If you have read “The Millionaire Next Door” by Thomas J Stanley, you’ll notice two obvious ways to become rich. But what is has to do with either thinking big or living cheap?
Living cheap is when you has limited purchasing power (or compromising what you want) in order to achieve your goal. For example, you can’t afford to “makan luar” because you have no extra cash after all other important expenses. Or, you might limit your expenses to save more money for whatever reason you want it to be.
This normally happens to people who totally depend on salary for living. The mechanism is simple, just because you have constraint in income (the same figure months after months & minimal increment), you have no choice but to reduce your expenses for maximum probability to achieve financial success.
Though I called it ‘living cheap’, this kind of financial management is not that cheap. One of US fireman worker with one wife & 5 children became millionaire totally from his monthly savings. Isn’t that amazing? symptoms withdrawl eliminating effexor
On the other hand, thinking big can be about higher expenses for more money. For example, if you buy trendy shirts, wearing expensive watch or getting designer handbag to attract clients’ attentions. This thing works well in this materialistic world.
Self employed or business people really good at this. To them, it’s not easy to control expenses on high inflation environment. Therefore, the sensible way to go is, go get more money! If you are one of these people, clear objective & direction is a must.
But the problem is, it become easier for you to overspend in the name of “investment” when in actual cases, you are just trying to satisfy your instant gratification. Justifying your purchase won’t help. Spending too much can make you heavily in debt.
However, if it works, multiply saving to a factor of 2, 4 or even 10 in less than 3 years is doable; something that someone who “living cheap” have difficulties to understand themselves.
So, who do you think you are?
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