| Real Life Strategies for Building Wealth
Conversations About Money: Being Wealthy is Not About Money

Conversations About Money: Being Wealthy is Not About Money

“Are we going to be poor, mum?” – my teenage son asked.

I was driving us to the gym and we were talking about changing our phones. Naturally, he wants a top-notch iPhone; I understand that. I worship in the temple of ‘Apple’ too.

What was my son about?

I had just mentioned that when our phone contracts are up for renewal we’d need to be careful to keep the cost down – particularly if I decide to take voluntary severance.

It was obvious that the thought of having to be careful with money upset my son. He flipped to the conclusion that we are getting poor and somehow this didn’t sit well with him (I don’t understand this one either but probably this is for another conversation).

I didn’t know what to say. Conversations about money are never easy and it doesn’t matter how open you are generally about it. Having conversations about money when your financial situation is about to become much less certain is…well, difficult.

I said nothing; which I find is the best thing to do when you don’t know what to say.

Then I started running and my mind drifted back to my son and his understanding of wealth and poverty; or the lack of it. On the way back home, we had our chat about money.

I told my son that we won’t be poor and that we’ll need to be careful. This didn’t seem to lift his fear.

This is when I realised that my son is fearful of being poor because he has very little understanding of what being wealthy is about.

The first of our conversations about money, about wealth, boils down to the following:

Being wealthy is not about money!

Are you surprised? Do you think this sounds wrong?

Most people I meet think like my son.

When they think about wealth they think about hefty bank accounts, mansions, soaking the summer sun on a yacht and gold plated door handles. Some, more sophisticated, acquaintances of mine would go as far as including unique experiences and limitless opportunities and choice in the description of wealth.

These are the signs of wealth but not what makes you wealthy.

Which brings us to the fact that being wealthy is not about money.

It is about what makes you wealthy and this is a combination of your ability to create wealth, to keep it, to expand it and to appreciate and share it.

So, I’m not giving you some new age drivel about how money doesn’t matter; how all that matters is love and your soul (for what it is worth, I believe that all these matter for a happy and fulfilled life).

What I’m saying is that becoming, and being, wealthy is not about money; it is about the conditions you’ve created in your life to make it, keep it, expand it and spend it appropriately.

Here is some of what you need to be wealthy.

#1. Understanding of the link between money and value

To be wealthy you need to understand the link between money and value.

Sustainable wealth is a measure of the value you contribute to others and to the society at large.

For instance, your pay is a measure of the value your employer believes you contribute to their business. Hence, if you want a pay rise, you need to make sure that you contribute a lot, that you contribute what your employer values and that your employer knows of your contribution. Simples.

This link between money and value works similarly when you freelance and start your own business.

(You can make money that is not linked to contributing value but, I’d venture, this is not sustainable. When money and value are not in accord, you are likely involved in a form of gambling and even if you are very good at it things can go wrong.)

#2. Understanding money and how it works

To be truly wealthy, you need to understand money and how it works.

I doubt very much that I’ll manage to help with this one here: many volumes and digital space is devoted to this.

What I can do, however, is to tell you that money is to the economy what your blood stream is to your body – it makes all else thrive but to do that it must circulate.

As part of this large body of the economy you make money, use it to nourish your life and store some resources.

Where this gets more complicated is the detail. For example:

Equally important is to comprehend some of the simple rules of money like ‘you cannot spend it twice’.

Understanding money and how it works can take a long time. Have you thought of playing some of the great money games to help you along? (I can tell you that playing CashFlow with John and our son made me think and research quite a few things.)

#3. Making choices

Being wealthy is to a very large degree about the choices you make in life – every choice comes with its costs and opportunities.

What did you choose to do for living? How much you choose to read (and what do you read)?

Did you go to university? Did you borrow all you can?

I can go on but you probably get my meaning already. Your choices matter so you ought to choose wisely. And remember that you can change the direction of your life.

#4. Sound money habits

Being wealthy is very much about your habits.

If you’d like to learn more about that you can check out Rich Habits by Thomas Corley. (You don’t have to agree with everything in it; just read it and think about it.)

#5. Resilience

Being wealthy is also about resilience.

As I tried to tell my son on numerous occasions, this is about what you do when sh*t happens to you.

