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Poverty is optional
I’m only responding to the article based on its title.
You are NOT one step away from poverty if your salary is your only source of income IF you have the following in place:
You consistently live below your means.
You have a 6–12 month emergency fund in place.
Your expenses are relatively low and easy to manage.
You have un-maxed credit cards with 0% to decent interest rates.
You consistently save and invest a large portion of your income.
1 Live Below Your Means What happens when you consistently live below your means? You build wealth, a nest egg, savings, backup money, etc. As you accumulate excess money, you’re creating a plan B unintentionally. For most of my career, I have lived way below my means, which means if I ever lose a job, I’m good. I don’t need ever to worry. #2 In Case Sh*t Happens, I’m Good Even your most basic financial guru will encourage you to build an emergency fund. 1–3 months is a starter emergency fund. 6–12 months is a robust and bulletproof emergency fund. When you lose income, a job, or disaster strikes, a robust emergency fund will be there to save the day. #3 Keep Those Expenses Tucked In It’s tempting to consistently increase your spending when you’re making money, getting raises, and experiencing increases. But it is precisely at these times when you should save and invest more than you ever have. You can live how you want when you live more intentionally and don’t buy into the trap of consuming everything society recommends. #4 Credit Cards Are Good Backups If you don’t have an emergency fund but have kept your credit card balances at zero, you can leverage your credit cards as a backup emergency fund. I did this when I was still building my emergency fund. I utilized my credit card for a couple of months, and once I restored my income, I paid off the credit card relatively quickly. #5 Don’t Save Modestly. Save Extravagently. People approach saving and investing too modestly. A guy earning 80 grand a week was too scared to invest more than $1,000 monthly. Come on, people. Suppose you can spend x amount of dollars on recreational activities, going out, entertainment, food, travel, shopping, and whatever your thing is. In that case, you can do the same for your investments/savings. Imagine how much more extensive your financial portfolio could be if you saved 25%, 50%, or more of your income. For many, saving this amount might not be realistic compared to the expenses they carry, but for some, this is doable.
Free Educational Resources
If Your Salary Is Your Only Source of Income, You’re One Step Away from Poverty
According to Warren Buffett. Here’s how to get a second income
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.