Responsibility Leads to Wealth

Dear Dave,

Why is it that some people have enough money for things like pizza and cable television, but they don't buy something as inexpensive as renter's insurance, and then they expect someone else to bail them out when a fire destroys their home?

Keith

Dear Keith,

This kind of behavior falls into the Stupid Tax category. It's an aggravating thing, but at the same time there's something about fire that elicits sympathy from me. Even if there's stupidity involved in what happened, it's such an emotionally devastating event. But I think it's important to talk about what you've brought up.

Let's put it another way. Why are there people who get mad at others for building wealth, or expect other people to bail them out after they've behaved irresponsibly? Ninety percent of America's millionaires are first-generation rich. They started with nothing, and instead of buying lottery tickets and smokes, they saved money and bought things like renter's insurance. They kept things like car insurance and health insurance in place, so that if they totaled their car or had to have an operation, they could pay for it instead of filing bankruptcy!

In other words, they were responsible. They stayed out of debt because they were mature enough and responsible enough to delay pleasure, and then after years of living this way, they looked up and discovered they were millionaires. That's how it happens. You delay bits and pieces of fleeting pleasure for a quality life in the future. Now, you don't trade away all momentary pleasures. You don't have to completely give up fun to win with money, but you trade impulsive, immature decisions and purchases for the reward of a better life later.

Most poor people delay none of the pleasures. They live only in the moment, and that's why they stay poor. If they want a better washer and dryer, they'll rent-to-own instead of saving up for a little while and buying a decent, used combo in the classifieds. I understand that bad things sometimes happen to good people, and you can end up broke that way, too. But I firmly believe that in most cases, it's not that they don't have the money, it's more a case of they don't have a vision for the future.

-Dave

* For more financial help, please visit daveramsey.com.

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