“It’s hard to stay warm. This house is freezing,” I said to my boyfriend Will the other day. “Let’s winterize it.”
Will stays up-to-date on energy innovation, so I expected him to suggest some futuristic, cutting-edge technology.
Instead he said – quite simply – “Cool. I’ll grab some caulk and some spray-foam.”
“That’s it?” I expected some crazy innovation evoking The Jetsons.
“Yeah.”
Will used to run a solar energy company. I expected him to offer a more cutting-edge solution than “seal the drafts.”
“But Will, you keep reading about all this crazy technol –“
“Only because it’s glamorous.”
“What do you mean?” I asked.
“Magazines cover the glamorous side of technology,” he said. “But winterizing your home is a matter of the simple acts. Weather-stripping. Caulk. It’s not sensational. But it keeps your house warm.”
Then he replaced the electrical outlet faceplates.
What’s Effective is Not (Necessarily!) Exciting
Success in anything — in your career, in saving money, in losing weight — is like winterizing your home: the simple stuff works best. What’s effective isn’t (necessarily) exciting.
We hear about the glamorous, high-profile ways to make millions – invent Google, launch Facebook, become the next Justin Bieber.
It commands headlines because it’s glamorous. It’s a riveting story.
But for most people, achieving a goal – like winterizing your home – is a matter of the simple acts.
Want to grow your business or get promoted? Forget tweaking your business card until it’s perfect. Create amazing stuff. Make people smile.
Want to be lose weight? Forget all the fads that weight-loss gurus trot out in order to sell books. Eat healthier, exercise more.
Want to be wealthy? Forget the rags-to-riches Justin Bieber story. Pick up a side job that earns you an extra $100 a week. Trim an additional $100 a week from your budget. Now you have an extra $10,400 each year.
Place it in a tax-deferred account. Invest in low-fee funds. Reinvest the dividends.
If that’s ALL you do, and you’re starting today from $0, you’ll be a millionaire in 30 years (assuming a 7 percent return, the rate Warren Buffet predicts.)
Chip in another $416 a month into a Roth IRA, and you’ll be a millionaire in 25 years.
It’s not a thrilling tale. It doesn’t inspire gossip and folklore, so most of us never hear about it.
Unfortunately, that means many people believe they’ll NEVER be wealthy unless they sign a record deal with Usher. You might know these people: they’re the nay-sayers who dismiss your goal of becoming rich on a mediocre paycheck. Ignore them.
“It’s not your salary that makes you rich, it’s your spending habits.” – Charles Jaffe
Two weeks ago I wrote a post about Andrew Hallam, who became a millionaire on a teacher’s salary. I didn’t anticipate how much attention that story would receive. It’s now one of my most-Tweeted posts.
I asked my roommate why she thinks this story became so popular.
“Do you think it’s because Andrew’s story is so relatable?” I asked. “Do people think, ‘Hey, I earn a teacher’s salary! Maybe I can be a millionaire too!’?”
She shook her head.
“No,” she replied. “I think people who see that headline think, ‘There’s no WAY that’s possible. Millionaire on a teacher’s salary? There’s just no way.’”
Playing Offense & Defense: Earn and Save
To be fair, you need to earn more AND save more. If you’re a sports fan, think of earning money as playing offense and saving money as playing defense. To win the game you need both.
But this doesn’t mean you need a brain surgeon’s salary. Andrew earned more by tutoring kids on the side. An extra $100 or $200 a week goes a long way.
So whether you’re thinking about your 2012 goals or just trying to stay warm this winter, remember: Ignore the headlines. It’s the simple stuff that counts.
Photo of Justin Bieber courtesy Jake Auzzie.
I have noticed with myself that I often get to caught up in either saving money or spending money sometimes and forget the other. This has led to bad things in the other category. I like your analogy here.
Very true! It is the choices you make everyday that will affect your goals. Simple things like bringing your lunch can save $2-300 per month.
My parents would seal the windows every winter – and they were already double pane. Perhaps they were ahead of the times?
I agree – good habits now have absolutely huge payoffs later. I mean, even looking back now you can usually pinpoint the thing you did that caused you to be where you are today. Get your finances in order!
Agreed. Working on the making more part. But you could have all the money in the world…if you don’t have good spending habits, you could still end up poor.
With enough time and discipline, almost anyone can become a millionaire. But I will submit the road is much easier and more fun if you can work on improving your income as well as minimizing your expenses.
@Well Heeled Blog — One thing I’ve discovered is that increasing your income can also be the “more fun” side of the equation, especially if you find work that’s fulfilling.
Funny you should mention weight loss, since I’ve been working on a post that covers my own weight loss. It certainly isn’t a glamorous story (although, the amount might be impressive), but I’ve learned lessons from the journey. It really is the simple stuff that matters. All I did was walk every day and eat right. You can’t sell a book about that.
@Matt — Congratulations on your weight loss! I can’t wait to read that post.
I like that it was so simple. Some people confuse ‘simple’ with ‘easy.’ It’s not always easy to make the right choices — picking the healthier food over the greasier one; walking even when you’re not in the mood. Those aren’t always easy choices to make. But they are simple choices.
Great insight. Everyone likes the idea of finding and investing in the next Microsoft, Google or Apple. But life is really a story of the tortoise and hare.
@cashflowmantra — I love the story of the tortoise and the hare! I had forgotten about that story … a great analogy.
I totally agree with you in this post. A month ago I was able to leave my job because I have been working on my side business, it’s not amazing, just owning taxis and having people drive them. It’s not a glamorous thing, but it can keep me well and allowed me to work on more interesting business.
Glamorous is not the best way for doing things, it’s flashy, but not the best way. For most of us, simple ways are more useful than the headline approach.
@Alejandro — Congratulations on leaving your day job and going into your own business!! Sometimes the BEST businesses are the non-glamorous ones. Everyone wants a glamorous business, so there’s a lot of competition. Fewer people try to start non-glamorous businesses, which means there can be more money.
In the book The Millionaire Next Door, the author found that most millionaires own “boring” businesses — the types of businesses that aren’t glamorous and don’t create interesting party conversations. They own janitorial services and stuff like that; “boring” stuff that no one else wants to do.
Yes, it’s the boring everyday stuff that really adds up! Too bad it’s not glamorous. Maybe someone can make it more fun? No, probably not.
Thanks a lot for posting that book “The Millionaire Next Door”, currently reading it and it’s blowing my mind ! Thank you very much once more !
@Michael — I’m glad you like it! I read that book several years ago when I first became interested in personal finance, and it definitely shaped my early ideas about how to spend money!
One of my husband’s colleagues was talking to him and told him that he lives a boring life. My husband was surprised about the comment, but we realized that compared to others, we do live a fairly “boring” life. We enjoy doing puzzles together and don’t run out to the latest movie in the theaters. We rent from Redbox and avoid doing a lot of things that cost a lot of money. We go to restaurants with coupons to get the best deal when we go out instead of going to other places that cost much more. It may be boring, but it also paid for 2 weddings this year without going into any debt. The benefits are long term, not immediate in most cases.
@Spendwisemom — Haha, the next time they call you “boring,” take it as a compliment. It means you’re sophisticated enough to know how to find joy in simple pleasures. The real “boring” people are the ones who have to pay wads upon wads of cash for entertainment because deep down they’re bored.
Perhaps they were ahead of the times? Yes, it’s the boring everyday stuff that really adds up!