A Case Against Frugality: Why Pinching Pennies is NOT the Best Path to Wealth

by | BiggerPockets.com

After reading articles by Ben Leybovich and Elizabeth Colegrove where they discuss frugality and the mechanics behind it, I figured I’d jump into the mix with my thoughts. As a millennial, the idea of frugal living is constantly being force fed to me via articles, friends, relatives, etc. This is likely a direct result of the economic struggles this nation (and world) have experienced in recent decades. However, I’m an investor and I like to take a contrarian view to the norm and as such, I disagree with the commonly promoted frugal lifestyle.

The commonly promoted frugal lifestyle is all about cutting out anything that isn’t a necessity and never (or rarely) splurging. They say doing so will allow you to save, save, save some more, invest and eventually retire early. While there are certainly successful frugalists among us, this advice isn’t practical, as so many people indulge in the immoral activity of spending money for a nice Starbucks Latte or buying the latest and greatest iPhone. Further, some of these splurgers have still figured out how to retire early. How? They ignore the shadow frugal living advocates cast and instead focus their time and energy on building businesses that pay for their splurging plus some.

Related: You Should Take $1 Today, NOT $2 Tomorrow: A Counterpoint

Don’t get me wrong, I’m all for “living within your means” and not financing your entire lifestyle to simply keep up with the Joneses. I also like the definition of frugal: “economical in use or expenditure.” The ability to make smart or “economical” decisions in managing one’s finances is key to generating substantial wealth; however, I disagree that pinching pennies is the best way to live your life and build that substantial wealth.

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Scarcity vs. Abundance

When you hear the word “frugal,” what do you think about? Probably spending and living on less allowing you to stash more money away each month. While exhibiting control over your expenditures is important, frugality is the wrong way to think about building wealth.

People who abide by the commonly advertised frugality lifestyle see money as a scarce resource. These people tend to think money is limited and difficult to access. Frugal people spend their time devising methods to stretch their paycheck so they can achieve financial independence and retire early. Rather than learning how to earn an extra dollar, they learn how to save an extra dollar, which is only good up to a certain point, as you can’t save more dollars than you earn. Frugality teaches people how to be a miser, not a mogul.

The fact is: Money is abundant. The rich know this and spend their time developing systems to tap into said abundancy and snag a share for themselves. They don’t waste an hour figuring out how to save $10, as they know they can make $100 in that time. They don’t stand in a 30-minute line waiting for a free sandwich from Chik-Fil-A because 30 minutes of their time is not worth the $5 they’d save.

Ben gave a great example in his article – his business (clients) and tenants pay for his mortgage and provide him with passive income to pay for his lifestyle. Ben has spent his time developing systems that will earn him money so that he can live a comfortable life and splurge as he wishes. Saving is important, but building additional streams of income is likely the primary focus.

Create Additional Streams of Income

Think about this – if a person makes $50k after taxes, the most that person can ever save in any given year is $50k. They can’t save a penny more because they haven’t earned a penny more.

On the other hand, a person who is focused on building additional streams of income, whether they be passive or active, has unlimited potential in terms of the amount they can save. They can invest in their income streams to make them larger and more lucrative. The possibilities are endless for the person focused on expanding their annual income by developing diverse streams of income. 

It really isn’t difficult to create additional streams of income. By defining and leveraging your core competencies, you will find there are plenty of business opportunities to take advantage of. The main goal, as the majority on BP would agree, is to create passive income streams. By dedicating yourself to creating quality products up front, you can essentially build businesses that run themselves and require little maintenance once established (e.g. real estate, royalties, software as a service, etc.).

By focusing on creating additional streams of income, you will learn good business habits. You will be able to splurge on that Starbucks coffee without it seeming immoral or feeling depressed at the expenditure.

Best of all, creating additional streams of income diversifies your income risk. People with one income stream (e.g. W-2) are more susceptible to risk than people who have started a business or multiple businesses. If a W-2 employee gets fired, their income is gone. On the other hand, if a business owner has 100 clients, that’s 100 streams of income – talk about diversification. A business owner can also adapt to a slowing economy by moving capital around and reorganizing. This is not a luxury an employee can utilize.

It’s All About Opportunity Cost

I live in an up-and-coming area in DC and as such, I pay a hefty $1,200 per month in rent. The building is new, nice, and safe (keyword “safe”). I’m within 100 feet of a metro station, which allows me to get anywhere in the city in under 15 minutes (this also happens to be my average commute time). I’m also within 50 feet of a grocery store entrance and right around the corner from a CVS and a dry cleaner.

If I bent over backward to live a frugal lifestyle, I may move out to Northern Virginia, where I can rent a similar place for $900 per month and save an additional $300 per month. However, I’d also be burdened with an additional 1.5 hours per day in commuting alone, equating to 30 hours per month simply to save $300.

Instead, I asked myself how I can boost my income to justify the higher city apartment expense and save on the grueling commute time. So I started a side CPA practice (I have a W-2 job), as I know that I can make significantly more than $300 with the 30 extra hours I’d save living in the city apartment.

An example that may hit closer to home for BP members is whether to rehab your properties or hire the work out. Doing the work yourself saves money and may make sense towards the beginning of your investment career. However, eventually you will reach a critical point where your time simply isn’t worth the cost savings of doing your own work.

I’m in the beginning stages of my investing career, and I invest at a distance. Naturally, I have taken the oversight/manager role rather than getting into the weeds and performing the work myself. Taking this role, even early on in my investing career, provides me with significant experience in developing a business system that is scalable and applicable to many different locations, strategies, and environments. By figuring out how to develop a system that removes me from the core operations, I am able to spend my time souring deals and partners — and ultimately growing my portfolio.


Conclusion: Find a Balance

Unfortunately, many people support the frugal lifestyle, and I think it’s because frugality is the path of least resistance. It’s easier to spend less money than it is to earn more.

Related: 10 Things Only Personal Finance Nerds Would Understand

But I firmly believe that everyone reading this article has the ability to generate additional streams of substantial income. It’s very important to develop financial competence and live within your means; however, the logic promoted by frugalists is flawed – they spend too much time and energy figuring out how to save their already limited income. They employ a scarcity mindset rather than one of abundance. Finding a balance, as Elizabeth stated in her article, between saving and developing additional income streams is what it’s all about.

[Editor’s Note: We are republishing this article to get the opinions of our newer members. Let us know what you think with a comment!]

What do you think? Do you agree, or would you argue that being frugal is the most important concept in building wealth?

Leave your opinions, comments, agreements or disagreements below!

About Author

Brandon Hall

Brandon Hall is a CPA and owner of The Real Estate CPA. Brandon assists investors with Tax Strategy through customized planning and Virtual Workshops. Brandon is an active real estate investor and a Principal at Naked Capital, a capital group investing in large multi-family projects and manufactured housing. Brandon's Big 4 and personal investing experiences allow him to provide unique advice to each of his clients.


