As your incomes rises, so too do your expenses. You buy a bigger home, nicer cars, better clothes, go on more expensive vacations and frequent restaurants more often.
When your income increases over time, you make adjustments to your life to reflect this higher income. This is The Walden Effect at work.
And The Walden Effect, my friends, is why most of you will never become rich.
The smart ones, the ones who accumulate the most wealth, live below their means. They spend less than they make. They do not alter their lifestyle when their income rises.
No matter what your income level, the main ingredient in accumulating wealth is to keep your expenses below that income, save the rest and then consistently and prudently invest those savings.
Those who are able to overcome the seduction of The Walden Effect send their kids to college, pay off their mortgages, pay cash for their cars, buy a house by the beach and retire financially free.
