4 Common Money Tips That Are Keeping You Broke, According To Self-Made Millionaire
Vivian Tu, founder of Your Rich BFF and author of "Rich AF: The Winning Money Mindset that Will Change Your Life," became a millionaire at age 27. So, she knows a thing or two about making money.
Tu recognizes that this is not your grandmother's economy, and that the old rules no longer work. In a recent post on CNBC, she had some advice for those who want to become wealthy in the current economy -- and most of it involves what not to do.
Here are four common money tips that are keeping you broke, according to Vivian Tu.
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Switch Careers To Make More Money
Tu said that this advice is "infinitely easier said than done." She gives the example of someone who grew up in a rural area, went to college and then moved to a mid-sized city to work for a consumer goods company. She admits they have no path to working at Google. They don't have the right degree, experience or network.
"Jobs aren't just about paychecks," said Tu. "They're cultural, they're local and they shape our identity."
Find a Cheaper Place To Live and Get Roommates
A generation ago, recent college graduates could find an apartment with a roommate or two in most major cities that they could afford on an entry-level corporate salary. This is no longer the case.
"Housing prices have jumped a ton," said Tu. "Even if you're renting, higher overall prices for landlords mean higher rent payments for you."
And Tu notes that most Americans already have roommates.
"Literally only about one in ten young people lives completely solo," she said. "The rest are bunking with roomies, partners, spouses, or -- yes -- parents: One in three adults aged 18 [to] 34 still lives at home."
Spend Less on Lattes and Avocado Toast
"Short-term small expenses aren't keeping us from achieving our goals the way most financial gurus want you to think they are," said Tu. She cites inflation as the reason that small indulgences feel more out of reach than ever before.
Inflation at about 2% per year, coupled with wages that increase at least that much, would indicate a growing economy. With inflation exceeding that target, and the federal minimum wage staying stagnant since 2009, things don't just "feel" more expensive -- they are.
Money Can't Buy Happiness
This old adage has been around for a long time and is commonly used to make people feel better about being broke. It's also not true, according to Tu. She cites a study from 2010 that concluded that the money-happiness correlation peaked at about $75,000 per year. Above that, happiness didn't increase the more you earned.
But a second study, this one from 2021, found that happiness continued to increase the more you earned, even well beyond the $75,000 level. So, while you may not be able to buy extra happiness at Target, you're likely to be happier the more money you have.
Vivian Tu understands that these old money tips need to go the way of the paper check register. While she doesn't provide specific replacement advice in her CNBC post, you can learn more about her approach to personal finance in her book and by following her on social media.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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