Sorry but Eduardo is right. You don’t build wealth by blowing money. $10 invested over time yields $100. $100 yields $1,000 and so on. If you are smart and disciplined it adds up no matter your job or salary. Spend less than you make and invest the difference. Wealthy people don’t get there by frivolously spending their money even though they can.
When I taught college finance I used the example of Trojan Yacht, a PA company that built excellent products and employed craftsmen who were very well paid. The politicians got the brilliant idea of a luxury tax because wealthy people can afford it right? Guess what? Wealthy people stopped buying yachts because they weren’t going to waste their money on an oppressive tax. Trojan Yacht went out of business and all their well paid employees lost their jobs. The luxury tax was eventually repealed. The moral of the story is wealthy people don’t waste their money.
Absolutely. If you do a future value calculation investing just $10 per month in an index fund that tracks the S&P (at the S&P's 100-year average ROI of 9.7% return (0.8083 per month)) from age 20 to age 65 (540 months), then you have added $95,131 to your retirement fund.
here is the calculation
Now most people don't have one $10 per month subscription that they do. They have several. If you are able to save $100 per month from frivolous expenses and instead invest it, you would have had just shy of $1 Million at retirement from just those savings.
Now think about people driving around with $800+ per month or more car payments, plus $500+ per month credit card bills from balances that they maintain (always pay your credit card off in full, the rates are ridiculous), $500+ per month of eating out, and several other very expensive things that you just don't have to do or do as expensively. Most people could easily cut $1000 per month out of their expenses by living more modestly. At $1000 per month instead going to investment from age 20 to age 65, you would have nearly $10 Million at retirement age.
People think little things and everyday decisions don't add up. They 100% do and if you are using compounding interest to your favor (investing) instead of to your detriment (credit card balances, big car loans, etc.) then you can amass sums that most people think are pretty sizeable. It comes down to being smart and disciplined in your everyday choices and best if done as early in life as possible.
It's no different than eating right and exercising daily. If you make those choices instead of stuffing your face with excess and sitting on your behind, then you will reap the benefits over a long period of time. A day off here or there doesn't hurt you. A year or more off does. A marathon wasn't just run some day and a 500 lb. squat or deadlift wasn't just done one day. They were invested in over years, one run or lift at a time. And like investing money, it is best to invest in your health starting as early as possible in life. The same principle applies to education. Invest early and daily.
Losers can sit back and say you can't do something. And they won't. And they'll hate on you when you do.
