The “American Way” vs. the Right Way
August 8th, 2007 - No Comments YetI am sure there is going to be some yahoo that reads this and gets pissed that I even used a title like that, but what they heck. Based on my experiences in life it certainly seems to me that there is a large percentage (more than a majority) of people in this beautiful country of ours, that like to live beyond their means. Personal savings rates in the US are currently below 0%…good job team. Alone, this stat doesn’t really show much other than people in the US, as a whole, don’t like to sock a lot of liquid assets away.
I am all for bet big, win big, but I think it definitely makes sense to have something to fall back on before you do so. It seems that too many people have used this mindset to bet big and have nothing if they make the wrong bet. I was just reading SEO Blackhat’s post about a Single Point of Failure (which is typically used in the tech world) when it comes to income and making a living online. Most people in the traditional world can’t fathom how people make money on the internet. That is fine by me, I don’t have the time to try and explain it to them anymore. But, I think that most of us that make money online understand that we don’t have the silly little rules and laws to “protect” us in the event someone shuts off one of our revenue streams. In the B&M (brick and mortar) world, if you get fired and they tell you it is for A and it was because of B (and you can prove it) you can sue them and make money. In the online world, if Google shuts off your Adsense account, you are F’ed and you have zero recourse.
To get back on point I have found over the years that most of the people I admire most in business are not only smart and cunning, but they are pretty frugal as well. The “American Way” I am describing is to spend more than you take in. For whatever reason, people think that if they get one big payday, there are surely more right behind it. The smart people save and then re-invest in a proven winner…or at least make sure they are smart about how much of their capital they spend in relation to how much they have and/or bring in. I remember Shawn Hogan (of DigitalPoint) telling someone to live well within their means one time and I have always remembered that for some reason. I had heard rumors at the time about how much money he was making (and have since heard more of the same from a pretty reliable source) and thought that he was a pretty together and smart guy for making a statement like that. Surely, I thought, that was one of the reasons he was so successful online and at the bank.
I think it has become increasingly difficult for people to keep up with the Jones’. Places like my old hometown of San Diego are littered with Bentley coupes and other exotic cars. I am pretty confident that while there have been many fortunes created this last boom cycle, much of this is fool’s gold. There are many people who find it more important to put up a picture of what they want people to see them as rather than what they are. We are all guilty of this to some extent. But, when you bet your financial future and viability on it, you are playing with fire.
[tags]Rich, Keeping up with the Jones’, Saving, Debt, American Way[/tags]