Personal finance experts don’t get wealthy by following their own advice

> If I had to give 1 bit of general financial advice though: develop your talent stack.

This is crucial, but having a relatively high savings / investing rate is as important.

> And baring some health issue, nobody can ever take a skill away from you.

Time absolutely can. Even someone in a sedentary job in a field where their expertise won't necessarily become outdated will eventually have to hang up their cleats for one reason or another.

> develop your talent stack. It doesn't matter if...

I think its 100% matters which talent you pick. Some will on average pay out 1000x over others.

> If I had to give 1 bit of general financial advice though: develop your talent stack. It doesn't matter if it's learning a new programming language, wood-working, learning to fix cars or toilets, taking a foreign language class, learning how to paint, or growing a great garden. If you have multiple skills you have more opportunities to make money as well as combining those skills in unique ways to create new business ideas and concepts.

Seconded. When you are wasting time you might as well develop your skills. Fortunes are to be found on the intersection of almost any two skills, if you can add more to the pile you are adding more chances for capturing that value.

I think what you said is great, especially about having 100% of the cash to buy something, before you buy it, so that you 100% know you will be able to pay that bill and avoid the super high interest rates on credit cards.

And, there is nothing wrong with not using credit cards. Especially if you don't have a job that pays $200,000+ per year so you can afford to buy a house. But for someone making $35,000, of what use is credit?

I suppose that buying groceries and gasoline and getting cash back is fine, and worth it. And making sure you can return items if there's a problem. But the way a lot of people talk about credit cards, is that they are some kind of holy grail.

But for people who are halfway intelligent, I don't think that financial expert is really that necessary. Just read a lot of great books on the subject, watch a lot of videos, and manage it yourself. It's not that difficult. Why even pay someone. But, this does not apply to someone who has super high worth, like $250 million plus, but it's kind of dumb to talk about them, because they're going to know what to do anyways, or at least 99.9% of them.

Also, try to develop a talent stack that actually is valuable, if that's what you're going to do. Nothing wrong with learning how to grow roses, for example. That is a hobby, not a skill or talent, in my opinion. Sure, maybe one out of 100 million will somehow write a book on rose growing, but that is the exceptionally rare exception. However, learning to landscape and taking classes at your local college and getting certifications is a different issue. But even then, you have to be able to actually DO it if needed, for money - so you have to be able to life heavy stuff, work in the sun all day, etc. If you can't, what's the point. Same with your example of painting - that's a pretty useless thing to learn. And again, this is in terms of money, which you stated in the first part: "1 bit of general financial advice though: develop your talent stack"

Learn computer programming. Learn plumbing. Learn auto repair. Stuff you can make money at.

And again, nothing wrong with doing stuff as a hobby because you enjoy them, but that is a different topic.

> Is the average business owner any better off?

Obviously anecdotal, but not really IMO. I've bounced back and forth between being in business for myself and working for the man.

Between healthcare, saving for retirement, etc. things are really optimized against someone "pulling themselves up by the bootstraps" in this way. I've listened to the politicians in the US scream how important small business only to vote against that very interest (tax cuts for rich + corporate tax breaks).

I can't get good healthcare unless it's tied to my employment here. The healthcare I get independently is of lower quality for much, much more money out of pocket... Lord help you if you do something stupid and show a profit on your books... etc etc... The first 2-3 rungs of the "small business owner" ladder are missing by design.

If I had a family I would likely never consider being a business owner again due to the health implications, financial risk, and time commitment.

100% the average working Joe is better off.

Starting a business is complicated, requires discipline, and then requires a decent amount of luck to even keep it afloat...

It can be used as a good tax harvesting vehicle but again this requires so much knowledge and ultimately I think running a business (even at a strategic loss) requires more depth of knowledge than the average saving/investing tips.

Would definitely agree that starting a business is a path to becoming RICH, but definitely not a path to being financial stable/above average

You're trying to cure the symptom, not the disease. You need a therapist, not financial advice.

You know what you're doing is unhealthy but you can't stop. A good mental health professional can help you deal with the pain you're trying to cover up with buying junk.

Therapy.

