So my friend Andrea sent me this link: it claims to be a guaranteed way to become wealthy.
What what does freemoneyfinance.com recommend you do for guaranteed wealth? i clicked through a few more links to chase down the “guaranteed equations” for becoming wealthy:
Personal financial success ultimately comes down to two very basic financial equations. There’s no doubt about it – if you master these two equations alone, you will become wealthy and be far ahead of most Americans:
Income – expenses = surplus
Surplus x many years = wealth
Yep, that’s it. It seems pretty simple, doesn’t it? In fact, these seem to be “common sense.” But remember that these are two equations that 70% of Americans can’t get right.
The basic reason why 70% of Americans can’t get it right? They spend too much money:
…they spend too much. They can’t control themselves and they simply over-spend. So they live paycheck-to-paycheck or worse, are falling more behind every month.
Okay, so i’m trying to think where to start with this one. i think i might break this one into a couple of posts; i think it’s worth it to look at what “common-sense” people are offering as financial advice and how it really pans out.
So i think first off is, let’s give them that Americans in general “over-spend.” (How would you tell a single mother, for example, trying to raise 3 kids on her $30,000 a year job that she “overspends”? i can introduce you to one if you don’t know her yourself.) All we need to do is spend less and keep within a budget, so we can sock away 7% a year, and we’re “guaranteed” to be millionaires when we retire. Right?
We’ll ignore the obvious things that would spoil this guarantee, such as… you die or get injured and can’t work. How would the guarantee work then?
Let’s look at some other assumptions they’re using. I think the next big one would be the big one for me right now; we’re all assuming the dollar will compete in perpetuity with the euro, RMB, yen, etc.
One of my teachers liked to tell a story about how they met a man who, before he went to sleep, was a millionaire in his
South American country. Overnight, there was a revolution and the acknowledged government collapsed. When he woke up, his millions in the local currency was worth about $100.
i just saw the movie The Social Network. If you haven’t seen it, go check it out. In one scene, the co-founder of Facebook finds out that he shares have been diluted. Before he got to the office, he owned 30% of the company. After he walked out, his same number of shares entitled him to .03% of the company.
So supposed, when you go to retire, all those yearly 7% deductions you’ve made into your 401k add up to .07% of what the dollar is worth now? This is what we like to call “the emptiness of money.”
The truth is there are no guarantees to be sure of by saving 7-8% of your income. Anybody can make bad investments, any country’s currently can deflate. And that’s if you’re lucky enough to work long enough to see that happen.
So how do i guarantee wealth? Give it away. Plant seeds in your mind to see wealth; learn how to make them strong and how to get them to ripen quickly–then those seeds will ripen in your near future, and if you saw yourself giving to others what they need, you will see yourself getting what you need.
It’s the only sure thing.