Get Rich Slowly!

Today is the second anniversary of Get Rich Slowly. In celebration, I'm reprinting this revised version of the article that started it all, a l-o-n-g post from my personal blog dated 26 April 2005. One year later — on 15 April 2006 — this site was born.

Today's entry is long and boring — it's all about the keys to wealth, prosperity, and happiness. Over the past few months, I've read over a dozen books on personal finance. Recurring themes have become evident. I want to share them with you.

These books often have embarrassingly bad titles, seemingly designed to appeal to the get-rich-quick crowd:

Some of these books really are as bad as their titles. But others offer outstanding, practical advice. The best books about money seem to have the same goal in mind: not wealth, not riches, but financial independence. According to Your Money or Your Life, which may be the very best of the financial books I've read, “financial independence is the experience of having enough — and then some”. More practically, financial independence occurs when your investment income (or “passive income”) exceeds your monthly expenses. Financial independence leads to psychological freedom.

To some of you, this will be common sense, stuff you've known all your life. To others, like me, this kind of thinking may be a sort of revelation. How is financial independence achieved? Again, the best books generally agree. What follows is my personal summary of the collected wisdom from their pages.

Step One: Prepare the Foundation

Building wealth is like building a house. The first step is to lay a foundation upon which the secure home of financial independence can be constructed. To prepare to build wealth, you must

  • eliminate debt
  • reduce spending
  • increase earnings

There are many approaches to laying the foundation of your financial life; the key is to find the ones that actually work for you.

Destroy debt
Most of the the books agree on one point: If you have trouble with credit cards, cut them up. Get rid of them. There is no compelling reason to keep them. You may or may not want to close each credit card account as you pay off the debt. Closing the accounts will ding your credit score (though not a lot), but some people believe it's a small price to pay to prevent possible future spending. I chose to cut up my cards and close my accounts — my credit rating is still outstanding. (For years, I lived without a personal credit card. I finally got a new one last summer, but only after I was sure that I would use it responsibly.)

Next, pay off your debts. All of them. For years, I tried the oft-touted method whereby you pay off your highest-interest debt first. Though this makes sense mathematically, it never worked for me. My highest interest debt was also my largest debt, and psychologically I just never seemed to make any progress.

However, I did have success with the “debt snowball”, as defined in The Total Money Makeover. I eliminated my debt by paying off the obligation with the smallest balance first. Then I took the amount that would have been applied to that debt each month and used it to pay off the second-smallest balance. When that was finished, I went to the next, etc. It only took me four months to pay off all my smaller debts this way, leaving me with two large balances (including a home equity loan). I was dumbfounded. I'd struggled with debt for a decade, and I solved the problem in four months? Good grief.

Slash spending
The next step in preparing the foundation is to reduce spending. First, track your expenditures for a month. Or two. Or three. (I use Quicken because it's quick and easy. Nowadays there are many web-based personal finance tools you can use.) After you've accumulated enough data, analyze your spending patterns. Are you spending a lot on shoes? Books? Alcohol? Dining out? Try to find expenses you can eliminate or reduce. For me, it made sense to reduce my comic book spending.

Many of the personal finance books encourage you to reduce your auto and homeowner insurance coverage to save money. This is also the point at which some books encourage you to adopt a budget. (I tend to think a budget is unnecessary if you remain aware of your current financial situation.) Note that all of the books I've read advise against purchasing a new car; all encourage you to purchase late-model used cars.

Increase income
The final phase in laying the foundation is to increase your income. Not all of the books mention this, and many people consider it optional. However, some authors who are adamant that this is an important step on the road to financial independence, and I've found it a valuable tool in my own life. How do you increase your income?

  • Become better educated so that your job skills are more marketable.
  • Work harder (and smarter) at your current job so that you qualify for raises and promotions.
  • Change careers.
  • Find a way to make a hobby profitable.
  • Or, as more than one book suggests, work two jobs.

