Three types of people (past a certain level of income):
- Those who save.
- Those who don’t think they can save.
- Those who don’t think they need to save.
Your savings rate is more important than your income or investment returns.
Analogy: The 1970s oil crisis.
Problem: Oil supply was insufficient to keep up with demand and economic growth.
Solution: Oil supply increased 65% but fuel efficiency and conservation doubled what could be done with that energy.
Supply side was out of people’s control but the demand side was completely within the control of the individual.
“You can build wealth without a high income, but have no chance of building wealth without a high savings rate, it’s clear which one matters more.”
“Learning to be happy with less money creates a gap between what you have and what you want—similar to the gap you get from growing your paycheck, but easier and more in your control.”
“Past a certain level of income, what you need is just what sits below your ego.” Solution: Don’t worry about what other people think or feel the need to keep up with the Joneses.
“The flexibility and control over your time is an unseen return on wealth.”
“Having more control over your time and options is becoming one of the most valuable currencies in the world.”