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He missed rule #0: Wealth is what you save, not what you earn or what you spend. There are many people with very high income but spending as high (or even hig
by kbutler 9y ago
He missed rule #0:
Wealth is what you save, not what you earn or what you spend.
There are many people with very high income but spending as high (or even higher!), so they have little or no wealth.
- nofilter 9y agoAgree, I'm a software engineer with naturally pretty good pay, yet I'm always broke. It's 99% to blame on my spending habits, which have increased equally with the increase of my salary over the years. A problem I am, and everyone should, aim to fix.
- jacquesm 9y agoActually, cash flow beats cash. Cash is also a liability but a large enough steady source of income is very hard to beat. That's one reason why so many people that have cash try their hardest to turn it into a stream of recurring revenue that they can then live of without hurting the principal.
- kbutler 9y ago...and that principal is your wealth. So to summarize: Use your career income to accumulate wealth that will provide your income without your career.
- stuffedBelly 9y agoActually from a financial perspective, wealth is assets you own (equivalent to equity + liability). People with high net income should be investing as much as possible to let the money flow in the market. If everyone saves with no intention to invest/spend, it would potentially result in a stagnant economy.