December 16, 2013

Thomas Stanley tells us you can act rich or you can be rich, but you can’t do both? Explain?

3 thoughts on “December 16, 2013”

  1. Katherine Graham says:

    You can act rich by buying expensive things so you look like you’re rich or you can be rich by saving and investing your money wisely over long periods of time. You can’t do both!

  2. Alex Lee Christianson says:

    Spending money in the here and now on depreciating assets are a great way to lose money. To be rich, change your focus from material things to concepts that come with having appreciating assets. Finnancial security, less stress because you are longer living paycheck to paycheck.. etc.

  3. Mike Finley says:

    Both answers provide very good insight into this rather uncomfortable idea. Let’s explore further.

    Thomas Stanley, author of The Millionaire Next Door, The Millionaire Mind, and Stop Acting Rich, has studied millionaires like no other and he has identified some truly remarkable facts. One of them is the idea that most Americans have the choice to act rich (look the part through expensive clothing, cars, homes, jewelry, etc.) or be rich (save your money consistently over time while owning appreciating assets that grow gradually over time). You can’t do both!

    There is only so much money to go around based on your monthly and yearly income. So the question is, what option will you select?

    You can try to stay up with the Joneses, but here is a bit of a secret. They are broke! They may know it and it is quite possible they may not. By acting rich, you will likely go into debt to do it. You are robbing from your future to live big in the present. Is that really what you want to do?

    The other option is not very exciting, but it is quite rewarding. Be rich by pushing materialism out of your life (stop identifying who you are by the stuff you have acquired) and save your money consistently at the beginning of the month (pay yourself first) and then invest it wisely at the lowest possible cost (no-load index funds at a place like Vanguard.com). The choice is yours. The choice is always yours.

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