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Get Rich Slowly!
Published on - April 15th, 2008 (by J.D. Roth)
Today is the second anniversary of Get Rich Slowly. In celebration, I'm reprinting this revised version of the article that started it all, a l-o-n-g post from my personal blog dated 26 April 2005. One year later — on 15 April 2006 — this site was born.
Today's entry is long and boring — it's all about the keys to wealth, prosperity, and happiness. Over the past few months, I've read over a dozen books on personal finance. Recurring themes have become evident. I want to share them with you.
These books often have embarrassingly bad titles, seemingly designed to appeal to the get-rich-quick crowd:
- The Richest Man in Babylon
- Your Money or Your Life
- Rich Dad, Poor Dad
- Think and Grow Rich
- Wealth Without Risk
- The Automatic Millionaire
- The Incredible Secret Money Machine
Some of these books really are as bad as their titles. But others offer outstanding, practical advice. The best books about money seem to have the same goal in mind: not wealth, not riches, but financial independence. According to Your Money or Your Life, which may be the very best of the financial books I've read, "financial independence is the experience of having enough — and then some". More practically, financial independence occurs when your investment income (or "passive income") exceeds your monthly expenses. Financial independence leads to psychological freedom.
To some of you, this will be common sense, stuff you've known all your life. To others, like me, this kind of thinking may be a sort of revelation. How is financial independence achieved? Again, the best books generally agree. What follows is my personal summary of the collected wisdom from their pages.
Step One: Prepare the Foundation
Building wealth is like building a house. The first step is to lay a foundation upon which the secure home of financial independence can be constructed. To prepare to build wealth, you must
- eliminate debt
- reduce spending
- increase earnings
There are many approaches to laying the foundation of your financial life; the key is to find the ones that actually work for you.
Destroy debt
Most of the the books agree on one point: If you have trouble with credit cards, cut them up. Get rid of them. There is no compelling reason to keep them. You may or may not want to close each credit card account as you pay off the debt. Closing the accounts will ding your credit score (though not a lot), but some people believe it's a small price to pay to prevent possible future spending. I chose to cut up my cards and close my accounts — my credit rating is still outstanding. (For years, I lived without a personal credit card. I finally got a new one last summer, but only after I was sure that I would use it responsibly.)
Next, pay off your debts. All of them. For years, I tried the oft-touted method whereby you pay off your highest-interest debt first. Though this makes sense mathematically, it never worked for me. My highest interest debt was also my largest debt, and psychologically I just never seemed to make any progress.
However, I did have success with the "debt snowball", as defined in The Total Money Makeover. I eliminated my debt by paying off the obligation with the smallest balance first. Then I took the amount that would have been applied to that debt each month and used it to pay off the second-smallest balance. When that was finished, I went to the next, etc. It only took me four months to pay off all my smaller debts this way, leaving me with two large balances (including a home equity loan). I was dumbfounded. I'd struggled with debt for a decade, and I solved the problem in four months? Good grief.
Slash spending
The next step in preparing the foundation is to reduce spending. First, track your expenditures for a month. Or two. Or three. (I use Quicken because it's quick and easy. Nowadays there are many web-based personal finance tools you can use.) After you've accumulated enough data, analyze your spending patterns. Are you spending a lot on shoes? Books? Alcohol? Dining out? Try to find expenses you can eliminate or reduce. For me, it made sense to reduce my comic book spending.
Many of the personal finance books encourage you to reduce your auto and homeowner insurance coverage to save money. This is also the point at which some books encourage you to adopt a budget. (I tend to think a budget is unnecessary if you remain aware of your current financial situation.) Note that all of the books I've read advise against purchasing a new car; all encourage you to purchase late-model used cars.
Increase income
The final phase in laying the foundation is to increase your income. Not all of the books mention this, and many people consider it optional. However, some authors who are adamant that this is an important step on the road to financial independence, and I've found it a valuable tool in my own life. How do you increase your income?
- Become better educated so that your job skills are more marketable.
- Work harder (and smarter) at your current job so that you qualify for raises and promotions.
- Change careers.
- Find a way to make a hobby profitable.
- Or, as more than one book suggests, work two jobs.
By destroying my debt, slashing my spending, and increasing my income, I have changed my financial life. I no longer live paycheck-to-paycheck. I feel as if I really have laid a solid foundation for financial success.
Step Two: Build the Framework
The second step toward financial independence is to construct the framework upon which future wealth can be built: establish an emergency fund, maximize your retirement investments, and begin acquiring income-producing assets. This is what I've been doing for the past several months.
Build an emergency fund
Every book I've read stresses that the most important part of the framework, the first part that must be completed, is the establishment of an emergency fund. This emergency fund ought to contain enough money to support you for three to six months in case you find yourself without an income. I had difficulty grasping this concept at first. I wanted to skip this and move on to other, more exciting steps. But after seeing the results of "laying my foundation", I was willing to suspend my disbelief and just do it. I built the emergency fund. I'm glad I did.
