As I was riding into the office I thought about all the cool things I could do. I could pick up some donuts for the office, I could grab a pumpkin spice latte, I could go shopping after work. My financial situation at this moment is quite lit. These might seem like small things to you, and they are in fact small things, but in the process of creating permanent money, small things matter.
Every time you don’t spend money you are actually paying yourself. By keeping money in your pocket that you would have spent on a feeling, you are paying yourself. When you pay yourself you can then take that money you would have spent and make it permanent.
Permanent money is the crux of wealth.
You can’t get rid of wealth and you can’t get rid of permanent money. Focus on permanent money not on temporary feelings. Say you buy a cup of coffee but your office provides free coffee. If you instead take that $5 and bank it, that is a permanent five dollars. Drink your office coffee bro.
Another example is the trips, make up, bottles, sneakers, watches and other expensive things we buy. Yes they look nice but they aren’t permanent. Those items get likes on the internet but those likes are soon forgotten. Choose to take that bottle money, make it permanent and then buy bottles out of the cashflow, that’s how you rinse it. All the bottles, sneakers, watches etc that you don’t buy and instead stack is permanent money on a larger more impactful scale.
Emotions drive spending
Lets keep it real, most of what we spend money on is rooted in feelings and emotions. People want to be seen because they like the prestige and honor that comes with being seen. This was demonstrated by C Tha God when he said “I would rather buy a car than a house because people can see me driving in my car but they can’t see the house”. Meanwhile that car is depreciating like a rock and charging you interest the entire time.
Another example of “being seen” is drinking Starbucks. People don’t do it because the coffee is better, they do it because of the prestige that comes with holding a $5 cup of coffee. In China they talked about how there were issues with the mermaid logo being controversial and Schultz pushed back. When they opened all the customers were walking around with the logo faced out so you knew they had Starbucks. Another example is driving luxury. Most drive luxury because of the prestige that comes with luxury not because it gets them to point B any faster. If you take the money you spend on that luxury car and buy a civic you could use your luxury car money to hire an employee to make you even more money.
There is a famous stock trading prisoner who makes this point. He has created an entire program that teaches people about the psychology behind spending. If you think that marketers and advertisers haven’t studies psychology you are fooling yourself. Thus, its important to know how to curb this so you can put money in the right places not in their pockets.
The problem with chasing these feelings is that those feelings will leave you broke. The level up will never leave you broke.
Being the best dressed will leave you broke
Being the best dressed is a never ending cycle of spending. There are new sneakers released each month, there are new bags released each season etc etc. Don’t fall for the hype and ultimately into a paycheck to paycheck lifestyle. By chasing these trends with your dollars you can never get ahead because there is always something new and better to suck up your paycheck. This is why Dave Ramsey says the first step to financial freedom is contentment. You have to learn to be content with what you have, while still generating massive sums of money. When you pour new money into a person who is living to keep up they will never have enough. If you pour new money into a person who is content with what they have, they will use that excess to create wealth.
Quality is a great way to contentment
Just because I preach frugality and contentment doesn’t mean you have to wear all cheap everything. I have found that at this age (31) my clothes last a lot longer. I have shirts that I have had for years and shoes that I have had just as long. We aren’t teenagers anymore, we don’t grow out of clothes. I also tend to by things that are timeless like Ralph Lauren and classic solid suits in blue and black or dress shirts in white or blue. These are things that never go out of style.
I always invest in quality though. This is because when you invest in quality your items last longer. It is better to have a pair of $200 shoes you can resole than some $70 shoes you have to replace multiple times. It is better to have a pair of $300 shades than a bunch of $20 shades you lose and sit on. So there is a balance. You have a few nice items that you keep, and are content with while you build your assets up. It’s easier to do that when you own a FEW, emphasis on a FEW, quality items. This is not your pass to make it rain in Nordstrom. Make it drizzle bro, leave the rain for your asset column.
Well dressed, not best dressed
The key is to be well dressed, not the best dressed. The key is to be well traveled not the most traveled. You can have nice things but trying to be the best and most on Instagram is a sure fire way to end up broke. When I was young and I saw someone with all gold everything I thought they were the man. Now, I realize that the same folks with all gold everything are the ones begging for a hook up or free food. You have to run your own race. You have to be content in yourself. If you look at Instagram and your peers to validate you, your pocket book will suffer. Invest in the things they can’t see.
Be great, invest well