Make more money, spend less:

What does it really mean to be a “millionaire”?

John Wick Still

I had a chat with an acquaintance and we has this interesting conversation about money and wealth.

He brought up this idea:

There is a difference between spending a million dollars, and having a million dollars in the bank.

Accumulation of capital

John Wick war chest

This is the problem in much of modern consumerist society:

We are encouraged to accumulate and spend our capital, instead of accumulating our capital, and building upon our capital.

Generational wealth

The concept of “generational wealth” is quite interesting. Apparently Odysseus (the hero of the Odyssey) was so wealthy, he had enough cattle and riches to support 10 generations!

The idea of generational wealth is this:

You will not exhaust your wealth in your lifetime. You will transmit your wealth to your next generation (children).

The protestant work ethic

Lottery

According to the sociologist Max Weber, the spirit of capitalism comes from the protestant work ethic– the idea that it is the duty of the protestant to accumulate as much wealth in their lifetime (and spending as little of it as possible).

The basic idea is good:

Accumulate wealth and capital, but don’t squander your wealth (by buying stupid shit you don’t need).

We like to spend money more than accumulating it

Captain crunch cereal

In modern times, we are encouraged to earn lots of money in order to spend a lot of money on toys and stuff.

But we aren’t encouraged to earn lots of money in order to accumulate it.

But this is the weird thing:

To accumulate a lot of wealth and capital, yet not spending the money– you’re seen as a “scrooge” (vice).

Why is it considered a vice to accumulate money but not spend it?

Frosted Flakes cereal

This is my theory:

Modern capitalism is dependent on people constantly buying stuff, consuming stuff. Thus in America, to not spend money is “evil”, because you’re not contributing to the (capitalist) economy.

The golden mean

Rolls royce

Now this is the tricky thing, the part which requires much wisdom:

What should we spend money on, and what shouldn’t we spend money on?

Specifically,

What should we spend a lot of money on, and what should we spend a little bit of money on?

Here are my ideas:

1. What to spend lots of money on (tools)

Shadow selfie

I got this idea from Cindy:

Differentiate between tools and toys.

Tools are technology which multiply our power. For example, I can produce more wealth by having a laptop and other digital tools.

Yet, we often confuse tools and toys. A lot of what we think is a tool is often just a toy.

2. Don’t spend much money on food

It don’t matter what you eat, you’re gonna shit it out anyways.

I was amazed; the other day I went to a “Food for less” grocery store, and I was able to buy a pork leg for 60 cents a pound!!!

“The goal should be to gain immortal fame among mortals. Yet the masses focus on stuffing themselves like cattle.” – Heraclitus

Why do we waste so much money on food, drink, and nutrition? It’s insane.

I think a lot of people waste a ton of money on eating out, on alcohol, etc.

If you want to accumulate capital, spend less money on food and drink.

Why accumulate capital?

#cindyproject

“Bitter is the bondage of debt.” – Publilius Syrus

To me, money is freedom. If you have money in the bank and no debt, you have freedom.

To me, freedom is the ultimate human good (Diogenes). If you have control over your schedule, control over what to do or what not to do; you have the conditions to become an artist and philosopher.

A lot of people talk about “financial independence”. The easiest way to gain financial independence is to lower your expenses, and to accumulate capital.

In other words,

Put more money in the bank.

Practical tips

Make it a fun game. Don’t live frugally as a way to self-flagellate and punish yourself. Pride yourself in how little money you can waste.
When it comes to tools that empowers you to create and make value (laptop, phone) spend a lot of money on it. If the thing you want to buy won’t earn you additional money, it is probably a toy. And when we study children, we know how quickly they get bored of toys.
Share meals with your partner. Just order a single entree to share with your partner. Don’t drink alcohol at restaurants. If you want to drink, you can always do it at home.
Cook more at home: cooking at home is fun and creative!
Buy cheap meats: pork is generally cheapest. If you don’t eat pork, buy eggs, chicken, or cheaper organ meats (very nutritious and cheap).

Hustle hard, and stack that paper (in your bank account)!

ERIC