Money Ain’t Everything…Until You Have None

When people make a list of the things in life that are most important to them, money is never ranked at the top – but it’s usually among the top three or four.

The list typically starts with health, family, happiness, and then money, in that order.

It’s always bothered me when people made comments like “money isn’t everything.” It may not be everything – but when you have none, it’s everything.

In the words of  Zig Ziglar, “Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.”

The only people in my life that I’ve ever heard make the statement “money isn’t everything” didn’t have any money. I’ve never heard someone that had money make that statement.

The fact of the matter is that to some degree – whether we like it or not – money is as close to “everything” as you can get without “being everything”. There are very few aspects of our lives that are not influenced by money either directly or indirectly.

Here are some examples of what I’m talking about:

1. The number one factor that determines where we end up in life is not our intelligence, hard work or ambition. I know this sounds contrary to what we’re taught, but it’s true.

The number one factor is the socioeconomic class we are born into.

This is not my opinion. It is a statistical fact.

If you are born wealthy, you are likely to die wealthy. And if you are born poor or middle class, you are likely to die that way as well.

2. Life expectancy increases as your socioeconomic status improves.

Fact is, the more your net worth, the longer your life expectancy.

People with more money usually have better health care and take better care of themselves.

3. Having money gives you options that you wouldn’t have otherwise. These include:

– The ability to not have to stay at a job that you hate, and/or to be able to venture out on your own and start a business.

– The ability to pay for your children’s education and spare them the burden of taking on an obscene amount of debt before they even start their lives.

– The ability to travel anywhere in the world whenever you feel like it, pay cash upfront, and not finance a trip that you’ll be paying off for the next five years.

4. If you want to live in a nice neighborhood – well, you better have a lot of dough. There is no way around it – living in a clean, low crime area that is well maintained costs money.

Let me share some of my personal story with you in closing.

I grew up in a what would be considered a lower middle class household.

My mother worked at NYNEX, which I believe is Verizon today. She made an annual salary of $30,000 – $35,000 in the 70s, 80s and 90s. She had great health insurance and a pension plan.

I graduated from college, and my first job out of college paid $18,000 a year.

My highest earning year in my life was in excess of $300,000.

I was never into cars, clothes or frivolous bullshit. The number one thing I wanted to do was travel and see the world.

I can tell you that I’ve been broke, and I’ve had money. And I will take the latter any day of the week.

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page. 

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

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How Much You Invest Doesn’t Matter!

Good morning!

Earlier this week, I posted an Ask Wealthy Joe question from someone who wanted to start investing but was unable to come up with the funds to do so out of her regular paychecks.  I advised her to use 20 percent of her income tax refund.

Now, suppose your tax refund is $1,000.  20 percent of that is $200.  That’s not a lot of money, and I know that some of you are wondering why you should bother if that’s all you have.

I know this because in The Stock Market is For Everyone, I suggest to people that they begin with a small amount out of every paycheck, and I have been asked how that could possibly make a difference in one’s financial future.

There’s a misperception that you need a lot of money to start investing.  That is NOT THE CASE!

Here’s the thing: The most important factor in your success as an investor is the performance of the asset class – in this case, the stock.

I said this the other day when I was talking about how people make the mistake of choosing penny stocks because they can get more shares for their money.

“What would my little $100 do?” you ask.

Well, the answer is “it depends.”

If you invest in a company that doesn’t perform, then your money won’t grow very much.  That’s the same whether you invest $100 or $100,000.

For example, let’s say you bought one share of IBM (NYSE: IBM) in 2006 at $82.20 a share.  That investment would be worth $136.80 today.  That would be a 66% return over 13 years.

Let’s compare that to buying one share of Apple (NASDAQ: AAPL) in 2006 for $71.89.  That investment would now be worth $1669, or 23 times your investment.

Get it?

Obviously, the more you have to invest, the more you can gain.  I encourage you to invest as much as you possibly can!

However, the performance of the stock trumps the amount you invested.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)