Bad Behavior and the Self-Destruction of the Middle Class

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In my previous article, I argue that a lack of education is a primary cause for income inequality in the United States. Today, I thought I’d point out the other primary reason for income inequality:
Bad Behavior.
I thought that I’d use one of my friends as an example and show how his choices demonstrate the severity of financial misbehavior in this country and the negative impact this behavior might have on the quality of his life. I want to show him just how easy it is to behave appropriately, and to see if we can’t convince my friend that he needs to shape up before it is too late.
Let me introduce you to this gentleman, his current financial state, and his financial “plan.”

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My Friend’s Current Situation

This fellow is 37 years old, 5’10” tall, and is getting a little fat, with his BMI of 29 (almost medically obese). He’s got a family consisting of his lovely wife and 0.54 children, and he drives his 2.28 cars an average of 10 miles per day to and from his white collar job. You might describe him as very solidly “Middle Class.”

His current financial state is as follows:

He brings in about $52,250 per year and has accumulated a net worth of about $56,000 over his 15 year career — most of that net worth is in the value of his $189,800 family home. This averages to a little over $300 in wealth accumulation per month so far in his working career. The little wealth he does have outside of his home is in savings accounts or high load mutual funds that at best keep up with inflation.
My friend is quite fortunate to know the exact age that he is going to live to: he’ll pass on at the ripe age of  77.1 years. To give himself the maximum possible time to enjoy his non-working life, he has developed the following financial plan (astutely recognizing that social security will not be around in its present form when he turns 65 in 28 years).

Related: 6 Lessons My Work Life Has Taught Me About Managing Finances

Here’s his three point plan:

  • He will stick with his current job and hope that they continue to pay him until his retirement.
  • He will continue to save at a rate of about $300 per month and invest those savings in funds that struggle to keep up with inflation. Quite by accident, he might actually accumulate net worth at a slightly higher rate as he gets older, but this will only be because of the intricacies of mortgage amortization, which he doesn’t fully understand.
  • He will attain a maximum net worth of about $185,000 by the age of 72, after a 50 year career, and then enjoy a 4-5 year retirement in which he spends virtually everything he has left.
 My friend’s plan doesn’t seem so great, does it? We might even call it a “mean” fate…

What Does This Have to Do With Behavior?

The first thing that jumped to my head was that this guy must be lazy! As a result of his laziness, perhaps he actually deserves this nightmarish financial fortune. But having taken a closer look, I decided that couldn’t be right. See, my friend here is a great employee. In fact, he’s an almost unbelievably hard worker. He is quite literally going to work his tush off for a lifetime total of approximately 50 years, all in a row, and he will average 47 hours per week for the duration of that career.
Somebody is going to get very rich off his dedicated work ethic!
Interestingly enough, my friend is and will be compensated extremely well for that extraordinary service! He currently earns a ridiculous amount of money: $52,250 per year, or about $3,483 per month after taxes. In fact, for the duration of his working years, he will be in the top 1% of global earners!
Nope, he’s definitely not lazy. And definitely not underpaid.
Here’s the real reason that he will forever struggle with debt, curse the millionaires and billionaires of the world, and be a slave to money for best part of his days and the best years of his life:
He lacks self-control and has thus far failed to intelligently design his life.
This behavior is harshly punished in today’s economy and society, as evidenced by my friend’s regrettable fate. An inability to control expenses and intelligently invest his accumulated assets will inevitably result in a lifetime of servitude to another individual or corporation.

A Lack of Financial & Lifestyle Planning

Here are what I conceive to be the two most egregious examples of my friend’s lack of thoughtful financial and lifestyle planning:

His Housing

My friend owns a property that is valued at almost 4 times his income and net worth. This liability costs him dearly, as he must make a mortgage payment, insurance payment, and perform or pay for any maintenance out of his own pocket each month. This largest single purchase of his life will provide very little financial utility to him.
While he is at least smart enough to own his own house and not remain a tenant, he lacked the foresight to buy a property that would cash flow as a standalone investment property or pay for itself by being partially rented to a tenant. His house will forever be a liability, not an asset. That’s part of the reason why he spent $13,500 last year on housing instead of little to none.

