WEALTH = (WHAT YOU EARN) – (WHAT YOU SPEND)

WEALTH = (WHAT YOU EARN) – (WHAT YOU SPEND)

There is a great post on the Get Rich Slowly website on the most important tip in personal finance.

Personal finance is easy. It’s simple. There is one fundamental law that governs your money. If you master this, you have mastered the entire game: To gain wealth, you must spend less than you earn.

There is a famous quotation from Dicken’s David Copperfield:

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.

This can be broken down to a simple equation:

WEALTH = (WHAT YOU EARN) – (WHAT YOU SPEND)

You need the WEALTH figure to be more than zero.

Simple? Yes. But very difficult to see when you are mired in bills and everyday stuff.

You can read the whole post here. It might open your eyes 🙂


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