WEALTH
IS NOT ABOUT MONEY
I am sorry to say that but school won’t teach
you anything about money and how to be rich. After reading a lot of
financial books, I think that most people have the wrong perception
of being rich. They think that the rich
are people who have a lot of money and display their wealth through
expensive cars and big houses. Actually, a rich person is a person
who has plenty of free time to learn new
things or simply enjoy life and doesn’t
worry about money.
If you exchange
your time for money; if
you have a credit on things
that you can’t afford, for example a brand new BMW 1 Series or Audi
A3 or Mercedes A-Class that will depreciate over the years; if
you save money (your savings get wrecked by inflation every year); if
you have stopped learning after graduation; if
you consume things only in order to impress people you don’t like.
In short, if
you’re a slave
to money, to your employer, to your debt, to what other people think
of you… You belong to the Rat Race: it is the competition with
other people to get ahead financially and you are ready to exchange
your most precious asset for that.
Time is limited.
Money is abundant if you learn to make it. The rich
know that time is the most precious asset in life and they will use
their time wisely to learn to make money and then have more time to
do what they really like.
So I decided to
apply what I’ve learned with books in real life, just by curiosity.
I started a small car rental business
but I am currently a student at the Grenoble
Alpes University. My business plan is to
create value for someone who can’t or doesn’t
want to own a car: it’s difficult to own a car in the city center
of Grenoble. However, there are plenty of places to visit near
Grenoble.
I saved money and
bought a car for €2,300 cash. The real value of the car is between
€2,800 and €3,000 but there are some fees like travel costs and
registration costs. The car – all
fees included – cost
me €2,500. I could have chosen to sell
it with a small profit but it seems possible to make your money
working for you. After the first month, I have earned €140. But
let’s say it was luck and I earn on average €75 per month
instead. I have to pay €25 every month
for my car insurance and
services. So I have a €50 operating
income per month. What is my return on investment? 50/2500=2% per
month or 24% per year. (I also consider that I’ll be able to sell
that car for €2500 next year, so technically, it will not
“depreciate”)
In my opinion,
it is not that bad for a first experience if you compare it with the
average return of the stock market. However, this investment is not
totally passive – I
have to deliver the car if necessary, vacuum and wash it once a
month… But I am already profitable. I have more time to learn new
things (I am currently learning video-editing and I will start
learning coding or real-estate investing soon) and this money helps
me to pay my bills at the end of the month. I don’t struggle
financially as a student so I don’t need a part-time job. Some will
say that I live below my means. That is true but I strive to extend
them until I reach financial
freedom.
Martin D.
Sources:
Rich
Dad, Poor Dad – Robert T. Kiyosaki
The
Millionaire Fastlane – MJ DeMarco
The
4-Hour Work Week – Timothy Ferriss
Hello Martin
ReplyDeleteFirst of all, congratulation on growing your own business. How difficult for you was it to develop it? Weren't you afraid to lose your money? Also considering your article you said : "The Rich know that time is the most precious asset in life and they will use their time wisely to learn to make money and then have more time to do what they really like. ", so do you consider yourself as someone who knows how to save time and enjoy your life?
Alice C
Hello Alice,
ReplyDeleteThank you for your interest in my article. I would say that it was easy because the structure is small and I already had the knowledge in mechanics and accounting. I am trying to build two others businesses and I think these ones will be harder - one on the internet which would allow me to earn some passive income when I will travel, the other one is a purchase/resale car business I am building with a friend. I have some experience in purchase/resale but I am clearly not effective when it comes to mechanics and he is not good when it comes to numbers so we decided to team up. He wants to own his own garage and I think I can help him achieving his goal. Anyway, we both started from scratch so even if the business fails - at least - we will earn some valuable experience.
Concerning the fear of losing money, I don't think I am afraid to lose money. I always have an emergency fund. For me, money is just a tool that helps me to try new things and money comes when you give value to other people. For example: how come that a guy playing football earns more than, let say a teacher ?
It's because he gives values, emotions and a feeling of belonging to a group to many people. And you have to know that most humans are driven by emotions. In my case, I allow people to rent a reliable car for a good price so they have that feeling of making a good deal.
Have you ever heard about "delayed gratification" or the Marshmallow Test ? I sacrifice instant gratification for delayed gratification. Once time elapses, it is gone for ever. I mean we are still young, we still have time, the power of choice to influence what we want to become. The more we wait, the more we spend our time on useless things like Instagram and Snapchat, the less time we have to do thing we want to do. Does hitting a like button on Instagram will help me to enjoy my life ? Do I want to complain about my life, my job, my environment because I made wrong decisions ? Do I want to work half a century ? Nope. So I’m putting all my efforts and time now to enjoy life as soon as possible.
But all of this is just my point of view.
Martin D.