His Commute

My friend’s house is in a lovely location with excellent schools. However, he somehow ignored the most important part of the decision on where to live (utility to himself!), and he lives very far from his workplace, resulting in a devastating monthly commuting cost of almost $600 per month. He drives over 10 miles and 25 minutes (on a good day) to and from work, and for some unknown reason, feels the need to own those 2.28 cars, despite the 1.8 eligible drivers in his household!
He justifies this borderline insane dollar expense (and even worse, loss of time) with the argument that “the schools are better” near his home, and blinds himself to the realization that he is actually not in the rare position where there are zero acceptable schools within 5 miles of his workplace. The punishment for this egregious behavior is about $7,200 per year. Plus, he forgoes walking or biking to work, which might be a start in improving his physique.
I won’t even begin to go into how much time and money he spends on cable TV, or how he is sucker-punched by his $900 iPhone and corresponding monthly data plan.  Not to mention silly and non-beneficial spend on clothing, fast food, and other things that have no material positive impact on his lifestyle.
That’s really bad behavior.
I think that my friend here has plenty of room to change his ways to save just $1,000 more per month. And it looks to me like he can do so without negatively impacting his day too much — wouldn’t you agree?

Guilty of Ignorance

My friend is also guilty of ignorance with respect to sound personal financial strategy. I’m not convinced that this is totally his fault, as he was never taught how to properly invest or shown the tools through which he should invest. But my friend is a 30-something grown man! He has been warned of his ignorance, knows the consequences, and still does not take the time to read up on basic personal financial strategy and investment practices. If he continues to fail to take the necessary action to inform himself on basic financial strategy, then he will be resigned to his fate.
Assuming that my friend is able to exercise some semblance of lifestyle control and sock away $1,000 per month, then I’d tell him that he really can learn the most important part about investing in less than 10 minutes! All he has to do is invest that money in an index fund.  This process took me less than 1 hour total to complete when I first started, and setting up the automatic contributions takes even less time.
At an inflation-adjusted 7% annual return on this index fund, my friend will see his net worth climb to over $1.5 million over the next 34 years with no further action required, although he will likely be able to retire and stop contributing income from his job long before then! Furthermore, by merely taking the time to study other forms of investment, he could surely take advantage of tax breaks, real estate, retirement accounts, and other powerful resources to climb far beyond that level of wealth.
In spite of having explained all of this to my friend, he somehow still fails to acknowledge that he lives in a time and place where it has never been easier to become wealthy in just a few decades, and instead, he consigns himself to a lifetime of dependence on income-producing labor. Yet he blames inequality on the government, the other political party, those who have already attained wealth, and “the economy” as the cause of his own failure to accumulate riches.
Perhaps instead of blaming others for his lot in life and complaining about inequality, he should heed the 7 “P”s — wisdom imparted by a former favorite football coach:
Proper Prior Preparation Prevents Piss Poor Performance.
Failure to do one’s homework is very bad behavior.


Can you fathom $52,250 per year? It’s an immense amount of money. In fact, it’s so much money that it would put you solidly in the top 1% of global earners, as stated previously. Life is simply not that expensive for 99% of the world. I challenge those who are at that level of income and yet still claim to have financial problems. I challenge them to question their lifestyles if they are unable to accumulate net worth at a rate of more than $1,000 per month. I challenge them to question basic assumptions about what makes them happy, where they live, how they commute, and what they do for fun.