Because, as we all know, dreadful things happen and often you have little or no control over whether they happen or not.

Being resilient means that you keep going – you adapt, you fight and you find a way. One thing you don’t do is admit defeat.

#6. Flexibility

Being wealthy is also about how flexible you are prepared to be in your life.

What are you going to do when there are setbacks in your wealth building plan? Like you are made redundant?

I believe that being flexible is key to sailing through financial adversity. If our monthly income declines, I’m more than prepared to reduce our monthly spending; and reduce it very seriously.

Because, through challenging my comfort zone, I know that I don’t need much to live on. I can take life as it comes.

#7. Hunger

No, I don’t mean this literally. Still, being wealthy is about being hungry – for life, for experiences, for glory even.

Indifferent people don’t make a difference in this word, they don’t ‘make a dent in the universe’. Hungry people do.


Conversations about money can be difficult. How do you explain to your teen son that wealth is not about money?

I chose to tell my son that being wealthy is not about how much you have, it is about how well equipped you are to have what you want.

“Are we going to be poor, mum?” – my teenage son asked.

No, son; we are not going to be poor. You can still forget about this shiny, new iPhone – this is what being flexible is about.

photo credit: Theo Crazzolara Chocolate coins via photopin (license)

7 Ways to Transform Job Redundancy into the Most Exciting Opportunity of Your Life

7 Ways to Transform Job Redundancy into the Most Exciting Opportunity of Your Life

In this post I discuss seven ways that will get you away from viewing a job redundancy as the end of your dreams and see it as the opportunity of a lifetime. Faced with job redundancy we feel fearful and stressed; this is only to be expected. Heck, I want to crawl in bed just now and not get out of it for a very long time. What I feel at the moment, however, matters little; what I do next is important. In this post, I’ll share with you what I do/have done to transform job redundancy into the most exciting opportunity of my settled, cushy, middle class life.

Imagine how one morning you get up, have breakfast, read the news and complete your ablutions. You sing in the shower because life is looking good: you know what you want, you have a plan how to get it and you enjoy the way getting there. You get in your car (hop on your bike or the bus) and arrive at the office. All kinds of opportunities are open to you and underneath all these is the unshakable belief that you’ll continue this sequence of events and you’ll be coming to the office, contributing to the organisation and it is your choice how long this goes on for. It is about feeling secure and in control, you know. Then you open your e-mail and you can’t believe your eyes – what you see is a message announcing a round of job redundancies.

This is almost exactly what happened to me, and to all academics employed by my university, last Wednesday.

So, my friends, I’m sitting here writing this post and my job is at risk of redundancy. And it is not only my university: the whole higher education sector in the UK is in profound crisis. Three other universities are undergoing job redundancies and many others are considering their options.

Do you want to know what I felt when I first read the job redundancy message?

I felt wronged, angry, fearful, full of righteous indignation and silly fight, I felt defeated. In this order! Than I reminded myself to breathe and started thinking about how to make the best of a very bad situation.

Somewhere on the way between fear and acceptance I realised that this job redundancy, assuming that I manage to get it under the conditions I’ve worked out, may be the best opportunity to do something sensible with the rest of my settled life.

Here are the seven ways I used to transform the threat of job redundancy into a most exciting opportunity for happiness and fulfilling existence.

#1. Focus on what you’ll gain through job redundancy not on what you’d lose

When I first heard the news about the job redundancy my mind jump-started an inventory of all that I’m going to lose. You know, these are all random thoughts about loss of status (oh, I’m not going to be Professor Nedeva any longer), identity (I’m not going to be an academic and a respected researcher any longer) and income (there won’t be a large(ish) amount of money hitting my bank account every month) shooting through your mind.

Reminding myself that ‘if I’m not enough without it, I’m not enough with it’ helped a bit; a tiny bit.

Then I decided to change my focus and think about the things I’ll gain if I engineer my job redundancy.

  • I saw myself in complete control of what I do with my time.
  • I imagined myself writing books that people what to read not research papers my university wants me to publish.
  • I reminded myself of all the wacky and wonderful projects I’ve thought about and never tackled.

And, you know what, I felt my fear of job redundancy recede and a youthful excitement take its place. I can hardly wait to begin the rest of my life!

#2. Do you love your job or you love what you do?

