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Automatic wealth The 6 steps to financial independence - Masreson M.

Masreson M. Automatic wealth The 6 steps to financial independence - Wiley & sons , 2005. - 291 p.
ISBN 0-471-71027
Download (direct link): automaticwealththesixstepsto2005.pdf
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At Ouzilly, deep in the French countryside, you can live well on a little money. On a beautiful day, you can sit out on the terrace of a stone farmhouse ... you can drink local wine ... you can eat local food ... you can putter in your garden and take day trips to visit medieval towns. Life can be quite good—even with little money.
But when you don't have money, you don't have the option of changing your lifestyle. As long as I am content to live in rural France—or rural Arkansas, for that matter—I can do that on little money. But what if I want to live in New York or Paris?
(continues)
98 AUTOMATIC WEALTH
I'm going to find out how much it costs to live in Paris in a couple of weeks. We're moving to an apartment near the Trocadero. The modest, 4-bedroom apartment rents for 17,000 francs per month—about $3,000. Not bad. And cheap by New York standards. Paris is actually one of the cheapest major cities in the world. Still, with school fees, meals, transportation, maintenance, furniture, utilities, and professional fees, we estimate that it will cost us about $100,000 a year to live there. But the tax rate in France is 60%, so I will have to earn $250,000 just to keep my head above water.
Hmmm ... this won't be cheap. How much capital would I need to earn $250,000 per year? Well, if I could get a reasonably safe return of 6%, it would mean that I would need $4.3 million. This does not provide a luxurious lifestyle, by any means. In fact, it barely pays the bills of a bourgeois American family ... with six children in school.
Most people think you need at least $10 million before you can be considered rich. That amount would provide you with about $600,000 in income. Most people could live comfortably on that much.
But wealth is not always forthcoming when, and in the amounts, we want it. So, in practice, people don't really calculate how much they "need" to live the way they want. Instead, they try to earn as much as they can and adjust their sights accordingly. They do not need to live in Manhattan—life in Omaha is good enough for Warren Buffett, after all. They do not need to go to the Tour d'Argent for dinner. The food at Madame Grammond's is just as nourishing. So why the pressure to earn ever more money?
Bunker Hunt said that money was "just a way of keeping score in life." But to what end? What's the prize, in other words? Once you have a comfortable place to live, and decent food to eat, does additional wealth really add to your quality of life?
Does it help your children ... or does it hurt them? Does it make you happier? More secure?
The major thing it does is expand your field of choice. You can decide for yourself whether you want to live in Omaha or New York, for example. More choice leads to more thought about what living well really means. This, in turn, may have the effect of enriching your life in unforeseen ways. Or it may simply make life more complex and difficult, like having to choose a long-distance phone service or an insurance program.
Step 3: Develop Wealthy Habits 99
"Women," repeated Michael. "Without women, money would mean nothing." At last, I grasped his meaning. He was reaching for the deeper truth. For all the practical advantages of having wealth, men strive for it for impractical reasons: Money is status. There is some reproductive imperative that causes men to seek status and women to prefer men who attain it.
To express it crudely, money is a way of scoring (metaphorically, of course)... not just keeping score.
The most valuable thing that money can buy you is the freedom to spend your time as you see fit. And when you reach the point where you can spend most of your time paying attention to those things that bring you the greatest pleasure, chances are you won’t spend a great deal of money (unless, that is, you are unfathomably shallow). You’ll probably choose to spend your time conversing with friends, reading good books, enjoying art and travel—living the kind of life you imagine wealthy English or French aristocrats did in centuries past.
To some extent, at least, you can do that right now.
LIVING RICH . . . STARTING RIGHT NOW
When you think about the rich—the really rich—you may find yourself marveling at their . . . well, their money.
Take Bill Gates, the world’s richest man. If you think $10 million is a fortune, then consider this: He has 8,000 of them. If he put his money in $1,000 bills, he’d have 80 million of them! His wealth is so great that the interest on it makes him $60 million richer every month. Bill Gates makes more money every time he takes a nap than most Americans make in 10 years.
But how much better does he live? Sure, he’s got a huge house. And a yacht. Probably he’s got a jet, too. But who needs that crap? Really!
You can live as well as Bill Gates does right now. And I’ll prove it to you.
100 AUTOMATIC WEALTH
Let’s start by identifying some of the basics of life:
• Sleeping
• Working
• Dressing
• Eating and drinking
• Enjoying leisure time
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