The Rich Get Richer

[KTP]

Get these right and you will be rich:

12. Vote Republican (but not for Bush/McCain/Palin types) ;-)

There you have it!

This is probably the most important step if you want to stay rich. Although maybe libertarian would work also. What is the point of saving, being frugal, living within your means, studying hard in school, staying off drugs and keeping healthy, etc. if the people who aren't willing to do those things can just take your money via extra taxes and wealth transfer schemes disguised as stimulous and social programs.

You can save as much as you want and it won't do a bit of good if people with less than you are in the majority and want to take it for themselves.

[Snodog]

This is probably the most important step if you want to stay rich.

I respectfully disagree. The individual has much more control over his/her financial well being than anything Washington does.

[disneysteve]

6. Drive the smallest vehicle you can fit your family into.

I disagree. It isn't the size of the car that matters. It is the price of the car that matters. Most people spend way too much money on their cars regardless of the size.

I'd much rather spend 10K on a roomy used car than 20K on a brand new compact car even though the 3 of us could fit in either.

[disneysteve]

The easiest way? Live like you are poor and put the money in the same type of investments that rich people do.

I know a lot of rich people who only buy generic food brands, take advantage of freebies (libraries, public recreation, etc.) and to a certain extent live a "poorer" lifestyle than those who have to have the comforts and gadgets that make them feel "rich" or special.

As we ourselves make the move toward living "poor" and saving, I am growing increasingly resentful of the people who cry about how the rich have everything and it is not fair.

I agree. Read "The Millionaire Next Door" and you'll see how true this is.

[lovcom]

I disagree. It isn't the size of the car that matters. It is the price of the car that matters. Most people spend way too much money on their cars regardless of the size.

I'd much rather spend 10K on a roomy used car than 20K on a brand new compact car even though the 3 of us could fit in either.

I disagreee because a smaller car will often get better gas MPG then a bigger one, and the cost of ownership of the bigger car is most often more. Even 5 MPG less over time is no small amount of money. In addition, better MPG means less wear on the environment too.

[Seeker]

Hmmm... interesting thread.

money blogger -- I am not convinced that all of this statement is true.

I think we've determined the poor get poorer due to their choices and the Rich get richer due to their choices.

You assume that all the poor wish to not be poor. And that's just not entirely fact, at least not by action. People are conflicted in themselves; often they will say one thing and do another.

While many people will insist that they do not wish to be poor, they by their actions, do not wish to change. Example: The many who take lesser paying jobs to spend more hours or time with family. It's a personal choice for what they consider more important in life. Having money does not define "rich" or "poor" at least not in my opinion.

Someday everything we have in life, all our possessions, will be gone (to us at least). So what in the end, does gathering money mean? Especially if we deny ourselves and our loved ones absolutely everything to accumulate that money?

There are also many "poor" whom have made all the right choices, but due to being in the wrong place at the wrong time, will never get out from medical tradegy or debts, or acts of nature that have demolished everything they own, or whatever. Life does not play by rules.

Alone, most people cannot do anything to better themselves or any other person. Almost always it takes more than one person in order for any person to make a change in their own life.

You all are acting as if we as individuals have 100% choice... that nobody or nothing outside of ourselves can affect us. I'm sorry, but nobody is an island.

Every person has a choice yes, but no single person is ever 100% certain of that outcome of that choice. Nothing in life, even richness or poorness, can be so certain.

Some of the rich, obtained their richness by taking on a very big risk. Had it not worked out, in the end, they would have been poor. There's a certain amount of external influence that has a part in every choice. Call it "luck" for lack of a better word.

Opportunity knocks for each and every one of us. Whether or not we answer.... that's another matter. Richness has more meaning than solely dollars.

Some of the financially rich are so because they have "passive" income, they let their money work to make more money.

Some of the financially rich are so because they've neglected every other aspect of their lives.

Most of the "poor" are so because they "earn" their living by working for someone else.

What is the easiest way for the the average person to start making better choices to not only move towards the Rich category, but to start attracting more and more money?

There's no one single answer to this question. I think the easiest way for the "average" person to get financially rich quickly, is to think externally.... not for yourself but for everyone.

[money blogger]

RE: Follow Up Question

Thanks all for your input.

I'm seeing a ton of advice on how to save, pinch spending and budgeting, and think frugally and to live within one's means.

How about earning more?
What if I didn't want to reduce my current spending. What if I loved the way my life is now, but don't want to reduce something like the amount I spend taking my wife out for dinner on the weekends. What could someone like that do to still have money to save.

I guess I'm wondering what type of ideas you all have for earning more money. What's the best way. Get a second job or start a business. What are your specific business ideas people can try to earn more money?

Thanks,

Guy Gagnon
Business Relations Technologist
Angulus Marketing, Barrie ON

[KTP]

How about earning more?
What if I didn't want to reduce my current spending. What if I loved the way my life is now, but don't want to reduce something like the amount I spend taking my wife out for dinner on the weekends. What could someone like that do to still have money to save.

