Social Question

RedDeerGuy1's avatar

Do some people become richer because they manage money better?

Asked by RedDeerGuy1 (21247points) July 2nd, 2021
8 responses
“Great Question” (1points)

By saving, spending wise, and giving?

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Answers

KNOWITALL's avatar

Several wealthy people I’ve known have given me tips on keeping money over the years.

One man who owned a company and fleet of vehicles, told me he only keeps liability on all his vehicles because any accident is still going to be less than all those vehicles with full coverage over their lifespan.

Sam Walton of Walmart was notoriously humble and no one would have known he was wealthy by his appearance, home or vehicle.

Another wealthy friend said he will only buy used cars for the rest of his life due to the depreciation as soon as you’re off the lot.

Dave Ramsey says NEVER lease a vehicle, it’s the dumbest move you can make financially.

ragingloli's avatar

That, and rigorous tax evasion and exploitation of employees and contractors. Mostly the latter two, actually.

JLeslie's avatar

Definitely.

There are many many millionaires, and a lot of them just make an average middle class income.

There are people in debt with no savings who make a half a million dollars a year.

Wealth has a lot to do with how you manage money.

linguaphile's avatar

I hesitate to make this an either/or answer—yes, it does have to do with how you manage what you have, but it also does have to do with the amount of money you’re working with.

The potholes (literal and figurative) that poverty create for people are huge and many. One wrong turn without a financial safety net can set a family back decades. What money truly creates for people are choices and time.

The amount you start with will determine what you can do with the money, then having choices and time gives space to manage money- from that junction, yes savvy management makes the difference.

JLeslie's avatar

@linguaphile Hello! Nice to see you.

Everything you said is true about needing to have some discretionary income to even be able to save and invest, but I always think of these Q’s as the average person with the average income. One will have hundreds of thousands of dollars and no mortgage on their house by age 60 and the other will be in debt.

ragingloli's avatar

@linguaphile
That reminds me of the analogy, that a poor person will spend more money over time on cheap boots that he has to replace regularly, than a wealthy person spends on an expensive pair of boots that he does not have to replace, but that the poor person has no choice but to buy the cheap boots, because he can not afford the expensive ones.

JLeslie's avatar

It’s true. The poor have the system working against them in so many ways. It’s horrible.

stanleybmanly's avatar

Yes of course. SOME people do exactly that. SOME people inherit both their wealth AND the people proficient at multiplying it.

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