This is absurd. Are you really saying that not having to financially worry and doubling your living standards every five years is ****ty?

Plus, who cares about when you die? I don't see how that is relevant at all. If my kids blow it all, why should I care? I'm not trying to establish some elite dynasty or something.

This is an unavoidably personal question. Power and greed seem to be primary motivating factors, especially compared to just wanting expensive crap. I know about a billion people who want nice cars and big houses who aren't willing to work for it--which seems to negate your argument that you need to spend money to want to work for it. At least, that's what I understand your argument to be.

I sharply disagree with this. I believe people are more compelled by dissatisfaction/fear/desire/[any emotion resulting from something lacking]. Happiness denotes contentment, which essentially diffuses ambition.

However, I 100% emphatically agree here. If you aren't compelled by something--whatever that something is--there is no reason to go above and beyond. It's like entropy.

I'm sorry man, but you don't know what you are talking about.

There are several factors involved in people achieving "success". Don't think intelligence is the most important one.

If this were true, the smartest people in the world would be the most successful, and we all know that is not true. Agree?

Its blatantly obvious. Look at our last 2 presidents.

The assumption that people at toga parties are not smart while people with 4.0s could be your problem. University (at least undergrad) is a joke so getting good grades isn't hard nor is it an indication of intelligence. Someone could be of average intelligence and as long as they work hard they get good grades.

Yes. Having enough money to not have to worry about things when you are old and no longer capable of / inclined to earn income has some value. Having any more than that is a complete waste of resources unless you are concerned about future generations in which case you are sacrificing your life for your children. There is absolutely no other value in accumulating wealth beyond what is required to maintain you standard of living for a reasonable lifespan.

Yes they are not what I'm talking about.

You are misunderstanding my argument. My point is to shift your happiness curve so that you are not happy with what you have but instead want to go to the next level. My whole point is that if you don't develop expensive tastes you become complacent and happy (because upper-middle class is a pretty decent life) and thus lack the motivation to actually achieve wealth.

So other than increasing the enjoyment of life what else could possibly serve as a motivation here?

Well based on this post I can see why you'd want that to be true but it certainly isn't the case. The correlation between building wealth and intelligence has been established quite definitively.

I'm curious if intelligence is not in the top three determent factors for success what do you think is?

This point is patently false, I agree with skindog here. People who accumulate the upper end of wealth enjoy the game of building an empire/taking from others in a zero sum context. Few people past that bracket could ever spend what they have earned, however almost all of them continue to work hard while they can to expand and grow their money. If your inclination were true the only people who are billionaires would be the ones who were too good for yachts, and have moved onto spaceships. That's not the case.

I don't think it's rational to believe anyone has expensive enough tastes not to retire the second they make a billion dollars if their need to spend was all that governed. Yet we keep having billionaires that work.

As for actually meeting one, go meet an actual entrepreneur. It's a pretty widely held stereotype that entrepreneurs treat their business as their baby(not all, but enough and with severity), and things get really touchy when someone tries to takeover.

1) No debt

Disagree.

First, accumulating wealth beyond your applied standard of living is prerequisite to further accumulation of wealth. (We agreed on this, apparently it was @$!#-ing clear.)

Second, having a financial safety net incidentally increases general quality of life by reducing stress.

Third, cash/asset excess is also usually prerequisite to qualify for financing/purchase of big ticket items (houses, etc). In otherh words, buying/financing a big house or whatever doesn't REQUIRE you to blow all of your disposable assets, but those assets contribute to acquiring financing.

I could probably come up with more reasons.

I believe your argument was blowing all your disposable cash on the most expensive stuff to make yourself happy motivates you to work more to buy even more expensive stuff. Your "why live a crappy life" stance completely breaks down this quote. I believe you're essentially backpedaling because you're seeing my point.

This is MY point. You were arguing that you should max out your disposable income bc apparently that's what motivates people. Remember when I said that emotions stemming from the LACK of something is the main compelling factor?

