A Little-Known Secret of the Truly Wealthy
Archives: Wealth Building
Carlos, one of my Jiu Jitsu instructors, is living the American dream. He came to this country to compete in mixed martial arts and earn his fortune as a champion fighter. While building a stellar win-loss record, he lived on club sponsorship and fees for giving lessons. For the first three years of his time here, he managed to support himself and his wife on less than $15,000 a year. Recently, he captured three title belts – and now fights at the top level in Japan. His typical payday has gone from $500 to $25,000.
“The problem with making more money in America,” he told me, “is that every time you make an extra dollar you spend two.”
How true. The first couch I bought cost $400. I remember thinking, “It doesn’t get any better than this.” And it never did. The couches I buy today give me no more pleasure, comfort, or space. Yet they cost much more.
What happened? The truth is that my own success has victimized me. In earning more, I allowed myself to spend more on things like couches. If I had gotten more out of it, that would have been fine. But I didn’t.
Why do we do it? Why do we feel the need to spend more when we make more?
Here’s what I think. When you are poor, you are surrounded by things you think you would like to own but cannot afford to buy. After a while, you equate the feeling of unsatisfied desire with poverty. And when desiring begins to feel poor, having seems like it will make you feel rich.
Master wealth builders understand a secret that it took me years to learn: You have to keep your spending down while your income increases.
[Ed. Note: This article is an excerpt from Michael Masterson's bestselling book, Automatic Wealth: The 6 Steps to Financial Independence. For more insights into becoming - and staying - wealthy, check it out today.]
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