Rich AF: The Winning Money Mindset That Will Change Your Life

by Vivian Tu

TO THE MAN WHO TOLD ME I WAS TOO GIRLY TO EVER SUCCEED IN FINANCE Fuck. You.

Finance has been male, pale, and stale for entirely too long,

Finance theory is most useful when it’s actually articulated as actionable advice. Instead of reading about things that could happen to you at some point, you’re getting step-by-step info and instructions for what to do right now, given your circumstances.

Because a lack of basic financial literacy keeps our working class working.

For now, the point is just that our current system depends on blue-collar workers not having that upward mobility, not having the luxury to leave sucky jobs, to keep a consistent labor force hungry for whatever work they can get.

Best News: You’re Not a Bad Person If You Don’t Know This Stuff

talking about money isn’t rude when rich people do it. So what makes it tacky for two young women who don’t have money to talk about not having money? Nothing, actually. Nothing except our rich-person-dominant culture saying that it’s rude.

the rich aren’t making money the way that regular people are making it.

their money is a much better moneymaking tool than their bodies or their minds.

When rich people buy stuff, they don’t buy it just because it’s a luxury they want to enjoy. They buy it because it will make them more money. In other words, they put the vast majority of their spending power into buying assets (stuff that makes them money over time) instead of liabilities (stuff that costs them money over time).

They see that the market is making them eight to ten percent a year, while their mortgage debt is going up by only two or three percent per year—and the amount is shrinking with every payment. The delta between that—the difference they get to pocket—is that 8- to 10-percent growth in the market minus the 2 to 3 percent in debt, which equals a nice 6 to 7 percent. Which, again, is money they are straight-up keeping.

How can I get this money flowing and growing—and waste no time doing it?

Just relax! Money can’t buy happiness anyway! Um, false. So false. Falser than you even think.

Brexit, COVID-19, the January 6 insurrection, the FTX fiasco, and the 2023 collapse of major regional and national banks had massive, unavoidable effects on the way we live.

Terry Pratchett’s Discworld series,

You can only save as much as you earn . . . but you can always earn more.

In reality, to reap the most out of your job (money-wise and otherwise), you need to find your sweet spot, where harder and better work from you equals more value to the company—and where that value is recognized, supported, and paid for.

Rich people are especially good at three things: selling their skills, networking, and knowing when to get the fuck outta Dodge.

Rich people don’t see their career trajectory as copy-paste, copy-paste. They’re playing a game of word association, strung together with the skills they’ve acquired and the knowledge they bring.

We know how to turn a .docx into a PDF and back to a .docx.

at your job, you should be either earning or learning (ideally both).

Explore some side hustles that fit your schedule. Pick one to try for a week or two and commit to giving it a shot.

Fact is, when it comes to money, if you fail to plan, you’re planning to fail.

A budget is just a plan for what you’re going to do with your money.

It’s an outline, not a word-for-word script. Your budget plan can and should adapt as life changes (for worse and for better).

Having a budget—and specifically, having enough money in your budget to invest—is what will allow the rest of your life to

you need to invest if you plan on retiring. Period.

For rich people, budgeting is just a plan that lets them maximize the value of their wealth (aka invest their money so it makes them money) and keep up the lifestyle they want for the entirety of their lives.

Rich people bring that to everything, but especially budgeting—aka financial planning, money management, cash flow oversight. Whatever you want to call it, it’s the same thing: budgeting.

odds are good that the majority of their wealth will be in held in illiquid (non-cash) holdings like their personal homes, any other real estate they own, investment and retirement accounts, ownership stakes in businesses, and a whole bunch of other assets that can’t be “spent” freely like cash.

they figure out a setup for those millions that will maximize their returns. They strategize. They divide and conquer. They calculate how much risk they can tolerate, research (or hire people to research) different investment vehicles, and allocate their money accordingly.

There are two basic steps to getting started on your spending audit: Track down all your stuff. Put it all in one place.

I recommend exporting the statement for one to two months prior than the current month

There are two steps to sorting your spending. First, you’ll group all your expenses into categories. And then you’ll classify those categories based on how essential they are to, basically, keeping you alive.

The three categories that most people don’t remember? Saving, paying down debt, and investing.

Red is for expenses that are truly not flexible.

Yellow is for expenses that are necessary, but may be flexible in amount or frequency.

green is for your straight-up discretionary expenses:

After that initial vibe check, try looking at your green expenditures through the lens of opportunity cost.

Opportunity cost is basically the idea that whenever you make any single choice, you are taking some other choices off the table.

Opportunity cost thinking helps you see where you can cut (or cut back on) your spending in a way that fits what you actually care about.

outflow isn’t everything. Spending—and therefore your budget—is actually kind of relative, because it all depends on how much money is coming in the door.

If you know you’re automatically contributing to retirement accounts (such as a 401(k) through your employer), make a note of how much you contribute each year. (Even if you don’t really understand how or why you’re doing it—we’ll get to that in a later chapter!) That money is money you earn—so it’s part of your income—but it’s already earmarked, because it’s going right to those retirement investments. In other words, it’s already budgeted, and you’ll include it in the “saving/investing” category you’ll set up in a bit when you lay out your actual budget plan.

Now that you’ve got your net income, let’s do that gut check. Take your monthly spending and multiply by twelve, then compare that yearly spending total to your annual net income.

50/30/20 Budgeting

50 percent of your posttax income goes to needs 30 percent goes to wants 20 percent goes to saving/debt/investing (we’ll get to how to save and invest it in the next chapters, but for now, it’s fine to just earmark that money)

Your saving, investing, and debt category will eventually be so much bigger than just 20 percent of your income—in fact, that’s the goal. 50/30/20 is just the jump-off.

Zero-Based Budgeting Don’t let the name fool you: this is not going to leave you with zero dollars. With zero-based budgeting, you take the total amount of money you have to spend and start assigning it to your expenses (your needs, your wants, your fun money, as well as your savings and investing goals).

you can buy anything, but you can’t buy everything.

Reverse Budgeting With reverse budgeting, you just commit to putting a chunk of cash in savings and investment accounts before making literally any other spending decisions.