By destroying my debt, slashing my spending, and increasing my income, I have changed my financial life. I no longer live paycheck-to-paycheck. I feel as if I really have laid a solid foundation for financial success.

Step Two: Build the Framework

The second step toward financial independence is to construct the framework upon which future wealth can be built: establish an emergency fund, maximize your retirement investments, and begin acquiring income-producing assets. This is what I've been doing for the past several months.

Build an emergency fund
Every book I've read stresses that the most important part of the framework, the first part that must be completed, is the establishment of an emergency fund. This emergency fund ought to contain enough money to support you for three to six months in case you find yourself without an income. I had difficulty grasping this concept at first. I wanted to skip this and move on to other, more exciting steps. But after seeing the results of “laying my foundation”, I was willing to suspend my disbelief and just do it. I built the emergency fund. I'm glad I did.

Maximize retirement accounts
Next, the books encourage you to maximize your retirement accounts. If you have a retirement account through work, contribute as much as you possibly can, as soon as you can. The magic of compounding derives its power through time. Establish a Roth IRA outside of work, and contribute the maximum amount every year. I've been funding my IRA for three years now — I wish I'd started sooner.

Explore income-producing assets
The final step in building a framework for financial independence is to invest in income-producing assets. For some reason, I'd totally missed this recurring theme until my friend Sparky recommended I read Rich Dad, Poor Dad, a book that's almost solely about this particular portion of the framework.

Beyond your retirement accounts, you should pursue other investments, specifically in income-producing assets. For different people, this means different things. Maybe it means bonds, maybe it means dividend stocks, maybe it means investment properties. It may even mean starting a business. It does not mean things like cars, or collectibles (coins, comic books, baseball cards), or expensive furniture. These things may be assets of a sort, but they are not income-producing assets.

I've done very little research into income-producing assets, but it's on my list for the coming year.

Step Three: Finish Construction

After you've laid the foundation to financial independence, and after you've built the framework, you must then spend years (decades!) finishing construction. All that is required during this time is persistence and discipline. Resist temptation. Do not accrue debt. Spend sensibly. Faithfully contribute to your retirement plan. Wait. Have the patience to get rich slowly.

The challenge during this phase is to balance current quality of life with future freedom. It's okay to allow yourself indulgences, but only when you understand the implications on your long-term goals. If you want a nice car and can afford it, then buy it. But don't sacrifice financial independence to do so.

Step Four: Move Into the House

Some years later, you will wake to find that your financial house is in order. It's finished. It's ready for you to move in. How do you know when this is the case? Financial independence is achieved when your investment income equals or exceeds your monthly needs. If the total of your house payment and living expenses is $1000 per month, then you are financially independent when your investment income reaches $1000 per month. Achieving this takes time. It's a slow, gradual process, but every book emphasizes that it's not only possible, it's inevitable if these steps are followed.

That's it. That's the combined wisdom of more than a dozen financial self-help books. I haven't fleshed out the final two steps as much as the first two simply because I haven't reached them yet. There are many books on how to best approach each step (even each substep!). I'm sure to obsess over each one in turn.

Bullet-point wisdom

As I've read dozens of personal finance books, it has occurred to me that these volumes are easy to summarize. Their content lends itself to bullet points. Here are summaries of five typical books:

The Total Money Makeover by Dave Ramsey was the first book I read. It features lots of practical advice, including the concept of the “debt snowball” I mentioned earlier. Here are Ramsey's steps to a “total money makeover”:

  • Step #1: Save $1000 as an emergency fund.
  • Step #2: Pay off debts, starting with the smallest first (ignore interest rates).
  • Step #3: Increase the emergency fund so that it will cover three to six months of expenses.
  • Step #4: Invest 15% of income in growth-stock mutual funds.
  • Step #5: Pay off the mortgage.
  • Step #6: Build wealth.

(I've left out a “Save money for college” step because it doesn't apply to me — I don't have kids.)

