SAVING MONEY can make you poor!

[STR8UP]

How can saving money make you poor?
1. Saving is finite.
You can only save so much. How many people can save EVERYTHING they make? Not many.
2. Saving hurts.
Life shouldn't be about denying yourself of the things that make you happy, including the things that cost money.
3. Saving can become an obsession.
It feels good to get a great deal, even for those who have plenty. So what's the problem? The problem is, when you are obsessed with saving money, you will miss opportunities to MAKE it.

Now let's look at earning:
1. Earning has unlimited potential.
You have to KNOW that you CAN be wealthy. Anyone can, if they do the right things. When you learn how to do it, your potential is limited only by YOU.
2. Earning feels good.
Earning allows you to spend and invest more. Enjoy your life- learn how to earn!
3. Earning can also become an obsession.
When you learn how to earn more money with your signature than you can putting in a year on the job, how could you NOT become addicted?

Bottom line-
1. It is always wise to keep your spending in check, especially in the beginning. Saving money DOES teach you discipline. However...
2. Make sure you are concentrating on MAKING money first. Saving comes second. How much easier would it be to save money if you were making double or triple or a thousand times your income?
3. When I speak of "making" or "earning" money, the main thing I am referring to is increasing your net worth. Learn how to think like a wealthy person, and one day you will BE a wealthy person! Your job is probably time consuming, stressful, and limited as far as earning potential and it will never make you rich. Learn how to INVEST to make money and the possibilities are truly limitless!

 

[check_mate_kid_uk]

you have 1200 posts yet this is the first i have heard of you. Well anyway, im not quite sure what you trying to say? are oyu having problems saving so trying to come up with reasons why its bad? I think saving money is good because then when you want to buy somthing big you already have the money to buy it with. I also dont think saving iwll stop you form earning more unless oyu run your own buissness and that saving is at the cost of not re investing, which in buissness is vital. But if you are just an employee then why not try and save what you can instead of wasting money?

 

[tristan22]

STR8UP

You have made some great posts here at Sosuave. However, i would like to know why are alot of your posts so vague?

 

[STR8UP]

Originally posted by check_mate_kid_uk
are oyu having problems saving so trying to come up with reasons why its bad?

Not at all. And I didn't say saving was bad, I said it can make you poor.

I should also clarify that when I say "saving" I am talking about two different things, BOTH having the potential to make you poor.

One definition of saving is to save money, as in earn it and hold it in the form of cash (or in a bank account).

The other definition of saving would be trying to get a lower price on something you purchase.

I also dont think saving iwll stop you form earning more unless oyu run your own buissness and that saving is at the cost of not re investing, which in buissness is vital.

Ah HA!

You hit the nail on the head, but you neglected to account for ONE THING.

But if you are just an employee then why not try and save what you can instead of wasting money?

This is what you didn't account for. YOUR MONEY, YOUR FINANCES is a business in and of itself! This is how saving money (money in the bank) can make you poor. Money should be INVESTED, not saved.

The other "saving" (trying to nickle and dime everything) can make you poor because instead of focusing on bringing in more money (or more importantly increasing your net worth), you are trying to squeeze what little you can out of your current situation. It closes off your mind which keeps you from progressing.

I'm not saying that you SHOULDN'T save by spending less than you make or shopping for a lower price, I'm saying that you need to be conscious of the fact that much of the time when you save you think you are getting ahead whenit is actually pulling you back.

You have to learn to think like the wealthy!

 

[STR8UP]

Originally posted by tristan22
STR8UP

You have made some great posts here at Sosuave. However, i would like to know why are alot of your posts so vague?

Because the key to wealth is in how you think.

There is lots of how-to material available on buying real estate, stocks, and businesses, but if you understand the basic principles behind generating wealth. If you think correctly you can make it happen regardless of what you do specifically to achieve it.

Change your way of thinking and the rest will fall into place.

 

[tristan22]

I have read all of the books, but alot of the books are dated(finance wise).

1. During this time (low interest rates) you need some form of capital to get loans. You make it sound as if someone with $500.00 in their banking account can just go out and start buying real estate and making investments. The banking business is booming, so they are not hard up for people taking out loans.

2. Most of the people here on Sosuave are young. They graduate from college making 25-30 grand a year. Factor in a car payment, rent, insurance, loans, etc, etc, etc, and that leaves them with very little to invest.

3. I read the Russ Whitney book you recommended and that book is beyond dated. During the late 70's and early 80's, lots of people (the risk takers) got very wealthy off of real estate deals. His ideas are great, but they aren't very beneficial in todays economic times.