      • Brandon, Glad you qualify your premise well. Love the phrase, you cannot save what you didn’t learn. But also consider that each dollar you go out an earn comes with a premium tax as does each dollar you spend splurging. So each time you save a dollar (wisely) you save an ‘after tax’ X2 dollar. Each time we find a way to accomplish the same task for $100 less it would take me $153 of earning to replace it.

  1. After reading this article I get the impression that your assumption is that one cannot be frugal AND expand their earning potential at the same time. Your example of spending $1200/month to live close to your work rather than spending $900/month and have to commute for hours a day in my opinion is following the mindset of a frugal person.
    Warren Buffet is self-admittedly frugal, yet he was able to grow significant wealth to become one of the richest people in the world. There are plenty of other examples like this. Being frugal alone will not lead to riches but it is an important component of building wealth.

    • Brandon Hall

      Hey Paul – I wholeheartedly agree with your statement. I’m pointing out that while smart spending should be employed, it shouldn’t be the focus of one’s ability to build wealth. It promotes the scarcity mindset when money is abundant. Thanks for reading!

    • Marvin Tu

      Just want to quickly make a response to this comment when Warren Buffet and living in frugality is used in the same statement.
      Featured in a recent podcast by Brandon and Josh, I remember the guest speaker mentioned how the board members of BH ultimately persuaded Buffet to get a private jet for commuting, instead of traveling in coaches…. The members believes Buffet’s time is too valuable to take longer commutes, but from Warrent’s point of view the “investment” in purchase of jet is “unjustifiable”…

  2. Gregory Hiban

    How many times do you see a celebrity who has made tens or hundreds of millions only to declare bankruptcy. Regardless of how great your income is, unless you learn to control your expenditures, you’ll always be poor … that is the key.

    No one is saying spend all your time clipping coupons, just like you do with your investment capital, you need to find the highest and best use of your time. However, there are plenty of things you can do to keep your expenses down that cost no extra time.

    If you need a car, buy an inexpensive, reliable car for cash. If you can find a way to live somewhere that doesn’t require you to have a car, you can invest the money you’d spend on a car and also not have gas, insurance & repair costs. Unless you are big on sports, you don’t need cable, just use the Netflix, Hulu & the network sites themselves at a fraction of the cost. Get rid of the gym membership & workout around the house or in the park.

    These are all things that don’t take any extra effort, but could save the average person hundreds of dollars a month that could be used to build up the savings for a downpayment on an investment property.

  3. Mark Ferguson

    Awesome article! I always hear people talk about how awesome the millionaire next door is. I really disliked the book because it to aches you to postpone enjoyment in your life. You do have to find a balance and not be completely frugal but learn to invest as well.

    Spend money on the things that make you happy and save money on things you Dont care about. Dont spend all your money on expenditures either. Attitude had such a huge effect on success and frugailty is the opposite attitude to attract money.

    • Brandon Hall

      Hey Mark – 100% agree. These books that become famous because they appeal to the masses who have been brainwashed into thinking save save save when they should be asking “how can I expand my income?”

      Look at Reddit as a prime example – 39k people follow the “frugal” tag while only 34k people follow the “entrepreneur” tag.

      • David Pickard

        That’s hilarious. If you look at facebook as well, you will see that only 23,000 people follow the Bigger Pockets page and 23 MILLION follow Kim Kardashians page! Talk about priorities, instead of figuring out how to make yourself rich they would just rather watch someone else get more rich!

      • Ira Ashton

        I agree with your article, but I do believe frugality is a very important component of becoming wealthy. It doesn’t matter what you earn: if you can’t control your spending, you’ll always be broke. It’s funny that you dislike the Millionaire Next Door. It’s basically just statistics–not opinions. When I read it, my takeaway was that the way to build wealth included frugality, but that I should focus more on building a business as most millionaires are small business owners and entrepreneurs. I guess it’s easier for people to focus on the frugality part though because it’s within their comfort zones. Great article!

        • Branden R.

          “It’s funny that you dislike the Millionaire Next Door. It’s basically just statistics–not opinions”

          I’m also shocked he’d say that. I guess the old saying that everyone’s an expert in a bull market hold true!

  4. Cory Binsfield

    You can’t save your way to wealth. The secret is to make your money work harder than you. Saving is simply a means to create capital. Warren Buffet managed to save more money at very young age than 99% of Americans. From there, he was able to compound his savings at 20% a year over 50 years. Yet, even as a billionaire he never allowed himself to spend up to his net worth. This is the beauty of letting your capital snowball over time.

    • Brandon Hall

      Hey Cory – thanks for reading. Everyone always uses Buffet as an example, and I agree that he has done a great job living frugally, however I think he’s the exception to the norm. He invested in a time where he was in a prime position to capitalize on access to information that few others had which allowed him to rapidly expand his wealth. His getting rich likely had little to do with living frugal and more to do with his investing/business savvy mind.

      I definitely agree that you can’t save your way to wealth, otherwise everyone living frugal lives would be wealthy.

      • Charles Worth


        As someone with many years of stock market experience I can tell you Buffet did not have access to anything that someone else could not get. The point I think you are trying to make is that just being frugal did not make him wealthy but his being really talented and able to see things other did not (not because they did not have access but because he thought differently). I would point out though that Buffet had what most people who are being frugal crave which is freedom and was able to do what he wanted because of this like moving to NYC and starting his own firm.

  5. Joe Cummings

    It takes money to make money. For most people, the reality of the situation is they have to be frugal in order to acquire that initial start up capital.

    If you have nothing else good going on, that means clipping coupons and driving a older car

  6. Cindi Anderson

    While many of your points are good, you underestimate the importance of saving money by being frugal so that you have funds to invest. Sure, it is “possible” to make money starting with nothing to invest, but it is much, much more difficult and takes a much more significant time commitment, on par with having a job. The majority of people in this country who have passive income from real estate, did so not through the methods espoused by BiggerPockets, but simply through saving and then investing the those funds (often in real estate). People who, because of education and skills can get high paying jobs, can easily be better of doing that than being “full time” real estate investors.

    Having done this, and living now off passive real estate investments, I could afford daily Starbucks and iphone 6’s, but I still find them unnecessary, and don’t. And this mentality, above all else, is why I have so much. Small things add up to a lot more than you think.

      • Susan Maneck

        Exactly. The better investor one becomes the more time becomes money. I drive an older hybrid car (bought used in 2012 and now paid off) and live in a house I bought for 30K when I was looking for investment property. But I pay people to clean my house, take care of yard and when it comes to rehabbing houses I never pick up a paint brush. (more power to those who DIY) If a young man shows up at my door step (and they often do) looking for work, I can usually find him something to do (especially if they are a tenant.) The people working for me need that money far more than I do and I need more time to make money!
        I think what we need to guard against is spending money on things that don’t save us time (like Starbucks.) I’m not sure anyone becomes a successful investor until saving and investing becomes as enjoyable as spending. For myself, I never set out intending to own nine properties, but opportunities kept presenting themselves and after awhile I found this addicting.

