Wealth AhHa!

My wife and I were at her company’s Christmas Dinner for employees. At our table was the CFO of her company. Well, during the conversation, he talked about how poor he was. Ester and I looked at each other in amazement because this CFO made a salary of about $300,000 plus bonuses. How could he be poor?

Then, the wealth AhHa! came to me…

Regardless of yearly income, we all feel the money pinch – rich or poor.

I guess the question remains whether your money pinch is lifestyle or wealth related.

Most have a lifestyle related money pinch meaning that they spend most of their income on that new car, bigger houses, and more stuff. These peoples spending balloon to the size of their income and carry credit cards debts. The lifestyle money pinch comes with great risks. Because, if you lose a job, your lifestyle remains the same – car payments, home mortgage, credit card payments, etc. The more money you make the higher the risk because you are able to build a larger lifestyle.

The wealth building money pinch is a different story. These people feel the money pinch because they are constantly using earned money to build additional wealth by investing in the future. It could be investing in your 401K or purchasing a rental property or investing in your education.

I must admit that I have felt the money pinch for years. I always had to watch my spending. For the first 10 year of my career, I saved and invested between 10 to 25% of my income in a 401K, an IRA, and a regular investment account. Later, I felt the pinch because I was investing in growing my new karate business. Now, 5 years later, I am still feeling the money pinch because I am preparing to purchase some commercial real estate.

Truthfully, my money pinch gives me a great piece of mind. I don’t mind forgoing the big car payments and oversized house to generate more wealth.

So what’s your money pinch is it lifestyle or wealth building?

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