This is very true. Let's look at two examples:
Guy A:
Earns $60k pa. Live a simple life, no car, take public transport, cheap holidays. Saves $20k pa. Live in a 4 room flat, which is fully paid and worth $400k. Current net worth $500k.
Guy B:
Earns $150k pa. Lavish lifestyle, likes partying with girls, drives a flashy sports car, lives in a condo, frequent high end restaurants, European holidays. Every year deficit of $30k, takes loan to cover deficit. Condo valued at $1.5m, outstanding mortgage $1.2m. Current net worth $500k.
Who is better off after 20 years? The answer is obvious.
Quote:
Originally Posted by lordlad
i think the most important thing is your total net asset needs to be at least positive....
no point earning 15k monthly but having a monthy expenses of 20k....
It's always like those banks shouting them having 500 million revenue but whispering that they made a net loss of 25 million.....this is not good business. Having high revenue and asset doesn't mean anything if you still end up having a net loss of profit.
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