Posted by Jack Beam on March 27, 2000 at 17:09:34:
Don’t get up tight. This thread was about how to save money and I simply pointed out that if someone was truly interested in becoming a millionaire there was a very simple, easy way to become one.
Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by Eduardo (OR)
Posted by Eduardo (OR) on March 27, 2000 at 15:05:41:
Several people have recently brought up the subject of “analysis paralysis.” They have bought the courses, read the books, and yet they can’t seem to get started investing in real estate. Some have said they can afford the education, but not the cost of one month’s vacancy. Well, here’s a solution: First, become a lifestyle miser. Second, consistent with the lifestyle, buy a cheap little rental house in a decent neighborhood.
Several years ago, when my sister got divorced, I advised her to imediately do several things including stop the newspaper, get rid of cable TV, and eliminate all other unnecessary debt that ordinarily nickles and dimes people to death. Stop going out for beer and pizza. Put the pizza money in a piggy bank. Put the piggy bank money in a savings account once a week. Even if it’s only a dollar or two. Develop pride in your ability to save pennies.
About a hundred years ago, Hettie Green, became one of the richest women in America by, among other things, eating cold oatmeal and refusing to heat her house. About twenty years ago Bill Greene (some of you may remember him, he eventually went to jail–but we can learn from anyone, can’t we?) became a millionaire by investing in real estate. Among other things, Bill wore the castoff clothing his tenants left behind when the moved and drove an old rusty pickup truck. Lesson: How to get rich: Earn more, spend less. We are talking about the spending less aspect. Check out the interest in this subject on the web. There are several sites promoting ideas for lifestyle misers and skinflints. Final thought: You have a spouse and he/she won’t cooperate–wants to continue the spending lifestyle. Do this: Get rid of the spouse. Now, of course, I’m not altogether serious here about that, but do you see the point? How badly do you want to invest in real estate and eventually become a millionaire? You have to do what it takes. It usually takes a desire so strong that you’re willing to take the sacrifices to make it happen. I have some poor tenants, for example (on section 8), who, if they only knew how to save money, could do it on their welfare checks alone. Don’t believe me? Our parents lived on proportionately less during the depression.
Then, after you’ve save, and the lifestyle becomes second-nature, buy a simple, little rental house in a relatively decent blue-collar neighborhood for as little as possible down and with as small monthly payments as possible. Fix it up cosmetically. Remember “Fixer” Jay DeCima’s advice (he now owns more than 200 units): if you’re really strapped for cash, paint only the front of the house. Spruce up the yard, put cheap carpet and paint inside and rent it out. Let the tenant make the monthly payments for you. Then do it again. Another good idea from a controversial guru: Wade Cook popularized the cookie cutter notion: Find something that works and then do the same thing over and over again. Just like stamping cookies out of dough. Great idea to keep in mind. Start small, keep it simple, do it over and over again, become an expert at it.
Anyway, my thoughts for beginners starting out with limited cash and experience. Why complicate things? Take your time. I’m having so much fun driving down the street in my old, paid-for car, buying little houses and working little paper deals, I wouldn’t do anything else. By the way, we’re now thinking about buying a condo in Hawaii. You can do it too. --Eduardo
Cutting ‘the fat’! - Posted by SusanL.–FL
Posted by SusanL.–FL on March 29, 2000 at 11:23:35:
This was a great thread! Enjoyed it ALL!!
About a dozen years ago, I decided to go on a cost-cutting ‘crusade’ at home. Kenny’s kids were around 5 or 6. Our little guy hadn’t been born yet.
One day I made the announcement: “We’re getting RID of the cable everybody!!” It was around $24/mo. at the time. I multiplied that by 12 and figured we’d save a chunk 'o change$. Boy was I wrong!! 
The first night the cable went out was a STORMY Friday night. Bleating little ‘cries’ from the kids: “Susie! There’s nothing to doooooo!”
We didn’t have an antenna and we were getting ZIP reception on the boob tube! Everyone was staring at the four walls…
The doorbell rang and in walked a long-lost buddy of Kenny’s (a lonesome polecat with nowhere to go). He took one look at our ‘dead’ TV. Kenny was too embarrassed to tell him ‘Susie was trying to save some money’ so he said the STORM knocked it out!
It was getting pretty B-O-R-I-N-G around there so I suggested we RENT SOME TAPES!!! One of the local stores had a delivery service. After all was said and done that night, I had spent over $7.00 on rentals PLUS a delivery fee. (Started doing some quick calulations in my head and decided that the cost of cable wasn’t so bad after all! Didn’t realize how much the family depended on T.V. for company. Got it turned back on pretty quick after that.
Kenny STILL laughs about it: “Hey, remember when Mom turned the cable off to save money and we spent a fortunate on tape rentals??”
