“It’s better to be rich than to be rich, even if you’re poor” – author and NYT columnist, Paul Sullivan

This is the most accurate line that has come to me in terms of being wealthy. And I’m going to present you two interesting stories that will help you understand.

A fortune wasted.

At one stage in his life, Hollywood legend Johnny Depp was one of the highest-paid actors of all time. In 2018, the Rolling Stones estimated that Depp earned $650 million on movies.

Depp’s weakness was his brilliant performance. TMG – The management group run by his business manager said Depp had compulsive spending disorder. His ultra-extraordinary lifestyle sometimes exceeded $2 million per month. 45-acre cliff in the south of France, private island in the Bahamas, home in Hollywood, penthouse loft in Los Angeles, home ranch in Kentucky, a luxury yacht, 45 luxury vehicles, 70 collectible guitars, and $30,000 blown on wine . from all over the world.

Then came the costly divorce. Today his net worth is in the comparatively weak range of $150-200 million.

A millionaire on a teacher’s salary.

Andrew Hallam worked at a bus depot in British Columbia at the age of 19. He had graduated from high school, but could not afford to go to college. His father was a mechanic and his mother earned minimum wage. Apart from shelter and food, they could not afford much. Andrew remembers being 14 years old and having to save himself money to buy a pair of shoes.

His tasks at the depot included washing the buses, checking their oil and mileage. A mechanic named Russ asked him what he would do if he got $10,000, to which Andrew said he would keep it for his college education. Impressed, Russ shows Andrew all the properties he owned and his entire investment portfolio. Russ was a self-made millionaire on a mechanic’s salary. That inspired Andrew to start saving.

When Andrew said he had nothing to save, Russ pointed to the vending machine and asked him if he could buy him a muffin and a chocolate bar every day. That means about $3.33 per day, which would be $100 every month. The month will give amazing results in equities. Andrew started by investing $100 in mutual funds and started working towards becoming financially literate. Russ’s words, “You may save less than your friends, but end up doing a lot” got him thinking about the value of compounding and starting early.

Andrew saved, invested, took several part-time jobs, got loans, and went to college. When he graduated, he had $12,000 in student loans. He worked as a middle school teacher teaching English; His first salary after taxes was $2,884. He repaid his loan very frugally within 9 months. By the age of 36, he was a millionaire. He is now a writer, a personal finance speaker and travels the world.

Johnny Depp – outwardly, filthy rich. But his bank balance was bleeding and he was doing nothing to stop the flow.

Andrew Hallam – A lower middle class home teacher. Started saving at a very young age to capture the power of compounding. Was a millionaire before the age of 40.

That’s what we can learn from them.

The key to getting rich is not to make a lot of money. You can make obscene amounts of money and waste it. Income is not a barometer of your financial position, money as an asset.

Being fabulously rich doesn’t mean you are rich. It is the choice made with your income that will determine whether you become rich or not. Being rich can make you feel good. Instead aim to get rich, first turning your money into wealth before moving on to managing an extravagant lifestyle.

Don’t ridicule small starts. You can start small, but if you start early, you can go too far. The power of compromise and patience is no different, it works with everyone. Capitalize on it.

Before aiming to impress, aim to submit. SAVE! With savings, buy property. Let these assets make money for you. This is the key to wealth creation.

Views are personal: Writer is Pawan Aggarwal, Director, Goodmanyman

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