After posting about stock markets and how they fare for quite some time, I wish to deviate from there and start talking about how we can get rich by starting from the basics first...
In fact, i feel quite sad for the celebrities who after going through all the luxuries in their lives, in turn, have to lead a life of poverty (& debt) in their aftermath usually after their careers have nearly ended.
Some more examples including Mike Tyson, Michael Jackson can also be found in the links below:
All these boils down to one fact - They are not living within their means!
If you have read Financial Self-Help Books like "Rich Dad Poor Dad" or "Secrets-of-self-made-millionaire", you would have learnt the what Wealth really stands for...
Wealth is defined as "how long a period of time You can sustain your current lifestyle if you stop working".
In fact, none of the celebrities who went bankrupt are RICH! Although they are earning A LOT MORE than the average person, they SPEND EVEN MORE than you!
And by the basic accounting standards:
Equity = Assets - Liabilities
Thus, their Equity becomes Zero or -ve once they stopped working! How sad a life for them... and for many average income earners out there...
Most people are fixated upon the idea that they just need to study hard, work hard and retire well with a pension fund supporting their old age. How wrong can that be!?
The truth now is that healthcare are becoming more advanced than ever and people are living longer than ever! If you retire (or forced to retire) at 60, you have 20 more years to live your old age based on the average 80 year old lifespan now... Can your savings cover the 20 years without you working at all?! I doubt so if you put your savings in a bank giving tiny paltry 0.05% yearly!!
The Key to Financial Freedom or a Comfortable Lifestyle is to 1) Live within your means and 2) Invest for higher returns. With compounding effect, you can exponentially generate a much bigger, fatter retirement nest egg than your peers.
Hope you like my post and can do me a favour by "Like"-ing my facebook page at www.facebook.com/kissinvesting. Thanks & HUAT AH!