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Keep in mind that many people who believe they're hitting the limits of their means simply don't have the personal will(not that it's their fault) to pick up th

Keep in mind that many people who believe they're hitting the limits of their means simply don't have the personal will(not that it's their fault) to pick up that book which would tell them they could save enough and invest pretty well with some basic knowledge. And typically they wouldn't need to sacrifice quality of life. I know lots of young people here in Canada at least work paycheck-to-paycheck but instead of buying stocks or at least saving, they will spend their unaccounted money on booze and video games(if they have any at all), it wouldn't take much for them to save up a couple thousand bucks and invest in something better for themselves. They just don't want to, or don't know how to make that sort of decision. Then of course there are people who are ACTUALLY poor, that's where my empathy starts. I recently helped a homeless man work the computers at the local library(not that I consider that a significant act in itself), and I know just how hard it is to work with people who are seriously SOL; they're even resistant to help. That said, I don't think being harder on billionaires is going to help people down on their luck, it's only going to serve the egos of those who have no idea what it means to be in either of those positions. EDIT: It seems people misunderstood what I meant by investment. I include in this investing in things like transportation, raw materials, and (if applicable) time off to pursue greater potential, and not just playing markets and buying shares.

rdudek 13y ago
That is true. Best thing to do is start with small changes so that you don't even notice it and all of a sudden, your bank account has more money in it. Also, which book would you recommend?
- npsimons 13y ago
  Also, which book would you recommend? Seconded; while I am very skeptical of the "invest to get (a little) rich(er)" approach[1], I'm open to and curious of what books the GP considers good. [1] - Every single way of investing that I've looked at is either (1) not worth it (doesn't even beat inflation) and/or (2) more work than it's worth (I've already got hobbies I like; why should I waste my unpaid time playing even more into the rat race by tracking markets and probably never making a profit?)
  - microcolonel 13y ago
    That's an important distinction to make, I don't necessarily mean financial institution investments, I would include personal capital investment as well(like buying a personal computer as a writer, or buying some raw materials to make some handcrafted good, or buying source chemicals to make useful compounds. etc.) Financial investment is a difficult bar to hit just because there are usually people more capable of it, and with better judgement for it than you. Investing in capital goods on the other hand can be best understood by the people capable of using the goods. For example, you may commute to a job every day, and take public transit to get there. If you're within bicycle range perhaps you could get a used bicycle(good commuter bikes can be had for a hundred bucks here, and we don't even have the usual number of surplus bikes.)
    - npsimons 13y ago
      Good points! I feel (perhaps wrongly) that I already "invest" a lot in myself, but I also feel I could be doing more, or finding a "quick and dirty" solution to an early retirement. I just get frustrated to no end when someone says "invest in the stock market! It's easy!", then they explain that all you have to do is keep tabs of a zillion different little market factors everyday, and oh by the way, pay for their super secret money making formula. The painstaking research on companies and the environments in which they operate might be fun for some (dare I say, most fantasy sports people or sports fans in general would be better served by putting their stats minded heads towards financial matters?), but it sounds too much like a second job to me. The point about bicycle commuting is extremely cogent, however, as I do have a working bicycle and a commute that lends itself well to it. But I am lazy, at what I estimate of cost of between 800-1200USD a year, and it's only going to go up. Still, I might be able to motivate myself with some righteousness about being better than all the gas guzzlers . . . All that aside, I can say one of my favorite "get rich slowly" books (that came out before that phrase was invented) is "Your Money or Your Life", although it's fairly dated (T-Notes at 15%? I wish!)
