Friday, February 15, 2008

The power of saving and discipline

I wanted to share two motivational stories today. I often hear that it is too hard to save, or that wealthy people get the breaks or are lucky. Some people tell me that no matter how hard they work, they can't seem to get ahead (while they are sipping a latte, as they get into the brand new fleeced...I mean car they just got. Well, these two stories show what you can accomplish, if you have the right mindset.

Our first one is the story of Adam Shepard. Adam decided to try an experiment after graduating college. He wanted to see if the "American Dream" was still alive. Adam moved to another city, with the clothes on his back, and $25 in his pocket. His goal was to have an apartment, a vehicle and some money in savings, all within 12 months. Part of his experiment included the restrictions of not using and friends or family or previous aquaintances for help, nor did he rely on his college education, as he purposely left it off any job application.

Adam lived in a shelter for over two months. He worked odd jobs, and worked his way into a steady full-time job. Two months before his twelve month deadline, he surpassed his goal...Adam had an apartment, a vehicle he owned, and several thousand dollars in his savings account. Adam showed that by living within your means, and saving, you can get ahead. The key, is living within your means, which means living on less then what you make.

Story two focuses on Lance Roberts, of Houston. Lance is worth several million dollars now, but he was homeless to begin with. He lived out of his pick-up truck for two years, parking behind a fitness gym at night to sleep. Now, he works as a radio talk show host and money manager. His advice is to pay yourself first, and save 40% of your income, and live off 60%. Strong advice, and not easy, but a worthy goal to shoot for. Lance actually lives on less than 40%, and saves 60% (but granted, it's easier to do, when your worth several million dollars). His next piece of advice is to get rid of credit cards...the debtor is slave to the lender. Can I get an amen? Lance also makes a great point, using watches as an example. As much money as he is worth, he says he will never buy a Rolex. Why? Sure, he can afford it, he says, but he doesn't need is a waste of money. A $20 watch tells times just as well as a Rolex. Lance points out, most people, when they make more money, spend it. They buy bigger homes, nicer clothes, and newer,bigger cars. If you live the same way, you'll never make it, but if you keep and maintain a lifestyle within your means, and put that extra money into savings or paying off debt (while not creating more debt), you will get ahead.

So what can learn from these two examples? People who struggle with money, as a rule, are not held down by the government, some evil corporate entity, or a string of bad luck. No, the thing holding people back, is something closer to home...themselves.


qualityjohn said...

To deny your self pleasures does not hurt when you make the choice. It is only when pleasures are denied that the desire to have is overwhelming.

When you make a goal and save to reach that goal, the pleasure is two fold. One is the sense of accomplishment and the other is in the pleasure of enjoying it.

Steve said...

QJ, your right, sometimes denying oneself something in the short term is not as painful as being denied something by a third party or circumstances beyond our control. And nothing beats the feeling of accomplishment from hard work and dedication.