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March 02, 2006


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I couldn't agree with you more. It really is about discipline. I know people with good salaries who could easily be building a nice nest egg, but instead are scrimping by each month because of poor financial habits.

You're right. It's simple but not easy. But all it takes is discipline and patience.

You are correct! I'll never forget my father telling me about a man that worked with him at the post office. This particular fellow never married, but he was very enthusiastic about saving and investing. He lived in a small apartment in downtown Oklahoma City. He was single, and as far as I know never married. On one occassion he asked my dad to come by his apartment after work to pick up something. What my dad saw was stacks of the Wall Street Journal. Of course, my dad being the inquisitive type asked him what all this stuff was, and he explained his interest in investing. He told my dad that every extra nickle he got he bought stocks and that at that time his net worth was approximately $600,000. A number of years later I asked my dad what happened to that fellow. Apparently, he left millions of dollars to charity upon his death.

I never forgot the story! I started saving rather late in life. I was 42 when I opened my first brokerage account, but I'll never forget the feeling I got when the first two stocks I bought for less than $2.00 per share were sold for over $20.00 a share.

Here are some simple things you can do to increase your saving. They worked for me and maybe they can work for you.

l. Pay you home off as quickly as possible. Refinance for 15, 10, or even 5 years then try to pay it off in two or three years.

2. Do not tolerate any form of debt. If you owe money get it paid off as quickly as possible. Especially credit cards.

3. Once you pay your house off, hopefully in five years, don't buy a bigger house or plan any spending for the savings instead start putting it into solid stocks. Advice: DO NOT BUY MANY OF THE MUTUAL FUNDS BEING SOLD BY INSURANCE COMPANIES.....MANY OF THESE HAVE A 4% charge. You can never make money in mutual funds paying high fees.

4, Make a list of everything that you are spending money on you don't need such as: newspaper subscription, magazine subscription, memberships, insurance policies, cable movie programs, checking fees (never pay a checking fee or an overdraft) Promise yourself you will never again pay a late fee, checking fee or overdraft fee then keep your word. Then take this money you save and put it into your savings. Example: I was buying two or three cokes per day at Sonic. The cost as approximately $3-$4 per day. That was $1,500 I saved enough to finance an IRA or Roth. I am not suggesting you stop doing the things you enjoy simply cut back on them so when you do it you will really appreciate. Avoid restaurants with a passion! You will never have anything living in restaurants. Cook healthy food and eat at home. Going out to eat should be one a week or every two weeks. You will appreciate it more.

5. Live in a home that is at least 30% less than you can afford.

6. Take vacations that are fun but not necessarily expensive. My sister has been all over the world, but the most fun she ever had was a camping trip to Yosemite with her two kids.

These ideas along with many other things allowed me to retire at 55. They can do the same thing for you!

Time for a reality check.

Let's say you start out with student loan debt, earn minimum wage for decades, and take a year off for an uninsured extended illness and hospitalization.

How prosperous can you realistically expect to end up?

@ Hamburger Flipper:

Well, you're as prosperous as you deserve to be if you allowed yourself to only earn minimum wage for decades, especially if you had the advantage of getting an education along with that student loan debt. If you had any gumption at all you should have managed to pull yourself out of the minimum wage category. I certainly did.

Accumulating wealth in today is very difficult if you do not have a fair amount of discretionary funds to invest but one of the best ways is to combine your resources and work together. Something we do not do a lot of in America because of our independent spirit.

Mutual funds are one way to do it, Real Estate investment trust are another, low cap stocks are another but they do not address the fact that you have to generate an income while investing.

You have to play the same game as the rich guys and level the playing field by combining your resources similar to mutual funds but with an income generator included. (membership investment clubs)

That means people of limited resources must work together to build wealth and generate income. It does work!

I know that will make a lot of semi wealthy guys pop a cork but if we don't we will forever be under the thumb of poverty. You can not make enough money to keep ahead of inflation. It will only get worse.

You're right and not right all at the same time. Don't confuse a goal with a current state of being. If someone is being frugal with their spending and wise with their investing they are still going to be low-income and low-asset until they become rich. The percentages are still going to change over time, of course--for instance, the assets will increase--but you don't wake up one day absolutely poor, decide to be good with your money, and then wake up the next day rich. (Unless you win the lottery or something, of course.)

