Millionz: Right and wrong ways to think about your financial future

I'm sure that, at one time or another, we have all dreamed of "making a million." This dream often includes a time factor that can be described as: fast, overnight, instant.

Unfortunately, too much focus on that sort of time frame can lead you to miss the time frame that worked for most millionaires in our country's history, namely "slow and steady." As the landmark studies done by the guys who wrote the Millionaire Next Door series make clear, most millionaires become millionaires by spending less than they earn. The difference between the two, between what you earn and what you spend, is known as wealth.

The tough part is to get to a point where what you earn is far enough ahead of what you spend for the difference--known as wealth--to accumulate. For many people, the earning side of the equation is the tough one. Wages at the lower end of the earnings scale have not increased in real terms at anything like the rate they have grown at the upper end. (When was the last time the fat cats in Washington voted to increase in the Federal minimum wage which sets the base line for wages in most states?)

Yet many people, through hard work and constant striving, do get to the point where they are earning enough to cover their essential expenses. Sadly, that is the point at which some people fail in their efforts to accumulate wealth, and thus achieve financial security, right at the point where their earnings rise above the cost of paying for their basic needs. Spending on frivolous or unnecessary items is a huge temptation, especially when you've gone a long time without any spare cash. And there is that voice--I think most of us have heard it--that says: "What the heck, now you've got some cash, why not splurge a little?" And a little splurging may be okay if it boosts our drive to do better, strive harder. But too often we go one splurge too far, or two splurges too far, until we have splurged away that gap between income and expenditure.

Now I'm not saying that accumulating wealth is the one true path in life. There are many ways to be happy without being wealthy. And being wealthy is not all about driving flashy cars and living in huge mansions. One of the joys of wealth is that you can share it with others. Another is that you can make a difference in the shape and direction of society. But one thing I have learned after thirty years of living in America, is that there are precious few "fall-back" positions in this country for people who have not accumulated some wealth by the time they reach a certain age or run into a sudden need.

A significant percentage of the needs that people cannot meet by themselves are met by people who have accumulated wealth. So the art of accumulating wealth is well worth studying, for everyone's sake.