What is your story of becoming discreetly wealthy

What is your story of becoming discreetly wealthy?

Asked on July 12, 2019 in Finance.
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About two years ago, at the age of 27, my husband and I realized we have more money than all of our friends.

In two years, at 31, we will have 1M$. (I know it for a fact, and you’ll see why).

Most of our money comes from having rich parents. They bought us an apartment with no mortage. The rest of the money comes from saving and investing in the stock market.

But, this is not the whole story.

First of all, “having rich parents” is something that shapes who you are. You see the way they live and you follow their example. I will explain what I have learned and applied in my own life.

My parents were not rich when I was born. They accumulated their wealth through many smart financial decisions. They educated me about money management. Saving money became second nature to me from a very young age. It’s like being thin your whole life. The chances of becoming morbidly obese are extremely low. It’s the same with money. When you know how to earn and save money, it is extremely unlikely that you will run out of money.

Here are the key factors that made me and my parents before me wealthy:

  1. Having a good job – I know most answers recommended having your own business. Indeed, the earning potential from a business is much higher than from having a job. I will probably have my own business in the future. But, you can also accumulate some wealth through the safer and longer route of a job. When you have a relatively high-paying job, it’s easier to save more money. Now my husband and I save almost 50% of our salaries. A high paying job (or a business, for that matter) does not appear out of nowhere. My mother has a PhD. I have a PhD and my husband a Masters. We are all hard-working. It takes time and effort, but when you prove yourself, and have the right experience, you can earn a lot of money.
  2. Saving- I cannot emphasize this point enough. Even when I earned next to nothing, I still saved some of my salary. You need to learn to live below your means. This requires planning and effort. It may mean not having a gym membership, cooking your own food, and going shopping less often. I have lived like that for many years, even though I come from a wealthy family. My parents did help me with some of my expenses, but I also learned how to manage my own money.
  3. Investing- I Invest all of the money I save in stocks and bonds. If you are no investing expert (I am definitely not one), make your portfolio low risk and highly diversified, with 10–30% stocks and the rest bonds and/or ETF. Don’t make the mistake of buying stocks of one specific company because “it feels right” or because you foresee a bright future for this company. This is very general advice, but once you learn the basics, investing is pretty uncomplicated. It is one of the only places where too much effort can actually make things worse. Much of my family’s money comes from real estate investing. My parents bought a number of apartments after years of saving money through the stock market. The money from the rentals goes to- you guessed it- saving and further investing. That’s how money makes more money.

The points so far explained where the money came from. But, there are many habits, personality traits and life factors that allowed us to follow these steps, stay wealthy and make even more money. The ones I can think of right now are:

1. Not having debt- I am from a country in Europe where college is cheap. Also, I have never taken a loan. I don’t even pay using multiple payments. If I can’t afford it, I don’t buy it.

2. Good life conditions- no severe trauma, debilitating diseases, mental illnesses, physical injury, addictions or family feuds. Therefore, I have the time and energy to work and earn money for myself. I don’t have people dependening on me. I am not helping some relative get out of debt. I can focus on myself and my husband, and save for my future children.

This has to do with luck, of course, but also with the fact that the people in my family make good decisions and take good care of themselves.

3. Not having children at a young age+ not having many siblings.

4. Planning for the future- not just for the next day. But for years to come. In all aspects of life.

5. A love for life

6. Having strong ambitions

These two things make it much easier to focus and work hard.

7. Good personality traits- being able to get along with others, work ethic, intelligence.
These traits are inherited to some degree, and can be learned to some degree

8. Delay of gratification- most of my friends who have no money, usually cannot stand discomfort. In order to get something out of life, you need to be have a goal that is stronger than short-term pleasure-seeking wishes.

9. I think this is the most important one: Ability to learn.

I love learning. I love reading. I take something of value out of every single book I read. I use this knowledge to change and improve aspects of my life that need improvement. I am constantly learning, growing and changing.
Also, learning new skills is important if you want to succeed in work or in business.

I think people who don’t succeed are very stubborn in their thinking and stuck in their old ways. They have less curiosity and they are less willing (and don’t see the enjoyment of) growing and learning. I am yet to figure out why they are this way, and how they can change that. I can only speak from my own experience. Hope my response was helpful to you and wish you the best.

Answered on July 12, 2019.
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