SIZ Education | Attitudes and Habits of Millionaires | Part3: Controlling and Eliminating Expenses
Hey everybody, let's learn some of the amazing and proven tactics to becoming rich, attitudes of rich and successful people that have helped many other people become successful.
I've covered this series in three parts. Click the links below to find amazing information about becoming rich
This stuff will help get you hired, get you promoted, and help you start a business. So if that's what you're in to help you grow a business and help you to manage people, money, and projects, let's dive in.
Spending is Death
Don't spend money unless you have absolutely no alternative. This will require a little bit of an explanation, but this is so idiotically simple and obvious at face value for most people.
You'd be surprised that how many people don't really understand this concept and, on top of that, don't have the discipline to really apply it to their personal life and their professional life.
I'm going to talk about three things briefly.
How this applies to personal finances,
How it applies to starting a business if that's what you're into,
And how it applies to working at a day job if you work in a large enterprise or you work in a medium-sized business, you have a nine to the five-day job.
How it applies to that?
Let's dive into...
How this applies to personal finances
Impact of Controlling and Eliminating Expenses to Personal Finances
From personal finances, I think everyone understands this concept. Your life is a balancing act; you got money coming in and money going out.
And it doesn't matter how much money you make in absolute terms as long as you have more money coming in than what you're spending. Because if that's the case, then it's sustainable, and you stand a chance of coming out on top in the end. So that's great.
But, if you're spending more money than you're earning or that's coming in, then it's unsustainable, and it's not going to end well unless something changes.
Imagine you're younger, get your first career job, celebrate you go out, and buy yourself a giant house. Because you got a job now to afford it, and you have to make mortgage payments, pay utilities every month and pay for the repair and maintenance of the house.
One day you find it needs a new roof or something, and you can't defer that. So you need to spend money on that now to solve the problem. So this is actually the worst kind of expense where you've created for yourself a bunch of mandatory recurring expenses. It's like creating a little black hole that sucks up all your cash, whatever money you make. It seems to get siphoned off into that black hole that you've created.
And then if you go out and you buy yourself a car, you’ll have to make car payments and pay for maintenance and all this you've just created another black hole.
So if that's what you're doing, it's pretty hard to be successful and to have a lot of money because no matter how much money you make, you're just siphoning it off into all these expenses.
Impact of Controlling and Eliminating Expenses to Business Finances
Maybe you've been curious about starting a business, or it's something you're going to do someday, or maybe something you want to do very soon. This is going to be hopefully interesting to you.
The entrepreneurs actually tend to be successful; They're the ones that don't do; they're the ones that are lean and mean, and they can get started without really needing a ton of extra stuff. so they don't need a lot of money right upfront.
You probably have two things; a phone or a computer and access to the internet. So many people can take those two things you've got, and without using any more knowledge than what you have, they can start making money.
Using the device, the internet, and the knowledge you already have, you can use those three things and start generating income.
This is perfectly possible to do. But, first, you have to understand people, understand how to create value, and get started. Then, you have revenue pouring in.
Any fool can spend money, and there's a lot of fools that spend money. You probably see them every day if you work in a day job, in a large enterprise, in a medium-sized business; you probably see many people they can spend money; they can spend the company's money or on behalf of the company.
And in fact, that's how they solve a lot of problems. They just throw money at the problem. But not a lot of people can make it.
What type of people can make money in NO time?
The people that tend to be able to make money are the ones that don't require to spend a ton of it. and this pays off for multiple reasons:
Less money to get started makes more profits
The obvious reason is that if you don't need a ton of money to get started, you can be profitable a lot sooner. But, on the other hand, if you needed a million dollars to get started, you're going to have to make way more than a million dollars to hope to be profitable.
Money is a substitute for a smart brain
The other reason is that money is often a substitute for brains, for thinking. with a little bit of thinking a lot of times, we can eliminate the need to spend a lot of money. not a lot of people do this because they don't want to think;) they skip that step. They just spend money, but many management initiatives, things like lean manufacturing and stuff it's based on this.
