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The secret to accumulating wealth

Road Runner

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I post this to help my forum friends.  It is the plan which I followed for many years and it is why I was able to retire early.  It is responsible for the considerable wealth that I enjoy today.

Please do not divulge this plan to other people, as wide spread implementation of the plan could cause massive amounts of wealth in the general population, which would then result in skyrocketing inflation and the eventual devaluation of our own assets.  Also, if too many people adopt this plan, it could have very adverse impacts on the economy, resulting in a possible world wide recession. 

The Plan:

1.  As soon as possible, acquire a position that pays really well relative to the cost of living where you reside. 

2.  Buy a reasonable house in a reasonable neighborhood.  Plan to remain in that house for many years.  Moving is expensive and usually unnecessary.

3.  Spend and buy what is required, but you should set a goal to spend only about half of your after tax income.

4.  Invest your savings as you see fit.  Stocks, Mutual Funds, whatever.  But continue to be thrifty and save, save, save.  It will take some time before your investments can accumulate wealth as rapidly as simply saving half your income each month. 

That's about it.  Spend a lot less than you make for many years and you likely will become quite wealthy one day. 

Your welcome.    :)

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10 minutes ago, Kzoo said:

I was going to say- or rob a bank.

I get wealthy by not paying for lawn care. I was willing but the schmuck never showed up.

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I had a high paying job, but it was in a career that had the shortest avg. lifespan of college grads: industrial research chemistry where I rose to Chief Chemist of Dow Chemical's Minerec subsidiary in the 70's before much was known about which chemicals were carcinogens.  So I went for a run one Saturday morning, tasted and smelled the chemicals I'd been working with the previous week, and soon left the chemical industry..

It was a big pay cut to go into teaching and until I approached retirement I didn't appreciate the fact that the pension I would get plus the 75% subsidized excellent retirement health insurance was basically deferred pay that made things ok.

So I didn't end up more than upper-middle-income wealthy but, with a mortgage-free home, my net pension plus social security are more than the avg. worker makes in a year and are significantly more than I spend in retirement - including nice vacations.

My nephew's grandfather, with a pension from AT&T, tells all the younger kids in the extended family: a lucrative thing today is to get a job with a pension and he's right.

My next door neighbor, in her mid 80's and with a pension from Westinghouse (now Northrup), asks me what I'm saving it for - she says go on more vacations. She wishes she had when she was a little younger.

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Don't spend...send the world into a recession.

Seriously, look at the dismal savings rate in the US compared to the rest of the world. If Americans started actually saving we wouldn't be the worldwide market for trinkets, trash and every other widget that marketing tells us we need.

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Agreed.  In the past, some of my threads about on this topic were met with rude comments, so I stopped talking about investing or prepping for retirement.  

We like to use the following methods:  Automate saving pre-tax with the most we can afford to do, maximize roth if there is anything left to do so, automate self impound accounts (more on that later), live within a budget, cut out stupid expenses that are wasteful or that don't provide true happiness, try to avoid reading magazines too much, try to avoid commercials whenever possible, use a list at the grocery and if I put something in the cart that isn't on the list ask myself...is this a real good sale?  why is this necessary today? will this purchase blow me over my weekly budgeted amount for this item? 

Debt.  I understand that this is a necessary evil.  It is used for creating wealth.  Our rental was an enormous source of wealth. You people warned me about it.  I didn't listen to any of you.  It was a pain in our fucking asses. Not that we like ass fucking, at all, but it was.  And we were one of the lucky ones.  No one really did serious damage.  The last set were pigs.  The house and yard were in such disarray, that we took their whole deposit and we still had a little more labor to repair.  Debt is also needed when you can't pay that dental bill, or 20K foundation repair to that POS house that you bought and didn't have properly inspected. But, that's all water under the bridge.

Organization.  Being uber organized, you can use credit to your advantage.  Banks pay us to spend money. When we make a purchase, we keep track.  Those records, keep us on track to the budget, and know what is going on.  We know how we are spending our cash and how much is saved.  Every month, we pay the CC bills off.  Every month you can earn rewards to your statement. Keep a check on your credit score.  That should help you stop any silliness going on.

Figure out your spending. For us, that was an eye opening exercise.  This helps to know how much you even need to be able to retire.  Do I need 55K a year, or 25?  We saved, but also we plan everything.  There is a new bike in the plan. Not ordered yet, but soon.

What is wealth, without freedom?  Does wealth really provide freedom?  Freedom from what? Is work fun?  can it be?  My husband got punched yesterday.  He was just saying how much he loves his job. ?  He still loves his job. I love my job some days.  Some days I want take the hammer to the stapler.  

Some days you love your vacations.  Sometimes, you get there and the forest catches on fire.  

What happens when every day is a vacation day?  Is that what people really want. 

This is all so much to ponder.

Should I go back to school as a senior? Maybe a new career for fun. 

Marine Biologist.



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I agree with many here in that spend less than you earn is key.  But there are nuances others have alluded too that are also true.

The key for us was staying out of consumer debt & living within our means.  We don't spend frivolously, don't drive fancy cars or live in fancy houses. Many of our friends got caught up in that and we always resisted.  It financially ruined them too.


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7 minutes ago, Chris... said:

We save a lot of money for retirement. But to what end. I hear the obits on the radio every morning and half of them are in their early 60’s or even late 50’s. 

But most of the other half are in their 70's, 80's, and even 90's. I'm planning on living until my mid-80s or longer and have invested enough to cover that.

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