The secret is to not spend money, save and invest:
Though the former tax attorney had a six-figure salary, he says he bought clothes from discount retailers, took public transportation and kept his home furnishings to a minimum to keep his costs low prior to retiring.
53-year-old early retiree shares 3 regrets from his 20s (cnbc.com)
Wealth is Assets minus Debt: W=A-D
Back at the time of the Great Recession (2008-2010), a lot of people thought it was W = A + D, and borrowed heavily to have a lifestyle that looked rich but was based on debts.
For us, we bought fixer upper homes, used cars (the two biggest expenses), did not go out to eat, never took exotic vacations, and wore the same old clothes for far too long.
Was it the right thing to do? Yes and no. Cutting expenses on the big ticket items (old homes and used cars) likely had the biggest impact. The rest – combined – added up cumulatively but their individual savings was not much. See the columns at the right of this blog – contemporary economic research finds that most college educated workers over saver for retirement – and miss out on important life experiences that might only have been available when younger.
Regardless, wealth is created by saving and investing – investing in yourself (education, training), investing in starting a business, or investing in other businesses (notably via stock shares). Wealth is not created by random spending on consumables and many fun experiences (and daily lattes).
