Here’s the difference between conventional personal financial advice and 7m7y thinking in one slide; according to Brian Taylor the fundamental rule of money is to:
Either earn more than you spend or spend less than you earn.
Simple … and, much better than the alternative (spending more than you earn) …
… but, wrong!
There is only one fundamental rule of money:
Earn more than you spend
Can you see why? Your financial future depends upon it š
Let E be earn and S be spending. If E E QED. The latter part of the statement is redundant. What about “if you can finance it you can own it?”
AJC, Is it possible to pm you vs. posting some questions I have to the forum?
@ E Winters – I always like e-mail from readers: AJC [at] 7million7years.com
Yeah, I noticd the same thing. If S is spending and E is earning he says
E > S
or
S < E
It is the same thing.
Now, if question is should you focus on Earning more than reducing your spending, then yes. Even if you reduce your spending to zero you are still limited by your earning. So it tends to be more important to improve your earning ability.
In terms of basic math, they are the same thing. In terms of personal finance, two important differences can be inferred from the E>S and SS = a focus on earnings: earnings can grow much more than spending can be cut
2. S<E = a focus on spending: but controlling spending is substantially the same as limiting your lifestyle choices
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