What Is Your Definition of Rich?

For me, it’s about freedom. It wasn’t always that way. I tend to dream big, and there was a time in my life when I felt that I had to be a millionaire in order to say I was rich. Some of my boyhood dreams involved mansions, fast cars, and private jets, although to be honest I never went so far as to figure out what I’d be doing in that big house and with those toys during my normal day-to-day life.

Once I reached my mid-twenties my definition of rich had changed drastically. Now I decided that all I needed in order to feel wealthy was the time and means to travel. Wouldn’t it be nice, I thought, to just hop in the car and drive across the country on a whim? The challenge to making that happen is to have the time and the money at the same point in your life.

I’m no longer in my twenties and my definition of rich has changed once again. I still want to travel, but now I also want a reasonably sized house to use as home base and I want it to be paid for. I believe that I can reach this goal in just a few years. In fact I know I can, because I finally have the tools to make it happen.

Debt-Free Toolbox

Here are the tools that anyone can use to get out of debt and gain their freedom:

  • Goals. We all need goals; otherwise we’d find ourselves drifting aimlessly through life. If your #1 financial goal is to get out of debt, then keep reading, but more importantly, accomplish this next step.
  • A Plan. A goal is just an idea. A Plan is the blueprint for making that goal a reality.
  • Discipline. We all have discipline to varying degrees. I taught myself how to play the guitar, I developed an exercise plan and went from being overweight to in-shape, and after getting an earful from an angry boss in my mid-twenties I’ve always shown up for work on time. All of these things take discipline, but for some reason I wasn’t disciplined with money until my early thirties.
  • Basic Math Skills. You must spend less than you earn. Sounds obvious, right? It is obvious, and yet most Americans are in debt. Why? Because we lack the discipline to use the basic math skills we learned in elementary school.
  • A Steady Income. Whether you have a regular 9 to 5 job or you’re self-employed, you need to have a minimum guaranteed amount of money coming in every month, and your take-home pay needs to be more than your monthly expenses (see Basic Math Skills).

That’s it! With those five tools anyone, and I mean anyone, can be debt-free. It doesn’t matter were you start in life. I’ve got friends from every social and economic level of society, and I can say without a doubt that the three people that were the most influential to my financial beliefs all started from very humble beginnings.

Three Mentors


By the time I was thirty I had a decent blue collar job and was making more money than I’d ever made in my life. I shared a rented house with two of my co-workers, and though I didn’t drink, use drugs, or have an expensive hobby I still managed to spend most or all of my weekly paycheck a day or two before the next payday. To this day I can’t tell you where I spent it or what I spent it on.

Paul was one of my roommates, and a couple of years older than me. One day, after listening to me complain about always being broke, he convinced me to start a savings account.

“I already signed up for the 401K.”

“That’s not enough. Ten percent of your check after the 401K isn’t enough. You need to save until it hurts. I do it.”

The gauntlet had been thrown down. Paul’s basic living expenses were the same as mine, yet he not only had a savings account, he also had money in his pocket the day before payday. Where was my money going?

I took his advice but started slow. I was a shift worker and already had direct deposit because of the convenience. I went down to the bank on my next day off and opened a savings account, then made arrangements for ten percent of my weekly take home pay to go into savings. The first couple of weeks were hard, and I wound up dipping into savings a few times. How the heck does he do it, I wondered. Then I started paying closer attention.

On the days that we both worked the same shift, Paul got up a little earlier than I did so he could brew a pot of coffee and fry himself a couple of eggs. Then he’d pack his lunch. I slept as late as I could, then would rush out the door with minutes to spare. On the way to work I’d stop at a convenience store and grab a diet cola and a sweet roll for breakfast. The store also sold sandwiches, so I’d pick up a turkey sub and a bag of chips for my lunch. I always made sure I had a pocket full of change in order to feed the coke machine at work. Breakfast, lunch, and coke machine cost me about fourteen dollars a day.

Paul, on the other hand, was spending less than five bucks total on his home cooked breakfast and brown bag lunch.

I decided to try it Paul’s way, and was surprised to discover that I could make a sandwich that tasted better than the one I was buying at the convenience store. Payday rolled around and I still had over thirty dollars in my pocket! I stopped shopping at the convenience store and bought actual groceries for the first time in years. I cooked dinner at home instead of eating out at one of the many fast food places in town, and was shocked when I realized that even though I wasn’t very good at it yet I actually enjoyed cooking. At this point I usually had sixty or seventy dollars left over by payday, was eating healthier, and the food tasted better. I didn’t miss those convenience store sandwiches at all.