Maximize retirement accounts
Next, the books encourage you to maximize your retirement accounts. If you have a retirement account through work, contribute as much as you possibly can, as soon as you can. The magic of compounding derives its power through time. Establish a Roth IRA outside of work, and contribute the maximum amount every year. I've been funding my IRA for three years now — I wish I'd started sooner.
Explore income-producing assets
The final step in building a framework for financial independence is to invest in income-producing assets. For some reason, I'd totally missed this recurring theme until my friend Sparky recommended I read Rich Dad, Poor Dad, a book that's almost solely about this particular portion of the framework.
Beyond your retirement accounts, you should pursue other investments, specifically in income-producing assets. For different people, this means different things. Maybe it means bonds, maybe it means dividend stocks, maybe it means investment properties. It may even mean starting a business. It does not mean things like cars, or collectibles (coins, comic books, baseball cards), or expensive furniture. These things may be assets of a sort, but they are not income-producing assets.
I've done very little research into income-producing assets, but it's on my list for the coming year.
Step Three: Finish Construction
After you've laid the foundation to financial independence, and after you've built the framework, you must then spend years (decades!) finishing construction. All that is required during this time is persistence and discipline. Resist temptation. Do not accrue debt. Spend sensibly. Faithfully contribute to your retirement plan. Wait. Have the patience to get rich slowly.
The challenge during this phase is to balance current quality of life with future freedom. It's okay to allow yourself indulgences, but only when you understand the implications on your long-term goals. If you want a nice car and can afford it, then buy it. But don't sacrifice financial independence to do so.
Step Four: Move Into the House
Some years later, you will wake to find that your financial house is in order. It's finished. It's ready for you to move in. How do you know when this is the case? Financial independence is achieved when your investment income equals or exceeds your monthly needs. If the total of your house payment and living expenses is $1000 per month, then you are financially independent when your investment income reaches $1000 per month. Achieving this takes time. It's a slow, gradual process, but every book emphasizes that it's not only possible, it's inevitable if these steps are followed.
That's it. That's the combined wisdom of more than a dozen financial self-help books. I haven't fleshed out the final two steps as much as the first two simply because I haven't reached them yet. There are many books on how to best approach each step (even each substep!). I'm sure to obsess over each one in turn.
Bullet-point wisdom
As I've read dozens of personal finance books, it has occurred to me that these volumes are easy to summarize. Their content lends itself to bullet points. Here are summaries of five typical books:
The Total Money Makeover by Dave Ramsey was the first book I read. It features lots of practical advice, including the concept of the "debt snowball" I mentioned earlier. Here are Ramsey's steps to a "total money makeover":
- Step #1: Save $1000 as an emergency fund.
- Step #2: Pay off debts, starting with the smallest first (ignore interest rates).
- Step #3: Increase the emergency fund so that it will cover three to six months of expenses.
- Step #4: Invest 15% of income in growth-stock mutual funds.
- Step #5: Pay off the mortgage.
- Step #6: Build wealth.
(I've left out a "Save money for college" step because it doesn't apply to me — I don't have kids.)
Your Money or Your Life by Joe Dominguez and Vicki Robin is, as I mentioned, the cream of the crop of these financial books. Its advice is sound. This is an especially great book for those interested in voluntary simplicity. It lends itself less to bullet points than some of the others, but I've made an attempt to enumerate the steps it advocates for financial independence:
- Step #1: Determine how much money you've earned in your life. Next, determine your net worth. Compare and contrast the two.
- Step #2: Establish the actual cost — in time and money — required to maintain your job. From this derive your actual hourly wage.
- Step #3: Keep track of every cent that enters or leaves your possession.
- Step #4: Determine which items are actually worth the money you spend on them.
- Step #5: Graph your total monthly income and your total monthly expenses.
- Step #6: Minimize spending through conscious decisions.
- Step #7: Maximize income by doing something you love.
- Step #8: Accumulate capital. Track its growth.
- Step #9: Invest this capital so that it provides long-term income.
The Richest Man in Babylon by George S. Clason is an aging chestnut. It's a classic in the field. Many later financial books are based on Clason's advice, which is framed in King James-style English rules:
- Rule #1: Start Thy Purse Fattening — save 10% of everything you earn
- Rule #2: Control Thy Expenditures — create a budget to live within your means
- Rule #3: Make Thy Gold Multiply — invest the savings from rule one
- Rule #4: Guard Thy Treasures From Loss — invest only where the principal is safe
- Rule #5: Make of Thy Dwelling a Profitable Investment — own your home
- Rule #6: Insure a Future Income — plan for retirement
- Rule #7: Increase Thy Ability to Earn — become better educated, more skilled; respect yourself
7 Money Mantras for a Richer Life by Michelle Singletary is a recent all-purpose financial book. I was ready to dismiss it for the absolute stupidity of mantra number one (stupidity in its phrasing, not in its advice), but after reading the book, I have to admit its advice is solid. It features:
- Mantra #1: "If it's on your ass, it's not an asset." If you can wear it, it's not an investment. Also, if something is riding your ass (such as a high house payment), it's not an asset.