How can we get better at something? How can we make more money without spending any more money? And it doesn't involve buying a bunch of stuff. It just involves changing what you do.
So many people who are successful at this; think,
“is there some way i could change my plan so that i could still accomplish the goal but i eliminate the need for having to buy this thing? so i don't have to buy it but i can still accomplish my goal.”
And they put a lot of thinking into this, and most of the time, they're successful. They find a way of doing it without the need for that thing, and so they can streamline until they can make a lot of money without having to spend a bunch of money.
The other reason, of course, is that which is maybe a bit less obvious actually is that if you need to spend a bunch of money on a bunch of stuff first. the problem is that presumably, you don't have those things already; when you have to buy a bunch of things first, and it costs a lot of money:
So that plan is riskier because there are so many variables, unknowns, and chances; it will not go according to plan. So that's another factor too. But, spending is a substitute for thinking. So that's kind of talking about starting a business.
Impact of Controlling and Eliminating Expenses to Career Job Finances
Let's talk about whether you have a career job; you work at a company or work at a for-profit company or an organization, and whether you're at the worker level or a manager level right.
Let's pretend you're the type of person that can't just spend money; you can generate money; you understand business and the thing that makes money.
You have a fundamental understanding of that. And so, as a worker or as a supervisor or a manager, you managed to generate some money. Nothing will get you promoted faster than being able to make money for your company.
Even if it's not directly what you should be doing, everybody appreciates that. So if you have this skill, you can climb the ladder pretty quickly. And if you get to an executive role, executives directly or indirectly can create income for the company.
Even if you work in something like compliance that seems quite far away from any kind of revenue-generating activities, compliance is all about generating revenue. It's about avoiding liabilities about cutting costs; it's about reaping opportunities.
Everything directly or indirectly is in a for-profit company is about making money, and if you have that talent, not only will it get you promoted, but if you get to an executive or even like a middle manager, you will perform very well.
If you understand this stuff and the secret, the prerequisite to doing this is understanding that to do this. So the first thing you need to do is control your spending.
You can't just spend money right left and center and still hope to turn a profit; it's just not possible. So that thinking leads to things failing.
And this can be observed everywhere; you can see it in the news. If you ever read the business news and see what companies are doing and some spectacular failures out there, you look at what led to the failure; more often than not, it's this.
It happened because people just spent and spent and spent and spent, and then they had either no concept of what makes money. or they did make money, but it was nowhere near enough to cover what they spent.
What's the moral of the story?
Here's the deal:
if you could get a grip on this very simple concept and start thinking in these terms. In your personal life, not just in the job doesn't matter if you're an entrepreneur or have a career job, the day job.
**If you can embrace this and start learning about business, you start understanding what makes money and become that type of rainmaker type person; this will pay off for you big time.**
No matter what you want to do, if you want to start your own business, if you just want to work in a conventional job, maybe get good job opportunities coming to you. Having a reputation as someone who can generate income and understands this stuff, you will go far for various reasons.
Even if it takes you five years to figure this stuff out, like how to make money, that's fine. You got five years to work on it. Five years is going to pass no matter what you're doing.
So it's nice to be able to learn this stuff in the meantime. But the beginning of that entire thing is learning that spending money is bad before we spend money; we need to turn on our brain and see if we can eliminate the need for something first rather than throw money at it.
Over to You
So hopefully, that was helpful; thank you very much for your attention to read this stuff. You guys are awesome, and I feel I haven't done a great job of really trying to inspire people to think more like this, but if you do, you're doubly awesome.
Let me know in the comments your opinion about this or what your thoughts are. I appreciate all the feedback I get.
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I enjoyed reading specially the Impact of Controlling and Eliminating Expenses to Personal Finances.
Thank you for your participation.
Bundle of thanks @vvarishayy 😍 for your kind words 😍😍
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great post. you can do so much effort