Mindset; Always Make the Profit Exceed the Expense is misconceived. Individuals go through life without properly grasping what that principle is.
One says, “I’ve an income of so much, and here is my neighbor who has the same; yet yearly he flourishes and I fall short; why is it? I understand all about mindset.” He thinks he does, but he doesn’t.
There are men who believe that mindset consists in scrimping, in cutting off two cents from the wash bill and doing all sorts of little, mean things. Mindset isn’t meanness. The misfortune is, likewise, that this class of individuals let their mindset apply in only one direction. They fancy they’re so wonderfully frugal in saving a penny where they should spend two cents that they think they can afford to waste in other directions.
Before kerosene oil was exposed, one might stop overnight at nearly any farmer’s house and get a really good supper, but after supper he may attempt to read in the living room, and would find it impossible with the ineffective light of one candle.
Perception Is Everything
The hostess, seeing his quandary, would state: “it’s rather hard to read here evenings; we never have an additional candle except on special occasions.” These special occasions happen, perhaps, twice a year. In that way the woman saves 5, 6, or 10 dollars: but the information which may be gained from having the extra light would, naturally, far outweigh a ton of candles.
But the difficulty doesn’t end here. Feeling that she is so frugal in candles, she believes she can afford to go often to spend 20 or 30 dollars for ribbons and frills, many of which are not essential. This false belief may frequently be seen in other instances.
You find great businessmen who save old envelopes and scraps of paper. This is all OK; they might in this way save 5 or 10 dollars a year, but being so frugal (only in paper), they believe they can afford to squander time; to have expensive parties, and to drive their fancy cars. This is an illustration of “penny wise and pound foolish.” I never knew a man to succeed by applying this sort of mindset.
Sound Financial Mindset
True sound financial mindset consists in always making the profit exceed the expenditure. Wear the old clothes a bit longer if essential; give up the new pair of gloves; fix the old dress: exist on plainer food if need be; so that, under all conditions, unless some unexpected accident happens, there will be a allowance in favor of the profit.
A penny here and a dollar there saved, goes on accumulating, and in that way the desired result is accomplished. It requires some training, possibly, to achieve this mindset, but when once used to it, you’ll discover there’s more satisfaction in rational saving than in irrational spending.
Here is a formula which I advocate: I’ve found it to work a great cure for extravagance, and particularly for mistaken mindset. When you find that you’ve no surplus money at the end of the year, and yet have a great income, I advise you to take a couple of pieces of paper and mark down each item of expenditure.
Post it daily or weekly in 2 columns, one headed “essentials” or even “comforts”, and the other headed “luxuries,” and you’ll discover that the latter column will be double, or more, larger than the former. The true comforts of life cost but a small portion of what most of us may earn.
Don’t “Keep Up With The Jones”
Think of the keep up with the Jones’ attitude: One may say; “there’s a man who has an income of fifty thousand dollars annually, while I have but one thousand dollars; I knew that young man when he was poor like myself; now he’s wealthy and thinks he’s better than I am; I’ll show him that I’m as good as he is; I will go and purchase a fancy car; no, I can’t do that, but I’ll go and rent one and ride this afternoon on the same road that he does, and therefore prove to him that I’m as good as he is.”
My friend, you don’t have to do all that; you may easily prove that you are “as good as he is;” you’ve only to behave as well as he does; but you can’t make anybody feel that you’re rich as he is. Also, if you act like this, and waste your time and spend your income, you’ll remain poor, in order that you might keep up “appearances,” and, after all, deceive nobody.
You’ll not advance in the world, if your envy forces you into debt. In this country, where we believe the majority ought to rule, we brush aside that principle in reference to style, and let a handful of individuals, calling themselves the aristocracy, run up a fake standard of perfection, and in striving to rise to that standard, we perpetually keep ourselves poor; all the time grinding away for the sake of outside appearances.
Be Ready For A Rainy Day
How much more sensible to say, “We’ll regulate our expenditures by our income, and save something for a rainy day.” Individuals should be as sensible on the issue of money as on any other subject. Like movements produce like effects. You can’t accumulate a fortune by taking the road that leads to impoverishment. Those who live beyond their means, with no thought of a setback in this life, may never attain monetary independence.
Men and women used to satisfying every impulse, will find it difficult, initially, to cut back their various unnecessary expenses, and will feel it a great denial to live in a littler home than they’ve been accustomed to, with less expensive furniture, less pricy clothing, less entertainment, and additional extravagances; but, after all, if they’ll try saving a “nest-egg,” or judiciously investing, they’ll be surprised at the joy from perpetually adding to their little “bundle”.
The old suit, and the old hat, will work for another season; the water tastes better than champagne; a brisk walk will prove more stimulating than a ride in the finest auto; an evening spent playing a family game will be far more pleasant than a 50 dollar night out, when you begin to know the pleasures of saving.
Thousands of men are kept poor, and tens of thousands are made so after they’ve acquired riches, in result of living beyond their means. “Easy come, easy go,” is an old and true adage. A spirit of pridefullness and vanity, when allowed to have full sway, is the undying problem.
Many individuals, as they set out to prosper, instantly start spending for luxuries, till in a short time their expenses eat up their income, and they become ruined in their absurd attempts to maintain appearances. Don’t be that person.