- Mantra #2: "Is this a need or a want?" This is a question Kris has been trying to get me to ask myself for years.
- Mantra #3: "Sweat the small stuff." Do worry about the small expenses; they add up.
- Mantra #4: "Cash is better than credit." There is almost no reason to carry a credit card.
- Mantra #5: "Keep it simple." With money, avoid anything that seems complicated. If you don't understand it, avoid it. You'll probably lose money.
- Mantra #6: "Priorities lead to prosperity." Determine what's important to you, and pursue that with your time and money.
- Mantra #7: "Enough is enough." Don't overconsume. Recognize when you have fulfilled your needs and your wants.
I haven't reviewed Singletary's mantras since originally posting this article three years ago. I like them. I like that she emphasizes goals, that she advises against consumerism, and that she encourages people to keep things simple. These are great tips.
Ordinary People, Extraordinary Wealth by Ric Edelman is rather a unique book. It features advice distilled from surveying 5000 people of moderate wealth. Each chapter relates a secret for obtaining financial security. At the end of the each chapter, there are excerpts from the surveys featuring anecdotes and advice from the respondents.
- Secret #1: Carry a mortgage even if you can afford to pay it off. — This flies in the face of every other financial book I've read, and I do not subscribe to the idea. I'm willing to bet that the people surveyed carry a mortgage out of habit, not because they think it's smart.
- Secret #2: Don't diversify the money you put into your employer retirement plan; instead, put all your contributions into stock mutual funds — I'm okay with this. It may not be appropriate for someone close to retirement, but for younger people, this seems like sound advice.
- Secret #3: Make many small investments rather than a few large investments. — The key is to make investing a habit, and to invest the money when you have it.
- Secret #4: Rarely move from one investment to another. — Market timing is not something to be treated lightly; it's not easy for a casual investor. Buy and hold.
- Secret #5: Don't measure success against the Dow or the S&P 500. — Understand what you own and why you own it; don't compare it to market indicators.
- Secret #6: Don't spend a lot of time paying bills and fretting about personal finances. Don't bother budgeting. — Many books encourage a budget, though I've not adopted one. And my success these past few months has come precisely because I have fretted about my personal finances. Maybe this advice is true for the long run, but I'm not sure it's applicable to somebody just starting to lay the foundation of financial independence.
- Secret #7: Involve your children in family finances. — This is another piece of advice that all of the books offer. I haven't mentioned it because it's not appropriate to me, and doesn't actually fit my metaphor.
- Secret #8: Don't pay attention to the media. — The media are about hype. They have to sell a product, even if it's just news. If you allow yourself to be caught up in the frenzy of the moment, you're apt to make a rash decision. Don't follow daily financial news — it's enough to check in every month or so.
The rest of this book contains three wonderful chapters entitled: "The Biggest Mistake I Ever Made", "The Smartest Thing I Ever Did", and "My Advice to You". The number one thing these people recommend is to start investing as soon as possible, as much as possible. They also recommend finding a financial adviser. (Looking back after three years, I think my evaluation of some of Edelman's points has changed.)
I was going to include a point-by-point summary of Rich Dad, Poor Dad by Robert T. Kiyosaki, but when I went to write it up, I couldn't put Kiyosaki's advice into words. I re-read a chapter. Everything seemed generalized. I did a google search, and found that not everyone agrees with the author. I, too, found the book amorphous and vague, full of outlandish claims. I thought it was inspirational, and that it contained some kernels of wisdom, though, and consider it influential in my financial development. I've incorporated advice from Rich Dad, Poor Dad in my general summary at the beginning of this entry, but I cannot recommend the book.
Finally, there seems to be one major point on which these books disagree. Some argue that your home should be considered your most important investment, that you should carry a thirty-year mortgage and not attempt to accelerate payments. Others declare that a home should be considered a liability, the same as a car or a credit card. (The latter admit that a home will generally appreciate in value, but they note — rightly so — that a home is a cash drain, not a source of income.)
All of the books, with one exception, encourage readers to only purchase modest homes; they smash the commonly held belief that you ought to "buy as much house as you can afford". Instead, these books say you should only buy as much house as you actually need.
Three years later
In the three years since I first published this article, I've re-read most of these books. I've also read dozens of other personal finance books, scores of magazines, and hundreds of articles on the web. Surprisingly, I've seen little to change my initial philosophy. I still believe in the four-step "building" process I outlined above.
