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personal finance is 80 percent behavior and only 20 percent head knowledge.
“To avoid criticism say nothing, do nothing, and be nothing.”
Ignorance is not lack of intelligence; it is simply “not knowing.”
I recommend good growth-stock mutual funds in this book as a long-term investment and dare to state that you should make 12 percent on your money over time.
The S&P 500 has averaged 11.69 percent per year for the last eighty-plus years, as of this writing.
Most experts and anyone who has had even one finance class agree that the S&P 500 is a great statistical measure of stock market returns.
“A man with an experience is not at the mercy of a man with an opinion.”
I went broke in my late twenties, and that experience changed my life.
your financial process and principles must work in good times and in bad times—otherwise,
just because you see a turkey flying in a tornado doesn’t mean turkeys can fly.
Using debt to invest in real estate or the stock market with the hope of a quick return will cause you to go broke the minute the market turns.
IF YOU WILL LIVE LIKE NO ONE ELSE, LATER YOU CAN LIVE LIKE NO ONE ELSE.
if you will make the sacrifices now that most people aren’t willing to make, later on you will be able to live as those folks will never be able to live.
Financially, we have made some mistakes such as keeping our student loans around because of the “low interest” and even leasing a car at one point.
90 percent of solving a problem is realizing there is one.
we increased our annual income—giving us the illusion that we could increase our standard of living.
The enemy of “the best” is not “the worst.” The enemy of “the best” is “just fine.”
Being willing to delay pleasure for a greater result is a sign of maturity.
Debt is so ingrained into our culture that most Americans cannot even envision a car without a payment, a house without a mortgage, a student without a loan, and credit without a card.
best way to build wealth is to become and stay debt-free.
The lesson is that while it is fine to give money to friends in need if you have it, loaning them money will mess up relationships.
Parents cosign for a teenager to buy a car. Why would parents do this? “So he can learn to be responsible.” No, what the teenager has learned is, if you can’t pay for something, buy it anyway.
“It’s stupid to guarantee someone else’s loan” (CEV).
we buy things we don’t need with money we don’t have in order to impress people we don’t like.
Staying away from car payments by driving reliable used cars is what the average millionaire does; that is how he or she became a millionaire.
Taking on a car payment is one of the dumbest things people do to destroy their chances of building wealth. The car payment is most folks’ largest payment except for their home mortgage, so it steals more money from the income than virtually anything else.
If you invested $495 per month from age twenty-five to age sixty-five, a normal working lifetime, in the average mutual fund averaging 12 percent (the eighty-year stock market average), you would have $5,881,799.14 at age sixty-five. Hope you like the car!
Taking on car payments because everyone else does it does not make it smart.
Consumer advocates, noted experts, and a good calculator will confirm that the car lease is the most expensive way to operate a vehicle.
The typical car dealer makes their money in the finance office and the shop, not in the sale of new cars.
creating an unneeded business expense for the sake of a tax write-off is bad math.
A new car loses 60 percent of its value in the first four years;
A good used car that is less than three years old is as reliable or more reliable than a new car.
The average millionaire drives a two-year-old car with no payments. He or she simply bought it. The average millionaire is unwilling to take the loss that a new car dishes out; that is how they became millionaires.
Some people want to buy a new car for the warranty. If you lose $17,000 of value over four years, on average you have paid too much for a warranty. You could have completely rebuilt the car twice for $17,000!
You don’t want to have a low score; it is best to have a high one or none at all. My personal score, by the way, is zero—because I haven’t borrowed any money in decades.
It hurts when you spend cash; therefore you spend less.
Broke people use credit cards; rich people don’t.
American teens view themselves as adults if they have a credit card, a cell phone, and a driver’s license. Sadly, none of these “accomplishments” are in any way associated with real adulthood.
I always thought you had to have credit-card payments, house payments, and car payments. Now I realize you don’t have to.”
If you stay in debt longer, you pay the lender more,
gold is a lousy investment with a long track record of mediocrity. The average rates of return tracked as far back as Napoleon are around 2 percent gain per year. In recent history, gold has a fifty-year track record of around 4.4 percent, about the same as inflation and just above savings accounts.
Do not invest money in life insurance; the returns are horrible.
“A budget is people telling their money where to go instead of wondering where it went.”
I am not against the enjoyment of money. What I am against is spending money when you do not have money to begin with.
Linda e-mailed my newspaper column, complaining that she would get robbed if she carried cash. I explained to her that crooks don’t have x-ray vision to look into her pocket or purse. The crooks assume that your purse is like all the others filled with credit cards that are over the limit.
you need to be far more worried about the danger of using credit cards than the danger of being robbed while carrying cash.
when you spend cash, you spend less.
Swiping a piece of plastic doesn’t register in your brain the same way cash does. When you actually lay a couple of Benjamins on the counter, you know you’re spending money!
you must have insurance in some basic categories as part of a Total Money Makeover:
