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Living below your means will not make you rich by itself. (i.e. making $10/day but only spending $0.01/day will still never make you rich)
That said, spending beyond your means will definitely keep you poor regardless of how much you make.
If you want to be rich, you need to focus on both ends of the equation. Most people just have more control over their spending compared to income, so people advice them to start there first.
If you can live on your income you can live on 90% of your income. Take the other 10% and buy value stock in a company that allows you to purchase fractional shares with your dividends. Rinse and repeat over the typical 45 year working life and you will end up well to do, even if all you do is clean toilets for 45 years.
Time and time again I keep reading articles by Billionaires telling us to live modestly and donate to charity. They tell the middle class don't live beyond their means and that keeping up with the Jones is what will get you in trouble. Then I read all the cool toys like mansions, yachts, fast cars, and stuff these rich keep buying while telling us not to emulate them. I really hope the pitch forks show up at their country club and mansions. The rich has the world under their control far far too long and all this rhetoric they keep talking is just to tell the poor and the middle class not to compete with them or get jealous of their lifestyles.
If you don't live modesty, do you get the money to live flamboyantly?
It is solid advice. It is how a person, a family, and a nation build wealth for the future.
Americans are entitled. They can't wait to get rich but they never get there. So they act rich. Then they say the pitchforks are coming.
They are not. The would be pitchforks are buying Toyota 4runners on a big car loan and paying interests to the bankers they hate. Why? Because they want nice stuff. Being against the rich is an expression of jealousy, not justice. After all, they themselves are chasing after wealth too.
So where are the would be pitchforks? Listen. They are in air conditioned Starbucks. They are playing games on their smartphones. They are leasing a bmw. They are waiting in their parents basement for that dream job that will pay them $90k so they can join pretentious social justice marches wearing expensive REI clothes. They are on bike trails, wanting others to endure work to pay their bills.
The pitchforks are not coming until this country is poor enough. Americans today are lame, loser, greedy consumers. They want others to do the work and harvest everything doing nothing. Pitchforkimg involves tremendous adversity, hardship, and risks. Americans are innately against such. Look. There are no vacations when you are pitchforking. There is no paid leave, maternal leave, dogs days at work, or fitness center on site. When you are pitch forking, you are risking your lives. And sorry, no sushi at the end of the day.
Amercians are not respectable enough to pose a credible threat to the power class.
Time and time again I keep reading articles by Billionaires telling us to live modestly and donate to charity. They tell the middle class don't live beyond their means and that keeping up with the Jones is what will get you in trouble. Then I read all the cool toys like mansions, yachts, fast cars, and stuff these rich keep buying while telling us not to emulate them. I really hope the pitch forks show up at their country club and mansions. The rich has the world under their control far far too long and all this rhetoric they keep talking is just to tell the poor and the middle class not to compete with them or get jealous of their lifestyles.
Nobody wants to view themselves as being the benefactors of a pattern of exploitation. So, the wealthy tell themselves, they must be rich because they are smart and hard-working and deserve it! Conversely, then, the poor must be poorer because they are less-smart or don't work as hard. Wealthy folks calling poorer people ignorant and lazy is a way of soothing their own consciences, and has nothing to do with reality. No matter how much data you show a wealthy person indicating that most of the poor are victims of circumstances or lack of the same opportunities, the best you can hope for is an admission that some particular persons were unlucky but most of "them" are still lazy dummies compared to the hard-working wealthy.
See, for example, Romney's reference to selling their inherited stock holdings to pay for college, and what a sacrifice it was. Rich people really believe, in their heart-of-hearts, that they are rich because they work harder than everyone else. Even when it's demonstrably untrue.
Last edited by FrankMiller; 01-26-2015 at 03:18 PM..
If you can live on your income you can live on 90% of your income. Take the other 10% and buy value stock in a company that allows you to purchase fractional shares with your dividends. Rinse and repeat over the typical 45 year working life and you will end up well to do, even if all you do is clean toilets for 45 years.
