Picture a rich person. Do you see someone throwing cash while holding champagne on a yacht? A huge mansion with gold-painted door knobs? Let’s change that. In this episode, together with Vivian Tu, Frugal Friends are redefining “wealth,” debunking rich people’s myths, and instilling social responsibility to define yourself as rich or wealthy.
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On a global mission to make the financial industry less “male, pale, and stale,” Vivian Tu is a former Wall Street trader-turned-expert, educator, public speaker, host, entrepreneur, media powerhouse, and the founder and CEO of the financial equity phenomenon, “Your Rich BFF.”
Rich People Are Not Better Than You
Society in general has put rich people on a pedestal—they’re smart, moral, better, and so on—but Vivian greatly rejects this notion. Rich people are not better than you; they just figured out the rules of the game (which the rest of us don’t know) and built up a strategy from there. In fact, rich people are the cheapest people Vivian has ever met in her entire life. They will relentlessly negotiate until nothing is left to be negotiated. You are allowed to be entitled, and when used correctly, it just means you know your value (as long as you’re not yelling at an 18-year-old employee for messing up your order), like negotiating the late fee on your credit card or a sudden fee on your wifi bill.
Lazy But Rich
Think about where you’re getting your money right now. The problem with only having work or labor as your source of income as an individual is that as soon as you stop doing it, you stop getting paid, and you don’t get any money at all. The only way you can be a two-income household as a single person is through investing. Vivian doesn’t want people to only think they have all this time and wait until tomorrow to invest when they can already do it now. It’s not about the money; it’s about the time. The best way to save money on retirement is to start early.
Finding Someone Like Me or an Ally
When Vivian started her job on Wall Street, she was unsurprisingly welcomed by mostly 30 to 40 old white guys, but the only person who wasn’t a white man was another Asian woman. It became a confirmation to her that someone who looked like her and came from a background like hers deserved to be in that room. Since then, she has always been grateful to this person and has dedicated her new book to her.
Finding a mentor is more of an art than a science. There’s no perfect way to find a mentor, but find someone you truly admire and someone who is where you want to be. Create conversations, ask for advice—most people who are in positions of power or prestige didn’t get there on their own. They had a helping hand or someone mentoring them when they were just starting, so more often than not, someone would always be willing to extend a helping hand and mentor you.
How Do I Make My Kids Rich?
One of the questions Vivian gets a lot is: “How do I make sure my child is 1000% set up to be a rich person?” There are three possible ways to set up your child or a loved one to become wealthy. As soon as you get a kid, put them as an authorized user on your credit card. Make sure to pay them on time and in full, so by the time they’re 18 or ready to take a loan, they’re going to have a near-perfect credit score. If there’s any way for your child to earn income (i.e., babysitting, lawn mowing, snow plowing), take those earnings, open up a custodial Roth-IRA, and then invest them. Or you can open up a 529 account and tag yourself as a beneficiary, but once you have your kid, switch the name of the beneficiary to theirs.
What is your personal definition of “rich?”
- Vivian: Having the money to be able to make decisions that serve and leave any situations that don’t.
- Jill: Make choices that I want to make when I want to make them.
- Jen: Can Identify what is enough and find a contentment in that. Also, the ability to cover medical expenses.
Bill of The Week
Thank you Vivian for sharing your bill about your ophthalmologist!
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