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

by Vivian Tu

And since they don’t trust us toddler-citizens to invest for our retirement just because, they’re going to give us a bribe: a way to pay less in federal taxes. The US tax code is crafted with a whole candy store’s worth of tax-incentivized investment accounts. By using these special kinds of accounts to invest, you’re agreeing to certain restrictions (as in, you can only use that money after you reach a...

This example is risk tolerance in a nutshell: the sooner you need something to be accomplished, the more likely you are to choose a less risky way to get it done.

Well, when it comes to investments, generally speaking, the longer your time horizon is, the more risk-tolerant you can be.

Rich people know how the markets work. They don’t freak out over “timing” the market and buying things at the “right” millisecond, because they know that over time, it almost always tends to go up (remember that magic 7 percent number)?

And they know how to wait. They can delay gratification. They don’t need to get rich quick—they want to stay rich forever.

Let me say this up front: You should not put anything into crypto that you aren’t willing to lose.

See, when rich people borrow money, we don’t call it debt. Ew! No, we call it leverage. A multimillionaire takes out a mortgage, invests the rest of their cash into a startup and makes bank, and we applaud their business brilliance and put them on the cover of TIME magazine. When poor people borrow money, though, that’s debt. That’s bad. Shame!

rich people love borrowing money. They live by that line from the Moulin Rouge song, “Why spend mine when I can spend yours?” and they use leverage to do it.

So many factors way, way beyond our control affect our relationship to debt: how much debt we have, the types of debt we have, and the resources we can use to help pay it off. Maybe you grew up low-income, maybe you live paycheck to paycheck, maybe you’ve faced housing insecurity, maybe you have to support your parents and family members, maybe you’re from a marginalized background and not making as much cash as your white male coworkers.

It’s important to address these socioeconomic nuances because no one should feel like they’re behind, or bad with money, or doomed, just because they have debt.

People treat their tax refunds like free bonus money, but it’s not: It’s just your money. Money you earned. Money you essentially loaned to the government, for zero interest, for up to a year.

I don’t think most people even want to stop working. Rich people don’t. Sure, their work is stuff like running the Junior League Thrift Shop or serving on the board of the Metropolitan Museum of Art, but they are not all just sitting on their asses sipping martinis. They are putting in effort and keeping busy, but it’s on their terms—because rich people have the opportunity and the optionality to do whatever the fuck they want.

That’s why we need to reconceptualize what this number is and chuck this idea of retiring early. Getting to that number ultimately has zero to do with retirement. It literally just means you are no longer tied to a job that you don’t want to do.

FU number = annual spending ÷ average annual rate of return

SOLID-GOLD TRUTH #1: Wealth Is Not Made to Be Hoarded

What you need to remember is that good personal finance habits are skills that can be learned, not natural-born character traits that you have or you don’t.

You won’t be able to control everything—investing always has some risk—but you can control what you do.

SOLID-GOLD TRUTH #2: Spending Is Not Inherently Shameful

SOLID-GOLD TRUTH #3: Money Spent to Impress Others Is Money Not Worth Spending