Any stock investors here?

[Turock]

Jim--I agree with so much of what you're saying. The only debt I ever had was for real estate. I do the same thing with vehicles---drive them until you have to kick them into the ditch. It's the only way to get your money's worth out of them. I have a very low tolerance for debt. After I sold all my rental property, I no longer had any debts. Living debt free is REAL freedom. It's great not to be beholding to others.

I liked the BMW story. Chasing after "the world" and things "of this world" is nothing more than a prison. BEING is so much more important than HAVING. And you can only have so much crap, anyway--and then you have all the responsiblity of taking care of it. In this case, less is truly MORE. By not buying into what the world thinks is important,this will give you the money you need to have financial security later on. THEN--maybe you can go out and buy that toy--maybe even TWO of them.

 

[kevinlfifer]

I am a Registered Investment Advisor. I clear thru RBC.

Anyone thats wants to PM me I'll be glad to talk strategy and address some common pitfalls.

Investments are not a gamble, they are managed risk/reward that require research and analysis.

 

[jswordy]

Here is a perfect example of confusing income with wealth:

http://www.chron.com/news/us/articl...aches-affluence-5047261.php?cmpid=usworldhcat

The story claims the mass affluent are people making a certain amount of money per year. Note that it goes on to talk about how marketers are working hard to take that money off this folks as they make it. And it never says anything about how much the mass affluent keep. (That's the wealth part.)

Then you read about the druggist who's making $200,000 a year and says he'll feel rich when "I don't have to go to work every single day." To which I say, keep buying those expensive shoes and trips, and you'll never get there.

Turock, there is no way I could have weathered taking a 40% reduction in pay without the principles you laid out in your excellent email. Like you, my goal is to be beholden to few and ideally to no one. Zero debt is the way to go!

 

[wineforfun]

Turock,
Excellent, excellent points and ones to which I adhere too. I drive a 2003 car (paid for), clothes for work come off the 60%-70% off rack at JC Penneys and my credit card is paid off every month, and used only because I am paid cash back on all charges.

Jim,
I hear you loud and clear on the college loans. Unfortunately, my daughter is looking at 30K worth of them and does not have a job in her collegiate field yet. She is just working a regular job and having a hard time making the student loan payments.

 

[sour_grapes]

Here is a perfect example of confusing income with wealth:

Jim, I agree with your points, and I agree that it is shortsighted that people (as in this article) conflate, confuse, and confound "wealth" and "income." However, to be fair, the original meaning of affluent was that you had a large income stream. (The root of the word is fluere, to flow.)

 

[jswordy]

Jim, I agree with your points, and I agree that it is shortsighted that people (as in this article) conflate, confuse, and confound "wealth" and "income." However, to be fair, the original meaning of affluent was that you had a large income stream. (The root of the word is fluere, to flow.)

All well and good. My point is, from where does the stream come? Does it come from your wealth or your labor? Go back a few pages and see "Your Money or Your Life," then go to the library and check it out for free. Or go to the website posted.

If you grab "The Millionaire Next Door" while you are at the library, and read about the wealth millionaires all over who are below the radar because of their lifestyles, it will make your jaw drop. The marketers have their work cut out for them with this group.

The media and the society constantly tell us it is necessary to buy, buy. buy; that we need to make ourselves feel better with material things. To me, it's a form of enslavement. When you buy, you sell them your time - which you cannot get back, whether it is in the form of cash or a loan - to have this thing now.

I know someone who owns a great and productive business. He and his family live the highest-class lifestyle with the finest of everything. Yet he complains that he has a hard time sleeping at night and he is plagued by anxiety, restlessness and fear. He's worried the tap will be turned off and he'll lose it all, because he buys as fast as he earns.

Guess who the worst are at accumulating net worth, as a profession? Doctors and dentists. Amazing.

 

[sour_grapes]

Yes, I got your point initially. I don't have to check the books you mention; I have been living that lifestyle since I was a kid!

I totally agree, it is quite liberating to ignore marketing, and gratifying to simply sidestep the hedonic treadmill.

All well and good. My point is, from where does the [income] stream come? Does it come from your wealth or your labor?

I think the definition of "income" is fairly unambiguous. It may be from labor, or it may be from return on capital (i.e., wealth), but it does not mean your wealth itself.