We often mistakenly believe that we love our jobs when in fact we love what we do. These are two very different things. You may love selling flowers and dislike your job in a particular flower shop, right?

When it comes to being a university professor, the difference is even more pronounced.

I love what I do. There are few things that give me more pleasure than holding a class of undergrads transfixed and seeing the spark of curiosity and passion for learning in their eyes. Every cell in my middle aged body starts humming with pleasure and excitement when I do my research (all stages).

For several years I have been less certain that I like the conditions under which my university expects me to do what I love doing. I’d go as far as saying that I would have checked at least four of the five signs that you should leave your job.

Realising that I love what I do but have grown to dislike my job makes the experience of loss because of job redundancy much less strong. Also, I started thinking about different ways to continue to do what I love doing while forgoing my job.

#3. Do you know what you are really good at?

This is a hard one because people tend to either overstate or understate their competencies. (Some people can get this one completely off kilter but this is not usually the case.)

I tend to underplay my competencies. Hence, it was very helpful to do an ‘inventory of competencies’. I just wrote everything I can do (this should be done without much thinking and strain). When you do this, please don’t concern yourselves if you find that you’ve put on the list things like ‘I can wipe a baby’s bottom’ or ‘I’m very good in the sack’.

Because the next step of this exercise is to get back to your list and match each competence with a way to mobilise it for income generation. You can choose not to take some obvious possibilities forward.

This exercise made me feel good. Unexpectedly I saw that my competencies as a successful scholar are almost exact match for the competencies one needs to succeed in the network economy. A possibility to make income from writing also transpired. Not that hopeless after all!

(I did find this very hard and would appreciate some help from you guys at some point. I’d like to ask you about how you see what I’m good at (have to find a form to do that.)

#4. Brainstorm some opportunities that you can see ‘out there’

This one is deceptively simple. To do it properly, however, you’ll need to achieve a good grasp of the developments in the economy, your industry and have an overview of future trends. Apart from that, you’ll need to move continuously – and for some time – between the opportunities to make income and contribute value that are ‘out there’ and the competencies you have.

You may need change your skills set. You may need to gain different social capital (start hanging with new people, make contacts with people in other industries etc.).

Sounds complicated but it isn’t. All this takes is intelligence, determination and persistence.

#5. Do your sums

Loss of income is probably the aspect of job redundancy that scares people most.

There are few things that deal away with fear more effectively than firm grasp of the fact. Here is where maths and numbers come into the picture.

To cope with the fear of loss of income you have to move away from the emotion and make it into a problem. Sit down and go through your monthly spending. I did this using The Money Principle Monthly Budget Planner. Check your income streams, savings and investments. How much is in your emergency fund? Work out how much you’ll get as severance payment? Check what will be the effects of job redundancy on your pension?

I’ve done most of these and I’ll be talking to a pension consultant over the next week. And you know what?

Numbers don’t lie and I feel so much better for the level of certainty they bring to my otherwise shaky existence. I know exactly how much income I have to make (as a minimum). It is not too bad, really.

#6. Take it one step at a time

The threat of job redundancy can leave you completely paralysed if you get ahead of yourself. Your best chance for getting it right, and approaching it with something at least approximating a dignified rationality, is to work out a sequence of actions and focus points and follow this strictly.

For me, the first question is do I want to apply for voluntary redundancy? (This hide several questions such as do I want to stay in academe, do I believe that I’ll make it outside etc.). What is important is that this decision is still under my control.

Next, if I were to decide not to apply for voluntary severance, would be to wait for compulsory redundancy. This is stressful but…

Main thing is not to allow yourself to worry what may or may not happen when you leave your job. Remember that most people when faced with adversity behave like Israel: they hustle according to their need. In other words, it seems to me that expanding energy worrying about what you’d do ‘after’ is a wasteful strategy: you’ll be all right at the end.

#7. Remind yourself that ‘it will be all right at the end’

Life has an uncanny way of sorting itself out. Please remind yourself that:

“It will be all right at the end and if it is not all right, it is simply not the end.”

Bonus…The Eminem Approach to Job Redundancy

To apply the Eminem approach to job redundancy you have to believe that

Success is your only motherf*cking option; failure’s not!

This is all.


