Rich getting richer versus poor getting poorer
Ultimately, the fundamental difference between rich people and poor people is what side of the interest rate they are on. When interest rates go up, rich people say: “That’s great. I’ll be earning more money on my savings.” while poor people say: “Oh no. Now I will have to pay more to borrow money.” There is a reason that all those pay day loan offices are in poor neighborhoods. While you may start out with the poor people, you should try to eventually end up with the rich ones.
The old saying that “you can never be too rich or too thin” implies that we should try to achieve these two goals simultaneously. The key to both is frugality: frugality in eating and frugality in spending. John D. Rockefeller famously required each of his children to account for every penny of their allowances from the previous week. Any penny without a receipt or otherwise verified would be subtracted from the next week’s allowance.
Just as important as writing down your weight each morning in pursuit of thinness is the task of keeping careful records of your finances each day. Just writing down the numbers reprograms your subconscious mind to make these goals more important to you.
You cannot accomplish either weight loss or wealth creation if you don’t keep focused on these goals. This means getting receipts for everything or at least writing down your expenditures on a piece of paper until you get a chance to log them into your financial planning program on your computer. Not knowing where every penny went is just as bad as not knowing what you did or did not eat on any particular day.
The key to success is just being compulsive about the right things. It is a question of whether you are going to be in control of life or if life is going to control you. There is no true freedom without responsibility. You can choose to be a slave to your appetite and a slave to financial insecurity or you can be the master of your domain.
Larry’s commentaries can be found via Twitter under NDProfMarsh.
George Hunsucker
Northland
10 months, 2 weeks agoan example of the rich getting richer….
http://www.foxnews.com/us/2012/07/14/teacher-union-bigs-rake-in-dough-despite-budget-cuts-across-education-sector/?test=latestnews
Don’t you just love unions educators?????
Charles Purvis
10 months, 2 weeks agoThe trouble with classifying people as “the rich” and “the poor” is that virtually nobody stays in the same classification forever.
Of course the rich get richer. With few exceptions, the Forbes 400 has very few people who were on it ten years ago and are still there. They are usually surpassed by up-and-coming people who are making fortunes which dwarf those who already were on the list.
Same goes with the poor. Virtually all of us started out there at one point.
Steven Fetter
66223
10 months, 1 week agoThe funny thing about the wealthy; they tend to be a little smarter and work a little harder than the average person.
Mark Hastert
10 months, 1 week ago“The funny thing about the wealthy; they tend to be a little smarter and work a little harder than the average person”
Read more here: http://voices.kansascity.com/entries/rich-getting-richer-versus-poor-getting-poorer/#storylink=cpy
I’d bet that not one of them work as hard as the guy riding on the back of that trash truck that cleans up our filth, or the guys in the trenches fixing water main breaks so we have potable water to drink and bathe in. Oh I’m sure that many put in long hours behind a desk but work? Smarter? They went to the best prep schools money could buy, had the best tutors and coaches and ran with the most privileged crowd. They went straight into good jobs that ordinary people would never have a chance at.
In the words of the late Molly Ivins. They were born on third base and think they hit a triple.
Their greatest accomplishment is convincing others that they are smarter and work harder.
Jon Whitten
10 months, 1 week agoHastert, you are one bitter person.
George Hunsucker
Northland
10 months, 1 week agoJon,
This is how the likes of hastert view business and the rich…. Of course, the big 0 courts the rich for their money and takes vacations like the rich, on our dime of course, but that’s “different”….
Come on Nov. 6
http://www.washingtontimes.com/blog/watercooler/2012/jul/15/picketvideo-obama-if-youve-got-business-you-didnt-/
Steven Fetter
66223
10 months, 1 week agoMark,
In my observations, people that went to school, studied, did homework, stayed sober and off the party circuit and worked hard when hired to a job have done amazingly well.
People that did none of the above, despite their advantages of family wealth, failed miserably.
I agree with the writer of this article that it is crucial to be in control of your life versus letting life control you.
Ultimately, who cares how people got more money than you? If money is important to you, take personal actions to achieve your goals.
Mark Hastert
10 months, 1 week agoC’mon fellas. I know, and I’m sure you do too, many many people who are intelligent, work diligently, and lost their jobs because they were in the wrong division after the merger. I see folks now laid off after 20+ years with the same employer not because they weren’t good workers or were stupid, but simply redundant. All things being equal, knowing somebody who knows somebody is a far greater advantage.
I’m smart and honest enough to know that a lot of life is luck of the draw. Sure, intelligence and diligence are attributes that will help you in this world but there’s always a good deal of luck involved.
On the other hand if the very rich have convinced you that they are better, smarter and work harder than you do then maybe they are.
Stephen David Simon
10 months, 1 week agoSo, Larry, where’s the data to support compulsive record keeping leads to wealth and sloppy record keeping leads to ruin? I see an anecdote about John D. Rockefeller’s kids, but I think that inheritance is a better explanation for why they got rich. As for John D. himself, maybe being rich changes you. Maybe after your first billion dollars, you become so paranoid that you start playing obsessive-compulsive documentation games with your kids.
As far as losing weight, the evidence there is pretty weak, as well. Weight Watchers, for example, encourages you to keep a dietary diary and count every calorie, and it’s a very good program. But competing programs such as the Atkins diet (don’t worry about calories from protein or fat) seem to have data supporting them as well.
The problem with any speculation on why rich people are rich and poor people are poor is that data is very weak (even weak by Economic standards). There’s no statistical equivalent of the “Trading Places” movie.
If you asked me, excessive record keeping is a sign of mental illness and an impediment to financial success. My income is above the median income, so the probability that I’m right about this is greater than 50%. Well, maybe not. Your income is above the median as well, I suspect, and we both can’t be right.
If you want to get rich by emulating the practices of rich people, why not follow the Howard Hughes example and let your fingernails grow to ridiculous lengths? Why not follow the Paris Hilton example and … Um, never mind.
Steve Simon, www.pmean.com