I maxed out my 401K and started putting fifteen percent of what was left into my savings account. Over the next several months I took great joy in seeing my net worth grow. I wish I could say that I haven’t been broke since, but I still had a few lessons to learn.


I wasn’t thrilled with the way things were going at work, and gave my two weeks notice. I had a few thousand dollars in the bank and was sure that I’d find another job in no time at all, making the same money or better. Quitting that job without having another one lined up was a big mistake. It took six months and a move from California to Texas to find a job working in a hot, airless warehouse, and it paid about half of what I was accustomed to making. By the time I started working again my savings were completely gone, and I had long since cashed in my 401K in order to survive. I was back living paycheck to paycheck, convinced I’d never be able to get ahead again, when I met Larry.

Larry was one of my new co-workers. He was thirty-four years old, made $9 an hour, drove a ten year old car and brought his lunch to work four out of five days. Although his pay was on a par with the rest of us, he had a huge advantage. His house was paid for! Larry started young, buying the house when he was just twenty. He struggled with the payments for a few years before he decided to take his father’s advice: once he had an emergency fund saved, Larry threw every extra penny he had at his house payment. Ten years later, it was his.

From that moment on Larry paid cash for everything. His wife drove a two year old sedan that looked brand new. He had a big screen television in his den. There was already a college fund for his infant daughter. By the age of 34 Larry had achieved financial security for his family.

I began to see the wisdom of paying cash for everything, yet I still rationalized that I needed the credit cards I had in my wallet.


A few years and a few jobs later I was working construction when I met Ismael. Izzy was originally from Mexico and to this day is the hardest working person I’ve ever known. I’ve always prided myself on being able to work anyone into the ground, and in fact had boasted several times that I would always be the “last man standing.” That changed when I started working with Izzy, and on one particular project we were the only two out of a crew of ten that consistently got anything done. We soon became good friends.

Izzy had a beat-up Jeep Cherokee with a number of mechanical and cosmetic problems. The paint was peeling, he had to prop the hatchback open with a broomstick, and you could smell the gasoline fumes a block away when Izzy arrived for work in the morning. The other guys gave him a hard time about the piece of junk he was driving, but Izzy just smiled and shrugged it off. He knew something they didn’t know.

One day Izzy pulled up in what looked like a brand new truck. He was grinning from ear to ear, having just purchased it for $9000 cash the night before. We all gathered around and admired his new wheels before getting to work.

Lunch time came and most of the guys left to hit a popular fast food place. I’d learned that lesson a few years before, and packed a couple of sandwiches. Izzy’s wife always made his lunch so we found a shady spot and settled in. When the other guys returned, the foreman started making some pretty heated (and unfortunately racist) comments under his breath.

“I have to drive a piece of **** while this wetback gets a new truck?! Something’s wrong with this country!”

I immediately came to my friend’s defense.

“Bill, I see you ate at Jack-in-the Box today.”

“Yeah, so what?”

“What did that run you, about 5 bucks?”


“Izzy, you ever eat lunch at Jack-in-the Box?”

“No, my wife always gets up early and makes my lunch.”

“How much do you think your lunch costs?”

“I dunno, maybe 2 or 3 dollars?”

“Hey Bill, do you have cable TV?”

“Yeah, why?”

“You have HBO?”

“Man, I’ve got HBO, Showtime, the Movie Channel, the Playboy Channel; I’ve got the whole package.”

“What’s that run a month?”

“About $120.”

“Izzy, you have cable TV?”


“Bill, do you drink beer?”

A light was starting to go on for Bill, and he wasn’t happy with the direction this was going. The truth hurts. He answered reluctantly. “Yeah.”

“A lot of beer?”

“No, not really. I go through about a case and a half a week, maybe a little more.”

“Izzy, do you like beer?”

“Man, I love cervezas!”

“How much do you drink?”

“Every Friday night, after I cash my paycheck, I buy a six-pack. I usually drink the last beer on Sunday night.”

That ended the conversation, but there was a lot more to Izzy’s story. The truck was actually 3 years old and as I mentioned earlier Izzy had paid cash for it. He also had an acre of land and a mobile home that he’d paid for in cash. None of the other guys knew this, and telling them would probably have only caused more animosity, especially with Bill, who lived in an apartment.

At the time I knew him Izzy had never even owned a credit card, so paying cash was more of a necessity than a choice. That same set of circumstances is played out all over this country by immigrants from all over the world. You can still come here with nothing and after a few years of hard work, make something of yourself.

Izzy was living the American Dream. Why wasn’t I? Why aren’t you?

For most of us it’s not too late. We can change our habits, make better decisions, and still enjoy life while living below our means. All it takes is discipline and a little basic math and we can all reach our personal definition of what it means to be rich.