You can’t consume your way to wealth — Frugality puts the ODDS of becoming wealthy on your side.

As I was riding into the office I was talking to my wife who is on a meal prep kick. She doesn’t know I am writing this and using her life as an example but it is fitting. She was telling me that her meal prep experience from her last diet has carried over habits into her new meal prep diet. She also told me that her new habits have exposed the flaws in the habits that were passed down from her parents such as using butter in everything. This is significant because the same goes for wealth building.

When we started the investment club I had to beat back ROI questions because ROI questions stem from consumerism and immaturity.  A true astute investor cares more about return OF investment not return ON investment.  I want those who are in it for the long haul not the quick flip so they can buy expensive things that their job wont afford them.

When I talk about denying yourself, stacking paper, not spending money on silly stuff people think that it is temporary until they get enough money to ball out on stuff. No. I am talking about habits that will carry you through life as your wealth increases.  I am talking about habits that will EXPOSE the flaws in the habits that were handed down to you by your parents. 

When you engage in these habits wealth is a foregone conclusion. When you chase quick riches like a lotto ticket you will spend your years chasing instead of stacking and building but even if you got those quick riches they will soon be gone because you skipped the process in search of one big wealth event.

Selectively extravagant

When you stack paper and stash away money this doesn’t mean that  you can’t at a certain point in life flash and ball. You can. This is OK. Where this is not OK is when flashing and balling is a way of life. Where this is not OK is when you have the watch, the shoes, the jeans the shirt the hat all in one fit. This isn’t TV and this is not the movies. In real life wealth does not look like that.  Do not be fooled by the people who want to sell you the things rappers wear.  Rappers and athletes are walking billboards.  Rappers and athletes are not wealthy. 

Why selectively? Because you energy, effort and resources have to all be poured into  your business and your asset column.  You can’t serve two masters. You can’t consume and invest at the same time. They both require different parts of the brain. One is long term, disciplined and focused. The other is short term, undisciplined and compulsive.

MORE often than not this is the look of wealth and not true wealth. Its not the stuff its the abundance of stuff. Its when all your discretionary income goes toward stuff.  Be selective don’t overdo it.

Now I will say that there are people who make massive amounts of money and therefore can afford to consume at a high level. This blog isn’t for them. This blog is for the 9-5 wealth builder not those who are already over the hump.  We are talking about two different people. Those with massive wealth might not have done the work but someone at some point in time did that work and engaged in that sacrifice.  If you aren’t one of those people you don’t get to live like those people until you become those people.

A lot of people see investing as a means to get the wealthy life that they desire. They want the bags, the shoes the cars. This will cause you to misfire. This will cause you to take crazy unsubstantiated risks. This will cause you to rush the process. I am telling you from experience. I became a good investor when I started investing for the game of it not the stuff.

Go where the odds are

Are there people that look like money and have it? Absolutely. Are the people who don’t look like wealth and don’t have wealth? Absolutely. The key is that you have to go where the odds are. Avoiding consumption and focusing heavy on assets will get more people there than those that are spending it all in hopes of finding a way to pay for it.

If you live below your means you might not land in wealth but you will be safe. Too often we attempt to play the odds instead of taking the for sure path. This is why I say I don’t want to get rich quick I want to get rich for sure.  Jews are the number one group that I stole this concept from and on the whole it has worked for a far majority of them.

What is unfair for them is the fact that they adopt frugality as a culture.  If  you skim a Jews Instagram it is probably a lot of money saving. If you skim my Instagram it is a lot of spending, flashing and going broke. The odds are why smart families push their kids to strong six figure earning careers as opposed to pushing them to be the 1 out of 144 men in the NBA or 1 out of 1800 in the NFL to then have astonishingly short careers.  Thinking you can consume your way to wealth is equivalent to turning your nose up at six figure careers to chase hoop dreams. You might get there but the odds are better with a strong career, business or real estate

We are pushing our people to be the one of one career wise and wealth wise.  If you really think about it, there are a lot of pro athletes but only one Lebron or one Steph curry.  there are a handful of players int he league that make good money. In business the worst entrepreneur still owns a jet. in the league the worst hooper makes league minimum which is around 70k or something. 

Odds

The key is to make the odds work in your favor. There are so many businesses, so many rental properties, the odds work in our favor to aim at those as opposed to aiming at the few pro careers that exist. If you reduce your spending and avoid flash the odds improve because you have more discretionary money to throw at deals. Can you do a deal strategically without money or cash? Probably.  But you can do way more deals if you have cash, credit and the strategy.  The odds improve as your financial situation improves. Your financial situation improves as you increase discretionary cash and improve your credit.  Your discretionary income improves when you increase your income and avoid consumption.

Don’t be like the guy who couldn’t buy a deal becuse he had a gucci belt and some shoes.  In a world where people look at you as if you aren’t anyhing many of us feel like they have to compensate by drapping logos on our body. That is all by design. The massive marketing that comes through videos, movies and music are all intended to make you feel like not having an audemar makes you worthless. Not wearing gucci or fendi makes you worthless. Not driving a benz makes you worthless. Well if you look at so many of us that have all that stuff and the condition of the community where people war 200 dollar sneakers it might be time to wise up and flip the script.

Prudently frugal

I know a lot of people who have a lot of stuff who are flat broke. At one point in time I was one of those people. At 30 after I acquired enough shoes, suits, cologne watches and shades I can chill. I don’t need the new, I already have what I need. I started to realize that on the whole when I looked around the people I saw with money were the people that spent the least of it.  W

hen I flipped it my assets increased.  When you live a low cost life you don’t have to be the best investor you don’t have to be the best employee you don’ t have to be them. If you happen to be that, then congrats. But one thing I have also realized is that you can be those people when you don’t have the pressure of making something out of nothing. You can be a great employee when you work somewhere because you want to not because you have to get the money to pay the lease on your Benz. you can invest better when you are investing because it makes sense not because you need to make the money to go on vacation.

Why do I gotta sacrifice

My demographic is a people who for the most part aren’t getting a small loan for a million dollars so my advice is rooted in how you can use your circumstances to work for you.  Because I preach accountability and self reliability I challenge you to look at yourself and see you YOU can save yourself. The most obvious way is your working income the most obvious way is cutting back on spending. Are there other ways? Yup. But even those ways will be amplified if you are living humbly. I have seen many lives ruined from people who live high on the hob. Consumption never ends, there is always a new jet a new boat a new car.  You will forever be chasing the feeling of high level consumption.

If you aren’t sitting on wealth you have to sacrifice. If you choose to look wealthy then your goal is satisfied. If you want to be wealthy you need capital and that capital will require sacrifice. If you are first generation wealth building then you will need to dig deep and avoid the opinions of the masses wondering why you don’t have on new shoes, new watches etc. Take their flack and stack stack stack.

If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership.  Email membership@capitaltodd.com today to join.

Be great, invest well,

Todd Millionaire

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