Posted on 03/07/2015 3:16:45 PM PST by 2ndDivisionVet
I have a client I'll call Linda Loaded. When making coffee, she is so frugal that she puts less coffee into the coffeemaker than she should and compensates by, when the coffee is ready, squeezing the filter with the hot grounds in her hand to get the concentrated coffee into her cup, incurring a bit of pain. To save a few pennies.
She is worth $10 million dollars.
Not surprisingly, I asked her why she does it.
LL: Being not wasteful is core to who I am, why I'm worth $10 million, and why I'm able to live a life with far fewer compromises than most people have to make.
I made every dollar myself, never more than an upper-middle class income, but I invested it prudently, bought things prudently, use my time prudently, and have a healthy respect for the power of thrift.
MN: Do you consider yourself a cheapskate?
LL: Not at all. When something is worth the money, I spend it without a second thought...although I must admit I make time-effective efforts to get a good price.
MN: Can you give me an example?
I've changed the specifics in her answer to this and some subsequent questions to protect her anonymity.
LL: Well, I decided to replace the window in my breakfast room with a big bow window. Prices ranged from $2000 to $4,000. I chose the $4,000 one because it is far more energy efficient, beautiful, with a far narrower frame so the view is less obstructed. Oh, but I took a half hour to compare a half dozen vendors, negotiated with the lowest-cost one, who wanted $3,600 and I got it for $3,000.
MN: So even though you're worth $10,000,000, it's worth the time and stress to check out a half dozen vendors and negotiate?
LL: The day I think it's not worth a half hour of my time to save $600 is the day they'll need to put me in a home.
MN: What about the notion that the window dealer is poorer than you and the money is cosmically better off in his pocket than yours.
LL: I don't believe it for a minute. He's probably making a good living. So that extra $600 will probably go toward niceties: jewelry, furniture, vacations, crap like that. I have set up an operating foundation that gives money to people whose lives will really improve as a result of that $600. Just last week, my foundation gave $5,000 to a guy who wants to do by-phone mentoring for kids who are feeling ignored in school and at home.
MN: What do you tell your son about money, frugality, and so on?
LL: I tell him the things I'm telling you but I don't think that's what changes people. If he ends up adopting my values, it's because he always sees me walking the talk.
MN: You sound like most of the millionaires in that book, The Millionaire Next Door.
LL: Yes except that I'm the Ten-Millionaire Next Door.
I hope to one day be like her. I bought a lottery ticket.
What a question. The soul of the Left laid bare in one moronic assertion.
LL: I don't believe it for a minute. He's probably making a good living. So that extra $600 will probably go toward niceties: jewelry, furniture, vacations, crap like that. I have set up an operating foundation that gives money to people whose lives will really improve as a result of that $600. Just last week, my foundation gave $5,000 to a guy who wants to do by-phone mentoring for kids who are feeling ignored in school and at home.
Actually, this is the way things should be done. Private donations.
Many millionaires are wealthy because they were careful to control spending and invested the rest. They retain those habits, which is why they typically retain their money.
Hey,I resemble that remark...(stooges)
What about the notion that instead of being an interviewer, you could give all of your assets to the poor and light your body on fire to keep them warm? How do you explain your selfishness in this matter? How do you face yourself in the mirror? How do you waste water on a shower when that water could save the planet and your burning flesh could save the life of some poor, homeless, starving, freezing child?
Where do you draw the line between your selfish personal wants, and the needs of the collective masses? Huh? Well?
I think it has less to do with how much you have put aside than how you were raised. My parents were depression people and I learned a lot about the difference between my wants and my needs.
Hey, back off. That’s my retirement plan.
LOL. And a fine plan it is.
Wealth is nothing more than unspent money.
If you spend every cent you get your hands on and more, you will never have wealth.
And then you will be able to call anyone who doesn't spend every cent and more "the rich" who "didn't make that wealth themselves. Somebody else made that happen."
I’ve always been like this. It’s how we live well on very little.
That “notion” is what is called a “baseless assumption”.
Many millionaires are wealthy because they were careful to control spending and invested the rest. They retain those habits, which is why they typically retain their money.
Yes, If we can keep the F’n Government from stealing it from you and re-distribute it to all lazy and shiftless Obamapeople.
anyone who manages to hold down a steady job (not always easy so I really admire them!).... and is frugal... does not rush out and buy all the latest krap
usually can save something every month.
it may look small.
but just keep doing it!
after awhile, invest a portion of it PRUDENTLY in, say, low cost Total Stock Market index or something like that, it will go up and down in value but over TIME it is likely to go up...
leave the rest of your $ in an insured bank account
and keep saving every month.
you do NOT need the very latest iphone.
you do NOT need a new car every year or two.
you do NOT need expensive vacations (go camping or find a cheaper vacation you will enjoy)
you do NOT need fancy new clothes from expensive stores.
just keep saving what you can each month.
It was reported that the oil magnate J. Paul Getty, now dead, had a pay telephone in his house.
” I have a client I’ll call Linda Loaded. ”
As soon as I read this sentence, I knew this was going to be a totally unbiased scientific study.
Advice we follow and also you do not need a home you can not really afford. If you have to take out a 30 year mortgage on a home, you cannot afford that home.
Yes, I know people will tell me they will make double payments, pay it off early, etc...it almost never happens.
Buy within your means, in the end, you will be glad you did. I was given this sound advice and I am glad I took it as it has kept me out of debt!
I think a person should own their own home, even with a mortgage....if they can safely swing the payments and if they have a meaningful reserve fund safely in the bank so that they won’t lose their home to foreclosure in event they lose their job or whaetver.
I think the mortgage interest is still better than paying rent for years and years and years.
and even with a prudent mortgage, ownership provides more stability in a person’s life, plus some possibility for appreciation (not guaranteed of course).
but anyway I do undersatnd the other point of view about this. CERTAINLY all the other things people borrow money for....are mostly stuff they could, and usually should, wait to acquire when they can actually afford them.
We agree!
In order to build a fortune one must make higher than average rate of profit and reinvest one’s profits over and over again over a long period of time. The best way to do that is to consume less and save more.
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