Spend every dollar you make!
How many financial advisors tell you to do that?!
None?
Well, let me be the first to advise you to spend every dollar you make, but maybe not how you think.
It is an intentionally provocative statement designed to make you think. Everyone tells us to save and invest, not spend, so why do I advise this? Indulge me for a minute and keep reading. Hopefully by the end I will get you spending every dollar you make.
The first reason is because, we already do! I want us all to think about things from a buying perspective since I like buying way more than saving.
Here are the categories of buying and I hope it is what helps you start thinking about spending like crazy.
Goods - food, clothing, shelter and other stuff
Services - utilities, internet, professional services
Taxes - you buy roads, police, education, and other social insurances
Protections - medical, car, life,
Interest - savings accounts or other things that give you guaranteed interest rates
Assets - things that go up or down in value, stocks, bonds, real estate
Charity - donations buy broader social good
Inflation - cash in the bank
The other reason I tell you to spend every dollar you make is to shift the mindset and place you in a perspective of asking “What am I getting or what am I buying by putting this dollar here?” For example, when you buy a bank savings account you need to ask what you are buying? Most of us don’t think of “buying” when we deposit money at the bank but we are! We are buying safety versus leaving cash in a place like the backseat of your car. You are buying liquidity in that you can use your money. You are buying interest and in most cases it is 0.1% or nothing. When you hold cash you are buying inflation at 2-3% or worse.
Having a spending perspective might be a key to helping you decide where to spend your money different and maybe buy yourself some more money!
As always, if you come across a financially related article you’d like to send my way please do!
Best place to send them is to me.
More next time!
Jonathan