Wealth and its acquisition

[Julia]

Geez Magoo
You type some rubbish.

+100/

Yep i whole heartedly agree on this point...im going to see a specialist doctor on Tuesday, 10 or 15 minutes for $200 bucks...also licensed thief IMO.

Rubbish. Perhaps you'd like to consider the years of study before qualifying as basic dentist, then probably a further six years to acquire a specialist qualification.
Considering their expertise at that stage, I'd happily pay more than $200 for a consultation which could result in e.g. avoidance of significant periodontal disease.

+1

Magoo, maybe you should have a chat to a few tradies on the Gold Coast - they sure would love to know where they could get consistent work for $50/hr, not to mention having to provide their own super, annual leave, sick pay etc. I know quite a few that get good money when they have work - but then get no pay when they have no work or can't work due to weather etc. I also know quite a few 30 year olds who'd love to be on anywhere near $80k yet have still managed to live within their means and save a deposit on a modest home to start with. Maybe they spend less time complaining that the good times have passed them by and just get on with it!

Your posts read like a litany of poor me, it's not fair! Anyone doing better than you is evil, employers are evil, professionals are thieves etc. Get a grip! Or maybe just grow up.

+ a heap. Magoo, you do nothing on this forum except whine about how everyone other than you gets a go in life. If you spent a bit less time whining and a bit more seeking opportunities for creating wealth you'd do yourself and all of us a big favour.

 

[Smurf1976]

The fact that you think every qualified tradesmen is well off is a clear indication you don't know many tradesmen. Yes there are wealthy trades, I know a few who I would classify as very well off, but they didn't make they're money necessarily doing their trade, they made money by running a business. I remember one of them telling me the only time I made any money was when I got my head out of the tool box and into the office. Once you take off tools, insurance, vehicles, etc etc they don't make a killing.

Well I'm a tradie (electrician) and in the past I have indeed earned big money working for an employer.

Sounds good? Try doing 84 hour weeks for an extended period whilst still being "on call" (and actually called out quite often) after hours. Try working outdoors with frost on the ground or in the rain too. The term "living to work" comes to mind.

Yes, there's big money there if you're prepared to get it but there's a definite downside to it. Hence you'll find that most tradies either move on to something else, or end up working somewhere that has "normal" working hours and which isn't based in the middle of nowhere. Those jobs don't pay the big money however.

Find 10 tradies earning big money on the tools. Now find how many of those are over 35? Very few and there's a reason for that - it's not something that the average person could sustain, especially not if there's a partner and kids involved. Most are over it by their early 30's.

All that said, my observation is that income has a very loose relationship to financial success. Assuming the person has some sort of full time job, the rest comes down to how they manage their money. I know people who earn $100K a year who are effectively broke with nothing to show for their efforts. I know others who earn $60K and who are in a far better situation simply because they avoid spending on things which are poor value.

 

[sydboy007]

I was reading an article recently that showed high income and high net wealth and the 2 categories had little overlap.

As they say wealth wasn't built in a day. If you can follow Warren Buffets lifestyle - modest house, off the rack suits, standard model car, then I think you're well on the way to being able to create wealth because you will have excess funds to invest.

I would say buying high quality companies paying reliable dividend streams will get you on your way too.

Just really annoying the corporate bond scene in Australia is so limited, and most of the bond managed funds out there are a rip off in their of their MER.

In many ways building wealth is like getting fit. There's plenty of flashy blurbs out there that promise you results with little effort, but the reality is it's generally a long hard slog.

Remember, capital preservation is more important than the chase for growth!

 

[tech/a]

Remember, capital preservation is more important than the chase for growth!

There are some terrible examples of mis managed funds on this site.
PEN/RED To name just a couple.

 

[Miss Hale]

Basically for me it boils down to simply spending less than you earn. If yo can manage to do this no matter what your income then you will acquire wealth pretty much automatically.

 

[cynic]

Basically for me it boils down to simply spending less than you earn. If yo can manage to do this no matter what your income then you will acquire wealth pretty much automatically.

+1

I've often encountered people whom insist that their income is never sufficient to accommodate a savings regime, and yet somehow, these same people always seem to be able to afford life's necessities - designer fashions, the latest gizmos, entertainment etc. When the mere suggestion of a 2km stroll to a person claiming to be unable to afford a rail fare is met with an expression of abject horror, I cannot help but wonder whether those claiming a lack of income have any appreciation of the true meaning of poverty!

