Five Reasons Why You’ll Never Be Rich And One Reason Why You Already Are

in Financial Planning by

I remember being mesmerized by Robin Leach’s “The Lifestyles Of The Rich And Famous” TV show as a kid growing up in Kuala Lumpur, Malaysia. A million dollar house and a $40,000 car was the dream combination back in the late 80s/early 90s. My parents were not rich as US foreign service officers, but they were comfortable. My first glimpse at wealth occurred when my parents would sometimes bring me along to parties thrown by local businessmen. They built their fortunes by starting everything from rubber plantations, to beverage companies, to even chicken farms.

One day after school, my father’s friend sent his driver to pick me up in his black Mercedes 280SL. He was throwing a New Year’s celebration party and my parents had already gone first. Like most kids in the 7th grade I was enamored with cars, especially foreign cars that were charged 100% import tax rates. My parents drove a paintless 1976 Datsun with a missing hubcap so I was absolutely giddy to sit in a moment of luxury. It was during this 30 minute ride to Kenny Hills that I told myself that one day I, too, would be rich. Too bad life is easier said than done.

Over the years I’ve come to realize several hurdles that prevent many of us from getting wealthy. Let me share some observations in this post.

FIVE REASONS WHY YOU’ll NEVER BE RICH

1a) Being a “C Student” who thinks s/he deserves an “A Lifestyle” – Remember during high school there would always be the goody two-shoe who sat in the front row, raised her hand constantly, and stayed after class to ask more questions? Well, she went places. I was the guy who strategically sat in the middle of the classroom because apparently teachers only pick on people in the front and back.

After a mediocre freshman year, my parents decided to slap me silly by telling me the truth. “Sam, if you continue to just get C’s and B’s, then all you’ll ever live is an average lifestyle. Don’t come crying to us when you’re an adult and still watching re-runs of The Lifestyles Of The Rich And Famous,” they said. From then on, I hit the books like a maniac because I wanted options.  Whatever type of student you are, make sure your lifestyle gets adjusted accordingly.

1b) The inability to delay gratification. – Even though you haven’t given your best and can’t afford the best, there’s a strong tendency to go into debt in order to fulfill your immediate desires. If you ask anybody who has consumer debt after their fifth beer, they’ll admit they bought things they couldn’t afford and did not need. Delaying gratification until you can afford something is absolutely one of the keys to building wealth. Piling on credit card debt at a 15%+ interest rate is a sure way to financial failure. Not even Warren Buffet has returned greater than a 15% annual compound return in his illustrious career. For those in debt, well done beating the greatest investor ever.

2) Spending way too much on a car. A car is the #1 personal finance killer given it is an unnecessary luxury that rapidly depreciates over time. I suggest spending no more than 1/10th of your gross income on the purchase price of a car. If you make $50,000 a year, then buy a nice second-hand Honda Civic for $5,000. If you make $500,000 a year, that new 4 series BMW coupe is quite alright. And if you only make $20,000 a year, then consider taking public transportation or biking. The last thing the median earning household should do with their $51,000 income is buy the median priced $30,000 car after taxes.

3) The unwillingness to go the extra 10 miles. When you first begin your career, you know nothing. You’re a cost center who is easily expendable by management. As a result, it’s imperative to do everything possible to show your worth by coming in early, leaving late, frequently asking colleagues if they need help, and being proactive with new responsibilities. Please review a series of career limiting moves from a previous post if you need a reminder on what not to do. Even as a veteran employee, it’s important to never take your work for granted. Your career is likely your #1 income earner. Nurture it as much as possible.

4) Saving as if Social Security or a pension will still take care of you. Back in the 70s, worker bees wouldn’t really save because they had pensions and Social Security to depend on. Nowadays, people still seem to be saving as if Social Security and pensions will be a 100% guarantee with a national savings rate of under 5%. The government has already highlighted that Social Security can only provide roughly 70% of its benefits in the next couple of decades in its current state. Meanwhile, pensions are disappearing faster than time. If you’re not maxing out your 401k, or saving at least 20% of your after tax income every year, you will likely be very dependent on the government or loved ones to get through your remaining years.

