FIRE,  Life

Wealth Creation Zones (and a Crazy Neighbour Story)

Reading Time: 4 Minutes

Hey guys! How y’all doing!

And how’s those new year resolutions coming along? Keep going!

I’ve added a new one to our list – we have to find a new place to live. Pronto.

Not by choice you see, but because we have this crazy neighbour next door who has been causing malicious property damage on our apartment level.

The guy thought it was a good idea to start hammering and drilling through the tiles and walls of our common area in the wee hours of the morning.

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No, this ain’t the guy.

Apparently he’s always been a bit unstable but it’s only in the last couple of weeks where his behaviour has really escalated. Everyone’s pretty freaked out and it got to the point where the police were called to arrest him.

“Ahhh, he’s gone. We’re safe now.” The other neighbours chorus in unison.

Ummm no.

Arnie voice on.

“He’ll be back”.

Arnie voice off.

So that’s that. We are moving.

A shame really, because both MrsFrugalSamurai and I love where we live now.

Oh well! That’s how life goes I guess.

But enough about me – you guys didn’t come on here to read about our crazy-next-door neighbour, you came here for some gems on finance right!

So forward we must go!

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Being so early in the year – I’m sure many of us have put wealth-creation as a particular focus in our resolutions.

Now, when we think about our personal finances, we usually start thinking of ways to create more money, more income.

Sometimes though, focusing on making more money might not necessarily make us wealthy.


Because wealth is a result of what we do with what we make, not a result of what you make.

To further illustrate this – today, I’m going to introduce some wealth-creation zones.

Red Zone

Uh oh – the red zone ain’t where you want to be. Those in the red zone have neither assets or cash flow, so they’re often in the red. Usually they struggle to make ends meet and/or carry significant debt. Sometimes this carries through the generations.

It is difficult for those in the red zone to move out without a concerted effort and focus.

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Typical red-zoners.

People stuck here tend to be pretty angry about their situation but can’t see a way out. Hence they often see red (humour me please).

Red zone quote: “I’m off to the Centrelink (welfare) office on Tuesday, those bastards ripped me off last week.”

Blue Zone

For most of us, the majority of our household wealth is tied up into our single biggest asset – that is, our homes.

Although we might have an investment property or two, a decent share portfolio and some spare cash lying around, any movement in interest rates or an unexpected cash flow emergency can cause our heart rate to skyrocket.

This is why the peeps in this zone are typically labelled as “asset-rich, cash-flow poor”.

Because they are constantly lacking free cash flow, they are often blue about their situation (haha, more Dad jokes).

Blue zone quote: “Gee, I hope they don’t increase rates on Tuesday, we can barely afford the monthly repayments as it is, might have to sell something soon if it goes on like this”.

Green Zone

Whoa, the green zone! The people here make bumper salaries and have large discretionary income to spend as they see fit. Their appearance is wealthy, with expensive cars, snazzy homes and an insta-worthy lifestyle.

Unfortunately their net worth is minimal based on a lack of appreciating assets – and their home, car and lifestyle is backed by their sole source of income, their high-paying jobs.

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They are in this zone because they love spending dem Benjamin’s, and are always splashing the greens to maintain the lifestyle creep.

Green zone quote: “When’s payday? Tuesday? Awesome! Oh Em Gee, can finally get that Merino Wool sneaker from Zegna – can’t wait!”

Gold Zone

Finally, we have reached the gold zone, which is the promised land of being both asset and cash-flow rich.

The journey to this zone can take a long, long time – but it’s worth it in the end as you sit back and enjoy the freedom it brings.

Not many of us truly reach this zone, hence why it is the gold standard.

Gold zone quote: “Oh looks like we made another $10,786 on Tuesday from rent, another $3,892 from shares and some loose change from our personal finance blog.”


So if you’re wanting to start your financial goals with a bang in 2019, then I think the first step is to really understand which wealth-creation zone you are in, and then go from there!

So… which one are you in?

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  • Hugzy

    “The journey to this zone can take a long, long time – but it’s worth it in the end as you sit back and enjoy the freedom it brings.” – theoretically I think it sounds amazing, but I am fairly certain if you had the drive, persistence, commitment and consistency to get to the gold zone on your own accord (ie by passing GO many times and didn’t inherit $150 will), I don’t think you will ever “sit back and enjoy the freedom”.

    Working (towards your goals) IS your freedom

    • The Frugal Samurai

      Wow amazing, are you a GURU – such words of wisdom I usually hear from my friend Bike Bao… but you’re right – if you’ve been powering ahead for the best part of 20 years… it IS very hard to stop. Then you have to ask yourself when is enough enough?

      Yknow, call me sentimental – but I can imagine MrsFrugalSamurai and I in our old age looking back with fondness at all that’s been achieved, the trials, the tribulations and MOST of all, the journey (pronounced jurn-nay).

      “Wipes a tear as I hold my love tenderly in my arms”.

      • Hugzy

        “Wipes a tear as I hold my love tenderly in my arms”

        *bites my tongue trying not to burst out laughing

        You remind me of one of Mike’s soft-cock friends… Tony Agedashi (Tofu) or something like that

        “Then you have to ask yourself when is enough enough?” – I think you have it spot on sir… the fun is in the jurn-nay, like when you are ABOUT to win the battle but not 100% sure yet

        eg. when you are upgrading to the Imperial Age but only have 6 musketeers whilst your opponent is stuck FIRMLY in the Stone Age

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