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I recently sat down and totaled up my net worth, surprise surprise I'm finally a millionaire. I live in a 20+ year old mobile home and drive an old Toyota truck. How did I do it? Cut up the credit cards 30 years ago, meager vacations, no cable TV, too much Ramen, worked my tail off and put half my savings in real estate and the other half in the market. 6 more years and I can retire at 60
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.
Quote:
Originally Posted by JIMANDTHOM
Heres a link to an article--from just a few days ago.
From your link:
“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” he said. “We need to reinvent our whole system of life.”
Is that really the same thing as saying "live modestly and donate to charity"? I would call it instead "have realistic expectations and live within your means". Different message, especially taken within the context of the OP.
The OP says that the rich tell us to live modestly so that they will not have competition. Let's see some evidence of that.
It does seem a bit hypocritical, but especially if they are financial advisors by trade, they are trying to give you sound economic advice so that you don't drown in debt and become even more depressed than you are now. The world is truly a cold hard heartless unforgiving place. Mistakes are remembered forever but kindnesses have to be renewed often. Your existence, though, is what you make of it. Perhaps it is the opinion and wisdom of those who know that money does not make you happy. Maybe it has the power to help some with their self esteem and affords them power to go places and see people they would rather not be able to get in contact with, but it can't buy happiness itself, nor can possessing it make a person happy. Rich people may indeed lament that the poor are better off than they are, because they don't have to worry about keeping up a certain image, maintaining a good reputation in the midst of people who actively seek to destroy it, or justifying their riches to millions of starving poverty-stricken citizens in foreign and domestic areas. I would imagine most billionaires are under an untold amount of stress. It's almost like they are warning us not to make their mistakes while counseling us to be happy with what we have.
~The "super wealthy" often DO throw out ideas on how the "ordinary folks" can make a few bucks and become "wealthy". Just watch/read any interview or commentary with them and they are likely to drop a quarter's worth of advice, and not just "which stock to pick this weeK". They have no real secerets and many started out "common folk". People Like Stock Investor Jim Cramer have been sharing thier secrets and advice for free on shows liek his on CNBC. Read one of his books "Get Rich Slowly".
~Many of the wealthy "millionaires" {or above}, "made their money" by choosing carefully how to spend what they had, sometimes risking it all. Donald Trump once made a comment about how he invested every last dime he had into a new property and then borrowed the rest, and told his then wife something like "the man in the park living in a cardboard box is probably more wealthy than I am right now". He Obviously came out well.
~They often made their money later in life. Money Maven Suze Orman has been telling people for years about her failed business prior to her success and how that success didn't come until after age 45 she wrote her first "money" book. Warren Buffett supposedly didn't start amassing a "fortune", and made most of his 'big" money, after age 50.
~They DO live below their means. ANd save/invest the rest in crucial investements. If you have a few BILLION dollars in your pockets, you CAN "waste" a million or two on a yacht and still live below your means. {Then sell it for a profit later!} Warren Buffett still lives in the same paid-for house he has had for many years...
~They SAVE for a "rainy day" when they find that "right investment" and sink their savings into it.
~They look for good investments and don't waste their time with small losing stuff. Buffett once said he also likes to calculate/invest his money where it will likely earn him at least 10%, which with compounding will DOUBLE your money every 7 years at minimum...{obviously a higher rate than that treasured 10% will double sooner}. He used buying a {dairy?} farm that would return a minimum of 10% as an example of one of his earlier investments.
~They "buy and hold" items and "invest for the long term" that will grow in value and "compound " over time. Whether it be certain stocks, or a 1982 Ferrari that will hold/grow in value as time passes and others will want to pay a new premium price for it. Same with property, art or other such investments. Or that Yacht mentioned above. See the Jim Cramer book title above....
~They most often pay CASH for everything... they DON'T like to finance and "give away" interest money to someone else, making someone else "rich" unless it will bring rewards. They only pay cash for things that will grow in value.
~Lastly for now, they find something they like to do, are good at, and THEN figure out a way to make money at it.
“America’s lifestyle expectations are far too high and need to be adjusted so we have less things and a smaller, better existence,” he said. “We need to reinvent our whole system of life.”
From the link I provided, that was the part that interested me. Consumption is a cornerstone of the capitalist world. If people don't consume business falters etc. Food and a few things are a bit different but even they are advertised to create a want in addition to satisfying a need.
In our budget, we started the slowdown of spending a few years before DH retired. We don't buy the new electronics, we don't have cable, we buy off-lease vehicles that get 30 mpg, meals are designed with leftovers/multiple meals. We find pleasure in walks, bike rides, brushing the dogs, reading and a whole bunch of simple things like that, even sitting on the porch having a beer and talking. We don't have to be this frugal. Maybe it is because we are both 60 now but as the highlighted area suggests we have come upon a smaller, better existence.
What would happen to our capitalism if everyone began to do this?
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.
Not necessarily, there is a basic minimal cost of living.
Whenever my monthly income exceeds $1200 I am able to save money, but whenever my monthly income falls short, I have to dip into those savings to cover expenses.
Actually, if you're taking home $60K and spending $59K of that on ANYTHING, you're poor. Saving $1000 a year is pitiful.
Yet there are people who spend every penny they make and save none. The 60k can be substituted with any income amount.
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. I live in a 20+ year old mobile home and drive an old Toyota truck
. How did I do it? Cut up the credit cards 30 years ago, meager vacations, no cable TV, too much Ramen, worked my tail off and put half my savings in real estate and the other half in the market. 6 more years and I can retire at 60
