Aesop's Fable of the Ant and the Grasshopper, tells us of two very different type of people: Those who play and do not invest / work and those who work / invest now to play later. Anyone who knows me will tell you that I am the role model of the ant. And I can tell you something right now, being an ant will not necessarily make you super rich, but it will allow you to retire comfortably unless you die early, in which case you won't much care about money anyways. The greatest gift of being a hardworking ant, is simply in knowing that you are an ant. NO ONE CAN TAKE THAT AWAY FROM YOU. I am an ant, and a proud ant at that. I do give to the poor, I am not stingy with my blessings in life, but I do not overspend on small pleasures for myself. Again, I am 34, I do not have cable TV, I use an HD antenna. I could easily afford it, but I actively choose not too. FYI, that usually saves about $10,000 in 10 years time. (assuming $80 / mo cost) I have a 6 MB internet connection, which is about as low as I can get that still works. My house is not huge, maybe 1500 sq ft, plus another 500 sq ft of finished basement, etc. I sometimes wish it was a little bigger, but it's nice with quality appointments, adn we are quite happy there. I have nice furniture and appliances, because quality furniture lasts, and you will have to use it for a long time, so you will really get the use out of that money spent. Both, my wife and I, drive new Hyundai's because they are economical and personally I think nice enough. We do drive cars about 8-10 years before we sell them though. I am a salesman at heart, I haggle on everything but groceries. I do not skimp on my children's educations, because they are my greatest earthly treasure and they are 60% of the reason we do this in the first place.

I have had to learn balance in my life. I started my own businesses since I was in my teens. There has never been any guarantee that my business would survive, so I lived as though it would not. Fortunately, the business has survived, but I learned some good lessons, which I would like to share:

1. Buy your house, and pay it off. Only buy what you can afford to pay off in about 15 years, assuming you are in the middle class. Once you pay it off, you can save a couple years and then upgrade to something really nice if you choose to do so. Renting allows you to do other things with your money, but you need a house and that will not change, especially if the market ever completely collapses. Your primary house should be well-bought, but never look at it as a money-producing investment. It will take more money that it will provide, but it is necessary.
2. Put as much as you can into tax shelters. I really like the concept of the Roth IRA here in America that allows for taxes to be paid upfront when you earn it, and then nothing on capital gains as you make money in the market.
3. Maximize any 401-K with matching. This should be your first priority, even above the Roth IRA and max it out. This is free money.
4. Once you max out your IRA and 401-K up to its matched bonus, then you go straight to your bills / debts. Don't worry about putting more money away for stocks yet. This is your insurance against the market. If you start this plan when you get out of college, there are not really many reasons that you should not be 100% debt free by 35-40. If you are not 25, it's okay, it's just a later start.
5. Do not go to a stock broker or accountant, you need to do all your own finances. The first couple years are painful usually, but you need to study and get experience. This is also another reason to pay the house and student loans down before you get into accruing your hard earned money in a non-sheltered portfolio.
6. I do not personally like the concept of day trading or swing trading as your only source of income until you are ready to retire. Not all markets are conducive to making money, and you should not feel that you have to make trades to eat.
7. When you are ready to retire, you should consider taking two years' income out and placing it in a fully liquid and fully stable checking/savings account. This will put you on a fixed income, but will make sure that you do not have to trade quickly to liquidate. You should replenish what you used at the end of each year, assuming there are no current market capitulations negatively affecting that action.
8. We always go on a vacation per year, but we rarely spend more than $1,500 per year on it. We drive and usually only go for 3-5 days. Drive to the beach, go to Amish Country, go to the caves, whatever. Nature offers a lot and there will be time a little later for Disney, etc.

If you are 25 and follow this, assuming you are married and your average gross family income over the next 15 years is slightly over $100,000, even with kids, by the time you are 40, you should have:
around $150,000 invested into you and your spouse's tax free IRAs, plus however much you can make on top of that.
a paid off house
no student loans or other loans.

You would now be ready to start to invest into non-sheltered accounts and pay the kids college's off. You can start to go on those nice vacations to Disney world that you "missed" out on earlier.

It's not always easy to put aside the fun other suburbanites have now, going to sports games, exotic vacations, 3,500 sq ft houses, but they will work hard later to support their lifestyle, while we retire in comfort and the peace of knowing that all our needs are covered.

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