Sam Walton says because he did not grow up with a lot of money (he had to pay his own way through college), he knows the value of money. Somebody else relates the story how he and a photographer waited for Sam at an airport. They decided to test Sam to see what he would do and threw a dime on the tarmac. Sam came walking out with aircraft coming and going. “Okay,” he says, “where do you want me to stand – on that nickel?”
There is a saying “save a penny, save a pound”. And another that says a “penny saved is a penny earned”. That is so true, just think about it. In business every penny we save on overheads falls right down to the bottom (profit) line! If we respect the pennies, the pounds will look after themselves. And we need to learn to deal with pennies before we can deal with the pounds.
As our wealth grows, the skill we need to manage it and grow it even more, changes. There is a lot more emotion involved when dealing with a million than when we invest a R1000. And there are so much more options when we invest a million. And recovering from a R1000 loss is so much easier.
But, if we start looking after the pennies, we will actually have something to save! I know many people who spend all their wealth R1 at a time with an attitude of “it is only R1.” Until one day all the R1’s add up to way more than they can afford. It goes something like this: “This cellphone is only costing R99 per month. I can easily afford that.” The next day they see a very nice DVD-player on special at only R96 per month. “I can easily afford that!” The week after that they subscribe to a “35% off subscription to your favourite magazine at R250 per month which means you save Rx per issue”, and who can say “no” to such a bargain and “I can easily afford R250.” But how much extra expenses have you now incurred? And what would happen if you decided to save R250 per month?
Let’s conclude with a piece of wisdom and a joke with a message. First the wisdom: “Bargains also cost money.” (My late father-in-law’s favourite saying.)
Now the joke. A Kirby (an execellent machine!) salesman came to a man and said he could save R5000 by buying a brand-new Kirby NOW. The man invited the salesman in and said: “You see that fridge? I saved R2000 on it. You see that stove? I saved R3000 on it. You see that TV? I saved R750 on it. You see that Microwave? I saved R1500 on it. I am sorry, I cannot afford to save a cent more!”
Respect the nickels and dimes. The pounds will come as if by themselves. It is a secret to wealth.