Disposable Income?

Rich E. Obscure in his blog (www.richeobscure.com) brought up this interesting phrase – Disposable Income.  We have heard of earned income and passive income from Robert Kiyosaki’s “Rich Dad, Poor Dad”, but disposal income? 

The concept of disposable income comes from the idea that after all your expenses are paid, presumably including savings, the money left over is for you to spend on anything you want. Maybe you choose to go out to diner with your “disposable income” or maybe you spend it on your favorite hobby. But aren’t those things just categories in a balanced spending plan? Isn’t every penny accounted for somewhere?

The general idea of disposable income is any money that is left after you have pay off your bills, expenses and what is left is your disposable income.  And if you take the term loosely, it is money that you are freely to dispose or spend it in any way you want to.

It is not difficult to guess how the general population make use of their disposal income.  You named it, they have done it.  How about a nice once-in-a-month dinner at a fine dining restaurant, or the Prada handbag which you have been eyeing for months, or perhaps a new laptop, a new iPod, new clothings, new jewelleries, or even a new car, a week long vacation.  It is disposal income, we got to spend it, dispose it, aren’t we?

There are only two things you can do with money. You can either spend it or save it. Sure you can invest it but that is just another form of savings. I suppose you could just throw it away or burn it but like I said earlier who would do that?

Successful people think differently about money. Every time money leaves their hands, the decision to part with it has been thoroughly weighed against other options. On the other hand people who struggle with money every day aren’t as conscious of their spending and that makes all the difference.

So don’t dispose of any of your money, spend it but spend it wisely after considering what else you could have done with it.

Well, if you have read Robert Kiyosaki’s “Rich Dad, Poor Dad”, you will realize that depending on how a person do with his disposal income, you will be able to guage if he/she has a mindset of the riches or not.

The riches will not be spending their disposal income on things which does not help them to generate an income.  Robert Kiyosaki called these as doodads.  They are non-assets and sometimes a liability.  What the riches will do with their disposal income is to spend it on acquiring assets, things which can generate income for them.

So the next time when you look at your disposal income, think like the riches and dispose them wisely!