Wednesday, September 5, 2007

A real saver...

This guy makes $20,000 a year. I consider him rich. Why? Because unlike most people, he is set to retire with more money than he earned during his working years. In a safe portfolio he is looking at an income of around $40k not including social security. If someone making $100k/yr lived by the same principles, let's say, we can safely assume they would have a few million in the bank (adjusting for inflation) to draw from for retirement.

This just doesn't happen enough. Though we can attribute some of this man's earnings to wise stock investing, the meat and potatoes of this story is that the man saved. He didn't spend all of his income and he likely did not dig himself into debt (though the article doesn't say, this man is from a generation that frowned on debt so I safely assume he has little to none). You save your money and make it work for you, not borrow it from a bank and pay them for the privilege. That is how you build wealth. That is how this man making $20k a year has more money than many fresh retirees who are applying to Walmart because their savings portfolios consist of a company 401k that they already borrowed from to buy a new kitchen for their house.

Money does not build wealth.

Not to worry, maybe you can turn your hobby into a career (video) instead of retiring. Meanwhile, the parking lot attendant you smirked at from inside your BMW is working on his backhand.

1 comment:

Vranjya said...

Well in my country 20.000 dollars means a lot and who has them it means that are rich.