Your Money or Your Life by Joe Dominguez and Vicki Robin is, as I mentioned, the cream of the crop of these financial books. Its advice is sound. This is an especially great book for those interested in voluntary simplicity. It lends itself less to bullet points than some of the others, but I've made an attempt to enumerate the steps it advocates for financial independence:

  • Step #1: Determine how much money you've earned in your life. Next, determine your net worth. Compare and contrast the two.
  • Step #2: Establish the actual cost — in time and money — required to maintain your job. From this derive your actual hourly wage.
  • Step #3: Keep track of every cent that enters or leaves your possession.
  • Step #4: Determine which items are actually worth the money you spend on them.
  • Step #5: Graph your total monthly income and your total monthly expenses.
  • Step #6: Minimize spending through conscious decisions.
  • Step #7: Maximize income by doing something you love.
  • Step #8: Accumulate capital. Track its growth.
  • Step #9: Invest this capital so that it provides long-term income.

The Richest Man in Babylon by George S. Clason is an aging chestnut. It's a classic in the field. Many later financial books are based on Clason's advice, which is framed in King James-style English rules:

  • Rule #1: Start Thy Purse Fattening — save 10% of everything you earn
  • Rule #2: Control Thy Expenditures — create a budget to live within your means
  • Rule #3: Make Thy Gold Multiply — invest the savings from rule one
  • Rule #4: Guard Thy Treasures From Loss — invest only where the principal is safe
  • Rule #5: Make of Thy Dwelling a Profitable Investment — own your home
  • Rule #6: Insure a Future Income — plan for retirement
  • Rule #7: Increase Thy Ability to Earn — become better educated, more skilled; respect yourself

7 Money Mantras for a Richer Life by Michelle Singletary is a recent all-purpose financial book. I was ready to dismiss it for the absolute stupidity of mantra number one (stupidity in its phrasing, not in its advice), but after reading the book, I have to admit its advice is solid. It features:

  • Mantra #1: “If it's on your ass, it's not an asset.” If you can wear it, it's not an investment. Also, if something is riding your ass (such as a high house payment), it's not an asset.
  • Mantra #2: “Is this a need or a want?” This is a question Kris has been trying to get me to ask myself for years.
  • Mantra #3: “Sweat the small stuff.” Do worry about the small expenses; they add up.
  • Mantra #4: “Cash is better than credit.” There is almost no reason to carry a credit card.
  • Mantra #5: “Keep it simple.” With money, avoid anything that seems complicated. If you don't understand it, avoid it. You'll probably lose money.
  • Mantra #6: “Priorities lead to prosperity.” Determine what's important to you, and pursue that with your time and money.
  • Mantra #7: “Enough is enough.” Don't overconsume. Recognize when you have fulfilled your needs and your wants.

I haven't reviewed Singletary's mantras since originally posting this article three years ago. I like them. I like that she emphasizes goals, that she advises against consumerism, and that she encourages people to keep things simple. These are great tips.

Ordinary People, Extraordinary Wealth by Ric Edelman is rather a unique book. It features advice distilled from surveying 5000 people of moderate wealth. Each chapter relates a secret for obtaining financial security. At the end of the each chapter, there are excerpts from the surveys featuring anecdotes and advice from the respondents.