Also, one short term hack I haven't seen explicitly mentioned yet. Try to enjoy a healthier kind of buying: buy your house piece by piece. In other words, pay off your mortgage early. If you can direct some of your impulse buying towards early mortgage repayment like that, that would be a win!

Try to experience the process of increasing your ownership as close to your senses as possible:

- Can you make the repayments cash transactions instead of online?

- Make these early repayments as frequent as possible. If the bank allows monthly, quarterly or annually only, arrange for a trusted friend to collect weekly or even daily.

- Visualise your progress:

  - Make a drawing/real life 3d model/photo/lego model of your house.

  - Colour the bits of the drawing you now own.

  - Move the lego bits over from "the bank" to "mine/ours".

  - Mark individual stones or pieces of siding as your own versus the bank's.

  - ...

Just don't forget about finding a good therapist!

I have a friend like this. She is successful, has an Ivy League degree in engineering and has very high income. But she grew up poor and makes terrible financial decisions. They largely seem outside of her control.

I speculate that growing up in poverty is not the cause of behavior; rather it's the reverse. Her family behaves in particular ways that make them poor and she has inherited those traits, either biologically or environmentally. From talking with her about how her family operates, this seems to be true. They have very low income but buy a new 4K HD TV every year along with trading up their vehicles to new models. They manage everything by an ever expanding debt load collateralized on their house/credit cards. I don't think these behaviors are 'breakable' because they aren't habits. It's almost like they are built into the default mode network.

In situations like this, when you can observe your behavior as something beyond your control, the best bet is to influence your environment rather than your behavior. Put your money beyond your easy reach (401k, IRA, pay down mortgage early etc.)

I personally struggle with eating behavior that is beyond my control. The only way I've been able to successfully control it is to put a lock on my kitchen cabinet that I don't have the combo to. This acts as a big moderator that gets me through the self destructive impulse periods.

I don't have complete answers, so I only give out solutions that has worked for me:

1. I set up a goal to only have one meal eating out per week and I did it by keeping track of whether I go to a restaurant that day. I used uHabit, an open source ads free android app to help me do this.

2. I also keep a spreadsheet for a certain aspect of my life: electronics and crafting. Each time I buy something craft related, I entered the expense. I have an expense goal that I try to keep it under per month.

These two strategies has allowed me to save me a lot of money and sometime I would go on for months without spending much money at all.

Also, it is likely that your spending habit is an emotional problem, not a discipline issue. I think it may be prudent to talk to a mental health professional.

So first suggestion is that it sounds like you could benefit from talking to a therapist. You're self-sabotaging, and it sounds like you know that, and this is a super, super common, normal behavior that a therapist will likely be able to help you talk through.

As for money advice: Can you automate some saving, and have that happen before your money hits your bank account? E.g. if your workplace offers a 401k, you should definitely be maxing that out, and that means your employer will save that money before you have access to it, and doing that for long enough will set you up for retirement even if you mis-manage the rest of your pay.

If you can set up more systems like that, you should! You may be able to set up an after-tax account at fidelity or vanguard or similar that automatically gets a portion of your paycheck deposited in, and you can set it up to automatically buy stocks/bonds/reits on a regular schedule. That money would still be accessible, but you'd have to sell your investments and wait a few days to transfer into a checking account, which might be enough friction to help keep it saved.

There's already a bunch of great advice here. I have just one thing to add:

> the me of right now acts as if future me will just blow all my savings irresponsibly anyway.

I know this horrible feeling, but it isn't really true. It's a self fulfilling prophecy. It may take some work and time to change yourself and your habits, but it is possible. Even just commiting to yourself that you're going to work on this can go a long way to easing your feelings about it and breaking the cycle.

And if you can't do it alone, don't! Therapy is an option. Consider it splurging on your retirement.

I agree with others that therapy is going to help you fix this problem (and others) more thoroughly than trying to muster up the willpower to do what you know you should be doing. You aren't a screwup, you aren't stupid. But you did get dealt a crappy hand and you're (naturally) struggling to improve it.

