Yet another nice guy from the IT business comes to share his view about personal finance this week. David writes the Money Ning blog. He has a very interesting story explaining why he is interested in the money related topic. This is one of the reasons why I did not asked him such a super innovative question like “How did you decide to write about personal finance”. Oh well, I came up with 3 other questions instead.
David doesn’t speak too much, but who says that quality equals quantity? Let’s hear his words:
SI: So you want to be rich… Do you have an idea when you will be rich enough? Don’t you afraid you can be chasing the dream of riches all your life instead of living simple and enjoying more free time?
David: My goal of being rich is to have my passive income greater than my foreseeable expenses on a monthly basis. I just got married, so at this point in my life, my expenses will increase as I build a family, have kids, buy a house etc. Once I grow through that phase and have a better gauge of what my expenses will be, I will have a more quantative answer for myself (and another else who asks me).
SI Note: Hopefully he’ll know when to stop. Many miss that moment and keep going just to turn back one day and see how their life is gone while they have been trying to be rich.
SI: What works better on building wealth – saving or making more money? Which would you concentrate on more?
David: Dollar for dollar, saving money works better at building wealth because of all the taxes and social security payments that Americans inevitably have to give before our earnings reach our own pockets. However, saving money is not something you necessarily “concentrate” on. You have to train yourself to have the mindset of not being wasteful with money. Once it’s ingrained into you, then you focus on making more money. In short, I’d say concentrate on savings first so your money doesn’t leak unnecessarily. Then once you have the right mindset, then concentrate on making more money.
Si Note: Of course if you are barely making money for food and are already as frugal as you can imagine, you’d better concentrate on making more first. That’s obvious anyway.
SI: Imagine you can give only one financial advice to your kid – an advice that should guide him or her in their entire life. What is it going to be?
David: If there is only one financial advice I can only give my kids (or anyone for that matter), it’s “live with your own means”. Spending less than you earn is the key to financial well being.
SI Note: I am sure he’ll be able to give more than one, but most kids won’t listen much. That’s why you better give them one many times so they really remember it. Hmm, should I start a blog about teaching kids in financial intelligence?