5) Not building enough income streams. Consider figuring out ways to build multiple income streams immediately, while you still have all the enthusiasm and energy in the world. You may love your job or business now, but interests fade and bad things happen all the time. Income streams can be in the form of dividend yielding stocks, REITs, rental properties, tutoring, starting a side business, earning royalties, and building a CD ladder, to name a few. The idea is to build enough passive income streams so that by the time you are absolutely sick of work, you are able to break free and rejuvenate while having a series of income streams keeping you alive and happy. Savings is the foundation for wealth. It’s up to you to start investing your savings wisely.

LET’S JUST BE REGULAR PEOPLE

For all those who think school is a waste of time, good grades are a waste of effort, and working towards a great career is a soulless exercise, you might be right. The all-out pursuit of riches can very well lead to a miserable life.

Watch one of the all time classic scenes from The Cosby Show where Dr. Huxtable asks his son, Theo how he expects to get into college and earn a living with poor grades. What transpires is one of the most hilarious interactions ever. In this 4 minute clip you’ll learn everything you need to know about minimalism, relationships, budgeting, work, taxes, career, love, and happiness.

No matter what you think about wealth, the good news is that you are already rich if you are reading this post. Someone with a net annual salary of $30,000 a year, is part of the top 1.23% richest people in the world according to the nifty calculator by globalrichlist.com. Unfortunately, not all of us can earn US dollars and live abroad.

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Photo: Piggy Bank Awaits the Spring by Philip Brewer is licensed under CC BY 2.0

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Financial Samurai

Sam is the former Managing Editor of the Daily Capital blog. He worked in finance from 1999-2012 before deciding to focus full-time on his online endeavors - FinancialSamurai.com and the Yakezie Network. Sam is an avid tennis fan who loves to travel. He received his BA from William & Mary and his MBA from UC Berkeley.

68 comments

  1. Dividend Income Project

    Excellent post. Sounds very conventional but how many youngsters or even adults actually know these? I echo many of your points. I guess I learned a few lessons that helped formulate my perspective.

    1. Educate yourself: Grab every oppertunity to educate yourself formally and informally. These days you have everything accessible to you through the internet.
    2. Learn how to communicate: Learn how to communicate and master the English, which is the universal language (so universal that even aliens in star trek speak english). As an immigrant, one of my biggest advantages that I didn’t have to overcome was that I was comfortable to read, write and speak english fluently and professionally.
    3. Work hard: Work hard and extra hours if you need to… there is no alternative to working hard. If you are starting out, gaining experience should trump salary. Yes, I know you need money to live so figure that out first. You neeed your employer to be dependent on you so take ownership of whatever is handed to you and make yourself indespensible. You are no longer just competing locally but globally. I know because I immigrated from a third world country where half the population starves and filled a vacant spot for a New Yorker who left the company.
    4. Save save save! After you have 6 months worth of emergency funds and have learned investing fundamentals. Research and invest in equities for the long term. Starting out early makes a huge difference.
    5. No debt: Never pay an extra cent for credit card or personal loan debt. Debt should be a last option that needs to be carefully planned.
    6. Be frugal. Learn to be content. Don’t play the “I’m richer than you because I have a bigger and better ______ (fill in the blanks) ” game.
    6. Be wise: A few sayings that have helped me:
    “A professional is successful if they do something extraordinary that works. A regular person is successul if they do a normal thing that works and does not do anything stupid. Most of us are not professionals. So let’s at least be normal”
    “A wise person learns from other’s mistakes. A normal person learns from his own mistakes. A fool learns from neither”
    “If you feel a deal is a steal, then grab it like it’s a free meal.” (applies to stuff you need and financial assets too).

    As an immigrant from the third world who came here 7 years ago when I was 26, I sometimes remember how I started out… pretty much with very little and how much I’ve been blessed beyond my wildest dreams since I’ve came to America – the land of freedom and oppertunity. My first job 9 years ago earned me no salary. However it was hard to break into the industry and I slogged it out for the sake of getting work experience and taking it from tehre. Personally I feel our household is “rich” compared to the rest of America. As per WSJ income calculator (http://blogs.wsj.com/economics/2011/10/19/what-percent-are-you/), we’re in the top 86% in America. And if I add our annual dividend income, we’re in the top 87%.