  • Secret #1: Carry a mortgage even if you can afford to pay it off. — This flies in the face of every other financial book I've read, and I do not subscribe to the idea. I'm willing to bet that the people surveyed carry a mortgage out of habit, not because they think it's smart.
  • Secret #2: Don't diversify the money you put into your employer retirement plan; instead, put all your contributions into stock mutual funds — I'm okay with this. It may not be appropriate for someone close to retirement, but for younger people, this seems like sound advice.
  • Secret #3: Make many small investments rather than a few large investments. — The key is to make investing a habit, and to invest the money when you have it.
  • Secret #4: Rarely move from one investment to another. — Market timing is not something to be treated lightly; it's not easy for a casual investor. Buy and hold.
  • Secret #5: Don't measure success against the Dow or the S&P 500. — Understand what you own and why you own it; don't compare it to market indicators.
  • Secret #6: Don't spend a lot of time paying bills and fretting about personal finances. Don't bother budgeting. — Many books encourage a budget, though I've not adopted one. And my success these past few months has come precisely because I have fretted about my personal finances. Maybe this advice is true for the long run, but I'm not sure it's applicable to somebody just starting to lay the foundation of financial independence.
  • Secret #7: Involve your children in family finances. — This is another piece of advice that all of the books offer. I haven't mentioned it because it's not appropriate to me, and doesn't actually fit my metaphor.
  • Secret #8: Don't pay attention to the media. — The media are about hype. They have to sell a product, even if it's just news. If you allow yourself to be caught up in the frenzy of the moment, you're apt to make a rash decision. Don't follow daily financial news — it's enough to check in every month or so.

The rest of this book contains three wonderful chapters entitled: “The Biggest Mistake I Ever Made”, “The Smartest Thing I Ever Did”, and “My Advice to You”. The number one thing these people recommend is to start investing as soon as possible, as much as possible. They also recommend finding a financial adviser. (Looking back after three years, I think my evaluation of some of Edelman's points has changed.)

I was going to include a point-by-point summary of Rich Dad, Poor Dad by Robert T. Kiyosaki, but when I went to write it up, I couldn't put Kiyosaki's advice into words. I re-read a chapter. Everything seemed generalized. I did a google search, and found that not everyone agrees with the author. I, too, found the book amorphous and vague, full of outlandish claims. I thought it was inspirational, and that it contained some kernels of wisdom, though, and consider it influential in my financial development. I've incorporated advice from Rich Dad, Poor Dad in my general summary at the beginning of this entry, but I cannot recommend the book.

Finally, there seems to be one major point on which these books disagree. Some argue that your home should be considered your most important investment, that you should carry a thirty-year mortgage and not attempt to accelerate payments. Others declare that a home should be considered a liability, the same as a car or a credit card. (The latter admit that a home will generally appreciate in value, but they note — rightly so — that a home is a cash drain, not a source of income.)

All of the books, with one exception, encourage readers to only purchase modest homes; they smash the commonly held belief that you ought to “buy as much house as you can afford”. Instead, these books say you should only buy as much house as you actually need.

Three years later

In the three years since I first published this article, I've re-read most of these books. I've also read dozens of other personal finance books, scores of magazines, and hundreds of articles on the web. Surprisingly, I've seen little to change my initial philosophy. I still believe in the four-step “building” process I outlined above.

My thinking has become somewhat more refined. I now know about index funds and high-yield savings accounts. I've discovered Amy Dacyczyn's remarkable Tighwad Gazette. I've exchanged ideas with countless readers. And I've begun to explore the notions of financial independence and early retirement in more depth.

In the original version of this entry, I reminisced about another time I was deeply interested in personal finance. When I got out of college, I went to work at the worst job I ever had, selling insurance door-to-door. During training, we were asked to make a poster illustrating our life goals. I cut out a picture of a log cabin in a lush, green woods. My goal was to retire to a peaceful lifestyle within ten years. Now, fifteen years later, I have the exact same goal. Only this time, there's a chance that I just might achieve it.

Final note: Last winter, I re-examined the “house” analogy in an entry entitled The architecture of personal finance: Choosing the right materials. I hope to elaborate on this metaphor in the months ahead.

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fivecentnickel.com
fivecentnickel.com
12 years ago

Great post, JD. It’s amazing how much of an impact this one piece of writing had on your life.

J.D.
J.D.
12 years ago

One thing that’s interesting about this post is that I remember the actual writing of it. I’ve written so much for the web that it’s difficult for me to recall where and when I composed most pieces. But I have a vivid recollection of writing this over a long weekend with friends in Central Oregon. I was feeling really down about money, and trying to puzzle things out. This article was a way for me to get all my thoughts down on paper, to clarify things in my head so that I could put them to use in my life.… Read more »

Finally Frugal
Finally Frugal
12 years ago

One of the reasons I started a blog was to see my goals and the steps to achieving them in black and white. I’ve always been a ‘journaler’, and blogging is just one more way to get my ideas out of my head and into a forum where I can analyze them and develop them further.