Related: 10 Things Only Personal Finance Nerds Would Understand

It is true — my friend wasn’t shown the consequences of this bad behavior early enough in life. That’s a shame because I think he might have acted differently if he had learned the disastrous consequences of bad financial behavior early in his childhood development, perhaps in public school. But I’ve just shown him. He no longer has an excuse to continue acting like a buffoon and to continue complaining about increasing inequality. The answer is right before his eyes. He refuses to take responsibility for his own bank account and credit card statement, and he is blind to the power of investing and compounding returns.
My friend, open your eyes!
Are the wealthy 1% of Americans truly holding him back? Is he truly underpaid? Is the financial system truly unfair? Or does my friend just need to take a good long look at his behavior and figure it all out before its too late?
A few notes:
First of all, just in case I was too subtle, “my friend” is YOU! “My friend” is a statistical median (and in some cases average) representation of an American household.
Second, average data is much easier to find than median data, but I believe that median data is more applicable to the study of American wealth because averages for income and expense are heavily skewed by the wealthy. For example, average income per capita in the U.S. is $65,596, but median household income is just $52,250.
Where possible and relevant, I use median data. However, as I was unable to find reliable data on median household expenditures, I instead take average household expenditures (partially inflated by higher expenses from the wealthy) and adjust them to estimate for possible median expenditures.  It’s not exactly apples to apples, but I hope that it will be close enough for my message in this article to still be relevant.

Looking to set yourself up for life as early as possible and enjoy time on your terms? Scott Trench’s new book Set for Life, slated for release April 23, 2017, is now available for pre-sale! Whether you’d like to “retire” from wage-paying work, become less dependent on your demanding nine-to-five, or simply spend time doing what you love, Set for Life will give you a plan to get there. This isn’t about saving up a nest egg. It’s not about setting aside money for a “rainy day.” Set for Life is an actionable guide that helps readers build the accessible wealth they need to achieve early financial freedom.

Now that you’ve seen the data, weigh in: Do you agree with my assessment? If not bad behavior, what do you think leads to the financial failings of the middle class?
Don’t forget to leave your opinions, in agreement or disagreement, below! 

About Author

Scott Trench

Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal development. He is CEO of, a real estate investor, and author of the best-selling book Set for Life. He hopes to now share the knowledge he has acquired with others so that they will have the tools they need to repeat his results in just 3-5 years, giving them the option to go anywhere they want in the world, work any job, start any business, or finish out the journey to financial independence and retire young. Scott lives in Denver, Colorado and enjoys skiing, rugby, craft beers, and terrible punny jokes. Find out more about Scott’s story at, MadFientist, and ChooseFI.


  1. Good article. My feedback to your friend’s behavior/situation as follows:

    1. The Choices he has made or currently making, he is responsible for. Nobody put a gun on his to force him to make these choices. So, he needs to own upto this situation (no bailouts).
    2. Instead of spending time/energy on the things that will improve his situation (financial, health => happiness), he spent time other things..He could have study/read/research articles that will give insights into investments that will improve his situation.
    3. He acts like kids when it comes to buying things. I have seen adults acting like kids when they want/get a new $600 iphone/ipad like it will add significant happiness to their lives instead of buying a cheaper models or using the old ones a while longer.
    4. Trying to keep up with the Jones or trying to fit in by showing off new cars/houses, jewelry, taking expensive vacations, eating out to different restaurants every week so that they can talk about it with their friends, buying latest iphone/pads to look cool/modern while not doing the things that really matters (fixing the old car, take a class o update skillset, spend more time exercising etc.).

    So, I say, yes the top 0.001& has the Wallstreet, Republicans and Tax Lobbyists/Lawyers on their side, but the Middle Class needs to understand the deck is stacked against them and do the things that will matter (save->invest) and not the things that WallStreet or big Marketing/Advertisers wants them to do which is spend/spend/spend…

    • Scott Trench

      haha – I guess that’s one way to interpret this. I’d say there is more of a balance available – I’m not sggesting that we all go live as hermits, but I am thinking that we could do well to live a little less luxuriously and be smart about our biggest expenses (living, commuting, food, etc).

  2. Quite a while ago Ben Franklin noted that the path to wealth lies in either diminishing one’s wants, or in augmenting one’s income. With the further comment that the fastest attainment would result by doing both at the same time.

    But society has no interest in fostering these concepts as they are not the stuff of which commercial dreams are made. This is why many of our financial systems are based on the concept of concealing the value of money. A cash based society tends to be a more carefully spending society – so that is actively discouraged with the card-substitutes and credit. Cars and houses for example are often sold based on the monthly payment for the same reason. Colleges could not charge as much or maintain their student volumes without concealing the price.

    In addition to all that – many things have come to be considered as life necessities when they are not. The basic costs of living-a-life have been cleverly escalated by all sorts of clever and persuasive advertising.

    All of this has served to create the Median Man of your example. However; a deception on this scale does require a fair amount of cooperation from the deceived.

    I love listening to my oldest daughter as I think she is much closer to representing an average person than anyone else I know well. One of her Classic Statements (now a standard part of the family lexicon) came about this way:

    We have exercise equipment in the house. She expressed a desire to lose weight and asked how she might go about doing that. I suggested eating less and exercising more; offering the use of the equipment. She later bought a fair amount of expensive “exercise clothing” and got on the treadmill. Against my repeated advice, she then set it for a much too fast beginner speed, and was very soon panting and sweating. She then got off and as she was catching her breath uttered the now classic:

    I guess I better wait until I am in better shape before I start exercising.

    And what a brilliant insight into the kind of thinking which creates and fosters your Median Man. I am sure that he will begin reducing his expenses and accumulating savings as soon as he has everything he wants and has a greater disposable income.

  3. Frankie Woods

    You are spot on. Education is a critical reason why the average american fails financially. However, I would say that we have been conditioned to believe that instant gratification is better than financial security. Most people try to “keep up with the Benjamins” because that’s what brings recognition today. I mostly blame the media and marketing for this, but that way of thinking will, in my opinion, be the greatest hurdle to overcome.

  4. Kyle Hipp

    The practice of delaying gratification is old as time itself and those that strive for it with intention and purpose have a lifetime of success. When I bought my first duplex to live in half, my mindset was that the average person my age rented anyway so why not live the renter’s lifestyle and enjoy the lower costs associated with it. I watched my budget very closely in the begining because I had to in order to make traction. At this point I spend mkre than I would have to by eating out and making purchases that I want but my years of effort and work have allowed me the freedom and flexability to do that.
    I am continually amazed by the folks that struggle financially but eat out on a regular basis, have several flat screen tvs even though the cable bill doesn’t get paid consistantly, lease their vehicle (s), and rent to own appliances and furniture…. The bar is set so low in the US and I believe that is because by and large we are so fortunate. Like you stated, it doesn’t take a huge income by any means (I believe under $40,000 annual income is still in the top 1% globally) to get into the top 1% globally. We have so much leisure time but fail to see just how much and how that affects our nation as a whole.

    • Well said! We have been spoiled in many different levels and having the entitlement mentality! I see kids in food stamps program but wearing latest several $75-$100 Sketchers sneakers, parents driving Hummers. I have seen students who say they don’t have money to buy books/calculators but spending huge sums of money of iTUNE and Apps downloads. Why do people think getting more stuff or spending on latest gadgets makes one happy or fit in with their friends/family. I say, if your friends are so shallow that they will not accept you if you don’t have the latest iPHONE, then you don’t need those friends to begin with…

      • Scott Trench

        Austin – thanks! I think at some point, we have to address the behavior that you describe here (high spending even when on welfare) – it is bad behavior. I think that you then have to ask yourself a tough question – “Do I want to hang around people who behave poorly?”

    • Scott Trench

      Kyle – you are reaping the rewards of your planning and dedication to controlling expenses. I am definitely following in your footsteps. I also want to thank you for your point about $40,000 being in the top 1%. I simply chose the American Median wage to show the absurdity even fruther. I definitely could have gone with an even lower number and still had the same point.

  5. Max M.

    Yup. My mom earned six figures when I was a child. A few years later we were homeless. LOL

    I ended up doing the same things she did. Spending everything I earned on instant gratification, just like almost everyone else. It’s what everyone I know does.

    Every dollar I earn will be going to real estate biz until I get out of my mom’s place. After that, a majority of it. It gets easier to make money with more money.

    • Scott Trench

      Max – thanks for your point. It’s interesting to hear that from a perspective of someone who has had this problem before!

      Prior to investing in Real Estate, I personally like to invest in things that help me cut my expenses drastically. For example, I am buying a duplex as an owner-occupier prior to buying a true standalone investment property. This investment really serves to cut my living expenses.

    • Scott Trench

      Sean – I think that the problem is that its so easy to have both! Why can’t you max out your 401K and have a huge TV? All you need to do is go about the acquisition of those items intelligently.

      For example, I wanted a large TV. So I waited months for one to come through Craigslist. The couple was moving and they unloaded a 55″ HDTV for about $150. Some might call even that extravagant, but I definitely enjoy it, and I can still max out my retirement accounts.

  6. jen kurtz

    Scott, I really enjoy your personal finance posts! Again, I absolutely agree with your Median Man. I don’t understand the mentality that believes an accumulation of “things” equates to happiness. I much prefer an accumulation of life experiences. Possessions cater to instant gratification, which is glorified in our media. Consumerism makes a lot of people rich and a lot poor. Its up to us as individuals to decide which we are going to be- a life of slave to money for small bursts and quickly fleating moments of happiness (like a crack addicted fein) or someone that can find happiness in life and experiences that stem from freedom (which comes from the immancipation of slave labor).

    It is truly a mindset that has to be planted like a seed into our brains. I try to pass on the type of thinking to anyone I think could benefit- friends, family members, young people I meet, etc. We have to keep talking til they hear us 😉

    • Julia Rowling

      I know tons of people who waste their money on “experiences” – movies, shows, travel, outings, courses, etc….nothing more than distractions and entertainment. And they think they are somehow superior than the accumulators of stuff. But regardless of whether you are buying stuff or buying fun times, you are still chasing the illusion that money buys happiness – and probably neglecting the aspects of life – family, community, service – that bring fewer thrills but more satisfaction.

      • Scott Trench

        Julia – I think that what you want is immaterial – you are right that the chasing of experiences and spending too much on that can be just as detrimental as the accumulation of “things”.

        I also think that the accumulation of “experiences” is a millenials thing. Many of my peers are way more interested in having an awesome night out every single day or going on expensive vacations, but the net effect is the same.

        It’s the mentality that matters in going after what you want, in my opinion.

    • Scott Trench

      Jen – Thank you! I agree and hope to keep spreading the word.

      Some want possessions, some want experiences like you indicate, I guess what I want is control. I want to be in a position of strength for the majority of my adult life, and the ultimate position of weakness (in my opinion) in today’s society is a position of financial dependence.

  7. Karen M.

    Scott, I am a huge fan of the Mr. Money Mustache blog, and I have to say that your articles sound almost exactly like him, same concepts, same view of money and passion. I’m also a huge Dave Ramsey fan (even though he says to buy all your RE with cash, and your first one locally.)

    It’s a cute article.

    I’m going to have to go double-check our savings rate now. Thanks for the encouragement.

  8. Middle class? Please.

    Go ahead and work you ass off, see how that plays out. Not trying to be Debbie Downer but I’ve been a very successfully self employed broker and appraiser since ’89 and work my arse off. That matters not at all because between taxes, company expenses, “regular stuff” and all of the unexpected things I’m juggling like Twisty the Clown.

    The clown in DC just administered a nice punch to the privates as well – obbamacare has more than doubled my premiums. You need to be either super rich or just enjoy living off the teat of the tax payers. In the middle is no man’s land and we’re getting murdered.

  9. Greg Baker

    My wife and I did not start tracking our spending until we had a baby on the way. Years later, we’re making a significant amount more, running a tight monthly budget that tracks every cent, and ironically spending less even with childcare and diapers to account for than we did pre-child. Investigate your spending, categorize wants and needs, focus on needs, and then reward yourself over time with the well earned, and the very occasional want! You’ll be able to enjoy it more (if you still even want it…) because you’ve earned it.

    • Scott Trench

      Greg – thanks for the comment and support. I think that your case demonstrates “what get’s measured gets managed”. Simple tracking and the development of knowledge on where your money is going is critical to changing behavior. I’m inferring from your post that your behavior changed when the facts showed exactly how bad the spending damage was.

  10. Mary B.

    Fact is, most people of the world are followers and either can’t or just won’t step out and be a leader. That’s the way its been for ages and the way it always will be. Often times a terrible economy will force those who can and will lead to step up and out even more. Yet if that doesn’t do it nothing else will. Good article, thanks for the share.

  11. Charmaine M.

    Sad to say I know a lot of people like that, and no matter how you try to explain to them how things work, they prefer to live that way because they want to impress.

    Hey you can only lead a horse to water, but you cannot make it drink. Some folks just have to learn the hard way!!

    • Scott Trench

      Charmaine, thanks for the comment. I would hope that you know some poeple like that – I chose the average or median american for a reason! It’s a real shame that so many will have to learn the hard way, when its so much better and easier to do it the right way!

  12. Scott Sir Great article when someone understands the concept that you lay out here in this article it changes their view. I have a friend who almost through out his life prob earned near $10-11/hour not at age of 37 he is five years away from owning his home outright and he is also a partner in 2 investment partner. I have always tried to keep the points you laid out here in this article in mind and it has helped me a lot to start building on future wealth with a less that medium family house income. Lots of good replies to the article. Lots of points made here are great lifetime lessons. Someone once told me Real Estate doesn’t need to be fancy just stick with the basics and let the numbers run the game. Thanks again great points to take from here


  13. Anthony Gayden

    Great article. I almost thought I wrote it because it mirrors my thoughts on the basic principals for a better financial life.

    A lot of people care more about looking successful than actually being successful. It is more important that they have the nice house in the nice neighborhood, the nice car, the RV/camper, the boat, the nice clothes, and latest gadgets because in reality, you would look poor and unsuccessful if you were to save, invest, and make smart spending decisions.

    I know this because it is what I do, and I look poor. I live in an inner city apartment, which I own, I drive an older inexpensive used car with no payment, I wear clothes from Wal-mart. I only pay for things with cash, because I have no debt (aside from my mortgages on my apartment buildings) and intend on keeping it that way. I don’t have some huge television, I have a 32″ that I bought 5 years ago and still works well. I don’t have cable tv, I don’t have a smart phone. Honest truth I live as though I made $25-30,000 a year, even though I make triple that amount.

    My coworkers live like kings by comparison, but the difference is that 30 years from now, I will be extremely wealthy, and they will be looking forward to their social security check (if it still exists), and nothing else.

  14. Max M.

    Hmm, as much as I’m—less than impressed—by ostentatious displays of status, at the same time I do question why someone would mold their whole lifestyle to be rich when they’re old and grey. If someone is that focused on riches, why not get rich now? From what I’ve seen it seems anyone who actually is able to put together real estate deals can pretty much be a millionaire in a few years give or take. Why be the millionaire next door when you can be a millionaire faster and enjoy the fruits of your labor sooner? If you’re not that ostentatious, you won’t even burn through more than a minority of your net worth, and any future earnings will be icing on the cake!

    • Scott Trench

      Max – I agree with you that there are faster ways of getting rich than by cutting back on spending. I’d argue however, that those methods are disadvantageous for several reasons:

      1) Many faster methods have a higher chance at failure
      2) Many faster methods require more hours worked
      3) Many faster methods can actually reduce freedom

      Depending on why you chase riches, there may be a strong case for avoiding other sources of income, especially those that provide the path to rapid wealth accumulation that you reference. I’d argue that many of those paths involve a decrease in lifestyle quality today far beyond what you sacrifice by decreasing consumption.

      • Max M.

        Good point. One thing I fail to take into consideration is the fact that some people may already be completely satisfied and enjoy their current lifestyle, and have no want of extra money outside of securing this lifestyle in the long term.

        I’m a total newb so take what I say with a grain of salt, but here goes.

        I think some of the faster methods can actually increase freedom, because instead of being tied to properties and management, or having funds locked up in a steady % return on investment, you’re completely liquid and can go in on any deals you want at any time. As well, once a certain deal has been done, you’ve been paid your profits and there’s nothing to take care of anymore. No commitments.

        Obviously these types of deals tend to require huge amounts of expertise to be efficient and increase freedom. Done incorrectly or just inefficiently they can be problematic. I figure all newbies have to go through a sort of trial by gauntlet whereby they learn the ins and outs until they reach a point where instead of chasing deals the deals start to chase them (marketing and systems) and they know how to hire out or joint venture all the extra labor involved so they can focus on the creative top level aspects of it and insulate themselves from as much drudge as possible.

        At the end of the day though, I suppose holding properties comes down to the exact same thing, particularly with economy of scale. Controlling hundreds or thousands of units/homes will probably make it easy to simply pay someone else to manage it all 99.9999% while the money just rolls in.

        I suspect a lot of this stuff comes down to an investor’s individual temperament and personality. For some, a certain strategy may be more fun and less stressful, and another strategy would be nerve-racking and painful or boring. Then the opposite with another investor.

        Since I’m broke and thirsty right now I’m happy to hustle hard for a little while until I get my head above water. Then the time will come for efficiency and tweaking! With increased skill comes increased throughput or increased efficiency, and in some cases both!

        • Scott Trench

          Max, I totally agree with your mindset and believe that there are absolutely ways to increase the rate at which you accumulate wealth and increase freedom at the same time. I think that it will take some extremely creative thinking and lifestyle design though!

          I simply prefer to take a slightly more passive approach to my financial affairs than you I think. I’d rather focus on my savings rate, get the best possible (mostly) passive returns that I can, and let the power of compound interest go to work for me. Yes it might take me a few more years than someone employing your all out approach to creatively mass producing wealth, but that might just be a difference in approach.

          Here’s why I’m doing what I’m doing:

          It took me the better part of a year to save the roughly $20K I needed to purchase my first duplex. While I certainly don’t have the nicest apartment or car, I didn’t give up too much lifestyle to make that sacrifice. Once I own my duplex, I plan to sell my car, and collect rent from my tenants, cutting my living expenses roughly in half, while producing income from the rental unit. Next year, I hope to save enough to purchase four additional units, then eight, and so on.

          I think that I just believe that the effort involved in massively scaling a business is more manageable for me than trying to produce that kind of portfolio with actively go-getting. I don’t think that either approach is wrong, it just means that we have slightly different objectives.

  15. Colin Reid

    It amazes me when I talk to coworkers and they think I am able to invest because I’m single and wealthy. I’m in the Air Force. My pay is public record. My peers don’t make drastically more or less than I do. My enlisted guys make significantly less, but even out of those guys, some have fancy cars and new phones and toys, and others have a ton of kids, stay-at-home wives, and STILL manage to invest a good amount of money.
    The difference? I don’t have the newest smartphone, I only have one car, I hate buying clothes. I refuse to water my lawn ($200/month saved!) I invest or save almost 30% of my take-home pay just from my paycheck. I have an expensive hobby, but I’ve found a side hustle to help offset the costs. My rental income gets rolled back into more investments, not into my pockets.
    Bottom line is that it’s all about choices. I know guys with half my income and well over double my monthly expenses that are investing, and peers that make what I do that don’t save 1% every month.

    • Frankie Woods

      I’m a fellow Air Force member, and I agree 100% with you. A co-worker and I were just discussing this exact topic today. We estimated that less than 10% of our peers (probably closer to 1-5%) here at Al Udeid probably have more than $100k net worth after > 10 years of employment. I blow that out of the water, and I haven’t done anything “special” or especially “smart”. It simply flabbergasts me! Anyway, god bless and happy investing!

    • Scott Trench

      Thanks Colin. I think that many of the people here on BP share your mentality and I think that while this type of thinking has massive financial advantages, that people who think like we do have a unique problem: frustration or exasperation with those who don’t get it!

      I think that your example really shows that it doesn’t matter how much or how little you make, its all in how much and how intelligently you protect those earnings.

  16. Pete T.

    Yeah, I liked the article for the most part and was exactly the same way. My wife is the exact opposite and we have met somewhere on her side of things. While you can greatly enhance the ability to invest by cutting things out, you also don’t enjoy those things you cut out. Its a balance and I am always careful about what I say is a waste of money because everyone has their own value on what is important. Yes it is annoying when some people just get everything they want and then are supported by the rest of us, but that is just part of something that is not going to change in the near future. I do wish more people looked at things in this way, as I assess this will be a national crisis in the near future as SS dries up, and a much larger population is going into retirement w/o enough money and many more w/o pensions of any kind.

    • Scott Trench

      Thanks for the comment and precautions! I agree that its up to everyone as an individual to decide what’s important to them and where they get the most value for their money. I would definitely follow that up with the caution that it is important to fully understand the true costs of those decisions and to weigh them against other expenses.

      I think that the point of this piece is to point out that someone who lives in the nice neighborhood with the fancy cars, big TVs, $900 phones, swimming pool, etc, is making a choice. That choice has significant financial consequences, and I think that many BP readers at least, would disapprove of those choices, when the consequence is a lack of wealth and anger directed towards a “broken system”.

  17. Stephen S.

    So long as we ignore the obvious conflict of interest inherent in the policy of allowing citizens who receive money controlled by the people for whom they are permitted to vote – there will be no resolution of ‘the welfare problem’.

    • Scott Trench

      Interesting concept. I think that there is a conflict of interest there, but I wonder if its as pronounced as you insinuate – there was certainly a telling election recently that indicates that the country may be relatively less interested in increasing distributions..

      • Stephen S.

        The US has a ‘pay to play’ system of electing leaders. That is; all votes in the US are ‘bought & paid for’ in some manner.

        The majority of voters cast their vote for the politician they view as most likely to most quickly benefit them personally. Politicians well know, pander to, and exploit this voter tendency.

        The flaw in the ‘logic’ of course is that the politicians are using the voter’s own money to buy their vote.

        What might be termed (admittedly callously) as The Welfare Voting Block is now much too large to be ignored by any politician who wishes to become mainstream. This is also why no one running for office can even Suggest that Social Security be reformed. The ‘Social Security Voting Block’ is much too large to ignore.

        And both groups are growing fairly rapidly. Which makes it all interestingly ‘catch-22’ -ish, doesn’t it?


  18. Eric B.

    Geat article and a bunch of awesome points in the comments! I’m also a huge MMM fan. Scott you make the point that a modest lifestyle supported by an income that accumulates wealth, in a significant way, gives a person more control. That is certainly what we have found. My wife loves her job and we are fortunate enough that it pays well above median income. But what I have found over the last four years of being a stay at home dad is that that control can free a person to actually be more productive and add to their net worth faster than having a “job”. I’ve allowed the market to dictate what I do on a part time basis. Because of that choice I have found several things that i love to do and pay better for our family(on a part time basis) than my old 50+ hour week job. Even though we have an all time personal high income this and next year I am returning our cable box today, am buying my own garbage cans, and working on two possible rental aqusitions. All on ” one income”. Freedom and control just allow you to come at life from a more powerful place and you can then let it rip when you go out into the world. Look at MMM. the guy actually makes more now as a blogger than he did as an engineer. Boom.

    • Scott Trench


      Great points. I am a huge believer in the idea that you can’t lose financially if you don’t spend. Once you gain control over that, opportunities may just be infinitely more available to you. As a low spender you can take a risk on an investment knowing that even if you lose, you don’t NEED the money. This gives you infinitely more opportunity than the family that locks into a $1,700 per month mortgage payment, and two $500 car payments. They are forced into a corner where not working, or a risk that does not pay off will result in financial ruin, whereas the thrifty person like yourself is free to choose the best opportunity where and when it becomes available. I think that it will be hard to overstate that advantage, especially when it is compounded by years and years of opportunities that one party (YOU) can take advantage of that are lost on the other families.

  19. Nice article n good comments.I’m a life insurance agent in Nigeria,people find it difficult saving up their monies for investment.they prefer getting loan to fund personal gratification or embark on businesses they have little or no knowledge about…I want to help advice guide by publishing a newsletter which will aim at educating people on venturing into real estate as people yearn to invest but lack the education to.I hope biggerpockets will b helpful in my quest to help in my capacity from here!keep it up Scot

    • Scott Trench

      Wow that’s so great to have readers from around the world! I wish you the best of luck and feel that you are doing some great work over there in Nigeria!

      By the way, we have exactly those same problems here in America, where people earn significantly higher annual incomes than in your country, on average. It’s truly amazing that you are able to work with people in a very different magnitude on the financial scale, and yet the foundational and behavioral problems are quite similar.

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