I was watching the American Express Summit where Shaq was describing a time when he asked a wealthy restaurant owner how he was able to maintain his wealth.
Apparently, the answer was blissfully simple, if you have the where withal to be able to accomplish it.
I am simplifying the numbers from the Shaq example. If you make $20,000, immediately put $10,000 off to the side as savings.
The you have $10,000 remaining, take half of that for savings or reinvestment.
So, then you have $5,000 to spend. So, you live off a quarter of what you earn.
As I stated blissfully simple. Now they never explained is this was the top number or the bottom number. But I imagine it is off of the bottom number.
It would be hard to keep 75% of your total revenue. It may be near impossible to keep 75% of your profit. Especially since there is the little issue of taxes.
But the message was simple and clear. Save as much as you can, spend a fraction of what you make. Generate wealth by having your money work for you, instead of working for your money.