The Winning Money Mindset That Will Change Your Life. Embark on a transformative journey with Vivian Tu’s Rich AF, a compelling narrative that demystifies the essence of wealth and financial independence. Discover the groundbreaking strategies that challenge conventional money wisdom and pave the way for a prosperous future.
Ready to revolutionize your financial perspective? Keep reading to master the art of wealth with insights from Rich AF.
Table of Contents
Genres
Money, Investments, Motivation, Personal Development, Personal Finance, Self-Help, Success, Inspiration, Wealth Management, Business, Investing, Entrepreneurship, Financial Literacy, Money Mindset
Rich AF by Vivian Tu is a financial guide that empowers readers to dismantle inherited money myths and build a wealth-oriented mindset. The book emphasizes the importance of unlearning detrimental financial habits and adopting strategies that wealthy individuals use intuitively. Tu shares insights on making money work for you through smart investments and financial strategies, rather than hoarding it. She also highlights the futility of spending to impress others and the necessity of taking action to achieve financial goals.
Review:
Vivian Tu’s Rich AF is praised for its accessible approach to financial education and wealth accumulation. Readers commend the book for its relatable analogies, like comparing strategic Monopoly gameplay to mastering real-world financial systems. The book is noted for its practical advice, clear breakdown of financial concepts, and engaging narrative that makes complex topics understandable. However, some criticism arises regarding originality in branding and content presentation. Overall, Rich AF is considered a valuable resource for those seeking to enhance their financial literacy and develop a winning money mindset.
Introduction: Unlock financial self-realization
Rich AF debunks myths and imparts strategies for maximizing earnings, investing, and saving, all aimed at securing long-lasting wealth. Starting with the author’s mentorship on the trading floor, the narrative offers a wealth of practical advice for financial empowerment to the new generation.
Why is financial freedom so elusive? Why does it seem to slip through our fingers, no matter how tightly we grasp? To put the question around – what behaviors or thought patterns, though well-meaning in origin, sabotage our own wealth potential?
Whether you’re seeking to negotiate a raise, invest, or make a budget, invisible barriers are likely obstructing your progress, barriers that come as much from your own attitudes as your environment.
In this summary, we’ll look at how to identify our money blind spots; how to build a mindset – and a skill set – that’s oriented towards financial freedom.
Believe it or not, it’s about seeing your finances not as a series of numbers, but as a canvas for your personal growth and self-realization.
Unlearning money myths
What’s the worst piece of financial advice you’ve ever received?
The author received some well-intentioned, but misguided, advice from her father. When applying for college, her father refused to let her apply for Federal Student Aid, wrongly believing that this would lower her chances of getting into top-tier universities. In fact, it wouldn’t have – and so she missed out on financial assistance that she could have benefited from.
This advice, though well-meaning, is a part of a larger web of money myths and practices young people inherit without question. This is where our journey begins, unraveling the lessons taught, often inadvertently, by our parents about money.
You see, just like our mannerisms and personal preferences, our habits are set from a young age. You might hold your pencil weird, like your mom does, or dislike the food on your plate touching, like your dad. And in the same way, your notions about money likely stem from your parents’ own idiosyncratic approach to their finances. But these habits, passed down through generations, aren’t always beneficial. In fact, they can sometimes be tiny acts of self-sabotage, holding you back from financial freedom.
Being rich isn’t about being a math whiz, a stock market guru, or someone born into wealth. It’s about properly understanding your financial goals and what’s blocking you from achieving them. It’s about dismantling those inherited money habits and setting yourself free – with a mindset geared towards effective wealth-building. So, let’s dive into three important financial truths.
Financial truth #1: Wealth is not meant to be hoarded. Maybe your parents taught you to always keep your money within sight, due to fear of loss or lack of investment knowledge. Rich people know that accumulating cash without putting it to work is a missed opportunity. You have to make your money work for you, through smart investments and financial strategies, not just keep it under the mattress.
Financial truth #2: Money spent to impress others is a waste. What’s one of the biggest financial mistakes you can make? Spending money you don’t have on things you don’t need to impress people you don’t like. Evaluate your spending habits. Are they for your satisfaction – or to keep up appearances? It’s okay to spend money on things you like, but your discretionary spending should be about your own values and priorities, not a response to societal pressures.
Financial truth #3: Complaining about money without taking action changes nothing. It’s one thing to vent about your financial frustrations; it’s another thing entirely to resign yourself to them. Recognize your value and your agency. You can negotiate, save, and invest in ways that change your financial course. Understand that financial success is a journey, one that requires active participation and a willingness to learn and adapt.
Here’s the thing: breaking out of a scarcity mindset isn’t just about therapy or self-reflection, though these are important. It’s about actively changing how you think and behave regarding money. Whether it’s affirming your worth, negotiating a better salary, or allowing yourself to enjoy the occasional luxury, these actions collectively shift your financial trajectory.
Know your worth
It’s time to rethink the traditional approach to personal finance; one which typically emphasizes scrimping and saving. Instead, you need to shift your focus to the other side of the equation: your earning potential.
Think about it, you can only save as much as you earn, right? So your saving potential is limited. But your earning potential is limitless! Wealthy individuals embrace this principle. They don’t just budget; they actively seek ways to increase their income through investments, raises, better-paying jobs, and countless other avenues. This approach isn’t about merely avoiding a Starbucks coffee or cramming into a shared apartment to save money. It’s about using your income to create more income, tapping into the power of investments over time.
