A couple of months back I completed the book The Psychology of Money by Morgan Housel.

(If you want to read the review article click here)

I quickly thought why not relate things directly to our life and analyze if we can connect with our general life and aspects. Also, I had personally gone through some ups and downs with finances myself, so I think a little reflection can be worthwhile for everyone.


Let’s quickly start here with something!

If a person has a great job, a big house, and a fancy car then he/she is rich.
If a person is a businessman so he/she is rich.
If a person inherited a lot of wealth, he/she is rich.
If a person won a lottery so he/she is rich.


The above things might reflect that the person is rich in an instant. As he/she seems to own something valuable at that point. Moreover, the prime motive of this article is to reflect that wealth is maintained by a process. If we don’t have the right process then technically we can end poorly. 

We have heard stories of great businessmen losing wealth. How does that happen? Sometimes its expenses are higher than income, on other parts, it’s higher ambition and risk involved. My whole article will help you analyze your wealth based on income, expenses, savings, and inflation with its process.


A normal life

Once we complete our studies, we quickly rush for a job, a few years down the line buy a house with some down payment and on loan and immediately purchase a personal automobile without ever calculating. Is it necessary? If someone has a family and needs to raise children then it’s reasonable as these can’t be compared from an economic standpoint.

Now if someone were to showcase the richness and purchase a house/car then it might not be a good idea. Yes, it helps to gain a few days of applause from people around you but they will soon forget and you will see someone with a bigger house and a more expensive car which will immediately make you feel poor. Also maintaining these things without a strong economic base can come costly.

Staying rich is hard and complicated, which is all we should be concerned about to succeed in our life. 


Buy Something to generate more wealth

Let’s say a person bought a house whose monthly maintenance is 10,000. He/She lives in a house which has, let's say, a life of 100 years. If it has a loan then the interest that is to be paid would be an additional expense added to the house. This seems to lose money. If we add inflation then we might be negatively affected. On the other hand let’s say someone rented the property which covers all the expenses (some part of principle to be paid back in 20 years, depreciation, maintenance, etc.) and delivers 5000 additional money each month, then it’s part of wealth generation.

Let’s say a person buys a vehicle, and it’s used partially or on weekends. Then it would be better to rent a vehicle to some company so that it can cover the purchase cost.

Also, wealth can be invested in stocks, commodities, and other areas.


Understanding necessity

Most of the time, when people have money they buy unnecessary things. These can start small. Let’s say you bought a pair of shoes which you only used once and never used again as you didn’t like them. Such kinds of expenses should be avoided or we can put less money into it.

Although, I prefer spending money on recreational activities like traveling, cuisines, etc. Sometimes it’s important to look at things that provide us happiness also.


Craving high living standards

As I have already mentioned the necessity above, I will explain this briefly. Top people like actors and businessmen seem to have a lot of money. They tend to earn and spend a lot of wealth. This is because they work with a big scale of wealth. They too have to put effort to maintain it. The interesting thing is they have highly experienced financial advisors working for them. History has some great actors, businessmen, and sportsmen going bankrupt. So it takes a lot of calculations to maintain that.

Let’s say when you have a monthly wealth gain of 50,000 you might be struggling with family needs. When you have a monthly wealth gain of 5,00,000 you might be struggling to maintain it, as consistency of this income throughout your whole life is very important and you might be having a lot of talks with your financial advisor.


Again, Are you rich?

So, answer the main question here. If you have thought of enough sources to generate money by yourself by your retirement then you don’t have to depend on anybody, you probably are rich.

Whatever you earn, find ways to scale it up. There is a popular saying: let money work for you, so invest in the areas that can secure you. Work hard for it.

If you see rich people either the richness is created by some regular and maintainable source or they are working in the field of high ambition where all people want to invest.

The beautiful thing about life is being happy and satisfied. There is a popular saying that if you have to cry it’s better to cry in the car but make sure you are not crying because you are unable to pay next month's EMI for the particular car ;)



I was once traveling with an Uber Driver. During the conversation, he shared his story. He said, “I and my Uncle operate this car. He does the morning shift and I drive in the evening. We both make a living and can pay monthly EMI covering other expenses. In two years we will fulfill the Loan and we are thinking of getting a driver to run this vehicle.” 

The driver already had a great financial plan. Can we call him rich?