The biggest pushback I get to my suggestion that people build Engines (An Investment that earns more than you spend) is that the Savings Rate required is completely unrealistic. Most people are barely getting by on what they earn. Most people live Hand-to-Mouth. Yes. That is 100% true. What is also true is that for most of the people reading this, there are people living on less than half of what you earn.
The median disposable household income in the UK is £27,300. For South Africa, the average family income is R138,168 (roughly £7,000). Now these figures aren't directly comparable. Services and taxes are different in the two countries, and the figures are calculated in different ways. But that isn't important for the point I am trying to make.
A 'Median' means more than half the people are living on less than that. An Average will be higher because it will be pulled up by the few people at the top who earn the big bucks. Those few people at the top earning the big bucks are normally where our eyes stray.
We don't tend to look at the people in our own country, or other countries, 'magically' making do on much less than we do. It is from them that we can at least see that it isn't impossible. Hard isn't the same as impossible. We can do hard. It just takes tough choices.
Engines start their lives as Buffers. A Buffer is breathing room. A Buffer is enough to help you handle the bumps and dips, without being enough to cover your expenses for the long term. A Buffer needs you to continue building it into an Engine. It just gives you space to retrain, try something different, or panic a little less, so you can make good decisions.
A Buffer may start life as enough to let you not have to live in debt. Debt is the opposite of an Engine. Especially if it is debt on something you have nothing to show for. Interest being paid on the ghosts of Christmas Past.
All big goals like personal financial security start somewhere. A first step. The first step is to snap the connection between your hand and mouth. Build a little. Breathe a little. Then take another step.
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