You can't use those people as typical examples -- once you get to the ultra-high net worth it becomes about getting stuff money can't buy which is entirely different. I'm talking about more realistic numbers of under $25M.

I know plenty of entrepreneurs and not one of them feels this way. One of my friends sold his second business a few years ago for about $10M and is on his third. He was already planning an exit strategy of selling it off before they even had offices for it. My GF owns her own business -- offer her more than it is worth and you can have it. Almost every entrepreneur I know has sold at least one business. There only desire to build it is so that it has value to someone who will buy it from them.

So we can't use people everyone knows, instead we have to use your sample selection of friends no one else knows as evidence. Am I allowed to point at Jerry Yang? Or perhaps Bill Gates who to this day still has problems leaving MS? What about Branson?

I only point them out because they are a common ground that everyone knows and blatantly violate your assumptions about what drives people. I know that there are plenty of money burning materially oriented rich people with vain desires. I am just letting you know that more likely than not the reason you think only money burners have the motivation get rich is a symptom of self-selection bias in that you only notice vain money-burning wealthy individuals. How often do you notice a multi-millionaire who doesn't really care to live in a mansion owns a 200k house and a Honda? Rarely, and not because they don't exist.

You guys are confusing being frugal with being cheap. There is a big difference.

Lets get something straight - just because you believe in something doesn't make it true. This is also true in my case. So, if we're going to have a discussion, lets back it up with facts, ok?

There have been numerous studies showing the most financially successfull people are NOT the most intelligent people.

You are oversimplifying something very complex, and overlooking other factors which weigh very heavily on being successfull.

You really just don't know what you are talking about.


"Some researchers claim that "in economic terms it appears that the IQ score measures something with decreasing marginal value. It is important to have enough of it, but having lots and lots does not buy you that much."[103][104]

Other studies show that ability and performance for jobs are linearly related, such that at all IQ levels, an increase in IQ translates into a concomitant increase in performance.[105] Charles Murray, coauthor of The Bell Curve, found that IQ has a substantial effect on income independently of family background.[106]

Taking the above two principles together, very high IQ produces very high job performance, but no greater income than slightly high IQ. Studies also show that high IQ is related to higher net worth.[107]

The American Psychological Association's report Intelligence: Knowns and Unknowns[31] states that IQ scores account for about one-fourth of the social status variance and one-sixth of the income variance. Statistical controls for parental SES eliminate about a quarter of this predictive power. Psychometric intelligence appears as only one of a great many factors that influence social outcomes.[31]

One reason why some studies claim that IQ only accounts for a sixth of the variation in income is because many studies are based on young adults (many of whom have not yet completed their education). On pg 568 of The g Factor, Arthur Jensen claims that although the correlation between IQ and income averages a moderate 0.4 (one sixth or 16% of the variance), the relationship increases with age, and peaks at middle age when people have reached their maximum career potential. In the book, A Question of Intelligence, Daniel Seligman cites an IQ income correlation of 0.5 (25% of the variance).

A 2002 study[108] further examined the impact of non-IQ factors on income and concluded that an individual's location, inherited wealth, race, and schooling are more important as factors in determining income than IQ.
"

http://elearningtech.blogspot.com/20...net-worth.html

http://showbizandstyle.inquirer.net/...ss--IQ--EQ--AQ

http://www.iqtestexperts.com/iq-success.php

http://scienceblogs.com/cognitivedai...for_you_as.php

http://www.kaaj.com/psych/BeyondIQ.html

http://www.mentorcorner.com/?q=node/51

How much money are we talking about? I'm talking about people who stress is not an issue. You don't have to be wealthy to have enough money to not worry about your future.

Again I think we are talking about different amounts here. House should be the only item where financing is even being considered as an option and barring US tax reasons that I don't understand for not being from there there is no reason to exceed a 65% LTV so there is never a financing issue.