    We have 80% of our networth in equities earning 4% of annual net income that we reinvest. The rest is in an emergency fund for 2 years worth of expenses which we plan to deploy for a house after that time as my wife will complete her medical internship and we expect to be more settled by then. We have a savings rate of 30%. Based on the numbers, I think we’re on the right track for now. I’m projecting that by 40, our dividend income should match our current living expenses and we would be in today’s 1% within a few years… unless a black swan comes along ofcourse.

    Reply
    • Financial Samurai

      Thanks for sharing your thoughts! Awesome!

      I particularly like the quote you shared, ““A wise person learns from other’s mistakes. A normal person learns from his own mistakes. A fool learns from neither”

      So true. To lessen our chances of steeping mines, we should simply ask folks who’ve been there before.

      Reply
      • Dennis Glenn Thomas

        I am wealthy Loving wife,son,daugheter I realised that is the true path to happiness and wealth is absorb the love they give and far more love from mom and dad aunts and uncles sometimes I I Feal like big John Walton I am a trillion are and my children know to ask dad if they need help no I not talking money it’s something money can’t buy.

        Reply
        • Rybo J

          You’ll also never be rich, because you can’t write a logical sentence. Why are you even reading financial websites if you don’t care about making money?

          Reply
    • Jared

      Aliens in Star Trek do not speak English. In the Star Trek universe, they have universal translator devices that make it possible for two people who speak different languages to communicate. While Kirk is speaking English, the Klingons hear Klingon. When the Klingons speak Klingon, Kirk hears English. This is why I am not rich. Too much time spent watching Star Trek and reading Star Trek books.

      Reply
    • Oleg

      Fantastic advice, I’ve been educating myself about dividend income and wondering if you can recommend some paths to go by starting it. I am relatively young, 21, but want to get my foot further into equities. I would appreciate some advice as I know how beneficial dividends are. I am not interested in immediate returns but rather want to secure a prosperous long-term horizon.

      Reply
      • Anonymous

        You can actually start in a bigger company who do financial service and seek advice from them.you can definetly private message me in terms of that issue.i can referr you to a friend of mine.

        Reply
        • simon

          want to talk to you privately

          Reply
  2. Untemplater

    I love that Cosby episode. I grew up scared that if I had bad grades my adult life would be terrible. That fear paid off, kept me an honor roll student, got me into a great college and a successful career path. My parents weren’t great with money but they were very supportive of my studying needs and school activities which helped me along the way and led me to become good at managing my own personal finances.

    Reply
  3. BARBARA FRIEDBERG

    I think the inability to delay gratification is the biggest road block to wealth and success. Maybe that and patience. It’s crucial to understand that “I want it now” is in direct contrast to “having more later”.

    Reply
    • Anonymous

      100 percent!

      Reply
  4. Jim

    My favorite purchase excuse I have heard over the years is “I can’t afford not to buy _____” Anytime there’s a deal I would hear that from some of my friends.

    Reply
    • Financial Samurai

      Interesting! I don’t think I’ve heard that one before… or at least for a very long time that I can’t remember!

      Reply
  5. willaim

    lol I am going to give up my life in the hopes of Independent. I make 35-40 depending on if I take overtime. I have three kids and a stay at home wife. My kids play soccer, hockey and baseball all competitive. Oldest is 10 and hockey 900 a season plus travel, soccer 400 plus travel. I also have a car payment 322.00, and cell phone 188.00 month. I rob peter to pay paul. lol Retirement hahaha

    Reply
    • Financial Samurai

      So long as you are enjoying life, that’s all that matters!

      Reply
    • Rybo J

      Why would you spend almost $200/mo on a phone? You deserve what you get.

      Reply
      • Anonymous

        My Mom spends $200. The message of payment get sents to my phone as well.

        Reply
        • Anonymous

          $200 for a phone is a bit too much!

          Reply
  6. Wayne A. Silkett

    “Don’t go shopping” is the best 3-word take on this. Not liking cars, clothes, or conspicuous consumption helps, too. I know 3 people with Rolex watches and not a one is ever on time. Skewed values. I use the library and often shop at garage sales. Together my wife and I share 9 income streams. No magic. It works.

    Reply
    • Financial Samurai

      9 income streams is amazing! Well done.

      Although, how does one balance spending some of their income and enjoying life a little more?

