In Taiwan, there lives a curly haired girl. We were hanging out yesterday.
She was managing her "business". A little play shop. My sister in law asked if she could buy something from her. The girl replied, "I'm the owner of this business if you want to buy something you have to save money first before you can buy anything."
She just turned 4 years old yesterday and already knows such an important concept about money. You have to Save before you can spend.
Save Money First
In the old days before money was invented, people would barter with each other. Exchanging services or goods with each other. This meant that if you wanted to "buy" something from someone else, you had to provide services or goods to them at the same time. You could not buy things first.
With money as a way to store value, you can provide services or goods to others first, save the money they give you, then, and only then, can you buy anything.
Think first about how you can provide value to others so that they will pay you money for it. Save that money. Then give yourself the option to buy things. It's a pretty simple concept but you would be surprised how many people have lost this concept.
In the age of capitalism and inherited wealth, many people have only grown up learning how to spend and not save. And when they are put in a situation where they have to make their own money, they are already in debt.
Save Money First. If you save enough, you can Retire Early and think about all the happy ways you can spend your money.
Later in the evening, my sister in law asked the little girl again if she could buy something, this time it was a negotiation. The price started at $3 but trying to haggle with her resulted in the price going up to $4 and then $5. The lesson here is, don't try negotiating with a 4-year-old.
Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.