Getting the highest and best use of every dollar - Part 1 of 3Article added by Jody Tallal on March 20, 2017
Joined: March 15, 2017
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Due to the length of this article, it is split into three parts. This is Part 1 and the other two will appear over the next 2 days.
Many people today are concerned about the raising costs of providing a college education for their children/grandchildren; and what it would take to retire. This can result in real anxiety over what the future may bring.
You may even be saving a few hundred dollars here and there for the kids’ education, but that obviously will not be anywhere near enough based on the escalating cost of college. You may also be contributing a small amount to your 401k, but again for most folks, that is nowhere near enough either.
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Additionally, even those that make respectable incomes, spend just about everything they earn. So the real question is how will you ever be able to earn enough extra money to be able to invest what you need to invest to meet your goals?
It will require a lot of new money invested each year to accomplish your financial goals. It will also take real commitment and focus to keep those goals vivid as you continue to make financial choices into the future.
However, there are strategies and processes that can make this all a lot easier. The purpose of this article series is to explore some of those with you. The first thing you need to learn is a concept called “Always getting the highest and best use of every dollar you spend”.
On the last day of your life, if we had sufficient records to review, we could look back and calculate every dollar that ever came int69o your possession. This amount would include everything you had ever received from your allowance as a child to every other source of income, gifts, or benefits during your life; and that final amount would be a fixed finite number. Therefore, we will call this finite number of all revenues received “Your Life’s Income”.
Additionally, on the last day of your life, if you had never spent a penny of Your Life’s Income, you would still have 100% of it left. Obviously however, since that is not possible, every time you bought something along the way, you were literally removing real dollars from Your Life’s Income and replacing those with on whatever you spent those dollars.
Now, to make a point; if we also on this last day your life calculated the value of everything you had left, we could instantly see how well you had done in utilizing all the money that had ever come into your possession.
Therefore, it is of the utmost importance that you become very aware of always getting the highest and best use of every dollar you spend, as this will determine what you have left in your estate of Your Life’s Income at your death.
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Every time you buy something; that is an irreversible exchange of that money from Your Life’s Income for whatever was purchased. For example, if you go down to the local electronics store and buy a new TV for $1,299; that $1,299 is removed from Your Life’s Income and it will be replaced with the TV. Unfortunately, in this example, the value of that TV in 10 years is almost nothing, so there would ultimately be nothing left from the original $1,299.
Now, what if you shopped around before making this purchase and found that exact same TV set on sale for $999? You would then have the same TV, but you would also have $300 dollars more left from Your Life’s Income which you could use for something else; like possibly investing towards your children’s education. If you decided to buy the same version of this TV, but in last year’s model instead, you might get it for $799; so now you would have an extra $200 more.
Related: Part 2: How to get massive savings on certain purchases:
Granted, this takes extra effort and time, but how long does it take you to earn $500?
Important Question: What if you became focused on the importance of always getting the highest and the best use of your money on just about everything you bought; from using dining coupons when you go out to dinner, to using the grocery store’s gas rewards program when you fill up your car? Can you see how quickly new money would be found that you are currently let slip through your fingers?
Another great way to do this same thing is look through the ads sections in your local Sunday newspaper. The ads you will find there are called “loss leader” sales items and this is one way how stores compete against one another for your business.
For example, you might see a large office supply chain advertising a $40 box of copy paper for only $26.95 (about their cost). While they do not make any money on the paper, if you come in to buy it, they have won the branding war over their competition (which is huge for them); plus you will probably also buy other things while there at the store that are not on sale.
Every time you shop for the best deal, instead of just buying on impulse, the extra money you don’t spend is now available to use to acquire something else. Learning to develop a habit of always getting the highest and best use of your money is critical in helping you find the majority of the money you need to invest to meet you financial goals. If you are too proud to use a coupon, drive to a different gas station, or look for a sale, you are squandering a portion of Your Life’s Income.
Tomorrow we will discuss a new tool that will make always getting the highest and best you of your money even easier to do. Here's the link: Part 2: How to get massive savings on certain purchases
About Jody Tallal:
Jody’s newest book, Billionaire Cab Driver, which includes the information covered in this article, has recently been published and is available in eBook format at BillionaireCabDriver.com. If you would like to get a copy of Billionaire Cab Driver, we have created a special 50% off Promo Code for ProducersWeb readers.
The Promo Code to use at checkout is: PW50. The book will be available in paperback in major bookstores after April 18, 2017.
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