Your Game Plan to Financial Independence

Your Game Plan to Financial Independence

Editor’s note: This is a guest post from Pauline of InvestmentZen.com. The point Pauline makes here is simple: to achieve financial independence you need to master three things: spending less, earning more and investing wisely the rest.

Financial independence is the stage of your financial journey where your passive income from investments covers all your living expenses. That means you never have to work another day in your life if you don’t want to. Pretty sweet, right? But that sweet reward comes after a few years of saving and dedication that not everyone is able to accomplish.

Know where you stand

When you embark on a journey towards financial independence and early retirement, you need to review your entire finances to know where you stand.

  • If you have high interest debt, paying it off is your number one priority. Try to get a 0% balance transfer or at least refinance for a cheaper rate, so it doesn’t take forever.
  • Then look for a refinance of your student loans and mortgage, that can also save you thousands
  • Send every extra cent you have to pay off your debt.

Once your high interest debt is wiped off, time to plan for financial independence.

Your financial independence number

How much do you need to live comfortably for the rest of your life? Right now, there are expenses that are related to work, like buying suits, commuting or having lunch with your colleagues, that will be eliminated once you are financially independent. If your income is lower once you stop working, you might also be paying less taxes. And if you are living off your nest egg, you will not be making retirement contributions anymore.

On the other hand, as you get older, you might need a bigger house for your growing family, money to send your kids to college, and medical care in old age. The last thing you want is having to go back to work at age 65 because you didn’t plan properly!

So, determine your financial independence annual budget, and multiply that by 25. Using a safe withdrawal rate of 4%, your nest egg should outlive you if you have 25 years of expenses saved.

Get started

Financial independence is achieved by a combination of

  • Spending less
  • Earning more
  • Investing and compounding

Spending less

Spending less is easy when you know the reward that is expecting you: independence from a cubicle and freedom to do what you please with your days, decades before your peers. But if it becomes a frustration, you might give up and go back to your old spending ways. Try to determine what is really important to you, so that doesn’t happen. If you want to buy something, wonder how long you would have to pay for it, and whether it is worth delaying financial independence by that much.

Earning more

Earning more is the real key to financial independence. While you can certainly cut your expenses here and there, you still need to eat and put a roof over your head. You can’t achieve a 100% saving rate. In order to become financially independent earlier, you need to make more.

You can start by asking for a raise at your current job, if you haven’t had one in a while. A one time $10,000 raise means $200,000 more over the next 20 years! If you were already able to live off your current salary, invest 100% of your raise for a year or two. Living on last year’s salary is a great way to boost your saving rate. If your boss won’t give you a raise, look for a better paying job elsewhere. Or a job that pays the same but would give you more free time, less commuting expenses, etc. Try to find an hour or two in the evening to work on a side project. It could be something that pays you right now, like teaching a yoga class or dog walking, or a side business you enjoy, so it doesn’t feel like work and might provide an additional source of income in retirement.


Finally, investing is the secret that will take your financial independence plan to the next level. It will take much, much longer to save 25 years of expenses if you are getting 1% interest from your saving account, compared to getting 8% from the markets. 8% is a realistic rate of return over a long period of time (30+ years) for index funds like the S&P500. Open a brokerage account and start sending every amount you can spare, taking first advantage of tax free accounts and your company match for an extra boost. No need to be an expert in investing or spend hours researching a company, just select a few low fee index funds and keep going. Ignore the market crashes, the craze about this or that stock, do your boring little thing and watch your nest egg grow. Invest only money you can afford to leave untouched until financial independence. Reinvest the dividends and watch compound interest work its magic.

You can also look for other types of investments, like real estate, but remember that managing a rental property is not exactly what you call passive income, so take that into account when you picture your retirement. Will you be active, and willing to do that? Will you even be around, or traveling the world? Will a manager still make the investment worth your while?

Financial independence does not happen overnight. But following these steps, even on an average salary, you can get there in just a few years. If you save 50% of your income, which is easy with a partner since many households make it work on one income, financial independence is just 17 years away.

What is your game plan?

photo credit: Lapse of the Shutter Tree Avenue via photopin (license)

This is How You Know Without Doubt That You Are Ready to Retire: introducing F*ck That Index

This is How You Know Without Doubt That You Are Ready to Retire: introducing F*ck That Index

Over the last several months my mind has been drifting towards thinking about whether I’m ready to retire.

