Chapter 59 Thrift for Thriving.
I have good news for you! If a child of 15 earns $1000 a year in a summer job, invests it in a growth-stock fund earning 10% annual returns, and keeps up this investment yearly, he would have more than $1,000,000 by the time he is 65! This is based on the interest-compounding table. If he had bought land he would probably have that much money by the age of 40! Putting it simply: If you refrain from spending a dollar on donuts each day and save it, that is $365 a year; you will have over $365,000, probably as early as the age of 40! Can you recall my motherinlaws bonanza mentioned in the last Chapter? She did it in only 9 years! Appreciation in land values is impressive because with population and economic growth, space becomes limited and precious. Whatever you save now would multiply, with interest added pile after pile. Benjamin Franklin said, ‘Money makes money, and the money makes, makes more money.’ He added: „The way to wealth is as plain as the way to the market. Waste neither time, nor money, but make the best use of both.
Insurance people always remind us of harsh reality. By the age of 65, only 1 out of 100 people is wealthy, 5 are financially independent, a few are dead and about 90 are dead broke and relying on some pension or government help. These people forgot to put aside 10 cents in each dollar they got. Those who do not are making a grave mistake. Besides the blunder of not putting money aside, people have a remarkable ability to spend next years income and to live beyond their means! Many have 2 cars in the garage; none of them paid for. Soon they find it tough, working for money they have already spent on things they dont need, and on things to impress people they dont like! Think of that.
If you buy what you dont need, you will end up craving for things you cannot buy. Anyway, saving makes poor people rich, while squandering makes the rich poor. Incidents world-wide attest to that. John Taylor, for example, of the pop group Duran Duranrecently admitted: „The truth is we need to work...so much was squandered it was ridiculous...Our life-style has been crazy. We flew in Concorde and rented suites in the worlds best hotels. I also heard of people who had won millions in lotteries and a few years later they were penniless. The world now spends US$400 million on cigarettes and US$160 million on beer! False standards, beliefs and values, foolish and frivolous pastimes and amusements all pave the way to failures. Extravagance, gambling and overspending have resulted in distress, disasters, bankruptcies and even crime.
Our financial strength and independence really depend more on the money we save than the money we earn. Save money and money will save you. In saving, you not only prepare for rainy days and lean years, you multiply your wealth for greater returns. Remember, the financially secured are happy and carefree people. Get in the habit of budgeting now, while you are young; it is an intelligent and well-planned way of using hard-earned dollars. You are then in charge of money before it controls and cripples you. A good budget differentiates between urgency and importance, between short term benefits and long term goals; furthermore, it must adapt to growth and changes. Your budget must identify necessities, luxuries and portions for investment. With good budgeting, you can prepare yourself financially and mentally at every point, to grasp various opportunities whenever they appear.
Thrift should never dwell narrowly on money matters. It should command all our visible and invisible wealth, including time, energy, talents and abilities. Andrew Carnegie said, 'Thrift is the great fortune-maker... but it develops also, the mans character. I couldnt agree more with him. Frugality governs virtues and excellence in many ways. It controls finance, possessions, and personal habits. Such self-discipline usually goes with focus, purpose, organisation, order, optimisation of opportunities and resources, and making the most of everything. Thrift is indeed the foundation for the development of self-mastery and greatness.
I will end here with the wisdom of 3 men. Napoleon Hill said, 'Fortunate is the person who has developed self-control to steer a straight course towards his objective. Donald Trump proclaimed, 'I never threw money around. I learned from my father that every penny counts, because before too long your pennies turn into dollars. Mark Twain urged us, 'Plan for the future because that is where you are going to spend the rest of your life. Scatter with one hand and gather with two. Keep saving; from saving comes having.