How Do You Know If You Are Rich?

In my recent post entitled “If you hate rich people, then you just might never become rich“, I received a set of very thought provoking questions through the comments section, and I would like to share them here, along with my answers, which can already be made into an article by themselves. Here are the questions…

Hi Jay,

We keep talking about rich and poor, but have we defined who are rich and who are poor?

Mayaman na ba ako kung makawala ako sa rat race (office work), at mapunta sa sariling negosyo that I personally manage at nag spend ng time na double pa when I was in the Corporate world? (Am I rich if I am out of the rat race, and have my own small business that I personally manage where I spend double the time I used to spend when I was in the corporate world?

Am I rich only if I belong to the taipans?

Am I poor even if I earn passive income of only 200K monthly, but still have four kids to send to school?

Kelan ako mayaman, at sasabihin ko sa sarili ko na I can retire without expecting financial help from my kids.(When can I say I am rich, and I can say to myself that I can retire without expecting financial help from my kids.)

Thanks and regards,

Here are my answers…

Let me share my answers to Godeng’s questions below…

Hi Godeng,

Thank you for the comment, the timing is perfect as I am trying to learn as much as I can right now on how I can turn real estate investing into a worthwhile business and as a vehicle to help achieve financial freedom for my teammates.

Being “rich” would actually depend on how we define it.

I would start by giving my own definition of being “truly rich” which is synonymous to being “financially free”. I would say that I am rich if I am able to fulfill all of my obligations and provide the needs of my family, without the need to have a 9 to 5 job.

I know that I would still not be rich even if I were able to build a real estate business that can earn more than enough, but would earn nothing the moment I stop doing the various tasks needed by the business to work. Such business that will not work without me is not really a business I own, it’s just a job which I would happen to own.

My example above is the kind of business I would rather avoid as it is even worse than being an employee, because I would end up doing so much more work and spend so much more time, just to make the business work.

If we are able to create a business that works, even without us, where we own it, but don’t need to run it, as it has been setup in such a way that it will work even without us, and it earns for us more than enough to sustain our family’s needs, then we can say we are “truly rich”.

I believe that if the same setup was done to your “negosyo”, where it works even without you, then you can say you are already rich, as long as it truly earns passively, and it would not matter if you had to send four or forty kids(or more) to school as long as your “negosyo” earns more than enough, and you can even retire without expecting anything from your kids.

I guess the question that needs to be answered is “What can I do so that my business/negosyo can work without me?”

I’ll expound on this further through another article.I would love to hear your thoughts on my answers above. Thanks for dropping by! Cheers!

… and some more thoughts on being “rich”

Other definitions of being “rich” or “Wealth”

Other definitions for being “rich” might include putting a value on the amount of money or wealth one might have.

We’ve all heard of words like millionaire, multi-millionaire, billionaire, etc. Some might even consider the currency used as a millionaire in the Philippines in Philippine pesos is obviously not yet a millionaire in terms of US dollars.

Again, I would rather stick  to my definition above which is actually based on Robert Kiyosaki’s definition in his book “Rich Dad Poor Dad”  where he described Wealth as a person’s ability to survive so many number of days forward.

In other words, it is how long you can survive beginning from the moment you stopped working. How long would depend on one’s expenses, the amount of money saved, and the amount of money coming in through passive income.

A true business owner

To be a true business owner, I believe that you should be someone who owns systems that make the business work, and you have people that run the systems for you.

This results in a business that can run even without you. This would also apply if one wants to turn real estate investing into a real estate business. As I said above, I will expound on this further through another article.

Time freedom is the key

Ultimately, I believe that being rich is not just about the amount of money you make but is also about the time freedom that comes with being able to earn money passively, so that one can live life to fullest!

One need not spend most of his/her time to make a living if one has more than enough passive income.

I see this as a perfect introduction to my next post which is part 2 of my article about passive income which I shall publish this week (See part 1 here). Sorry for the delay, I just had to make sure things are back to normal for foreclosurephilippines.com. It would be pointless if no one can access the site right?!

To our success and financial freedom!

Jay Castillo

Real Estate Investor
Real Estate Broker License #: 20056
Blog: https://www.foreclosurephilippines.com
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Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

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