Phil is right - Posted by MilNC
Posted by MilNC on March 27, 2000 at 21:12:55:
Do without stuff you don’t need…sometimes, you don’t
know what you don’t need til it gets gone.
(Well, at least don’t buy it back retail!)
And that doesn’t mean privation, if you know yourself.
What was that post about eating gruel? That’s breakfast! I have cholesterol problems, too. I go to cheapie community mobile clinics to check it.
i’ll be sure to get a lobster dinner soon,
I just don’t do it every week.
I never “run out of bacon” because, I don’t ever eat
it anyway. I don’t run out of paper towels, because I have old newpapers and vinegar and lots of cloth.
You learn to conserve when you have to, and it helps
to have old friends…friend that are old people,
that know old ways. And then you can decide for yourself if the old ways cost more money in labour, or if they are
ideas that apply to you.
I think it is good to know both ways,because situations
change from time to time, and you need more than one solution.
I continually evaluate: Does what I do make sense?
Am I just going through the motions of old habit?
Am I really benefitting from my expenses?
What works? what does not?. One needs to know oneself; it’s not hard work, though, all the signs are there.
In my town, everyone drives a truck, because everyone
has got something going, even if they have a job in
town. Cause your town job can go away, but… you still have your farm, or some way to make a living. Nobody owns a truck they can’t work on by themselves or get help with from a neighbor. Wouldn’t make sense, would it?
Best shopping? Go to auction of household goods from
old farmer: tools, etc. Decent prices, except on the usable farm tools, because all the
Other old farmers already have the same tools, but need replacements, extra parts,
but don’t want any of that other fancy stuff. It depends on what the local bidders want.
Just like real estate.
It’s all the mind set.
Ann
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by Earnest
Posted by Earnest on March 27, 2000 at 20:09:29:
In my area, I can shop for Tombstone pizzas for $3.33 a piece. I can get 1 1/2 meals out of one. Ya don’t need to stop the pizzas if your willing to be “creative.”
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by phil fernandez
Posted by phil fernandez on March 27, 2000 at 19:22:59:
Eduardo,
Excellent post. And it is that simple. The pizza, the cable TV, the newspaper are fine. But the beer. I dunno.
Actually I have stopped the cable and I read the newspaper where ever I am. Pizza’s not good for my cholesteral so that’s a no brainer and I bought a 1997 stripped down Ford Ranger with a radio for $9,400 in 1997 that I still drive today.
Before that I drove a 1987 Ford Ranger with 162,000 miles on it up until 1997.
Am I eccentric. Sure, but it works for me. It’s not just the making money side of the equation, it’s the other side where you do without the stuff you don’t need.
Can I afford a nice big car or truck. Sure.But darn if I waste money on a depreciable item like that.
Re: Advice for a Newbie: Nate/Sharyn are both right - Posted by MilNC
Posted by MilNC on March 27, 2000 at 19:05:18:
I love your posts, Eduardo, and this is another Great post …it pulls out people who have
strong feelings about spending vs saving, and the mind set discussion.
“I am an educated buyer, you are stingy, he is
a low-life”, in the familiar conjugation.
I lean toward you and toward Sharyn, however.
I bought my washer& drier brand new in 1988, $1,100 because
my parents always did. Then I moved, bought another
set, $950 because that’s what I always did. Then, I had
a misfortune, and went without. THEN, I got smart, and
bought one washer $75, and one dryer, $65 (a discoiunt from my friend at the thrift shop because
the door wouldnt’ stay shut–but, I’m a genius, so
I fixed it.) That was 3 years ago. They are working fine. And when I need another, I will not panic.
I know how to get them picked up and how to replace them.
With all due respect to Nate, I understand his concept:
don’t consign yourself to a poverty mentality.
But, At the same time, if you can save $1,000 by not spending, then you can invest that.
My microwave blew up. I didn’t buy another one. I spent that money on business cards and ads, because
I already know how to boil water.
Former tenants clothes? They are great for cleaning
jobs. Save your good clothes. And who buys jeans retail?
That is the cost of a new set of business cards…almost.
Heating bills? put on
another (former tenants?) sweater. I’m going to need
heat more when I’m older.
I get coupons in the Sunday paper all the time, which I buy at the newstand, but they are
for products I don’t use… processed food, plug-in air fresheners–never a coupon for incense though, which is cheaper, and works just as well.
I don’t buy soda or coffee.
My goal when I get more money is to have a house
with a better floor plan, income-producing rental or crop,
and a dishwasher, vegetable garden and be able to hire someone to till it, plus a maid and a secretary.
Not full time, just as-needed. I used to be able to
do my own lawn.
It’s a good idea to know where to get stuff cheap, and
not be tied into an all-or-nothing situation.
That is one of my ongoing projects: to avoid ongoing/recurring expenses.
And oddly, if one supports this idea as to saving costs on rentals, one is a hero, but if one does so
in ones personal life, one is looked down upon.
