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Low net worth circles

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@gogreenbuddy
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A friend sent me a text from some Reddit guy that also posts on Twitter. I don't follow both even though I don't have anything against Reddit. The Link is about the behavior and life of high net worth people 10-30m and upwards to billions.

And I felt like nice to read but I think how to get there and the mindset of low net worths are more interesting for me. Net worth is highly dependent on your location, but I'm talking about west European/USA money. You can also have 1 million $ but with a mindset of a negative net worth group you will end up in that group soon. Jackpot millionaires are great examples.

The silver lining is that a million-dollar mindset often makes you a million $.

The groups

  • Negative up to 10k USD
  • 10-25k USD
  • 25-100k USD
  • 100-250k USD
  • 250k- 1M USD
  • 1m+

Negative up to 10k USD A big group of people live in this group. It can have many reasons often they lack health, knowledge, attitude or they are very young. Most of the time (almost always in life) you only have yourself to blame if you're not happy with being in the group you are.

The best way to get out of this group is to learn a valuable skill, live like a student. You got no money so your focus needs to be on selling your time for a higher rate.

10-25k USD We saved a bit, maybe got some valuable skills or have a cheap lifestyle. The paycheck to paycheck worries are a bit less and you don't lose lots of money on debts / overdue payments / short-term solutions.

You still have to focus on developing your skill set, keep spending low, consider small investments like solar panels, renting out a holiday house, stocks, crypto, or a course. Don't fall in the money traps of buying any house with debt, a car, an expensive phone, or furniture.

25-100k Now we are talking we can start making money work for us. You can't stop your job (not even close) but with a bit of luck you get an additional paycheck each year or you got the runway for a small company.

*You're not checking your bank account to see if your salary got sent anymore. You got some freedom to choose the type of career/life you like. You can maybe think about a job that you don't want to quit? Still, your spending has to be low, and learning things like taxes or make small investments become essential.

100k-250k Your money could start to earn you just as much as your salary in good years. Crypto gives unrealistic expectations but you for sure could make 30k euro's a year additionally in good years. Your savings start to grow faster and you don't have to live extremely eager anymore just smallish. preferably still (no) car and consider owning a small house?

250k-1M Your money can pay for your expenses and you only work for additional savings or to splurge a bit on things you like. Still preferably on things that increase in value. skills/holiday houses or a classic car? Many people would say ''not in my country'' but this is often because they got a big house, kids, wife doesn't work, etc. (those are your choices remember)

The rags to riches idea suggests that the target is to be rich. All in all that's a poor target. I know people that are very content and happy with the laid-back chill life and close to 0 ''net worth''. The flip side is that money pressure can destroy a lot in life including your freedom & relations etc.

Final Note In short, your living expenses should be always one group below your earnings if you want to increase your wealth. Being wealthy and looking wealthy are 2 completely different targets.

Always keep working on something & always improve yourself.

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