That being said, the number 1 thing that helped move me out of a situation similar to yours financially (grew up in poverty, poor impulse control, etc) was listening to the Dave Ramsey podcast every day. It probably doesn't matter if you listen to Dave Ramsey or one of the others mentioned in the article, so just go with someone. Though I will say that once every episode Dave Ramsey has someone come on and do their Debt Free Scream where they tell their story of getting out of debt, and then they shout at the top of their lungs, "I'M DEBT FREE!!!" And that was incredibly motivating, and at times emotionally moving and I even cried sometimes.

Anyway, listen to it as often as you can: on your commute, in the shower, while working out, while cooking, while eating, etc. Get it in to your bones.

What this did for me was it began changing the way I think about money. As I listened to hours of Dave Ramsey tell people everyday that saving money was cool, paying off debt is cool and the best way to financial freedom, that the 7 baby steps are achievable, my thoughts around money slowly changed, and so did my behavior. At first I disagreed with Ramsey a lot, especially how he treated some callers (that has improved a fair amount over the years, thankfully). But eventually I saw the wisdom in what he was saying.

Your biggest enemy is your present self. It’s also your biggest ally for recognizing your risk of self-defeat and asking for help.

In addition to the advice to use accounts with penalties for early withdrawals, I’d consider if setting a fun money budget would give you a metered amount of “yeah, no one’s perfect” escape valve but then have other accounts that are harder to readily access.

Consider splitting your direct deposit (after 401k deferral) into multiple accounts, some of which you don’t have ready access to. Put $100/check into an emergency fund account, $150/check into a travel or big fun account, $400/check into a house/car repairs account, $X/check to an after-tax Vanguard account, and the rest into your daily usage account.

You’ll have setbacks over the years, just as your grandparents did. But over the long run, there’s never been a 15-year run of negative nominal returns on the broad based US stock averages. Bet with that trend to continue, including there being some 5-year losing periods ahead.

You can do this, it won’t be easy but setting in place a few mechanisms to support, not letting the wheels come off the bus entirely if you skip up a little, and just committing to being better every year than the last probably has positive correlation with an ok outcome.

There are some good answers here (along with some less good ones), but I wanted to just pause to applaud you for this post.

Even though HN is full of smart, data-orientated people, it's rare to see this level of self-awareness, vulnerability and curiosity demonstrated in a single comment. We could all benefit from more of this set of skills. Most of us dole out advice far more willingly than we ask for it. Through revealing your own frailty, you've opened the door for others who are less courageous to hear some good advice.

There's nothing pathetic here at all -- it's how we learn and grow. I hope this doesn't come across as condescending: I genuinely wanted to say, "thank you".

This is a really honest comment and my thought reading through it is that there isn't going to be "one quick trick" to help. Your troubles seem multifaceted and not completely about money. Have you considered talking to a therapist?

Hi Wincy, it seems to me not at all pathetic, to struggle with willpower to break bad habits, when you've got a disabled child! Seems to me that looking after your child would take lots of willpower and cause stress and lack of freedom, and that you should forgive yourself for using "retail therapy" as a coping strategy. ;) Perhaps the answer lies partly in finding a support group with other "special needs parents", as lets face it most of the population don't understand what its like to have a disabled child until it happens to them. Beyond that, one way not to waste money is to think of it in terms of hours you give your employer, spent money is spent life hours, therefore you're really shooting yourself in the foot, but obviously you know that.. frugality, hunting down deals can be fun and kind of a sport in itself (in moderation of course!) ,also being frugal reduces one's footprint on the earth and amount of waste one creates which can help others, so can be a motivator. If really you have no self-control over this (which is 100% understandable when dealing with other challenges) then how about some tricks like automatically pay money into a higher interest savings bond that has penalties if withdrawn early, or pay into an account that someone else has control of like a trusted friend or family member has to countersign or something, just surrender control to someone else for a temporary period if you really can't trust yourself. Can your partner/spouse help? I guess maybe not if you're asking here. Anyway I think nothing to be ashamed of, because loving and caring for a disabled person is enough to deal with, and having cr*ppy finances as result, well, like can be like that.

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

Work for a company with stock trading blackout periods. Setup a 10b5-1 plan to periodically sell your company stock, then when the blackouts are lifted invest the money you want to save into your company stock.