4. I know very few people who come from minimal means who achieve great wealth. Most peoples wealth derives from some sort of financial break or break in general (meeting the right person/persons, inheriting money, or coming from a wealthy family). Very few people become self made millionaires based on their own merit!

5. There is an old saying. When you come from wealth their is only one way to go.........UP! I have noticed alot of people i know who come from wealthy families tend to be successful without even trying to be successful. It's like they fall into great jobs and financial greatness; they never struggle in life and always have a golden parachute. It amazes the $hit out of me!



I'm not trying to start an argument, i just wanted to point some things out. Maybe you can fill me in on some things i might be missing!

 

[STR8UP]

Originally posted by tristan22
1. During this time (low interest rates) you need some form of capital to get loans. You make it sound as if someone with $500.00 in their banking account can just go out and start buying real estate and making investments. The banking business is booming, so they are not hard up for people taking out loans.

I'm not sure where I mentioned anything about loans in this posts, but you are wrong about needing capital to get loans. A good credit score will allow you to get loans. There are even ways to borrow if your credit is shaky.

As for banks, when I started out you needed 30% down payment to buy investment property. Today I am able to regularly buy with 5-10% down, and I sometimes use BORROWED money as the down payment! That means I don't need ANY capital whatsoever.

As for the "anyone with $500" comment, you have to understand that you won't go from 0-60 in 3.5 seconds when you are just starting out. You talk as if it is impossible because there is a huge mountain standing in your way that is impossible to cross. Trust me, my mountain was as big as anyone's. I started by building credit, learning, and as soon as I was able I got started small.

2. Most of the people here on Sosuave are young. They graduate from college making 25-30 grand a year. Factor in a car payment, rent, insurance, loans, etc, etc, etc, and that leaves them with very little to invest.

You don't need to SAVE to invest!

CREDIT is more important than cash, ESPECIALLY in the beginning. I bought my first property with a down payment that I saved because I didn't know any better. I bought my second and third WITHOUT down payments because I realized that it would take me FOREVER to save up enough to repeat the process. At that point I realized that if you are borrowing $70,000 to buy a $100,000 property, why not borrow $100,000 and not have to spend the time saving? leverage baby, leverage.

Do I need to post a SPECIFIC example of how it can be done? Study Whitney, Sheets, Allen, and any of the other authors that teach no money techniques. IT CAN BE DONE.

3. I read the Russ Whitney book you recommended and that book is beyond dated. During the late 70's and early 80's, lots of people (the risk takers) got very wealthy off of real estate deals. His ideas are great, but they aren't very beneficial in todays economic times.

Show me ONE outdated idea in his book and I will show you TEN that can be used to make you rich long after you are gone. You are making excuses.

4. I know very few people who come from minimal means who achieve great wealth. Most peoples wealth derives from some sort of financial break or break in general (meeting the right person/persons, inheriting money, or coming from a wealthy family). Very few people become self made millionaires based on their own merit!

Where do you get your facts?

You have the classic attitude that you have to have rich parents or get lucky to make it happen. With that attitude it won't happen for you, that's for sure.

My parents filed for bankruptcy when I was a kid. By the time I got out of high school they were still struggling. I had to move out around the same time when they finally managed to buy a house that was too small for all of us. My parents are still having a hard time.

I could have played the victim and cried about how unfortunate my circumstances were, but instead I LEARNED (yes, building wealth can be learned and it doesn't require that you start with any kind of advantage) how wealth is made and made the decision that this was the road I wanted to travel.

5. There is an old saying. When you come from wealth their is only one way to go.........UP!

There have been quite a few people earn millions a few years ago acting or playing in a band that are BROKE today. Money helps when you are starting but it is knowing what to do with money that allows you to keeo and build it.

I have noticed alot of people i know who come from wealthy families tend to be successful without even trying to be successful. It's like they fall into great jobs and financial greatness; they never struggle in life and always have a golden parachute. It amazes the $hit out of me!

What is successful? A good job? A nice car? A big house? You need to learn how to measure success (net worth). I would bet you would be surprised if you knew the net worth of many of these individuals you believe to be "successful".

I'm not trying to start an argument, i just wanted to point some things out. Maybe you can fill me in on some things i might be missing!

I think your problem lies in your attitude about how wealth is accumulated and the fact that you see every obstacle as a stopping point.

I face challenges every day. The difference is, I know by now that there is almost always a way to get over or around an obstacle, and I usually learn lessons that will make me MORE money in the future. It's all in how you look at it. Don't be your own worst enemy, there are plenty of more important things you should be worrying about.