      Reply
  7. joe blow

    My wife and I met in college and both studied super hard and got good grades and good jobs and have successful life and live below our means. We have a little house that is almost paid off and we are only in our early 30s. Cars are paid off, we waited until we were almost 35 to have a kid which is on the way now. We have friends that bought a place, went underwater on the house and then bought a boat, and a new bathroom, and kitchen, and cars…. They are still broke. We are almost debt free. Feels good to have your finances tight. Enjoyed the article, you nailed it.

    Reply
  8. slay

    i’ve noticed you seem to dilute the most important tenants of your philosophy somewhat frequently. just an observation. i assume part of it is wanting to write every day and be prolific in order to get web hits. i mention it becuase it sometimes confuses me. and i think that sometimes drags people away of what are actually the most important underpinnings of your philosophy.

    you overemphasize on the study/academics which is understandable given your background and own experience. it’s ironic you mention this in this particular instance as #1 since i’d guess that a very small fraction of the illustrious and wealthy businessmen you envy in your story were the ‘A’ student that you put on a pedestal. normal academic achievement is probably acceptable to get into most trades that will earn you a sufficient income to live and have a high savings rate.

    it’s also ironic that you lavish praise on luxury so frequently, the house, car, jewelry, ‘treat’s, ‘trips’ etc etc etc.. to me it shows there’s still something missing. we know that adding these things don’t bring happiness other than an initial flash so to occasionally bring them up as little rewards here and there as little ‘perks of the good life’ seems hypocritical.

    #2 is spot is on but incomplete. how can you not hammer your own experience with the requisite very high 40-60% savings rate necessary for a realistic retirement? not only will you never be rich by overspending on a car but also if you overspend on a house, clothes and food. just looking at the car is too narrow.

    #3 again harkens the eastern philosophy of overworking, be the lap dog employee or you’ll never be a ‘real success’, cave to the peer pressure of work work work as the only way to ‘get ahead’ etc.. it seems as though this is substituted in for actually having any hobbies or a life outside of work until you’re 35. you just need to have cheap hobbies. the high savings rate is the essential part, not the income. most people won’t/can’t achieve the high income portion. it detracts from the goal and how to get there to focus on something that is out of reach for most folks. you’re creating more of an ideal than addressing reality.

    regardless of income, if you have a high savings rate and a lifestyle that you can manage, then an early retirement is mathmatical certainty save catastrophe.

    #4 i think belongs in a larger mental/emotional category of procrastination and abdication of responsibility. ‘someone else will do it’, ‘it will work out eventually’, ‘i’ll start saving next year’ etc..

    i propose the list actually look like this. most other things are contained within it and addressed by it implicitly. adding sub points as main tenants and other distractions really weaken the argument.

    5 or 6 reasons why you’ll never be rich:

    1) your savings rate is too low for a variety of reasons
    2) you overspend on housing/rent. buy less house, you’ll therefore have less crap because you’ll have less space to fill and your utility bills will be lower. see #1
    3) similiar to FS’s #2. you overspend on a car. live close enough to work to bike or on a mass transit line. if you have to have one, read FS’s #2. also see #1
    4) you overspend on food. you buy lunch everyday at work and think it’s essential to hit the new restaurants every weekend becuase food complexity and possibilities grow exponentially and you’ll get left out and be uncool if you don’t. just eat at home and focus on nutrition. invite friends if you’re lonely. also see #1
    5) you don’t do #1-4. no one else will do these things for you or take care you. or stop you from doing the opposite. if you start avoid them thinking that you’ll make up for it by letting work rule your life to get that raise or just cut back elsewhere then you’ll be making it very hard for yourself to retire early or at all.

    6) trying to hit investment home runs and not understanding basic asset allocation theory. #1 via #1-5 will get you piles of cash much faster than always searching for the next investment home run to put your savings into. do your home work on allocation and find some allocation ratios (stock, bonds, alternatives-real estate, metals, p2p, private real estate) that work for your risk tolerance while still providing for some type of income (dividend/interest) from the investments.

    Reply
    • Financial Samurai

      Seems like we are saying the same things? Tomato, potato?

      Reply
  9. Mike Lam

    Great article. regarding 1a, A or C students should not be related to millionaire status.

    In the book Millionaire Mind by Thomas J. Stanley. His data shows that A students don’t become millionaire. It’s the C students that do.

