What is more important to achieving financial freedom: having millions of dollars or having much less money but having the tools and knowledge necessary to invest and to spend (save) wisely? Before you answer, consider the following:
1. There are many famous people who made tons of money but filed bankruptcy anyway. The list includes Mike Tyson (boxer), Donald Trump (entrepreneur), Anna Nicole Smith (model-actress), Ted Nugent (rock star), Robert Kiyosaki (Rich Dad, Poor Dad author), and Larry King (talk show host) just to name a few.
2. Approximately 35% of lottery winners of more than one million dollars are in financial difficulty or have filed bankruptcy within 10 years of hitting the jackpot.
So the answer is not how much you make that’s important but how much you save and how wisely you invest those savings. Almost anyone with a steady job and average income can amass a small fortune if they are wise with their money.
Check out my earlier blog Would You pay $1,000,000 for a Burger? There is a good example of Mr. Bob Works-a-Lot and how much saving $7/day could have earned him if he invested it wisely. Finding an extra $7 a day is pretty easy if you eat out a little less often, keep your car for one extra year, use coupons when grocery shopping, buy clothes when they are on sale, etc. I’m sure you can think of many other examples.
I’ve included a link below that gives some good real life examples of people (extreme savers) that have successfully saved money.
One last thought: What kind of car does Warren Buffett (world’s 2nd richest billionaire) drive? Answer: A 2001 Lincoln Town car with a license plate that reads “THRIFTY”.