Time works in your favor too, even as a spendthrift, shares have accumulated, compensation becomes more generous over time, if you keep growing (even at a reduced pace) then 20+ years down the line your skills and experience become a very valuable asset
Ignoring the obvious issues with compound interest in reverse, the far more consequential problem is that it fucks with your head in ways that normally require CIA-style brainwashing and mind control.
Debt justifies and rewards your worst impulses, encourages poor, short-term decision making, and alters your frame of reference to a degree that even the smartest, most noble people among us think they can outsmart debt only to wind up losing big.
Nonsense. Debt managed carefully is exactly how you join the million dollar club.
Twenty years ago, my grandfather told me that he had never been in debt, ever. He always paid cash. Always. He was strangely proud of this.
My immediate reaction, even though I barely knew anything about finances: "Well, that sounds like a dumb, dogmatic principle to follow".
A few years ago, I bought a car and I carefully played the card of "This car is beyond what I can afford but you, the sales person, are so good that you convinced me to buy it anyway". When we went to discuss the finances part, I was given several options: 1) a loan with no down payment and a crazy interest 2) a loan with some down payment and a reasonable interest and 3) all cash.
I could have bought the car in all cash. The money was there, in my bank account, ready for this. However, the interest for option 2) was 1.5% and I knew of at least one bank that would give me 3% of interests if I deposited at least $30k in this account and maintained it for a year.
So what did I do? I picked option 2 of course. I went in debt. And I didn't just save money doing so: I earned money.
Debt is fine for people who have a reasonable ability at managing it. This is how you get rich, don't listen to people who tell you "never do this" or "always do that": look at the number and make the smart decision.
(Except the part about how debt is "how you get rich")
And yet, I'd wager than 90% of people who attempt to replicate your success story would wind up worse off for having tried it.
The problem is that it comes with a huge risk of screwing with your head. And it's very difficult to detect and correct when this is happening.
I've had my success stories playing games with debt too. Gaming low rates, churning credit cards, and so on. I see people around me do the same things all the time.
The only trouble is, the next day these same people are:
* Allowing debt to influence their purchasing decisions (e.g. buying a larger car, a larger house, and so on)
* Trying more sophisticated "experiments", only to get burned
In other words, they scored a minor victory in an inconsequential battle only to lose big later on.
"Carefully managing debt" can be summed up as one single principle: be aware of deadlines.
It's ok to use a credit card as long as you know the deadline to pay it in full and you do so diligently in order to avoid insane interest rates. If you can pull this off, you can actually earn money with credit and debt (e.g. rolling credit card over new credit card with 0% interest, over and over). Just make sure you don't miss any of the deadlines.
Same goes for my little anecdote above: it works great if you're aware of simple deadlines (how long I needed these $30k to be in the account) and elementary level math to compare 1.5% and 3%.
I used to think everyone should be able to handle this simple math approach but if the US population is any indication, I am dead wrong.
Debt is good. Don't be afraid of it: tame it and you'll start earning easy money.
I have dozens of friends and family who are in the top 5% of the US population in terms of math skills who have all tried to play "smart" games with debt and come out as big losers as they continued to play. I'm talking software engineers, dentists, doctors, pharmacists, tenured math professors, and so on.
The problem is not math skills. The problem is not managing deadlines. The problem is that these people are human and are not immune to the pernicious effects of debt. Even you. Even me.
Here are some things you haven't considered or acknowledged:
* How debt influences the choices we make. Would you have bought such an expensive car if you had to pay cash? Statistically, the answer is no. If forced to use cash, might you have opted to buy a less expensive used car? Are you sure you didn't buy thousands of dollars more car in order to "save" a few hundred bucks?
* How managing debt takes over space in our minds. What could you be if you could free up mental capacity for other things?
* How debt warps our perspective and plays to our human weaknesses and short-term desires. Are you sure you're coming out ahead? How do you know?
You can't run an A/B test on yourself, but you can open your eyes and take a look around. It's not pretty out there.
The average car loan has a 4% interest rate[1], and the average bank gives a paltry 0.06% interest rate[2].
I agree that if you can make a higher return investment than the rate on your debt, that's certainly profitable. I just disagree that it can be done so passively, at least today.
[1] https://www.valuepenguin.com/auto-loans/average-auto-loan-in...
[2] https://www.valuepenguin.com/banking/average-bank-interest-r...
> most people haven't even figured out what they want and so they default to mainstream consumerism
Not everyone defaults to mainstream consumerism. Some of us just don't understand and cannot comprehend why others are such consumers. Keeping up with the Joneses? Why?
For my family at least, we require no deep inward analysis, fundamental questions about ourselves or changing of our lives. To sum up: this is just how we are.
[0] https://www.bogleheads.org/
[1] https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...
reddit.com/r/financialindependence/ (check out all the links in the sidebar). The advice on this sub is generally much higher quality than r/personalfinance (although less newbie friendly)
See also: Mr. Money Mustache / Dave Ramsey (both seriously tackle the behavior problems that hold us back from success and wealth)
There are universal themes like budgeting, responsible spending, paying yourself before you pay others, etc. Just remember that everyone's situation and priorities are different, so don't get caught up in one specific strategy.
The last is vital, as an investor's emotional composure is at times even more important than the rational side of investing.
edit: that being said, what you said is what I almost always tell friends who have the temptation to augment their income through side projects.
* Frugality: deeply understanding the things that bring you satisfaction and skipping the rest
* Aggressively saving and investing money
* Building a mastery in personal finance
But becoming a millionaire isn't a math problem. Most people on here are capable of doing so many times over without any great career home run.
However, achieving such a milestone will require you to (on an ongoing basis) look deeply inwards, answer fundamental questions about yourself, and change your life.
At the risk of getting too preachy, most people haven't even figured out what they want and so they default to mainstream consumerism. Such people have little chance of becoming a millionaire (which requires sustained, long-term behavior changes) until they first sort themselves out.