 

[tristan22]

I'm not crying victim, pointing fingers, or making excuses. Of course you don't have to come from money to make money, but it helps....it helps ALOT! How many successful people do you know who have kids living in poverty....probably none!

I grew up in one of the richest parts of the UNITED STATES (more millionaires and billionaires per capita then any other place), so i'm not making assumptions. I had rich friends, my family was involved in the community, so i know for a fact--these individuals aren't a rags to riches story! These people are worth alot! If you live in a 10 million dollar house.............YOU HAVE MONEY!

I'm not some idiot who assumes someone is rich based on their appearence, house, cars, etc. I realize wealth comes in all shapes, sizes, forms, etc. So your assumption about my definition of wealth is off! I just happened to grow up around people who had lots of money and who lived in monstrous houses, had exotic cars, and spent money like it was nothing! I also have two relatives with millions of dollars (through inheriting and saving every dime) who live like bag people!


You seem to be touchy when someone brings up reasonable questions. Listen bro, i'm not trying to demonize you anyway so stop with the assumptions you seem to freely throw around.

 

[STR8UP]

Originally posted by tristan22
I'm not crying victim, pointing fingers, or making excuses.

I didn't say you were crying victim or pointing fingers, but you are making excuses as to the many reasons you feel that things CAN'T be done, instead of trying to figure out ways to solve problems.

I get the impression that you are interested in this stuff. If you are serious about it you have to stop looking for reasons why you can't do it and start figuring out how you can.

I'm not some idiot who assumes someone is rich based on their appearence, house, cars, etc.

Nobody said you were an idiot. It is common to assume that material possession equal wealth. Even if you DO know that the only thng that really matters is net worth, how many people have showed you theirs? None I would bet. That means that you saying that the people around you are successful is only an assumption. Everyone makes assumptions and that's ok, as long as it doesn't cloud your perception of wealth.

You seem to be touchy when someone brings up reasonable questions. Listen bro, i'm not trying to demonize you anyway so stop with the assumptions you seem to freely throw around.

You weren't asking questions, you were stating assumptions that aren't based in reality. It's ok if you choose to believe something is impossible or too hard, but don't discourage others who might not limit themselves in that way.

Take my advice for what it's worth to you, but you are truly defeating yourself before you have even gotten in the game. Why so many negatives?

 

[Create Reality]

Inflation also takes a toll on Savings over time.

 

[ShizamDaMan]

Cool stuff. Not that I needed another reason to justify spending 500 dollars on a new guitar amp...

 

[Page]

Originally posted by Create Reality
Inflation also takes a toll on Savings over time.

Exactly.

If you leave your money in a saving account for a long time (10 years or more), inflation will begin to eat it.

It works like this: Sure, you're getting interest by leaving your money in there, but it's a mere pittance compared to how little that money will be worth in tommorrow's dollars.

The only way you can make money by doing long-term saving is if the dollar somehow magically increases in value signifigantly over time. However, I can't see this happening as our currency has depreciated exponentially over the past few decades (a dollar now has a fraction of the purchasing power as it did in the 1950s) and I don't see a change anytime soon. Our money is pure fiat money--- we went off the gold standard, then went off the silver standard, and we are now on what I call the bullsh!t standard. Our money is only good because the fed claims that it is good and people believe that it is good. Take away the confidence in the dollar and you literally have nothing.

 

[STR8UP]

Originally posted by ShizamDaMan
Cool stuff. Not that I needed another reason to justify spending 500 dollars on a new guitar amp...

I know you are joking, but think about this for a minute.

When you want something, instead of thinking of reasons why you can't afford it, try thinking of ways you can put enough money in your pocket to be able to buy a ten of them. Don't buy it until you have made the money, but if you manage to figure out how to make enough money to buy ten of them, treat yourself to one.

Again, the point of this post is to make you expand the possibilities in your mind which will in turn expand your wealth.

 

[diplomatic_lies]

Well I don't completely agree, some savings accounts offer up to 8% interest (in Australia they're called long-term deposits). Its always good to have a very secure nest egg, in case something goes wrong with your high-risk investments.

 

[Create Reality]

Putting that money, which would normally be put into a savings account, into assets seems like the smart thing to do. Buy a house, fine jewelry, ect. appreciating assets and when it comes time for cash, there is an entire base there to be used!

 

[OzyBoy]

I agree with this, its got a lot to do with how you think but also with how you spend (or not) what you earn.

 

[Mr. Fancy Pants]

STR8UP - I like your insights. You offer a lot of valuable advice.

