The late Benjamin Franklin is quoted as saying “it is the eyes of others and not our own eyes which ruin us. If all the world were blind except myself I should not care for fine clothes or furniture.”
The real comforts in life don’t cost much. What are my basic needs?
Food, water, shelter, clothing, transportation, books, giving, saving and love.
In our day and age, you need to add insurance to the list of needs but that’s another subject for another day.
PT Barnum, certainly one the best marketers of his time and arguably one the best of all time discussed this very subject in great detail. The subject of borrowing to look like we have more than we do.
The subject is near and dear to my heart because I went through a hell of a time when one of the companies I owned (frankly it owned me), filed for chapter 11. Chapter 11 is when you tell all your creditors that you can’t pay them and the US bankruptcy courts agree with you that you can’t pay them and then you formulate a plan of repayment for less than what you owe them. The thought process here is that its better for them to get something rather than nothing, that is if the business can make it out of Chapter 11. This subject I will save for another day.
As of 2016, the median household income in the US is $59,000. If you ask any young couple coming out of high school if they could live well off that income every one of them would answer unequivocally yes. A select few would tell you how much more they would like to have but suffice it to say that is enough money to provide for all of your needs on one condition, you don’t borrow money for anything.
This may seem like an impossibility at first but once one disciplines themselves they will learn that the accumulation of wealth is derived from saving money for items they choose, not borrowing for them.
When I was 19 years old I was in Amway. For you young readers, Google it, every reader above the age of 35 knows what it is. The speakers in Amway often referred to delayed gratification. I understood it to mean waiting to purchase something until you had the money to buy it. I think that is an inaccurate definition. In my opinion delayed gratification is having the money to buy something you really want and you still don’t buy it. The longer you wait to more you will know if you really want it. It is funny how often when you wait for months or even years after having the money to buy something you really want that all of a sudden you don’t want it any more.
The focus becomes needs based not wants based. We are a wants based society. I speak from experience because I was fortunate to have a very substantial income in my 30’s that made me a multi millionaire several times over and I made a series of wrong decisions based around wants that eventually cost me millioins.
The one good thing about failure like I had is that it is the greatest learning experience one could have if you let it. I don’t recommend you go through it but, I am no longer afraid of it. I know what caused it and I know the signs of others who are heading toward it.
Look, when I went broke I had with income in excess of $250,000 per year for over 10 years with times the income was over $500k. I wasn’t Warren Buffet rich but I made more money than the upper 2% of all people in the entire world. How the hell do you go broke with that much?
WANTS. When your focus is on what you want and not what you need then you are headed down the wrong path.
Debt is the surrender of life.
When you are in debt for your things you give up your life to work for the lender. Solomon, King David’s son, was the richest man of his time and arguably on a comparative basis had wealth like Jobs, Gates or Bezos. Solomon wrote in Proverbs that the borrower is a slave to the lender. If you don’t believe that’s true go read my story in either of my books. I was a slave and I almost lost everything. When I say everything I am not talking about the stuff, I am talking about the woman I love, my health and my family. Those are my needs.
Countless amounts of great successes teach this one principal but yet our society is filled with great marketers who convince you that you should get a new Lexus for Christmas because you always wanted one. Instead of financing one this Christmas how about waiting a few years and paying cash for one.
I love Dave Ramsey, he talks about how to go through life with no credit score. Dave is enormously wealthy today but he went bankrupt many years ago and now he teaches others how to avoid the same fate and live truly free lives. Sound familiar?
So I ask you, what are your needs?
Can you focus on those instead of your wants?
Can you use delayed gratification until you are no longer a slave?
Only you can decide, I hope you decide well.
To your lifelong prosperity,
David Mulvaney