Opinion

How To Be Rich

By CHRISTINE CUNANAN-NOMURA

An international best seller called "The Millionaire Next Door" is currently changing the way many people think about wealth and rich people.

The book reveals how many ordinary people become millionaires by diligently saving their earnings over a long time, rather than by simply earning a lot of money. It also claims that many people with high incomes are not rich, even if they are living well today, because they spend everything they have.

First let me say that having money is neither good nor bad in itself, although I agree with those who say that having money helps you do a lot of things in life. If you have money in the bank, you can stop working and go back to school, quit a job you don't like, take a vacation, eat and shop where you want and be independent of other people.

Second, a high income doesn't automatically make someone wealthy. A lot of highly paid people feel poor and are unhappy because their income never seems to be enough. At the same time, many ordinary working people feel rich because they are happy with their lives, enjoy their work and have many friends. Obviously, feeling wealthy is relative and has nothing to do with the amount of money you have in the bank.

Still, everyone needs money to survive — particularly in Japan, where the cost of living is among the highest in the world and the sluggish Japanese economy has brought hard times for companies and individuals. Today many people are worried for their future. They fear that they may not be able to maintain their lifestyle if they are fired from their job or if they have to take a cut in pay.

"I wouldn't have to worry if only I were born rich or if I had a well-paying job," many people sigh. "I'm not as lucky as other people."

Yet according to "The Millionaire Next Door," it's not how much you earn that matters, but how much you save. Many ordinary working people have become millionaires in a very straightforward way: by carefully watching their spending over the years and making sure they save as much as they possibly can. They sacrifice and opt for a less glamorous lifestyle in order to invest their earnings for the future

In contrast, high-income earners feel they have to maintain a certain luxury lifestyle. They end up spending heavily on fancy restaurants, expensive clothes and other material things.

After 20 years, many ordinary people have much more money in the bank than some top professionals who actually earned 10 or 20 times more, but spent it all.

"Living below your means" is an expression for choosing a lifestyle much simpler than what you can really afford. You are not trying to show off what you have, you aren't competing with other people to buy the latest fashion or electronic gadget, and you don't need a designer dress or a fancy car to prove to people that you are successful.

I think this is the most sensible philosophy anyone can ever practice — particularly during hard economic times. If we look around us, there are really so many things we can do without.

Which road are you taking: sensible saving for the future or conspicuous consumption for today?

Shukan ST: May 22, 1998

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