    • Agreed. My wife and I spent years being frugal. We were both raised that way. I saved a lot of my income from my 6 figure salary. I didn’t buy Starbucks or the latest gadget. I still don’t own an iPhone or Galaxy. Those savings were put towards buying rental properties. Now I am financially independent living off that passive income stream. I’ve quit that 6 figure salary career and am probably less frugal now than I was in my 20’s and 30’s.

  7. Nobody could ever say that passing on 30 to save 5 could ever be considered frugal but as you point out it may be exactly the route that many Americans and citizens of the world may feel compelled to take. It could be that advertising campaigns of the very people helping them save have made that the sensible direction to travel even though FRUGAL would have made their own damned sandwich in the first place .
    To me spending money to make money is frugal to most of the people I know it just might be considered wild and risky but I don’t ask those people for help,I might buy lunch because we don’t have enough time to wait in that line !!

  8. serge s.

    You got it right Brandon! Instead of spending energy on pinching pennies all of our focus needs to be on growing income and net worth. After all it takes just as much energy to complain and devise “frugal” systems as it does creating cash flow. This is the difference between us and our tenants. Saving is great but unfortunately it’s not what gets is to our goals. Leverage talent and the W2 and plow cash into assets that create both income and equity.

  9. DL Martin

    Uh.. “hefty $1,200 per month in rent”??? In Downtown DC?? In my opinion, there is NOTHING decent downtown for under $2,500 per month. How can you stand to live like that?? Goodness, you only live once. Get out there and generate some additional income streams so that you don’t have to live like an animal for crying out loud.

    I think that maybe you are the one operating within a scarcity paradigm. Why would you deprive of yourself of a decent place to live?

    I just don’t understand you millennials…


    p.s. I talked to Warren Buffet this morning and ran the whole “Is Starbucks a waste of money?” thing by him. He told me that he would give me his old coffee brewer and bean grinder that he has at home sitting in his basement. He said that I could go to Walmart and buy 12 ounces of Starbucks coffee beans for $7.48 and brew it myself. He then leaned over and whispered “There are 16 ounces of coffee in a Starbucks Grande. Two ounces of coffee beans makes 84 ounces of coffee per pot, and that works out to 5.25 Grandes per pot.” He then winked at me and said, “That works out to less than .24 cents per Grande. Starbucks Coffee Shops get $1.95 per Grande!!” He ended with, “You have to get up pretty early in the morning to screw ole’ Warren on the price of a cup of coffee.”

    I thought that the moral of the story was that you can have your Starbucks and drink it too. Until I told this story to my wife.

    So My wife says, “Why are you listening to Warren about getting a good deal on coffee? Warren may be frugal, but he’s not thrifty. Why buy your Starbucks beans at Walmart for $7.48 per 12 ounces when you can buy it at Costco for $19.99 for 2.5 pounds?? It sounds to me like Warren has a habit of overpaying for his coffee beans.”

    • Brandon Hall

      Hey DL – sounds like I struck a nerve. I have a roommate and we have a 2bed 2 bath flat, in a building that was renovated and came on line Dec. 2013. It’s actually a much nicer place than any of my friends and co workers live in and has all of the amenities. Admittedly, our timing was perfect as they were looking to fill the place so they were offering deals, but we just resigned at our same rate.

      Look me up when you are in DC, more than happy to show you around. Thanks for commenting!

      • Jesse T.

        Ah I was wondering how you were close to a metro in DC for $1200/month. I think having a roommate is to some degree a frugal choice. I think a lot of times taking a cheaper location is false frugality – when factoring in the extra time it takes from being productive.

        • Brandon Hall

          Hey Jesse – I definitely make economical choices in my everyday life, and I am by no means bashing the idea of frugality. I just want people to take that time and energy they spend trying to figure out how to scrape pennies and use it to start a business, or invest in an income producing asset class.

          And I definitely agree about the false sense of frugality people may have – always need to factor in the opportunity costs.

          Thanks for reading!

      • DL Martin

        Brandon, I was just joking. : ) Mostly.

        I knew that there was “more to the story” and that you very likely lived in a very nice apartment.

        My caution to you younger guys (I’m a 50 year old guy) is that you don’t want to wake up on your 40th birthday and have high income and no net worth.

        No one here believes that having multiple income streams, building passive income streams, and increasing W2 income is a bad thing.

        We are simply pointing out that being frugal, within reason, is a good thing. When you have kids you will understand just how important it is to model these attributes for your kids. It matters.

        Keeping up with the Jones’ is a deadly trap.

        Take Care buddy

        • Brandon Hall

          Hey DL – naturally, it’s difficult to gauge one’s emotions via a comment board, so I appreciate the follow-up comment 🙂

          I am very economical in my decision making, so I completely agree with you that saving and being “frugal” is a powerful thing. The main idea of my article was to point out the cost/benefits of being frugal vs. growing an income stream. Sometimes, too much time and energy is being wasted trying to stretch an already limited income stream, so why not figure out how to create new income?

          Thanks for commenting!

  10. Scott Trench

    I think the question really comes to this:

    “What is the most efficient means of accumulating assets over the long term?”

    As a young person with relatively low assets (compared to many on BP at least), I believe that frugality is by far the most powerful way for me to initially accumulate assets to deploy and invest.

    Prior to focusing on frugality, I drove for uber on my weekend nights, tutored high school students during the week, and tried a number of other of moneyaking schemes. Sure, I might have made a few hundred extra bucks doing that, but the reality of the situation was that I was being paid a very low wage per the total effort involved. I personally found it quite difficult to make good money on the side without sacrificing large portions of my day and felt that the challenges of starting a business on the side, on top of working a full time job, was not a reasonable sacrifice to make.

    When I decided to focus on being frugal (or optimizing my lifestyle) I saw an immense increase in the amount of money I sock away each month, and at the same time had more overall time in my day to pursue my interests. This approach allowed me to save over $20,000 in just one year out of college, buy a property, and “house-hack”. While I could have achieved the same result by working harder and longer, my lifestyle would have been far more negatively impacted than it has been by simply cooking my own meals, avoiding starbucks, biking to work, and living with a roommate.

    I’m sticking with frugality for the next few years. I think it’s the most efficient way to gain initial traction and build the foundation from which to invest going forward.

    • Brandon Hall

      Good points Scott – I suppose I take the approach of figuring out how to create additional income, and if that means longer hours, I’m okay with that. Of course the cost benefit analysis should be ingrained in every decision we make, so driving for über and tutoring may not have been the best use of time as you stated.

      Either way we will both come out on top!

    • DL Martin


      I just thought of another way that your “frugality” might benefit you “going forward.”

      Any potential mate will view your frugal lifestyle and either embrace it or reject it. If they like you enough to stick around and continue to get to know you, they will learn that there is a method to your madness and that you have a purpose and an endgame. If they view you as a “cheap skate”, … then good riddance.

      This, my friend, will very likely cause many spend thrift types to de-select themselves, saving you countless headaches and heartaches.


  11. Gene Hacker

    Sure your example of waiting in line forever for a free sandwich is a waste of time…but that is an exceptional example, not a daily habit. Take a more common daily ritual…I think most people would save a lot of time making coffee at home rather than waiting in line at starbucks.

