Rich Geek Poor Geek
- Last Updated: Monday, 26 October 2020
If you’re a computer geek that thinks a big dollar salary means you’re rich, we might have some bad news. It’s time to recode your brain, because that particular if / then statement has some serious flaws in its logic.
The Big Geek Salary Myth
Despite what outsiders might read in the newspapers, we all know there continues to be a high demand for those of us that are not afraid to admit we are… well, computer geeks. With a shortage of talent, the laws of supply and demand dictate that we get above average salaries.
But just because we make a lot of money each day doesn’t mean we are rich or wealthy individuals. Bill Gates is rich; so are Michael Dell and a lot of other geeks. But they’re not rich because of their salaries. They’re rich because if they stopped working tomorrow, they’d still have enough income to live out their lives without dramatically lowering their standard of living.
At the risk of sounding redundant, we’re going to emphasize this point. If you want to know if you’re rich, then the new code for your logic would be written something like this:
If you could quit your job tomorrow, and still live comfortably for the rest of your life, then you’re a rich geek.
Until you reach that point, you’re either a poor geek or simply a geek that’s on their way to being a rich geek.
Young Geek, Old Geek
We’re not going to debate the exact year when the number of true computer geeks started to rise dramatically. We all have to admit that when there is a gathering of geeks, there is an awful lot of grey and thinning hair in the room. We might be hardware or software experts, but we age just like everyone else.
If you think we’re exaggerating, just stop over at WebMasterWorld, where you’ll see members with names like grandpa and threads announcing the birth of grandchildren.
If you don’t think creating wealth is important, then just take a look at all of those senior citizens still whacking a keyboard at McDonalds for minimum wage. Do you honestly think anyone plans to be in that situation?
Becoming a Rich Geek
We’re not going to deny that any one of us could come up with the next billion dollar idea, it happens. But the odds are that most of us will not come up with an idea that valuable. So if we’re not going to become instantly rich, then how can we slowly become a rich geek?
Making Money versus Saving Money
There is an old saying that goes like this: “It’s not how much you make, but how much you save.” We’d like to take that saying a step further and say it this way:
“It’s not how much you save, but how much you invest.”
Wealthy geeks understand that becoming rich is more than just making money; it’s putting that money to work. One of the unfortunate facts is that many people “invest” their money in local restaurants five nights a week.
Working Hard Playing Hard
A lot of people are going to take exception with the suggestion that eating out in upscale restaurants is a luxury. After all, they worked hard for their money, and deserve to treat themselves.
But we are going to let you in on a little secret. The entertainment industry knows you like to be entertained, and it’s going to cost you, big time. The average cost of a premium NFL seat for the New England Patriots was $127 per ticket delivered in 2019. A study conducted by the Wall Street Journal found the average time the ball is in play is 11 minutes per game, which works out to over $690 per hour of entertainment.
We’re not saying that all entertainment is valueless; it’s just that we geeks need to keep things in perspective. Sure, you might have a smile on your face after the game, but what actually happened was a small transfer of wealth from you directly to those NFL “entertainers.”
Consider this: The average NBA player’s salary is just over $8.3 million a season and the league minimum is just over $946,000 per season in 2020 / 2021. Those numbers should give you a pretty good feel for the price we’re willing to pay to be entertained, and that is a huge transfer of wealth.
Putting Money to Work
We’re not going to cover more “advanced” topics like researching stocks or investing in real estate. But we are going to offer some advice on how to start down that road to becoming a rich geek. The first tip is simply this: Put money to work for you.
You may have heard one of those financial geeks throwing out terms like return on investment or return on capital, but all they’re really talking about is putting money to work. If you don’t want to depend on McDonalds or “So-So” Security for retirement income, then you need to start investing money in assets that will provide a reliable source of future income.
Fast Cars, Stocks, and Real Estate
While you might look great sitting behind the steering wheel of a Porsche 911 turbo, and a car certainly qualifies as an asset, it’s probably not going to offer a positive return on investment. If you’re looking to become rich, then the best investment bets are in stocks and real estate.
If you happen to agree that it’s possible to make money via the stock or real estate market, then start educating yourself on the kinds of smart investments that will provide a reliable source of future income. This can be done by getting involved in local real estate clubs, attending financial planning seminars, or by reading books. That brings us to a final recommendation.
Perhaps the single best source of practical advice for those thinking about investing in the stock market is a book called The Intelligent Investor by Benjamin Graham. This book walks the reader through the rationale behind something that we think makes a lot of sense: value investing. In case you never heard of the author, maybe you’ve heard of his star pupil – the rich billionaire, and investment guru, Warren Buffett.
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