Not all but a lot. Basically my argument is that the frugal mentality that is advocated in many wealth building self-help books doesn't work. That is not the same as saying you have to spend every last dime. You should always be pushing the upper limit of what is affordable while at the same time increasing your income.

No that is not what I'm advocating. I'm advocating that expensive tastes motivate you to go to the next level. If you are happy with X and your income can easily get you X you'll save and then build wealth with your disposable income by saving and investing but that will never get you to being rich. You need to eventually require 2X which now will force you to find a way to increase your income or be unhappy. Once you can afford 2X you eventually need 3X-- etc.

Here is what I agree with.

I apologize about all the quotes and copy/pastes from web pages. I never really thought about it much, never had to, really. I've known for 15 years that intelligence was not the most important factor for success.

Its trivial, once you get out of your schooling years.



"We should learn never to give up. It is more important to develop character skills, which depend more on diligence, perseverance and discipline than those based on hereditary intelligence. These traits have proven time and time again to be far more important in achieving success than other factors.

Ross Perot, self-made American multimillionaire and presidential candidate, recently addressed the graduating class of a small university. He first directed his comments to those ranked academically in the top of the class and warned them that many would not succeed because they would rely on their intelligence and not fully apply themselves.

Then he addressed those who were ranked in the middle of the class. He said they actually held the biggest opportunity to succeed in life because they knew the rewards would not come easily and would not take their first achievements for granted. They understood they would have to work hard and persevere to succeed.
"

wil318466

Six garbage links are your argument? Come back with peer-reviewed journals.

Also the quotes you took from Wiki mostly argue against your position so I'm confused about why you would post them.

yeah yeah, it's funny. But chilling with gates or buffett on the side of the road would be an excellent use of one of my hours.

Probably isn't so bad for them either. An uninterrupted hour to think and talk isn't an hour lost necessarily.

You're right, the links aren't peer reviewed. I'm going to have to learn how to find them.

The wiki paste was just showing that it isn't cut and dried as you think. Believe what you want, obviously you are not going to be swayed in your opinion, but you ARE incorrect.

Perhaps... my folks like in Newport Beach, so I've met quite a few and have drank/partied/heard stories about a lot of them. Suffice it to say I don't think there are many 4.0s in there. But their people skills are ridiculous.

http://www.sciencedirect.com/science...c34094838e15c0

http://www.sciencedirect.com/science...f29dddad666565

http://www.sciencedirect.com/science...67fbfd7162097a

To me, financial freedom is the ability to maintain or increase your lifestyle without being forced to work. The path to financial freedom involves the acquisition of assets that produce enough passive income to exceed your living expenses.

Cheap =/= No Risk Tolerance

Henry, you're not making any sense.

I'm on board that expensive taste CAN motivate you.

This does not compute.

Saving...and building wealth...with disposable income...by saving and investing...will never get you rich.

So...if saving money and investing it doesn't get you rich...wtf else can you do? What exactly are you suggesting? You made a circular argument that doesn't even lead to your conclusion.

And, how exactly, do you increase your income? Could it be, oh I don't know, "saving and investing what you save and invest"?

edit:
:sigh:
How do you do this, exactly? Doesn't money make more money? The word "limit" denotes an absolute cutoff. You can't push something that does not, by definition, give. If you set your budget at 25%, you spend 25%. If you "push" it to 30%, you're not abiding by the limit, and you're decreasing your ability to build wealth/income.

what if income goes down? Doesn't that make big spending people stuck? Maybe even destroy their wealth...

I agree on this trait (a trait of successful people that is). I used to talk about real estate to a number of people. What I found is 99% of people who talk about real estate...are still just talking about it 10 years later.

This thread got really awful really fast.

I read through all 5 pages and agree. BFI is getting ridic derailed these days. A lot of "know it alls"

I miss the day when people actually posted on BFI to learn...not to be "cool"...back to bogleheads I go I guess