Okay. Not really pondering whether I’m ready to retire; more like trying to decide when I’m going to be ready.

For me the matter of retirement – be it early or not – is not mixed with longing for twisty, ribbed stockings, bubbly cardigans and watching daytime TV. I can’t stand daytime TV.

For me, the matter of retirement is tangled with the lust for independence, the desire to create without restrictions and contribute to people’s lives with no limitations. While I’m employed this is not possible.

‘Oh, but you are a university professor.’ – I hear you say. ‘If you are not able to create and contribute value to people’s life, who can.’

You’d be surprised. In the past, I have made some positive contributions through my research; like contributing to a very substantial increase of the science budget in the UK in mid-1990s. I have touched the destinies of generations of Doctoral, Masters and undergraduate students…reputedly. Still the changes in Higher Education and the universities over the last decade or so, have been consistently robbing my life of meaning.

I want the meaning back.  After all, we are all mortal and we are not born to make money, spend money and die with regrets.

So I’ve been trying to decide whether I’m ready to retire – and when I’ll be ready if I’m not there yet – and have had a big problem.

This problem is called ‘enough money to last me for life’. I am not looking to stop being employed so that I could put my feet up and do b*gger all, that’s true. Still, leaving the security of a full professorship and having to make a living is scary. I’d like to know that I have enough at a very basic level so I don’t need to obsess and panic about earning.

So, I played around a bit with our retirement calculator. It is fun but…I had to make too many assumptions that are highly problematic. Like my annual spending in ten years’ time.

While looking for something else, I came across an easy formula that helps you decide whether you are ready to retire; it was introduced by Quora reader Doug Massey and is known as F*ck That Index (or FTI).

Are you ready to retire: what is FTI?

FTI, or your readiness to retire, is calculated using the following:


Your Age * Your Net worth/Annual spending


The index should be greater than 1,000 for you to be ready to retire.

I love this one! I love it not only because it is the kind of thing that tells you ‘yes’ or ‘no’ but also because it allows you to play with the conditions for readiness. For instance, you may be closer if you reduce your annual spending; or you need to wait several more years.

Where do I stand in all this retirement lark?

Remember when I was telling you how important it is to know your net worth and that you should follow it religiously. Hope you did! I do know my net worth exactly and update it every month so calculating my FTI is easy.


…my index is 1,705.

(Had to correct this one up after carefully calculating my net worth. What am I waiting for, I wonder.)

Which is over 1,000 anyway and this means that I can jack my job tomorrow is I want to. And this makes me feel all warm and glowing inside. This is without changing our current level of spending at all.

(Just for the record, John’s FTI is well over 1,000 as well. I haven’t factored keeping a teenage son through university but this may be why I have to make a lot of money some other way.)

What is your FTI value? Are you ready to retire?


Your Freedom Fund is the One Thing to Stop Life Happening to You

Your Freedom Fund is the One Thing to Stop Life Happening to You

freedom fund

Let me ask you a question:

Do you live your life or life keeps happening to you?

Life happens to you at least some of the time? I thought so.

This is the case with most of us; we inhabit a personal space – mental or physical – where our control over the events shaping our lives is fairly limited.

It doesn’t have to be like that. Moving away from ‘life just happens to me’ to ‘I live my life’ is a matter, I’d say, of maturity, confidence, self-esteem and a substantial freedom fund.

Life happened to my sister. I’ll never forget the hot summer day when she broke down in tears and told me what her married life is really like. It was a life of early passion, followed by drink, infidelity and psychological and physical abuse.

‘How long has this been going on?’ – I asked.

‘Over a decade.’ – she mumbled.

‘Why don’t you get out?’

‘I don’t have money to get divorced and how am I going to raise my daughter as a single mother?’

We helped her get out. We paid for her divorce, my parents supported her emotionally and psychologically and we pledged to pay for my niece’s university education (incidentally, one of the best investments we ever made including buying the apartment in Sofia for her to live in).

And if you think that finding yourself in the tight corners of life is exclusively for women, think again.

One of my friends – a man and a very high achiever at that – found himself with nothing but the clothes on his back and the cash in his wallet when he left his wife. He sorted it all out later, as it happens, but living his life was touch and go for some time.

