Rich AF
Overall Thoughts
This book is FILLED with rich information that makes it an amazing toolkit for navigating finances. Some parts were a bore whereas other sections had snippets of new information to better understand the financial landscape! Vivian’s writing style truly lives up to a BFF hyping you up with finances and was overall a delightful experience.
“We’re smarter than we think, we’re better together–and we all deserve the opportunity to be RICH AF.”
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Quotes
Talk about it: “Talk about money. Because when we talk about money, everyone benefits.”
Take action: “Doing these thing—not just reading about them—is the only way you’re going to meaningfully improve your financial life.”
Part I: You Work Hard For the Money
1 | Education for This Era: Why This Book is For You
Learning from those ahead of you: “Whereas if you play with someone who’s played before, who has a strategy, they can teach you not only the rules but which rules matter– and how to use them to your advantage.”
Information sharing: “Where are the rich learning all this secret money info if not at school? The answer might surprise you: talking among themselves.”
Value investment: “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.”
How to make things work: “The mindset rich people have isn’t How do I scrimp and save and keep every last penny locked up in my account? It’s How can I get this money flowing and growing—and waste no time doing it?”
Long-term location investment: “With a shorter commute, they were able to get more sleep, show up earlier, and generally just look like they were more dedicated to the job. Essentially, they were seen as better employees. And for what? Because they had more money to spend on rent.”
The cycle of paycheck to paycheck: “When people are actually in a cycle of paycheck-to-paycheck brokenness, it’s not that they don’t want out of that situation. They do. They want to make the right choices. The problem is that there are factors working against them: exhaustion, illness, a lack of time, a lack of resources, and a lack of role models.”
Minority Groups: “In fact, Asian Americans are now the most economically divided racial group in the country: in 2016, Asians in the top tenth percentile earned over ten times as much as those in the bottom tenth percentile.”
Enjoyed how there were also metrics about other minority groups
2 | I Know My Worth: The Earnings and Career Section
Most solid piece of advice: “The truth is the best, craziest, most solid-gold piece of financial advice I’ve literally ever gotten in my life… You can only save as much as you earn.”
Second biggest advice: “Now here’s the second part of this mind-blowing advice: You can only save as much as you earn…but you can always earn more.”
Managerial investment: “So even when my managers truly let me have it, I know deep down, This person is going to advocate for me. This person is going to be in the back room pounding the table to make sure I get paid, I get promoted, I get a raise.”
Opportunity potential: “I left because I wasn’t going to waste my time, talent, and energy in an environment where the inner circle was very clearly not going to open for me, no matter what. I left because I wasn’t valued the way I should have been,”
Hardwork & Money: “We work to earn money. But when it comes to getting what you’re worth, it’s just not as straightforward as harder work in = more rewards to you.”
Maximizing opportunity: “So step one is maximizing your opportunities is to know your skills. Step two is to compile your knowledge.”
Environment analysis: “If you’re in an environment where you recognize that you have no ability to politick your way upward, where your manager does not give a flying fuck about you…well, I hate to be the one to say this, but you want to look at other jobs. Maybe internally, maybe externally, but you can’t stay where you are and advance.”
How much do companies take to hire you? “Fun fact: Did you know it can cost a company as much as three to four times an employee’s salary to replace them? Firing and replacing takes up a lot of valuable time: your manager would lose weeks, if not months, out of their schedule searching for a replacement, interviewing candidates, onboarding them, getting them up to speed,”
How often do we discuss raises? “Rich people, though, are On. Top. Of. It. They will ask, ask, once every two to three months, they will set up those meetings and remind their boss that X raise is what they’re looking for and Y accomplishments are why they deserve it.”
Actions speak: “You’ve got to improve and then prove that you’ve improved.”
Paint the pathway: “No matter what, try to end on a note of establishing specific benchmarks and a timeline: “Understood. Thank you for explaining. How can I help you make that case in the near future? And what timing feels feasible to you?”
MLMs: “Because net: if something seems too good to be true, it likely is. And if a company business model is based more on recruiting new members than actually selling the product, proceed with caution.”
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3 | I Am In Charge of My Money: The Budgeting Section
Budgetting mindset: “The real talk is this: budgets don’t suck, and if you think they do, it’s because you haven’t been taught about them correctly.”
Failing: “Because you know who doesn’t like failing? You know who hates to fail? Rich people. Rich people hate failing. But they do love planning. Especially when it comes to money. In other words, rich people budget. They budget like hell.”
Setting up for success: “The way they budget is what makes all the difference. For them, budgeting is not a stressor–it’s an opportunity.”
Spontanoues vs budgetting? “By the same token, budgeting lets you plan to be spontaneous. I know, it sounds like an oxymoron, but think about it: rather than make a last-minute decision to meet up with your friends only to panic over whether your account is overdrawn when you slap down your card, you can ring up another round of cocktails no prob because you know you have the $$$ for it. ‘Thanks, budgeting.’”
Make your money work for you: “The rich person mindset is always ‘How can I take what I already have and use it to make money?’”
Opportunity cost: “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.”
Value spending: “Get down to the root of overspending: value. Generally speaking, a purchase has value for us when we have more positive feelings about having it than we have negative feelings about not having the money anymore.”
“Value-base spending means you weigh the price of a potential purchase against the work you’ve done to earn that amount of money, and then ask yourself, Okay, so is it worth it? …The secret formula looks like this: price of item / effective hourly wage”
“Value-based spending also lets you calibrate what you buy as you live your life. The value of a dollar for you will change as you start to earn more, for one thing.”
