How to get rich and other related thoughts

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cassowary
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How to get rich and other related thoughts

Post by cassowary » Fri Apr 30, 2021 1:49 am

I am inspired by the story of Ronald Read. He was a gas pump attendant and later janitor who got very rich. Despite a modest salary and the expense of raising a family, the amassed a fortune worth $8 when he died.

In contrast, there is a story of Michael Carroll, who won $14 million in a lottery. He spent it all on prostitutes, drugs, cars and is now broke.

From Read's example, we can see how easy it is to get rich. Just earn as much as you can, save as much as you can and invest your savings. In his will, he left most of the money to charity. Read's life mirrors what John Wesley, founder of the Methodist Church said.

"Earn as much as you can, save as much as you can and give as much as you can."

But how did he get rich? Firstly, he was frugal. He saved as much of his modest salary as possible. His coat was torn but he held it coat together with pins. His favorite pastime was chopping wood which also saved money on his heating bill.

Secondly, he did not wallow in envy. I am sure he must have pumped petrol for large cars and seen the disparity of wealth. He did not think how unfair capitalism is and demand a redistribution of wealth. He became a capitalist Instead by investing in stocks. He made use of capitalism to get rich.

Almost anyone can do it. If a guy of modest salary like Read can become so rich, then it is within the reach of almost anyone in a capitalist economy.

At the opposite extreme is Carroll. He is always seeking instant pleasure. He had many vices - drugs, sex that made him poor, even though he was temporarily rich after he won the jackpot at the lottery. This proves that giving people money will not end poverty. No welfare state can afford to give $14 million to an individual. Even if it did, many will still end up poor. There are many people who are like Carroll. That's why so many lottery winners ended up broke.

Its always some vice - gambling, drugs, sex, extravagrance - that causes their downfall.

99% of the population are not like Carroll or Read. We are all somewhere in between. Those closer in behavior to Read will prosper and maybe get rich. At least, they will be middle class. Those with too many vices will be more on the poor side. The worse vice is envy.

Envy comes will a strong need to blame others. Some blame capitalism and in the US, many blacks blame racism. They think the system is unfair to them. They sit around demanding the state to look after them. As a result, they don't learn how to help themselves. Envious people rarely become rich.

Life long learning will help you. Read was an avid reader. He went to the libray to learn about investing in stocks. As a result, he became rich.

That's the moral of the story of Read and Carroll. If it is too late for you, tell the story of Read and Carroll to your children or grandchildren. Tell them to make use of capitalism to get rich.
The Imp :D

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cassowary
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The Critical Race Theory

Post by cassowary » Fri Apr 30, 2021 8:19 pm

Parents rose up against Critical Race Theory in Texas

This is related in my topic, "How to get Rich".

Let me explain. But first, lets jump into an excerpt from the article:
In this case, critical race theory asserts that society is racist, whiteness is a problem, and that all unequal outcomes between different racial groups are proof of racism.
This is rubbish. Unequal outcomes are the result of a deficit of virtues. I assert that the main reason for black poverty in the US is the high % of single parenthood in black families. The left, which traditionally blame capitalism for income inequality has latched on to race to divide America.

The Critical Race Theory won't help the black community when the root cause of their poverty is not even mentioned. Wealth transfer schemes such as reparations for slavery won't help them just as winning $14 million in the lottery did not help Michael Carroll. But calling for reparations sure will win votes for leftist politicians wanting to win power, money and girls.

Instead of this harmful Critical Race Theory class, they should teach the kids on How to get Rich. Teach them the virtues that foster wealth - diligence, thrift, the importance of savings and how to invest their savings. In other words, teach them how to harness the power of capitalism to build wealth. The story about Ronald Read should be required reading for school kids. Also warn them that single motherhood is a sure fire way to poverty.
The Imp :D

neverfail
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Re: How to get rich and other related thoughts

Post by neverfail » Sat May 01, 2021 8:29 pm

You know what Cass? In my post high-school bachelor years I was not unlike your Ronald Read character. Despite a mediocre income I was able to keep my average weekly spending less than my income; maintain a healthy bank balance (while earning something of a reputation as a tightwad) and invest in stocks and shares - out of which I even made some money. At time of school leaving I even dreamed of making enough from such speculative actities to "set myself up for life" so I could retire early.

