How to Get Rich on $20k a Year

I LOVE THIS GUY!!! Here's a piece from MSN Money on a guy who has never made much, but has amassed a portfolio that dwarfs that of most Americans:

Earl Crawley, 69, better known as Mr. Earl, earns $20,000 a year as a parking-lot attendant. But he has amassed a stock portfolio worth more than $500,000.

How did he do this? He simply spent less than he earned and invested the surplus:

I did it with good old-fashioned nickels and dimes. My mother taught me how to budget, which made me appreciate how a little money can grow. I saved what I could from odd jobs, such as lawn cutting and window washing, that I did in addition to my day job.

He invested this little bit. It grew. He saved and invested a bit more. It grew too. He kept doing the same thing over and over again -- fueling his savings/investments. Before too long, the investments themselves were growing quite a bit.

A few thoughts on this:

1. No matter how much you make, you HAVE to spend less than you earn to get anywhere financially.

2. He was able to spend less than he earned on $20k a year. Makes you wonder how someone making $50,000 a year can't find a dime to save, doesn't it?

3. He took advantage of the power of compounding. If you really want to super-charge your net worth, you will want to do the same.

4. Personal finance isn't rocket science. If you simply know and apply the basics, you can become rich.

Comments

[bryan]

i dont want to steal this guys thunder BUT...

is he a parking lot attendant that sits in a booth and collects a "toll"? or is he a valet parker? if he is the latter, he would be paid a $20,000 salary but likely is making another $15,000 + in cash tips that he is probably not reporting as income.

additionally, he is 65 years old. you would not have to invest very much annually to end up with a $500,000 portfolio after 45+ years of potential employment.

i dunno, maybe its just me but im not impressed.

[Bill K.]

Good for him. It is not what you make, it is what you keep.

[KK]

Bryan,
You are not impressed? Why not? I don't think guy gets $15,000 in tips because people just are not that friendly...anymore.
I think you are missing the real point. Alot of people (including myself) complain about not having enough money to invest or save. So, we just continue on with our miserable excueses. Now here is a *older gentleman that doesn't make much but was able to save and invest. It just shows what can be done with little money. Sometimes it's the stories like this that can help and change someone's life.
I know it helped changed the way I viewed things. Even though, I have been reading about persoal finance and investing for about two years, I still feel stuck because I'm not making what I thought I would make after college. So, seeing this helps...like a friendly reminder.
So, again, I think it's very impressive...on so many levels.

[mysticaltyger]

Bryan,

You're being way too hard on this guy. Even if he is making, say 35K...that is still not a whole lot of money. And the majority of people, even at the 35K to 50K income level NEVER amass anything close to 500K in financial assets.

So even if his income is unerreported, it is still a major accomplishment.

He also raised several children as well.

[The Money Post]

Just another great example of the power of compound interest. Although I would be no means call him rich, he is certainly better off than the majority of people heading towards retirement.

[BenC]

Bryan, I'd like to see you live in Baltimore on $20K/year as well as being dyslexic (FTFA). That's also probably what he makes "now", 44 years ago he was making less. Saving $500K is not an achievement to be lightly discarded, even if he was making tips. Kudos to Earl for doing what most of couldn't do.

[Mike Flynn]

the essence here is spend less than you make. I did that and retired at 56. I was making in the 200,000 area and spent in the 120,000 area...did that for about 10 years and invested the difference so nice chunk at 57.
Frequently the bread winner will need to actually hide what they are making from other family members as it is likely some will miss the point of savings, I think its in the genes.

[Kevin]

Pretty remarkable, thanks for sharing.

[Lord]

It wouldn't be remarkable for someone higher income, but given the low income it is exceptional. It is enough to replace his work income entirely.

[Zook]

Let's say Bryan is right...I wonder why more than a few people I know who make $100,000 [or more] a year don't have a pot to piss in or a window to throw it out of?

If a guy is making $30,000 a year, is happy and has $500,000 in his retirement account, why isn't everyone doing it?

I would like to think that what Earl did is rather simple and smart, but he is NOT the majority of this country. We would like to think so in our bubbles, but there are people everywhere making tons of money all the way down to making nothing that didn't have the fortitude and smarts that Earl had. It might not sound like a lot, but I think it's a remarkable story.

Again, in this day in age, it's a shame that this type of story sticks out like this, but it is a sign of the times that no one has any vision for their future.

[Zook]

I guess in short...

If this isn't a big deal, why is it a big deal? Why did this get an article in a magazine/paper if it's common stuff?

:o)

[Big Cheese]

If he's dyslexic have you considered the possibility that he has $005,000 and not $500,000?

Sorry- bad joke.

Considering he's 69 I'd suspect most of his big net worth increases came via the stock market in the last 5 years. But $500K isn't going to make him rich although he should be equipped to stop working now and fully replace his $20k a year income.

-Big Cheese

[Experienced]

It's nice to see that he has done so well even though he is/was earning the average income.

However... 69 years old... what good is it to have a large portfolio if you are too old to enjoy it and will die within the next ten years (give or take a decade)?

I'm sure that what everyone is really wondering is how to become rich before half of your life is already over.

Please post more links to average income stories of people "striking it rich". Maybe eventually one of us will happen across one that is more helpful.

Thank you for thinking in the right direction... average people with average incomes becoming rich... even if this one is a story of too little too late.

[MS2008]

It's all about THINKING you make MORE than enough. $35,000 at most with side jobs/tips is still a below average household income. So for this man to have saved $500k IS impressive as this means he would have had to have saved $150/month every month for 40 years (just think about what he was making in 1970!) Granted, it's all relative and this is just 10% of his income (which is the minimum that everyone SHOULD be saving.) However, when you think about some of the population who make 3 times more than him and have a negative net worth, it IS impressive.

[Marlo]

Great article, I concur!

[Kathy Farrey]

Is he married? Does he have any children?
If so, then I 'm really impressed.

[Zoidy]

Kudos to Earl. But we're not being told the whole story. Surely this feat could not have been accomplished without a Capital One Rewards card. Or maybe he just surfed his credit card balances to one w/ a 0% intro rate. Or maybe he carefully watched his credit on FreeCreditReport.com. He at least had to have taken advantage of Rooms 2 Go no interest, no payments till 2011! C'mon!! Are we really supposed to believe he achieved this success WITHOUT the help of a finance company?? Not even one teeny tiny payday loan?? Doubtful.
:P