“Vices respectively fall short of or exceed what is right in both passions and actions, while virtue both finds and chooses that which is intermediate.”
– Aristotle, Nicomachean Ethics
The high cost of saving money
Living within your means is good.
Being a cheapskate who obsesses over saving money is not.
Being frugal won’t get you anything. That’s literal too. Saving money limits your options and forces you to work with a very finite amount of cash. Making money, on the other hand, gives you unlimited freedom. There’s no limit to what you earn, but there are very strict parameters for how much you can save.
Yet most people will focus solely on cutting costs. They’ll spend 10 hours looking for coupons online and 10 seconds thinking about ways to earn more.
You can only save so much
You have $2,000. You don’t go out to eat, ride a bicycle everywhere, and refuse splurge on two-ply toilet paper. At the end of the month you “saved” an extra $500.
Now imagine that you took all the time spent cooking Spaghetti-O’s, peddling your Schwinn, and haggling at the grocery store and invested it into yourself. You found a way to monetize a hobby or make some extra cash. Maybe you spent an hour a night on a project that netted $15 a day.
At the end of the month you’d have made an extra $500 and have the potential to grow your business even further.
Guy A has a $52,000 a year job. He focused on saving money and finding “deals.” Unless he gets a raise he’ll still be making $52,000 next year.
Guy B has the same job but focused on making more money. Let’s say that he made an extra $12,000 and has potential to double his business next year. Now he’ll be at $76,000.
One of these men increased their wealth while the other did nothing to improve himself.
Cutting costs is a racket
Go look up those “World’s Richest Men” articles. Ignore the dudes who inherited their wealth and focus on self-made men. How many of them got rich by working for someone else while they cut coupons and spent hours looking for free gift cards.
Here’s a hint: Zero.
They started companies and created value.
Look at all those early retirement guys and extreme frugality gurus. They might be cheap, but that’s no where the money’s coming from. Their eBooks, DVDs, seminars, and other products are what makes them money.
Early retirement bloggers are con men. They’re still working (blogs don’t write themselves) and still running a business (selling books, advertisements, and other stuff).
They might have saved money to reach that point, but it wasn’t enough to sustain them forever. By their definition I would count as “retired” since I don’t have a traditional job.
My grandparents are retired, they play golf and go on trips. That’s what people who are actually retired do. They relax and stop working.
Being a retiree who spends 40+ hours working on a business is like being a vegetarian who eats meat.
Acquiring wealth requires you to go on the offensive. You have to actually make more money. Cutting coupons or eliminating needless purchases isn’t terrible, but it should never be your main focus.
Learning how to earn more will be far more beneficial than worrying about the price difference between two brands of frozen peas.