Since I love reading finance blogs, I wanted to blog on some of my favorite posts that I find at each of these blogs I like to visit. I hope to keep this up as a series and point you in the direction of some great finance blogs out there that I enjoy regularly.
www.freemoneyfinance.com had this great post that was short, sweet and oh so true: How You Can Become Wealthy. The post discusses a great article on moneycentral. The article covered some findings by 2 professors from Dartmouth and Harvard, that did a study for the National Bureau of Economic Research, some years ago. The bottom line was this:
...the vast majority of the differences in wealth had nothing to do with income, chance events or investment choices.
So, there's scientific study that shows that the first step to saving is 'saving'!
What did explain most of the differences in wealth? Venti and Wise concluded it was this: How much the families chose to save. Those who made it a priority to save built wealth, regardless of their income level, individual circumstances or choice of investments.
I'm sure we each have experienced this. There's that one moment or period in our lives when we realize that we need to get our butts into gear and start saving.
It's funny, when I talk to friends/associates and the topic gets to money and I occasionally hear something like: "I haven't really been able to afford to kick off my 401K yet". I try to slowly encourage them to get into the habit. Now, I'm not talking at that moment, because I know it just isn't going to be taken well or digested. But, over lunches and through the course of time, I'll generally get back to the topic and offer a little encouragement. Maybe, I'm a pest, but I wish someone was a pest with me and got me on the right track sooner. I would have loved to start saving in my teens, wow would I be set for retirement already! I was glad though that I did run into someone that got me pointed in the right direction.
One final thought. Recently I bumped my fun-money savings ratio, just out of sheer annoyance and maybe some back-strain. I have this 5 gallon jar that I have saved coins in for a couple years. Just figured that I'd never spend coins and pop them in there and see how much it will add up to. When I finally filled it almost to the brim, I was going to vegas :-). With that puppy nearly filled I almost broke my back with 2 trips to the bank hauling change in my backpack to cash it in. I swear I must have looked like someone carrying plutonium or something! It was a hefty $1000+, that easily paid for some fun in Vegas! For those of you curious how much change you've amassed, Coinstar has a handy little trivia estimator on their site (example: 1 gallon of change is estimated to be worth $228.34) Cool :-).
So, after that I decided not to focus on the change and instead focus on $1 bills. Since then my savings rate for fun-money has tripled. Which tells me I'm having too much fun, or I need to tighten up the screws on my automatic withdrawal savings :-(.