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October 19, 2009


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Discipline isn't the problem in our case...I just need to figure out what the heck I really want to be when I grow up since there isn't much room for advancement or more money where I am now.

Anybody need a Cum Laude UH graduate with a Marketing major, Spanish minor, and 8 years of customer service experience who likes to volunteer at the Houston SPCA?

Back on subject, this post does seem like most of the posts I see on building wealth. I like the reminders since it's like seeing a little check list once in a while. When do y'all suggest getting umbrella insurance? Is there a monetary wealth point where it makes sense or is it when you own things other than a house and car with their own insurance policies?

THANK YOU for saying (and calling it #1) "You need to make a decent living" - my #1 PF peeve has been the nearly universal tendancy of PF writers to casually ignore (or at best, gloss over) - as if given - that point.

This, indeed, is the *sine qua non* of building wealth, and the source of nearly all my disputations regarding personal finance.

I agree with Terry. I see alot of people go the Dave Ramsey route and sell stuff to cut debt, that is fine. But they wonder why they are not rich because they have no debt and making $40,000 a year.

Sometimes you just need to make MORE money

"If you want to get rich, if you want to be wealthier than you are today..."

I think those are two separate concepts, really, and while it's generally prudent to aim to achieve the second, that doesn't mean you're going to get to the first. To be perfectly honest, FMF, from what you've said here I wouldn't even count *you* as rich (by First World standards, of course, and considering only material possessions).

Doesn't your list include "have some luck?" The book seems to ignore that. Here are some additional steps I think are required, or very nearly so:

* Do be born into a family that can keep you safe and provide you with the cultural, spiritual, and economic resources needed to succeed.

* Don't have a serious illness that either exceeds your insurance's actual coverage or impairs your ability to work long-term, and don't be a first-degree relative of anyone else who does, either

* Don't be a victim of domestic violence

* Don't lose control of your reproductive choices for any of the many, many reasons that women do (rape, incest, economic and/or legal inaccessibility of birth control measures and elective abortions)

* Don't have your entire industry disappear out from under you as a result of global economic change

These are all factors that heavily implicate luck. I think your list acknowledges this. That list does not, and it's disingenuous not to.

The best quote I see often is:
"You need to spend less than you make."

This is very important, because it applies to everyone. It even applies to the burger flipper at Burger King. There are too many people in the mindset of "I worked so hard for this money, I deserve to spend it!"

This is totally wrong. We should all be saying: "I'm working so hard for this money so I can sit back and relax in the future."

Nothing says smart like a good budget!

The majority of millionaires in the US are self-employed. In my view, it's your best shot at real wealth.

A lifetime burger flipper will never earn enough income to become wealthy, and a good budget won't get him there.

DK --

Are you sure of that? I can't find proof one way ot the other that that is the case. This piece from the NY TImes seems to indicate "no":

It says:

"Just 18.7 percent of the millionaires own — or owned before they retired — part of a business or professional practice, an indication that high-wage earners who save and invest are the dominate group, at least among those on the lower rungs of the millionaire class."

But this piece says something differently:

"74% of self-made millionaires in America, not only in this generation and in this century, but in the last century as well, come from self owned businesses."

Though the last piece didn't offer any data to support their conclusion.

An as a middle of the road piece, this one seems to say owning a business is important, but how important is not clear:

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