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Parkinson’s Law:
Why do so many people seem to struggle financially during their working life and then retire poor? Parkinson’s Law, developed by English writer C Northcote Parkinson, may offer some insight.
This law of wealth accumulation states that no matter how much people earn, they tend to spend that entire amount… plus a little bit more. Even though they’re earning several times more than they did on their first job, their expenses seem to rise right along with their income, eating up the difference… so they feel that they never have enough money.
The first step to financial independence is to violate Parkinson’s Law and resist the powerful urge to spend everything you make. The second is to slow down spending and allow your expenses to increase at a slower rate than your earnings - then save or invest the difference.
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