Being Cheap is Unlikely to Make You Really Rich (And It’s A Crummy Way to Live)

Nov 1, 2020 | Industry

By Ron Sturgeon

You can’t do it on your own. You need others to help you. … It’s about having them wanting to help and wanting to be a part of your success.

Those of you who know me well can recall when I lived in a mobile home. I wasn’t broke, but I wasn’t rich. But, even back then, I like to think I was never too cheap. Yes, I can remember having a pole truck to pull engines and move cars around, and I can recollect making fence poles with drive shafts. I was frugal. There IS a time and a place for thriftiness.

Road Map to Wealth

As I’ve grown emotionally, however, I’ve learned an important lesson: You can’t do it on your own. You need others to help you. What does this have to do with being cheap? No, it’s not about paying employees more, although you must be fair and competitive. It’s about having all stakeholders and friends wanting you to be successful. It’s about having them wanting to help and wanting to be a part of your success.

As part of my new book, Homeless to $100 Million: An Entrepreneur’s Road Map to Building Wealth (coming in 2021), I had to think carefully about the road map to building wealth and how best to articulate it to others. To write the book, I had to think about all the things that have led to my success. One of the most important insights is that, if you want real financial success, you need lots of folks pulling on the oars … and doing so happily. And, that’s hard to achieve if you’re not sometimes generous with those you depend upon. Put another way: You are unlikely to achieve a good amount of wealth being cheap because not enough other people will be invested in wanting you to succeed if they perceive you as tightfisted.

The other thing that I have learned is that being cheap squeezes the fun out of life – unless you think it’s a sport to give the waiter a 10 percent tip. By the way, it’s not about just those you chose to not be cheap with; others watch. Most of us don’t like someone they observe who stiffs a waiter.

Defining Success

What is a good amount of wealth? We can likely agree that $1 million isn’t what it used to be, and most business owners want more than $1 million to retire with. So, it’s more than $1million. I picked $5 million; you choose your own definition.

You can retire with $1 million by being Cheap. Thrifty. Frugal. Call it what you like. My forthcoming book is about an actionable road map to building wealth, not income. They are very different. You can save money by not valet parking your car, or tipping the bare minimum. You can save money by driving to the Southside to save ten cents a gallon on gas. If you pile up all those savings for a lifetime, you can retire with $1 million. But why not aspire for more? Perhaps not a great deal more as some of us are more competitive and ambitious than others, but striving yields results when done well.

If you want more, remember that you need a lot of other people willingly pulling the oars and wanting you to succeed. Giving a bonus to your employees, one that they didn’t expect, is a good starting point. Equally important, show up for work before they do and leave after they do. They will notice that you work as hard as they do, and they will want you to be successful.

Be Mindful of Your Tactics

Does anyone have one of those friends who always seems to forget his wallet at lunch? Or tips exactly 15 percent for over the top service? You don’t dislike him, but no one likes to think that you got ahead because you did it at the expense of others. Me, I never change a vendor for a price savings of less than 10 percent. And I make sure the current vendor knows that, and that they need to be competitive in their pricing. And I never tell another vendor the price to beat.

Be kind, thoughtful, and generous, within your means. Always be perceived as fair. Under promise and over deliver. Make sure everyone knows which oar to pull, how hard to pull, and for how long. Don’t be a spendthrift. Live modestly, within your means. Folks don’t work as well for a boss who plays golf all the time. Unless he’s 70 and they know he worked his ass off for a long time and was always fair to everyone. Then they want him to enjoy the fruits of his labor. And they couldn’t care less that he has $5 million in the bank.

Ron Sturgeon, speaker and author, regularly shares his expertise in strategic planning, capitalization, growing market share, and more, providing his field-proven and high-profit best practices. Reach him at (817) 834-3625, ext. 232 or email RonS@MrMissionPossible.com.

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