Wednesday, May 11, 2011

Get a Pay Raise By the Minute

It is possible to determine the class a person comes from by their attitude toward money. You can spot a spendthrift a mile away before they spend a single penny. The same is true of frugal folks. You should also note that wealthy people are more frugal than middle class families. There are exceptions to the rules, but they are rare. Frugal people gather a million dollar plus liquid net worth in a relatively short time and no one knows it by the way they act. Poor folks spend what they can to look richer and the middle class spendthrift lives beyond his means on borrowed money ( and borrowed time) exuding the illusion of wealth.

I know people that carry a card in their shirt pocket that lists what they earn at their job by the year, month, week, day, hour, minute, and second. Tell said person to buy a soda from a vending machine and you will get a quick answer that they need to work just over two minutes for that one soda.

Here is what the card looks like:


The example is a hypothetical person, not a real person or client. However, a lot of people make $60,000 per year. Adjust the numbers to fit your personal situation.

These experiences pushed front and center as I started reading Jeff Yeager's latest book, The Cheapskate Next Door. When he states in chapter one that he knows people that carry an income card in their pocket a few clients came to mind. Every one of these clients is well off or wealthy with a liquid net worth of seven figures or higher.

My dad always said, "Son, it is not what you make; it is what you do with what you make." It took me forty years to figure it out. It is easier deciding if you want to spend money when you can equate it with how much time you will spend at work earning it. Spend $50 and you need to work another two hours.

The slow economic recovery has people thinking about money in ways not done for decades. It is survival mode for many. When unemployment is about to run out it takes desperate measures. Why wait. Take the necessary steps now so desperation is averted later.

It is always a good idea to wait before making a purchase. Think through what it will really cost you in life spent at work paying for it. And heaven forbid you pay interest to pay for a toy. Many folks pay a third or more of their income on their home. That means you spend nearly three hours at work every day just to pay the loan. Is it worth considering a smaller home and taking those extra hours with family? The choice is yours.

Try this for a week only. I do not want a lawsuit if someone goes into septic shock on my advice. Write down your income by year, month, week, day, hour, minute, and second. Keep it with you at all times. Before every purchase anything, check your chart to see how long you need to work to pay for the purchase. I bet you will put several items back on the shelf. Then you can cut your hours at work or retire years or decades early. Like I said, the choice is yours.

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