    Reply
    • Financial Samurai

      We can do an experiment and have your children be C students, and your friend’s children be A students and we can report back in the future and see how they do. I think it would be a neat one! You willing to let your kids slack off in school?

      Reply
      • Anonymous

        The Millionaire Next Door (published before The Millionaire Mind) by Stanley et al, were fascinating studies re the habits of highly successful people. True, most millionaires described themselves as average students.
        PS – loved the Cosby clip!

        Reply
  10. Syed

    Really great points made here. The desire to have things NOW (especially luxury cars) seems to be the downfall of many Americans. I think that most people in America can be pretty well off without having to worry about money from month to month, but over consuming and subsequently getting into debt seem to be the biggest hurdles. And this is only making the rich even richer.

    Reply
  11. Eugene

    While I agree with some of the points in the post, I must disagree on two points: Delay gratification is a sure way to let your life pass you by. I went to school and got good grades so that I could live like I wanted to, not so that I could plan one day to live like I want to. I don’t buy everything I own, but I don’t take it to the extreme – if you make 100K, a 10K car will no longer get you an 8 year old Honda Civic – I’m not sure where you are getting your prices. Where is that advice from – what does 1/10 ratio for your car have to do with wealth?

    Let’s face it – if you don’t do some of the things here like save early, build multiple revenue streams(great advice) and get a high paying job by studying – it doesn’t matter what you do with your money – you will never be rich.

    I’m always against extremes – life is too fast to live it for money – just as long as you live comfortably. As for the rich and famous – that just looks like misery.

    Reply
    • AmericanFool

      I think your first point is absolutely true and important. You don’t get a second chance. You have to know what is important to you. We don’t have cable TV and our cars are 17 years old, but we all practice Karate, and we take fun vacations. Don’t get me wrong, we save aggressively, so much so that retirement is no longer the major worry, and now are focused on saving for college for our kids. Some things lose their value entirely if you wait too long.

      Reply
    • Financial Samurai

      I’m a car fanatic. Was just at the Honda dealer last week to check out the new Honda Fits.

      You can absolutely get an 8 year old Honda Civic for $10,000. They cost $19,000 brand new.

      Reply
  12. FiftyFive

    Good tips for the sheep of this world. And strong personal capital advertisement, I don’t even remember why I signed up for this thing.

    Reply
  13. FriscoTx

    Some thoughts here. Success is found in being yourself not everyone else.

    Wide is the path that leads to destruction, narrow is the path that leads to life.

    Doing what everyone else does will not make you rich.

    Literally be the best at what you love to do. The world rewards #1, the winner, the best. In sales, being #2 means you don’t get paid.

    Work hard, but work smart too.

    Find a rival in your field, beat him. Find a better rival, beat him. Repeat until you are either champion, or well matched with a rival. The best in racing (Rush), tennis (Conners/Macenroe), basketball (Magic/Byrd) comes from those rivals and the drive of the best to win.

    Seek to be the best, adjust your game constantly to get better.

    Keep your body, mind, and spirit healthy, active, alive and focused.

    Watching TV never made you rich.

    Reply
    • Financial Samurai

      As an avid tennis fan who just checked off a bucket list item by watching Federer play at Wimbledon this year (and Nadal), I like your analogy!

      Reply
  14. Daniel

    I find this an interesting illustration of how greed blinds. Do we encourage our children to want the Life Styles of the Rich and Famous or do we encourage them to realize how truly blessed we are to be in the top percentile of wealth in the world and understand the responsibility we have because of this status. No caviar dreams when most people cant feed their children

    Reply
  15. Jorge

    I wasn’t an a student. I partied. What I always liked was the buy and resale market. I was a c student.
    But the one thing that will kill wealth is impulse buying. Buying stuff that you can’t afford. Yet.
    I’m 40 yrs old and all my stuff is paid off. House cars a couple of Realestste properties. I think I’m doing pretty good. I could have had more by now but you only live once. And once your 41. 40 is gone forever
    Live in your means. But enjoy life. Money for retirement is important but you could die before.
    Live life in the middle.

    Reply
  16. Rob

    Sorry, this is a bit pedantic. It’s all so perfectly practical. You would do well to spend less than you earn, but otherwise, following these pearls will guarantee you a life of mediocrity. Dare to be different. Do what you want. We will all be dead one day and only regret the things we didn’t do. Follow your heart. Do what you love. Be better at it than anyone could ever imagine. You will go far. More importantly, you will life a life of fulfillment and satisfaction. Are we all just working to retire? Or would we like to live out our final days doing what we love and being paid well for it?

