<story><title>Climbing the Wealth Ladder</title><url>https://ofdollarsanddata.com/climbing-the-wealth-ladder/</url></story><parent_chain><item><author>disintegore</author><text>I understand this isn&amp;#x27;t the point of the article, but it seems like a roundabout way of saying &amp;quot;don&amp;#x27;t overspend&amp;quot;. This part in particular bothers me :&lt;p&gt;&amp;gt; More importantly though, the best way to climb the wealth ladder is to spend money according to your level.&lt;p&gt;As far as I (a non-economist) can personally tell, any notion of climbing up some abstract wealth ladder is synonym with a salary increase for the vast majority of people. Other methods, whether they involve quantity of free time or already-available money, are intrinsically tied to the quality of your job or, failing that, the quality of your parents&amp;#x27; or partner&amp;#x27;s jobs.&lt;p&gt;Personal net worth, while definitely an important factor in this equation, is far less so than income in my opinion. A fiscally irresponsibly professional worker living from paycheck to paycheck has &amp;quot;grocery freedom&amp;quot; while a person with 10,000$ of accumulated wealth and no income whatsoever (let&amp;#x27;s say they are between jobs) is far more likely to buy the store brand margarine. Similarly, the former will most likely not achieve &amp;quot;travel freedom&amp;quot; without decades of hard work, of careful spending, of saving, investing, etc.&lt;p&gt;Simply put, no amount of &amp;quot;not carelessly booking flights&amp;quot; will turn you into Jay-Z, let alone into that small business owner across the street with the McMansion and the gaudy Christmas decorations. The undisputed &amp;quot;best way&amp;quot; to climb the wealth ladder is to receive large amounts of cash from some external source.</text></item></parent_chain><comment><author>CPLX</author><text>Yup. I see this kind of logic in personal finance discussions all the time but it&amp;#x27;s bullshit. There simply aren&amp;#x27;t any spending decisions you can make that will change you from not wealthy to really wealthy. Those things can just move you from poor to middle class at best, or to a better level of middle class.&lt;p&gt;Outside of real outlier status where you&amp;#x27;re paid really, really large amounts of money for your services (like notable entertainer or cardiac surgeon) the way to wealth is to own the means of production. Period.&lt;p&gt;Same as it ever was.</text></comment>
<story><title>Climbing the Wealth Ladder</title><url>https://ofdollarsanddata.com/climbing-the-wealth-ladder/</url></story><parent_chain><item><author>disintegore</author><text>I understand this isn&amp;#x27;t the point of the article, but it seems like a roundabout way of saying &amp;quot;don&amp;#x27;t overspend&amp;quot;. This part in particular bothers me :&lt;p&gt;&amp;gt; More importantly though, the best way to climb the wealth ladder is to spend money according to your level.&lt;p&gt;As far as I (a non-economist) can personally tell, any notion of climbing up some abstract wealth ladder is synonym with a salary increase for the vast majority of people. Other methods, whether they involve quantity of free time or already-available money, are intrinsically tied to the quality of your job or, failing that, the quality of your parents&amp;#x27; or partner&amp;#x27;s jobs.&lt;p&gt;Personal net worth, while definitely an important factor in this equation, is far less so than income in my opinion. A fiscally irresponsibly professional worker living from paycheck to paycheck has &amp;quot;grocery freedom&amp;quot; while a person with 10,000$ of accumulated wealth and no income whatsoever (let&amp;#x27;s say they are between jobs) is far more likely to buy the store brand margarine. Similarly, the former will most likely not achieve &amp;quot;travel freedom&amp;quot; without decades of hard work, of careful spending, of saving, investing, etc.&lt;p&gt;Simply put, no amount of &amp;quot;not carelessly booking flights&amp;quot; will turn you into Jay-Z, let alone into that small business owner across the street with the McMansion and the gaudy Christmas decorations. The undisputed &amp;quot;best way&amp;quot; to climb the wealth ladder is to receive large amounts of cash from some external source.</text></item></parent_chain><comment><author>hultner</author><text>I wouldn&amp;#x27;t fully agree with this, I&amp;#x27;d say income that non-linear to amount time spent it the highest driving factor.&lt;p&gt;Let&amp;#x27;s take an example.
I&amp;#x27;m going to use Swedish living conditions and salaries as an example as that&amp;#x27;s where I live but they are close to most European&amp;#x2F;western countries.
We have a frugal grocery store cashier who makes $2000 USD&amp;#x2F;month after taxes.
We have a high level executive in a medium-sized company who makes $5000 USD&amp;#x2F;month after taxes.&lt;p&gt;The grocery worked lives like a student (student loan&amp;#x2F;benefits in Sweden is about $1000 USD&amp;#x2F;mo) and saves the rest on the stock market (assuming average yearly yield with reinvested dividends at 8.5%), efficiently saving $1000USD&amp;#x2F;month for future non linear income.
The cashier plans to stop working early at 55, at a net worth of about $2 900 000 USD.
This allows for a safe withdrawal rate at about $10 000 USD&amp;#x2F;month.
At this level travling&amp;#x2F;vacation expenses isn&amp;#x27;t a problem for the cashier. Housing probably does but they can most likely live comfortably even if they decide to rent. They can also easily increase monthly spending allowance by 10% if they decide to continue working half time.&lt;p&gt;At the same time our executive have been burning through every pay-check, and have effectively no net worth at the same age, sure there&amp;#x27;s plenty enough to lease a nice car, don&amp;#x27;t care about restaurants bills but more expensive traveling will still be a setback and vacation time per year is certainly limited as income is still linear to time spent.&lt;p&gt;So in this example we have a cashier ending up as a multi millionear set for life at 55 with no need to work a day more and a high level executive who&amp;#x27;d be back at 0 without the job and a strictly linear income.&lt;p&gt;Sure salary increase does matter, but in the long run underspending matters more. 
With a longterm plan it&amp;#x27;s possible to become a multi millionaire with an entry level job, for instance there&amp;#x27;s a famous Swedish railroad worker who recently passed away who ended up with somewhere around $17 000 000 USD net worth at the time of his death, and achieved this by living under his expenses with a low salary and investing the rest, he initially turned to the stock market because he couldn&amp;#x27;t afford a house in his youth. Not Jay-Z levels for sure but well beyond what most people would consider very wealthy.</text></comment>