My thinking has become somewhat more refined. I now know about index funds and high-yield savings accounts. I've discovered Amy Dacyczyn's remarkable Tighwad Gazette. I've exchanged ideas with countless readers. And I've begun to explore the notions of financial independence and early retirement in more depth.
In the original version of this entry, I reminisced about another time I was deeply interested in personal finance. When I got out of college, I went to work at the worst job I ever had, selling insurance door-to-door. During training, we were asked to make a poster illustrating our life goals. I cut out a picture of a log cabin in a lush, green woods. My goal was to retire to a peaceful lifestyle within ten years. Now, fifteen years later, I have the exact same goal. Only this time, there's a chance that I just might achieve it.
Final note: Last winter, I re-examined the "house" analogy in an entry entitled The architecture of personal finance: Choosing the right materials. I hope to elaborate on this metaphor in the months ahead.
Great post, JD. It's amazing how much of an impact this one piece of writing had on your life.
One of the reasons I started a blog was to see my goals and the steps to achieving them in black and white. I've always been a 'journaler', and blogging is just one more way to get my ideas out of my head and into a forum where I can analyze them and develop them further.
Congratulations, J.D., on the anniversary! I'm sure there are many more wonderful posts to come!
And I would add to that it is amazing just how much impact this one piece has had on other lives. Think of the hundreds of people you have inspired to become debt free, save for retirement, live out their dreams, etc. over the last two years. You have even introduced others to the idea of blogging (myself included) which can be a wonderful creative outlet for us repressed writers stuck in our own "box-factory" jobs!
Happy Anniversary Get Rich Slowly!
Happy Anniversary Get Rich Slowly. I love the blog.
Happy Anniversary! Excellent blogs!
Great post, JD, and thanks for being such a great inspiration and role model.
Happy birthday, Get Rich Slowly!!! I am glad to be part of this community, for me it's a daily reminder to live mindfully – in financial terms and in other terms as well.
Congrats on the accomplishment. This is surely one of the top pf blogs I've encountered. If I may make a topic request…. you mention in this article income-producing investments. May we get an article on the various options? Having just paid off the mortgage and contributing as much as I'd like to retirement, I'm trying to decide "what next?".
Happy anniversary GRS, and congratulations JD on everything you've accomplished thus far, not just in your own life but in helping positively impact the lives of all your readers. I'm thankful for your research and insights every day. Here's to many more years of sharing the wealth, as it were.
Selling insurance door-to-door. Wow. facing all that annoyance and REJECTION must build some character! I'm so glad you don't have to do THAT anymore.
Happy anniversary JD! Your blog is one of the few I read regularly that continues to inspire me to do better at building up my financial house. Thank you for all your wonderful, heartfelt writing. I wish you all the best with full-time blogging. I am so glad you decided to follow your heart. Best of luck to you and Kris! (Because I like her posts too!)
Happy Birthday!
The Richest Man in Babylon was a surprise gift from my parents. Before I started reading PF books this book inspired me. Its a great beginner book.
Happy Anniversary!!
Happy anniversary! You are an inspiration J.D. I have learned a lot from you and everyone one else on the site.
happy b-day GRS!
Happy anniversary! Reading this original post as a new reader gave me a great sense of your journey. I agree, the act of writing really gives you control in unexpected ways. I would have never thought that blogging would help me improve my finances, but in just a few weeks, it's made me so much more aware of my thinking about money!
Congrats on 2 years! GRS started with a bang and hasn't slowed down. I'm looking forward to many more years.
It's interesting to take a look at a manifesto of sorts from the added perspective of time passed, so thanks for adding the reflection at the end of the post. It's interesting how points of view change with added information and experience, etc.
I am in a position of not having comfortable financial life. Your writings inspired me and gave me courage to change!
Happy anniversary and thank you for the great blog.
Happy anniversary! This is my favorite personal finance blog. You do a great job.
Happy blog anniversary. Best wishes moving forward.
Great article J.D. I for one am glad you wrote it. Your blog is the best out there. Just imagine all the people you have helped to inspire to pay off their debt, stay out of debt, and get financially fit. Keep up the great work!
Great post!
I too have read many PF books. The only issue I have is that the coming economic crisis may change the definition of good advice. With the dollar dropping and inflation eroding away my savings – maybe saving money isn't such a good idea. At least not in dollars, but other currencies are also losing value. I just read an article about how inflation could cut 15% of the purchasing power over the next three years.
I guess what I am questioning is, is economic advice relative to the state of the economy? In an inflationary economy, a lot of things change. Will the advise in these books change with, wage freezes, price controls, food hoarding, high gas prices and high unemployment?
These books have stood the test of time is the good years, but how are they going to stand in the bad years?
