For most of Americans, even though we are by far the richest and most powerful country ever in history, the vast majority of us do not live that way day-to-day according to American standards. In fact, 81% of Americans are in debt and have less than $20 in their pocket right now (cash). It is clear that this is a result of lower incomes and poor financial management.
I believe that if you don’t have cash or hard assets like property, gold, silver, etc, you don’t really have anything. Credit is not an asset and your bank is only safe if you can take money out of it. Banks are government backed for now up to $250,000 but one sign of the pen can change that and then you’ll remember banks are just a business. They don’t keep your money safe, they invest it. In fact, every time you put $1 in your account, the bank loans that same dollar out 9 more times – to 9 different people. So it is clear that we can’t depend on banks to teach us how to be responsible with money.
In the next sections we’ll go over how we can make regular changes that will guarantee you to be rich within 20 years or less, without putting in that much effort.
I think a lot of information about this topic is rather boring on the internet. They all say the same thing – save more money, make more money, whatever. We all already “know” this but something keeps us from doing it. It’s a matter of impatience and our inability to preoccupy ourselves constructively while saving towards a goal. The rules are changing. Money isn’t the same as it used to be and neither is banking. Never save to save! Why? Your parents said that during a time when the American banking system paid a decent interest rate and you could actually make a profit by keeping your money in the bank. Also, saving money only has one purpose – so we (or someone else) can spend it later. This means the rules of savings you’ve probably heard from your parents (you know, build up your nest egg) isn’t going to work anymore.