Mean Brother Blog

Is your goal to be known as a hard working person? Think about it. You get married, you move into one or the other’s small apartment; you start thinking of the future. You are saving money and have two incomes. You want a house to raise kids and you want nicer cars. In short time, you buy the house, new furniture, and new cars. You now have a mortgage payment, property taxes, increased insurance, increased utilities, credit card debt from the furniture and fixtures, and maybe new car payments. So, it is time to work harder. Then you have one or more children and the expenses that go along with that. So, work harder again. Even though you talk about cutting your spending, the reality of it is that you buy more unnecessary items due to your desire to keep up with the neighborhood (Joneses) or just because your emotions control the spending. So, now you have to work even harder and your actual quality of live goes down. You are in the rat race, chasing the dollar. If you could slow down and think before you make the major purchases, it would be helpful. Buy what you need and a little of what you desire, not what others expect you to buy or have. Buy a house that works for your family, not one that shows nicely for others. With your disposable income, buy income-producing assets. That is your key to financial independence. Yes, independence from working for the man. Again, that is money working for you, not you working for money. Do not let the power of money control you. You should think about your financial decisions and control your emotions relating to these decisions. If you simply follow the crowd, you may actually believe the stories about tax deductible home equity lines being a great tool to buy more “stuff”, or stories about the great asset your home will be, or stories about playing everything safe and not taking any risks.

Calculated risks are good. Calculated risks with your bread money are bad. Build up some asset base that produces income for you. A good goal would be to reach the point where the monthly income from your assets is great than your monthly expenses. Then you will be building wealth. The greater your wealth the more funds you can allocate to risky investments. That is one way that the rich get richer. They take some of their excess funds and take big risks. When one of those big risky investments hits, they make super large gains. If they lose their investment, it does not affect their standard of living. If you are chasing the dollar and never have funds to invest when a great opportunity comes along, you will have a harder time acquiring wealth. If you have the funds available, more people will offer opportunities to you.

There was a guy that said something like wealth is a measurement of how many days you can live at your standard of living if you were to stop working today. I like that measurement. It seems to be a much better measurement than for instance your “net worth”. Net worth is usually defined, in general, as your assets minus your liabilities. That leaves the values of your “assets” up for interpretation. How much is this asset worth to you versus what it is worth to me. Get it?