    In our consumer based society, being bombarded by commercials and ads at every front…its great that older folks are trying to teach frugal habits to younger generations. Most young people will not listen and would rather justify any consumption.

    I spend a ton of time buying stuff, its fun to come home with new “stuff”. I am better than many and we live well below our income level, but if I was more frugal I would save time in this regard.

    I am teaching my kids about investing, creating wealth, leverage, and being frugal. I think they are all important aspects of financial health. Kind of reminds me of the old take away I got from “Rich dad, poor dad”…know the difference between assets and liabilities…and buy assets, not liabilities. Timeless advise for all generations.

  12. Jered Sturm

    Brandon great article, and very good comments from everyone else. I was going to drop all my opinions on here but decided to save it for my own article!
    Keep writing. Great articles elicit disagreement. I look forward to reading your next stuff.

  13. Chad W.

    To each their own I guess. I don’t see why anyone would feel the need to make a case “against frugality.” The fact is that “stuff” doesn’t do a very good job at making us happy, at least not long term. I am sure the term “hedonic adaptation” has crossed your Facebook feed more than once if your friends are constantly sharing frugal links, right?. Emotional stuff aside, I believe that we have preserved more wealth in our budget through frugality than we have created with our current, non W2, income streams. I would like that to change soon, but a solid financial footing, free of debt and waste, is a great start. It’s kind of hard to get the ball rolling with tons of debt and a habit for new purses, luxury cars and lattes.

    Anyway, I was in my 20’s and 30’s once and I was not very good at delaying happiness either. I would really like to see if you change your tune in 10 – 20 years. 🙂

  14. Jeff S.

    My observations have been that people that love their work have a tendency to spend more. Spending is fun and if you want to look successful then you need to spend to look good. If you sell RE you need a nice car and nice clothes and want to get people in the spending mood.

    If you are one that isn’t trying to impress then you can thumb your nose at those that feel the need to look the part.

    One of my tenants just bought a motor home for 20k. It is funny because that isn’t something I feel I could afford even though I own the house he lives in.

    My favorite guy is Joe Weston, a local RE investor that kept his 160 employees working during the recession. He kept buying beat up buildings just to keep his crews busy because his downtown projects were on hold.

    He drives a VW bug and rents an apartment. He says he eats at Subway so he doesn’t have to raise rents. His RE is worth around $250,000,000. Oh yeah, his license plate says: don’t bug me.

    • Jerry Kaidor on

      That’s just silly. It reminds me of a lady I read about once who had inherited a major fortune. But she was really REALLY cheap, and was found frozen to death in her Chicago apartment.

      She had taken frugality to the point of insanity.

      Years ago, I was pretty cheap. My coworkers were buying new Benzes and BMWs, I soldiered on in my old car, and changed my own oil.

      Time passed. I now own 81 units.
      Last year, I decided I needed a minivan, and just went out and bought one. Brand new. Paid cash.

  15. Chris Newman

    Great thoughts, Brandon! I couldn’t agree more.

    I have friends who focus their time on saving money and constantly cruising the “Free” postings on CraigsList. But, they’re still usually a day late and a dollar short. Thrift makes a wonderful servant, but a terrible master.

    It’s always been my thought that if people would spend half the time making money that they spend saving it, they’d have both twice as much money and twice the time to enjoy it.

  16. Hi Brandon,

    Good article and good conversation in the comments. I hope you aren’t too discouraged by those pushing back on the importance of frugality; I know you see a role for this as well. But I think your article is perfect for someone like me — in my fifties, have always only had one income stream at a time (beyond investing in mutual funds), and thrifty to a fault. As others have pointed out, there is a benefit to being frugal, but I read your article as rightly saying that there is such a thing as over-focusing on frugality. That would be me.

    Anyhow, well done. I have a lot to learn about creating passive income streams, but the season is upon me… Thanks for the encouragement.

  17. Jordan H.

    Great article Brandon.
    I agree that frugality doesn’t make you wealthy. But the opposite of frugality isn’t building income streams. The opposite of being frugal is spending frivolously, and we all know that doesn’t make you wealthy either. Whether you call it being frugal, good budgeting, or simply living within your means, you need this discipline in order to build wealth. I am a DC resident as well and know the pain of renting in this city. I have far too many friends and coworkers paying $2000 a month for nice trendy apartments. But I choose to live in a less popular area of the city with lower rents and get by without a car. This allows me to save a decent amount each month. Frugal? I don’t think so.
    You could argue that the guy making $40,000/year is being frugal when he saves 50% of his income. But no one uses “frugal” to describe the girl who makes $1 million a year and saves half of it. Frugality is not the goal, but simply a means to an end. Whether you have $1 million or a $1,000, I believe being “frugal” is financially healthy, and necessary to increasing your wealth.

  18. Great post Brandon!

    You and I are looking at the world through the same lens my friend. It is so true that you can focus your energy on the expense side with a natural floor in how much you can cut your expenses. At some point you have have somewhere to live and something to eat.

    But when you focus on the income side of the equation the sky is the limit. I think that being frugal is a good trait to have, when it comes to making smart financial decisions.

    However, I personally find Extreme Frugality about as sustainable as FAD Diets. I don’t know a single person that has not completely binged after losing 30 lbs on a very restrictive diet.

    When you think things are too expensive, find a way to make it affordable.


  19. Nate T.

    I totally agree with your post. I also disliked the Millionaire Next Door, for the same reasons. A good alternative is Secrets of the Millionaire Mind, which echoes a lot of the sentiments from your post.

    As a person who grew up poor and was formerly overly frugal, this was a shift I had to go through personally. For penny pinchers this is great advice. However, for the majority of Americans, who generally live beyond their means, this advice is probably not helpful. If they think that by overspending they are displaying an abundance mentality, but they forget to generate the additional income streams that makes the time/income trade off possible, then they will be even worse off than before.

  20. Chris Newman

    I wanted to share an experience that I had today that’s right on point for Brandon’s thesis that over-frugality can be a losing philosophy.

    I just returned from touring a closed 52 acre dairy farm in Snohomish county, WA, about 45 minutes north of Seattle, and I was thinking about this article while inspecting.

    My first impression is that this place is BIG! You need a 4X4 truck just to go from one end to the other. But, it’s a sweet piece of mixed terrain land that includes about 1/3 mile of country road frontage, a couple of nice ponds (former manure ponds now gone to nature with many resident ducks), a boarded-up 2/1 house, a double-wide mobile home two driveways down and a bunch of sheds and outbuildings. Also, there’s reportedly preliminary platting and septic approval for 19 more homes.

    All for $280,000 (asking), in an area where unfinished building lots are worth about $55,000 each. I’ll let the reader do the math (19 X $55k), because it would sound like a lie if I stated it.

    But, I can make even more profit by not developing the lots and instead harvesting/transferring the development rights to an urban growth area. This option is part of a new resource land conservation program.