High value purchases: “But that’s not really what I’m getting out of those lash extensions. What that $2,500 is actually getting me is daily confidence. I never feel like I have to put on makeup to leave the house.”
Choose wisely: “You can afford anything. You just can’t afford everything.”
Own boundaries: “Saying ‘I don’t do X’ instead of these squishier alternatives articulates the boundary not just to the other person, but to yourself.”
One size does not fit all: “There is no one single ‘correct’ way to budget!!”
The why: “No matter how your personal plans shape up, remember that a budget only really needs to do two things: 1/ Leave you feeling good about what you spent your money on. 2/ Ensure you have some money left over to save and invest.”
Part II: Making Your Money Work Hard For You
4 | I Take Care of Future Me: The Saving Section
The foundation: “Saving will give you the abundance mindset and overall chill of a rich person, and it will give you the lifestyle of a rich person with all the bells, whistles, and all-inclusive cruises your heart desires. Basically, saving is the foundation of financial security.”
Rich vs broke: “It all comes back to the fundamental truth of rich people: when you’re rich, your money works for you. When you’re broke, you work for your money.”
Saving accounts: “For savings, an account’s job will fall into either emergency fund or sinking fund territory. An emergency fund is a savings account with money set aside for covering unforeseen, uh, emergencies (like slicing off your fingertip). A sinking fund, on the other hand is a savings account with money set aside for specific big expenses (like a fancy cruise for Mom and Dad…or yourself).”
Emergency fund: “Basically ask yourself: If I were to lose my job tomorrow, would this emergency fund sustain me long enough to find a new job?”
Sinking fund: “The math behind sinking funds is pretty simple: how much the thing costs divided by how much time until you plan to buy the thing.”
Negotiation: “Every expense can be negotiated. BUT: small expenses are less worth the effort to negotiate. THEREFORE: focus on bargaining down the biggest expenses in life (housing cars, bills, etc.), and you’ll save the most money for the least amount of effort.”
YOUR VALUE: “In other words, remember that your business has value to this company (because they spend serious $$$ to acquire new customers, so losing you would suck) and invest a little time in doing your research (because if you’re informed on what the competition offers, you’re equipped with #facts).”
“Your business is worth something. It’s THEIR HONOR to work with you and for you.”
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5 | I Wasn’t Born Rich, But My Kids Will Be: The Investing Section
Investing: “When it comes to investing, I have three Your Rich BFF truths to share: One: Investing might seem complicated, but it doesn’t have to be. Two: investing does not require you to be a stock market genius (and if you think you are, you’re probably in deep shit). Three: investing – not saving – is how you get rich. Because you cannot save your way to rich.”
You can’t know it all: “Even when you think you know what you’re doing, you’re so much better off investing in a diversified portfolio than trying to be a genius stock picker.”
Do what you can: “Investing is worth doing no matter how much you’re contributing.”
TAXES: “Step 4: Play by the government’s rules. Say it with me now: rich people hate paying taxes.”
What we don’t want to do: “No, the government would much rather you personally go HAM with savings for your golden years and retire with plenty of money for your arthritis meds and condo in Florida.”
IRA contribution: “The amount you contribute to a traditional IRA is deducted from your taxable income for the year you make those contributions.”
FSAs: “FSAs can save you a lil bit on taxes, but they are not investment accounts. They’re a chunk of change you can set aide at the beginning of the year (pretax!) and spend on qualified health expenses over the course of that year… and only that year.”
Target date funds: “Target-date funds are mutual funds that are regularly rebalanced to a mix of stocks, bonds, and other assets tailored to someone retiring in a given year.”
Index funds! “If you invest in a fund that simply tracks the growth of the economy (such as an index fund), you have a 99 percent chance of at least keeping your initial investment over forty years, and a 95 percent chance of tripling that initial investment.”
6 | I am Ready for Financial Domination
Credit score: “Your credit score is a number from 300 to 850 that essentially grades you on how ‘creditworthy’ you are as a consumer. It’s the ‘how likely are you to pay back debt’ score, so the higher the credit score, the better you’ll be to potential lenders—basically, it’s a grade, but for real life.”
Debt consolidation: “Debt consolidation is when you take out a loan and use it to pay off multiple debts. You still owe the same total amount of money, but now it’s in the form of a single loan. The idea is that this new single loan will have a lower interest rate than your previous individual debts, so you’re paying less overall.”
Credit Counseling: “A nonprofit credit counseling agency can help with your budget, debt management, and credit by setting you up with a personalized repayment plan (sometimes with lowered interest) at NO COST TO YOU.”
Tax process: “You send your [tax] return to the government, and the government sends a [tax] refund to you.”
Tax Refund: “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.”
CPA: “A certified public accountant is someone who helps people prepare and file their personal and/or business tax returns.”
Wills: “Living wills are also called advance directives and are basically a document that spells out exactly what medical procedures you do or don’t want performed in the event that you’re in a serious accident that leaves you unable to advocate for yourself.”
CFP: “A certified financial planner is a solid go-to. In order to become a CFP, a person has to pass an accreditation exam, complete a required amount of education and hands-on experience and comply with a strict set of ethical rules and codes of conduct.”
Conclusion: True Secret to Being Rich AF
Parents are human: “Our parents might be teaching us the wrong lessons about money—even if they mean well. Turns out, we all have money habits ingrained in us from a very young age–as young as seven to nine years old.”
Venting vs whining: “Look, venting can be very healthy. But there’s a difference between letting off steam about frustrations in a one-off bitch session and… whining, basically.”
