After a not so long journey of earning money, Michael Karnjanaprakorn has learned the true meaning of wealth. He in his twitter post has briefed the true meaning of wealth to him.
Michael Karnjanaprakorn is an entrepreneur and investor based in New York. He is the founder of Skillshare, a platform that provides classes and career opportunities to freelancers, creative professionals, and millennials.
Money is an Addiction!
Starting with a quote by Nassim Nicholas Taleb which says “The three most harmful addictions are heroin, carbohydrates, and a monthly salary”, Mr. Karnjanaprakorn wanted to highlight how money is an addiction.
Michael also said how being financially independent is important in one’s life. Being financially independent and retiring early is what one has to strive for. They call it FIRE, Financial Independence, Retire Early. What exactly is financial independence? When one is being able to shape their life and take any decision without taking money into consideration. Then they are financially independent. Well coming to retiring early, one doesn’t have to quit their job instead it means having the freedom to being able to pursue dreams and ambitions. Financial independence also means that your job needs you more than you need it. So it gives an upper hand to negotiate with the work timings, vacation, flexibility at work etc.
When are you financially independent? How much money does one need to have to be able to be financially independent? Well, when one’s net worth is 25X times their annual expenses then they are considered financially independent.
Side Hustling for Passive Income
Reaching FIRE can be done in two ways, either minimize your expenses or maximize your income. Doing both is considered an ideal decision. But what is more important is to earn more income. Earning more from your existing job can happen through the way of bonus or salary increment. But Michael highlights the need for side hustling along with your regular income.
Taking risks is very important to earn those extra bucks. Michael Karnjanaprakorn says that taking calculated risks is essential. Limiting downside while having a considerable upside is how risks have to be taken. He likes to invest everything when the risk is close to zero or it’s limited. It allows him to make bold bets, in his words it allows him to “swing for the fences”.
He is not urging everyone to invest in a business like he did. He himself considers it a risky route but with an opportunity to be your own boss. Most entrepreneurs have a 15-year career span before they burn out. Investing in a business involves high opportunity cost of the lost opportunity and therefore he suggests that extra income can be earned by way of side hustling. It helps to earn passive income in a less risky way.
Leasing your apartment, a part-time marketing consultant, giving your extra car to an Uber driver, buying a youtube channel, investing in various local music bands and organizing their performance are just few side business ideas that will earn you the extra amount you need.
Non-Traditional Approach to Wealth Management
Smart investments are very important. Quoting Warren Buffet, Michael said that investing in a smart way will make your money work even when you sleep. Investing in stock markets will get you same returns with less work than investing in a house. Investing in a non-traditional way would mean investing in startups of early and late stages. Early stage startups will help you build a diversified portfolio. Late stage startups are those that are planning to go for an IPO in the next 2 years. Investing in these would help you make easy money. Investing in a non-traditional way would be a better diversification to your portfolio of investments, easy money but with a little more risk.
Living life with no Regrets
According to Michael, the meaning of wealth for him is happiness, freedom, flexibility and valuable relationships. He runs behind success and defines it as spending less time working on something that you hate rather than spending more than on working on something that you love. He doesn’t want to live a life with regrets. The 5 things people regret the most on their deathbed are courage to live a true life to yourself, not working so hard, the courage to express feelings, staying in touch with friends, and letting yourself be happier. He urges everyone to understand how important happiness is in one’s life and how worthy one’s life would be if there are no regrets on his deathbed.
Michael concluded his twitter tread by saying that the wealthiest people in the world are those who value experiences, relationships, happiness, freedom, flexibility, and having a sense of purpose. He quotes, “This is the “new wealth” that we should accumulate in our lifetime.”
What Michael wants to convey is earn money but in a simple way and do not work for money but let the money work for you. Be financially independent and live a life with no regrets. Accumulate the new wealth as you live only once.