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March 21, 2011


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My sentiments exactly. I identify with all nine rules and have lived by them for as long as I can remember.

Looking back though I believe that if I had been born into an affluent family, if my parents would have had foolish habits with money, hadn't had a very happy marriage, or hadn't taken great care of their home (even though it was a rented home), I wouldn't be the same person that I am. I believe that many of the habits that you need to become wealthy are learned during the most formative years of your life.

It has also made a big difference to me that my wife of 55 years came from the identical background and has the same attitude that I have about money.

We no longer have any type of budget and I don't track our annual expenditures. We basically buy whatever we NEED, however our needs are quite modest by comparison with the average American family. Our three children also learned from us. Our two daughters are each worth several million dollars and our son, the youngest, is very close to his first million.

Life has become so much simpler for us since the children left home. Money is no longer an issue and our finances are on "Cruise Control", moving steadily upwards, year in and year out, and although this time of our life is quieter than the old days, we have an inner feeling of contentment and happiness that is nice after the hectic years of raising children, working very hard, and gallivanting all over the world.

One fairly new company that is making a difference for us these days is NETFLIX. It's so nice to be able to select entertainment from tens of thousands of titles and to relax in our recliners most afternoons at this time of the year, darken the room, and watch a program that we both thoroughly enjoy. It's so much better than having to drive to a movie theater, often in the rain, and have to choose from a very limited selection, most of which are geared to younger audiences and have no appeal at all. When we compare our lives, at this age, with that of our parents, we feel so fortunate to be living it here in California and to have the peace, security and lifestyle that money helps provide. At times like this I often think of the poor people that have lost their homes and jobs.

I will buy a car either new (I just did, a 2011 Ford Escape that I love so far), or used with very low miles. I just want to make sure my vehicle doesn't break down while I am hauling kids all over the place, so a newer car is worth my piece of mind.

Oh, and I will never buy a Toyota...

Lesson #4 is hugely important, and IMO is one of the biggest steps separating the "always will be poor" from the "poor for the moment".

In my experience, the always-poor tend to get themselves into situations where all of their money is already spoken for. The paycheck comes in and most of it disappears to pay the rent or mortgage on too big a place, cell phone contract, lease for a car they bought new at full price, cable TV with a bunch of extras they probably don't use, payments on the big-screen TV they use to watch all those channels, bills relating to their 3 dogs, and so on. What little is left pays for food and other necessities. If they get a raise, most of the difference will end up going to a more expensive cell phone contract or something. So when money comes in, they don't have much choice as to what to do with it, and therefore can't get ahead.

In contrast, the poor-for-now are often getting by on the same paycheck, but are renting a smaller place, driving an older car that's reliable enough, talking on a prepaid phone, watching netflix on an older TV that works just fine, and walking other people's dogs for a few extra bucks. Their stuff costs less and has fewer contracts, which means more money in their pockets and more flexibility with it. When they get a raise, they might celebrate with a nice dinner, but the rest ends up in savings. Over the time, the difference grows into a solid emergency fund plus longer-term savings and investments.

Both the always-poor and the poor-for-now might grow into pretty solid incomes, but the always-poor will find ways to be stuck spending it all, while the poor-for-now will find ways to save and invest and no longer be poor.

Well, great! I already follow all 9 lessons, if you count falling into the "outgrown a budget" category of Lesson #2. Of course, I'm not a millionaire (yet), but my wife and I definitely have the right attitude, mindset and, I believe, long-term plan to reach that milestone.

@Everyday Tips: Well of course you have to worry about breakdowns - you refuse to buy Toyotas :)

I am the exact opposite. Almost every vehicle I have bought had at least 60,000 miles on it. I have bought mostly Toyotas and Lexuses, and driven them all to 120,000 to 160,000, and had precisely one breakdown in 25 years. (It was an Oldsmobile.)

Lesson #1 can be taken much further than in this example. Say the person making $75K is still saving $25K but the person making $1M has cut spending and is now saving $50K/year. The million dollar earner is saving twice what the normal earner is, but is still in "worse shape", as it'll still take them a decade to build a 6 month emergency fund and forever to reach FI with those expenses.

Lotharbot - I like your comment. Good analogy. I think this is a similar concept to Dave Ramsey's - Every dollar has a name. Simple concept, but so many seem to have a hard time grasping.

Forget the lessons, just don't have kids and you'll be rich!

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