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What you spend on is more important than frugality.

5 Things Millionaires Spend On

When it comes to the blogs and other tracts providing information on building wealth, frugality carries most of the weight. And it makes sense. The greater the difference of income over spending is a strong determinant of the level of wealth an individual will achieve during their lifetime as compared to their income level. 

As important as frugality is, spending is even more important, even if it doesn’t garner the required column inches the matter deserves. Spending less than you earn is the seed money for investments and without investments it is impossible to build significant wealth.

As an accountant I see people from all spectrums of income. Frugality, even hyper-frugality, is the hallmark of those with modest levels of wealth. Even the lowest income earners can amass a half million or more in a working career when frugality is taken to religious levels, with the excess invested in equities like index funds.

Mid-levels of income also do well with only the single tool of frugality. As their wealth grows they sometimes seek out professionals to help them. These clients tend to want short consulting sessions once a year with a review at tax time. 

Then come the serious achievers. These people sometimes have modest incomes, sometimes large incomes.  Regardless their income level, these people smack it out of the park. Their level of wealth is well beyond what would be expected for their income level or level of frugality (the excess of income above spending).

Super-achievers in wealth building focus on spending more than frugality. They know spending is more important. And they know most spending drains their energy and wealth while proper spending can actually make them richer!

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Stalking the Accountant 20 Jan 2018

As tax season approaches I start to fall into a familiar pattern I’ve developed over the years to help focus my attention.

Some people like listening to music while they read; I don’t. I prefer absolute quite, huddled in a dimly lit corner while I devour pages of knowledge or embark on an adventure through space and time.

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tradelines

Tradelines: The $1,000 an Hour Side Gig

Remember all those credit cards you acquired to earn out those bonuses and eventually canceled? You’re going to wish you hadn’t done that.

Credit cards are one of the most powerful wealthy building tools in existence today when used properly. They get a bad rap because irresponsible people rack up massive quantities of high interest debt and spend decades digging out if they ever get out. Still, credit cards can put a lot of ka-ching in your pocket if you understand the rules and never run a balance on the card.

If you are in the accumulation phase of your wealth building cycle, looking for a high income compared to the time invested or love gaming the system (your favorite accountant is guilty as charged), then you need to learn about tradelines.

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