Between income tax, property tax, capital gains tax,i liquor tax, cigarette tax, gasoline tax, “carbon” tax, GST/VAT, inheritance tax, inflation, and various sorts of menial tickets distributed wantonly for non-offenses such as poor parking and jaywalking, it’s not hard to see why this isn’t 1870 Pennsylvania anymore and the rate of creation of new millionaires, much less billionaires, is downright lethargic verging on unobservable in the Western World.
But there’s hope for us yet!
Ever vigilant, Cheep Pete is here with a few tips on how you can seize and take advantage of a few shortcuts in life so that you don’t wind up completely impoverished and destitute in your old age, relying on the beneficium of your begrudging family and the capricious state edifices you thought were there to catch you.
Here are the Top Eight Tips :
1. Make a budget, stick to it.ii
2. Pack a lunch.iii
3. Make coffee at home.iv
4. Walk or bicycle to work.v
5. Rent rather than “buy” your home.vi
6. Have a friend over for after-work drinks instead of going out.vii
7. If you don’t know how to invest, don’t!viii
8. Don’t treat yourself, you don’t deserve it.ix
That’s it! Some people are born poor and stay poor, some people are born rich and become poor, but with a little self-discipline and a very reasonable degree of frugality, you can improve your lot in life, leave your children with more than you had, make yourself robust to economic shocks, and watch as one-by-one you surpass your friends in net worth,x all with just these time-tested tips. These tips won’t prevent you from looking like a poorfag, at least not at first, but they will help you from being one in the medium-term.
It’s a noble pursuit, this.
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Addendum incorporated from a pursuant conversation in the Trilema comments section of a response to this article :
Pete D : Cheep Pete’s list has little to do with becoming an overnight kajillionaire and everything to do with training oneself to find and secure value, starting with one’s own time and resources, however meagre. This is about degrees, not 180s.
We can both agree that money per se has little to do with this discussion, but we seem to be at odds over the value of thrift, economy, delayed gratification, and the directed cultivation thereof. Yes, people who are better are better, but this tautology would deny Nurture her evident role.
You need not be born into a life of pomp and prestige to ameliorate your station, nor does such a beginning guarantee your success. There’s surely an element of luck involved in social mobility, but there’s much to be said for the adage “The harder I work, the luckier I get.” Not that this grants those who “try hard” the keys to the kingdom…
Mircea Popescu : The value of thrift, economy, delayed gratification may be that it builds character.
That should be enough of and by itself, no need to sugarcoat it in the pious fraud of random “good things” plucked from the fairytales.
Ameliorating station is a dubious endeavour. Ameliorating self, perhaps is possible, though I remain reserved on the possibility of such amelioration by the self itself – it seems much akin to the breeches-powered selftrip to the Moon.
Pete D : What you call “pious fraud,” I’d call “actionable steps,” but perhaps I’m too indoctrinated in the USian tradition of “self-help” books and the religious traditions of “don’t touch that bacon!” to see through to the other side. From this vantage point, the possibility space of stupid actions is indomitably large and that of sane actions considerably more constrained.
Providing a prescription for right action is nothing new, but it is undoubtedly effective at preventing the repetitions of history’s errors, perhaps even because of the sugar-coating. Maybe it should be otherwise, but I don’t think we live in that world.
Mircea Popescu : Take the simple case of “stay in school”. So this is sound advice. But … why ? Kid wants to know, he doesn’t so he asks. Why ?
What do you tell him ? If you tell him “because that makes all the junior high sluts want you in their wazoo”, you are committing utter fraud – they don’t, at that age. If however you tell him “because that WILL make all the club sluts & sorority girls want you in their ass when you grow up” you are comitting pious fraud, and arguably a much worse offense – the kid can’t verify your lie until it is sadly too late.
All the while, the truth of the matter is that there’s very little why. “You’ll maybe be less dumb, perhaps” is the most objective anything you can say.
Which is why it is so important for this question to be answered subjectively : “Because if you do not, ~I~, your father, will piss on your skull after having separated it from your body.”
A less gruesome equivalent may equally well work, but the central point remains : “because if you don’t I won’t like you”.
