Taking Responsibility

This is a guest post by Robert, who lives in Calgary and works as a financial adviser retired at 34. He is married, has three kids.  Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.

The rich get richer. It’s a well-known aphorism, usually used as a complaint about the unfairness of life in a material society. But it also holds the secret for people who want to join the ranks of the rich. If you want to get richer, you have to act like the rich. In order to get richer, a person needs to have the mindset that they are rich, and they need to make decisions the way rich people make them.

I lived in Taiwan for two years, in the capital city, Taipei. It is a huge city of almost seven million people. What really struck me while I was there were the dichotomies: new vs. crumbling, density vs. parks and open spaces, busy vs. leisurely, and especially rich vs. poor. I was impressed by the numbers of brand new luxury cars and, at the same time, the number of motor scooters. I was surprised at the number of businessmen and, in a different setting, the number of street vendors. I was surprised at the wide gap between the richest and the poorest. So I reflected on my relative position. Most days, I would walk to work and then eat at a hole-in-the-wall restaurant. But many days, I would ride in a taxi with rich friends to an expensive restaurant in a fancy hotel or shopping district. Poor people don’t have that experience. I realized that how much money I spent was irrelevant to my place in that society. In fact, I had opportunities that weren’t available to poor people, so I  must be rich. And if it was all in my mind, I would continue to be “rich” when I returned to Canada, whether I had the money or not.

Simply having an education, a good job and a steady income puts me in the luckiest 5% of the population of the world. Why should I worry about competing with others to scrape out a little more and feel a little richer? Instead, I can spend my mental energy and my effort on making the same decisions that rich people make. Because I’m not poor, I don’t need to steal (even MP3s) or borrow money (for a bigger TV) or waste my money on vices (like cigarettes and beer). I’m not judging others, just deciding that isn’t what I want for myself. Instead, I sharpened my skills that relate to my interests in personal finance and investing. I read books, like Wealth, by Stuart Lucas, that describe how the rich make choices. And then, through some trial and error, I started taking actions that increased my wealth.

There’s no secret about how to get richer. Luck may magnify the amount a person is able to accumulate, and the speed with which they can do it, but it almost always follows the same pattern: work, save, invest, protect. Money isn’t there as rewards and punishments for intelligence or hard work. Smart people aren’t always wealthier than people of average intelligence. (By extension, not all people are wealthy because they are smart.) Not all hard workers are rewarded equally.  That’s why I don’t think getting rich is a function of being smart and working hard. I think it’s a result of making choices the way successful rich people have.

The key is taking personal responsibility. No one else is going to come along and make you rich. The government can’t make you rich. No one but you is able to coordinate all your actions and choices that are required to put your finances in order. And waiting until later doesn’t move you toward success. Only by deciding that it’s important to you to be richer, by deciding that you’ll make the same types of choices that rich people make, and by starting now, can you make progress toward becoming richer. You can’t control the economy, or the stock market, or the government’s policies, but you can control your own mindset. And even if you don’t succeed right away, you’re probably already among the richest 5% of the human family.

Are you rich? How do you know?