After thinking about this question, I think most of the advice will not change, but that the risks of losing your saving are now much higher. The safety net of owning everything and having money it the bank – is no longer going to be as safe. Cash management will become a much higher priority – and will consume more time – to protect your wealth.
I totally agree with the first comment too. I started my journey to financial freedom from reading " Rich Dad, Poor Dad". Now I wish that I have started my journey from educating myself about personal finances.
Congratulations on two years, J.D. I've just started reading in the past few months, but I'm definitely looking forward to the articles in years to come!
Happy Anniversary man. Its amazing how far you've come. Pretty inspirational for both readers and bloggers (and those of us that do both )
JD, GRS has been my favorite blog to read for the last year (really, I do mean it!) I'm really glad you've kept up with it cause its kept me on the straight and narrow. I can't wait to see what year three has in store.
Congrats on the Anniversary. I am pretty new to this whole PF thing and your blog was one of the first I found. Not even sure how I found it, but I enjoy reading your posts every day, so you can tell your wife that I don't think you post too much. One of your posts led me to Dave Ramsey's book, which changed my entire outlook on my financial situation (not that I agree 100% with him, but it definately pointed me in the right direction) I will look foward to reading more of what you have to say in the coming years.
JD, it's brilliant that all these people are congratulating you, and they're right. You really have changed people's lives for the better.
I got "Money" magazine today and Getrichslowly was recommended!! I also saw a blurb in another recent magazine but can't remember which one! Congratuations!
Feliz Aniversario GRS
I love your blog and read it every day. Thank you, thank you, thank you!
Stay Poor Quickly
That is the actual outcome of following many of these suggestions. The problem is the assumption that you have a large amount of debt and nothing to show for it. What now? If that is the assumption, then many of the suggestions here are worth considering.
If, instead, you are looking to get rich the key question is not how much you spend, but how you spend it. You should be adding debt, not eliminating it. Because you get rich by making use of other people's money. Debt is leverage – adding oomph to your investments.
And setting aside money for retirement is the last thing you need to worry about. You are going to retire rich, remember? Unless your employer is matching your contributions, retirement is not something you should be saving for until you are at least 40.
The same goes for that emergency fund. Securing a line of credit that will be there even if you are unemployed is a better strategy than tying up capital in unproductive investments just to have liquidity.
On the other hand, using a Roth IRA's can be quite useful if you want cash for emergencies. There are no penalties for early withdrawal of the principal and the earnings are tax free. Moreover, if you should have a fiscal meltdown and go bankrupt, money in your Roth is protected from your creditors. There is also the often ignored fact that if your adjusted income is in the $30,000 range you can get a tax credit for a portion of the money you save. If you are just starting out, that, not retirement are the reasons for using a Roth IRA to save.
Saving is the worst way to get rich. It is by investing that you really make money. And investing other people's money is as good as investing your own. Of course the key is to invest the money you borrow wisely in assets that produce revenue. If you are thinking of buying a house right now, think again. That was a great way to get rich for a few years there, but probably won't be for the forseeable future.
The best place to invest is in yourself. Want to get rich? Go to school. Get an advanced degree. These are things that will eventually translate into wealth. Its a lot easier to get rich with a $75,000 per year salary than with $35,000 and its even easier at $150,000. The return on a $50,000 investment in education is going to pay a much larger return than any other investment.
If you have the brains, invest in attending one those schools that have legacy admissions. Having a bunch of rich, well-connected college friends is going to be an asset for your entire life.
College is also an investment in finding a well-educated spouse who will produce an income similar to yours, doubles your income while sharing a lot of expenses. If you don't find that spouse in college, you probably aren't going to find one if the only place you go is the local tavern for a light beer. You need to spend money on dating and going places where other well-to-do young people hang out.
The most important thing to remember is that you get rich by spending money on things that will generate future wealth. You get rich by making use of other people's money in addition to your own. You get rich by risking other people's money while keeping a good portion of the returns for yourself.
Ross, I think you completely have missed the point, or else your entire post is parody. If its parody, kudos, but if you're serious, well, I strongly urge all readers to ignore the spirit of your advice.
Congratulations, J.D.!
Congratulations on the two years… you'll never see dig up my articles from two ago. I wouldn't put anyone through the torture of reading them.
Happy Anniversary. Keep up the great work.
Congratulations!! Look how far you've come in two years! Awesome!
Ross says you should be adding debt to get rich using other people's money. The only drawback is those other people usually want their money back with a fat rate of return for the privilege of lending it to you. As for leverage, ask those folks who are sending their lenders "jingle mail" after getting interest-only loans because, after all, real estate can only go up, right? They're not making any more of it, right?
Keep up the good work J.D. and continue to be discerning and wise when it comes to financial advice.
Happy B-day. 2 years wow. I hope I'm around for the next 2 years myself to follow you on this journey. Thankyou.