    Not only will it make at least the same profits without the trouble and cost of developing the lots, but when these rights are sold, I’ll still get to keep the entire 52 acres for myself, with no pesky neighbors or debt, plus a nice chunk of play cash. (If I can swing it, I’ll probably start building a destination bamboo plant nursery here as a retirement business – bamboo in the ground is money in the bank.)

    The important thing for this discussion is that this place wasn’t just foreclosed, it was in flat-out receivership arising from the owner’s bankruptcy. If the owners had set up a small artisan cheesery, for instance, instead of just selling bulk milk, they’d have done very well and not lost their home and livelihood.

    But, one thing that I noticed throughout the property was that everything was built as inexpensively as possible, with cheap materials that don’t last long. For instance, most of the sheds were originally sheathed with OSB “chip board” instead of honest plywood. Now, it’s all falling apart and will need to be replaced, essentially rebuilding the sheds. Some of the posts for the metal sheds should have been pressure-treated, but were obviously locally cut small trees that were rotting at the base and will need replacing. Some of the sheds have rather funky engineering, too. That kind of stuff. I haven’t even seen the inside of the house.

    There was a lot of time and work invested here, but they just pinched pennies on materials and however else they could squeeze their budget a little tighter. Needless to say, the place looks like a shanty town of its own. If there was any effort to outgrow their challenges, it’s not apparent.

    The bottom line is the the people went bankrupt and lost everything. Sad, but they did it to themselves by keeping their minds closed to new possibilities beyond pinching their pennies even harder. I can’t help but believe that it was their too-frugal life philosophy was what ultimately did them in, instead of looking for a way to grow, like adding value to their milk by turning it into high-priced artisan cheese.

    One moral here for me, again, is that thrift makes a wonderful servant, but a terrible master. Another is that, in the long run, quality doesn’t cost, it pays.

    BTW, since this is a real estate investment education community, I’ll share that I’m planning to offer the Receiver’s agents “double your asking price, if you can work with me.” This will be with no cash out of my pocket.

    One of the more difficult challenges with the development rights transfer program is that the mortgage- holder needs to release the development rights, which puts a permanent “conservation easement” on the property’s title to prevent all further residential development. So, they’ll need to agree to release their interest (with proper equity protection etc.) and let me sell the credits to urban developers. With the first $280k from sales, they release title to me and I own the land. The next $280k also goes to them, and I keep the rest, which should be around equal to the doubled price that I paid. Everyone wins.

    The worst that can happen is that they’ll turn me down, in which case I’ll make a similar offer for an investor through the BP Marketplace. It will cost me more profits, but I’ll still end up well to the good.

    The only way that this could be a better deal would be if I had the $280k already and didn’t have to share the development rights harvest. I have more deals like this lined up, though, including farmland of my own, so it will get even better next time.

    If you want to follow the progress of this deal, set “Snohomish” as one of your key words.

    Or, Follow me. Questions and ideas are always welcomed.

  21. Steve Ramer

    Wow, I just found this, and you wrote it back in April?! Anyway, great article! I wanted to share my experience, because it’s something you might run into someday when you have a family. You’re miles ahead of me in your investing experience though!

    I have a wife and four kids. I had no buy and hold real estate until last year. Here’s why that changed. Last year was really tough on us. We had two kids just finishing up phase one of the orthodontic treatment, and 5(!) visits to the ER. I had some Health Reimbursement Account savings built up over the years I’ve been with my employer, but it wasn’t nearly enough to cover all the bills. While I did have savings in other places like an Employee Stock Purchase Plan (yes, I have a 401(K), but with younger kids I need more liquidity, so mostly investing in that ESPP now), I decided to defer the bill payments rather than pay them all off immediately.

    Using that time, I started looking for locations I could invest in that would provide me with some positive cash flow if I bought with the savings I had. Luckily I had enough to pay all cash, and the guy I bought from knew someone who was willing to offer owner financing on another property that also cash flows well. I bought these two properties, already tenant occupied, and used the money from that to pay off the hospital bills. Now, instead of being out all that extra money with nothing to show for it, I’m fully paid up and still have cash flow. There have already been ups and downs with those investments, but all in all it has been a good learning experience.

    So for me, even though I had been researching real estate investing most of my adult life, it took a major disastrous event for me to realize I needed to take action. To purchase assets rather than only save money. That’s when the definition of frugality shifted for me. There may come a time when you are forced to live outside your means/W2 income, and if you haven’t been building passive income, that may not be possible. So there–I’m living proof that saving and investing in passive income complement each other nicely. Both fit well within the definition of “frugal.”

    I wonder if it’s like this for most people? Do they just sit on the sidelines until something happens because of fear that something may go wrong? Admittedly that was my problem, and things did go wrong, but not enough so that I wouldn’t do it all over again. I’d just start sooner.

    I’m now looking forward to using the equity in those properties to purchase more sensible cash flowing assets. Now if I can just figure out how to get that portfolio loan…

    • Brandon Hall

      Hey Steve – awesome story! Sorry for just now replying too, our email alerts have been disabled for some odd reason.

      Do people sit on the sideline until they are forced to take action? Yes I’d say this is true for the majority of people. But even then, only the smart ones DO take action. I know plenty of people who simply wallow in their self-pity. It’s sad because opportunities are literally all around us. You just have to reach out and take what’s yours, and it sounds like you have done an excellent job at that.

      Best of luck to you and your future endeavors!

    • Susan Maneck

      Hey Steve,

      I got into investing for precisely the same reason, financial difficulties. I was fifty two when the recession began and found I now had more debts than assets. Fortunately I got a consulting job right around that time which brought in extra income. I used that income to plow back into the stock market and when I felt it had full recovered, began to buy real estate. I’ll be turning 61 in a few days and I’m happy to say I’m in a financial position today where continuing to work is optional and unemployment would not be a tragedy.

  22. Jeff M.

    Hi Brandon:

    As a frugal person this is a helpful article. I sometimes wait line at Home Depot to save a few bucks, but this is when I enjoy it or am learning something (usually the same thing). Lately I have been spending more time in acquisition mode while living well within my means. This article helps guys like me, because my discipline of frugality, helpful though it was, can become an anchor on growth once a certain point is reached. As you and others say, it is all about knowing yourself, balance, and enjoying the ride. None of us are taking any of this stuff with us when we go. Thanks.

  23. Brandon Phillips

    To me Frugality = Opportunity cost. Driving 10 miles to save $.04 on gas is stupid, not frugal. Commuting 2hrs a day to save a few bucks on rent is stupid, not frugal. I look at every purchase and decision and wonder if there is a better way. Is waiting in line for 4 hours on black friday to save $40 bucks a good decision, not if you can make more money in that same time frame; or just not buy the thing in the first place.

    A good example in my life that relates to being Frugal and to Real Estate is that I recently hired a property manager to run a 4-plex about 40 minutes from my house. In the first 9 months I made, or saved depending on how you think of it, about $1400 by managing the property split with my partner. After I added up my driving time, time spent on the phone with the terrible tenants that came with the property, time spent finding new tenants and time spent on maintenance I figured out I was making around $10/hr at best. I hired the management company and now I freed up a few extra hours per week to find more properties.

    To me that is Frugal.

  24. Cindi Anderson

    Brandon Phillips: While I agree those examples are stupid, I object to your use of the word frugal to describe them. The dictionary definition of Frugal is “the quality of being economical with money or food.” The definitions for economical are “giving good VALUE or service IN RELATION to the amount of money, time, or effort SP{ENT” and “careful not to WASTE money or resources.” None of those definitions apply to the things you wrote about. Those are simply bad uses of time and money..

    Perhaps it’s an interesting note on our society that people like yourself equate frugality with stupidity, when in fact it is just about the exact opposite. It is the SMART use of resources.

  25. I whole-heartedly agree with this. Thank you for sharing!! Frugality only gets you so far, and, quite frankly, life is short and should be enjoyed! I love Starbucks coffee and decorating my home, for example. I would much rather earn more money to justify these expenses (and save even more since I’m earning more!) than never experience the things that I like! Of course, there are plenty of activities that are free, but there are also plenty that aren’t. Why not have both!

  26. Vanessa Vandervalk

    Great article and great comments. I was just speaking with someone who has the frugality mindset, and I was trying to convince her that she could make more money and have an easier life by doing something that we were discussing. She was too focused on counting the dollars she would be spending to see the possibilities. I don’t know how to explain to her that her mindset is limiting her resources and her ability to provide for her family. I may send her this article. It doesn’t mean you should be wasteful or impractical in your spending, but where you focus your time and energy over the long run is the key. Thanks!

  27. “if a person makes $50k after taxes, the most that person can ever save in any given year is $50k. They can’t save a penny more because they haven’t earned a penny more.”

    False. If a person makes $50k after taxes when they’re 25 years old, the most they can ever save in that year is $748,723 assuming a 7% rate of return if they withdraw it at age 65.

  28. Cory Binsfield

    Too many people are tripping over dollars trying to pick pennies. I happily spend a fortune on Starbucks while analyzing deals to increase my net worth. I’d rather focus on the big drivers of wealth and the freedom that it entails then constantly looking for ways to scrimp and save. The big drivers of wealth are prudently leveraging assets, people and resources. This is the essence of Warren Buffet. He leverages the insurance float from his vast empire and invests the money in private companies with outstanding attributes. He doesn’t skimp on life’s simple pleasures as seen by his penchant for steaks at Gorat’s steak house and cherry Cokes at Dairy Queen.

    • Charles Terrizzi

      For Buffett, those steaks and cokes are extremely frugal. Most Americans would have an entourage cooking and taking care of them at that level of worth. Buffett is frugal to the extreme if you really look at him.

      French press is way better than Starbucks, but in a pinch I’ll take em.

  29. Charles Terrizzi

    Most millionaires are frugal, according to one study. “The Millionaire Next door” is a book that expounds that principle.

    I think Americans (and real estate investors in particular) are trained and trained to use leverage. Some own $4 million in investment property (well not them, but the bank) and don’t have any cash in the bank. This to me is not wise. Yet this is held up as the pinnacle of success.

    Not sure we need to encourage a lack of frugality. Frugality is not synonymous with stupidity or miserly either

    Let’s talk net worth, then let’s see how free your life is, and let’s see what good you do with your wealth.

  30. Rob Letterman

    Frugality in and of itself won’t bring weath, What brings wealth is frugality WITH a high savings rate. If you can save 70% of your income you’ll be able to retire in 10 years. It isn’t necessary to have a super successful business or make millions in real estate. You just need a decent income a high savings rate and time and you be wealthy enough to have to never work again.


  31. Darnell Kramer

    I like what you wrote, and wanted to add that the book I am reading now is well written and eloquently illustrates the point.

    Killing Sacred Cows
    by Garret Gunderson.

    He writes about the scarcity vs abundance mind set. He does a great job of taking the talking points in this article and really bringing an alternative view point to the thoughts many of us promote, without actually thinking about them.

    I think it is a great read for anyone that is here on BP. Anyone that is really changing their lives and contribution to society and others.

    Great Article.

  32. Kurt K.

    “Don’t get me wrong, I’m all for “living within your means” and not financing your entire lifestyle to simply keep up with the Joneses. I also like the definition of frugal: “economical in use or expenditure.” The ability to make smart or “economical” decisions in managing one’s finances is key to generating substantial wealth; however, I disagree that pinching pennies is the best way to live your life and build that substantial wealth.”

    Frugality isn’t “penny pinching” being cheap nor miserly. Being frugal is simply what the definition says.
    Frugality and thriftiness ARE the way to wealth.
    Warren Buffett’s license plate was “thrifty” for many years (maybe still is).

  33. Connor Dunham

    Too many comments(tldr)! Here is another one to stoke the fire.
    There are two measures I track when trying to build wealth: savings rate (percentage of gross income) and net worth growth over time. I would say: optimize your frugality first by tracking savings rate. This can be down over about 6 months. Once you’ve reached a point of diminishing returns on your time invested (not much effect on your savings rate), then concentrate on maximizing your net worth gain per month (or any unit of time that makes sense) while keeping the same level of expenses.

  34. Kahnica Cole

    I really enjoyed this article. I think many of us get into real estate investing for financial freedom. What freedom means to each individual is different. I understand frugality to a point, however, why do what we do in investing to just to minimize the enjoyment in this one life that we have? Stop telling yourself, “I can’t have this because…” Make more money, and figure out how to have the “this” you want. Let’s not put ourselves in a box, but learn how to spend money the smart way, while sometimes reaching outside that box. Great article! Thank you for it!

  35. eally enjoyed this article. I think many of us get into real estate investing for financial freedom. What freedom means to each individual is different. I understand frugality to a point, however, why do what we do in investing to just to minimize the enjoyment in this one life that we have? Stop telling yourself, “I can’t have this because…” Make more money, and figure out how to have the “this” you want. Let’s not put ourselves in a box, but learn how to spend money the smart way, while sometimes reaching outside that box. Great article! Thank you for it!

  36. stan pace

    I agree that simply saving money, is not the wisest way to increase your wealth, however it is a necessity if you are not fortunate enough to be able to start with money. I am also a firm believer in never stop consistently saving a portion.
    Takes money to make money/invest. I find frugality as simply spending less than goes out. It’s relative to each persons income. some people, frugality might consist of not purchasing expensive cell phones yet another’s might be not purchasing an expensive yacht.
    The key I have found is spend less than coming in and never stop the simple process. Invest cautiously a portion of the money being saved and the geometric growth of wealth production starts.
    The unknown items that occur, can take away wealth quickly if not having savings to sustain through those things.
    As my wealth has increased over time, the more issues that need to be prepared for have increased also.
    My recommendation, spend less than you make, never stop, invest a portion and your amount you can spend on other pleasures, increases also.