This has the drawback of being undiversified, but undiversified savings may be preferable to no savings at all.

For the scrolling till 2am thing I have been using this strategy:

1. Before opening the laptop I decide how much time I want to spend, and what I will do immediately after.

2. Set a timer that I'll have to get up to turn off.

3. Do the thing I had decided to do. It can be a little thing, like washing 1 dish, taking out the trash...

I tried many strategies before finding one that works, and will still try to develop more so I'm not completely sunk if/when this one stops working.

Ironically, I think the advice of "Personal Finance experts" (which are derided in this article) is probably perfect for you. Maybe someone else will have a specific suggestion of who to check out, but I think they are mainly trying to help people with the psychological problem of spending too much money.

Well you're being somewhat responsible already in that you're paying your bills straight away, so yay for you.

Regarding your shopping habits, it sounds like you're acquiring more tools but not making good use of what you have. Switch to buying used things,a nd spend more time sweating over the things you bought figuring out how to use them effectively. This will probably be an emotionally painful and initially unsatisfying process. Make something with your 3d printer. Be disappointed. Make something marginally better, continue being disappointed. Repeat until one day you unexpectedly feel pleased with the results.

It takes about 3 months to shift behavior patterns, even with the help of something like Adderall, which is totally fine to use.

I think you’ve already got a lot of advice related to the mechanics of saving money (401k which has withdrawal penalties, maybe an IRA for greater friction, etc.)

On the emotional management / discipline front, I’d suggest also exploiting the similarities between personal finances and healthy living. If money is particularly painful for you, try forming simple habits like going on a 10 minute walk each morning, or eating healthy 1 day a week.

Small actions like that will help you prove to yourself that you can make changes, and you can ride that proof emotionally to make bigger changes incrementally over time.

An example would be 1 day a week of not eating out, which becomes a $10 per week saving habit, then moving to 2 days and $20.

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

I think this is called a trust: https://en.m.wikipedia.org/wiki/Trust_law

Also, if you are so inclined, check if you can replace your habit of trawling Amazon for stuff to buy with trawling Amazon looking for stuff to buy in the future. Personally, looking forward to buying the thing is at least 60% of the enjoyment.

Anyway, try seeing a psychotherapist. Someone serious with a degree. Your money problems seem to be at least partially learned, so they can be unlearned.

> Is there anyone here who has gone from being extremely irresponsible with money to having savings? How do I get over the trauma of my grandparents losing millions of dollars in the 2008 financial collapse, which happened right as I came of age? How do I stop “shopscrolling” Amazon until 2 in the morning?

Partner with someone who is disciplined, such as a potential spouse/partner, a friend, or even a support group of people in the same situation.

I know that recommendations are frowned upon here, but also take a look at Brian Johnson/Optimize. Discipline is one of the things they touch on a lot, and unlike other places, they have advice that actually seems to work.

> it’s pathetic

No it isn't. But that is revealing the issue: you tend toward the irrational. In fact,

> How do I stop

By realizing that there is no need for that, rationally. You want to buy new X, but you do not need them: _see the fact_ - they are per se useless and replaceable for their improper purpose of emotional release: to have X is just petty if you want to fix your finance. You can replace the feeling of that X with something free. If there is one stroke of luck of living in these times, is that access to stimula has probably never been so rich in options and free in cost.

> trying to think of things to buy

Think instead of things to enjoy. They are really, mostly free nowadays (even our presence here at Dan's is). Be faster than the other habitual pattern and replace it - if you think of something to buy, realize you are doing it and think of something to enjoy. Replace the thought. You are used to collect items: collect experiences instead. Realize that you can replace items with experiences. For that, one laptop is enough, a basic car etc.

That thought habit is a mental pattern to replace, to replace with something that makes sense - the other does not, as you have to realize and in fact realize.

