how do you explain to someone the benefits of saving money to build wealth

Discussion in 'Financial Planning' started by justine77, 23rd Feb, 2021.

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  1. justine77

    justine77 Well-Known Member

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    how do you explain to someone the benefits of saving money to build wealth
    i'd love more suggestions

    i've tried saying that

    1 they are not on high incomes to spend
    2 write lists of what they want and prioritise the items on the list and delay them till they find cheaper 3or to have money for things they really will need
    4 like jan somers books, people who spent suffered in their old age
    5 while people who saves for 5-10 years and bought a house or 2 or more became very rich and could then spend on whatever they wanted
    6 that houses go up in price
    7and at times rent can pay the mortgage
    8 and once its paid its extra income

    but i think they just see clothes car leases, latest phones, outings, trips, holidays, and want everything now.

    can you explain this to people differently
    they will want children in their future
    people save for children for many needs for children and then they do better they have money when they really need it.
     
  2. Vertigo

    Vertigo Well-Known Member

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    IMO the only way for someone to make a decision, to create new habits and to stick to a plan is for them to get excited about the "end outcome", the process must be goal driven with the rainbow at the end, this is in effect a deeply personal mental commitment,

     
  3. MB18

    MB18 Well-Known Member

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    You can lead a horse to to water but you cant make it drink.

    Some people have to learn the hard way, and for others the simple reality is that the benefits of consumption outweigh the benefits of saving so far as they are concerned.
    Not every one is concered with accumulating wealth (there IS more to life), some enjoy living in the now. Most of us however are somewhere in between.

    The worst thing you can do is preach/force them to try and see the benefits. It might not be your intention to do so, but it can certainly come across that way to the recipient who will begin to disregard everything you say regardless of how 'right' you are.
     
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  4. jaybean

    jaybean Well-Known Member

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    You need savings to get started, but it's less important afterwards as a means of accumulating wealth.

    This is what makes it hard to explain.

    Basically: saving your way to retirement is very difficult, even on a high income. You need leverage and assets to help. Savings gets you started, but that's really it.

    Savings sucks. Savings is critical. Can be confusing for people who don't get investing :)
     
  5. Sackie

    Sackie Well-Known Member

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    Sure you can explain to them but that's all you can do. The yearning to take it any further must come from within.


    Also, there is the risk of working hard, sacrificing etc etc for the future only to die prematurely and not live those years to the fullest. Now I don't ascribe to that thought process but who are we to want to impose our will on others?

    Once you explain, if their not interested just let it be. Life is certainly not all about investing and building wealth imho.
     
  6. Millie

    Millie Well-Known Member

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    How old are these people?
     
  7. Piston_Broke

    Piston_Broke Well-Known Member

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    That's why all the money making scammers on youtube hire fancy cars and houses to show in videos. That's how you attract those people.
     
  8. wombat777

    wombat777 Well-Known Member

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    Show them a compound interest calculator.

    Compound interest calculator - Moneysmart.gov.au
    Free Compound Interest Calculator | Noel Whittaker
    Stockspot - Leading online investment adviser

    Demonstrate different savings / wealth-building scenarios that should be achievable for them. Use an end date of 10 years from now.

    Some scenarios:
    • doing nothing
    • starting in 1 year's time
    • starting in 2 year's time
    • starting now
    (point of this is to show them the opportunity cost of doing nothing or delaying)
     
  9. New Town

    New Town Well-Known Member

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    The Rich dad poor dad book is said to convince a lot of people
     
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  10. Alex P Keaton

    Alex P Keaton Well-Known Member

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    Have they asked for your help!? If not leave them alone. Don’t waste your energy on them. The person has to be ready and asking for help.

    They are on their own journey and you are on yours. No ones journey is better than another’s it’s just different.
     
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  11. spoon

    spoon Well-Known Member

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    And some say it "conned" a lot of people too. Nonetheless it is an inspiring story. :)
     
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  12. Sackie

    Sackie Well-Known Member

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    Personally I'm no fan of Robert kiyosaki or the RDPD series. He stole all the mindset material from the real greats and his advice on what is and isn't an asset is laughable. If you own say a 2mil home in Australia, no debt. He views that as a liability not an asset. :rolleyes:

    He's also full of BS imo. He's taken over leadership of the Doom and Gloom brigade for the entire world. He says Australian property will have a major collapse :rolleyes:

    Then the boom hits lol.

    Btw folks, guess who is Robert's economic inspiration and genius? Harry Dent! I **** you not. Listen to the interview.


     
    Last edited: 15th Mar, 2021
  13. Simon Hampel

    Simon Hampel Founder Staff Member

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    The Richest Man in Babylon by George S. Clason is a great book and universally applicable - although some people might struggle with the style of writing.
     
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  14. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Capacity to save is a function of:
    • Income earning
    • Living expenses
    • Financial commitments

    If income is not high enough
    and living expenses are not low enough and
    financial commitments not managed then capacity to save will be impossible.

    If you ask 95% of people to list these three items they will have NO idea.
    Most people who struggle financially do so as their financial commitments and living costs are not consistent with income. They will use finance to fill the gap but it just consumes more cashflow.
    Savings should be a first priority to a healthy budget. Not a after thought because some is left over.
     
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  15. skater

    skater Well-Known Member

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    The best thing you can do is nothing at all. Leave some wealth creation books out on the coffee table, to see if that sparks any interest. Live your life & just be open and honest when they ask questions, but preaching to them will just turn them away.
     
  16. Sackie

    Sackie Well-Known Member

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    I have some friends who have seen me do well with RE, have even come with me to some opens ( usually only because we're meeting up and I tell them need to make a quick stop first:D) and have had many chats with me about it it general. And after all that, many of them do thing. Which of course is fine.

    The drive and desire has to ultimately come from within.
     
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  17. jaybean

    jaybean Well-Known Member

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    The WORST people are the ones that ask for advice, then a week later they return to you after having watched a bunch of people on Youtube and say "but x and y person says this??"

    Well why the hell did you bother asking for advice if you're going to second guess everything I've said based on some doomsayer on youtube? I have MONEY to prove I know what the hell I'm talking about. They have a camera in their parents basement and zero track record. If you want, I can take you on a tour around all my properties and show you this #$@% is real, what can they do? But no, they continue on down the rabbit hole of youtube's "experts".
     
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  18. MTR

    MTR Well-Known Member

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    By example
     
  19. jaybean

    jaybean Well-Known Member

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    And then you have whiners that will say "oh that's just cause you got lucky" or "that's unlikely to be repeated". Some will do anything to avoid getting off their ass.
     
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  20. Sackie

    Sackie Well-Known Member

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    Common we all know being lucky is the key.

    Do you know, there are many folks, who ACTUALLY believe that BS.
     
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