    Reply
    • Financial Samurai

      Rob, please share what you do differently and your story of success! Love new perspectives. Thanks.

      Reply
  17. jamie

    Here is a philosophy I always lived by. Instead of looking at ways to cut costs just make more money!
    Its very hard to grow when you are focused on cutting back. Sometimes I get mad that the wife will have a 20K a month Amex bill. I have two choices. I can say honey stop spending so much freaking money or I can just focus on making more money. I never have had a budget cause I always wanted the freedom to feel rich.
    Of course this really only applies for the entrepreneurs out there where you have the ability to earn more income. If you are stuck in a 9 to 5 focus your time and energy on creating a additional income stream more then just cutting back on a budget or living expenses. It will serve you better.

    Reply
    • Financial Samurai

      Can’t agree with you more. You can only cut so much costs. There is so much one can do to make money, namely working longer if one doesn’t have the immediate skills.

      Reply
  18. MC

    I have the most powerful assets in the world. I am young, sexy, gorgeous with a great smile, natural blonde and as everybody says very smart. One day I will marry the guy who knows how to invest…at the moment I must invest in my beauty if I want to get the rich guy. So all of the above are for the guys who need a woman like me on their side. Achievement is men’s job, for me is the Lifestyle and every day lost is a waste

    Reply
  19. Sean

    I like Jaime’s answer 🙂

    Reply
  20. Lucy

    There are way more reasons than that of why some people will never be rich; being born poor, lack of education, discrimination and these have nothing to do with the things mentioned above.Yes, there are exceptions, but they are just that, EXCEPTIONS! Living beyond your means to fit in with the American culture is one thing but applying for a credit card because you are struggling to make-ends-meet is different.
    Another thing, why shouldn’t our Social Security benefits be there when we retire? Why should we have to pay for the financial mismanagement of our political representatives? FYI: I come from a humble family and grew up witnessing some of the shittiest teachers discriminate my classmates in school. I was always an honors student, I worked since the age of thirteen, I graduated from college with a pretty good GPA, I have NEVER lived beyond my means AND I don’t think I will ever be rich. Why? Because I chose to pursue a career in Education and Social Advocacy and our government and local representatives don’t think that people like me, who put their heart and soul into helping the youth and underprivileged people decent pay.

    I too recall watching shows in the early 90s of very empowered women and people of color achieving economic prosperity but those days have been gone for some of us. I say some of us because I am fully aware that one’s ascribed roles play a very pivotal part in how much we can achieve in this country. Remember, that if it was ONLY a few people struggling it would be a personal problem and maybe in some cases it is, but we are talking about almost 2/3 of Americans, therefore this is public issue.

    Reply
    • Financial Samurai

      We pay for the financial mismanagement of our political representatives b/c we voted them in. We get what we pay for!

      Reply
    • Financial Samurai

      The good thing is, you don’t want to be rich because of what you pursued. If you did want to be rich, you’d pursue other occupations and develop other income streams. Hence, all is aligned, and all is good.

      It’s folks who want to be rich, but don’t do things that are logically beneficial to their income earning powers that befuddle.

      Reply
  21. Charlotte Hall

    My husband and I both have bachelor’s degrees (husband also with a master’s) from a prestigious university. I’m a marketing writer. He’s an architect. And we live in a big metropolitan area. Combined, we make $96,000… and have $80,000 in student loan debt (which also makes us wonder if college is even worth it).

    When my daughter is choosing her college major in 16 years, I will make her think long and hard about how she can do what she loves but also make a lot of money. Because we chose what we love and that didn’t get us very far financially.

    Reply
    • Financial Samurai

      Perhaps better to do what you love and not be rich, than be rich but hate what you do?

      Reply
      • Eldred

        If you’re rich but hate what you do, you can put aside enough money to stop doing what you hate pretty quickly. If you have plenty of money(enough to retire), but still continue to do what you hate, then you’re pretty stupid…

        Reply
        • ABC

          Eldred;

          WOW. You hit the on the head (sorry about the cliché) for me and my wife. Worked our tails of for years (sometimes 2 jobs each). Made big bucks doing so. When we had used all the tactics the article suggested we bailed! Done…no connection to the working world. Family; yes. Charity; Yes. Working world…NO!