Never mind the money.
Pete D : With the benefit of hindsight as well as this discussion, “Cheep Pete’s Guide To Being Liked By Cheep Pete” would’ve perhaps made for a better title.
So it is. Then again, being liked by me and being successful are historically well correlated.
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Second addendumxi : Diana rightly reaffirms that the suggestions listed hereabove are nothing new – dating back to the 1930’s, if not considerably earlier – but it doesn’t stand to also reason that no one ever read such a guide and was moved to follow its advice. Some people read ancient scripture like the Talmud for life advice, some read pop-psychology like Kahneman or Munger, still others read blog posts like this one, and others yet learn from studying the habits of those around them as they either succeed or make mistakes, then learn to adopt more of the former behaviours and fewer of the latter. There’s more than one way to skin a cat, and all, in this case at least, are valid to the extent that they result in positive and productive outcomes, however your particular society may define these.
With these more well-defined parameters in mind, this guide is for the Albertan kid in his early-20s, like my soon-to-not-be-next-door-neighbour, who made $150k+ for each of the last 4 years working on the oil rigs, just recently found himself laid off with WTI under $40, and was so utterly frivolous with his not inconsiderable earnings that he’s now forced to find alternative accommodations after just a few weeks of unemployment. I don’t begrudge the guy for economising on his rent, goodness knows there are cheaper places to live, but the fact that he has to move tells you that he’s wasted a golden opportunity like far too many others. Maybe this guide is only useful for those in the 20th and 21st centuries in this bizarre little corner of the world,xii where we have seemingly endless opportunities and have only to not fuck it up royally to surpass the accomplishments of our parents, but that’s fine by me. Maybe I live in alt-Narnia and have overreached on the broader applicability of these tips, but I wouldn’t have guessed it without testing the waters stepping on a few landmines.xiii And hey, what am I here for if not precisely that ?
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- If there’s a more sinister and callous tax than the capital gains tax, it’s yet to be conceived by the minds of [bureaucratic] men.↩
- For one entire month, get an app on your phone and record every single penny you spend. From the pack of chewing gum at the gas station to the toonie you lose [forever] in between the seat cushions to the fiver you tip the bartender on Friday night, count it aaaaaaaall.
At the end of the month, review and assess your spending habits with a partner or parent, then set realistic goals for the subsequent months (ftr, “realistic” = “less than you make” under absolutely any and all circumstances, unequivocally). You’re not a government and you don’t have a license to print money, even if your bank is presently retarded enough to extend you seemingly infinite credit. Don’t take it. Stick to the budget come hell or high water.
Unless you’re incredibly scrupulous in your private life, this means that you will have to “no” to things, like offers from friends to go on a “once in a lifetime trip to The Mall of America.” So get used to saying the “n” word, it won’t make you a bad person.↩
- Enough of the $6 fast-food burgers, $10 tacos, $12 bowls of pho, $15 pizzas, and $25 fishes of the day. Go to the grocery store, buy some salad, some whole grain bread, some cold cuts, some cheese, and some salt & pepper. Now figure out the rest and watch how you’ll have “all this money” at the end of the month. It’s a miracle!↩
- Fuck this $6 wankster coffee nonsense. I don’t care if the foam comes in the shape of your star-crossed lover’s face, it’s an unnecessary indulgence when you can make perfectly excellent coffee at home for $0.50 per day including organic beans, organic coffee cream, and organic raw sugar. Even if you’re going to Tim Horton’s and spending just $2 on coffee, you’re still probably also buying a $2 bagel and waiting in line 20 minutes for the privilege. If you have to, wake up 10 minutes early and put the coffee in a to-go mug. And buy some bagels from the fucking bakery fer fuxxake.
