Wed 20 Dec 2006
Forget Frugalism and Embrace Capitalism
Posted by RichSlick under Money Management
[6] Comments
A frugalist will spend his time searching the web, newspaper, and speaking with his friends to find that next great bargain basement deal. Upon finding the lowest price for a product or service he’ll triumphantly cheer as he reaches for his wallet to fork over cash to pay for that item.
A capitalist will spend his time searching the web, newspaper, and speaking with his friends to find that next great money making opportunity. Upon finding the highest return on an investment, he’ll triumphantly cheer as he reaches for his investment portfolio and adds that extra capital that he’s just earned to his books.
A frugalist will live his life loathing people who pay (gasp) full retail price for a product or service. He’ll buy second hand, dinged or refurbished items to save a few bucks.
A capitalist will live his life enjoying the fruits of his labor. He won’t concern himself too much with the cost of an item because he knows he earned the income to enjoy it.
A frugalist will congratulate himself at his ability to pull one over on a corporation by taking advantage of rebates, discounts, sales and other tricks so that a retailer doesn’t achieve full profitability on their sale - a win-lose proposition.
A capitalist will improve the economy by helping create new jobs, corporate expansions, product development and a slew of other activities because of his investment capital. He’ll also improve the economy because he uses his returns to invest further or uses his excess capital to buy products and services -a win-win proposition.
A frugalist will deride you for not following his ways.
A capitalist will try to teach you how to achieve superior returns but will not ridicule you, he’ll simply sigh, shrug his shoulders and move on to teach others willing to learn.
A frugalist will never buy a new car and will advise you to do the same but he doesn’t quite understand that used cars have to come from somewhere.
A capitalist may or may not buy a new car but he carefully considers his options because he knows that buying new cars helps keep people employed and keeps the economy growing.
A frugalist will condition himself his whole life not to spend a penny.
A capitalist will condition himself his whole life to earn an extra penny.
A frugalist will squander the most valuable commodity (time) doing all of the frugalist things above.
A capitalist will invest the most valuable commodity (time) doing all of the capitalist things above.
6 Responses to “ Forget Frugalism and Embrace Capitalism ”
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October 4th, 2007 at 4:15 pm[...] goes back to the whole capitalism vs. frugalism debate I wrote about earlier. You can spend time learning for earning or scraping for saving. I [...]
December 20th, 2006 at 2:22 pm
Rich, I have to frame this one!! thats for the insight.
December 21st, 2006 at 8:50 pm
I think that you are using the wrong terms. You might want to use optimist and pessimist or saver and spender….
but, I’m a frugal capitalist. These are not “opposite” types or positions…
Capitalism functions via supply and demand… I choose to maximize my supply of talent to meet the demands for my abilities… and I minimize my demands for goods and services so that I can maximize my choices from the available supply…
you might want to re-think your terminology…
NCN
December 22nd, 2006 at 8:17 am
It’s about focusing your time & energy on either making a buck or saving a buck; it’s not a false choice you do one or the other every day.
Will you spend an hour of your time searching fatwallet.com or slickdeals.net or techbargains.com to save a few bucks on an item you might buy or will you spend an hour on bloomberg.com, finance.yahoo.com, or pfblog.com to find the next great money making opportunity?
You can’t do both within the same hour and while you may rotate by switching from one to the other (30 minutes for one, 30 minutes for another) it gets back to my original point – you do a half ass job when you don’t concentrate 100% on one or the other.
December 22nd, 2006 at 5:24 pm
I’ve blogged about this divide before. For people on low incomes or in a lot of debt saving money on things is the best strategy… but once you have some amount of capital it makes sense to try to get higher returns. But many of these PF bloggers seem trapped in the penny-pinching mode. They regard debt or spending as sinful. There is a huge divide between investing blogs and PF blogs. There are a few like mine that cross that divide (e.g. I post my net worth). But I never post on saving money on stuff.
December 22nd, 2006 at 5:40 pm
You hit it right on the head moom: PF bloggers seem trapped in the penny-pinching mode.
I think this happens because:
1. People will blog about what they know and for many penny pinching has worked in the past and they’ll write about it.
2. People with like minded thinking will group together thus penny-pinching bloggers all re-enforce their own thinking. Is it any wonder why Bill Gates & Warren Buffet are close friends?
3. There is a general lack of education amongst many pfbloggers. I don’t say that as a slight or put down but when you see some of the advice doled out: invest in mutual funds, clip coupons and be merry you really have to wonder if this is the best advice for people.
4. Spend less than you earn isn’t the best advice for people because their real problem is that they need to EARN MORE THAN THEY SPEND. What if you earn $1 day and your food costs $2 day. Is cutting back an option?