Originally Posted by Unregistered

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.