(And about Amzn, if other people were unable to read this, I would add: Bzos is bald. And you do not seem to have stopped to consider that. If you want to buy from him - who am I to convince you otherwise. But he is bald (you should see that - it should be a thought stopper, a doubt inducer). And possibly the last person in the world who needs your money. With your money you vote: is that what you want to promote? The very fact that you shop there raises the question: how long have you thought about your actions? The single ones, the generic ones. Some people think you are supposed to evaluate your actions before doing them. You take a step back, look at what you do, and what you have done and what you would do, and judge them as good ideas or bad ideas, for what they are. I am sure you know mathematics sufficiently. If I shop from somebody with those traits, I have deliberately deliberated it, it is a conscious choice. Read these paragraph carefully, and understand them. If you want clarifications, we are here.)

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

You can do this with a trust or annuity. Have you looked into them?

I would put money in a 401K or IRA that has a real penalty of withdrawing and takes time to withdraw as to deincentivize yourself from spending. Remove yourself from your financial equation. If you have a significant other and they are better with money have them manage both of your finances.

You need to have money removed from your account and into investment accounts automatically before you have a chance to spend it. Money in checking or saving will get spent.

I never had your problem, so this might not work well for you, but maybe it will:

Write everything you spend money on down in a single place before you buy it. If you buy a book and pen to do this they can be your first entry.

Creating an awareness of what you spend money on gives you a chance to ask if you will value the thing as much as your impulses are telling you.

This goes generally, lots of self help people suggest keeping a diary, and reviewing it.

One thing I did that helped me a lot is to set up an automatic transfer to a savings account on the day I get paid. That way I don't even see the money. I try to forget about the savings account as much as possible. I mentally file it away as "not my money".

It works much better for me than trying to save at the end of the month for me anyways.

That's exactly the kind of things I've seen CBT (Cognitive Behavioral Therapies) do miracles in short periods of time. It requires some dedication but I've never thought it would work so well on my friends and relatives.

What you're describing sounds to me like a mental health issue. Sounds like you've hacked a dopamine reward loop and now can't stop it.

Have you tried therapy?

For me it was getting married and having a shared account and a spouse who doesn’t have adhd impulse control. It will get better if you find someone who fills this void. Therapy is good until then, you need constant awareness of the issue to me able to throw up hurdles like blocking websites via iOS screen time functionality etc.

> I wish I could put money into an account that would then only disburse small amounts of it over the year, and I couldn’t override that.

This isn't financial advice, but what you want is definitely possible with defi and smart contracts. I'm not sure what in the ecosystem has this capability, but there's a good chance you can get a bit of interest too.

Just stay away from USDT if you're planning to have payouts happen over the long term; USDC would be a safer bet.

Have you been to a doctor? There's a few mental illnesses that can be the cause.

Others have already recommended therapy and I agree. I would also recommend loving-kindness mediation, and reading the book "Don't Shoot the Dog" to understand how brains work.

I could try giving you financial advice, but the problem is that you would not follow it, and we both know it. So instead, I will recommend a few tricks I use to make myself believe that I have less money than I actually have (which reduces the impulse to spend too much).

First, realize that "the money you have" is just a fiction anyway. Suppose you have a $100,000 mortgage, and $10,000 in your bank account. Does it mean you have $10,000 that you are free to spend? No, it actually means you have $90,000 debt. The number $10,000 is so misleading that the less you think about it, the better for you. (You have an option to reduce the fiction by making an advance payment to the mortgage. Perhaps you should do it when the feeling "I have too much money" becomes too strong.)

Perhaps you should get a second bank account, move some money from the first account there, and then forget that the second account exists. Even better, if possible, make it so that only your wife (or both of you together) can move money from the second account. Again, when the feeling "I have too much money" gets too strong, move some money from the first account to the second account, and then forget that you did this. (There should be no card associated with the second bank account.)

I am not American, so I don't know whether this would be a practical advice or a huge inconvenience for you, but don't use cards, always pay cash. With cards, paying is too easy, and the money is too virtual. Do you NOT want to simplify things you want to do less of! Keep between $100 and $500 in your purse, pay cash, and whenever you get below $100, take $400 more from an ATM. If you notice yourself visiting the ATM twice during the same week, you know you are spending too much. More importantly, this way your brain will learn to interpret "how much money do I have" as the amount in your purse, not the amount in your bank account (and definitely not the amount in your second bank account.)