Well, if you can't change anything about your current spending and lifestyle, then you are doomed to be poor unless you get a raise or 2nd job and keep your lifestyle exactly at its current level.

It is very easy to say "I am not going to stop spending money taking my wife out to dinner on the weekends" when you would actually probably be more appreciated for learning how to prepare a elegant but inexpensive dinner at home without her help for a few of those weekends. If you choose to instead take the easy way out and dine out every weekend then you have nobody to blame for being poor but yourself. People like that blaming rich people for being rich really tick me off.

[disneysteve]

I disagreee because a smaller car will often get better gas MPG then a bigger one, and the cost of ownership of the bigger car is most often more. Even 5 MPG less over time is no small amount of money. In addition, better MPG means less wear on the environment too.

So maybe I should trade in my $20,000 Toyota minivan for a shiny new $60,000 Corvette.

You can't generalize and say that a smaller car is automatically a better value or has lower cost of ownership or gets better gas mileage. It doesn't work that way. Also, buying a bigger car used will often save way more money than what you might save in fuel costs on the smaller new car.

[feh]

I respectfully disagree. The individual has much more control over his/her financial well being than anything Washington does.

+1

Nobody is prevented from becoming wealthy because of the taxes they pay.

[bjl584]

I work hard at saving and investing. My plan is to be debt free. Once I achieve this goal I will be saving and investing a large portion of my income. This situation will make me "richer" by default. It has nothing to do with being evil or greedy or with taking advantage of anyone else. It's more a matter or discipline, planning, dedication, curbing impulses, and a general knowledge and understanding of finances than it has to do with anything else. Some people are good with money and some aren't. Alot of people don't think longterm for whatever reason. This has been my experience anyway.

[lovcom]

So maybe I should trade in my $20,000 Toyota minivan for a shiny new $60,000 Corvette.

You can't generalize and say that a smaller car is automatically a better value or has lower cost of ownership or gets better gas mileage. It doesn't work that way. Also, buying a bigger car used will often save way more money than what you might save in fuel costs on the smaller new car.

I should have use the term "small economy car". Your argument seems to ignore the cost of ownership too, which is gas, and maintenence. I personally ignore depreciation cost because I keep a car through it's entire life.

I never bought a used car in my life because I can never trust how the prior owner treated and maintained the car.

I prefer to buy brand new, because I know how I treated the car, and I never how to worry about something breaking today because a prior owner neglected the car 20,000+ miles back.

When I buy a car, I am buying miles. When I went shopping for the current car, I wanted to buy 300,000 miles and if one keeps a new car through it's entire depreciation (life), this is better then buying a used car every few years.

I would guess (because I know of no scientific studies) that 75% of car owners drive a car that is too big for their needs, and/or a car that has a very high cost of ownership, and/or replace their cars too often and before their car needs replacing. Then there are the guys that are dads and husbands, are middle class and they think nothing to leasing or buying a $50,000+ car...talk about dysfuntional priorities...

Also there are fools that spend $50,000+ on luxury foreign cars that have worse dependability then an entry level Korean make...for these, it's about putting on appearances at any cost (Range Rover owners, for example, and there are many more).

In summary, buying the wrong car can dent one's long term financial life in the tens of thousands of dollars.

[Snave]

Just a few comments on 2 things I observed today. The first was in the USA Today and was an article about "sideshows" in Oakland. Personally I had no idea what this was, but it is where young (20-somethings) bring their cars and party on the streets and race, burn their tires, etc... The picture showed some younger people and I swear there were some cars that were worth a ton. On this same note, I just drove through a neighborhood a few miles from where I live. The homes are 75K - 100K. This is what I would consider a fairly modest home. Someone was in the driveway waxing the car and cleaning the rims of the new Suburban. And we wonder what some people that are not well off are doing with their money?!

[Snave]

Did anyone see the recent article on Antoin Walker, the former NBA player? He earned over 110 million in salary in his 12 years in the NBA, plus some endoresements. He is currently broke at 33 years old. I guess not all the rich are getting richer!

[disneysteve]

Your argument seems to ignore the cost of ownership too, which is gas, and maintenence.

How so? Surely the cost of ownership on a Corvette will be much higher than that of a Toyota minivan. The van gets better mileage, has lower repair costs and is probably more dependable mechanically.

In summary, buying the wrong car can dent one's long term financial life in the tens of thousands of dollars.

This I agree with 100%.

I drive a 1998 Camry. I bought it used in August 1998 as a dealer demo (Toyota certified). So I've had it for just over 11 years and it is 12 years old. I don't expect to replace it for at least 2-3 more years if all goes well and possibly longer than that. My daughter will get a license in 3 years. I'd love to pass it down to her as her first car.