I am still struggling with the aftermath of the first dose of the Shingrix vaccine. Here is a guest post from Dr Maurice:
It’s Not What You Make, It’s What You Keep
There is a lot of talk about the shrinking middle class, income inequity, and the lack of a living wage for most people these days. But one of the most important rule of personal finance for me is “It’s not what you make, it’s what you keep”. Whether it is how you finagle your taxes, or how you use other people’s money, it comes down to how you can meet your obligations with the money you bring home. I know of janitors who have retired with million-dollar real estate portfolios, and seven figure earners who go bankrupt.
The first thing is to pay yourself first with an IRA, 401K, savings plans, and incurring the least amount of debt. What is interesting is that how painless it can be to fund these things. The second thing is not to dig a hole for your yourself, with debt or divorce. I could not believe what a difference the ending of child support made in my lifestyle. Also, cutting my debt not only freed up cash, but improved my credit score. When I look at my status, I still have a significant amount of debt left over, but I am fully funding my 401K and getting my company match. Pretty soon, all my debt, including my car loan, will be gone.
What can you do with all the new found free cash, now that you have paid yourself and have cleared the deck? Well, you could have bought Amazon at $80/share back in 2010. Or you could have bought Apple at $5/share. Back in 2008-09 you could have bought the S&P at 600 and change, and the Dow at 8000. You could have also bought foreclosed houses. Free cash means FREEDOM. Freedom to be spontaneous, freedom to be generous, freedom to live and not merely survive. Freedom to get that 1963 Corvette, or to fund a scholarship at your alma mater, or buy your love one a colorless 1.5 carat excellent cut diamond ring. And most importantly, the ability to weather the storms that come with life-and they will come, is priceless, like a pristine Ferrari 250 GTO: