The Loop Newspaper - Tehachapi's Online Community News & Entertainment Guide

I want to share with you something that is amazing to me. I overheard a conversation in a coffee shop the other day between three teenage girls. They were talking about the parents of one of their friends who had just bought an expensive Range Rover. One of the teenage girls said to the others, “Wow, they are so rich!” Well, I couldn’t just sit there and not say anything, so I chimed in saying, “You know, what you drive doesn’t have anything to do with whether you’re rich or poor.” The girls went silent as I was talking. I explained that many people don’t buy these expensive name brands but rather lease them, so they really don’t own them. I don’t know if it was, “why are you butting into our conversation; we weren’t talking with you,” or they were actually listening to what I was saying, but the look on their faces was priceless. I mentioned to them the research done in the book the Millionaire Next Door, which found that millionaires typically live in very modest homes and drive very basic automobiles.

They continued their conversation, but it inspired me to do a little research of my own. Later, when I got home, I did an internet search and found a news report about the vehicles that are most likely to be driven by high-income earners. I found an article in USA Today that specifically addressed this topic. According to the article, there are five vehicles that a high-income earner is most likely to drive. The list consisted of the Honda Civic, the Honda Pilot, the Jeep Grand Cherokee, the Jeep Wrangler, and the Ford F150 pickup. These are pretty inexpensive vehicles compared to what you would think a wealthy person would drive. Now, you can run up the price quite a bit as you add options, but there is not a luxury make among them. Think about it; there’s not a very expensive vehicle on the list. More often than not the people who drive the fancy luxury cars are people who are trying to make others believe they are something they are not. They haven’t made it yet, but they are trying to create the impression of having made it by what they drive. The funny thing is a lot of people who are worth a lot of money still run around in very basic vehicles or even a used vehicle. It’s just not their thing trying to impress people.

Being wealthy is a mindset created by habit. The wealthy are not afraid to spend money they just don’t want to waste it. It’s not what you spend that determines your net worth it is what you don’t spend that ultimately determines your net worth. I believe everyone in America who owns a business or has a decent job can amass a sizeable amount of wealth. It doesn’t take a lot of money to become wealthy; it takes a relatively small amount of money, consistently put into the right vehicle over time, and wealth will be created. It’s not a microwave event; it’s crock-pot.

When do you begin to become wealthy? The moment you decide that you are going to be in control of your finances. That is the moment you begin. It starts with creating a budget and knowing where every dollar is going. It’s living within your means and becoming a habitual saver with a goal and a plan in mind. Once you implement your plan, you are on your way. But you say, “I’ll never be wealthy, I can’t afford to save and invest my money. I don’t have a lot!” Well, think about this, according to edmunds.com, the average car payment in America is $479 per month. This equates to $5,748 per year. Currently, most Americans are allowed to save $5,500 per year in a tax-advantaged account known as either a Traditional or a Roth IRA. (Individual Retirement Agreement) A 25-year-old who invests $5,500 a year for forty years or until age 65 could potentially have a couple of million dollars in such an account. Think about it, most people waste $5,500 per year on a variety of nonessential things and later have nothing to show for it. I know it can be tough. Life happens, and there are plenty of temptations begging for you to spend money on them. The decision is yours. Creating a wealth plan is not to hinder you or cramp your style; it’s to empower you. It’s to put you in control of your future and might just be the best thing you will ever do for yourself!