I wholeheartedly agree with you on the book, "Your money or your life". It was the first book I ever read on frugality and it changed my thinking FOREVER.
I still keep it on my bookshelf front and center to remind me that life isn't about the almighty dollar.
"More practically, financial independence occurs when your investment income (or "passive income") exceeds your monthly expenses." is indeed Part A. of the 'secret to wealth' if there ever was one …
… Part B. is NOT to accept that your monthly expenses should approximate what you currently spend, but what you MUST be able to spend to support your Ideal Retirement:
Part A. on it's own = Acceptance of 'what Is'
Parts A. B. = True [financial] Wealth
Happy anniversary!
Whew! So much info! It's clear now why your blog has been so successful, and you have too… you're dedicated and honest in your approach to all things. That's really something to admire. Yours was the first PF blog I started reading oh so long ago (it seems). You've done really well and I'm so proud to refer friends back here, and to keep reading. Thank you for all the work you've put into this blog – it's really a wealth of information everyone needs access to. Thanks! And CONGRATULATIONS!
Great post and congratulations on two years of GRS.
One idea that might help… When you say:
"Secret #7: Involve your children in family finances. — This is another piece of advice that all of the books offer. I haven't mentioned it because it's not appropriate to me, and doesn't actually fit my metaphor."
Kids CAN fit into the "financial house" metaphor. You build a house to shelter yourself, your family, and your property. Part of being a parent is teaching kids how to live in a house (don't break things) and how to maintain/fix things. Further, the stress of excess debt and poor financial decisions is felt by kids, too.
There are a number of articles out there on teaching kids responsible spending, and I have seen other families where the kid's actions have had a financial impact on the parents.
Your financial house doesn't need to include kids, but a number of your readers do.
Happy anniversary! Congratulations JD!
Wow….that pretty much says it all. If the majority of the US population followed these steps…..this country would be in a different situation. Thank you for your dedication to helping America change our finances.
PS…I'm glad I subscribed to your feed…I read so many blogs everyday, this post was sitting in my email which prompted me to read your site again.
As for leverage, ask those folks who are sending their lenders "jingle mail" after getting interest-only loans because, after all, real estate can only go up, right? They're not making any more of it, right?
If you want to get rich without taking risks, good luck. A lot of people lost money in the real estate market – but a lot of people made money as well. The risk to your financial well-being from any single investment diminishes the more investments you have. Borrowing money is one good way to add more investments and reduce your overall risk.
people usually want their money back with a fat rate of return for the privilege of lending it to you.
A lot of people want to make money with little or no risk. But its the people who take risks in exchange for a larger return that get wealthy.
What is amazing is the advice here on debt that contradicts the practice of almost every corporation in the world. They all borrow money – that's the source of all those corporate bonds people invest in as the conservative part of their portfolio.
Telling people to avoid debt to get rich is just plain terrible advice. "You have to spend money to make money" is an adage that is as true today as it ever was. Like corporations, you should take on as much debt as you can effectively spend on things that will generate future wealth.
I think you completely have missed the point
I doubt it. I think the problem is that there is a lot of moralizing out there about debt and frugality. There is a desire to think that wealth is a reward from "proper" behavior. In fact, it isn't. Its a result of a lot of things, including how much value you attach to money and the stuff it buys. And how willing you are to compromise on other things to get it.
Finding a rich spouse is a more important wealth generator than how frugal you are. And it will do more to secure your retirement than saving money in a 401K. And you are more likely to find that spouse by spending money on fancy clothes and eating at a toney sushi bar than by putting on your frugal Walmart knockoffs and going to local bar. This is a fact many attractive "goldiggers" have known for years.
Choosing a college based on wealthy and connected classmates will add more to your financial future than the quality of the education. Those things may offend people's sensibilities, but they are nonetheless the reality.
Of course the other thing that has always brought success is telling people what they want to hear. Congratulations on your success.
All corporations borrow money? What do you mean? What size of corporations?
All but the very smallest and least successful. And that's not because they wouldn't benefit from borrowing, but because no one will loan them money at a reasonable rate or because their owners are risk-adverse.
Marrying wealth is more likely to bring a secure retirement than saving in a 401k?
Yes – and it ought to be obvious on its face. There is plenty of evidence, in fact its almost a truism, that family income is higher where there are two high-wage earners. There is also plenty of evidence that the higher one's family income while working, the more assets one is likely to have for retirement. Focusing on earning more money instead of saving more will get you a lot further if your goal is financial independence.
The reason I use marrying someone for their money as an example is that most of us don't do that. We understand that we have other values than getting rich. How many of those valued are you willing to compromise for financial security? Because if riches are your only goal, getting rich is a lot easier.
