30 Day Writing Challenge
I’ve seen so many variations of the image below, it’s not even funny anymore. Anyone who’s ever read literally ANYTHING on how to build wealth has heard that the riches people are extremely frugal. Warren Buffet? Frugal. Mark Zuckerberg? Frugal. Robert Kiyosaki? Frugal. The list is exhaustive and it’s not even a secret, business insider has an entire article on 8 extremely wealthy people’s frugal habits.
The first time I read Rich Dad, Poor Dad by Robert Kiyosaki, I was surprisingly underwhelmed. He doesn’t give any groundbreaking advice on wealth creation, or secrets to the road to riches—instead he offers basic, sound advice that should really be common sense if you think about it. He says things like, don’t spend money you don’t have, and never consider yourself a poor person.
Kiyosaki is not the first person to say this, nor the last, suggesting that there actually is no real secret to wealth creation. So why aren’t we all rich?
“there is no real secret to wealth creation”
Simply put, it’s because we are lazy. We want to be wealthy without putting in the work to build wealth and so we take shortcuts—flexing like we have money when we really don’t.
What I’ve gathered from reading books, listening to podcasts, and watching YouTube videos is that wealth creation is all about adopting and sustaining healthy and productive habits. These habits are simple concepts that are hard to maintain. Here are a few habits that I’ve learned on my journey.
But first, what NOT to do
Stop living your life to impress others
One of the biggest things holding us back is what everyone else thinks. Society and modern American culture (which is built on capitalism, you know) has ingrained in us that we need to have the latest xyz phone, the latest tablet, the latest you name it. Everyone wants a Tesla because it’s more environmentally friendly, right? Or is it because it’s the new, cool, hot thing to do? Because in fact, keeping and maintaining your current car is more environmentally friendly than buying a brand new car.
Stop treating yo self
Marketing companies are overjoyed when some unsuspecting internet user, or Drake in the case of Yolo, gives them a cleaver hashtag to fuel their campaigns. Do you realize that ordering pizza on Wednesday night or splurging on a $5 coffee at Starbucks is NOT treating yourself? Apart from the former being all calories and the latter being calories and sugar, they are just enablers of bad habits. It’s so easy to say, eh, don’t feel like cooking today. But it’s also really easy to buy a couple of frozen pizzas for literally 1/3 of the price at your local supermarket.
I hate to be the one to break this to you—when you buy a completely unnecessary 3-piece robe set with the slippers and an eye mask, you didn’t save $10, you actually spent $30. Often times there is a huge different between what we want and what we need and alot of those times, we like to rationalize what we want as a need. Well I have a robe at home, but it’s on sale so I’m saving money. Sorry sis, you’re wasting money.
Now, what to do
Cut down on unnecessary spending habits.
Repeat after me: necessary, unnecessary, necessary, unnecessary. Example, it is unnecessary to buy a $5+ coffee every morning because you can make coffee at your house for 1/2 the price according to The Simple Dollar.
It is also unnecessary to buy the latest of any electronic/techy product. Technology is so rapid and competition is so fierce that buying a product that is 2, even 3 “generations” old will still get you a really great product.
To this point, I walked into the Apple store in 2015 to replace my 2009 (bought used) macbook. I asked the techy guy helping me to tell me the truth, what was the difference between the new 2015 macbook and the one before it (2013)? He looked me in the eyes and said, well there’s this and that and this and that, blah blah, but truthfully, you probably won’t even notice. Fast forward 4 years later, my 2013 macbook is in “like new” condition.
Even more to this point, my roommate recently bought a 2019 macbook and I can’t tell you what the difference in performance is. Sure it’s nice and sleek looking. And I’m sure it has some updated features, but unless you are a graphic designer or someone who knows enough about technology to appreciate the difference, does it really matter?
Remember; necessary, unnecessary, necessary, unnecessary.
Live a healthy lifestyle.
“Live a healthy lifestlye” sounds a bit nebulous but it all comes back full circle. If you eat high quality, home cooked meals, you will buy less food (because it’s expensive) and also eat less (because it’s nutritious and therefore more filling). Hence, you are saving money.
The same applies to working out; when you work out, you tend to change your eating and drinking habits because you want to see results. In this case, maybe you stop drinking soda, stop snacking, start intermittent fasting. The decision to workout, then, creates a snowball effect of moneysaving habits.
This ties into living a healthy lifestyle and also goes deeper than that. Consider when you go to target meaning to buy a pack of underwear and walk out with $300 worth of stuff—my roommate refers to this as “blacking out.” That’s because there’s an adrenaline rush when you add things to your cart (whether online or in person).
If you take time to consider everything you have in your cart before getting into the cash register line, you can analyze what’s necessary and what’s unnecessary.
Another thing that I do often is put things in my cart then either leave them there for next time (if it’s online) or leave them at the store for next time. This trick eliminates the rush you get from instant gratification and it will help you determine if it’s something you really should get or not. For example, I finally bought some chair cushions for my dinning table which have been in my cart for months now.
Very wealthy people have used a series of healthy and productive habits to build wealth—frugality being one of them. And just to be clear, being frugal and being cheap are NOT the same thing. I think the contributor Stefanie O’Connell said it perfectly in her article, 5 Major Differences Between Cheap and Frugal, “Frugality is about assessing the bigger picture and having the patience to cash in on the simple savings strategies.”
“Frugality is about assessing the bigger picture and having the patience to cash in on the simple savings strategies.”
The big picture when it comes to wealth creation is how you analyzing your priorities. What’s it going to be? A Mercedes today and big debt tomorrow or frugality today and financial freedom tomorrow?
Also read: How to save money like an impulse shopper.