It's not what you make.....................

[truckingbronco]

Originally Posted by redwhiteblue

I have heard time and time again people saying that it's not what you make it's what you do with what you make.
Do you think this statement is true?
I think it's true to an extent but you have to have money to invest, so if you're making $25k a year you that rule probably doesn't apply.

What do you think?

I've always heard the saying as "it's not what you make, it's what you take home", which is hard to argue with.

[Submariner]

Originally Posted by truckingbronco

I've always heard the saying as "it's not what you make, it's what you take home", which is hard to argue with.

To an extent, yes.

Limiting how much you pay in taxes, does show an immediate increase in your take home.

However two different people can both earn $25k/year; they can both support a wife and two children.

One will just barely survive and have no investments.

While the other could be on his way towards becoming a millionaire.

[redwhiteblue]

Originally Posted by mbuszu

I concur with several of the other replies - no matter what your income you can and should live below your means and save money for the future. I've experienced it and seen it so I know this isn't blowing smoke.

The biggest challenge I believe low-income earners have is overcoming the lack of fiscal knowledge they usually have. Not knowing the fundamentals of money management, tax-write offs, and how to invest I think is what contributes to them earning such low incomes and it also acts as a barrier to ever spend and save properly. Any such people on this forum would be wise to try to do some reading on this topic because you literally do not know what you do not know. It is no coincidence that financially savvy people typically pay less taxes and save more than the rest.

I agree with you. I do admit at not being to informed when it comes to money, would you recommend any books on the subject?

[redwhiteblue]

Originally Posted by forest beekeeper

Respectfully, I disagree.

Myths abound and it is those myths that keep poor people poor, and wealthy people wealthy.



In 1985 I was attending college fulltime in Southern California. I was working 20-hours a week for minimum wage, I had the GI-bill to pay me $550/month which covered college with a tad left over. I had a wife and a new born child.

In 1985 I bought our first Multi-Family-Residence [MFR]. 20 acres of land with three houses. Zero money down, 'first-time home-owner' fixed rate mortgage, on an 'owner-occupied' rental property.

I borrowed the money to cover escrow closing fees.

The rental income covered the mortgage payment plus taxes, garbage, and just enough to make an extra principle payment each month.



Your $25k/year would have been very wealthy compared to my income.



In 1987, I re-enlisted in the US Navy and was transferred overseas. Everyone seems to know how poorly paid sailors are. Well I bought a building in Scotland a Multi-Family-Residence [MFR]. Zero money down. A five unit rental building. My family lived in one unit, and we rented out the remaining four units. The rental income covered all expenses, plus it left us with more money to put against the mortgage back in California.

Then in 1991 I was transferred back stateside. So I sold the Scotland property [at a good profit] and moved to Connecticut. Once my family was in Connecticut, I had to attend a school in Texas. So while I was in Texas, my wife bought a building in Ct, in my name. She bought a Multi-Family-Residence [MFR] with three units. My family lived in one unit while we rented out the remaining two units. etc.

Do you see a theme?

I have never paid any money down when buying any property [with the exception of when I bought our retirement home].

We have owned Multi-Family-Residences [MFRs] in California, in Scotland, in Connecticut, and in Washington.

And I was finally able to purchase our retirement home using cash. I retired at 42, and we have no mortgage on our retirement home.



"you have to have money to invest"

Is a statement which I seriously disagree with.

I have seen far too many examples of folks who have become fairly wealthy without having a dime to start with.

I have renters right now, who are immigrants, who work full-time and get lots of over-time. Without speaking the language well, they live far below the average American standard-of-living, and yet they will soon buy their own restaurant using cash.

I have had renters like this before, who have since moved out, who were paying cash for their daughter and son to attend college. and they moved out because they had bought a home for themselves. I helped them as they needed someone they could trust to keep them from getting into trouble with the realtor.


If you truly look at any American who is affluent, and not the fakers on TV, you can see how they made it. 'The millionaire Nextdoor' is a good bible for that effort.

Thank you for your story, it does tell a lot about how to get ahead I appreciate your input. It's always nice to hear other's stories. I have a long time before retirement but really want to do everything I can to improve my future.