And that's the trouble with the mentality of blaming poverty on laziness. Especially when you consider that a lot of people who are low-income actually hold jobs that require them to work very hard. And oftentimes people don't make wise money decisions because they don't know how. You can't make knowledge appear in your head where there was none previously--you have to be exposed to it, and if your parents don't do the job and the schools don't do the job then whether you ever think to look for the information will depend greatly on luck.

My parents got as far as teaching me to put money in a savings account. I don't recall them ever sitting me down and giving me the "spend less than you earn" talk, and I do remember them having credit cards, and that stuck with me later when I was offered one. (Yeah, it got ugly.) They taught me absolutely nothing about investing and my dad, for sure, is *still* ignorant about money today in his 50s. In fact he even believes he can't get a mortgage simply because of his age, so he settled for living in a mobile home, which depreciates like a car. Ouch. You also don't want to know what his level of credit card debt is. Last I heard it was pretty high. My mom's declared bankruptcy at least once, possibly twice. Those are the people I come from.

School wasn't any better. We had a supply-sider in economics class--good lord, talk about passing on the ideology that debt is good. *eyeroll* She actually told us it was better to borrow and spend than to save. Why people think Reagan was an economic hero is quite beyond my ken. I did take accounting class in my senior year but that was just the mechanics of keeping books, not any financial lessons in particular.

Most people come out of school knowing how to do math and hence understand the *theory* of "don't spend more than you earn," but if they are completely ignorant about every other aspect of finance, the lesson usually doesn't sink in; without financial goals, you kind of don't see the point of being diligent with your money. And if you don't know you can *make* financial goals, you aren't going to bother. I remember hearing something about mutual funds when I was in the Army; a guy I dated briefly was investing in them. But I dismissed them, thinking I had to be an expert or something to even ask about them. Those were the days before widespread use of the Internet (I'm 34 now). Man, I wish we'd had ShareBuilder back then and that I'd known how to use it.

And I came from a relatively privileged background--no inner city, minority-race upbringing, military brat, straight into the military after high school, married right out of the military, kind of thing. Imagine what kind of obstacles people face who had it worse off. They can be overcome, but most people don't overcome them because they don't know how, or don't see how they can, or don't understand why they should.

I was lucky. I got addicted to the Internet and I'm nosy. I just wish it'd happened fifteen years sooner.

Bad punctuation on that last paragraph. Meant to convey, "I wasn't of a minority race and raised in the inner city." Because people with both those strikes against them have even more problems; if you're poor enough to need to be on government assistance, they usually discourage you from having any assets whatsoever. I understand the taxpayer's reluctance to subsidize a person who already has some money, but it's kind of stupid to make a person choose between being able to get an emergency brake job done on their car that they need for their job, and being able to put groceries on the table. (As in, if you have any savings at all, you can't get adequate food stamps.) It's expensive to be poor, especially when you're trying to get *out* of poverty.

I think that people have the most problems with point #1. It is very hard for many to spend less than they earn.

The problem is that when they get a raise from their job, or come across some extra money, nothing changes. They simply continue to spend as much or more than they have.

Once you get in a cycle of this kind of living it is even harder to break - because interest kicks in. If you are paying interest, you have added an expense that you don't need - an expense that only comes about because you broke point #1. That expense makes it harder to keep point #1 in the future.

All is not lost of course, you just need to focus on spending EVEN LESS so that you can pay off your debt first.

I love what the great Christian leader from the 1700's said about money. He said you should do three things: 1. Make all you can make 2. Save all you can save (be frugal) and 3. Give away as much money as you can.


I think that people have the most problems with point #1. It is very hard for many to spend less than they earn.

The problem is that when they get a raise from their job, or come across some extra money, nothing changes. They simply continue to spend as much or more than they have.

Once you get in a cycle of this kind of living it is even harder to break - because interest kicks in. If you are paying interest, you have added an expense that you don't need - an expense that only comes about because you broke point #1. That expense makes it harder to keep point #1 in the future.

All is not lost of course, you just need to focus on spending EVEN LESS so that you can pay off your debt first.

I love what the great Christian leader from the 1700's said about money. He said you should do three things: 1. Make all you can make 2. Save all you can save (be frugal) and 3. Give away as much money as you can.


For some people "Spend less than you earn" means "I'll get the Accord instead of the Lexus." For others it means "eat out no more than once a week," or "never eat out". But for some people working 80 hours a week between three part-time jobs it means "Rent, food or medicine? Pick one". So yes, anyone can accumulate wealth if they can spend less than they earn, but "spending less than you earn" isn't always possible, if you can't find a job that actually pays a living wage.