Generally, the best way to get rid of a habit is to replace it with an alternative. "When you feel tempted to do X, do Y instead" is easier than "simply stop doing X". What could be a replacement for your Amazon scrolling? (Alternatively, could you somehow subvert the process, so that you e.g. scroll for awesome things, then you bookmark them in the browser, but you never actually buy them?) Could you read a book or watch a movie instead? Play a computer game (some ancient game, without loot boxes and stuff)? Learn to cook, or build furniture? (If it must be buying, could you add some artificial constraint, such as "I am going to find the most awesome thing below $5, and then I will buy it"?) Or maybe you could spend some time with people who have much less than you... and perhaps buy something genuinely useful for them. (As a side effect, thinking about other people's problems makes you think less about yourself. Think how many homeless people you could feed for that $5,000.)

> there's a "dirty little secret" that this article doesn't mention: most of them never get paid a dime by their own business. They are spending their way through a business loan, or they have family money, or some other source

Over fifty percent of generic small businesses survive for more than five years, so it's unlikely that a majority of them are completely subsisting on government loans, investors, or family money.

The most common outcome (for the small businesses that last) is to turn into something that creates just enough revenue to support the owner and a handful of employees. The owner takes a small salary and uses the rest of the cash flow for float or reinvests it into the business.

However, depending on the country, tax laws can be fairly advantageous for small business owners (e.g., higher limits on tax-deferred retirement accounts). There's also the benefit of building net worth in the business, which isn't something that employees benefit from. So, while the owner may not be getting paid all that much, they still benefit in a bunch of other ways.

Are you alleging that most small business efforts fail before they make any profit -- as in +50%? That seems rather unlikely but if anyone has strong numbers on that I'd be very interested.

The r/personalfinance and r/financialindependence subreddits are quite good and even cover more exotic details like the “mega back door roth” otherwise known as “after tax 401k contribution in plan conversions to roth” (which can let you add an additional 36k to a Roth IRA over the 6k limit each year in addition to the normal 19.5k for a traditional 401k).

They’re mostly bogleheads so are a little risk averse, but for most that’s probably the right move anyway.

Owning a small slice of a business where you're employed can also help make you rich if it grows a lot. In the tech world there are probably more financially independent employees than founders, because of the growth of some massive companies over the last few decades and high salaries. Probably a different story in the UHNW category though, very few employees can get to that level.

Yeah, but the audience of those financial gurus are the general public. So sure, their advice might work for the top 5%, but the rest of people will never "get rich" using that advice. Even that top 5% could be better off if building passive income, businesses, etc.

> max out 401k plan works

What are the advantages of 401k instead of say dumping it into half-VOO half-crypto and making millions one way or another?

Definitely not everyone, but most people in America can become millionaires (inflation adjusted) within their lifetimes.

Saving $100 per week should be possible for most households today. $100 per week over 40 years with an 8% return is $1.3m.

If you think the market will be slower in the future, or higher inflation, or whatever, use the absurdly conservative 6% and it’ll take 50 years instead of 40.

Add in the possibility of home ownership giving an additional asset to add to the net worth over the investing lifetime, giving an extra few hundred thousand… and in forty years from now, we’re well over $1m in assets, easy.

Getting $100/week might seem daunting, but that’s less than 10% of the median household income — totally within reach of a majority of people with some small changes.

I think an even deeper question is, is it possible for the masses to get rich and what would the macroeconomics look like? I would think competition and resource scarcity would prevent this.

While not everyone’s household has a practical probability to become a millionaire household, I think a quarter of them could without inordinate difficulty (around 10% already have and some of the 90% are well on their way, but are younger households and so have time and growth ahead of them)

I agree with the thrust of the article. Most personal finance experts are...a bit weird (I have no idea why Tony Robins is an expert...he knows literally nothing, isn't he a motivational speaker...only in America could this be a job).

But there is a reason why spend less is the best advice for most people: they can't start a business, they have limited scope to increase their earnings significantly, and you can actually become relatively rich if you just spend less.