The emphasis on saving for retirement is largely financial industry propaganda. This is why the mantra is that people should start saving early – as if 20-somethings should be organizing their lives around their retirement goals.
One of the more amusing polls I saw was of the elderly. It found their most common regret was that they didn't take better care of their teeth. So there you have it – advice to the young – to secure your retirement, brush your teeth and floss every day.
And that is not really a joke. The fact is that looking back on your life in retirement, you are more likely to regret the things you didn't spend money on than the things you did. Its the places you never went, the instrument you didn't learn to play, the experiences you never gave your kids etc. that are the real investments that are important in life. And you can't make many of those investments in retirement – the opportunity has been lost no matter how much money you saved or how early you started saving it.
I can point to a dozen books that demonstrate how this advice *can* lead to wealth:
I can point to dozens of get "rich quick schemes too." Is there some reason you choose not to believe them, but believe the ones you list?
As I said, telling people what they want to hear is a formula for success. Some people are looking for someone to tell them how to get rich quick. Others want to hear about how savings and frugality will ultimately be rewarded with wealth. I doubt either one is true.
You're skeptical that hard work and perseverance can pay off.
No, actually I'm not. In fact most things worth having require work and perseverance. But those two things will not guarantee you success.
"9 … the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favor to men of skill; but time and chance happeneth to them all.
14 there was a little city, and few men within it; and there came a great king against it, and besieged it, and built great bulwarks against it.
15 Now there was found in it a poor wise man, and he by his wisdom delivered the city; yet no man remembered that same poor man.
16 Then said I, Wisdom is better than strength: nevertheless the poor man's wisdom is despised, and his words are not heard.
17 The words of wise men are heard in quiet more than the cry of him that ruleth among fools."
Why is it important to you to discourage those of us who are trying to improve our financial circumstances?
How have I discouraged you? By suggesting that borrowing is a more important part of improving your financial circumstances than saving? You borrowed money and spent it foolishly? The lesson you should learn from that is to not spend money foolishly, not that you shouldn't borrow it.
And having wasted a lot money on things that didn't enrich your life is not a lesson that you should stop spending money on things that do. If you want to bake your own bread, by all means do it. But do it because you enjoy it and the bread tastes better, not because it will save you a few pennies on the store-bought version.


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June 23, 2014 /
Caribbean Medical Exchange: The Time is Now
The term 'exchange' has become a hot topic since the onset of the Affordable Care Act. While affordability of coverage is the point of exchanges within the United States, many are looking forward to the future, anticipating the need for …
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June 10, 2014 /
Nueterra Global Alliance Partners with Marina Del Rey Hospital
Nueterra Global Alliance (NGA) is pleased to welcome Marina Del Rey Hospital to its international collaborative of healthcare partners, providing unique opportunities for inbound and outbound medical exchange patients. Marina Del Rey Hospital is located …
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May 23, 2014 /
Nueterra Global Alliance Aligns with Surgery Center of Pinehurst
Nueterra Global Alliance (NGA) is pleased to announce the Surgery Center of Pinehurst (SCOP) as the newest addition to its global health network, which consists primarily of specialty healthcare facilities and tertiary service providers, all working to …
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May 19, 2014 /
How Business Intelligence Helps Positive Patient Outcomes
Data is power. Or, more accurately, data can be powerful if it's collected and analyzed correctly, which is why business intelligence is becoming a more critical part of today's increasingly competitive healthcare marketplace. Before we delve …
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Awesome top down cruiser. by Dan from Hartford, CT on 01/08/2004. Trim: 1996 Audi Cabriolet, Owned 5 years.
Pros: I loved this car! I'm going to buy another one. I was in a terrible head on accident....the car protected me though. The passenger compartment was untouched in the accident. These cars are beautiful.....even though the car was 7 years old I would reguarly get complements on it. Interior layout, dash and controls are great. Interior is pleasing to the eye. Comfortable, adjustable, heated, leather seats. Top folds down with the touch of a button and hides away beautifuly.
Cons: Plastic back window is not so nice. CV joints go alot. Almost as expensive to work on as my Mercedes.
Overall review: Wonderful crusing around car with the top up or down. Would reccomend 10 times over.
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Men's Nike Flex 2012 Running Shoes
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Brewery (Canadian Tourism Commission photo)
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1 Breweries, Distilleries & Cideries in Duncan
Merridale, nestled in the mouth of Vancouver Island's Cowichan Valley, is a destination the whole family can enjoy. Take a tour of the cellar or stroll the orchard at your leisure while the kids hunt for the faeries rumoured to live here; join us at the bistro & savour local fare; peek at our distillery, then sample our brandies & cider; browse our store for gourmet food items & cider apple vinegar made on-site; delight in the baked goods from our own wood-fired brick oven & enjoy the rural tranquillity.