Life used to happen to me as well.

Debt happened to me.

Worrying about how we’ll pay for our modest but fun wedding happened to me.

Heck, life still, occasionally, happens to me. Most of the time though I live my life.

What made the difference?

Many things. I’m older, have more experience, feel more secure and confident and have got to grips with my mortality. Even more importantly, I have choices in life sustained by having a rather generous freedom fund.

Guys, most people will tell you that to ‘take life by the horns’ you need to find yourself, to figure out who you are and what you stand for. This is true. Still, your ability to act on what you find depends on whether you are able to meet the money obligations that come with standing by your principles; in other words it comes down to you having a freedom fund.

Much has been written in personal finance about having an emergency fund; this is money that you keep to be able to pay for life events that may happen to you. A bit has been written about having a ‘f*ck you’ fund.

In my book, positivity rates very highly. So, I won’t be talking to you about starting and emergency fund or building up a f*ck you fund.

Today I’ll ask you to start a freedom fun; this is money that will give you the option to do what you want to do.

You know what the difference is? A freedom fund is about you and your level of control over your life; it is not about what may happen to you or getting your own back.

#1. What is a freedom fund?

A freedom fund is a fund that allows you to do what you want in your life; it allows you to plan and finance life events you value and welcome in your life. Incidentally, a freedom fund would afford you control over the emergencies, the do-dads, in your life as well.

Generally, a freedom fund does ‘exactly what it says on the tin’: it gives you the freedom to live your life on your own terms.

#2. Why do you need a freedom fund

Each and every one of us needs a freedom fund. It doesn’t matter whether you are a woman or a man, whether you have safe job that you enjoy or not. Your freedom fund is the one thing that stands between you and the unpleasantness of life that could happen. Having a freedom fund means that you have a level of control over your life; over what you keep and bring into it.

More specifically, you need a freedom fund because:

Things may change at work

Even if you love your job today employers have a way with changing conditions and doing away with the parts of the job you enjoy.

Employers change their goals, they can change the way in which they go about achieving these goals and this can have a large negative effect on your job and working conditions.

Now, the thing is that whenever your employer, their demands and your job description change you have three possible ways to react.

  • One, you may be completely attuned with the change and fit into the new job description like a hand in a well cut glove. If this were the case you are very lucky.
  • Another way to react, would be to decide that there are other things that matter. In other words, you are not attuned with the change, you have a problem with the new demands of the job but you think that you can still do it because there things on the fringes that still feel right.
  • And last, you can refuse to comply and adjust. In this case you have to leave immediately.

In my experience, when employers change their demands the latter two options are the more likely outcome. If you don’t have a freedom fund this can cause a lot of personal unhappiness and life disturbance.

If you have freedom fund, on the other hand, this can be the best opportunity that life threw you as a curveball.

Things may change at home

Okay, I get it!

You really, really love this guy/girl next to you and you have made public promises to stick by them for the rest of your life. You trust him/her. Until one day he/she gets so mad at you that they hit you.

He/she is apologetic; what’s more you shouldn’t have got him/her so mad, right?

Wrong. Abuse is abuse and you don’t have to put up with it for any length of time.

You don’t have to put up with it particularly and specifically because you don’t have the money to leave the relationship. Now here is where having a personal freedom fund can come very handy.

Oh, and abusers can be men or women.

Life will happen to you anyway

Do know what I mean?

There are life events that are difficult to avoid.

People get born.

People die.

People get married.

Are these emergencies? Not really. These are life events we know will happen (well most of them anyway) but we have no way of predicting when they will happen.

A freedom fund gives you peace of mind; when such events occur it is your choice to decide how to tackle them.

#3. How large should your freedom fund be

A good question but why do you ask me?

The size of your freedom fund is a very personal matter; a matter that only you can settle. How large or small your freedom fund needs to be, among other things, depends on:

  • how expensive is your lifestyle;
  • how long do you take to sort your sh*t out; and
  • your freedom purpose (what is the freedom you want, freedom from what and for what).

I intend to write more about the freedoms we crave and how to calculate how much these cost you. For now, I can only tell you how large is my freedom fund.

I have a personal freedom fund that would allow me to sort out my life were everything to go wrong (e.g. leave job, leave family). This fund is roughly 8 months of my personal living expenses (allowing for accommodation of course).

