Go Cheap? Yeah, probably not.
Hello, American Debt Project readers! I love what you’ve done with the place. If you don’t mind, I’m going to pop my suitcase in the guest bedroom. While I’ve been instructed by the puppet masters that I’m going to be writing here only once a month (your loss…), it’s still probably important that you know Joe’s rules to this game.
…and before I share them, I’ll mention this: I may not know everything about money, but 16 years in the trenches peeking behind the “money curtain” that hundreds of families hide from others leads me to strongly believe that this is the path to success:
Here Are The 5 Paths To Winning:
1) The key to winning isn’t in avoiding lattes. I’ve met hundreds of successful investors and have had the privilege of peeking inside their budgets and portfolios. I hate to inform those of you cutting back on lattes that not a-one would credit avoiding Starbucks in the top ten reasons they’ve succeeded in life. In fact, many are avid latte-lovers.
That doesn’t mean that you shouldn’t watch dollars carefully. Clearly, wealthy individuals have a relationship with money that’s different than their non-wealthy counterparts. Wealthy people understand that money isn’t a permanently running faucet. They’ll save a buck on groceries because they won’t find value in spending more on a product.
2) Whether you pay attention to nickels or not, wealthy individuals focus their time and energy on big problems and big solutions. Rather than cutting coupons to save $20 they create a side income or score more money from their job that nets them $200. Rather than worry about branded vs. unbranded cereal and saving $3, they refinance their mortgage when interest rates are low and save thousands. Even better, they stay away from high interest debt that steals hundreds of dollars from their pockets.
But hey, if you demand making a few bucks here and there off of unwanted stuff, give selling your old games or music a try with MusicMagPie.
I remember Crystal from Budgeting In The Fun Stuff telling me a story recently on our podcast about the name of her site. She said people were complaining on a well-known finance blog about a woman’s displays of wealth. They were ripping her for having a cleaning lady and for hiring someone to take care of some fairly easy tasks.
I’d be like that lady every chance I get. Here’s the deal: unless Shirley Maclean is right and we’re going to be reincarnated, we can only do this merry-go-round life one time, and I like the “merry” part of the go round. “Merry” doesn’t mean washing dishes or sweeping floors. Sure, I can find pleasure in simple tasks, but I’d much rather whine about my day in a hot tub over a foamy beverage than sweating while laying tile in the heat.
3) That said, it’s easier to become wealthy if you cut out silly expenses. We realized a few months ago that we weren’t watching our Dish Network. I purchased a Roku to see if we liked it. We did. We travel cross country fairly frequently, so a year ago I invested some money in a one year XM radio contract. Because I’ve found several apps for my phone and podcasts I like, we’ve cancelled that bill. These are silly expenses that we no longer need. Together they save us nearly $100 per month. That’s money I can spend on a housekeeper, if I choose.
4) Winning usually means surrounding yourself with great advisors. Sure, I believe in saving money whenever possible, but in unimportant areas. I haven’t met wealthy individuals that didn’t have some prominent advisors helping them. When you ask successful people how they became successful they discuss breaks, mentors and hard work. You have to sometimes hire great coaches to reach the highest heights.
I read “Don’t hire advisors” pieces on the internet and groan. The authors of those articles are missing the point. You should hire the RIGHT advisors, not ditch all advisors. Can’t afford an advisor? Start a mastermind group with people who are headed in the same direction. While you might miss out on the shortest route to solving your problems, you’ll be able to look at issues from multiple points of view and find success more quickly.
5) You need a basic understanding of investing so that you don’t get robbed. I’ve never met a wealthy individual who said, “I don’t know much about investments.” Sure, you may be afraid of the jargon and semantics of investing, but that’s a hill you must climb if you’re gonna be successful. I’ll put it bluntly: in the financial advising business we could see noobs from a mile away, and there were some pretty predatory individuals working in that industry. It’s okay if you don’t understand the complexity of investments….and don’t let that stop you from hiring good advisors if you feel you need them…..but you need (NEED!) a basic understanding of how this works. Read beginner books on the topic. Suze Orman and Dave Ramsey keep it interesting. Keep reading this blog. Fill your mind with the topic.
Hopefully those help you start down this path to financial success more quickly than you would without this roadmap. Financial success isn’t only profitable: it’s also fun. Once you watch your net worth begin to ascend, you’ll feel like a mountain climber reaching for the next wrung. Instead of prodding yourself to try and cut your budget you’ll be dancing toward your next financial milestone.
…and that’s a fantastic feeling.
Joe Saul-Sehy is the co-host of the popular podcast Stacking Benjamins and also writes at the blog sharing that same name.