0 Replies Latest reply on Jun 4, 2015 8:49 AM by BoBraxton

    income, the rich and the wealthy

    BoBraxton

      evidence look / before making / a decision

      I read the Letters to the Editor (Washington Post) daily.

      One letter writer stated that those with greater income, because they can live well while spending a smaller and smaller percentage of their income(s), have a higher savings rate (put more of what they earn into savings and investments).

      While this may be stating the obvious, personally this turns things upside down.

      From my earliest earnings from work (which continued forty-nine years) my actions and personal financial rules (priorities):

      1) "pay God first" tithe - then offering of another 5% beyond the ten percent of pay (at that time, every two weeks, six days a week, ten hours;

      2) "pay self next" - put the bulk into savings / investing

      3) "pay what you must" - obviously, any bills (which I avoided)

      4) invest in what enhances your work (in my case it was tools for carpentry) - this is capitalism.

      5) anything that is necessities (eating, staying alive and in health)

      6) "wants" - for many months and years, this was minimal to non-existent.

      It may take five decades and more, but following this set of priorities can produce what some may consider to be "rich" or "wealthy."

      As regards "investing" this puts a degree of randomness, which in my view is an advantage.

      This was the basis for "dollar cost averaging" - invest in a steady and plodding manner.

      The other huge factor, of course, is compounding - over a long time horizon.

      If one waits to become rich and THEN considers investing, it is not likely to com to pass.

      Of course my "plan" might not either - but in my case - I had / have but one life to live and these were my choices (from age 15 / 16).