Congratulations, J.D., on the anniversary! I’m sure there are many more wonderful posts to come!

Frugal Dad
Frugal Dad
12 years ago

And I would add to that it is amazing just how much impact this one piece has had on other lives. Think of the hundreds of people you have inspired to become debt free, save for retirement, live out their dreams, etc. over the last two years. You have even introduced others to the idea of blogging (myself included) which can be a wonderful creative outlet for us repressed writers stuck in our own “box-factory” jobs!

Happy Anniversary Get Rich Slowly!

Jennifer
Jennifer
12 years ago

Happy Anniversary Get Rich Slowly. I love the blog.

Linda
Linda
12 years ago

Happy Anniversary! Excellent blogs!

Starving Artist
Starving Artist
12 years ago

Great post, JD, and thanks for being such a great inspiration and role model.

seawallrunner
seawallrunner
12 years ago

Happy birthday, Get Rich Slowly!!! I am glad to be part of this community, for me it’s a daily reminder to live mindfully – in financial terms and in other terms as well.

Dave C
Dave C
12 years ago

Congrats on the accomplishment. This is surely one of the top pf blogs I’ve encountered. If I may make a topic request…. you mention in this article income-producing investments. May we get an article on the various options? Having just paid off the mortgage and contributing as much as I’d like to retirement, I’m trying to decide “what next?”.

djgets
djgets
12 years ago

Happy anniversary GRS, and congratulations JD on everything you’ve accomplished thus far, not just in your own life but in helping positively impact the lives of all your readers. I’m thankful for your research and insights every day. Here’s to many more years of sharing the wealth, as it were.

Vered@MomGrind
12 years ago

Selling insurance door-to-door. Wow. facing all that annoyance and REJECTION must build some character! I’m so glad you don’t have to do THAT anymore. 🙂

mapgirl
mapgirl
12 years ago

Happy anniversary JD! Your blog is one of the few I read regularly that continues to inspire me to do better at building up my financial house. Thank you for all your wonderful, heartfelt writing. I wish you all the best with full-time blogging. I am so glad you decided to follow your heart. Best of luck to you and Kris! (Because I like her posts too!)

The Weakonomist
The Weakonomist
12 years ago

Happy Birthday!

The Richest Man in Babylon was a surprise gift from my parents. Before I started reading PF books this book inspired me. Its a great beginner book.

SingleGuyMoney
SingleGuyMoney
12 years ago

Happy Anniversary!!

Liz
Liz
12 years ago

Happy anniversary! You are an inspiration J.D. I have learned a lot from you and everyone one else on the site.

zach
zach
12 years ago

happy b-day GRS!

Mydailydollars
Mydailydollars
12 years ago

Happy anniversary! Reading this original post as a new reader gave me a great sense of your journey. I agree, the act of writing really gives you control in unexpected ways. I would have never thought that blogging would help me improve my finances, but in just a few weeks, it’s made me so much more aware of my thinking about money!

Flexo
Flexo
12 years ago

Congrats on 2 years! GRS started with a bang and hasn’t slowed down. I’m looking forward to many more years.

It’s interesting to take a look at a manifesto of sorts from the added perspective of time passed, so thanks for adding the reflection at the end of the post. It’s interesting how points of view change with added information and experience, etc.

ed
ed
12 years ago

I am in a position of not having comfortable financial life. Your writings inspired me and gave me courage to change!

Happy anniversary and thank you for the great blog.

Kate
Kate
12 years ago

Happy anniversary! This is my favorite personal finance blog. You do a great job.

No Debt Plan
No Debt Plan
12 years ago

Happy blog anniversary. Best wishes moving forward.

