, what is the skill that I have where I can generate long term income while travelling the world?

What Makes You Poor?

1. Bad Financial Planning
If you have no financial planning & spend as you please, this is where your money will deplete faster than you thought. This can be from bad spending habits & going into credit card debts. Buying things that you can’t afford & maximising your loan can be also a red alert for you. It can be from buying the house or car that exceed the amount of commitment you can afford. Taking a personal loan to spend on unnecessary spending is also bad financial planning that will cause you to be poorer. Remember, there is no such thing as I can earn it back tomorrow or in the future.

2. Unskilled
Being unskilled actually reduced your chance to earn extra income or climbing the corporate ladder. Basically, it is purely for those who are looking to live the same life for the rest of their life or for those who are comfortable with their current life.

Conclusion :

As all of you may know, I have been chasing my financial freedom since I got out of my credit card & personal loan debts. I realised that life can be really dull if we are just walking in the rat race & live that life for the rest of our lives. That realization over the years has motivated me to plan my “Financial Independence, Retire Early (FIRE)” journey. To be honest, it is not as easy as what everyone thinks where you can just leave your 9-5 job or business to live a FIRE life. It takes years of planning to ensure that I am able to retire by the age of 40. Currently, I’m 34 & I am still far from my FIRE goal despite working for it for the past 5 years. Nevertheless, I am still committed & motivated every single day to ensure that I achieve my financial freedom goal once I turn 40.

OSS!