2. LOAD UP ON AMMO

Everyone understands the concept behind “it’s important to save”, but not many truly understand the first principle reasoning on WHY it’s important.

Take a moment to ask yourself “why do you save”?

Most likely your answer is to cover daily expenses like food, gas, rent, mortgage, school, emergencies, and stuff like that so that one day, you have enough savings to be financially free.

However, I think about the meaning behind “saving” a bit differently, bc I know just saving by itself will rarely, if ever, make a person financially free, but rather it’s actually the assets & investments a person owns that will enable them to.

I save bc I want to make sure I am prepared to seize rare opportunities that come around in my life to plant large seeds in assets, generational companies & entrepreneurs of the future, so that the fruits of my INVESTMENTS allow me to control my time till the end of time.

I’m trying to “load the ammo” so that my bang hits hard at rare opportunities that present itself.

However, if you don’t have your ammo loaded for when the opportunity comes, you won’t be able to fire as hard as you could or should. Therefore, many people may have invested in the same company, at the same exact time & duration, but the bang for their $ invested is no match to someone that saved a significant amount & invested it.

It’s the MAGNITUDE that matters.

For example, a majority of people can invest $1~$100, but not many have the ability to invest $500,000~$1,000,000.

Over time you may have the same % returns, invested in the same company, but the impact will be very different.

Take the extreme example below:

10X return in 10 years of $1 => $10

10X return in 10 years of $100 => $1,000

10X return in 10 years of $500,000 => $5,000,000

10X return in 10 years of $1,000,000 => $10,000,000

You can probably retire comfortably with $5,000,000~$10,000,000, but not $10~$1,000.

Therefore, this concept of saving has to be viewed from a different lens, ingrained in your mind, and implemented into action as soon as you begin to generate $.

You gotta save so that the loads of bullets are ready to be fired when the opportunities arise.

You don't want small hits, you want LARGE hits that'll knock someone out cold.

You gotta dream it, live it, and breathe it.

Next time when you spend your hard earned $, try to understand the core reason why you are spending it.

Is it simply to make you feel good in the short-term? To show off or impress someone temporarily? Or to make someone think of you as something you're really not?

Ask yourself, do you really need to get that expensive 'thing'? Or will you still have an awesome time with a cheaper (but greater value) 'thing' and what really matters are the people you will be hanging out with?

Be real and true with yourself.

Imagine your happiness curve and the area under it, based on your spending. Does it increase the curve and the area under it permanently & materially?

If it doesn’t, don’t spend it! It really is that simple.

Start off every day with a goal to be economical, so that it becomes a natural habit to spend on NEEDS rather than WANTS.

Here’s a little story back in the day on how I saved up a significant amount of $ pretty fast.

When I used to work at Apple, I intentionally lived in a very small 400 SQ FT rent controlled studio w/ my girlfriend (current wife now) in San Francisco. The studio was charging $1,500 a month, in a location (Pacific Heights) where a one bedroom would easily go for $4,000+.

My luxurious bed was sleeping on the floor on top of a Sivan yoga mat that costed ~$20 (mice would crawl around me some nights!) and my girlfriend would sleep on the couch (how nice of me!).

I even chose not to park in the garage in order to save the extra parking $ fee, which was an extra $400.

Instead, every Tuesday & Thursday early morning at 6AM (2nd & 4th week of every month), me and my girlfriend would drive around SF in my broken down 2006 Honda to find free street parking before we got on the Apple/Google bus to commute to work.

Also, while our friends would go out to eat at Michelin star restaurants and drink fancy drinks, me and my girlfriend would go to Costco and make our own Michelin-like food and special drinks at home (Costco food & drinks are my favorite!).

These were honestly the most memorable times - cooking delicious food, making tasty drinks, dancing with beautiful music in the background, and enjoying it all with the person I love in a small, closed home-like place, all while saving significant dough!

It's not like we didn't have $, which many may have thought at that time, but in fact, we were being compensated pretty well at Apple & Google.

The fact of the matter was that we were both aligned in our vision & goal to save, so that we could invest it in companies that ultimately would one day allow us to become financially independent.

Saving can’t be something you just “know” is important and just a concept that is kicked down the road to be implemented later in your life.

Saving needs to be a high priority and put into action NOW in a disciplined, habitual manner so that you can accumulate a significant amount of $ as fast as you can, so that when the opportunity arrives, you are ready to take advantage of it and GO AT IT HARD.

Remember, it’s like a fist fight, you don’t want little punches, you want that one punch that will KO your opponent for a long period of time, if not forever.

Anyone can put a $1 into each of the 500 companies in the S&P and say they were a long term investor, yet these people are probably still working.

But not many people can say they put a "significant" amount of their $ savings into a company AND was a long term investor. These people are the ones that are probably retired.

Saving is such a simple topic that everyone knows is important and seems very easy to do, but it’s only like this because it's easy in theory, but NOT actually in practice.

So next time you spend $, take a moment to think about the core reason you are spending it and you’ll realize that if you have the will, patience, and discipline, there always is a way to make an adjustment to save an extra $, without jeopardizing your level of happiness.

Let me know on Twitter what you did to start LOADING UP THE AMMO!

-TESLACONOMICS