He said, "spend less than you earn"... That's it.
I have lived by this mantra ever since my mid 20's. I get called "stingy" for it every now and then but i'll tell you what. It works.
I read a book when i was in business school that taught me more than any class I had taken during my 6 years in college. It was called "Investing for Dummies" but those people that made all those "dummies" books.
Two pieces of advice they gave that took no thought, no planning, and no expert financial advice that I followed were this:
- Invest in companies that make products you use and believe in. I bought Intel, Texas Instruments (because i was building computers at the time and was astounded by how almost all computers contain TI parts,) Starbucks, and CarMax stocks. This was in the late 90's. These stocks have grown immensely
- Invest in no-load index funds for the S&P 500. This is a no brainer because the 500 largest companies in the world, even if a few of them fail, is going to gain in value over time.
I haven't even looked at the values of either of these things in years, but the last time I did check, the magic of compound interest was really encouraging to me. Unless capitalism fails on a global scale, I'm going to be sitting on a pretty good chunk o' cash when I turn 60 something.
Sitting on a "good chunk-o-cash" is something to look forward to for sure.
I like the simplistic nature of your strategy...No bullshit, no smoke and mirrors...Just gold old fashioned logic. Nice work.
The spend less than you earn comment was so off the cuff and at first I was taken aback but within seconds it sort of started sinking in...That was almost 20 years ago...I've been deploying it since then and suggest everyone else does too...But that's a choice we each have to make for ourselves.
Thanks for your awesome comment. I won't say, "bring on 60!" because as good as sitting on chunky cash will be you want to live your life as it rolls out I reckon. :)
well i don't remember exactly how old i have to be to avoid capital gains taxes... by the time I am 60 they will have likely moved it to 80 or something crazy like that :P
Haha, yeah I hear ya! They keep moving the goal posts...And sub-40-year olds think they will have someone to look out for them, a government pension when they get to retirement age. Yeah people, keep dreaming...And spending every cent you have on afterpay/paylater... Idiots.