Here's an excerpt of the article from Motley Fool, as well as a link to the whole piece: http://www.fool.com/news/commentary/2006/commentary06102702.htm?source=eptyholnk303100&logvisit=y&npu=y
The American Institute of Certified Public Accountants and the Ad Council, who are working together in this project, hope the dose of nostalgia will get more young consumers to skip the plasma TV purchases and become young savers ... (paints) a bleak picture of his targeted age group:
- Their average credit card debt is $4,088.
- Their average student loan debt is $20,000.
- They spend 24% of their income on debt payments.
- They have the nation's second-highest rate of personal bankruptcy.
A study commissioned by the accountants' group also showed that the proportion of young adults with a simple savings account fell from 61% to 48% from 1985 to 2004. Over the same time period, the median net worth of adults in that age group has fallen dramatically, from $6,788 to $3,746. This means lots of young adults are missing out on one of the biggest advantages of saving while they're still young -- the advantage of time. Several thousand dollars put away early will grow exponentially greater than several thousand stashed away a decade later.
When I was in my late teens, my parents gave me a copy of the Wealthy Barber. While I don't follow all of the advice outlined in the book, it gave me a start on the path I'm currently following. It also sparked an interest in wealth creation that has lived on to this day.
In a RichDad CD, Robert Kiyosaki says that the only problem with keeping up with the Jones is that the Jones are going broke. I believe this is true. With the mentality of instant gratification, need it now, don't pay a cent, people are racking up debt they can't get out from under. It's truly frightening and what is worse is that most people aren't aware of what they are doing to themselves until its too late.
Take some time to review your personal budget (manage your household like a business). Look at the expenses and income. If you are red-lining, take action now before you are in so deep you can't get out.
Now let me be clear on one thing: I'm not talking about becoming cheap. If you become rich by being cheap you are still cheap. I am talking about being responsible with your income and your expenses. A trick I was taught by Kiyosaki is to have passive income businesses pay for my doodads, that way you have the doodad you want, and you have the passive stream of income for life.
Next time: More on Why We Want You To Be Rich
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