I want you guys to visualize a world where there is no media schadenfreude. Imagine never reading stories debasing others out of delight in order to make the writer and you feel better about yourself. My how nice the world would be!
The reason why there are so many negative articles out there is simply because there are a lot more people making a lot more money and doing much greater things than one realizes. If you can’t make it on your own, it’s easier to just try and bring others down. Don’t do that!
You know from a previous article that $60,000 to $75,000 is such a silly low range for what researchers and the media think is the ideal income level where happiness rises no more. It’s so silly because that is clearly not the case if you ask anybody who has ever made more. Is it a coincidence that researchers and reporters make on average not much more than $75,000? Of course not and therefore it helps makes them feel better about their wages. It’s perfectly rational.
THE SECRET MOVEMENT
Ever since the tech bubble downturn in 2000 there’s been a secret movement to hide one’s wealth and be more understated. So many people killed it during the dotcom boom that they have no choice but to hide their wealth because the media went on and on about how so many people lost so much money. It’s just not true, speaking from experience and the experience of others.
As a result of so much wealth creation during the dotcom days, juxtaposed by the disconnected reality of what the media was peddling, the wealthy had no choice but to start pretending they too suffered. It’s so ingrained in people’s minds that most people lost so much money in the downturn it’s just not true. Are people stupid enough to think that everybody bought at the top and sold at the bottom? Don’t be silly.
We had another fantastic stock market run from 2003-2007, accompanied by an amazing real estate run from 2000 to end-2006 as well. A lot of people killed it during this time period and are hiding their wealth. Again, not everybody bought at the peak and sold at the bottom and the markets have now recovered fiercely since.
SO MUCH AGITATION IN SOCIETY
People who do well are afraid of the government, the media, and bitter people all around. They are afraid they will be hunted down by organizations who will tie you up and burn you at the stake. You don’t know how many conversations I’ve had with people who are just so agitated they can’t spend 1/10th their income on a car because that would mean they’d be spending $50,000-$150,000, which is fancy by “normal” standards but is absolutely whatever by their standards! Instead, they spend 1/20th to 1/50th of their income on a car because anything more than a $28,000 Honda Accord will be frowned upon.
Just the other day, I got a ride home from a tennis buddy who works at a hedge fund. He drives a common Ford Explorer and on our way back we started talking about real estate. He mentioned he and his wife are looking for a new house having recently relocated from Florida. He mentioned his house in Florida costs just under a million, but is nicer than so many $3-4 million dollar houses in San Francisco. So then I suggested instead of spending $3-4 million on a house in San Francisco to perhaps rent for a while.
He responded, “Actually Sam, I’m seriously looking at buying this unlisted house asking $8 million. $8 million just seems like a lot though. I’m thinking it’s worth no more than $6 million. I haven’t rented since I was 25, so renting feels foreign to me.”
Boy were my price estimates wrong, I thought to myself. “Yeah, I wouldn’t spend more than $1,200 a square feet on the house either. Take your time! Houses are like stocks. If you miss one, there’s always another that comes along.”
“Yeah, you’re probably right Sam. But I wonder though, b/c I bid on a smaller house at $1,200/sqft and got outbid. I wonder if there is just that much money out there?“, my buddy vented in frustration.
“There definitely seems to be. Just wait until Facebook goes public!” I responded.
MAKING MONEY IS SO STRAIGHTFORWARD
If you guys want to make money, know that it is very straightforward. There’s no magic formula. You just simply have to want to do it and create enough scale. Don’t settle if you don’t have to. The following are conservative examples of what people make in their respective occupations according to an article I read on Bloomberg, and knowledge from my own conversations. Many make more.
29 year old MBA student from a top 10 school: $150,000.
Oakland dockworker (Longshoreman): $120,000.
Policeman with 20 years experience: $150,000 with a 6-figure pension.
Cancer researcher 10 yrs experience: $150,000.
4 Star General: $185,000 with 6-figure pension.
Bond trader with 10 years experience: $1,000,000.
Law partner $600,000.
Professional blogger with 5 years experience: $50,000-$200,000 +.
Software sales rep at Oracle, Salesforce.com and the like with 5 years of experience: $300,000 +.
Strategy consultant 5 years out of undergrad: $100,000+.
Hedge fund manager partner: $500,000-$20 million depending on performance and assets.
Google / Facebook employee with 5 years experience out of undergrad: $100,000+ with potentially millions in stock.
The list goes on and on. As you can see, practically everybody makes over $100,000 a year with enough experience and many make much, much more. See: How To Make Six Figures A Year At Almost Any Age
THE ECONOMY IS STRONG
Have you ever wondered why restaurants are so packed, malls are so busy, and traffic is horrendous all the time despite the media droning on and on about 9.6% unemployment and 16% underemployment? Well now you know! More people make a lot more money than you think! There is a serious amount of under-reporting of income, and an obsequious amount of over-reporting of how bad things are.
It’s important as a Financial Samurai reader you aren’t brainwashed by negativity and the media. I want you to know that things are actually much better than they seem, and I’d like you guys to stay away from pessimists and those who delight in the suffering of others. Focus on what you can do to make yourself better. Be happy for those who are doing great because when they do great, we all do great.
At the same time please stay humble and follow the movement. Keep your success under wraps. You will have people trying to come after you, and you don’t want that. There’s absolutely no need to brag about how much you make and what you’ve done. It’s just going to backfire. The most successful people are ones who have no need to talk about their success. They let their success speak for itself because they’re out doing something more.
STARTING AN ONLINE BUSINESS
It’s been around six years since I started Financial Samurai and I’m actually earning a good passive and active income stream online now after a lot of hard work. Yet, I consistently am asked whether I make any money on this site. Such a question is one of the biggest compliments I can receive as I’m not focused on making money, but on story telling and sharing useful information.
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, see how you can set up a WordPress blog in 15 minutes with Bluehost. You never know where the journey will take you. Hard work is worth it because it takes no skill.
WEALTH BUILDING RECOMMENDATION
Manage Your Finances In One Place: One of the best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
The best feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.
TAKE ADVANTAGE OF THE SHARING ECONOMY
I’ve recently tried out driving for Uber in 2015 because they are giving up to a $300 bonus after you make your 20th ride. After 25 hours, my gross pay is $32/hour, which is not too bad! I can see how people can easily make an extra $2,000 a month after commission and expenses with Uber or any ridesourcing company. I’d definitely sign up and drive until at least the bonus . Every time I plan to drive somewhere, like my main contracting gig down in San Mateo, I’ll just turn on the Uber app to try and catch a fare towards the direction I’m going. Why not make extra money?
$32/hour is a huge pay cut for me and it’s a humbling experience as well. But discovering the whole ridesourcing experience first hand is fascinating! I’ve got so many stories to share in the future about my experiences picking up random people.
Updated for 2015 and beyond