Getting rich is really quite simple [10 Secrets of Millionaires' Money Management, usnews.com]! It's using the simple "bucket of water" approach. You have to add more than you spill out, so the level keeps going upwards. Never buy a new car, just a late model used. Buy at a discount, and never pay top dollar. Don't pay for the kids' education; just let them use student loans so they learn the value of a buck! Buy less, save more, and never live above your means!
Comment by Albert of NY
My wife and I have always lived below our means A raise always signaled an opportunity to save more and a bonus a means to pay off the mortgage. We made multiple savings accounts for car, vacations, and college ... contributing to them heavily. We maxed out what we could contribute to our 401(k). Our house was paid off early and credit cards paid off fully at the end of every month. At age 56 we retired. Our net worth is now over $1 million. My retirement dream has been to build a new house ... acting as my own general contractor, and it is now complete. If I had a credo to pass on it is that it is easier to live on less and be able to increase spending in the future than to live on more and have to cut back. We feel very fortunate and blessed in our life. We simply had a plan and worked it. Being financially independent is not an accident. It takes vision, discipline, a goal, and a plan.
Comment by Charles Preuss of AR
Taking action in these opportune times affords the leverage we need to sustain wealth. For example investing now when markets and real estate are at an all time low. Opportunity knocks not always at the right time in your life, but when it is least expected. Rich people do what most people are not willing to do. They find opportunities when the economy is challenging, they find opportunities and take action, when most other people have fear and turn away. I always learned "watch the masses and do the opposite." Take action, get out of your comfort zone, and keep growing every day. We have to become more of what we are to have more of what we want.
Comment by Maria Dempsey of CA
The basics in this article have always worked, except the future may create higher hurdles as we enter a "greed/envy" philosophy for supporting everyone by confiscating and re-distributing wealth. I believe for the first time, more voters pay no taxes, which will exacerbate the expectations for government entitlements. The article mentioned only 2 percent are millionaires, so if we taxed them 100 percent, it still would not be enough to fund our nation's collective wants, and would certainly diminish the inspiration and initiative to acquire wealth, whether through hard work, or luck. Since most lottery winners go bankrupt, I think it adds to the position that hard work and discipline are more a factor to being financially successful than being lucky.
Comment by Bob of IN
Paying cash for everything, although I do have credit cards, really makes you conscious of the cost of items. My house is paid off, my cars are paid for, and I have no debts. Always pay yourself first—401(k), IRA, and credit union savings, and then pay the bills, etc. Buy dividend-paying stocks with a long history of dividend increases like Sherwin-Williams (SHW). Back in 2000 they paid .54 per share, now they pay 1.40. The same money invested in 2000 is still there, but now it is earning roughly 12 percent per year instead of 2.5 percent. Put money/investments into something that generates passive income so when you are sick and can't work, you still have money coming in. Pay off credit cards every month. If you can't afford to pay cash, then you can't afford the item.
Comment by Michael of OH
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Edna Ferman 10:10PM May 31, 2009