A Cure for a Bad Case of the "Spends"Posted on January 29th, 2013
I was delighted to learn of one of my reader's (Mr. RK) transition from being a member of the income statement affluent segment to one in the balance sheet affluent population. Congratulations! The examples (of income statement types) are endless. My personal example was similar. Professionally, I'm an engineer. I'm really good at math and people pay me to solve problems. Financially, I sucked. That's a hard thing to have to admit to yourself, especially with my (high) income and profession where 'I know all the answers.' Most engineers are members of the balance sheet affluent segment. In Stop Acting Rich, I suggested...
Small Expenses Add UpPosted on January 22nd, 2013
A newspaper article reported on a "low level employee" who has been accused of stealing from his employer. His theft went unnoticed for more than two years. And his crime was discovered only when an investigation outside the firm led to his arrest. No, the fellow did not steal cash, coins, checks, motor vehicles, etc. In just two years, he stole $376,000 worth of copy toner (ink cartridges) and resold it on the black market. Nearby, another thief who worked for Memorial Sloan-Kettering Cancer Center was convicted of stealing "more than $1.5 million worth of printing toner cartridges from the hospital." As part of this man's...
To Build Wealth Maximize Your Unrealized IncomePosted on January 15th, 2013
Warren Buffett is the best of the best at transforming income into wealth. How did he do it? Wise investing, you say. Combine this with his reputation for having enormous integrity and his well publicized frugal lifestyle. When it comes to consumption he seems to possess traditional midwestern values. In spite of his substantial wealth he lives in a relatively modest home and drives American makes of cars. Ah , but there is something else. As I stated in The Millionaire Next Door, Millionaires know that the more they spend, the more income they must realize. The more they realize, the more they must allocate for income...
Millionaires' Income: 8.2% of WealthPosted on November 27th, 2012
Five years ago Brit, 36, and his wife were upside down on their heavily mortgaged home, had a negative net worth and owed more than $60,000 on their credit cards alone. Today the couple has a positive net worth of about $20,000. Brit explains that paying off their debts was extremely difficult and took much sacrifice. The couple is genuinely proud of this accomplishment. But, in spite of this, Brit reports that he is depressed . . . "bummed out. . . I can't see how we are ever going to become wealthy even with us both working our tails off." People...
A Lesson in Financial IndependencePosted on October 24th, 2012
I lived for a few years like no one wants to so that I can live for the rest of my life like no one can. This is the basic success formula recently reported by one of my readers. In the following paragraphs, another reader, Honey, paints a similar picture of how her mother became a multimillionaire. I was raised by a single mom who immigrated to the US in the early 1980s . . . did not speak or write English very well . . . perhaps the most frugal person I have ever known. She ran the family household like...
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