How to Avoid Financial Stress

I was reading through the comments on an article about investing over at Yahoo Finance and a lot of people were whining about the fact that it is impossible to save money.  Only those who inherit their money can be rich (which you all already know is false based on the evidence).

A gentleman named Frank replied to the commentators:

It is absolutely, positively true.  Pay cash.  Eliminate all debt.  No mortgage.  Save as much as you can. 

In fact, I have a family friend who is in her 70′s (I’ll call her Rose), who owns her house outright, has no debt, hundreds of thousands of dollars in the bank, and owns three or four rental houses in the neighborhood where she lives, all filled with renters paying her cash each month.  For most of her life, Rose earned less than $50,000 per year.  She just refused to buy things unless she could pay cash and when she took on a mortgage, she sent every extra dime she could safely part with into the bank to reduce the balance.  It is fair to say she has zero financial stress.

Rose didn’t have an inheritance.  She had no grand genius financial plan.  It was simple, plain vanilla saving and debt avoidance so the bank paid her interest rather than her paying the bank.

Related posts:

1. How We Used Shares of Coca-Cola to Teach My Youngest Sister About Investing (and Why the Cycle of Consumption and Financial Stress Starts as a Teenager for Most Americans)
2. How I Approached the Financial Side of Buying My First House
3. Nearly 1 Out of 3 Homeowners Have No Mortgage
4. Credit Card Debt Is Poison
5. A Few Reminders About Money and Financial Success
6. We Should Rename the 30-Year Treasury Bond “Financial Suicide Bonds” … Because That Is What They Are for Investors at Current Yields
7. Reading Through the Visa, MasterCard, Discover Financial, and American Express Reports
8. Building Wealth Is the Process of Converting Human Capital to Financial Capital
9. Revenues Are Up Big Time (Merry Christmas To Me!)
10. Mail Bag – Why Do Some People Say It Is a Bad Idea to Pay Off Their Mortgage?