You are so right! I never thought we would be in the position we are in right now. We moved from the city to a rural area so that we could raise our 3 daughters in schools that do not have metal detectors at the entrance. And to avoid the rat race. My husband was promised a job and when we arrived in the new town, the employer decided that position was not going to be filled. This area is very rural. He spent 8 months unemployed while I cleaned for anyone I could. Talk about humbling. I had never cleaned for anyone else in my life. Making minimum wage and just trying to pay utilites and feeding our kids ruined us. We would love to move away from her, but relocating takes the money we do not have. What a vicious circle. .....And we just wanted to raise our children in a safe, small town atmosphere. Go figure.

The path to prosperity is quite simple:

1. Spend less than you earn.

2. Invest your surplus to make your money grow.

3. Repeat steps 1 and 2 for many, many years.

I literally believe that one thing was omitted in the three steps to prosperity, that is to pay our obligations before they become due. I really believe that meeting or paying our accounts payable forms part in making us prosperous since it can avoid surcharges, fines and penalties which will erode and empty our buckets of wealth. The other thing to remember in leading to the path of prosperity is having positive affirmations in life. It is when we affirm ourselves to positive things in life that we attract prosperity. What you think is what you become. If you believe you are a failure then you are right in your own respect. If you believe that you are prosperous then the universe will conspire to your beliefs and then that will be your outer world and reality. Basically, I fully believe that prosperity starts from within. One must change his inner world from lack to prosperity to be able to change his outer and real world. No less than Alexander the Great has affirmed this contention when he once said: " He who conquers his own self is the greatest victor." The universe obeys to our desires and beliefs, if we believe that positive things in life can happen then it will be like a Genie who says that our wish is his command. The number one concept of spend less than you earn is a very simple and straightforward rule towards prosperity but is indeed the Midas Touch that will provide us the flying carpet and the magic touch towards prosperity. In this material world coupled with the dazzling advertisements of ultra modern gadgets and inventions, consumers are enticed to spend more and more to keep with the Johnyses leading to debts and insolvency. The best way to spend less than you earn is to earn more but want less. Buy only the goods that are basically needed. The other very important point to remember in considering to attain prosperity in life is that money is just a medium for the barter of goods, services and other valuable things in life. If that is so then let us use most of our money in bartering for things that would provide us more prosperity into our lives. Prosperity is not only in terms of money although that is the common conception but it can also be in terms of education, happiness, self-esteem, health, vacations and attaining integrity in life. Let us then barter our things in life towards our very own definition of prosperity. If you believe that being prosperous is by having vacations in the West or Asia and Europe then so be it. Go for it, life is too short for you regret during your dying days. The other thing which I believe that will propel one to prosperity is having commitment to whatever we are doing. In life everything is a commitment, your marriage is a commitment, your business is a commitment towards your community to provide either profound service or goods, your corporations and empires are committed to provide jobs to the multitudes as well as to earn substantial profits and your life is a commitment to excellence and prosperity. Everything in this world is a commitment. The universe is committed to make everyone prosperous that is why it is a sin to be poor because it represents lack in life and against the will of God since He is committed to provide prosperity to everyone, as He is prosperous Himself for He created everything in this universe. The other thing to remember is that prosperity is just an energy, a spirit De Corp. Let us then resource our energy towards
prosperity. This is like saying be enthusiastic towards prosperity, woo it, court it since after all we are by nature already prosperous. There are so many prosperous things that we are already enjoying, the fresh air, the innovative minds that we have, the friends that we possess, the integrity that we practice, the sunlight that we generate from the sun, the support from our kins both moral and sometimes financial and the strength that we have in our physical bodies. To end, I would like to mention what Prophet Mohamed once said: " Prosperity and wealth is not the material possessions that we own in life but rather it is having a contended mind."

