Everyday Economics For People, Section I Conclusion

The most important aspect of becoming wealthy is mastering yourself. Some of us were lucky to have been programmed well by our parents and society to predisposition us for wealth accumulation habits. Others of us were not given — or rejected — those same advantages. Thankfully, childhood programming can be unlearned and replaced. After a relatively short period of mental discipline establishing a new set of heuristics, correct thinking about money is fairly automatic.

The program to follow is relatively simple:

#1: Never pay for consumption on credit

#2: Never rent something you are going to use every day

#3: Never buy something durable you will only use for a short period

#4: Never pay more if you could pay less

#5: Never pay for more than you need

#6: Never pay for somebody to do something you could do yourself

#7: Never buy anything you didn’t already plan to buy

#8: Never trust an advertiser’s description of their own prices

Time management is a bit more complex, and in many ways creates contradictions between the above heuristics. #6, for example, requires that you honestly evaluate how much time you have available for something if you are going to do it before you decide whether it is worth paying somebody else to. As another example, too much time invested in researching prices as per #8 could cut into productive time. Even refusing to pay for “more than you need” could mean wasting a lot of time working with barely-sufficient materials. Some interpretive thought will be required for maximum optimization. However, the bias from these heuristics will be to reduce expenses to a level at which savings become automatic.

I just want to emphasize a few more things before we move on to the next section. Wealth grows cumulatively and exponentially, so your first 10 years of growth will probably not look or feel like much. However, the sooner you get through those first 10 slow years, the sooner you get to the much faster years of growth that follow. You cannot skip the slow years except by living as a spartan or making a huge income, so try to get them done early if those things aren’t reasonable options for you.

You were probably not born into a good context for becoming wealthy. Most people are born into systemic factors that lock them into their socioeconomic status, preventing social mobility. If you weren’t born into wealth, you’re going to have to move away from or behave very culturally differently from those others around you, if you want to become wealthy. It’s easier to save money if you can easily afford to make rent feed yourself. What changes do you need to make to yourself or your situation to get to that point?

Lastly, you’ll be consuming less as you become wealthier. It seems like it should be the opposite — as you become wealthier, you should have more money to spend, so you should be spending more! That’s not how it works, unless you have a huge income so that you can spend $100k per year and still save on top of that! Being wealthy actually means being frugal and careful with your money, not buying whatever you want. “What’s the point of being wealthy, then, if you don’t even get to buy stuff?” you might be asking. Well, there are two kinds of purchases. There are consumptive purchases and there are investments. Being wealthy means you try to purchase only investments rather than consumptive items. As it happens, there are many investments that also have consumptive value! For example, very fancy clothing, cars, houses, tools, art — these are all actually not a consumption of wealth so much as a conversion of wealth from one form to another form. When you are sufficiently wealthy to afford things with resale value, then your consumption can take on a higher level of quality and it becomes essentially free or even profitable.

That’s the game, folks. You’re being played by rich people who are living literally for free off of their wealth by making you poor folks hand over your wealth for cheap consumable crap. That’s the whole game! You can start playing it their way, too. Don’t hand over your wealth, stop consuming your own worth, and invest in yourself and in financial opportunities!

Section I: Building Wealth Through Financial Habits

Chapter 1: Credit and Interest Chapter 2: Rent and Ownership Chapter 3: Budgeting & Reducing Expenses Chapter 4: Bargain Shopping Chapter 5: Optimizing How You Allocate Your Productive Time Section I Conclusion

Section II: Taking Advantage of Factors Bigger Than Oneself

Chapter 6: Crash Course In Microeconomics Chapter 7: Crash Couse in Macroeconomics Chapter 8: Why Businesses Sometimes Sell At A Loss Chapter 9: You, The Savvy Consumer Chapter 10: You, The Savvy Producer