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Shenzhen WJM Silicone & Plastic Electronic Co., Ltd.
|Business Type:
|Manufacturer, Trading Company
|Main Products:
|Guangdong, China (Mainland)
|Year Established:
|Year start exporting:
|Number Of Employees:
|101 - 200 People
|Total Revenue:
|Main Markets:
|Average Lead Time:
|10 Day(s)
Shenzhen WJM Silicone&Plastic Electronic Co.,Ltd is one of the leading silicone & plastic products manufacturer established ...
Shenzhen WJM Silicone&Plastic Electronic Co.,Ltd is one of the leading silicone & plastic products manufacturer established in 2002.Our factory is located in Longgang District,ShenZhen,China. With 7000 square meters and employeed over 200 workers,Specialized in silicone & plastic products,Mobile phone cases,Tablet covers,Plastic products manufacturing and developing. "Only Do the First, Never Do the second"is our firm belief , which has already established good reputation in the industry. Meanwhile we have experienced experts in management and engineers,and site operators, We can design and produce all kinds of silicone&plastic products according to customer's drawing or sample.From the design of products to mould and real products to deliver, we are able to offer perfect service for you. At moment our most 80% products are exported to America and Europe.Our main clients are TESSCO,T-MOBILE,WALMART,CASE-MATE,BUSHNELL,BEYOND and so on.
We factory passed Certificate of ISO2001-2008 in 2009, whole process from mass production to inspection were executed strictly according to the standards.
Our main products various kinds of silicone products, mobile phone cases,tablet protecting covers,Plastic products,Conductive keypads,silicone nipple,silicone kitchenware,silicone rings or other components.
For more details, pls feel free to contact us now!
A Supplier Assessment Report provides verified information about a company's production and trade capabilities. This includes factors such as company legal status, human resources, export records, production capacity, quality assurance, customer service, production process management, R&D, certifications and more. View sample.
Company Capability
Trade Capacity
North America : 50.00%
Domestic Market : 15.00%
Production Capacity
Factory Size : 3,000-5,000 square meters
No. of Production Lines : 6
Quality Control
Test Equipment and Facilities : Indicates information has been verified onsite by a certification specialist
R&D Capacity
No. of R&D Staff : 11 - 20 People
Equipment and Facilities : Auto-coating equipment,Injection Compression Molding Machine,Micro Injection Machine,Oil Hydraulic Press ,CNC
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Marc Hinton on Tanerau Latimer
Father Time Tana Umaga named to start
Marc Hinton The fairytale continues for Super Rugby's oldest ever player, with former All Blacks captain Tana Umaga handed a starting assignment for the Chiefs' competition opener against the Brumbies in...
Chiefs make more changes as Umaga recalled
Marc Hinton Ian Foster continues to search for a winning formula with the Chiefs coach making five more personnel changes to his starting lineup for the Saturday night visit of the buoyant Melbourne Rebels.
Sivivatu ruled out of final
Marc Hinton, www.stuff.co.nz Chiefs lose star winger for the Super 14 final as Ian Foster's side have another major obstacle to overcome.
Chiefs give Stormers match 'test' status
Marc Hinton, www.rugbyheaven.co.nz Not for the Chiefs this cat-and-mouse game of hiding from the high stakes at play as the Super 14 reaches its denouement.
Standouts missing from All Blacks
Marc Hinton, www.stuff.co.nz There may have been three debutants, a new skipper and even a surprise omission, but, let's face it, Graham Henry's 26-man All Blacks squad unveiled yesterday for the upcoming Iveco series is more...
Lauaki back as Chiefs shuffle pack
Marc Hinton, www.rugbyheaven.co.nz It's hard to say whether the Sharks will be nervous or excited, but the return of Sione Lauaki from his hamstring problems definitely boosts the chances of the Chiefs putting an end to their...
Advantage Crusaders, Canes as S14 squads named
Marc Hinton, www.rugbyheaven.co.nz The Chiefs and Highlanders have been the big draft/transfer market movers, the Blues have steadfastly stuck to their (pop)guns and the Crusaders and Hurricanes have unveiled what appear to be New...
Williams out of Italy Test
Marc Hinton in Christchurch Isaac Ross didn't know whether to laugh or cry when teammate went down with a recurrence of Achilles injury.
NZ team of the week
Marc Hinton, www.rugbyheaven.co.nz The Hurricanes dominate the XV selected for this week.
Tipsters guide to the All Blacks squad (Mk II)
Marc Hinton, www.stuff.co.nz All Blacks coach Graham Henry has been delivered two positive injury reports on a couple of his crocked contenders which may change some thinking ahead of the Iveco Series squad announcement at Eden...
Henry rings the changes to keep All Blacks fresh for French finale
Marc Hinton MARSEILLE: Graham Henry is searching for the freshness factor among his jaded All Blacks as he looks to cajole one last big Test match out of them for the year.