 

[Julia]

Basically for me it boils down to simply spending less than you earn. If yo can manage to do this no matter what your income then you will acquire wealth pretty much automatically.

Can you define what 'wealth' means when you say this?
Your definition could comprise someone earning $40K p.a. who only spends $35K p.a. Even over a lifetime it's pretty hard to envisage that saving per annum creating real wealth.

 

[Calliope]

Can you define what 'wealth' means when you say this?
Your definition could comprise someone earning $40K p.a. who only spends $35K p.a. Even over a lifetime it's pretty hard to envisage that saving per annum creating real wealth.

Obviously Miss Hale is a disciple of Mr Micawber. My definition of wealth, and i suspect hers is too, is;

"A tangible or intangible thing that makes a person, family, or group better off."

 

[Smurf1976]

+1

I've often encountered people whom insist that their income is never sufficient to accommodate a savings regime, and yet somehow, these same people always seem to be able to afford life's necessities - designer fashions, the latest gizmos, entertainment etc. When the mere suggestion of a 2km stroll to a person claiming to be unable to afford a rail fare is met with an expression of abject horror, I cannot help but wonder whether those claiming a lack of income have any appreciation of the true meaning of poverty!

I used to quite literally walk 8km from the bus stop to home when I was doing night school (TAFE) many years ago. A car was out of the question financially, and buses didn't run further at that time of night.

Having grown up in an environment where money was extremely limited is the main driver of never wanting to be in that situation again. I have always been careful with spending as a result - not to the point of being obsessive, but I'm just not going to pay for things that are poor value.

 

[YMI]

Basically for me it boils down to simply spending less than you earn. If yo can manage to do this no matter what your income then you will acquire wealth pretty much automatically.

Can you define what 'wealth' means when you say this?
Your definition could comprise someone earning $40K p.a. who only spends $35K p.a. Even over a lifetime it's pretty hard to envisage that saving per annum creating real wealth.

Sorry to interfere, I think Miss Hale actually wrote her definition there. Wealth is defined by each individual differently. While some may feel wealthy and contented on a level that allows them to pay the bills and live comfortably without financial fears others may not even classify $1billion as excessive wealth. There is no number attached to the definition.

What is your definition Julia?

 

[tech/a]

I've noticed those without wealth and those without prospects of achieving any real wealth
Have a far lower or different definition of wealth than those who have achieved wealth that
Is appreciable.( financial independence ).

 

[Julia]

Sorry to interfere, I think Miss Hale actually wrote her definition there. Wealth is defined by each individual differently. While some may feel wealthy and contented on a level that allows them to pay the bills and live comfortably without financial fears others may not even classify $1billion as excessive wealth. There is no number attached to the definition.

What is your definition Julia?

Several posts ago I summed up my attitude here:

I won't be drawn on that, sorry burglar. It's going to be different for every individual.
I'd probably describe 'enough' as being a carefully calculated amount, considering life expectancy, inflation expectancy, likely future spending - discretionary and non-discretionary - which allows an individual to take a fairly passive approach to the management of capital. An amount which gives the individual a sense of security.
(And probably a huge sense of relief that the years of saving, investing and risk taking can be largely left behind.)

So for me 'enough' may not be wealth in someone else's terms as I've suggested in my response to burglar, and I'd never consider myself wealthy but I have no aspirations toward money for its own sake, just what is needed to provide a sense of security and the capacity to make choices. Oh, and the relief of knowing you need never work for an employer ever again.

 

[MrBurns]

I had a considerable amount of money at one stage, I'll never forget walking into the Mercedes showroom, pointing and saying "I'll have that one" or saying to the bank, "No I dont want you to keep the mortgage on the house in case I want to borrow again" Owing nothing, buying cars for my kids, travel overseas buying a property for a relative to live in to be closer to us and on it goes.

Divorce took care of a large part of it, I'm still ok but cant splurge like I'd like to any more.

That was a great sense of freedom and utter joy I can tell you.

Wealth really depends on the indivisual but most would consider wealth to be enough money to do and buy what you want without worrying about the cost.

 

[white_goodman]

I had a considerable amount of money at one stage, I'll never forget walking into the Mercedes showroom, pointing and saying "I'll have that one" or saying to the bank, "No I dont want you to keep the mortgage on the house in case I want to borrow again" Owing nothing, buying cars for my kids, travel overseas buying a property for a relative to live in to be closer to us and on it goes.

