There are countless blogs that encourage frugality in order to build wealth. (This blog is one of them.) Then, there are the blogs, geared toward entrepreneurial minded people, that focus heavily on increasing income.
At times, it seems the frugal minded folks and the “make more money” folks disdainfully trivialize each others methods for obtaining wealth.
Although some balk at the idea of giving up small expenses, lattes and what not, to save money, I prefer a balanced approach to increasing my net worth. I live by the motto, “Big or small, I sweat it all.”
Maybe you shouldn’t sweat the small stuff, but is the “stuff” really all that small when it can do big things?
The other day, a friend told me about a conversation he had with his neighbor. The Neighbor stated she would give up smoking. Ignoring the positive impact the move could have on her physical health, The Neighbor continued by saying something that was both infinitely wise and exceptionally stupid:
“Do you know how many times I can get my hair and nails did if I stopped spending so much money on cigarettes?”
Like The Neighbor, we should evaluate the opportunity cost of the things we buy. If you’re not familiar with the term, “opportunity cost” is the value of the next best alternative. For The Neighbor, the opportunity cost of smoking is forgone hairdos and manicures.
Now, let’s take a lesson from The Neighbor. There are many relatively painless ways – quitting smoking isn’t one – to free up an extra $50, $100, or even $200 a month. Instead of spending this money on other products and services, put it to good use.
Many financial experts would encourage you to invest your newfound savings in the stock market for the next 40 years. At an 8% annual rate of return, $50 a month could grow to some large amount of money that you don’t care about because it’s practically impossible for a human being to conceptualize what life will be like 4 decades from now. I hate to point out the obvious, but you could be long dead by then.
Instead, let’s take our extra $50 and do something radical with it.
Let’s invest that money now in an effort to grow our usable income 5 years, 1 year, or 6 months from now.
Here are few ways you can take the 50 bucks you saved and invest it for short-term income growth.
- Buy a website on Flippa.
- Promote your business by using 10 different services on Fiverr.
- Expand your audience by hosting a $50 Amazon gift card giveaway on your blog.
- Hire a Filipino Virtual Assistant for 25 hours.
- Purchase, read and apply knowledge learned from 5 Kindle ebooks on business and investing.
- Pay someone to write two blog posts. (I actually have no idea how much this costs.)
- Download three audiobooks from Audible.com.
- Take a 2 hour class at your local adult education center on web design, social media marketing, getting into the import business, etc.
The value of money is determined by what it can do for you. You can make $50 turn into $500 50 years from now, or you can make it happen 5 years from now.
It depends on how you use it.
What other ways can $50 grow your income in a relatively short period of time?