What thwarted my plan? I got married and with that turned almost overnight from a net creditor into a debtor.

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cassowary
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Re: How to get rich and other related thoughts

Post by cassowary » Sun May 02, 2021 12:25 am

neverfail wrote:
Sat May 01, 2021 8:29 pm
You know what Cass? In my post high-school bachelor years I was not unlike your Ronald Read character. Despite a mediocre income I was able to keep my average weekly spending less than my income; maintain a healthy bank balance (while earning something of a reputation as a tightwad) and invest in stocks and shares - out of which I even made some money. At time of school leaving I even dreamed of making enough from such speculative actities to "set myself up for life" so I could retire early.

What thwarted my plan? I got married and with that turned almost overnight from a net creditor into a debtor.
Oh dear. A family can be expenisve. You obviously love your family to lavish so much money on them. But Ronald was also married with kids. How did he manage to avoid the debt trap?

By the way, the way to build wealth on the stock market is not speculation and trading. The best strategy is to buy and hold.
The Imp :D

neverfail
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Re: How to get rich and other related thoughts

Post by neverfail » Sun May 02, 2021 4:05 am

cassowary wrote:
Sun May 02, 2021 12:25 am
neverfail wrote:
Sat May 01, 2021 8:29 pm
You know what Cass? In my post high-school bachelor years I was not unlike your Ronald Read character. Despite a mediocre income I was able to keep my average weekly spending less than my income; maintain a healthy bank balance (while earning something of a reputation as a tightwad) and invest in stocks and shares - out of which I even made some money. At time of school leaving I even dreamed of making enough from such speculative actities to "set myself up for life" so I could retire early.

What thwarted my plan? I got married and with that turned almost overnight from a net creditor into a debtor.
Oh dear. A family can be expenisve. You obviously love your family to lavish so much money on them. But Ronald was also married with kids. How did he manage to avoid the debt trap?

By the way, the way to build wealth on the stock market is not speculation and trading. The best strategy is to buy and hold.
After I married I had to sell down the remaining share portfolio I still held. Apart from the progressively growing costs accruing to a young, growing family; virtually all of my spare cash for years to come had to be devoted to paying down a home mortgage. Had I been able to buy our first home without getting into debt I would have but that was patently impossible.

Real estate prices in my home town were by no means static then and nor are they now. Either buy now or find prices unaffordable later.

(Your paragon of virtue Ronald Read might have been able to do it but I am sure that there must have been at least one significent difference, possibly more, between his circumstances and mine that favoured him successfully doing it.)

Still, real estate turned out to have been not such a bad investment at all. Apart from the much improved resale value of the home we have bought since there is also the savings on the rent we would have otherwise paid over the years to a landlord balanced against the regular mortgage repayments we made to the bank to consider. Then along with the government grant we got at the time we took out the mortgage (later abolished) there were (and still are) the tax concessions for first home buyers not available for renters (or owners of corporate shares; who unlike first home buyers have to pay capital gains tax on profits from sale of non-franked shareholdings).

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Re: How to get rich and other related thoughts

Post by cassowary » Sun May 02, 2021 6:40 am

neverfail wrote:
Sun May 02, 2021 4:05 am
cassowary wrote:
Sun May 02, 2021 12:25 am
neverfail wrote:
Sat May 01, 2021 8:29 pm
You know what Cass? In my post high-school bachelor years I was not unlike your Ronald Read character. Despite a mediocre income I was able to keep my average weekly spending less than my income; maintain a healthy bank balance (while earning something of a reputation as a tightwad) and invest in stocks and shares - out of which I even made some money. At time of school leaving I even dreamed of making enough from such speculative actities to "set myself up for life" so I could retire early.