  37. Erik Justen

    Frugality can be the cornerstone of wealth and asset building. If you are frugal even when you have money you constantly keep more of your dollars to invest or build a business. Not to pick on Starbucks drinkers, but had you decided to save the money on the coffee and buy Starbucks stock instead… lets see a $20 weekly habit would have bought (in 2011) around 4 shares per month, or 48 shares that year. Given that SBUX has increased 150% since 2011, your loss was actually almost $2800 (profit) just for that year alone. Now if you figure those numbers out over 5 years, you’d have nearly 250 shares by now, with a value of $14000.

    While I don’t think extreme frugality is worth the effort- I agree it is much easier to make money- any frivolous spending, overspending or missed opportunity to be frugal is money that is unavailable for investment in stocks, real estate or any other asset.

  38. Jerome Hanson

    I started from the top of the comments even though it’s over a year old and am astonished by some of the responses…. “The Millionaire Next Door” shouldn’t be thrown to the side just because some guy writes an article. While Brandon’s points are to be taken seriously, Thomas Stanley, Phd and William Danko Phd ain’t friggin slouches. They are researchers who spent years compiling the data and personal stories which laid out exactly how the majority of millionaires in the United States got what they got and build on what they keep. Clearly their findings showed that a huge part of the average millionaire’s tactics included being a bit frugal. I’m not saying Brandon Hall is wrong… I’m saying that just because he wrote this article doesn’t mean the path he laid out is actually the clearest and quickest.

    • Brandon Hall

      I don’t think anyone will argue with you. I can’t stand people who blindly follow anything, hence the creation of this article (I think many people follow frugal tactics blindly and that narrows their perspective to what else is out there).

      I also stated that a balance approach should be taken in my conclusion.

  39. Kyle Scholnick

    Taking a contrarian view because everyone is pushing frugality? Isn’t that like saying, “I’m going to take a contrarian view here since everyone is pushing this health food and exercise crap down my throat, I’m eating oreos all day and never exercising, haha!”

    But seriously, being a contrarian isn’t always a good thing…In many instances like in investing it is…but sometimes people are all doing something because its the right thing to do, such as the playfully sarcastic comment I made above about eating well and exercising. Frugality would fall into that category.

    So many things to say about this, but will be as brief as possible:

    1. When did anyone say frugality is the ONLY thing you have to do? It is an ESSENTIAL contributor to wealth. You absolutely need to start with this and then can start focusing on other things like building wealth. Not sure how people spend endless amounts of time on frugality…it is pretty simple…and once you are done with that, you can focus on the others. Building wealth and frugality is not an either or thing, they are compliments to each other…You need both.

    2. Even if you only did focus on frugality, that has been a time tested and proven way to wealth, so you can’t knock it. There are countless bloggers that have done it, books written about it, plus just simple common sense and math can show you anyone can do it. But I have seen it first hand. My grandparents who were very frugal and never made much were able to retire early and live the life of their dreams because of frugality. I have a few of my friends who without even planning it were saving 60% of there income and all of a sudden they are 34 years old now and have over a million dollars in the bank and it wasn’t very hard.

    3. Although it is easy to write articles and stand on a soap box to the masses to just, “Increase your income” and “build wealth streams”…it is clearly harder than it seems. Whereas frugality, literally anyone can do it.

    4. Lastly, this is a much more philosophical point, but frugality and scarcity is not the same. Frugality is about minimizing and simplifying your life which has been shown to be the key to happiness, not more crap. It is a state of mind and unfortunately the people who knock it (not saying you are Brandon) will never understand its true powers of freedom. We will all die…Our time is limited on this earth and you can’t take any of this crap with you. Frugality is about figuring out what is important to you and focusing on that.

    Anyway, I appreciate the general message the article is trying to convey.

    • Brandon Hall

      I’m not following your example with the Oreos as that is clearly an unhealthy option. Is stating that people should spend their time and energy building additional income streams unhealthy?

      In my conclusion, I state that a balance approached is necessary. I think swinging to the extreme of either side will leave to failure.

  40. It comes down to good capital allocation decisions of all types, in relation to the law of substitution for a point in time. Part art and part science, a good investor will spend a lifetime to learn and perfect within the framework of their personality and abilities.

  41. Deanna Opgenort

    I think the term “frugal” is a term that gets thrown around without a real definition.
    If I don’t spend as much on lifestyle as I COULD, am I a miser, frugal or just prudent…and who gets to make that decision?
    Example; I choose to drive a Prius (with a spare Camry). Based on my income/credit rating a Toyota dealer would be delighted to sell me a new car (actually, so would the Mercedes or Caddy dealer. Lotus or Tesla sales guys would let me admire the cars, but not test drive them).
    So. If my current car(s) are safe & comfortable to drive, am I being a miser, frugal or just living within my means if I keep my 10 &12 year old Toyotas while being able to afford “more” car? Does that change if my income doubles next year, and if so why? (the two Toyotas are both safe, well-maintained & easily good for another 100 & 200k miles before major repairs). If I were making $500k two years from now would I be beyond the pale for staying satisfied with those same two Toyotas (after all, one has some dents, the other has some scratches on the bumper!). What if I make $1million per year – is there something wrong with me if I continue to live in my same safe older neighborhood, & don’t buy the new luxury car (or $900 shoes, a $1,200 purse, $2k watch, , or that really cool $8k OLED TV I saw at Fryes)?
    Let’s be honest -there isn’t any thing that I NEED I don’t already have (food, shelter, clothing, health care – all covered. Income isn’t a limiting factor for any of these basics for me). While there are a few things I would LIKE to own (more property), there are few consumer items I could buy would make me any happier much past the initial purchase. Ever notice how many $$$ sailboats are sitting tied at the dock on a beautiful sunny wind-perfect-for-sailing weekend? How many fishing boats & deluxe RVs don’t leave the side yard or driveway for years?

  42. Wane Zaza

    Really enjoyed it, different viewpoint than the norm. Also I agree with many that said they like the part in which you state you cannot save more than you earn. Too true. I also hate the feeling of guilt tripping myself for wanting a $5 latte in the morning.

  43. I find your logic confusing. What is about about living frugally and developing additional streams of income that you find mutually exclusive? You seem to assume that frugality is synonymous with wasting time.
    It takes FAR less time to decide NOT to buy a new phone than to go out and buy it, not to mention the week or so of futzing around with it that follows. How long does it take to go to Starbucks (mine ALWAYS has a line in the morning) vs making coffee at home…?

    I agree with you about coupon clipping. It’s a waste of time — but I don’t consider it “frugal” because most of the coupons are for junk we don’t need anyway (try finding a coupon for eggs or milk!) It’s a hobby and some people carry it to extremes. But that’s another bogus argument. Driving a 10 year old car and bringing your lunch to work — that’s a great way to free up money for investing AND save you a bunch of time.

    And your example about the apartment in DC vs Virginia, doesn’t hold water at all. Some who lives frugally would be unlikely to not consider the cost of commuting when deciding where to live. Duh.

    Do the math. You will get to your goal faster and more reliably if you can invest more in developing those income streams early on. Right?