I've read the Rich Dad books and a couple other wealth books but my problem is just like you stated, it seems the mountain is too big and I don't know where to start.

I have access to a few grand through my credit cards but if I was to borrow on those I would have to find something that makes me at least 15% in order to make money. And, since I haven't been exposed to any other ways of making money (other than the stock market which would be tough to get 15% in), I'm back at square one.

I know in another one of your posts you outlined the benefits of building credit and here you said you focused on building credit and started when you were able to. How small can one get started at?

I know the way to succeed at something is just to start doing it, but I don't even know what to start doing

 

[spider_007]

my family (being foren and all) does that a lot. They work EXTREAMLEY HARD, and put all their money in the bank or safe. At the end (near retairement) they have quiet a bit, however they would have more if they took advantige of some things like RRSP......

 

[STR8UP]

It's not easy to quantify because when we are kids most of us are taught that money only has a few different components. You start out by getting a job earning as much money as you can. You then proceed to save as much of your income as possible. When you have managed to save some of this income you sock away a chunk for emergencies, then invest the rest. This is the standard by which most people manage their money, but in truth there is a WHOLE other dimeinsion that most people don;t even know exists.

Well I don't completely agree, some savings accounts offer up to 8% interest (in Australia they're called long-term deposits). Its always good to have a very secure nest egg, in case something goes wrong with your high-risk investments.

Before you define security, you have to know what is real security and what is false security. MOST of the time money sitting in a savings account is FALSE security. People put 3-6 months living expenses into these kinds of accounts, but what if you get hurt and can't work for a year? Or the rest of your life?

Putting that money, which would normally be put into a savings account, into assets seems like the smart thing to do. Buy a house, fine jewelry, ect. appreciating assets and when it comes time for cash, there is an entire base there to be used!

The whole idea is to keep your cash and your credit working for you. In a savings account your money is doing nothing but whithering away. Have an emergency CREDIT account, sink your cash into quality investments, and in a short time your cash account will grow. Credit can buy anything that cash can. It's all about floating yourself for a period of time.

I've read the Rich Dad books and a couple other wealth books but my problem is just like you stated, it seems the mountain is too big and I don't know where to start.

I have access to a few grand through my credit cards but if I was to borrow on those I would have to find something that makes me at least 15% in order to make money. And, since I haven't been exposed to any other ways of making money (other than the stock market which would be tough to get 15% in), I'm back at square one.

I know in another one of your posts you outlined the benefits of building credit and here you said you focused on building credit and started when you were able to. How small can one get started at?

I get this question all the time.

Why not start learning and earning money with an Ebay account? Keep in mind this is more of a JOB than a business (due to the fact that YOU will probably the one doing all the work), but at least it gives you an idea of how markets work, shows you how to deal with money, etc.

Find an item that you can buy from person A and sell to person B for a profit. I have bought several things from Ebay that I have owned for over a year and could sell today for more than I originally paid. It's pretty easy, just search completed items to find what the Ebay market value of something is. Factor in your shipping and stuff, calculate your risk based upon that person's feedback, and make the purchase.

Next turn around and resell the item. You might want to use a different account so your customers can;t see what you originally paid. The key to turning a profit might be as simple as creating a better ad. Or maybe buying your item during a slow season and selling it when there is higher demand. For anyone who doubts you can do this, I once bought something NEW from a local store, used it for 6 months, and turned around and sold it on Ebay for a profit!

So if you pay $70 for an item (includes shipping etc.) and sell it for $100 (not including shipping charges to the buyer) your gross profit is $30. Your credit card interest over a few weeks will be less than a DOLLAR. On top of that, if you can manage to pay the debt off during the float (grace) period during the first month you aren't charged any interest, it costs you NOTHING to use the credit. Make sense?

You won't always make money, but thats the game.

Start with Ebay, then look for bigger and bigger opportunities to apply your knowledge and resources!

 

[ShizamDaMan]

Originally posted by STR8UP
I know you are joking, but think about this for a minute.

When you want something, instead of thinking of reasons why you can't afford it, try thinking of ways you can put enough money in your pocket to be able to buy a ten of them. Don't buy it until you have made the money, but if you manage to figure out how to make enough money to buy ten of them, treat yourself to one.

Again, the point of this post is to make you expand the possibilities in your mind which will in turn expand your wealth.

Earlier I was thinking about buying an intermediate quality amp that I'd use until I forked over the money for the amp I wanted (the one I bought). Then I decided to just buy the one I would eventually buy, as it's powerful enough to do shows with.

Perhaps I'll get famous doing some gigging around my city, and then be able to afford 10 of them