4 ms·
This reminds me of what my mother used to tell us when we were kids. Since we were poor, she used to say that "Rich people are rich because they only eat one it
by acangiano 15y ago
This reminds me of what my mother used to tell us when we were kids. Since we were poor, she used to say that "Rich people are rich because they only eat one item for lunch". Even at an early age, I questioned this logic.
Rich people are people who manage to earn more than they spend on a regular basis. Short of extreme lifestyles, there is a certain amount of money you'll have to spend to be a participant of society. If your income is very close to that number, you are not broke because of your spending habits or because you eat pasta and salad for lunch.
You are broke because you don't earn enough money. The recipe then is to earn more money, which is generally easier said than done when you are dealing with financial difficulties.
But that's where the focus should be, not stressing yourself further in an effort to save $5.
- Retric 15y agoA nice safe retirement costs about 20$ a day if you start at 18. (20$/day * ~6% ROI ~= 1.8million) but many people are dealing with credit card debt all there lives which blows those numbers out of the water. So, yea if your scraping buy try and make more money, but don't think you need to make all that much more money. PS: When it comes to CC debt spending 1$ more than you make each day will crush most people in around 20 years. (Run the number @20% interest.)
- barrkel 15y agoNice 6% ROI you pulled out of thin air. Where exactly do you find that? It's hard to find a risk-free way that just keeps up with inflation at this point.
- philwelch 15y agoIf you start at age 18, you're likely to live through a couple economic cycles and it'll even out.
- splat 15y agoWith the standard caveat that past performance does not guarantee future results, the historical average real return on the stock market has been >~7% [1, 2, 3, 4]. Assuming someone starts saving for retirement at a young age (say, early 20s), assuming that the average return will be close to the historical average is not unreasonable. [1] http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm http://www.simplestockinvesting.com/SP500-historical-real-to... [2] http://www.istockanalyst.com/article/viewarticle/articleid/2803347 http://www.istockanalyst.com/article/viewarticle/articleid/2... [3] http://www.getrichslowly.org/blog/2008/12/16/how-much-does-the-stock-market-actually-return/ http://www.getrichslowly.org/blog/2008/12/16/how-much-does-t... [4] www.ssab.gov/publications/financing/estimated%20rate%20of%20return.pdf
- rphlx 15y agoWell, 6% is the historical average including victory in a war that eliminated almost all of the US' global competition, the discovery and near-depletion of easy petrochemical energy resources, and major technological advances driven by the cold war/space race. Plus endless borrowing and debt expansion. It seems unlikely that the resulting 50 yr period of prosperity can and will repeat over the next 25-50 years.
- marvin 15y agoI was going to argue that you can always invest internationally, but even this looks slightly dodgy. The MSCI world index has had a 3% annualized return after inflation since 2000...which is strange and somewhat hard to explain. Another problem is that for the last 10 years, the best investment opportunities have only been available to rich people, at least in the US - the IPO market doesn't exist anymore and most wealth seems to be created in companies that are privately held. I'd give my left nut to be able to invest in any company in the world.
- gte910h 15y ago6% ROI's have long been dreamland (As real interest rates rarely approach that).