February 18th, 2021 | Frugality
Money is weird. It's almost as if it's attracted to the people that don't lust over it. And won't spend it either. You know, the cliche that rich people are simple. And don't spend much money. And the cliche that people living on salaries many times wear Luis Vuitton and Burberry on their way to work. Trust me, I've seen a lot of that here in Milan. I was thinking about this yesterday. I think the cliche is true. And I also think I've found a logical explanation as to why this is happening. Being frugal seems to be a main characteristic of successful entrepreneurs. Being frugal alone won't make you successful. Saving money from your salary will never make you rich. But frugality, combined with an ability to make money, might. And it doesn't come from being cheap. It comes from viewing money in a different way than others. Let me explain: - Up until two years ago, I used to view money as purchasing power. "Wow, I have $20k. I could buy a nice car!" - Then, I started a job. I started viewing money as freedom. "Wow, I have $20k. I could quit my job and travel!" - Now I have my freedom. I've started viewing money as runway, safety, and time. "Wow, I have $20k. That's an extra year of runway there!" - I think the next step is viewing money as something that can work for you while you sleep and make you even more money. Mainly, through investing. "Wow, I have $20k. Invested, it will become $25k in a year!" So, it kinda makes sense. How can you be careless with money when you understand that it can buy things that are priceless to you? Like freedom. Time. Safety. Runway. More money. Which in time leads to more freedom. More time. More safety. More runway. And so on. I believe that most of the money in the world is held by frugal people. It is invested in banks, stocks and real estate. It's sitting somewhere and passively growing. It is not being splashed away at the expensive shops of your city. Or on Amazon and Ebay.