We also have a family freedom fund. This assumes that I stop working and we stay in the house we live in. We keep approximately a year worth of expenses above our monthly passive income (this is not yet large enough to cover all our expenses).

#4. How do you build a freedom fund

You do it just like you build up any other fund: with patience and persistence. You have to persist with the persistence of a drug addict.

Only caveat is that if you try to save this fund from what you normally bring home every month can be a stretch; and despite all dedication and persistence you may claim other savings and spending will easily take priority.

I’m a great believer in making more money. Build your freedom fund by thinking of side hustle, building it up and keeping at it.

I built my personal freedom fund from my site hustle – all money earned from activities other than my job were directed to build this fund. Our family freedom fund was built by our positive cash flow minus what we keep for investments.

There are novel and imaginative ways to build a freedom fund fast. Some have used GoFundMe.com to garner support and raise funds for their freedom.

While this can, and indeed does, work remember that there are severe limitation. To begin with, you will still depend on the benevolence of others for your freedom and this can be granted or withdrawn. Further, your success would depend greatly on your ability to ‘sell’ your story and not everyone has that. And lastly, you need considerable media savvy because crowd funding is a very noisy space.

In balance, it is better and easier to build your own freedom fund.


We all need a freedom fund. You need a freedom fund and you need it now.

So, stop surfing the net and go get yourself a side hustle; save the money from this side hustle; and very soon you’d have your freedom fund.

Start now. Trust me: it feels better than smooth chocolate melting on your tongue; better than running silk velvet through your fingers.

Do you have a freedom fund? How long did it take to build?

(Please don’t be shy and share.)

11 Reasons Why You’ll Never be Rich: poverty is not skin deep

11 Reasons Why You’ll Never be Rich: poverty is not skin deep

never be rich

One of the most asked questions on Quora is how to become rich. Which is fair enough if we keep thing in perspective: it is highly likely that the people who ask it will never be rich.

Let’s face it: poverty is very persistent. For instance, Britain and the US are two of the wealthiest countries in the world. Still, at this very moment 23% of the population of Britain and a similar proportion of the population of California live in relative poverty.

No, I don’t wish to get into the ins and outs of the measures of poverty or arguments that poverty is relative: of course it is. I don’t wish to discuss the possibilities for people who live below the poverty line to have satisfactory lives. What I’d like you to note is that a considerable proportion of the population in two wealthy countries still live in poverty.

Governments talk about ‘war on poverty’ but so far policies have failed. Bloggers, and others in the personal finance industry, make a living by teaching people, well or not so well, how to be rich. People dream about leaving poverty behind and becoming rich.

Still poverty persists.

Most people who were born poor will die poor. In fact, it is much worse than that: the children and grandchildren of most of the people who were born poor will be poor as well.

Now, the question I’d like to ask is why poverty is so persistent?

Searching for an answer, I’ve read many books and articles. I’ve read about the personal habits that limit our success; about the thought patterns that are in the way of becoming wealthy; about the social structures that impede the opportunities we find; and about the social barriers that prevent poor people from accessing opportunities.

I expected all this; I had actually figured it out – after all I’m a social scientist. These ‘reasons’ are also attuned with my egalitarian, leftist leaning.

What I didn’t expect was to find a book by Ruby Payne entitled ‘A Framework for Understanding Poverty’ in which she argues – rather convincingly – that the key differences between ‘poverty’, ‘middle class’ and ‘wealth’ are hidden in a set of socio-cultural beliefs, values and attitudes. These are transferred from generation to generation and very difficult to break.

Now, let me ask you, what do you think informs your actions?

Yep. It is your beliefs, values and attitudes.

I’ve become convinced that the core reason for poverty to persist – at individual level – are these beliefs, values and attitudes which limit your aspirations and frame your actions and choices.

Building on Ruby Payne’s research, I’ve come up with 11 beliefs and attitudes that, were you to share them, would ensure you’ll never be rich. People who are serious about escaping poverty have to work on changing these beliefs and attitudes rather than fall for ‘think like a rich person’ traps.

Let’s do this! Do you believe that:

#1. People are your main possession

Do you believe that you are ‘rich with your children’? Or your family? Or your friends?

