The New “Rich” Standard

by Kelvin Davis

In Australia the definite figure to be truly rich is $5.3 Million – this according to a study by Finder. A million dollars is not enough anymore. You need to have five times more to be worthy of the “rich” tag. To be a millionaire you need to be a multi-millionaire. The irony of the times!

The reason for this elevated standard of wealth is simple: the rising costs of mortgage repayments, bills, child care, travel, education, and etc. Even people who are earning six-figure incomes can still end up struggling to keep up with the expenses.

In a article, Bessie Hassan, the financial expert of Finder, was quoted saying, “For many people across Australia, $5 million is an inconceivable sum. Saving that sort of money would be comparable to winning the lotto.”

$5 million might be a huge amount but it is not impossible to earn in one’s lifetime. The key word is “earn” and not just save. The secret to solving the modern-day wealth puzzle is financial literacy – knowing how money works and how you can leverage it to your advantage. Understand the concepts and “earning” takes a different definition.

There is a need to demystify financial literacy and get important lessons that steer you to the right direction on saving, investing, working your way around tax laws, protecting your money, creating multiple income streams, even leveraging other people’s time and money.

Today’s inflation rate is making saving a senseless exercise to earn extra on your “stockpiled” money. Saving to invest is the winning move.

I saved a lot in my younger years and that gave me access to cash for my very first property purchase. If you save, do it to build up an investment fund, improve your financial standing or perhaps leverage it to secure a loan – buy an asset you couldn’t have afford with just using your own money.

Today I am earning good passive income, freeing me to earn more by getting into new investments and businesses.

Having $5.3 million is not a short-term goal. It is a journey and anybody can pursue it. However, you need a road map to make the right choices along the way.

The takeaway:

1.      Learn how money works (financial literacy matters!)

2.      Save to invest

3.      Leverage money

4.      Seek to build up multiple income streams

You can be rich. You can learn the principles to be one. And it’s never too late.