Frugality is Stupid

Being frugal is held as a hallmark of fiscal responsibility. Everyone thinks that seeking ways to save money makes you inherently good with money.

Those people are wrong and frugality is most often stupid.

Being frugal is the equivalent of someone shopping sales and thinking they’re saving a ton of money.

How?

All you did was spend money. Sure, the money you spent is less than what you would have spent on those items regularly but since when has spending money made you financially savvy?

THE TWO MOST COMMON FRUGALITY ILLUSIONS

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Stop 8: What’s coming in?

So we spent weeks discussing how to get rich and didn’t even mention income until the last stop? How is that possible? Am I disorganized? Do I even understand how numbers and money work?

All these questions and more will be answered on the next episode of I am just making this up as I go along.

Truth be told your income plays a surprisingly small role in your likelihood to getting rich. I am sure you are scoffing about as hard as I did when I first found this out but I assure you, it’s true.

However, this blog is generally directed at those of us starting in the great decade of life known as the 30s. I say generally because my advice works for all ages. For us our income will play a larger role. It just has that little special something for those who start later.

Your income can determine your outcome but only if you have followed the other Stops on this Roadmap. No matter how much you make it is possible to end up penniless if you don’t know what you’re doing.

WHAT’S COMING IN? Continue reading

Stop 7. How’s My Offense?

Investing is the best offensive maneuver you can make this side of inventing the next Amazon. Conveniently, I am writing this right after one of the worst market drops we have seen in about a decade. Guess how much this market correction has changed my offensive picture?

Not a single iota.

Down turns, corrections, and recessions are all part of the game when it comes to offense. Not every punch lands and not every shot goes in. Does this mean we stop punching or shooting? Not if you still want to win.

YOU MISS 100% OF THE SHOTS YOU DON’T TAKE- Wayne Gretsky

Offense is not about always scoring and neither is investing. We succeed because we continue putting our money into our chosen investment system until the facts, not emotions, tell us it is time to make a change.

 

HOWS MY OFFENSE? Continue reading

Stop 6: Where Am I Bleeding?

 

Americans are notoriously bad with debt. One of the side effects of living in a country built around consumerism I suppose. The only thing Americans may love more than buying things and debt are celebrities.

Celebrities are such a part of our culture that their opinion on matters are treated as actual news. Dave Chappelle once hilariously described an encounter with this phenomenon he witnessed.

“I remember right around September 11th Ja Rule was on MTV. They said “We got Ja Rule on the phone. Let’s see what Ja’s thoughts are on this tragic….

WHO GIVES A F$%^ WHAT JA RULE THINKS AT A TIME LIKE THIS. This is ridiculous”

Given the intersection of these three American culture staples is it any wonder that our celebrities may be even worse than we are with debt?

Johnny Depp, Nicholas Cage, Mike Tyson, and basically every sports star have all amassed fortunes that were still outpaced by their debt. We admire these people and let their poor choices influence our behavior.

Debt and the interest associated with it are incredibly detrimental to our financial pictures. Today let’s look at where you’re bleeding and figure out how to patch the wound.

 

WHERE AM I BLEEDING?

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Stop 5: Where Is My Money Going?

I’m a bit of a planner. I like to map out my day, weeks, and months around large events in my life. It helps me prepare mentally for the type of energy I am going to need for that day. One of the worst things is when I have not planned for something and get blindsided by a commitment.

For any of my real-world friends who are reading this I hope this explains why I didn’t come to your event or showed up with all the peppiness of Eeyore.

I tend to be a pretty social person but that comes with a decent amount of mental preparation and careful planning. Without these steps no one will believe the crazy story you told them about me when they meet your friend who is standing in the corner all evening. They’re not meeting the real me after all.

I can’t be alone in this. Just picture getting home after a long day. Changing into your comfiest lounging clothes and discovering a new Netflix series to binge. Feels good right?

That is until you get the FaceBook notification about that event you forgot was tonight. Now you have to rush through getting ready and try to show up no more than fashionably late. Do you think the person who makes it there will be the best version of you?

As much as we hate that feeling we get when something we forgot pops up we seem to love to treat out money that way. People hate making or following a budget so much that they treat their money like some unexpected event pop up. They have a general idea of what they have planned but there is always something they missed. It’s shocking how few people know their own spending.

 

Where’s My Money Going?

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