Personal finance advice too often consists of prescriptions. Do this, not that and save the difference for a better financial future. That’s a diet, not a plan. And like diets, this kind of financial advice works great in the beginning but fails when reality sets in. Simply put, it’s no fun.
I propose a better way to think about financial decisions, using a bright line test – in this case, a thin green line. That line, which looks like stock index returns over the past 50 years, divides the wealthy, who are financially secure, from the rich, poor and everyone else. It has less to do with people’s income and a far more to do with the decisions they make and the behaviors they exhibit when it comes to money.
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