S4E49 - It’s No Fun Being Poor
Open Your Eyes with McKay Christensen
Three components of true financial wealth
McKay defines wealth as being debt-free, having adequate savings, and being able to give 10% away.
This week on Open Your Eyes, McKay talks about why it’s no fun being poor. He opens up the episode by recounting the plot of the Oscar Award winning film, CODA, in which the protagonist's family rises above the poverty line and comes to live a much more fulfilled life as a result. Next McKay talks about his friend’s work building wells in the Republic of Congo and educating the community about maintenance and education. McKay remarks that this education and access gave Congan people the opportunity to rise above their water scarcity and focus on growing other areas of wealth.
These two stories lead to McKay listing his three markers for wealth: a complete lack of debt, having savings to provide for an emergency, and having 10% of your wealth to give away. He urges the audience to do so by cutting monthly spending in half, increasing monthly income, paying off your lowest debt balances, and eventually paying off your mortgage. A lack of debt fuels confidence and contentment in life, and McKay concludes the episode by reminding us all that it isn’t fun to be poor, but it’s extremely fun being debt free.
The Finer Details of This Episode:
- The synopsis of Apple’s CODA
- Building wells in the Republic of Congo
- The three components of wealth
- The importance of cutting monthly spending
- Increasing your monthly income
- Paying off debt
- How a lack of debt fuels confidence
Quotes:
“The truth is, it's no fun to be poor. And another truth is: no one has to be.”
“Bringing people from poverty has as much to do with their learning and understanding as it does about them actually having materials for wealth.”
“You're wealthy if you're completely debt free, you have adequate savings to provide for you and your family if you stopped working, and you're able to give away 10% of what you earn.”
“Don’t buy it unless you can pay cash for it.”
“By cutting monthly spending and adding monthly income, paying off the lowest debt balances first, and then applying that to your mortgage, you're soon out of debt. “
“I've seen people with a lot of things who are emotionally and spiritually poor, because they believe what they have defines who they are.”
“The peace and security of being out of debt is worth so much. As I mentioned, it teaches you to be content, to stop using debt to satisfy your wants; it sets the course for a life of frugality and humility.”
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