- microcolonel 13y ago
  I have to agree with the small changes point, lottery winners tend to screw up very badly when they get their deposit, the same is true for those born into large unconditional trust funds(lots of rich kids go bankrupt). Book recommendations are a tough thing for me to make, I studied more gradually since I started in my early youth, and was already interested in mathematics. I suspect most of the "top ten personal finance books" articles favoured by PageRank™ are pretty reasonable, and a good start for most people. My personal method was perusing Wikipedia for accounting and economics information, and looking at people close to me. Sorry I can't fob the right book title though.
- vkjv 13y ago
  The Automatic Millionaire. It's not as extreme as the title suggests. It's really about practical life decisions and investments for a comfortable retirement.
- hispanic 13y ago
  Read the Mr. Money Mustache blog - http://www.mrmoneymustache.com/ http://www.mrmoneymustache.com/ I just did a quick scan of recent articles that you might find interesting. Try this one: http://www.mrmoneymustache.com/2014/02/04/why-the-middle-class-keeps-giving-itself-the-shaft/ http://www.mrmoneymustache.com/2014/02/04/why-the-middle-cla...
zeidrich 13y ago
Past food and shelter, people need leisure as part of a healthy lifestyle. Spending excess money on drinks and video games is not simply a matter of being to undisciplined, it's a real need, just one that can be put off. Putting it off indefinitely to invest is not healthy. The people who are actually wealthy are the people who buy their booze and video games, or the equivalent, and then still have something left over to invest. The other reality is that it doesn't significantly matter if you invest that $100/month that you'd otherwise spend on beer and food. If you invest 1200/year into mutual funds every month for 20 years and make 10% per year, sure, you'll make yourself some $70,000 over those 20 years, but that's not going to make you change from being lower middle class. You can do something riskier, but what happens if that fails? And all the while you've denied yourself the simple pleasures of drinking a beer and playing video games at the end of the day. It's discouraging because no matter how hard you save, when you start at 0, and earn a wage, you aren't going to touch the levels of wealth that some of these people have. But we still like to tell people if only they remove all of the extravagant things from their lives, like nights out with friends and hobbies, that they will get rich too. But it's not true, it's not even close. There's no way that you could ever work as an employee and make a billion dollars without either very risky and lucky investment, or a CEO's salary. And if you get into the position where you could get yourself to billionaire status, you won't be in the position where you have to give up booze or video games to do it.
- Loughla 13y ago
  You don't start at 0. You start in the negatives. Those that are uber wealthy tend to start with a massive, massive head start. Combine massive debt loads, poor job prospects, and you get a hopeless generation of youth. They would rather buy video games and beer to forget about how crappy their life is than to invest and plan for the future. Basic human tendency is to ignore and/or avoid pain.
- microcolonel 13y ago
  You don't need to pay for leisure, there are tonnes of free concerts, free activities(like playing frisbee with strangers in the park), plenty of fountains etc. You /certainly/ don't need to drink booze to live a rich life, I'd be miserable if that were the case. While it is nice to be able to pick your vices and have funds left over, that's just not a realistic way for most people to live their lives. Nobody starts at zero by the way, you start much of the way to the junction point of life enjoyment, I'm not sure how reliable these studies are, but some suggest that enjoyment in relation to wealth follows a law of diminishing returns, with a juncture around $80-100k(I don't remember the exact figures); so ostensibly the goal is not to become the richest man on earth from a homeless orphan, but to gravitate toward that juncture.

