… [I have] a question on your Blogpost “Advice for a new Multimillionaire” you stated something that grabbed me “Wealthy people spend capital. What they should be spending is income.”
My question is this… when you were first starting out how did you determine how much of your income to turn into capital and at what point did you decide to change that ratio.
This is an excellent question because it ties into the common notion of “paying yourself first” i.e. putting aside a set portion of your income into debt reduction and/or savings.
For a very long time, I didn’t save anything …
Then I discovered my Life’s Purpose (a very expensive one at that!) and realized that I would need to make $5 million in 5 years [AJC: I overachieved, although it took me a little longer than hoped, hence the title of this blog].
That made me rethink everything in my financial life, including starting to save.
So, I pumped as much as I could spare into buying mainly real-estate and a little in stocks and other investments … and, as my income increased, I pumped almost all of that increase into more investments.
Unfortunately, I didn’t have much of a strategy at that time beyond “save as much as I can”.
Now, I recommend that (if you are still earning income) you should pay yourself twice.