Working Dollar
Working Dollar
12 years ago

Great article J.D. I for one am glad you wrote it. Your blog is the best out there. Just imagine all the people you have helped to inspire to pay off their debt, stay out of debt, and get financially fit. Keep up the great work!

Curt at PennyJobs.com
Curt at PennyJobs.com
12 years ago

Great post! I too have read many PF books. The only issue I have is that the coming economic crisis may change the definition of good advice. With the dollar dropping and inflation eroding away my savings – maybe saving money isn’t such a good idea. At least not in dollars, but other currencies are also losing value. I just read an article about how inflation could cut 15% of the purchasing power over the next three years. I guess what I am questioning is, is economic advice relative to the state of the economy? In an inflationary economy, a… Read more »

Yi Hui@The Simple Wealth
Yi [email protected] Simple Wealth
12 years ago

I totally agree with the first comment too. I started my journey to financial freedom from reading ” Rich Dad, Poor Dad”. Now I wish that I have started my journey from educating myself about personal finances.

Ellen
Ellen
12 years ago

Congratulations on two years, J.D. I’ve just started reading in the past few months, but I’m definitely looking forward to the articles in years to come!

Jesse
Jesse
12 years ago

Happy Anniversary man. Its amazing how far you’ve come. Pretty inspirational for both readers and bloggers (and those of us that do both 🙂 )

Brad
Brad
12 years ago

JD, GRS has been my favorite blog to read for the last year (really, I do mean it!) I’m really glad you’ve kept up with it cause its kept me on the straight and narrow. I can’t wait to see what year three has in store.

Michele
Michele
12 years ago

Congrats on the Anniversary. I am pretty new to this whole PF thing and your blog was one of the first I found. Not even sure how I found it, but I enjoy reading your posts every day, so you can tell your wife that I don’t think you post too much. One of your posts led me to Dave Ramsey’s book, which changed my entire outlook on my financial situation (not that I agree 100% with him, but it definately pointed me in the right direction) I will look foward to reading more of what you have to say… Read more »

plonkee
plonkee
12 years ago

JD, it’s brilliant that all these people are congratulating you, and they’re right. You really have changed people’s lives for the better. 🙂

Chris
Chris
12 years ago

I got “Money” magazine today and Getrichslowly was recommended!! I also saw a blurb in another recent magazine but can’t remember which one! Congratuations!

Luis
Luis
12 years ago

Feliz Aniversario GRS 🙂

Miss O
Miss O
12 years ago

I love your blog and read it every day. Thank you, thank you, thank you!

Ross Williams
Ross Williams
12 years ago

Stay Poor Quickly That is the actual outcome of following many of these suggestions. The problem is the assumption that you have a large amount of debt and nothing to show for it. What now? If that is the assumption, then many of the suggestions here are worth considering. If, instead, you are looking to get rich the key question is not how much you spend, but how you spend it. You should be adding debt, not eliminating it. Because you get rich by making use of other people’s money. Debt is leverage – adding oomph to your investments. And… Read more »

JerichoHill
JerichoHill
12 years ago

Ross, I think you completely have missed the point, or else your entire post is parody. If its parody, kudos, but if you’re serious, well, I strongly urge all readers to ignore the spirit of your advice.

Czar Kastik
Czar Kastik
12 years ago

Congratulations, J.D.!

Lazy Man and Money
Lazy Man and Money
12 years ago

Congratulations on the two years… you’ll never see dig up my articles from two ago. I wouldn’t put anyone through the torture of reading them.

David C
David C
12 years ago

Happy Anniversary. Keep up the great work.

Shirley
Shirley
12 years ago

Congratulations!! Look how far you’ve come in two years! Awesome!

Al
Al
12 years ago

Ross says you should be adding debt to get rich using other people’s money. The only drawback is those other people usually want their money back with a fat rate of return for the privilege of lending it to you. As for leverage, ask those folks who are sending their lenders “jingle mail” after getting interest-only loans because, after all, real estate can only go up, right? They’re not making any more of it, right?