rdudek 13y ago

That is true. Best thing to do is start with small changes so that you don't even notice it and all of a sudden, your bank account has more money in it. Also, which book would you recommend?

npsimons 13y ago
Also, which book would you recommend? Seconded; while I am very skeptical of the "invest to get (a little) rich(er)" approach[1], I'm open to and curious of what books the GP considers good. [1] - Every single way of investing that I've looked at is either (1) not worth it (doesn't even beat inflation) and/or (2) more work than it's worth (I've already got hobbies I like; why should I waste my unpaid time playing even more into the rat race by tracking markets and probably never making a profit?)
- microcolonel 13y ago
  That's an important distinction to make, I don't necessarily mean financial institution investments, I would include personal capital investment as well(like buying a personal computer as a writer, or buying some raw materials to make some handcrafted good, or buying source chemicals to make useful compounds. etc.) Financial investment is a difficult bar to hit just because there are usually people more capable of it, and with better judgement for it than you. Investing in capital goods on the other hand can be best understood by the people capable of using the goods. For example, you may commute to a job every day, and take public transit to get there. If you're within bicycle range perhaps you could get a used bicycle(good commuter bikes can be had for a hundred bucks here, and we don't even have the usual number of surplus bikes.)
  - npsimons 13y ago
    Good points! I feel (perhaps wrongly) that I already "invest" a lot in myself, but I also feel I could be doing more, or finding a "quick and dirty" solution to an early retirement. I just get frustrated to no end when someone says "invest in the stock market! It's easy!", then they explain that all you have to do is keep tabs of a zillion different little market factors everyday, and oh by the way, pay for their super secret money making formula. The painstaking research on companies and the environments in which they operate might be fun for some (dare I say, most fantasy sports people or sports fans in general would be better served by putting their stats minded heads towards financial matters?), but it sounds too much like a second job to me. The point about bicycle commuting is extremely cogent, however, as I do have a working bicycle and a commute that lends itself well to it. But I am lazy, at what I estimate of cost of between 800-1200USD a year, and it's only going to go up. Still, I might be able to motivate myself with some righteousness about being better than all the gas guzzlers . . . All that aside, I can say one of my favorite "get rich slowly" books (that came out before that phrase was invented) is "Your Money or Your Life", although it's fairly dated (T-Notes at 15%? I wish!)
microcolonel 13y ago
I have to agree with the small changes point, lottery winners tend to screw up very badly when they get their deposit, the same is true for those born into large unconditional trust funds(lots of rich kids go bankrupt). Book recommendations are a tough thing for me to make, I studied more gradually since I started in my early youth, and was already interested in mathematics. I suspect most of the "top ten personal finance books" articles favoured by PageRank™ are pretty reasonable, and a good start for most people. My personal method was perusing Wikipedia for accounting and economics information, and looking at people close to me. Sorry I can't fob the right book title though.
vkjv 13y ago
The Automatic Millionaire. It's not as extreme as the title suggests. It's really about practical life decisions and investments for a comfortable retirement.
hispanic 13y ago
Read the Mr. Money Mustache blog - http://www.mrmoneymustache.com/ http://www.mrmoneymustache.com/ I just did a quick scan of recent articles that you might find interesting. Try this one: http://www.mrmoneymustache.com/2014/02/04/why-the-middle-class-keeps-giving-itself-the-shaft/ http://www.mrmoneymustache.com/2014/02/04/why-the-middle-cla...

zeidrich 13y ago

Past food and shelter, people need leisure as part of a healthy lifestyle. Spending excess money on drinks and video games is not simply a matter of being to undisciplined, it's a real need, just one that can be put off. Putting it off indefinitely to invest is not healthy. The people who are actually wealthy are the people who buy their booze and video games, or the equivalent, and then still have something left over to invest. The other reality is that it doesn't significantly matter if you invest that $100/month that you'd otherwise spend on beer and food. If you invest 1200/year into mutual funds every month for 20 years and make 10% per year, sure, you'll make yourself some $70,000 over those 20 years, but that's not going to make you change from being lower middle class. You can do something riskier, but what happens if that fails? And all the while you've denied yourself the simple pleasures of drinking a beer and playing video games at the end of the day. It's discouraging because no matter how hard you save, when you start at 0, and earn a wage, you aren't going to touch the levels of wealth that some of these people have. But we still like to tell people if only they remove all of the extravagant things from their lives, like nights out with friends and hobbies, that they will get rich too. But it's not true, it's not even close. There's no way that you could ever work as an employee and make a billion dollars without either very risky and lucky investment, or a CEO's salary. And if you get into the position where you could get yourself to billionaire status, you won't be in the position where you have to give up booze or video games to do it.

Loughla 13y ago
You don't start at 0. You start in the negatives. Those that are uber wealthy tend to start with a massive, massive head start. Combine massive debt loads, poor job prospects, and you get a hopeless generation of youth. They would rather buy video games and beer to forget about how crappy their life is than to invest and plan for the future. Basic human tendency is to ignore and/or avoid pain.
microcolonel 13y ago
You don't need to pay for leisure, there are tonnes of free concerts, free activities(like playing frisbee with strangers in the park), plenty of fountains etc. You /certainly/ don't need to drink booze to live a rich life, I'd be miserable if that were the case. While it is nice to be able to pick your vices and have funds left over, that's just not a realistic way for most people to live their lives. Nobody starts at zero by the way, you start much of the way to the junction point of life enjoyment, I'm not sure how reliable these studies are, but some suggest that enjoyment in relation to wealth follows a law of diminishing returns, with a juncture around $80-100k(I don't remember the exact figures); so ostensibly the goal is not to become the richest man on earth from a homeless orphan, but to gravitate toward that juncture.