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Sunday, November 21, 2010

Radical Thinking in Uncertain Times

Credit cards
In order to survive the economic meltdown facing nearly the entire planet we all must re-evaluate our previously held convictions. Competing with your neighbors is out. Frugality is in. Credit is for slaves and cash is king. Even though we have all been programmed to consume there are people, rich people, who live very modest lifestyles considering their resources. Warren Buffet is a prime example. He still lives in the same modest house he bought years ago. He still eats at the local steak house. Even though he is rich he openly tells people to avoid credit cards. Like I have always said, if you do the exact opposite of what everybody else is doing, you will prosper.

The article below was re-posted from A Life Worth Living Blog-

The get rich quick industry is exploding. More and more people are acquiring the desire to expand their wealth as the global economy crumbles before their eyes. The concept of getting rich is an illusion. Except for a handful of ultra rich rock stars, most live very conservative lifestyle.

In a book called Stop Acting Rich: ...And Start Living Like A Real Millionaire, Thomas J. Stanley points out the facts. The majority of luxury consumers are frauds. They are the people that over extended their credit in order to maintain the appearance of wealth. They buy the finest threads, drive Mercedes, drink the finest wines, and dine at the Ritziest restaurants. Appearance is everything. Meanwhile Warren Buffet still lives in the same modest house in Omaha, Nebraska and eats regularly at the local steak house. Here is a real billionaire who could care less about appearances and neither should you.

While surfing the net I found an interesting article which inspired this post. It was an article about not following the trends and embracing a radical lifestyle in order to expand your wealth. In a nut shell, you have to do the exact opposite of what everybody else is doing. Here are 10 life changing rules taken from that post:

  1. Pay cash for everything. Yes, I know that people don't use cash much anymore, but there are some good reasons to do this, namely you will never go into debt if you only use the cash you have on hand for your wants and needs (be sure to get a receipt for all of your purchases)
     (Nomad adds- Taking into account the number of bank failures this year it's not a bad idea to keep your money in cash. If there is a sudden lose in confidence, the masses may run on the banks causing them to be shut down for a period of time. If that occurs you will not have access to your money.)

  2. Stop using credit cards and cut them up. Such an idea may be considered blasphemy in our credit-obsessed society, but (see number one above) if you never use credit cards, you will never be subjected to the interest, late fees, over limit fees, random reduction of credit limits, etc. imposed by the credit companies.

  3. Live on half of your salary and bank the rest.

  4. Buy the minimum that will satisfy your needs.

  5. Become debt free.

  6. Take care of your own needs. Mow your own lawn, clean your own gutters, color your own hair, and fix your own plumbing problems...

  7. Participate in the underground economy. Should your plumbing experiments go awry (see #6 above), do the next best radical thing and barter for the services you need. The underground economy also includes shopping garage sales, shopping thrift stores, buying from farmer's markets, and the like.

  8. Be self-employed. I cannot rave about this method of earning a living enough. Set your own hours, be as creative as you want, and work more/make more. All of these are good reasons to employ the best person you know, yourself!

  9. Learn from other financially radical people.

  10. Don't be afraid to be weird. You can be weird by having five part-time jobs that you love instead of one job that you can barely tolerate. You can be weird by working double time, living in your truck, then paying cash for a house after a couple of years of doing this. One man actually did this.
Source Article-Be Radical, Get Rich
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