Consider the author’s own journey. Her career didn’t begin in the glamorous realms of Wall Street or social media, for that matter. It started with a summer job as an intern at a so-called “marketing company” in Chicago, which turned out to be a club-promoting gig. Despite the job’s less-than-ideal nature – getting paid a measly $5 per head for getting people into bars – the author saw an opportunity. Leveraging her network of college friends, she organized groups to attend these bars, earning a decent sum each weekend. This experience taught her a valuable lesson: earning more is often easier and more fulfilling than cutting costs.
Of course, not all jobs offer the same rewards for hard work. Essential workers, for instance, are often underpaid despite their crucial roles in society. This disparity highlights the importance of your chosen work environment and its impact on your earnings. To grow financially and professionally, you need to be working somewhere where your hard work will be a) recognized and b) valued.
The author’s transition from the club scene to a trading position at J.P. Morgan was a step in the first direction – an environment that valued hard work. But she soon found that a workplace that values work isn’t enough. It must also advocate for you and provide space for your advancement.
At BuzzFeed, the author found a company that rewarded performance and initiative. This led to significant professional growth, reinforcing her belief that work environment plays a crucial role in one’s financial success. Then came the unexpected turn in the author’s career: TikTok. What began as a fun hobby evolved into a profitable personal venture.
Let’s take a step back. What’s the big picture lesson? It’s about knowing your worth and finding the right platform to showcase your talents, in order to tease out a pathway to financial success. How do you do this? First, recognize and sell your many skills. Don’t confine yourself to a single, linear career trajectory. Some of your less-recognized abilities could be the key to opening doors in different industries and roles. Second, network relentlessly. Your key opportunities will arise from connections both within and outside your current workplace. And lastly, know when to move on. Staying in a stagnant – or even worse, toxic – work environment can stifle your professional growth and, ultimately, your financial potential.
In summary, your financial well-being isn’t just about how much you can save; it’s every bit as much about how much you can earn. Understand your worth, leverage your full range of abilities, and choose environments that don’t just recognize, but actually reward, your efforts.
It’s about strategically navigating your career for maximum growth and maximum satisfaction.
A budget is a plan for the future
A common misconception is that budgeting is a form of financial dieting, full of restrictions and empty of joy. However, the truth is far more liberating. You can think of a budget like a recipe for a fulfilling life, allowing you to keep enjoying the things you love, without ever running out of them. Many people get stuck at the initial “ew, budgets!” stage – never realizing the freedom a well-structured budget can bring.
A budget is simply a plan for your money; one that considers your unique resources and goals. This is about balance, not deprivation. It’s about aligning your financial decisions with your life’s priorities – and that includes having room for joy and spontaneity, so you can enjoy life’s surprises without financial stress. You don’t have to say goodbye to all of your spontaneous desires and whims – you just have to plan for them! Your budget, then, should ensure that you’re prepared for both the expected and unexpected.
The key to successful budgeting is self-awareness and adaptation. As life changes, so should your budget. In fact, flexibility is the hallmark of a budget that’s working.
It may be counter-intuitive, but the heart of budgeting is self-acceptance. You’ve got to take a candid look at your spending habits, acknowledge where you are, and think about where you want to be. This process is about transforming shame and embarrassment into proactive planning.
Now, let’s break down the process of creating your personalized budget. Start with a spending audit, gathering all your financial information in one single place. This is going to let you see where your money is going.
The next step is to categorize your expenses into three categories, which the author classifies as red, yellow, and green. Red are essentials – things like rent and basic utilities. These are things you truly cannot cut back on. Yellow are necessities with some flexibility. These are things you need, but where you still have flexibility as far as how much you can spend. Groceries, for example, are something that you need; but you nevertheless may have wiggle-room as far as how much you spend. Green, finally, is your discretionary spending. These are things like entertainment, eating out, and shopping for fun.
This three color classification scheme will help you mentally categorize your spending and begin to identify areas where adjustments can be made.
Once you’ve done this, take a look at the green items through the lens of “opportunity cost.” What’s that? Opportunity cost is a term from economics that refers to what you’re giving up whenever you make a choice. Let’s say you spend $15 at Burger King for lunch. The cost of the meal is 15 bucks. But the opportunity cost of the meal is all of the things that you could have spent that money on instead.
So as you look at your green (discretionary) items, look at them through the lens of what you’re giving up in order for each of them. Viewed in this way, are you happy with your decisions? Or do you feel a twinge of regret at what you can use the money for instead? There’s no right answer. This is about you, your values, and your priorities.
Once you’ve done this with the green items, go back and do it with the yellow items as well. The point is that every spending decision comes with alternatives; understanding this helps you prioritize your expenses based on what truly matters to you.
Finally, compare your annual spending to your net income. This comparison will reveal whether you’re living within your means or … not so much. If you find yourself spending more than your income, it’s time to reevaluate and make changes – either to your income or your spending – to make sure you’re hitting your financial goals.
Remember, budgeting isn’t a punishment. It’s a tool for planning your glorious future. It’s about understanding and recognizing your financial habits, not shaming yourself for past choices. It’s an empowering process of self-discovery and strategic planning.
And it’s about shaping your financial habits to fit your life goals. By embracing budgeting as a tool for personal empowerment, you can create a financial future that aligns with your values and aspirations – a budget you can get excited about.
Conclusion
Examine your attitudes towards money and try to identify unhelpful money myths you’ve absorbed during your upbringing. Shift focus to your earning potential through professional strategic planning, evaluating whether your work environment is stifling or rewarding your growth.
The emphasis should be on creating wealth rather than simply exercising financial restraint. But when it comes to budgeting, approach this, too, as a means of expressing your aspirations – aligning your spending choices with your personal values and goals. Ultimately, the path to financial freedom requires expanding beyond your old assumptions and making thoughtful, holistic decisions to serve your own unique vision of a life well-lived.
About the Author
Vivian Tu