"wealthy people do not pay interest"

[Nutria]

Since anyone can claim anything in a book or blog post and make it seem profound, or Word Of God, is there any evidence that this is actually true???

Remember "everyone must drink eight 8 oz glasses of water per day"? Some guy says he's a Doctor (and may even be one) and -- with zero evidence -- writes a book claiming water cures everything from angina to arthritis.

Because I read that wealthy people stay as liquid as possible (which naturally means paying on time) so that when a great investment opportunity arrives, they have the cash to make that killer investment...

[yupstrips]

Getting children to understand the concept of money

I have two 6year olds and an 8 year old who (as kids do) always ask for money when at the shops and at the moment we are really tight for cash as we have just had a baby and are waiting for our benifits to come through as hubby's pay covers bills (only just), food and rent . Who has a way to help them understand????

[Nutria]

I have two 6year olds and an 8 year old who (as kids do) always ask for money when at the shops and at the moment we are really tight for cash as we have just had a baby and are waiting for our benifits to come through as hubby's pay covers bills (only just), food and rent . Who has a way to help them understand????

Just tell them, "Money's tight. We can't afford it. Four kids cost a lot of money, blah blah blah." Our kids understood, and yours can too. Important: stick to the facts, and don't get all whiny or emotional.

This being a debt forum, I must ask if you are living within your means, or piling up more CC debt because you're too embarrassed to let others -- or yourselves -- realize that money's tight?

[Fishindude77]

I agree with Nutrias post.
Cash is king.

[snafu]

Yupstrip, following our own upbringing, DH and I had our DKs do age appropriate chores for negotiated pay from about school age. We wanted them to understand that money is earned for work performed. This did not include routine chores like dirty clothes in hamper, make your bed, put away your toys or take your dishes to DW. They choose tasks and challenges and process/expectation was explained in detail. Poor job got zip, incomplete got no more than half pay. They were a lot more engaged in what things costs when they worked out how many hours of work were required to buy movie tickets or treats.

[dawnwes]

My kids are teens now but when they were younger we would just talk to them.

If they wanted something they could ask but they weren't allowed to whine, beg, or throw a fit. Sometimes I could say yes, other times I would say, "you will need to put that on you list to save for, ask for for your birthday, etc....because it is too much money for me to get right now."

They really didn't ask for all that much. And they knew if there were any fits about anything, we walked out of the store.

However, one thing they LOVED was that I would take them to a thrift store or yard sale and tell them they could each spend X amount. They often found great treasures there and were so thrilled to get them. They found expensive lego sets for a song or action figures for really cheap.

I always made a huge deal about how they would have only been able to get ONE action figure at the store for the same amount they got 10 at the yard sale.

[FLA]

However, one thing they LOVED was that I would take them to a thrift store or yard sale and tell them they could each spend X amount. They often found great treasures there and were so thrilled to get them. They found expensive lego sets for a song or action figures for really cheap.

I always made a huge deal about how they would have only been able to get ONE action figure at the store for the same amount they got 10 at the yard sale.

my kids loved this as well and it taught them how far a dollar can really go. They both get things at thrift shops now and then and their clothes are nice but off the clearance racks.

I raised them that regular household chores were not tied to their allowance, those were chores you were expected as a member of the household to help with, i.e: laundry, care of pets, etc. They always got a small allowance. Then if they wanted more spending money, they could do bigger chores like clean out the garage.

They both turned out with a good work ethic and good ability to manage their money.

so far, lol

[tripods68]

Because Istay as liquid as possible (which naturally means paying on time)

I don't quite understand your meaning.

"stay as liquid" is to "pile up cash as much as possible" (meaning don't buy/trade equities or spend it).

[Nutria]

I don't quite understand your meaning.

"stay as liquid" is to "pile up cash as much as possible" (meaning don't buy/trade equities or spend it).

You seem to have snipped my post in a confusing manner. Anyway, "paying on time" is ambiguous. I meant "pay via 30 or 90 days net"

As far as staying liquid, you can trade equities while staying liquid by responsibly (that's always the key, isn't it??) buying on margin.

[tripods68]

You seem to have snipped my post in a confusing manner. Anyway, "paying on time" is ambiguous. I meant "pay via 30 or 90 days net"

As far as staying liquid, you can trade equities while staying liquid by responsibly (that's always the key, isn't it??) buying on margin.

No, it just means, don't do anything with it, continue to add to it, keep building it up, don't trade.


But don't do anything crazy like "trade equities on margin", high risk trade, where you can tie your money for at least 3 days before you have full access to the funds. Every trade is T+3 (3-business day to settle a trade).

Now whether you made a "responsible trade to build cash reserve", that's a different topic altogether.

[sv2007]

Since anyone can claim anything in a book or blog post and make it seem profound, or Word Of God, is there any evidence that this is actually true???

Remember "everyone must drink eight 8 oz glasses of water per day"? Some guy says he's a Doctor (and may even be one) and -- with zero evidence -- writes a book claiming water cures everything from angina to arthritis.

Because I read that wealthy people stay as liquid as possible (which naturally means paying on time) so that when a great investment opportunity arrives, they have the cash to make that killer investment...

AFAIK wealthy people pay a ton of interest compared to poor people. They employ leverage and that needs interest payment.

[JeffH]

All of the wealthy people that I don't use debt like the majority of people. They leverage their knowledge and other people's money. However it is not by a loan (debt). They partner up with people with money for part of the opportunity.

They also use their name and bank account as leverage without putting any money into their deals.

[bjl584]

I think it depends.

I can see a wealthy person paying cash for a car but mortgaging a house or financing a business venture.

[Fishindude77]

In my view, true wealth is getting to the point where it is unnecessary to borrow funds and / or pay interest for your various financial needs. Using your own money and paying cash puts you at a significant advantage over someone else doing the same thing and borrowing.

[TexasHusker]

Cash is king, but a good banker is nice too. Why use my own money for a good investment when I can use someone else's ?