# Think Rich – How Millionaires View Their Money

I got into a discussion with a coworker, John, discussing the topic revolving around people who spend \$7 – \$10 every day at Starbucks (we’re in the DC area) grabbing coffee or snacks. We have another coworker here, Bob, who likes to eat out often and generally begins his day going to Starbucks. He grabs a medium (tall? or grande?) ice coffee and a muffin for breakfast. Being the quantitative people that we were, John and I quickly calculated that \$10 a day for a year equals \$2,520 spent on breakfast alone, not counting the lunch outings he does, and possibly dinner. How does one grow rich unless they can think rich? And how would a millionaire view this behavior?

## Think Rich In Order To Be Rich

Let me give you an example of how a millionaire would think rich when buying coffee everyday. Looking at it from an alternative perspective, if someone here were working at a minimum wage of \$12.50, that would mean in order to pay for the \$2,520 per year, one would have to work around 200 hours. This isn’t accounting for a form double-taxation of course. You get taxed once when you get your paycheck, then sales tax at the register when you purchase your drink. Millionaires think rich not just in dollar values but also in labor hours.

In a normal 40-hour work week, Bob would have to work 5 weeks in order to pay for Starbucks. Or in other words, Bob has to work roughly an hour every day in order to pay for breakfast.

Essentially, Bob gets paid for 7 hours worth of work everyday.

A millionaire who think rich would see it this way.

#### Other “Currencies” of Cost

It becomes an eye-opener when you think about the labor-to-reward ratio for the most generic routine purchases in life. If you go out to eat with your friends and spend \$40 on food and drink, that’s about the equivalent of working 4 hours. Some people go to work for 4 hours, take a \$20 lunch break, and go back to work for the last 4 hours. At the end of the day, they’ve essentially gone home with 6 hours worth of pay for 8 hours worth of work. That’s think poor. Not think rich.

Here in the DC area, we have express lanes on the highway, whose cost is dependent on the time of day and number of cars. They can be as low as \$0.50 to as high as \$30.00.

Now it’s understandable that some people have obligations after work and so the need to get by traffic makes sense. But those with more flexible options might want  to think about whether it’s worth it to spend an extra hour stuck in traffic or cancel out 2-3 hours worth of work. My friend likes to say that you might as well go to dinner and spend \$30.00 on a steak. Then when you’re done, traffic will be gone. My friend likes to think rich despite not being rich. However, I believe that’s a great characteristic towards wealth building.

#### Conclusion

Next time you’re out shopping, remember to think rich. What is the cost of your purchase in labor hours rather than dollars. It may help put things in perspective. Addressing the Starbucks example, it might be economical to bring in your own coffee maker. My sister gave me her Keurig machine and my coworkers and I spend \$1-2 on K-cups per day. Our entire room uses the one machine and brings down costs. True coffee drinkers out there bring their own machine and grind their own beans. Over 30 years of professional work, this will save you tons of money.

That’s not to say somethings aren’t worth spending money on. I like to flip this argument around and think about things that are actually worth it. My dad and I were discussing plans to travel to Asia this Winter for two weeks. As the topic of finances came out, we calculated the true cost of taking a vacation under the think rich mindset:

• Take home pay: \$3,000 per month
• \$3,000 per month converts to \$150 per day
• Vacation days: 10
• Flight: \$700
• Hotel: \$300
• Misc Expenses: \$300
• Total Cost: (\$150 x 10) + \$700 + \$300 +\$300 = \$2,800

The question came down to: Would I work one month for a 2-week trip to Asia? For me, still under the think rich mindset, would say hell yes!

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