    No one is holding a gun to your head saying you can’t have that new car or a latte every morning. But I rather object to you trying to justify self-indulgence as great financial decision because it frees up time to focus on business. This is not a reasonable argument — or a responsible post.

    • Brandon Hall

      While I certainly appreciate the time you spent to write this comment, I think it’s a bit far reaching. If you re-read the opening paragraph, you’ll see that I’m definitely a proponent of living within your means. What I’m not a proponent of, is focusing time and energy on figuring out how to pinch every last penny while you could be spending that time and energy on building additional income steams.

      I live within my means myself, but I’m not going to feel bad about buying a Starbucks latte like some frugalists do.

  44. Great article. I was raised to do everything myself. And as a wage earner, that made sense. If you make say $100K per year, that’s about $50 per hour. But maybe only $30 after state and fed taxes. So if you are looking at a non-deductible expense that costs you more than $30 per hour, a wage earner should probably do it himself. Assuming a wage earner is all they want to be.

    But if you want to be a business owner/investor, I quickly learned this is the WRONG way of thinking. You need to curtail expenses, absolutely. But real estate investing, done the right way, pays more like $500 per hour. It’s a good thing I have very limited mechanical and rehab skills. Otherwise I would have bought about 5 houses in my career, instead of 600+

  45. Love it! I think both sides are saying the same thing, just from different perspectives. And I happen to like THIS perspective, better! I spent more than I made in my younger years and spent several years getting out of debt – good lesson! So I completely agree with living within your means, but I think what Brandon is saying is that frugal defined as “economical with regard to money or food” can yield a myriad of results when you add more income streams. Twenty years after recovering from my overwhelming debt I still live within my means, but my means are now significantly better!!

  46. Laura posluszny


    Thanks for your article! I am a 24 yo Newbie REI. I too lend toward adding or maximizing income streams as opposed to pinching pennies. I bought first house last yr that my garage apt tenant and my roommate cover majority of mortgage, I nanny 6-8 hours most weeks for $30/hr, and I’m closing on my second rental property this month. In my full time job-I choose to work night shift because I make $10,000 more than peers just by working at a different time.
    I drive same used car from College and rarely get new clothes. But, what are your thoughts on graduate school? I have a desire to go out of state to school to be a nurse practitioner. My cost would be about $50,000 and 4 years. I’d be able to work full to part time during most. From your article I am conflicted on if this is a strategy that spending a dollar makes a dollar or if this is money I could be using to start a business/buy more houses/etc.
    Thanks again for your article. I really appreciate it!

  47. Amit Patel

    Wow.. controversial topic. I feel like it’s critical to save a LOT and be very FRUGAL early on and definitely live in the crappy apartment. This gets you your BANKROLL. Once you do have bankroll generating money, then you can slowly start enjoying the things you want (within reason and based on your income/net worth level).

    The risk is that if you grew up with a “frugal” mentality, you hate spending and it takes a while to actually let that go. This is especially important when you can afford nicer things/experiences and you want some of them for their own sake (rather than just having them for status, which never brings happiness). I mean the whole point of having money is to be able to give you the freedom to live life the way you want. So if you never use it on experiences (vacations, etc.) or some of things you really enjoy, then there is no point. Also, in my experience, the people that grew up very frugal and ended up dong well financially erred so miuch on the side of safety and didn’t enjoy the fruits of their labor. Most of them work work work and accumulate more but very few understand that as you get older, time becomes your scarcest asset.

  48. George E.

    There’s always at least two sides to an issue. Well said! It certainly has given me a new set of glasses to view my position in. Why ask: how much do I have to save to afford something VS how can I increase my revenue stream to enable that purchase. Awesome and exciting potentials!!!

  49. Joshua Locke

    Great article! I grew up in a very frugal family: I had 4 brothers, made about $1 week in allowance, and had to buy my own toys if I wanted the new Batman action figure if it wasn’t close to my birthday or Christmas. When I was 12 my Dad started a lawn service for me and the next brother who was old enough to push a mower. We learned the value of a dollar really fast, but frugality/scarcity was still engrained in us I think because that was engrained into my Dad from his parents. Looking back, I notice that I started picking up on prosperity principles as a young kid… pushing for more yards to do… and learning that time is money and that I was willing to pay a little more for something that saved me time because I knew what I was worth per hour I was cutting grass. I am much more concerned with creating as many income streams as possible now, since I better understand prosperity rather than just saving money. That said, my wife and I still probably save a lot more money than the average Joe.

  50. David Fisher

    Thank you for the post! This is something I’ve been thinking a lot about lately since I’ve been more on frugal side of finances, which I think is important to learn but in the same time I think it’s more important to be frugal with your time. In other words having discipline to manage time is more important since there is so much opportunity to have more cash flow, if you learn how to manage your time. Thanks for putting my thoughts into words!

  51. Alex Romoser

    Favorite quote from the above blog article: “It’s easier to spend less money than it is to earn more.” That’s where I’m at right now, trying to fight that natural tendency as I go out and earn more instead of only spending less. Thanks for your words Brandon.

  52. Paul Coelho

    An old saying, “You have to spend money to make money.” Very true. But be sure your spend is less than you make. That’s being frugal. If your “spend” goes above your “make” all the time or is a matter of lifestyle, you’re in trouble. “Buy low, sell high”. Another frugal concept. If you waste, it’s wasted and you can’t make on waste. I’ve worked with clients that don’t think they can afford to buy the investment property because they “don’t make enough”. Well, in reality as soon as they put a name to every dollar they spend, they realize a $6 daily cup of coffee is unnecessary. That can turn into a $2 cup of coffee and the $4 can go towards better wealth. That’s $120 dollars a month to go towards increased wealth if put towards something that return you more than you spend over time. Let’s not dis frugality completely. Keep in mind there could be unnecessary spending even when treating yourself well. Don’t get me wrong, if you hold on to money with a closed hand, you will never receive any. Hold money with an open hand so that the open hand can both give money as well as receive money. Just do it with wisdom.

  53. Kory MacKinnon

    Great article Brandon! Your correct that too many people look at how money relates to their life with a scarcity mindset, and they don’t put a value on their time. I’m all about saving $ and being thrifty when a person can. Like many people I don’t like to be wasteful. I also value my time at $100-250 per hour so I regularly hire things out, and focus on increasing the bottom line of our portfolio so we can afford the vacations and splurging that top 2-5% work very hard for. You can be frugal and never get a chance to enjoy the money you are saving. I’ve lost too many friends in their 40’s and 50’s who were waiting to check things off their bucket list. Make a plan instead to earn more income (extra jobs, extra businesses, extra properties, raise rents annually, etc.) to afford the lifestyle you want. Warren Buffet grew up in a different era. Today it is about the velocity of money, proper leverage of time and you hit the balance of the topic on the nail head. Cheers!

  54. David Neilson

    Thanks for writing that article Brandon. I couldn’t agree more and have believed whole heartedly that there is always more money to be made in one way or another. If you live without because it’s too expensive instead of trying to find a way to afford by generating additional income streams you may be missing more than just opportunities.

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