A) If you're barely getting by paycheck to paycheck, you can't necessarily get by on 90%.
B) But assuming you're able to save 10% of your salary and that you're paid minimum wage for cleaning those toilets, that comes to a savings of $1,700 per year. Let's assume this dividend company pays a dividend and grows at a rate equal to 7%/year. That will leave you with a retirement fund of about $485k by the time you retire.
Just about all retirement estimates agree that $485k is far from enough to retire comfortably. Sure, it may sound like a lot, but as far as retirement goes, it's no where near "well to do" when you consider the increased medical costs that come with old age.
Now you could go so far as to try and include a 3% raise each year, which would change the $485k to $731k, however that increase would largely be eroded by inflation.
Like I said, savings alone isn't enough, you need to focus on income too.
Time and time again I keep reading articles by Billionaires telling us to live modestly and donate to charity.
They want the middle class to stay middle class so that they can stay rich.
Quote:
up with the Jones is what will get you in trouble. Then I read all the cool toys like mansions, yachts, fast cars, and stuff these rich keep buying while telling us not to emulate them. I really hope the pitch forks show up at their country club and mansions. The rich has the world under their control far far too long and all this rhetoric they keep talking is just to tell the poor and the middle class not to compete with them or get jealous of their lifestyles.
I agree. But it's not going to change anytime soon. At least on a large scale. The best effort anyone has made in many years were the "Occupy Wall Street" movements, which have not made a dent in anything. On small scales, as individuals we are free to each do our part to promote equality on all levels in our own circles - including financial equality. When enough individuals do it, it makes a bigger impact.
Time to get back to basics. Many interesting people have devoted their live's endeavors towards promoting equity among humanity, to name a few:
Time and time again I keep reading articles by Billionaires telling us to live modestly and donate to charity. They tell the middle class don't live beyond their means and that keeping up with the Jones is what will get you in trouble. Then I read all the cool toys like mansions, yachts, fast cars, and stuff these rich keep buying while telling us not to emulate them. I really hope the pitch forks show up at their country club and mansions. The rich has the world under their control far far too long and all this rhetoric they keep talking is just to tell the poor and the middle class not to compete with them or get jealous of their lifestyles.
Just because they can buy those things does not mean that they are not living within their means. If you don't have the money to buy those things than chances are you would have to go into debt to get them. Not a good move if you ask me.
Realize that a third or more of this nations wealthy are self made. They did it on their own. How in the world did they get there if they were spending all their money buying toys that they could not afford? No, they bought the toys after they made the money. That is what anyone will tell you.
Saying all of that, why not do what they did to get rich? Why complain when most of them, or at least a third of them, know that you can do it to. You can also build wealth so that you can buy the toys that you wish you had.
As far as donating, many of the wealthiest are giving most of their wealth away to charity or causes that they are interested in. Bill and Melinda Gates are giving it just about all away and that is what $76billion or so. Warren Buffet is doing the same. Many others are giving it away as well.
Many of the rich, namely the self-made millionaires and billionaires did live modestly before and in their earlier years of building up their wealth. Some only started to buy their 'toys' once they had more money than they knew what to do with....if they had started buying expensive items like Jaguars, large boats, etc before they were in a position to afford them outright and not stretch their wallet, they very likely would never had built up their wealth later on.
Frugality is one thing a great deal of wealthy self-made men and women tend to have in common in their earlier years. Some continue this lifestyle of frugality throughout life, even after they have made millions and millions of dollars. Spending within your means is really one of the most important things, habits really, that the rich did before and during their accumulation of wealth....the other very important thing is too of course a successful business model/product, etc and competent management of their business and money.
Many (but not all---many poor are victims of circumstance only) people stay poor because they do not give themselves the chance to accumulate savings to reinvest or what have you and do not have a viable way to increase income.
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