“Tempus fugit,” (time flies)

“Wealth is what you accumulate, not what you spend.” [“The Millionaire Next Store,” Thomas Stanley and William Danko. p1]

But thrift is not a natural instinct. It is an acquired principle of conduct. It involves self-denial—the denial of present enjoyment for future, good—the subordination of animal appetite to reason, forethought, and prudence. It works for to-day, but also provides for to-morrow. It invests the capital it has saved, and makes provision for the future. [From Samuel Smiles’ book “Thrift,” electronic edition at Library of Liberty.com]

Just do it. Just take the first step on the road to financial independence.

Otherwise, the opportunity to invest will be lost before you know it as time flies by.

Don’t worry that you are starting your investment program with very small amounts so maybe it might be better to wait until you have more. Don’t tell yourself that you’ll get started next year or five years from now or after you get married or when you see your United States senator regularly riding alongside you on a rush hour E-train.

Don’t think that you’ll get started when your favorite relative dies and leaves you a bundle. Don’t tarry or it will cost you a chance at financial independence.

Do it now. Do begin your commitment to investing. Do make a few sacrifices today for a better tomorrow. Do start with small amounts, if that’s all you have.

Doing a little is much better than doing nothing. That’s because “it is better to light a candle than curse the darkness”, according to Peter Benenson, the founder of Amnesty International.

Why is there no time like the present?

Consistently saving and investing over long periods are the ways that most people get rich. The longer the period, the better. Obviously, the higher the rate of return, the better. But it is time—how long you follow this program; how much you use compounding—that is the most important. That’s because the mighty oak springs from the tiny acorn.

Let’s begin with a very small amount. Can you find a paltry $1.66 a day to put aside? That’s right. One dollar and sixty-six cents. Maybe you put aside your spare change every day.

Sometimes I see spare change on the street and few people seem willing to bend over and pick it up. I pick it up. It’s good exercise for an old Bunkerland Babbitt like yours truly.

The spare change strategy, over the course of a month, comes to some $50. What can a lousy $50 a month amount to anyway?

A lot over decades thanks to the power of compounding.

Just Start with $50 a Month

Let’s say you put $50 a month into a mutual fund—every month—and never increased the amount. And say you earned an average of nine percent a year over 40 years, what would you have before taxes? You would have some $235,822. That’s pretty good for just putting your spare change aside each night and diligently investing it.

Now $50 a month is less than $2 a day. That is certainly not beyond the means of a lot of Americans, many of whom each day pay $6 or more for a cup of java that they can make at home for a fraction of that. And $100 a month may not be too much either when one examines how much money people often throw away though reckless spending practices. And, of course, with $100 a month, you’d have double as much—$471,644 after forty years. Again, that’s a nice piece of change.

And for many people, in their 50s or 60s, with some other savings and their pensions/Social Security, if they just had an extra few hundred thousand dollars so many things would be possible and life could be so much easier. I think of Judy, the elderly woman who I mention at the beginning of the book. A few hundred thousand dollars would make a huge difference in her life.

But again, I can hear the doubters: “Sure, the loose change money concept might work and I might come up with $50 a month, but I would never be able to find $100 or $200 a month to invest. That’s just too much.”

Really?

Let’s think about it.

We’ll now look at some common, wasteful money practices that almost all of us—especially me before I earned the much revered “Tacano” title, a title I was given because I stopped wasting money—have engaged in at one time or another and may still be doing today. Let’s also look at some ways that one can raise a little extra money that can be devoted to investments.

Do you take a train and a bus every day? Here in New York City, the basic subway fare was raised a few years ago to $2.75. And there is talk that it will have to be raised again next year as the state authority running the problem plagued system is, once again, running huge deficits. The authority is always on the verge of financial disaster. That seems to be the trademark of all advanced welfare state enterprises. That’s because almost every business “enterprise” the government tries to run ends up in the red.

Assume you use four fares a day. You ride a bus to the subway. Ever thought of walking to the subway? Ever thought of saving five or six fares a week? Let’s say you save $13.50 a week because you hoofed it more frequently. There’s a little more than your fifty dollars a month. There’s your sleeker body. There’s your first step down a lovely road called MoneySense. It intersects with another road called financial independence.

Rancid Apple Cabs

By the way, if you use cabs here in New York City or almost any congested big city—you often paying part of your considerable fare to sit in the car. The cabs often get stuck in traffic with the meter going and going—and if you can find a way to reduce or eliminate your use of them, then the savings are huge. Yes, many people can save $50 or even $100 a month just by walking a little more. And there are many other ways to generate more geld through smarter spending. Let’s look at them in the next chapter, which will be here soon.

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Gregory Bresiger
Gregory Bresiger

Gregory Bresiger is an independent financial journalist from Queens, New York. His articles have appeared in publications such as Financial Planner Magazine and The New York Post. The eBook version of his latest book "MoneySense" is available now for Free Download by clicking HERE

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