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Wealth Is What You Don't Spend



Wealth Is What You Don't Spend
Let me tell you a story about why some people aren't as financially secure as they could be. It starts with a weight-loss study. Fitness is a $30 billion industry. Almost 40% of Americans are obese. How do you reconcile those figures? You could say a lot of people don't exercise.


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Financial wellbeing

Financial wellbeing can't be measured by only focusing on how much you earn. The gap between what you earn and what you spend is an important figure.

Household savings fell by 30% during a period when median real income rose 40%. Even though Americans earn more than ever before, they have been offset with higher spending.



Temptation to spend

It is tempting to spend more when your income rises. But savings rely on the ability to receive an extra dollar and say: "I can spend this money, but I'm not going to."


Leave your gains alone

Leave your gains alone

Earning more will do little for building wealth if every extra dollar is offset by a dollar of new spending.

Wealth has less to do with your gains and more to do with your ability to leave gains alone without cashing them in.


Live with less

  • Learn to live with less contently is easier and more in your control. It has the same effect as growing your income.
  • Money has a lot to do with the actions you don’t take. Everything has a price, and prices aren’t always understood.
  • The price of building wealth isn’t just earning money; it’s avoiding the post-earnings urge to spend what you’ve accumulated.



Saving money

Saving money

Everybody wants to start saving money as soon as possible. However, quite few people actually do it. This is because saving money implies giving up on the immediate joy that one could feel when pur...

Keep your money in different accounts

To be able to actually save money on a regular basis, you should first make sure that you cannot touch the money that is intended to be saved. 

Ensure this is by keeping your money in two different accounts: a  checking and a savings one. The accounts should be at different banks, making it more difficult to transfer the money from the savings account to the normal one whenever you feel like buying something that is not really needed.

Change your focus when saving money

Whenever you try to save money, try focusing on the process itself rather than the final goal. For instance, telling yourself that this is a temporary situation might prove extremely useful and help the time pass faster.

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Many life transitions happen in your 30's

From moving up in your career to buying a home. Making smart moves with your money during your 30's can help you achieve future financial success.

Focus on percentage of income saved, not the dollar amount

Over the long term, it's not as much about the dollar amount you save, but the percentage of your income that you dedicate to saving and investing. By focusing on percentages, you can ensure you're always saving more as you earn more. 

Spend time tracking your money

Most people react to their finances. The problem with that is that you rely on chance to have enough money in the bank when you actually need it. Be intentional about your money and spend time reviewing and evaluating it. If you don't, you'll never know if you're moving in the right direction or not.

The 30-Day Rule

The 30-Day Rule

One can develop healthy spending habits and avoid wasting money by using the simple 30-day rule: Whenever there is an urge to spend on something, just wait for 30 days.

One can buy...

The Emotional Component of A Purchase

  • Marketers capitalize on the emotional component of any purchase while working hard towards ensuring consumers make ‘impulse’ purchases both online and offline.
  • Many people purchase due to their need for emotional fulfilment, indulging in shopping therapy and incurring credit card debt.
  • This leads to random, unused stuff lying in the house, which is not really needed.

When Everything Is On Sale

Most stores use the ‘SALE’ marketing gimmick (both online and offline) so that we can splurge our money now, instead of waiting.

The system is gamed for us to spend our money wherever we go. We need to stop wondering where our money went and start telling it where to go.