Don’t try to save a dollar at the expense of tenfold value (you may not see, initially.)
“Trying to save a dollar at the expense of extraordinary value is one of the worst financial decisions anybody can make.
Cut expenses.
Not valuable investments yielding high returns.”
-Ray Zingler on Twitter
I am no financial guru, not even close. Thank God there are people in the world who are far smarter than me who I can invest in.
Nor is it my job, duty, or business to tell, understand, or encourage anyone how to invest or expense their own money.
Live and let live is a pretty sound, simple principle that I think works out best for most scenarios in life.
Not to make this a discussion about economics, but it is important to note the differences between investments and expenses, at least fundamentally.
A (good) investment is an appreciating asset that yields a quality return over time.
Example: A house purchased in a thriving area in 2012 that is maintained and upgraded over time will likely sell for a lot more in 2028 (barring market quality) than what one purchased it for initially.
An expense is a depreciating asset that yields no return over time. They are costs you cannot get back.
Example: Think renting a home or buying a jet ski. You’re obviously not going to get any return on those expenses.
Now don’t get me wrong some expenses are absolutely necessary, despite the lack of return on them, and my examples are pretty much common knowledge, but I’ll get to the point of the message.
When the grey area of “investment vs expense” creeps in to most consumers’ minds, they often automatically assume that ‘thing’ is an expense.
To stay in my lane, I’ll use my field of Private S&C Training, for example.
On the surface there are costs involved and there isn’t a pay out on the back end, leading one to believe training is an expense.
But is there a payout?
What if that training helps a child improve their confidence and self-worth, aiding in their employability as an adult?
What if that training helps them find purpose? Helps them to make better decisions? What if it helps them stay out of trouble and stay mentally physically healthier?
What if that training helps and athlete earn a scholarship?
Those are just a few examples (I could name 100 more) that yield returns that are nearly unquantifiable in value.
Know the real difference between investments and expenses.
Be wise where you make you cuts.
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