When your income increases, try and “stay broke” for a little while

So, your income has just increased and you want everyone to see just how rich you are!

Don’t.

If you try to “look rich and loved”, you may never enjoy your increased income, since your expenses will always be equal to, or more than your income.

As we’ve seen in this great country of ours, people have dug deep holes for themselves trying to “look rich and loved”.

Hehehe, it’s like “looking broke and unloved” is more rewarding. Of course it’s good to just be level headed and not go to either extreme.

Stay broke first

By “stay broke”, I mean you don’t have to rush to buy that brand new Subaru just yet. Maybe you’ll do just fine with a second hand Toyota NZE or an ex-Japan Honda Fit for a while. Or even without a car.

You don’t have to feed Instagram with your photos of lush hotels.

You don’t need to immediately buy the latest Samsung S or iPhone.

Time for those things will come, and you may do even greater things when you get your money right.

And no, I don’t mean that you should keep all your money stashed in some bank with no use. That’s unwise as well.

First, focus on growing your income. It starts with saving, addition, then multiplication of income.

I’ll divide your income levels into 3 categories

Income category #1: Survival

This is where you’re barely surviving. You sleep hungry sometimes. It’s hard to pay rent.

You’re in constant BAD debt.

You feel like nobody wants to pick your phone call or see you.

You’re even tempted to feel unloved and unworthy (don’t succumb to this feeling please).

Income category #2: Thriving

You don’t have to be rich, but at this stage, you’re comfortable.

You’re able to afford your lifestyle without any bad debt.

You have good savings, insurance, good debt, mutual funds, stocks, a bit of real estate, some passive income etc.

This is where the middle class usually falls in.

Income category #3: Generational income

Only a few get here.

At this stage, you have systems (or machines) in place that give you constant income, whether you’re there or not.

For example, read about how the late Hon. Gachagua distributed his wealth. Or about people like Steve Jobs whose wealth and companies outlived them.

Many who get to generational income don’t spend a lot of their time trying to look rich, loved and successful. There’s a difference between “looking rich” and “being rich”.

They grow from survival to thriving mode, sometimes without people ever noticing.

They then focus on MULTIPLICATION of income and get to the generational mode.

For example:

– They don’t keep money stashed in a bank, they make great investments and build systems (like companies, institutions and foundations that will still be there long after they’re gone)

– They don’t try to shine alone, they create teams that shine. For example, they build great companies and hire CEOs to run them. Strive Masiyiwa keeps saying this, you need to have the right people in office.

– Right now, some don’t even live in their own houses. They rent where they live (meaning they can live anywhere), but have thousands of real estate units out there that give them constant passive income.

– Some drive big fancy cars, but someone else pays for them (their customers / clients / passive streams). They don’t go for bad debt to finance a showy lifestyle.

– See that money you leave lying around in the bank? These guys come and borrow YOUR MONEY then use it to make wealth while your net worth remains stagnant.

Don’t focus on looking rich

Look at this:

If you earn 200k and save 5k, you’re way poorer than that guy who earns 80k and saves 40k. In a year, you’ll only have 60k saved while that guy will have 480k saved.

If you leave money lying around in the bank, rest assured that someone else (plus the bank) will use it to build wealth.

If in your late 20s and early 30s you focus on building a luxury house to live in, there’s someone who earns the same as you who will live in a rented unit, and build many other real estate units for rent.

In 20 years, you’ll have finished paying for your single luxury house (praying the neighborhood remains the same, that you’re not building in riparian land, there’s no bad politics etc!).

That guy (who didn’t go straight for a luxury house) will probably have 20 smaller rental houses. Those will not only fund their future luxury home, they’ll remain as passive income machines, that will keep generating income even after their luxury home is complete.

Of course be careful and pray a lot about your finances

You don’t want to end up LOSING money like some of us did. Seek lots of advise and make informed choices. Nowadays, not everything is what it seems.

Times are tough. This is the time to get your money right. The focus should be on MULTIPLICATION of income. Not just SAVINGS or ADDITION. Seek lots of advise and make wise choices.