Personal financial advice really isn't about attempting to become rich, it is about stopping people doing things that make no sense. We aren't talking about becoming Jeff Bezos...that isn't the goal for most people, the aim is to help people retire with dignity. Telling everyone to start their own business is terribly unhelpful because it won't improve anything as most people will fail (this is why personal finance experts exist...because most people think in these unreasonable ways i.e. the only way I can become rich is by taking huge risks...rather than just not buying stupid shit I don't need, ppl reason in very weird ways).

To say this another way, most people do not understand the long-term value of a $1 saved today. Obviously, exactly how you calculate this is a little complicated but if people realised that $1 now was worth $4 or $6 or $8 in 30 years then they would consider what they do today more carefully (and even then, some people are just weird...they will say: I am going to die before then, or I don't care...then they will get to retirement and everything is fucked).

Btw, I used to work in this industry, I have seen people who didn't consider any of this. We had a client who worked all his life in a decent paying job but had little savings, took to drink, wife divorced him, lost his job in his late 60s, got drunk one day, fell down the stairs when he was on his own in his rented house (he lost his house a few months before), died. This all happened within a few months. It will happen. You will get old. You can't control everything in life but something that is relatively easy to control is your spending. I try not to give people specific advice but the number one thing that everyone can do is: control your spending, think about what you need, you can't avoid some expenses but the peace of mind later down the road from small changes is huge.

This kind of thing is unfashionable as hell though because it does put that pressure back onto the individual. Lots of young people today have this attitude of: everything is rigged, telling me to change anything when X person is so wealthy makes you an oppressor, etc. Unsurprisingly, this attitude tends to be linked with taking decisions that are unwise, and abrogating all responsibility for the consequences.

If everyone used cash, maybe, but since that isn't happening, those who don't use credit cards are paying for those who do.

Some cities had an issue to even have to ban in person businesses from banning cash transactionss. Given the costs of cash handling taken for granted bizzarely it is possible that being charged a fee where there was none before will save merchants and consumers money net even while the credit card companies make money. Cash counting machines, time spent tracking physical money, safes, and armored car transports all cost money. The wire transfers of money and credit are a real service of real value.

100% of the rewards don't have to come from transaction fees. they could also be funded in part from other customers' interest payments. I notice that the best rewards cards often have very high interest rates. this is also not a great state of affairs; you are essentially taking advantage (through an intermediary) of other people who can't manage their finances. but it's not quite paying into your right pocket by picking from your left.

As the author of this article, this isn't true. some comes from the merchant fees, many comes from the fact people don't pay off their cards every month and that far more subsidizes those payouts.

Lastly have you tried paying with cash online? While Bitcoin is a neat idea we are far from yet mass acceptance of any digital currency yet.

Where can I get these cheap lattes? Seattle prices are >$5

Exactly. This is a terrible article that's designed to prey on people's FOMO. The basic financial advice he derides is solid advice. Do that first. Starting a business is very hard and often fails.

I did a double take when I saw the navigation menu links like "Make money blogging". Is this 2004?

It’s totally false even ignoring extreme outliers like Tim Cook. The reason there are so many angel investors in the Bay Area is because of the feedback loop of ipos giving regular employees 1-5M pretty often (and 5-50M+ less often). It’s also part of the reason a pretty unremarkable and small home on the peninsula costs $3M.

Considering the majority of CEO pay is in company equity, they are working for themselves.

One of the problems is that "rich" is relative. I was talking to a guy at an alumni event who said that managing partners are prone to fraud as they feel poor compared to their similarly ranked CEO friends.

Is he really 'working for Apple', when he's the CEO? It'd be fairer to say he has Apple working for him.

Of course you can get rich (or at least well off) in A Job. but realistically, that almost invariably means becoming a workplace strategist and doing office politics to make sure you outpace your peers, not just performing a job you like and then checking out to focus on your domestic life.

If you are just a diligent and unselfish team member who never tries to elbow your way in front of others, you are very unlikely to become rich just from your job. Wealth tends to flow towards people who are competitive rather than cooperative.

Yes and several members of professional sports leagues like the NBA/NFL are also very rich too. While it is possible to become very rich working for someone else, I think the author's point is that it is extremely unlikely.

Being the ceo is sorta an exception to this.

