Monday, February 29, 2016
"I am indeed rich, since my income is superior to my expenses, and my expense is equal to my wishes."
–Edward Gibbon, English historian (1737-1794)
The quotation above describes a financial position that many strive for. And perhaps those who don’t, should.
Having income that totals more than expenses is the ideal financial way of running a business and a personal life as well. The bottom line must show a gain, not a loss, of income for anything to remain successful.
I’ve always heard that Mr. J. C. Penney, founder of the J.C. Penney Company, had this philosophy about his money: when he got a raise in pay, he’d continue to live on the income he received before the raise. I can’t verify this story. Of course, his business career came about in the early 1900s. With our present economy, his philosophy might not work.
Sometimes it’s not easy sticking to a budget that will keep expenses less than income. Emergencies are bound to happen and rainy days sometimes come quite often. That’s when our money seems to take flight and goes out faster than money comes in.
The second part of the quotation above is also notable: keeping expenses equal to wishes. Without restricting our wants, it’s so easy to spend more than what we can pay for. I recently read this observation: used to, people stopped Christmas shopping when they ran out of money. Not anymore—we whip out the plastic credit card and continue shopping.
The term microwave generation aptly describes many people today, not only a generation of young people. Society seems to have no patience about fulfilling their wants. People want their wishes met in a hurry. Do stores even have lay-away plans anymore where the store holds your selection until you pay for it with regular payments?
Maybe this whole economic scenario is why we see many financial management companies around these days. My parents’ generation didn’t need financial planners, they just didn’t spend more money than they made. Maybe our government could learn from the quotation at the beginning of this blog. Think it would do any good to mail the quote to them?
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Thanks for reading my blog! My next novel in the West Virginia Mountains Series is titled Promise Me. Look for it this spring.