I was into the "positive thinking" movement for many years up until recently thanks to a friend of mine who provided a much needed "reality check" directing me to the insights of Dr. John Demartini. In short, our brain is programmed to see only one side, or perspective, of any situation, event, person or thing in our lives, whether positive or negative. It is all a reflection of traits within us and until we own it, it will own and run our lives. We may fail to recognize the form if we are sot in our ways. In an unbalanced perception we are only seeing the drawbacks or benefits of any given situation, event or person in our lives. If we are only seeing the benefits, the erstwhile "positive thinker", we become infatuated, and we will brought be down to balance in accord with Universal Law. Is it coincidence that depression and SSRI use are on the rise in recent years with the mass marketing campaign of positive thinking? It's a f-in fantasy! Likewise, if we are only perceiving the drawbacks of any situation, event or person we become resentful and we will be brought up to balance. We must, according to Universal law, always have equal parts challenge and support in our lives. The greater the endeavor the greater the challenge and support. Again, we may just fail to recognize it's form until we open our mind like parachutes. In either instance we are polarized to one extreme. Once we consciously perceive both sides of any circumstance, event or person the positive and negative neutralize (like an acid-base reaction in chemistry), leaving us with a sense of enlightenment, or love and gratitude. If we get too high we become self-aggrandized, or arrogant. If we get too low we are self-minimizing, hence humbled. I understand it is the fundamental tenet of Buddhism to walk the "middle path." There is actually a trademark tool called the Demartini Method which can is based upon quantum physics, i.e. law of conservation of energy. I spent 6 hours in a group intensive last weekend, all I can say is it is life-altering. Google it!

people are under the assumption that inorder to be financially stable, you have to have millions of dollars, or at least make a 5 figure income each month.

the key to being "financially sound" is believing that you don't have to have A LOT of money (meaning hundreds of thousands of dollars, if not more a year) to have a good life. being stingy is not always the best way to go, it's being humble that will get you by.

the most important thing one can do, especially if you're young, is to attend school for a given career. mainly something that you will enjoy, but also pays well, not to mention something that is high in demand and pay rates increase significantly through out the years.

I'm 25 years old and I'm going to be attending nursing school in about a month. I will start off about 20 an hour but this will increase each year. when I get experience, I'm going to return to school to further my degree and make as much as 30 an hour which will also increase. that's about 57,000 dollars a year before taxes. many people can say that's a pretty good income, especially with how the economy is right now. I know I will always have a job because they will always need nurses in the medical field.

my fiance, luckily went to school for mechanics when he was young and was offered a very good job working for the county (government) being a transit bus mechanic. when he started 5 years ago, he was only making 17 dollars an hour, but 5 years later to this date he is making 28 dollars an hour, which will only keep increasing. he gets free medical insurance which is also a very big plus.

so once I'm in my career in nursing and he has his career, together we will make about 90,000 a year. which is MORE than efficent.

we are not rich, but we are definitely financially sound. this is also to say, yes you must organize how you spend your money, but it's also important to keep a humble attitude towards you financial status. be grateful for the things you have, and you'll be less tempted to spend more money on things you don't really need. Like a quote I read somewhere once "it's not about having what you want, it's about wanting what you have"

those of you who are older and haven't established much of a career for yourself, it's never too late to go to school! I mean, it may not be reasonable to got to school for a 4-8 year degree, but you can definitely attend school for 1-2 years that will pay quite decent money. and if you don't make enough money the govenment will pay for you to go to school, that is what I'm doing!

education is the key! After 8 years of working in dead end jobs I finally realized that.

It really irks me when people believe that they are where they are only on sheer determination and hard work. Whether you call it luck or serendipity or happenstance or whatever, it played a role in where you are today, going all the way back to your childhood. Were you abused or severely malnourished in childhood? No? Then you were lucky. That wasn't something you had a choice over, but it would affect everything that comes after it. Did your parents talk to you and listen to you and read to you? Then you are already advantaged compared to many people, even if you didn't have a lot of money. Did you grow up in a neighborhood that had decent schools and at least a few teachers who gave a damn? Then you were lucky. None of those things are products of your choices. Or you worked in hard in college and graduated at a time when an employer you wanted to work for was looking to hire someone like you? That's luck or whatever else you want to call it. Just admit it and try to be decent about it. I'm pleased for you that sh*t doesn't happen to you, but that is not necessarily so for everyone. There is increasing evidence, for example, that how much your parents talk to you has lifelong impacts on education and achievement, but you are really kidding yourself if you think you have any control over that.

this is all good if you start really early like when you are 18 or 20 other than that whats the point of ending up with lots of cash and you are some 70 year old... so you end up depriving yourself of some fun just for the sake of ending up with big cash when you are old and frail...pointless !!

Power of compounding is useless when the S&P plunges 60% in 9 months. The math just doesn't work. I know money managers that had a great track record that have now blown their entire record by this crash. We are in beyond miserable times.

Being age 70 does not mean old and frail. So many young people are looking older and frailer than 70 years. People should invest when they are young so when they get older they can relax and enjoy the fruits of their labor.

I think that every one should understand the power of money. we should teach our kids the true value of a money
at an early age.

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