Nathaniel Thiele

69% of Americans have less than 1,000 in savings. Most people live paycheck to paycheck. Why is that? Any income can be wealthy. People making minimum wage can be millionaires. Income is not the deciding factor. Cash can create wealth. Most people live paycheck to paycheck because they spent as much as they make. They are net worth neutral. They have no assets but no liabilities. When you break down expenses and budgets, most spending is discretionary spending and small habits. 

People buy stuff they don’t need. Food is the easiest example. You need food, but not snacks. Most people when buying groceries make impulse purchases. If you spend an hour at a store, you are more likely to make impulse purchases. Limiting your time at the store and creating a list allows you to avoid buying stuff that isn’t healthy and you don’t need.

By having the cash you get options. It allows you unique investment opportunities and you can increase your net worth with cash. If you save large portions of your income-20-30% of your income and then invest the savings you get a higher net worth. If you make 40,000 a year and save 12,000 dollars. You then take and invest 25% of the 12,000 or 3,000 dollars. You would beat inflation just because the value of inflation is less than the investments. 

Cash is key when having a low net worth. Just by increasing your saving and investing rate you can accumulate a higher net worth. Personally, I have grown my net worth by over $10,000 by saving and investing my money. Cash is a secret wealth builder for low net worth.

I think combing cash with investments is one way to be wealthy with a low income.