Divorce took care of a large part of it, I'm still ok but cant splurge like I'd like to any more.

That was a great sense of freedom and utter joy I can tell you.

Wealth really depends on the indivisual but most would consider wealth to be enough money to do and buy what you want without worrying about the cost.

wealth to me is living comfortably for little to no work not so much spending willy nilly, and removing the risk of losing capital ie thankyou for confirming not to get married

*comfortable is two holidays a year with good amounts of drinking/eating weekly = 2.5k a week spending money in todays dollars

 

[prawn_86]

*comfortable is two holidays a year with good amounts of drinking/eating weekly = 2.5k a week spending money in todays dollars

Does that spending money include the holidays or are they on top?

For me to be completely comfortable (not filthy rich), outside of rent/house already paid off, i would probably want:
1k pw spending
1k pw holidays (50k pa)

 

[white_goodman]

Does that spending money include the holidays or are they on top?

For me to be completely comfortable (not filthy rich), outside of rent/house already paid off, i would probably want:
1k pw spending
1k pw holidays (50k pa)

holidays on top, though holidays arent that expensive

problem is when you reach goals you tend to get bored/complacent and need to set a higher one, so the 2.5k a week thing then relax might be a pipedream

http://www.amazon.com/Rush-Why-Need-Love-Race/dp/B007K4FSJW/

 

[burglar]

Oh, and the relief of knowing you need never work for an employer ever again.

You have won me over!!

 

[Miss Hale]

Can you define what 'wealth' means when you say this?
Your definition could comprise someone earning $40K p.a. who only spends $35K p.a. Even over a lifetime it's pretty hard to envisage that saving per annum creating real wealth.

It's just as I said, wealth is spending less than you earn, this way you are always ahead. As Calliope quite rightly said, I subsribe to Mr Micawber's theories (especially the one he outlined previously about expenses being less than earnings). I've read many books on making money and they all boil down to this same basic principle.

As an aside I wouldn't underestimate what $5,000 a year from an early age over a lifetime would amount to bearing in mind the wondors of compound interest and the fact that with inflation your earnings and savings capacity would rise.

The key is to not spend the money you save (and subsequently invest of course), much easier said than done when 'things' tempt us.

As an example, I had an elderly relative who passed away a little over a year ago. To all intents and purposes she was a little old lady living a fairly simple but comfortable lifestyle as a self-funded retiree. In actual fact she had accumulated several millions in investments The money she earned was far more than she needed to live on so even in retirement she was building more wealth. She had a very modest job when she worked and had travelled extensively in her youth but she clearly saved and invested all through her life. She never married though, maybe that is the key

 

[Julia]

It's just as I said, wealth is spending less than you earn, this way you are always ahead. As Calliope quite rightly said, I subsribe to Mr Micawber's theories (especially the one he outlined previously about expenses being less than earnings). I've read many books on making money and they all boil down to this same basic principle.

OK, agree of course. I thought that pretty much went without saying.

As an example, I had an elderly relative who passed away a little over a year ago. To all intents and purposes she was a little old lady living a fairly simple but comfortable lifestyle as a self-funded retiree. In actual fact she had accumulated several millions in investments The money she earned was far more than she needed to live on so even in retirement she was building more wealth. She had a very modest job when she worked and had travelled extensively in her youth but she clearly saved and invested all through her life. She never married though, maybe that is the key

The key to her wealth was her successful investing, it would seem, rather than just simply saving what she didn't spend.
I like the observation about her not being married. I only succeeded in doing OK after I was no longer encumbered by extravagant husbands.

 

[Miss Hale]

The key to her wealth was her successful investing, it would seem, rather than just simply saving what she didn't spend.

Well yes and no. I think the key is saving it and not spending it once you have saved it. Even if you just put it in the bank you'd be way ahead of most people. My relative was a pretty conservative investor actually, mainly blue chip shares with good earnings and term deposits and the like. The key is to invest it in something with not too high a risk and not blow it which is always the temptation (be it on holidays, cars, expensive home, other consumer goods or some hair brained scheme/dodgy 'investment'). Of course this is a pretty boring approach (way too boring for some) but it gave her what she wanted; financial security.

I like the observation about her not being married. I only succeeded in doing OK after I was no longer encumbered by extravagant husbands.

I'm still encumbered by mine Suffice to say we have different approaches to money management Interesting that both men and women feel they are disadvantaged financially by marriage.