Opinion – From Grain to Grain: If you want fortune, stop thinking about wealth and adopt these two habits

In one of the letters from the American periodical The Motley Fool, analyst Bill Mann wrote: “There is no faster way to feel rich than to spend lots of money on really nice things.“(There is no quicker way to feel rich than spending money on nice things).

However, as Morgan Housel explains in his book The Psychology of Money:

“People tend to want wealth to signal to others that they should be loved and admired. However, in reality, these others often forget to admire you, not because they don’t think wealth is admirable, but because they use wealth as reference to the very desire to be loved and admired.”

Housel explains the difference between wealth and fortune.

Wealth is related to present income. If you own a house of a few million, you are rich. Even if it is financed, your income must be enough to cover the financing.

Fortune is represented by financial investments that have not yet been converted into assets. Therefore, he defines fortune as what no one sees.

You see people who have wealth pass by on the street, but those who have wealth go unnoticed. You could come across Warren Buffett and not notice.

At this point, you may be asking yourself: but what does fortune provide?

It provides something far more valuable. What do you prefer, having a nice car and risking not being able to retire, or the freedom to choose when to stop working?

Fortuna gives you flexibility and financial freedom to choose, for example, what to do with your life. How much is it worth?

Possibly you have already thought at some point: “if I had money, I would change jobs and do something that would generate pleasure for me.”

However, soon after, you got distracted on the internet, by impulse, bought the latest iPhone model and justified yourself, arguing “I deserve it” as a reward for the hard work you did in the year. Like someone who after training at the gym indulges in sweets. What was the exercise worth?

As singer Rihanna’s accountant responded when she sued him for nearly going broke: “Wasn’t it obvious to her that if you spend your money on things, you’re going to end up with things and no money?”

So, be careful not to end up with what gives you more value at the expense of something that depreciates and can destroy you financially.

The author also warns about the care that must be taken in following those who have wealth and not fortune. We believe that if we imitate it, we will achieve success. By severe penalties, these lead us into financial traps. No wonder that those who sell financial pyramids show off on social media with riches they often don’t even have.

As Housel recommends, building a fortune requires a proper balance between frugality and paranoia.

Michael Viriato he is an investment advisor and founding partner of Investor’s House