Rich getting richer versus poor getting poorer
The Kansas City Star
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.