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February 20, 2012


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Never judge a book by it's cover! It took me a long time to learn that, I thought everyone who drove a new BMW or Mercedes must be very wealthy, what I come to find out is they usually have more debt than anything else. I had met with a financial planner many years ago, he thought I only had $4000 to invest, he was ready to end the meeting quickly until I showed him my spreadsheet that showed many times that in liquid assets, he was then very interested in talking to me, I ended up not using him.

Nice story. Here is mine.

There is a guy at work who does the same job as I do,probably makes the same as I do and was in real financial straits when he was laid off for 4 months. He drives a Caddilac while I drive a Chevy Malibu. He leases while I own the car. He was tapping into his 401k while laid off becasue he did not have a reserve but he is 62 so no penality where as I am 48 and it would be.

I am not sure how much he has saved for retirement but my assumption would be that I have more because he NEEDS to drive that $400 a month lease Caddy where I don't care.

So true - I see this daily -- I'm reminded of meeting with the client who was going to buy a new car at a luxury dealership near my office -- when I asked him "oh, are you going to buy a (fill in the blank with whatever luxury car you care)" he responded, 'no way, I wish I could afford that, I'm buying something that someone traded in' (that cost half as much). This, as I'm looking at his balance of close to $2M investment portfolio.

My story also follows a similar pattern.
My parents were born in England in 1908 and 1910 and neither went to high school. My mother took care of writing letters for my father because of his lack of literacy. He did go on to have a long career as a fireman and during WWII his unit was often sent up to London to help out during the Blitz. For spending money I did a morning paper route before school.

I became an aircraft apprentice in 1951 when I was 17 and gave my parents half of my pay to help with my keep. I obtained the equivalent of a BS degree in aeronautical engineering before my wife and I emigrated first to Canada in 1956 and then to the USA in 1958 where my aerospace company paid for me to get an MS degree. My parents never owned their own home and when they died there was just enough money for me sister to cover their final expenses. I was the first in our whole extended family to ever obtain a degree.

The most important "Life lessons" that I learned from my parents and the extended family, particularly during WWII, were to avoid debt, to live frugally, and to save all I could. Fortunately my wife came from a very similar background and I can guarantee that today you couldn't find two more frugal multi-millionaires than us. We have also been able to travel all over the world to fantastic places and were able to afford it because at the age of 58 when I retired I used my computer and math skills to become a very successful investor and hit some great times in the market and the economy.
When I look at my monthly brokerage statement, which is now all in income investments, it never fails to amaze me how "Money makes Money" in an effortless way that sure beats having to work for it or to manage rentals and deal with bad & non paying tenants on occasion.

Great stories. Thanks for sharing. I guess the millionaires next door is a true story after all. :)
Spending less money than they make is the key to financial independence. If you spend more than you make, you'll just be stuck in debt cycles.

These stories are right on - the more I see and experience, the more I find out that the folks who seem to be flashiest with their money are usually being flashy with someone else's money! I've had multiple coworkers and even managers who made more money that I make and who are somehow always in financial straits...but then again, I'm not into fancy cars, I bring my coffee & lunch to work, I don't buy $200 sunglasses or designer clothes, and I've learned to save and budget and invest. I'm by no means a millionaire, but I'm fiscally mindful, and that's more than I can say about a lot of other people.

With delayed gratification, you can be financially secure and enjoy the good life. We can examples of people on this board that can now travel the world and have any experience they wish, without the worry of being in debt.

Goes with the Dave Ramsey line: "If you live like no one else, someday, you will get to live like no one else".

Was anyone struck by the thot that this man who has a poor relationship w/money is managing others money? Lol

Call me contrary, but if you cannot manage your own...you will not be managing mine.

@tamdra - Exactly. Seems like a really poor choice for a financial advisor/manager.

If this is really how people think that explains why so many people hate the “rich.” This only further proves that so many American’s don’t want to make any sacrifices, they only want handouts. And then these spendthrifts have the audacity to point fingers at those who do forgo luxuries and work hard to build a better future.

I frequently let emotion dictate what I spend my money on, don't earn very much, and have a large amount of debt.

That said, I'm saving more than I'm spending by a considerable margin, simply by countering my emotional spending with sensible finances the rest of the time. It is possible, although people don't often like it.

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