You’re going to the grocery store at least once a week anyways, and it doesn’t take 140 minutes to walk by the coffee aisle. Spend your time as if it were worth something, and it will be! ↩
- Save on pricey gym memberships, save on the cost of car ownership, improve your mental health, and improve your performance at your desk job. How can you not ?? I do it nearly every day of the year that it’s not -30C outside, and I can afford the toys!↩
- Being a landlord, particularly a small-time one, is neither easy street nor a particularly profitable use of your time. Thankfully, there are a great many fools out there who haven’t learned this lesson the hard way yet and are all too eager to have an upstanding tenant such as yourself in their rental property. Take advantage of this and forget all the naysaying bumbaklots whose “best investment ever” was their house. Interest rates can’t get any lower than there are, so unless you’re buying the house outright for cold hard cash, it’s sensible to stay away from mortgages for the foreseeable future. Let your home be your home and your investment be your investment : mixing the two is like trying to turn your wife into your mistress, and vice versa.
Besides, while you can also sorta kinda very nearly just about own a house, you can’t properly be said to own a condo. You want to tear the walls down in your condo but need Board approval first ? That’s ownership like O’Douls gets you drunk.↩
- Bars are very expensive places to spend time, particularly with minimum wage increases in the pipeline, liquor tax increases, and even minimum legal prices for alcohol in some jurisdictions. It’s far more cost-effective to pop by the liquor store on your way home from work, grab a six-pack, invite a friend over, and watch TSN or ESPN highlights on your own TV. Wanna ogle the waitresses ? They don’t give a shit about you, honestly. You’re better off walking through college campus on a weekend afternoon or logging onto Pornhub after your friend’s gone home. Save yourself the trouble.
This isn’t to say that you shouldn’t go out to the bar on a Friday night and shred the dance floor – please do! – just enjoy the majority of your drinks at home and have one or two at the bar.↩
- You may find that adhering to these tips suddenly puts the kind of money in your pocket that gets all warm and toasty to the point of being uncomfortable. If this is the case, don’t go speculating in the stock market using “diversified portfolio theories” with your newfound savings. At most, and if anything, buy 5-year [Russian] bonds and maaaaaybe a few bitcoins, but stay away from the slot-machines, ok ? That means no tech stocks, no biomedical stocks, no herbal remedy stocks, no Chinese fortune teller stocks, none of it. You’re better off with the 1% interest from the savings account at your local credit union.↩
- No new golf clubs, no new motorcycle helmet, and no fancy winter jacket. You’re not worth it! If you were, other people would buy these things for you.↩
- No one will tell you this, except for the son of a poor farmer who, like his father, is now not-so-poor (ah! two cows! kulak!!!1), but there’s much to be said for not being the poorfag in your group of friends.↩
- Even a single addendum was more than I’d hoped for, so a second within less than 24 hours is really quite an unexpected delight. This article has kicked off a vigorous discussion on both #trilema and the other TMSR blogs – the sort of response that only happens once in a blue moon – so I don’t mind reveling in it in the slightest, nor expanding the scope of this original article as far as these other valuable perspectives might allow.↩
- For fans of Dragon’s Den, the above guide is perhaps best viewed as Dave Chilton’s The Wealthy Barber… as read by Kevin O’Leary. That this should be in any way controversial to our international friends is certainly amusing, if not also quite telling as to the uniqueness of the Canadian mindset as forged by the bounteous opportunities presented before us.↩
- A related curious fact about Canuckistan that informs my advice but may well render it meaningless to outsiders : even on 30-year mortgages, the interest rates can only be locked in for a MAXIMUM of 10 years, and are only locked in for 1-5 years in 93% of instances.
This is what makes mortgages such an incredibly risky proposition for Canadian borrowers and why I recommend that you rent or buy your house outright with cash instead. For Americans, as I often forget, they tend to lock in their interest rates for the entirety of the amortisation, so why wouldn’t they?!
The fact that interest rates can’t get any lower also means that the housing markets across North America, and possible in Europe as well, are heavily dependent on new immigrants providing the groundswell of demand needed to push home prices higher, or at least not lower given new home construction starts. The kicker is that, should inflation take off in earnest and interest rates be raised to catch them, as last happened in the late 70s and early 80s, even new foreign labour won’t be enough to keep home prices from plummeting, presenting buying opportunities for those who’ve been accumulating capital, and a whole lot of butthurt for those who thought that the good times would never end. ↩