How the Rich Invest

Quick Look

Focus:A plain-English breakdown of how the wealthy think differently about money — from Vivian Tu’s book Rich AF

Key Takeaways:

Rich people prioritise long-term wealth over short-term spending
Investing regularly — not perfectly — builds financial freedom
Your mindset matters as much as your money habits
Reading Time: ≈ 5 minutes

Introduction

Vivian Tu — a former Wall Street trader turned financial educator — has become a relatable voice for everyday people wanting to grow their money. Her book Rich AF: The Winning Money Mindset That Will Change Your Life aims to break down “rich person thinking” into actionable steps anyone can take.

Because it can be your mindset – your behaviour, that is holding you back, this article unpacks her core ideas about how the wealthy build wealth, why mindset makes a difference, and how to apply these insights without needing a six-figure salary or an economics degree.

Context & Problem

Most Australians grow up without being taught how money really works. We’re told to work hard, save, and hope for the best — but not shown how the wealthy actually grow their wealth.

Vivian Tu argues that rich people aren’t just lucky — they follow patterns, use specific strategies, and play a different game altogether. If you don’t learn the rules of that game, you may be stuck working for your money forever, instead of getting your money to work for you.

She also challenges common myths — like thinking investing is risky, or that budgeting means deprivation. In reality, rich people do three things consistently:

Make investing automatic
Use debt strategically (not emotionally)
Focus on long-term returns, not short-term savings

Ignoring these habits means missing out on what actually builds wealth over time.

Strategy & How To

Vivian Tu’s advice boils down to a few key money principles that anyone can adopt. Here’s a breakdown in plain English:

Build a Rich Mindset

Before anything else, the wealthy think differently:

They see money as a tool, not a measure of self-worth
They ask how to grow money, not just how to save it
They value time and freedom, not just stuff

Start by asking: “What do I want money to do for me?” Your goals drive your financial strategy.

Automate Your Wealth Building

Rich people don’t rely on willpower — they set systems:

Set up automatic transfers to savings and investments
Use a percentage-based budget, e.g. 20% for future you
Prioritise investing early — even $100/month adds up

Understand & Use Investing Basics

Tu simplifies investing into accessible steps:

You don’t need to “pick stocks” — index funds are enough
Time in the market is better than trying to time the market
Start with low-fee, diversified investment packages

Example: If you invest $500/month in a broad ETF averaging 7% p.a., you’d have around $420,000 after 25 years.

Use Debt Smarter, Not Just Less

Tu warns against “good vs bad” debt labels. Instead:

Use debt that helps build value (e.g. study, property)
Avoid high-interest consumer debt unless paid monthly
Prioritise paying off higher interest %

Get Comfortable Talking About Money

Tu encourages open, judgement-free conversations about money:

Learn from friends, partners, and online communities
Ask questions, even if they feel “silly”
Remember: financial literacy is a skill, not a personality trait

Case Study

Before: Sarah, 29, was saving sporadically, had no investment account, and felt intimidated by finance. After reading Rich AF, she: Opened a micro-investing account and automated $250/month Paid off a credit card with 17% interest Started budgeting using Tu’s 50/30/20 rule Shifted her mindset: “I’m not bad with money — I’m learning” After 18 months, Sarah’s net worth grew by over $12,000, mostly from consistent investing and paying down debt.

Common Questions & Misconceptions

“Don’t you need a lot of money to invest?”

No. Starting small but early builds real wealth over time. Even $50/month makes a difference with compounding.

“Isn’t investing risky?”

Investment carries risk, but risk is a relative term. For instance, driving a car, taking the train, both have risk. Even doing nothing has risk too — like inflation eating your savings. Diversified, long-term investing is safer than many think. How do you think millions and millions of people have grown their wealth over the centuries. Because investing works.

“Is budgeting the same as penny-pinching?”

No — budgeting is just planning. It helps you spend with confidence, not guilt.

“But I’m bad with numbers…”

Money confidence comes from practice, not perfection. Most tools do the maths for you. Tu’s message: progress beats precision.

Conclusion

Vivian Tu’s Rich AF isn’t about being flashy — it’s about being free. Her biggest message? Wealth isn’t just about how much you earn. It’s about the habits you build, the mindset you adopt, and the systems you put in place. This is also my message based on a lifetime of advising people how to confidently build their wealth.

If you’re feeling behind, that’s OK — now you’ve got the rulebook the rich use. And it starts with your next decision.

Terms explained

Compounding is the term that describes how the earnings from the previous year are now also earning, and so on over the years.

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Review & Fact Check

1. Fact References

Investing basics and compounding: Referenced in Rich AF and supported by ASIC guidance on long-term investing
Index fund returns: Based on historical averages from Vanguard and Morningstar

2. Unverified or Inconclusive Items

Sarah’s case study is illustrative only. Not based on a real individual.

3. Time Sensitivity

Content is not date-sensitive, but compounding examples assume long-term investing (10+ years).

4. Bias Assessment

Neutral summary of a third-party book. No investment product promoted. Light promotion of guidance tools (MoneyGPS, PlanningIQ) at article end, consistent with informational intent.