I am on a path to becoming debt free by living frugally; shop at thrift stores, menu plan around grocery sale ads, make my own coffee, pack a lunch, etc… But, by not spending am I cutting myself short?
Investor Junkie did a guest post, You are already wealthy, stop complaining! at Financial Samurai’s blog. He replied to my comment by saying, “Hey I have no issue with greed. Being greedy can help with overall good”. It made me think… am I cutting myself short by living a nonexistant life to pay off my debt?
I mean, could I pay off my debt by actually spending money to create additional cash flow (Steadfast Finances wrote a good post on Digging Out of Debt by Improving Cash Flow)? Investor Junkie states on his about page, “Most of the other financial freedom blogs discuss…live frugally (is living very minimalistic really living?)”. My response: No, it really isn’t ‘living’ but it is the way I know and has minimal risks associated with it.
Investor Junkie’s life projects a good lifestyle to back up creating additonal cash flow and/or a passive income to generate extra income; his family is in the top 5% of the US population, has a business, retirement accounts, a rental property, and savings. And offers a great set of Rules of Wisdom that provides some validation to this subject.
Take Lillian Hochberg, many of you know her company by the name of Lillian Vernon the catalog merchant. She started out by using $2,000 of her wedding-gift money to buy a supply of purses and belts and placed a $495 ad in Seventeen magazine. The result: the ad brought in $32,000 in orders.
I live frugally, but am not ‘broke’. I may have to start on a shoestring budget, but I can start investing $500 – $1,000 for a start-up, whether it be investing, a small business, etc… I can continue to pay my snowball scheduled payments while investing into creating additional income. So the risks are not relative in the is matter. Meaning if I lost $1,000 in this investment I do no harm towards my journey of becoming debt-free; that path is still maintained.
I am curious to hear your thoughts on this subject. What would you do with that money? Do you believe in spending money to make money?
For more information on making additional income, you may enjoy:
- 28 ways to Make Extra Money
- 9 Really Wierd Ways to Make Money
- 26 Ways to Make Extra Money While Keeping Your Day Job
*Sorry if I reiterated IJ’s lifestyle so much but I am kind of keen to it right now. It is my intentions to project that Investor Junkie and wife worked hard to get the results they have. I can see how someone may interpret this article as ‘living it large’ or snobbery. This is not my intention. My intention, is to show that working hard & smart for your money can produce some pretty cool results! 😉