Nate is right, and you can only “save” so much.
But, I think we can revisit our expenses from time to
time and see if they fit.
You would possibly complain to your car ins company
if there was a $50/year charge on your bill that you
thought you didn’t need. So would I…and yet, I’m sure,
at between 89cents and $1.18 per bunch I’ve probably
wasted that much in celery that I bought but didn’t
use up before it rotted. So now I don’t buy celery, because I know me.
I’m just saying, one can examine the things that are
taken for granted.
My goal is to make a living at RE, but even when that
kicks in, I will still not buy celery or new washer/dryers.
I really AM more creative than that.
Ann
Kiyosaki: “If you have trouble living within your means, increase your means” nt - Posted by OzarkMark
Posted by OzarkMark on March 27, 2000 at 18:57:17:
nt
Become a prosperous, wealth-building machine - Posted by Nate Tyler
Posted by Nate Tyler on March 27, 2000 at 17:39:45:
Recently I read a similar post on another newsgroup about “living skimpy” as a way to increase your cashflow. After all “less expenses” means “more income”…right??
I offer another perspective.
I’m a firm believer that you can become whatever you want. I believe that if you see yourself a certain way, you become that way. If you want something bad enough, you find a way to get it.
You will only accomplish as much as you think you deserve. And within the framework of our “thoughts” we set our own boundaries. Financially, physically, intellectually, and on and on.
“I can’t lose weight”
If you tell yourself that long enough, you’ll convince yourself of it. And you’ll stop trying to lose it.
Or else you see yourself as thin, and your lifestyle supports that until it is a reality.
Limiting beliefs.
They keep us all from being the best we can be. I believe that identifying what keeps us from growing and improving is the first step to getting there.
So how does this relate to the topic of “cutting your lifestyle”?
To me, that way of thinking is backwards. Of course making poor financial decisions, or spending money frivolously is one thing. But purposely settling into a “poor” lifestyle is setting yourself up for a negative shift in perspective.
You call that “living”?
I don’t know about you, but I don’t want to spend my life on this earth with no heat in my house wearing recycled tenant underwear.
How about expecting more from yourself? How about setting your sights higher than you ever thought possible? How about breaking out of your comfort zone, and achieving more than you ever imagined?
It’s worked for me like you wouldn’t believe.
I had spent the majority of my lifetime trying to figure out how to get a discount here, and save a buck or two there. I lived my life as a “cheap, tight, miserly skinflint.”
Then one day I realized how much energy I was throwing in the wrong direction…
False Economy…
Stepping over the dimes to get to the pennies…
And that’s the truth.
Now I like to spend my time thinking about how to make lots more money, instead of how to save a little.
Takes the same amount of time, and the same amount of energy, only the returns are much greater.
Try it sometime…I think you’ll like it better.
Nate
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by sheryn
Posted by sheryn on March 27, 2000 at 16:18:32:
I agree with the cost cutting. One of the best ways I have found is to shop at second hand shops (like Goodwill) and garage sales. My entire wardrobe is great quality, designer clothes that I have bought at Goodwill (including belts and shoes, although only if they haven’t been worn). I either throw the clothes in the wash or spend a couple dollars to have them dry-cleaned. If I do say so myself, I look like a million bucks because I feel good about myself and I look like I spend a fortune on clothes. I shop at Goodwill every week and spend between $30 and $50 (which is usually about 4 tops, 3 pairs of pants, a couple pairs of shoes and a jacket). For every new item I buy, I retire something from my closet and give it back to Goodwill (where I get a tax write off). My friends (only my 2 best friends and husband know where I get my clothes) think I spend a small fortune as i always have new clothes. By the way, I have an annual soft income of over $125k per year and $2M in re assets, so I could afford to shop at the best stores if I wanted. I also drive pretty basic, american made cars that I buy from rental companies when they are 1 year old and I pay cash for them. The home I live in has a guest house that I rent out, which pays all my utilities and property taxes. And I have completely furnished my home with top quality furnishing from Ethan Allen, Hendredon and Thomasville by shopping for furniture at estate sales, where the things are in great condition and I pay about 25 cents on the dollar of value. My point is, there are many ways to cut back and still feel like you are living the good life.
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by eric
Posted by eric on March 27, 2000 at 16:02:16:
this is ridiculous. both my cars are paid for, and I don’t have any consumer debt, we don’t eat out much, but I am drawing the line at wearing clothes left behind by deadbeats and eating cold oatmeal. I know we’ve all heard stories of rich people who live like this, but most of them were actually alive during the great depression. An examination of the rich, and even the well-to-do, will certainly show that they drive domestic cars that are paid for, but not many of them wear rags and eat cold porridge for supper. This isn’t England during the Industrial revolution. I thought the reason for investing was to have more money to enjoy the finer things in life. Otherwise why are we going to all this trouble? I’d like to think that a life of wealth, or abundance, is diametrically opposed to a life of scarcity. I’d rather buy real estate with Other People’s Money rather than my own savings.