          Reply
  22. Howard Greenstein

    Of the numerous things my brilliant father taught me, these two are the most important. 1) Don’t spend your gross salary. 2) If you can’t afford it, don’t buy it. My only debt is my house and it will be paid in full in 3.5 years, although I could pay it in full now. I’ve also been saving for retirement since I was in my 20’s.

    Reply
    • Financial Samurai

      Smart father. I’ve found that listening to everything I parents say saves us a lot of heartache down the road.

      Reply
  23. James

    These are worthy points and yet I’ll always remember when I was in my 20’s and had just finished climbing Duns river falls in Jamaica. I was on my way back down feeling exhilarated, and smiling from ear to ear, when an older woman with a walker and an attendant spoke to me. She said “you look like you had fun” to which, I replied, “oh, yes ma’am, it was great! ” she then told me to travel as much as you can while you’re young even if you do it on the cheap, she then said “don’t wait until until you can afford it as I did, do it while you’re young enough to enjoy it”. I’ll never forget her, or the lesson she shared.

    Reply
    • Financial Samurai

      It’s a great lesson, and very true. Traveling when you’re young and not so wealthy is just as great as traveling when you’re older with a lot of resources.

      It’s more of an ADVENTURE when you travel young. When you get to your mid-30s or older, you no longer want to “rough it,” as much. You’d rather stay in a nice hotel instead of a hostel, and some of the magic disappears forever.

      Reply
      • Ralph

        I got to travel a lot before retirement. I never cared for hotels, airplanes or rental cars. We vacation in state parks and camp which I love. If vacationing is just a trip to stay in a hotel, I just assume to stay at home. I don’t care to go just to site see. I like activities like fishing, hiking etc.

        Reply
  24. J

    This article may have been true in the 80’s, but now this is most certainly outdated. I make over $100,000 a year, so I should buy a non-dependable automobile to drive to and from work? Take coworkers out to lunch in a used, beat up honda? Absolutely not. I enjoy my new 4 series BMW (lease) and sti have plenty left over to pay my luxury apartment, student loans, as well as putting some extra away for savings.

    Show up to work early and leave late? Oce again, an outdated piece of advice. Management does not care if you’re the first person in the office and the last one out. In fact, in my experience, if anything it’s seen as negative. Our generation appreciates the work/life balance. Work as long as you need to get the job done exceptionally well, but make sure you save time for excersize and whatever you enjoy doing in life. The money WILL follow.

