Saving up
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I loved this recent post from I will Teach You to be Rich. My favorite part said,
Ordinary actions get ordinary results. Look around. Do you see many rich people around you? No, because they are behaving in predictably ordinary ways: Not knowing how much they spend, not being conscious about where their money goes, and not setting investing goals. Want an easy way to see this? Go ask your friends who just went on vacation (or bought a new handbag or iPhone or whatever) this: “Wow, that’s awesome. How long did you save to be able to buy that?” Their reaction will be priceless, as if the antagonist from Saw II is holding their head in a vise and ordering them to look at the moon while opening their mouth. Try it.
Not only would it not occur to many people to save up first and then buy something; it wouldn’t occur to many of us to ask a question like “How long did you save?” at all. We just assume that they bought it on credit, and many times that assumption is correct. It’s like there’s a breakdown in logic, because while we often assume that someone borrowed the money, we still wonder how they can afford it. Instead of following through with the logical response of “they can’t” or actually asking them how they were able to afford it, we start to think “well, they must be able to afford it somehow, so I should be able to afford it too”.
The truth is, people can afford a lot of things, but they usually can’t afford everything all at once. Want to travel over the summer? Save up for a year. Want to buy a new iPod Touch? Save up til you have the money. Want to fund your early retirement? Figure up how much you think you’ll need, and then make regular contributions to your retirement accounts each and every month. Ordinary actions get ordinary results, but saving and investing regularly can give extraordinary results.
November 12th, 2007 at 2:18 pm
I saw a segment (on Good Morning America, I think) today about a new internet service called eLayaway. It’s a layaway service that’s available with a big list of merchants. It’s paid online from your checking account with a 1.9% service charge for the items purchased, but no interest charges (from what I understood).
http://www.elayaway.com/
Will you look at it & see what you think? I’ve not ever been a big fan of layaway and would rather just save my money then purchase. I can see how this sort of thing would be appealing, though.
November 14th, 2007 at 4:42 pm
Sure, I’ll post about it soon.