Came here to say this. The author lost all credibility with me when including Ramit in the list as if he's actually paid any attention at all to what IWT says he'd realize that Ramit could have written the article he just published (and they would have been similarly condescending tones)

Agreed. I haven't taken this class, but Ramit disparages the "skip a cappuccino a day and become rich" nonsense explicitly.

Yeah, I read IWTYTBR back when it came out and even then he stressed how skipping the latte was not enough: you had to increase your income + assets

I think there’s a large subset of the population who is in savings and checking accounts (often with meaningful amounts of money that sit there for a long time) who could trivially easily increase their rate of return by buying VTSAX with a portion of those funds.

> I know plenty of people making mid-6 to low-7 figure incomes while “working for someone else” and some retired in their late-40s, early 50s

Plenty to satisfy what? Why would you bring anecdotes to a gun fight?

While I generally agree, I think for many people it's easier to cut 10% of their annual spending instead of getting better return rates or a salary raise.

It varies widely by person (some people are addicted to spending money), and by career (bumping salary up by a few percentage points is a lot harder in some industries than others), which is part of the problem

It is "easier" for people that are capable of becoming wealthy to do so by making money and leveraging their skills to accrue wealth not by hours worked.

It is unclear weather it is "easier" for everyone to do so, or possible. And if not, whether they are better off not trying, and instead saving and budgeting.

Isn't aggressive budgeting a way to be able to stack that cash?

Yeah I find it a bit ironic that people complain that "rich" people aren't trying to sell their own story and instead think about how to help a non rich mortal. Of course it is a bit hypocritical because they may not know much about the middle class or below but the point is that they are trying instead of assuming that you just walk down the golden path you were born into.

Without question, not everyone should start a business. That wasn't the point of the article. It's about the advice you get and how they themselves not follow that same advice.

This may be true, but to be fair...

50 years ago, 70 years ago, an enormous series of treatments we now have, did not exist.

And even disease treatment options, even knowing how some diseases worked? Nope.

So medical care was less costly, because, there was literally less to be done. And people died at home more often too, as a result.

So naturally medical care was less costly.

And housing, the average family did not have a ginormous, 6000sq foot house. Try 1000 sq foot, 1500 sq foot as a norm.

So sure, less cost.

Same with all these fancy dodads.

Yes, 100% housing is more expensive due to low rate mortgages, and other reasons.

But in non-crazy priced locations, you can still build a small 150k, 250k house with land all in.

Some of it is indeed changing wages vs costs, but some is "more" vs wage.

I think there’s a place for Dave Ramsey’s advice. I don’t care for the religious stuff- but the advice is solid to get out of debt

He mostly talks to people that don’t realize the stranglehold debt has on them.

The first step is to acknowledge the problem

> The solution isn't "get a side hustle" it's "the full time minimum wage should support a reasonable life".

Ugh I saw you getting close and then miss it

Why would you think the solution to the savings problem is minimum wage?

When is the minimum ever good enough? Frustrating how not enough people talk about increasing income way beyond the minimum

Actually these seem like fair criticisms especially regarding your mischaracterization of Ramit Sethi.

Your conclusion in the article (under "What would I recommend you do?") turns out to be the same thing Ramit Sethi recommends you do (among other points in the article which are in agreement with his writings).

So, you are not calling out Ramit Sethi as much as you think you are.

It also conflates the fundamentals (not having credit card debt, investing in a tax-advantaged retirement fund) with the next step of not trading money for time.

How is someone who can't manage their (small) amount of money going to manage the large amount of money earned from a successful business? They can't.

As a further thought to consider, what are the chances they would be able to start a successful business to begin with?

In other words, "you learn to crawl before you walk".

Yeah, Ramsey rich is being an "everyday millionaire" by the time you retire. It isn't really rich, but it is just having a comfortable retirement and a large financial moat.

I agree entirely, but would phrase it differently. The baseline advice isn't about how to get rich, its about how to live a financially comfortable middle-class life.

I agree with this. Not everyone can be above average and not everyone should pursue self-employment, passive income and leveraging debt to grow wealth. For many many people lessons on saving and budgeting are the best course of action.