Reply #37: Classic problem of this group.... [View All]

[triguy46]

All cash flow, no wealth. This is discussed in depth in "The Millionaire Next Door," by Thomas Stanley. Though these people have large incomes, through bad decisions and lack of money management, they never accumulate "wealth", those things that have cash value. So the money they make goes to debt payments, inflated mortgages for trophy homes and second mortgages for other toys. It does not take much out of the ordinary for them to discover they do not have cash when they need it: simple things like deductibles and copays for out of the ordinary medical expenses.

Simply put, people in this country make 2 mistakes: they live beyond their means, and they buy too much "stuff".