Someone just stole $2 million from our business. Here’s why we’re OK.
We’re still investigating how it happened, so I can’t reveal too much detail.
How it happened and how to prevent such theft is not the point of this newsletter.
The point: the power of frugality.
The ultimate success hack
Want better health, more wealth, greater happiness, and to be better prepared to deal with getting large sums of money stolen from your business?
Spend less than you earn.
The only reason we didn’t freak out when that money got stolen is that both Charles and I are relatively frugal. We don’t have garages full of exotic cars, multi-million-dollar watch collections, or a constant need to impress others with displays of wealth. We both avoid debt.
We love nice vacations, investing in our health, and doing things for our families, but that’s where most of our spending ends.
We also try to avoid wasting money in our business.
That’s how we built up a cash cushion to withstand big, unexpected events like the one that happened.
How to improve everything with one thing
Cicero said, “Frugality includes all the other virtues.” By spending less than we could, we develop self-discipline, focus less on impressing others, and learn to manage our resources more effectively, all of which naturally cultivate virtues such as honesty and wisdom.
Here are 3 great ways to practice the ultimate hack of spending less in your business or personal life:
- Require abitrary, non-negotiable savings levels first before spending on big items (last year, we set a target to build a multi-million dollar nest egg in the company)
- Before making a large purchase, think first of the opportunity cost (what else could you do with an equivalent amount of money? By saying “yes” to this one purchase, you’re saying “no” to many more.)
- Spend on experiences over things (1. Because you’ll be happier long-term and 2. Because you have a finite amount of time, so spending on experiences is limited by your time to invest in them unlike buying house(s) full of stuff you never touch)
Before your next major purchase, consider these three items. You may still decide to buy whatever it is, but you’ll be doing so with greater intention—and you’ll be a little wiser.
On the journey with you,
Matt
P.S. Being personally frugal to better grow a business is the fourth lesson in a video I recorded covering 19 lessons that can help you achieve success faster with less pain and cost. Watch the full video here for free.