When I was a kid my parents always taught me that I had to choose good people to be friends with. But to be honest, for the first 8-10 years of my life they chose friends for me.
In Soviet Russia you don’t choose friendship. Friendship chooses you.
When I was in middle and high school they said, “Look at Ivan, you don’t want to be like Ivan“. I think it’s a Russian version of “Don’t keep up with the Joneses”.
And of course, being a parent now I understand why they were worried about people I hanged out with. We all learn from our friends, it doesn’t matter good or bad. We pick up our friends’ habits really quick, we even pick up accents without noticing.
Howdy ya’ll. Can you imagine me in addition to my Russian accent pick up a Southern one as well. That would be hilarious.
Learn what not to do.
If you want to achieve certain goals, you have to work hard and learn. Learn from people who have gained more than you have. In business it’s called learning best practices.
Being a wise person you probably have been doing it without even noticing. For example, if you want to lose some weight, you wouldn’t ask your overweighted friend about how to lose weight, right? Same here with parenting: you wouldn’t ask an advice from a person who has a toxic relationship with his kids. You want to learn from successful folks, you want to learn their best practices.
This would be very true for personal finances as well. If you want to become wealthy, do what wealthy people do and avoid broken people habits. Flashback my previous post about being normal in America. A lot of normal people around taught us a lot of things we actually need to avoid.
I have a friend who makes really good money, but he lives from paycheck to paycheck and believes that it’s impossible to become a millionaire or even a wealthy person in America nowadays. So, lets see what he could have done differently.
My friend has about $80K in consumer debt. He has two car loans of total amount of $60K. His accrued car payment is $860 per month. To be honest, I was shocked when he told me these numbers. In addition to the car payments he has credit cards’ payments and a couple of medical bills due. His total monthly debt payments are close to $1,100.
Do you know how much money my friend will have in 30 years if he start investing those $1100 monthly? A little over $1,000,000
Bring food for lunch.
Every working day my friend spends $10-15 for lunch. Seems like reasonable price for lunch, right? Lets do some simple math. He spends $50-75 per week, or $240-360 per month. This is $2,880-4320 per year. OK, lets round up to $3000/yr for the sake of math. Instead he could have added $1000 extra for groceries and bring lunch to work, and therefore save $2000 per year.
Some of my readers can say, “Oh, it’s not a big deal, it’s only $2000 per year or $166 per month worth of savings. $166 per month will not make me a wealthy person”
But what if you add $166 to initial $1,100 that my friend spends on his consumer debt.
Avoid fancy coffee shops.
Do you know how much money an average family annually spends on Starbucks coffee? You would be surprised, because it’s nearly $1,100 a year or $91 a month. Let’s add $91 to $1,266 and see how much money my friend would have had if he had started investing now.
Isn’t it amazing when just by adding $91 per month we can increase our net worth by $150,000
Do It Yourself.
My friend pays $30 for oil changing, or $60 for adjusting chain on his motorcycle. Both of these tasks easily could have been done by himself. The other day he told me he had to pay $100 for fixing clogged garbage disposal.
He should have hired me for these jobs. Probably, instead of writing this post, I should sell him this idea. What do you think? Would it be a good idea?
And when I asked him abut why he didn’t do it by himself his response was… Well, he told me this, “I don’t know how to do it”.
This is the time for some Russian wisdom for you. Are you ready? It’s free, by the way.
If you don’t know how to do something, it as time to learn how to do it.
In 90% of the cases it is much easier than you think, what you need to do is to check on Google or YouTube. There is 146% chance that someone has already posted an article or a video explaining how to DIY this or that.
Mrs. FR editor’s note: I started to dye my hair on my own with just regular drugstore 8-9$ L’Oreal hair color when I gave up to find a good colorist. Surprisingly I got triple benefits: (1) I’ve never had such a vibrant and classy color and have never received so many compliments to it, (2) my hair got way less damaged, (3) We saved 1,200$ a year.
Live below your means.
Do you know what wealthy people do when they receive a bonus, or when they got promoted? They don’t spend this money on stuff they don’t need. They invest. And what normal people do? You know the answer, they spend all the extra money on cars, vacations, or designed clothes, shoes and watches to showcase their new shiny upgraded status.
I don’t know about you, but I don’t want to be “normal” like this. I have my goals, my dreams and I know what I have to do to achieve those goals. And more, I know what I have not to do.
Please share your examples and stories about what normal people do.