What thwarted my plan? I got married and with that turned almost overnight from a net creditor into a debtor.
Oh dear. A family can be expenisve. You obviously love your family to lavish so much money on them. But Ronald was also married with kids. How did he manage to avoid the debt trap?

By the way, the way to build wealth on the stock market is not speculation and trading. The best strategy is to buy and hold.
After I married I had to sell down the remaining share portfolio I still held. Apart from the progressively growing costs accruing to a young, growing family; virtually all of my spare cash for years to come had to be devoted to paying down a home mortgage. Had I been able to buy our first home without getting into debt I would have but that was patently impossible.

Real estate prices in my home town were by no means static then and nor are they now. Either buy now or find prices unaffordable later.

(Your paragon of virtue Ronald Read might have been able to do it but I am sure that there must have been at least one significent difference, possibly more, between his circumstances and mine that favoured him successfully doing it.)

Still, real estate turned out to have been not such a bad investment at all. Apart from the much improved resale value of the home we have bought since there is also the savings on the rent we would have otherwise paid over the years to a landlord balanced against the regular mortgage repayments we made to the bank to consider. Then along with the government grant we got at the time we took out the mortgage (later abolished) there were (and still are) the tax concessions for first home buyers not available for renters (or owners of corporate shares; who unlike first home buyers have to pay capital gains tax on profits from sale of non-franked shareholdings).
Well, by now your home must be worth a lot. So, if you no longer need the extra rooms because your kids moved out, have you considered selling and moving to a smaller place? You can get some cash out of it.
The Imp :D

neverfail
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Re: How to get rich and other related thoughts

Post by neverfail » Sun May 02, 2021 3:55 pm

cassowary wrote:
Sun May 02, 2021 6:40 am


Well, by now your home must be worth a lot. So, if you no longer need the extra rooms because your kids moved out, have you considered selling and moving to a smaller place? You can get some cash out of it.
We have considered that.

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cassowary
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Re: How to get rich and other related thoughts

Post by cassowary » Sun May 02, 2021 8:34 pm

neverfail wrote:
Sun May 02, 2021 3:55 pm
cassowary wrote:
Sun May 02, 2021 6:40 am


Well, by now your home must be worth a lot. So, if you no longer need the extra rooms because your kids moved out, have you considered selling and moving to a smaller place? You can get some cash out of it.
We have considered that.
In my father-in-law's case, he chose to rent out one of his extra rooms to get some income. This is commonly done over here. But you may not like the idea of a stranger in the house. In his case, things worked out well. The tenant is a nice lady. When he fell sick, she sent him to the hospital.

So we have an extra pair of eyes and hands to help out an elderly couple.

On top of that, a house owner has two other options. First, he can go to almost any bank to do a reverse mortgage. Second, he can sell 30 years the remaining number of years back to the government if he is living in a HDB flat. All HDB flats are sold with a 99 year leasehold tenure.

Typically, people buy the first home at about 30. By the time they retire at 65, they will have 69 years leasehold left. To help their retirement, the goverment will buy 30 years of that. This leaves another 39. That means he can live in the apartment till he reaches the age of 65 + 39 = 104. The average life expectancy is 84. So his kids or heirs can still benefit from the value of 20 years of leasehold property.

Of course, another option is to sell and buy a smaller apartment when the extra rooms are no longer needed. This also releases their money for their retirement.
The Imp :D

neverfail
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Re: How to get rich and other related thoughts

Post by neverfail » Mon May 03, 2021 3:52 pm

Hi Cass.

Your father-in-law was either lucky in his choice of tennant or else an exceptionally good judge of chatracter (or both). Taking a tennant into your home is a bit like entering into a marriage contract: you really do not know what you are getting until you have lived with that person for awhile.

The rest of your post with its mention of government buyback of leasing time etc seems to illustrate what a scarce and valuable resourcers living space must be in Singapore.

Taking in a tennant to fill one of our unoccupied rooms is not an option for us as my wife and I value our privacy too much.

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