Some helpful thoughts from an old book

Often I bypass looking at a money book that is several years ago, figuring that its concepts are probably out of date. But in 1999's Your Money Matters: 21 Tips for Achieving Financial Security in the 21st Century by Jonathan Ponds, I found many ideas that are still very relevant:

1. Spend less than you earn. People who don't get in the habit of living beneath their means - saving regularly - will never achieve financial security.

2. Wealth is created by owning individual stocks, owning investment real estate or starting a business. I've already done well with mutual funds, have decided that starting a business is not my thing, so investment real estate seems like the right option for me. Ponds says its 'one of the best ways for average people to create a lot of wealth.'

3. Money needs to be distributed between necessities, luxuries and saving for the future. Persuading yourself that you really need something is often the end result of convincing yourself that some luxury has become a necessity. We also like to think that we are saving for the future, but most likely we are not saving enough.

4. Live beneath your means - but don't unnecessarily deprive yourself. This can be challening, as my wife and I have discovered.

5. Arguing sometimes with your spouse about money is inevitable because spenders are usually attracted to savers. Even if one partner tends to handle most of this area, the other person shouldn't be left in the dark. Until about a year ago, my wife was content to let me handle everything but this changed while she found out that we were consistently spending more than we were earning (see item #1 above).

Finally, in order to spend less than you earn, you have to learn to be happy with what you've got. If you can be happy with what you already have, you will find it easier to save the money to make investments that will give you financial security. This doesn't mean that you resign yourself to your current financial situation; you still strive to advance in your career, earn more money and invest better. As long as you feel deprived, you will want to acquire more 'things.' More things won't make you happier but more things could make it difficult to achieve financial freedom. Seems contradictory, but true.

Happily, I purchased this book at a library book sale for $2.