(Note: This article was originally published to JamieMcSloy.co.uk on January 29th, 2020. I’m going through an old backup of the site, which has hundreds of posts that aren’t currently uploaded. As I’m working hard on updating the site – and releasing The Vault, letting these old posts be the daily posts for a while. We’re getting very close now, so bear with me. Soon I’ll resume regular posting and then just upload these archives in one go.)
Caricature Personal Finance
I’ve changed habits since the New Year. Funnily enough, a big one is that I’m plugged into the digital world a lot less. This wasn’t planned, but necessary.
Essentially, I put my much beloved Samsung Galaxy Tablet away and will only use it when travelling. (This also means no laptop when travelling too.) I’ve never gotten into using my phone as a mobile device, and the long and short of this little intro is to say that when I’m on the computer, I’m connected to the digital world and the rest of the time, I’m AWOL.
There’s no checking my phone at night. No waking up with the blue light of my tablet, checking furiously to see whether I’ve got paid or any emails have come through overnight.
The first hour of my day involves no screens. The last few hours of the day involve no screens.
Get to the topic, you say.
I log onto my computer every day and I check emails. Now, I have a list of emails from the various people I know and chat to. Mostly to see what they’re up to, to be honest.
And recently, I log in each morning to get a constant stream of flanderised-abuse nonsense in the inbox from fellow marketers.
As each person copies each other, it becomes a feedback loop of increasingly dumb emails.
This morning:
- If you don’t have massive arms, you’re a little bitch who doesn’t deserve to survive
- If you don’t buy my point-and-click investment scam, you’re an idiot
- Working a 9-5? You guessed it, you’re a fucking idiot
And honestly, I don’t like using curse words, but we have to get the point across. Increasingly a lot of email marketers are just foaming thinly-veiled abuse at their customers in some sort of weird mix of, “I’m a real tough guy” and “you’re worthless unless you buy my products.”
It’s all getting more ridiculous by the day.
But unlike the honest-to-god imbeciles who are marketing like this, I’m going to assume if you’re reading this blog, you’re not a moron and you’re probably pretty smart.
So you don’t need me to tell you this is nonsensical as an approach.
Let’s talk financial advice.
Nobody Spends On Their Way Up
Recently over on the Twitter, I wrote that there seems to be a wave of guys, like those mentioned above, who will say, “FUCK saving money! You need to make more! Saving is for losers!”
And honestly, this is absurd advice. It sounds good, it leads to a pitch where you’ll inevitably make more money… and the basic idea of “make more money” is obviously an irrefutably good idea. So these things mask how utterly inane the false dichotomy is.
It also reveals a lot about the marketer; namely… most of them have clearly never dealt with rich people before, because they talk in absolute caricatures of rich people.
Stuff like, “Rich people don’t sweat the small stuff. They’re happy to pay 10k for a new toilet seat if they’re making 50k a month…”
… it’s not really true.
Sure, rich folks buy stupid stuff. And let’s stick to the self-made rich here, because 2nd and 3rd generation rich kids are very bad with money.
So, self-made rich people will buy a Ferrari. Ultimately, a pointless exercise in first-hand depreciation.
But where people reveal themselves as not understanding wealth is that they’ll think this is arbitrary when it isn’t.
A rich person who has already made enough money to cover the cost of an expensive toy is absolutely not in the sphere of someone who is on the way up, spending frivolously.
There’s a key difference and that’s where the, “Don’t save, make more” people show their lack of understanding.
Virtually nobody spends to excess on their way up.
Personal Finance: Boring Is Correct
The reality is that people will say, “Saving $3 a day on a coffee will never make you a millionaire!”
That’s true. Saving $3 on a latte will not make you a millionaire. That said though, there are two things to consider:
- The mentality needed
- Everything compounds
So, when you’re on your way up, it’s not about the paltry $3 you spend a day. $21 a week. $84 a month on coffee.
Monetarily though, you quickly see the cumulative effect. It’s the same with Netflix. $10 a month, (or whatever it costs, I don’t know,) is not a huge amount. It’s $120 a year.
That said, everything compounds. $84 a month is $1008 a year, and with your morning coffee; it’s a hidden money-sink. $1008 a year in a 3% savings account is the equivalent of $30 a year forever.
When you’re in business, an extra $1000 is a lot of extra cash-flow for expenses.
But more importantly, there’s a mentality switch.
If you want to succeed at any business, the one quick trick that’ll make you rich is seeing opportunities and, more broadly, value.
Your coffee habit is a sunk-investment of $1000 a year for which you get zero return.
Your Netflix addiction means binge-days that could have been spent doing something to get you an ROI.
This behaviour is something that businesspeople use to make decisions for their businesses.
“Should I invest in a new MacBook or spend that $1500 on a $500 computer and then put $1000 into ads?”
“Would it make sense to hire a manager to run this part of the business or should I suck it up and work 5 hours extra when I could be doing something else?”
There isn’t really a difference between business sense and personal financial sense, ultimately.