Well, Duh!

To get wealth, the best way is to focus not only on bringing in income, but you also have to make sure you adhere to the Millionaires’ Secret. I’ll mention it below. After reading it, it may seem obvious. But why don’t people do it?

The following clip comes from Saturday Night Live—it’s not one of the best clips, but the message was priceless.

http://danwho.net/mp/index.php?id=snl_dontbuystuff

For those of you who did not (or maybe can not) click through, here is the gist of what went on:

[cutscene to kitchen table, couple balancing their checkbook]

Wife: (sighs) I just can't get these numbers to add up.
Husband: Like we're never going to get out of this hole.
Wife: Credit card debt, does it ever end?

Finance Guy CP: [walks in] Maybe I can help.

Husband: We sure could use it.
Wife: We've tried debt consolidation companies.
Husband: We've even taken out loans to help make payments.
CP: Well, you're not the only ones. Did you know that millions of Americans live with debt they cannot control? That's why I developed this unique new program for managing your debt. It's called [presents book] "Don't Buy Stuff You Cannot Afford."

Wife: Let me see that... [grabs book, reads] "If you don't have any money, you should not buy anything." Hmm, sounds interesting
Husband: Sounds confusing.
…
Wife: Ok, so what if I want something but I don’t have any money?
CP: You don't buy it.
Husband: Well let's say I don't have enough money to buy something. Should I buy it anyways?
CP: No-o-o-o.
Husband: Now I'm really confused!
CP: It's a little confusing at first.

Wife: Well what if you have the money, can you buy something?
CP: Yes.
Wife: Now take the money away. Same story?
CP: Nope. You shouldn't buy stuff until you have the money.
Husband: Oh, THEN you buy it. But shouldn't you buy it before you have the money?
CP: No-o-o-o.
Wife: Why not?
CP: It's in the book. It's only one page long. The advice is priceless and the book is free.
Wife: Well, I like the sound of that.
Husband: Yeah, we can put it on our credit card.
CP: [shakes head]

(SOURCE: http://snltranscripts.jt.org/05/05lbuy.phtml)

Remember that managing finances, as in everything, is more behavioral than mathematical. Most of us know that you shouldn’t buy things you can’t afford, but with today’s emphasis on the “look” and not necessarily the responsibility, it’s quite difficult. So many young people (and “older” young people) put purchases on credit and make small payments in anticipation of a job. Thus you’re paying for something you can’t afford to impress people who, in turn, are probably trying to impress you too. Don’t get me wrong. If you wanna ball, by all means, ball. But it must be done in moderation if wealth is where you want to be.

Let me be clear. I’m not much of a doom-and-gloom guy—I could ramble about how Americans are not saving like they should but I’m sure you are quite aware of that already. However, Americans are saving in some areas that are not tracked—according to The Motley Fool, capital gains savings are not tracked in American savings numbers. So for those of you who are investing by socking significant money into your 401(k) or IRA, you’re doing well, but it should also be coupled with storing up a good emergency fund, debt-free living, and giving back to your community through your church or other community-outreach organizations.