the poor literally have less time and less flexibility
I never said it’s easy, I said it’s important. In fact, the harder it is to stick to a budget, the more important it is. I’m not going to preach budgeting to people who are already financially stable because that’s not going to help them (I’d probably talk about investment strategies instead).
the easiest way to get rich is to start with a lot of money
It may be the easiest, but that assumes discipline. I think you’re more likely to get rich if you start very little, but you’re disciplined with it. Generational wealth tends to disappear after 3 generations, and a lot of that is because you’re not as motivated to manage it well if you didn’t earn it. If you don’t believe me, look at various posts on Reddit or elsewhere where people regret wasting their inheritance, e.g. here and here, or this non-reddit story. People tend to suck at managing inherited money.
If you can manage to be financially stable, you have a lot more ability to take advantage of opportunities. Let’s say a family member or friend is starting a company and needs help, but can’t pay for a couple months until money starts coming in. If you have 3 months expenses saved up, you can jump on it because you know you can at least last three months. Maybe it goes bust, or maybe it ends up being a really good opportunity. But if you didn’t have that safety buffer, you wouldn’t be able to even try.
It’s certainly not easy, but it is important. Being in debt is kind of like dealing with psychological trauma, and the steps are roughly:
- not relevant to personal finance IMO, we generally ignore what happened in the past
- validate any feelings of stress, anxiety, etc - this generally happens before asking for help online, so I tend to skip this
- list all of the facts (debt, regular expenses, income, skills, etc) and look at the balance - this is usually enough to spark someone to be motivated to change
- make a new plan that provides a surplus over necessary minimums that makes progress on debt or savings, or if that’s not feasible, plan how to make more money so you can have that surplus
- actually execute on the plan - this is the hardest part
In most cases, becoming financially stable is possible, and sometimes it takes a second pair of eyes to see it. The whole point here is to create hope from despair, with that hope can turn into action. I firmly believe the vast majority can achieve financial stability and eventually financial independence (i.e. have the option to retire), but it takes hard work and a plan. I can’t help with the hard work, but I can help with the plan.
