They say only rich people have no money because their loans are huge?

Question

But I dont Drink,smoke,or drive as a single person I still find it difficult to manage I have also never had a credit card and do not intend to start now. what do you think about this

Answer 1

The thing about finances is this you have to take a long hard look at yourself in the mirror and point out all of your flaws.  You state that you don't drink, smoke or drive and you find i difficult to make ends meet.  Why is that?  What is your biggest expenditure?  Do you have your spending under control?  How do you track it?  Are you using money or quicken?  Do you still balance a checkbook or do not track expenses at all?  

Look it is numerous ways to cut back on spending and save.  Are you living above your means.  I recommended getting some type of financial software if you don't have it.  But you don't have to pay for Money or Quicken anymore.  Go to a site like Wesabe or Geezeo and start with your finances there.  You can make a change you just have to want it and the prospect of a better future.

Answer 2

i think you're like millions of other people

Answer 3

I don't understand where the drinking comes into this... I drink, is that supposed to make me poor or something?

Anyway, to answer your question... the majority of wealthy individuals tend to hold their wealth across a portfolio of instruments such as stocks etc, the main reason for this is that it's not taxable till you convert it into cash, so it makes it a useful vehicle for wealth storage since it's also generally a liquid instrument.

Loans also are a means of offsetting tax liability which can work well since the interest rate on the loan will be favourable since you will of course have an excellent credit rating.

At the end of the day though, you need to be bringing in more than you're spending; either by cutting spending, or starting up more work/enterprises to increase income, or both.

Answer 4

I've never heard that saying, and any rich person would never use loans for liabilities.

Let me tell you a little something about the riches. Money is made whenever there is an exertion of human effort.

When you make money from your job, you get paid for the efforts of one person: you.

When rich people make money from their businesses or investments, they get paid from the efforts of many, many people, all at once.

You see, rich people make their money differently than you. That's why they live a lifestyle different from yours. More importantly, they spend money differently than you.

You spend your money on liabilities -- things that take away value from you. This includes rent, food, entertainment, etc... Rich people spend their money on assets -- things that add value to you. This includes securities, real estate, businesses, stocks, etc....

Rich people spend their money on things that, in turn, make them more money. They take that and spend it on things that, in turn, make even more money. And so on, and so forth.

Everyone has the same opportunity as the next guy. People become successful because of information they've received, and actions they've taken based on it.

You want the secret to riches? I got it for you. Find a rich person -- they're not hard to find -- and ASK him how he did it. He'll be a willing teacher, but only if you're a willing student. Make it worth his while, and he'll teach you exactly how he did it, step by step.

Learn from the people who are already where you want to be.

This whole idea about going to school, get a good job, save your pennies, cut costs... look at the people who have told you this. Are they rich and prosperous? No. If you do the same thing as they did, shouldn't you expect to get what they got? Yes.

Is that what you really want? Is it?

Break the norm. Step outside your comfort zone. Forget what's been drilled into your head all your life. Make some REAL changes.

If you want something you've never had before, you have to do something you've never done before.

Answer 5

I think in some ways, you may be right because some rich people do not have ready money with them at any given time. But they are considered rich and  credit worthy by people because they had at their disposal huge loans that  they had arranged with Banks for their future investments and use. Business people who know them are willing to sell them goods or services, because they know those rich people have Bank loans which they can use to pay them at any time.