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(part 2 of 5)
“Poor People Have Big TVs. Rich People Have Big Libraries.”
The late Jim Rohn said that often. It sounds like a glib statement to be sure. and it might offend you if you enjoy your TV. That’s not the point. These days, many rich people do have big TVs of course. The point is that successful people continually invest in developing their minds and creative pursuits, while unsuccessful people just seek instant self-gratification, which tends to default to doing stuff like watching junk television.
A secondary point is that when you buy a TV or any other toy or new car or even a house, it won’t make you more money – in fact it will usually either decrease in value (TVs, Ipods, computers) or it will cost you money to maintain (houses, boats).
Of course with real-estate your investment may be worth more in the future, but if you buy more than you can afford, you’re investing in a liability that sucks up your monthly cash, not an asset. Of course you need a place to live, and having more space than you need can be a pleasant luxury – but the truth is making money as an entrepreneur almost always involves using the money you have to get leverage. If your money is tied-up (or spent) on luxuries, it’s not liquid and you cannot use it.
I don’t personally much care what you spend your money on, but I do care about being a rational business writer so here it is: the smart play is to invest your money in assets that are likely to either increase in value and be sellable later or assets which you can use to create more income.
Making money isn’t the only thing in life and even disciplined asset-oriented entrepreneurs have our little indulgences. That’s okay, but if you’re splurging most of your income on things that amuse you but which are going to lose value and become obsolete, you’re headed in the direction opposite to wealth.
The post author, Loren Woirhaye writes sales copy and creates marketing systems for business clients who want to slash customer acquisition costs and position their businesses For 20%-30% sales growth in the next 12-18 months. He writes regularly about marketing and life at his Entrepreneur Blog.