The biggest thing blocking most peopel to financial freedom is their rising consumption rate.

As their income goes up, their consumption goes up, usually matching their income. This, in itself, is ******ed. Unfortunately, we see this over and over again, in the western lifestyle.

Make 30k? Live in an apartment with a roomate and live frugally.

Finally got a better job? Make 60k? Live in a nicer apartment alone, buy a nicer car.

Got to 80k? Buy a house, upgrade car, upgrade girlfriend.

Finally get to that 100k mark? Buy a bigger house, bigger car.. you get the picture.

If you really want a shot to become "rich", you need to spend significantly less than you make. Unfortunately our society puts pressures on us to spend it, which is a shame.

wil318466

Why would I bust my ass if my life is not going to be any better than the guy making 1/4 of what I make?

That's horribly pessimistic but doesn't leave much room for debate. I guess we just have vastly differing opinions. All I can say is that 100% of entrepreneurs were unqualified to own businesses at some point... gotta start somewhere.

That reminds me to add to OP's list. Successful people are generally comfortable with being uncomfortable. They know how to find answers to problems.

they have rich parents

I think Warren Buffett has billions of dollars, and no private plane. I think he has saved billions of dollars directly as proof in contradiction with everything you believe. I think the people who are rich know you need to spend money to make money.

You still need to spend less than you earn. Theres huge difference between this and just being cheap. Cheap people save, and can't comprehend spending money in general even if it means creating more money. Thats why you might have your bias. However, a guy who makes even 200k, but spends it all on beamers and eating out is going to end up having an asset appreciation rate similar to a frugal man making 60k.

No he owns Netjets instead. He has always claimed that fractional jet ownership is considerably better. Very few people need to own a private jet but that doesn't mean they don't use them.

He doesn't own a park of yachts even though he could, he has pledged his assets to be donated at death, and could definitely be living a far more lavish life than the same house in Omaha. Please try to argue that Warren Buffet is a hot shot wall street ferrari collector as you imply are the types of people who are rich.

Also, point out the fact that he has billions of dollars, and his lifestyle probably at best, approximately the same as a guy with one billion burning money. He still finds some motivation to "bust his ass" despite it not materially increasing his wealth at this point.

1. they own their own business
2. they are smart
3. they work hard
4. they were in the right place at the right time
OR
5. they are over 65

but really those are just guesses

You proved my point.

Whats wrong with living in a modest house, or driving a modest car?

I drive a 10 year old car. I'm 34. A kid I work with who makes about the same money but is 7 years younger than me asked me "Why don't you buy a nicer car?" And I replied "because I like having money in my pocket, instead of spending it all on stuff that doesn't make a difference."

To him, I looke like an idiot for driving a 10 year old car.

To me, its more money I can save or put away for investing, or for a nicer house. Spending it on a car is a waste, in my opinion. In his, its not. Just depends on the person.

Warren Buffet is so famous that he really doesnt need to buy any of the status symbols that many non-famous people surely would if they were in his position.

He wasn't always this famous, and before then was probably wealthy still. Theres not even a point in arguing that Warren Buffett is closer to frugal than anything else.

I read a story somewhere that he was driving around with Bill Gates in his 20 year old Buick, and it broke down on the side of the road and they had to wait for Triple A.

Pretty funny that two of the richest people in the world broke down on the side of the road.

I didn't say he is and I knew people would bring him up immediately -- given his level of wealth he lives very frugally (I'm sure he is the idol of all cheap people who dream of making it one day). Now how many people are there like Buffet vs how many people like I describe?

Theres plenty, you wouldn't know them because they are building wealth instead of giving parts of it, loudly, to others. If you can't see the merits in not constantly ordering bottle service even if you have the money theres no point in this discussion. You can spend a lot if you make a lot, and be rich. You can still be rich if you make some, and spend less. There is no reason one is better than the other. The only key spending quality that you must have in both scenarios is willingness when it will make you more money.

I think the scope of your comparison is too narrow.

Hypo: Year 1:
Guy 1: 30k/yr
Guy 2: 120k/yr
Assume Guy 2's strategy is to only use 25% of his disposable income.

During the first year, #2 will be SIGNIFICANTLY less stressed about potential financial issues/disaster because he has massive padding, whereas #1 is probably scraping by. Note #2's added comfort in knowing that he has cash piling up and invested. So, while yeah, you're living under similar standards, there is a disparity in quality of life.

Hypo: Year 5:

Guy 1: 30k/yr
Guy 2: 240k/yr
Same strategy

At this point, #2's living 2x as well as #1, has more cash going to savings/investments, and is still living at 25% his means.

I don't think I made any huge logical leaps here. Living substantially below your means HAS to relate to considerable growth over time.

I guess a definition of rich would be helpful. How are we defining rich?

Haha thats hilarious. How can anyone say its not completely irrational. What is the value of these peoples time?

Id be interested to know their spending habits when they were younger. Was Buffett always that frugal? At this point it would be bad PR for them to spend extravagently.

Yeah, I mean, I could have broken it down the way you did, but you get my point. People's consumption usually just goes up and up.

Yes so? When guy two dies his executor will say **** this guy had a lot of money too bad he led a ****ty life and then his kids will blow it all.

No one is disagreeing that if you don't spend any money and just keep taking your cash and investing it to make more cash you will make a lot more money. That is pretty ****'en obvious.

The question is can someone actually do that and remain motivated? I know people think they can but my experience is that they can't -- at least most can't and you certainly are not motivated as much as people who have shifted their happiness curve. People are naturally lazy.

Yes, they can. A lot of rich people make getting rich the game they play. They enjoy the challenge of building their business or of earning excess returns on their capital. This kind of motivation leads to far greater achievements, and as a result, wealth, than motivation derived from expectations of more luxurious consumption.

I don't think people are naturally lazy at all. People, in general, don't like going to work and doing some crappy repetitive job over and over again for a paycheck that doesn't allow them to do the things they do. Yes, I would agree with that.

But look at the richest people in the world. They all goto work. Why do they do this? I thought about this years ago and realized the reason they all go to work is because they have "jobs" where they actually make decisions. To them, its a challenge.

Most jobs are NOT a challenge. Most jobs suck. Most people don't want to go to work to do those jobs. Rich people don't have "jobs". They run ****.

Outside of horrible personal finance books and people who have not yet actually made it I have never met a single person who thinks this way and I know a lot of people who own larger businesses and/or have a lot of money. I'm sure there are some out there but I would guess most likely had some sort of absolute scarcity situation as a child that warped the way they think.

Life is finite -- we all die. If you didn't keep upping your lifestyle there would be no rational point in accumulating more than $8-10M. Playing a game is certainly not going to motivate someone to work hard when they can have the same lifestyle and just do whatever they want.

Forget about money -- people on 2P2 fancy themselves to be smarter than the average bear. In school if you were smarter than your peers and could pull off better grades than them regardless of effort did you still bust your ass to get that little bit higher or did you just get the A with no effort and <S>party</S> play WoW instead?

You do know that there isn't a correlation between success and intelligence, right?

I'm starting to wonder about your "view".

There isn't a correlation between intelligence and success?

Yeah all those stupid people making millions.

More often than not the rich people I've met were more likely to have been the Toga Party King in college than the 4.0 student. They are still at college though, so I dunno.