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by Jack Beam
Posted by Jack Beam on March 27, 2000 at 15:36:43:
Why stop there. One of the greatest expenses that any family will have is their kids. It cost a couple $100,000 grand to raise and educate children from birth through college. Simply don’t have kids and if you all ready do, get rid of them and simply invest the money saved and you will over time become a millionaire and you won’t have to eat cold grits and choupiques to do it.
Re: Kiyosaki: - Posted by nick clegg
Posted by nick clegg on May 15, 2000 at 16:02:30:
any advice would be fantastic!
I Once Heard… - Posted by Bill K. (AZ)
Posted by Bill K. (AZ) on March 27, 2000 at 19:06:11:
Nate,
Great post!
I once heard a motivational speaker indicate that sayings like, “Save your pennies for a rainy day” causes us to focus on the wrong things. That belief instills the idea that someday, if not now, we are so poor or unable to attain much in life that we need to save something as meaningless as a penny.
I agree with you. While the point of Eduardo’s post is worthwhile, we shouldn’t fixate on living a meager lifestyle today. Such thinking is what has people spending all of their money today. They reason, “Hey, if I’m going to be poor someday, it might as well be tomorrow. I might be dead then.” And, tomorrow suffers as a result.
This post just reminded me of my new motto:
I REFUSE TO THINK LIKE A POOR PERSON!
Bill K. (AZ)
Now this post is full of wisdom! (nt) - Posted by DanM(OR)
Posted by DanM(OR) on March 27, 2000 at 18:55:19:
.
Another tip (or 2) to share… - Posted by SusanL.–FL
Posted by SusanL.–FL on March 29, 2000 at 14:08:04:
Sometimes the ‘better’ department stores (with the top-of-the-line labels) have RACKS of clothes discounted up to 75% off! I have found some fantastic bargains at a fraction of the price.
Jewelry is another item I’ve learned to ‘stretch’.
Awhile back I bought a pair of ruby earring ‘jackets’ on sale for $59.00. (I already had the diamond studs.)
I had my jeweler solder on a tiny gold loop onto the under edge of each earring jacket so that I could wear either one or both earring jackets (and studs) on a necklace. And voila! A $59 purchase was suddenly transformed into a $3,000 necklace! [Looked pretty good, if I DO say so myself!]
On another pair of (square gold filigree) earrings, I had a jeweler drill a tiny hole in the corner of the earring (large enuf to put the diamond stud earring thru). Gave the earring a whole nuther ‘look’ to it!
C-ya
…and let’s not forget about all those … - Posted by SusanL.–FL
Posted by SusanL.–FL on March 28, 2000 at 13:19:27:
$dollar$ stores that are springing up all over the country these days. You can save a $BUNDLE$ on cleaning supplies (for our rentals) plus other home-furnishing and knick-knacks.
Don’t be surprised to see ‘bag ladies’ (who live under bridges in cardboard boxes) ‘brushing elbows’ with people ‘dressed to the nines’----all shopping for bargains. But hey…only in America!!
P.S. Even Scotty’s is now going the ‘dollar’ route. They are revamping their stores in Bradenton and Sarasota, as we speak.
C-ya
…speaking about eating (someone ELSE’S) cold oatmeal… - Posted by SusanL.–FL
Posted by SusanL.–FL on March 28, 2000 at 13:10:59:
and how one dude pinched his pennies!
Ex-hubbie and I were having a sandwich in Bayne’s (sp?) Cafeteria (Broad St. in Phila.) years ago.
As the patrons finished their meals and left the table, I saw this WELL DRESSED man non-challantly sit down at their table and eat EVERY morsal of food that was left on their plates. I KID you not. He went from table to table. (Talk about my mouth dropping open!!!)
Is that gross, or WHAT???
What was so amazing is the fact that he was dressed in a 3-piece suit, had a nice top hat and umbrella. Ya just never know about people…
Re: Advice for a Newbie: Become a Cheap, Tight, Miserly Skinflint - Posted by Rob FL
Posted by Rob FL on March 27, 2000 at 16:12:59:
Of course one of the easiest ways to finance a college education. Buy a nice blue-collar rental house when the child is born say for 75K bought creatively little down. Let the tenants pay your 15 year mortgage down for 18 years, and then when college begins you have a free & clear rental house with lots of cash flow paying for their tuition. You could also sell or refinance it to pay the costs as well. Even if appreciation is only a measely 3% per year it will be worth $127,500 at the end of 18 years.
Also find out what poor people read and dont read it ! - Posted by M Stevens
Posted by M Stevens on March 28, 2000 at 24:06:11:
nt