    Reply
  25. ron

    I have problems with some of thsese posts. ill put it out there right now. ive got a 9th. grade education. I really think that getting a lot of unessasary education clogs up a persons brain with a lot of gibberish now if your going to be a doctor.go to school. I knew a ladt that had a masters degree in French lit. she works as a librarian. im not rich never wanted to be. my house is paid for,bought it cash. my truck is a 78 ford 4 wheel drive im driving and have been restoring, bought it..cash. my wife drives a 2000 ford Taurus…cash. we use track phones, 9.00 from walmart,we bought it because it was on sale and you get triple mins. we use about 20.00 a month. I got rid of cable,bought a hdtv intenae,for 75.00 cash. im way out in the woods,but I get any where from 20, stations on a good day. I have a nice little 15 ft. bought,i bought for 75.00 cash put a new transom on it myself, bought a 15 h.p motor for it 300.00,worth 5 to 6 hundred. I make it a habit never to buy new if I can find something as good for atleast half the price. my old truck goes up in value evey day,and its great when drive it so many people stop and tell me what a nice looking truck it is and they once had one just like it. I just keep thinking every time a person I know buys a new car,i can rebuild my entire engine every month for what the their payment is. oh I almost forgot I have a 1965 falcon 2dr.htp,i bought about 10 years ago,im restoring it too,but when you don’t make the big bucks it takes a little longer,oh I paid 2500.00 casg for it,and like other great investments it goes up in value every day.i prefer buying things that I can hold,see and polish to increase value.yea I ha some money and decided was going to get rich in the stock market,did real good for a while,i had a credit card tied to my account. I bought a lot of stuff and never paid one payment,my earnings paid for every thing,and the one dat a hot stock I bought went up and I held it and then a nother company was going to buy it shot to the moon . but the deal fell through,i had bough a lot on margins. I lost 10.00 in one day,i was pretty much done.and I remembered some thing I heard,….STICK WITH SOMETHING YOU KNOW. so all those paper investments sometimes are not worth the paper they are written on. I haven’t had a credit card in ten years or so. CASH IS KING and don’t forget it. I allways keep a few grand where I can get to it. if a deal comes along,youve got to have bullets…that’s cash.if I run into some one at the gas pump and they’ve got a nice car they want to sell and I can double the money by buying it and reselling it,you don’t have time to go to the bank,you got jump.just remember this,you cam make money in slow motion. this rule apples to everything ,not just to cars and boats.i made a lot fast easy money in the 90s,buying real estate ,shinning them up and triple the price.i would look at it ,ecide if I could make money,make an all cash offer and close while you educated people had their calculator out fiquring how much paint and carpet would cost.theres a lot of ways to get rich,and hell no you don’t need education,my neighbor is 80 yr=ears old and has had a lot of businesses hes bought and sold for a profit ,and I laught every time he has a yaed sale or something written. he cant spell at all,but hes like me just a smart screwed man. I just talked to my exwife shes a high flyer like most of you educated people,she gos all over the world as an IBM tech,her husband works at IBM too. shes got a lexus,a 500.000 dollar house,a cabin up in the mountains of Colorado. and shes taped out,if she was laid off tomarrow,she would lose everything.i don’t have all that bling,but when I lay down to go to sleep,im not worried,if my truck will be repossessed,or the bank will take my house. and by the way,ive probably averaged around 6000.00 a year for the past ten years.im rich,but most of you will never be,just remember,…ITS NOT WHAT YOU MAKE…BUT WHAT YOU KEEP. so forget about thses high priced gurus,email me and I will tell you how to get your fiancés together …and if wont cost a dime…FREE. THANKS

    Reply
  26. zone440

    Passion, dedication, patience and discipline along with hard work will take you there. I.m not underestimating education but I have met many successful wealthy individuals who have never even made it to college. However, I truly believe that education will unlock your true potential. But, then again I have met many educated individuals working who are working for uneducated non college graduates—go figure.

    Reply
  27. Froogal Stoodent

    I really liked that you included the Bill Cosby clip! That was an excellent show, with both hilarity and wisdom! People like Bill Cosby sure don’t come around every day!

    And anyway, out of the points you made here, my favorite was probably 1b: The inability to delay gratification WILL cost you money, and the entire industry centered around loans takes advantage of that fact! Another great article here!

    Reply
  28. S.

    I’m a Southern Belle.

    Reply
    • swag

      cool story bro

      Reply
  29. bad attitude

    I’m a multi-millionaire, retired with a low 6 figure defined benefit pension, zero debt, and I got by on C’s and B’S. I turned 19 on a Navy freighter headed to Saigon. The now richest kid from our 1971 graduating class ended up in Vietnam with the Marines after he got caught in a stolen car. He has a GED and could buy and sell Personal Capital a dozen times with spare change, probably actually has. The key to success, as I have experienced it, is not buying into anyone elses B.S. Think for yourself. Always, always, always question the system and authority. That includes academic b.s. artists. By the way, both me and the jarhead have multiple graduate degrees, but in relevent fields. We kept learning, which is way more important than academic success.

    Reply
  30. Anonymous

    PFF 50cent did it an he didn’t even go to skool haha

    Reply
  31. richie

    It does occur to me that non-rich people’s opinions of how rich people should act has a defined, built-in, idiocy.

    Reply
  32. Kevin

    I really don’t want to hear advice from someone who was born into money.

    Reply
  33. Anonymous

    This is the stupidest most self-limiting post I have ever had the honor of reading.

    Reply
  34. Anonymous

    No debt, no car, cheap apartment, 401 k that I need to understand better, monthly income around $1200.

    I just started doing a monthly budget to keep my finances under control in November, and it seems to already be paying off.

    I also plan to have a $1000 cousion in my checking account, and anything over that at the end of the month will be transferred into savings.

    I will indulge in things like trips on occasion, since you should be able to enjoy life now as well. But I can still both enjoy life and plan for tomorrow.

    Reply

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