Well, this is what this is about. It is not about possessing people but the fact that the people in your life are seen as your main possession.

When it comes to possessions, research shows that the middle class values things and wealthy people value one of a kind objects, legacies, and pedigrees.

This is why, the middle class will continue struggling with clutter and wealthy people will continue asking you whether you come from the New Orleans Jones’s.

#2. Money is to be spent

Some time ago I published a little piece on the one key difference between poor people and rich people. In brief, it is that poor people don’t spend money because they don’t have it; rich people don’t spend because they don’t want to.

Now turn this one over and you will get the meaning of this belief. When they have money, poor people spend it because they view it as a means to meet long ignored ‘wants’ today.

According the research, for middle class people money is something to be managed. Wealthy people view money as something to be invested.

In brief, when it comes to money, poor people spend it, middle class manage it and wealthy people invest it. Here you have it.

#3. Food is to satisfy hunger

How do you view food? If you see food as something that satisfies your hunger you are likely to be poor (and to stay so). This made me realise why I feel so dubious about the whole ‘feed yourself on £1 per day’ movement. Yes it is possible, but the food will keep you full while your body may be screaming for nutrients.

Middle class focuses on the quality of food and whether you liked it. Wealthy people mind the way in which food is presented.

#4. Your clothes express your personality

Poor people dress to express their personality. Middle class dress to fit the norm and label is important. For wealthy people clothes have artistic quality and designers are important.

#5. Your present is most important

Recently I saw a movie called American Honey. When asked ‘What is your dream?’ the main character replied: ‘Do you mean in the future?’.

This is what this one is about. Poor people act to survive in the moment and their decisions are grounded in the present.

Interestingly, for middle class people most important is the future and their decisions always take into account longer term ramifications. For wealthy people, past is important and decisions are made accounting for tradition.

#6. Education is great but it’s not for you

Do you remember in Pretty Woman when Julia Robert’s character was really impressed when Richard Geer’s character told her he’d ‘gone all the way’ at school.

You see, poor people value education; they just think that it is not for them. So they are less likely to aim high at school.

The middle classes, on the other hand, see education as absolutely critical for success and for making money. Wealthy people, view education as a way to maintain and build connections and get included in the elite networks of the time.

#7. Things happen to you and it is fate

Poor people believe in chance, destiny and fate.

Middle class people believe in choice and control; they believe that it is within their power to determine, and change, their future. Wealthy people believe that a bright future is their right anyway.

#8. Your little corner of the world is your world

Poor people generally inhabit a rather small universe; it is the neighbourhood that is important and all else is secondary. Middle class people see the world in terms of national setting. For wealthy people the world is a global notion.

#9. You love and accept people for who they are

According to Ruby Payne’s research, poor people love and accept people because of their individual characteristics; so it is very important to be liked. For the middle classes acceptance and love are also conditional on achievement; for wealthy people, love and acceptance are related to social standing and connections.

#10. Life is about relationships and entertainment

Another interesting difference in values and attitudes is that the lives of poor people are generally driven by relationships and entertainment. Middles class people are generally driven by work and achievement and wealthy people live for financial, political and social connections.

#11. Jokes are about people and s*x

Last but not least, poor people have very different sense of humour. This research shows that generally, poor people laugh at jokes about other people and s*x. Middle class people appreciate situational comedy and wealthy people laugh about social faux pas.

Where do you fit?

Now, you can check where your beliefs, values and attitudes place you across the divide between poverty, middle class and wealth.



Middle class Wealth
Possessions People Things Collectibles, legacy
Money To be spent To be managed To be invested
Food Quantity Quality Presentation
Clothing Expression of self Way to fit in (labels) Difference (designer)
Time Present Future Past and tradition
Education Admiration Means to success Means to connections
Destiny Fate Choices Noblesse oblige
World view Local National Global
Love Personal characteristics Achievement Social standing
Driving forces Survival, relationships, entertainment Work, achievement Financial, political and social connections
Humour About people and s*x About situations About social faux pas


I’m very firmly middle class it seems with the occasional venture in poverty and wealth. For example, my world view is global (wealth) and I like the people I like (poverty).

In which column do you find most of your beliefs? Have you managed to move from one to another?


photo credit: Jayson Edward Carter Variation on a Theme, XII via photopin (license)