Monday, December 03, 2007

How much do you keep?

It's not about how much you make, but how much you keep. Who would you rather be: A professional athlete who makes $500K a year and spends $501K a year or a teacher who makes $20K a year but only spends $15K? Personally, I would rather be the teacher. Yes, the athlete probably has a nicer house and car than me... today. However, that extra $5K can be invested and used to create even more wealth. Imagine this: you invest that $5K and earn a nominal return in a retirement fund. At the age of 65, you'll have enough money saved you'll NEVER have to think about money again. As a matter of fact, you'll have well over $1 million (if you start at 30 years old) in your account. That athlete, who never saved, will only be up to his/her ear in debt. Chances are that nice car and house will disappear.

Now if you're like me, 65 years old sounds like a long time to wait. What if you could earn better returns that 10% annually? What can you do that adds value to people's lives? There is no right answer, but think about this for a minute. The majority of millionaires in the US are small business owners (we're talking 97%). The other 3% percent are athletes, actors and inheritance benefactors. Also, the majority of millionaires are ... surprise surprise ... teachers. Teachers know how to live within a budget and enjoy a nice chunk of time during the summer to operate their business.

So, as nice as it might be to be a superstar athlete, it's not about how much you make. It's all about how much money you save, and how you figure out ways to have that money work for you.


  1. Well then I guess there IS hope for real professions! :)

  2. Well then I guess there IS hope for real professions! :)