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URL:  http://boards.fool.com/this-is-excellent-the-author-has-obviously-given-12325044.aspx

Subject:  Re: Ten Mental Exercises Leading To Freedom Date:  4/2/2000  12:49 PM
Author:  pjohns Number:  7315 of 744595

This is excellent! The author has obviously given considerable thought to the subject. As he suggests, it can be hard to resist the temptation to spend money promiscuously when the goal of saving (the alternative) is entirely abstract and distant; but when the goal is made more tangible (e.g., saving enough to pay for some specific items, or shortening the time remaining until Financial Independence Day), the benefits of saving can come alive!

Along these same lines, I would highly recommend a 1996 book by Thomas J. Stanley, Ph.D., and William D. Danko, Ph.D., The Millionaire Next Door, which speaks to the saving-and-budgeting habits of most American millionaires. (Yes, most American millionaires do budget--assiduously--which is how many of them became millionaires in the first place, and how they stay that way.) According to the book, most who do not budget use the alternative pay-yourself-first method (which I personally like); it allows you to spend whatever you wish-- after you have first put aside a very large chunk of your income for saving (to satisfy short- and intermediate-term needs) and investing (for long-term goals, like retirement).

Whichever method one prefers--careful budgeting or the pay-yourself-first method, or even a modified combination of the two--one thing is clear: Out-of-control spending, with no view to future needs, does not produce wealth. Or even financial security.

As the authors of Millionaire said in the very beginning of the book: "Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high."

Again, I commend the author, hocus, for a very fine essay. I recommend it enthusiastically. For anyone interested in wealth building (or even earlier retirement), it should be required reading!
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