Keep up the good work J.D. and continue to be discerning and wise when it comes to financial advice.

Mark Krusen
Mark Krusen
12 years ago

Happy B-day. 2 years wow. I hope I’m around for the next 2 years myself to follow you on this journey. Thankyou.

Darla
Darla
12 years ago

I wholeheartedly agree with you on the book, “Your money or your life”. It was the first book I ever read on frugality and it changed my thinking FOREVER.

I still keep it on my bookshelf front and center to remind me that life isn’t about the almighty dollar.

AJC @ 7million7years
AJC @ 7million7years
12 years ago

“More practically, financial independence occurs when your investment income (or “passive income”) exceeds your monthly expenses.” is indeed Part A. of the ‘secret to wealth’ if there ever was one …

… Part B. is NOT to accept that your monthly expenses should approximate what you currently spend, but what you MUST be able to spend to support your Ideal Retirement:

Part A. on it’s own = Acceptance of ‘what Is’

Parts A. B. = True [financial] Wealth

Pinyo
Pinyo
12 years ago

Happy anniversary!

Shanti @ Antishay
Shanti @ Antishay
12 years ago

Whew! So much info! It’s clear now why your blog has been so successful, and you have too… you’re dedicated and honest in your approach to all things. That’s really something to admire. Yours was the first PF blog I started reading oh so long ago (it seems). You’ve done really well and I’m so proud to refer friends back here, and to keep reading. Thank you for all the work you’ve put into this blog – it’s really a wealth of information everyone needs access to. Thanks! And CONGRATULATIONS!

Freccia
Freccia
12 years ago

J.D- Great post and congratulations on two years of GRS. One idea that might help… When you say: “Secret #7: Involve your children in family finances. – This is another piece of advice that all of the books offer. I haven’t mentioned it because it’s not appropriate to me, and doesn’t actually fit my metaphor.” Kids CAN fit into the “financial house” metaphor. You build a house to shelter yourself, your family, and your property. Part of being a parent is teaching kids how to live in a house (don’t break things) and how to maintain/fix things. Further, the stress… Read more »

Travis
Travis
12 years ago

Happy anniversary! Congratulations JD!

Ray
Ray
12 years ago

Wow….that pretty much says it all. If the majority of the US population followed these steps…..this country would be in a different situation. Thank you for your dedication to helping America change our finances.

PS…I’m glad I subscribed to your feed…I read so many blogs everyday, this post was sitting in my email which prompted me to read your site again.

Ross Williams
Ross Williams
12 years ago

As for leverage, ask those folks who are sending their lenders “jingle mail” after getting interest-only loans because, after all, real estate can only go up, right? They’re not making any more of it, right? If you want to get rich without taking risks, good luck. A lot of people lost money in the real estate market – but a lot of people made money as well. The risk to your financial well-being from any single investment diminishes the more investments you have. Borrowing money is one good way to add more investments and reduce your overall risk. people usually… Read more »

J.D.
J.D.
12 years ago

@Ross Williams Ross, what are you basing your arguments on? Marrying wealth is more likely to bring a secure retirement than saving in a 401k? Where do you get information like this? If this is the case, why aren’t there articles out there about how to marry rich men and women? Where are the books on this? All corporations borrow money? What do you mean? What size of corporations? Our small family business (about a million dollars in sales) borrows money, but rarely. We try to operate without debt. So do many other companies we work with. And what does… Read more »

Ross Williams
Ross Williams
12 years ago

All corporations borrow money? What do you mean? What size of corporations? All but the very smallest and least successful. And that’s not because they wouldn’t benefit from borrowing, but because no one will loan them money at a reasonable rate or because their owners are risk-adverse. Marrying wealth is more likely to bring a secure retirement than saving in a 401k? Yes – and it ought to be obvious on its face. There is plenty of evidence, in fact its almost a truism, that family income is higher where there are two high-wage earners. There is also plenty of… Read more »

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