If You Take Home Anything At All… Seven Fundamental Tips

I write about a huge variety of topics on this blog and I’m quite sure that not all of them are interesting to every reader. Some of you love the frugality material, others like the investment advice, still others are big fans of personal development tips, and so on.

As much as I write, though, there are a few fundamental principles that flow through everything that really sum up the things that I talk about on this site. These aren’t individual investment tips or nice ways to save a few dollars, but some fundamental principles that you can tie to any situation.

Like many of my ideas, this one came about from a conversation I had with a graduating high school senior who doesn’t really know where he’s going in life. I told him what I knew about things, and these are basically the seven points I told him.

Know how much your time is worth. If something is only going to save you a dollar, you’re only doing it because it saves a dollar, and it burns an hour of time, don’t waste your time doing it. Figure out a rough estimate of what your time is worth, and before you set into a task, decide whether or not it’s worth that time investment. Time is money, but not knowing how much money can really hurt you.

Over any period longer than a month, bring in more than you put out. This should be the gospel truth for any normal month. On occasion, there may be exceptions – I expect there to be exceptions in the coming few months for me as we move into a house – but if an average month shows you spending more than you’re bringing in, you’re going to be in very deep trouble before long.

Do things that you enjoy – money will follow. This is advice that I give to every young person that I meet. Follow what you really enjoy and keep doing it and exploring it. Money will follow you if you do that, no matter what, because passion and effort attract money.

There is no free lunch. Everything that makes money requires some sort of time and effort investment from you. If it seems that you’re getting something absolutely free, you’re not – don’t ever fool yourself. Even public services aren’t free – you pay taxes, don’t you?

The simpler the investment, the better it is. If there’s a ton of maintenance or research work involved in an investment, or there are tons of caveats and rules and fees, for most people the investment simply isn’t worth the effort unless the gains are huge. You’re far better off putting money in an index fund or even into a high-interest savings account most of the time.

Don’t buy what you can get for free. Look around you and see what things you’ve already paid for – or are available without a financial cost. Quite often, just a bit of footwork and thinking can provide tons fo free things. For example, if you enjoy reading, use the library – you’re already paying for it with your taxes, right?

Putting effort into learning new skills and organizing yourself usually pays huge dividends. Without learning how to organize my time and my stuff better, I could have never started this website. Personal productivity and personal development do eventually lead to cash in your pocket.

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  1. Wil says:

    Trent, these are right on! When you put them on “paper”, they seem so simple that its laughable. I’m sure you are getting tired of hearing “great job”, so mega-kudos!

  2. David says:

    Hi,
    I love this blog – it’s definitely one of my top daily reads. Could you please expand on your first and last points?
    Specifically, the first one discusses the value of one’s time, but isn’t one’s time only worth actual dollars if one would be using that time to make extra dollars? If the choice is, for example, saving a dollar or cleaning out one’s car, then the value of that time is different than if one was instead working at Target.
    The last point discusses organizing time and learning new skills. Could you please provide links to writeups on the time organization method you use? I’ve used several and always end up back at square one.
    Thanks.

  3. dwlt says:

    I’m with David – it would be great if you could write more on your last point. That’s something I’m spending a lot of time on right now (ha), and I’m pretty sure I could pick up some tips from you!

  4. Trent says:

    For the first tip, figure out your true hourly wage and use that as a comparison for your activities. Is it worth this to you? If not, don’t do it (or have someone else do it).

    For the last tip, keep an eye on the personal productivity category here. I am a BIG fan of getting things done.

  5. Rick says:

    Unfortunately, like David, I find it difficult to really determine the value of my time. For instance, I work a salaried job where I do not have the opportunity to earn overtime. Sure, I could determine my hourly wage, or even my “true hourly wage” following your advice, but in dealing with economics, we deal with marginal changes. If my time is worth (say) $25/hour, while working, that doesn’t mean it’s also worth $25/hour during the rest of the time, since I can’t earn that $25 by working an extra hour.

    Likewise, we can consider the opportunity cost of time, rather than money. Would that hour be best used working, cleaning my car, or spending time with my kids?

    I think all these are real issues that cannot be solved simply by evaluating how much I make at work (even if I take into account the “real hourly wage” like you discuss in your past posts).

  6. Canadian says:

    I think that’s a GREAT summary. :)

  7. Brett McKay says:

    How long is the lag time between doing what you enjoy and money following? ;) But, seriously. I’ve been blogging now for almost seven months and my traffic has plateaued to about 100 visitors a day. I’m really trying to bust through that. Every time I come up with some killer post idea that I think will finally push me over the edge, nothing ever changes. It’s starting to get frustrating. Don’t get me wrong, I love blogging and will keep doing it because I’ve benefited so much from it, but it would be nice to see my efforts bear fruit in more visitors and RSS subscribers.

  8. Brad says:

    passion and effort attract money

    To a point, though it is missing two key elements:

    - You should do it with excellence. You won’t start out excellent, but you should aim for it.

    - People have to have a demand for what you provide.

    You might really have a passion for a pro sports team, but most people will end up losing money on that passion rather than gaining it.

    If you can get a passion that has a market, and if you will do it well, you should then draw the money to you.

    Brad

  9. Brad says:

    Brett, your “payback” may not come from the blog site itself. It may come from connections you make there, a job opportunity you get, etc.

    While money does tend to follow passion, it doesn’t always come in the channels we design for it. :)

    Brad

  10. Brett McKay says:

    Good point, Brad! I guess I should expand my view when it comes to blogging. :)

  11. Jim Lippard says:

    Brett: Your blog looks very good visually, and the written content well done, but my first impression was marred by two typographical errors in the first sentence of the first article I looked at–”Do You Suffer From Digital Pack Rat-itis? Here’s Your Prescription.”

    The two typos are “intresting” and “pat racks”–and two sentences later, “vinal” for “vinyl.”

    I looked at your popular post about “Want to improve your law school exam grades? Go here.” and found that you misspelled Gregory Bowman’s name every time you gave it (as “Greggory”).

    It’s possible that you are losing potential repeat visitors if others also find these kinds of errors to be an annoyance.

  12. js says:

    There’s a joy in doing many things yourself though, that specialization misses and only doing what pays you most misses.

  13. Gal Josefsberg says:

    That first tip is really important. A frugal mind set is great, but if it takes you four hours to save $1 you may have ended up with a loss. Those hours could have been spent on something more productive.

    Even if there wasn’t a financial gain to be made during those hours, you still could have used the time to do something better. Go for a walk, spend time with your family or just read a book.

  14. Brett McKay says:

    Jim,
    Thanks for the feedback. I really appreciate it. I really need to do a better job with the typos.

  15. Orthros says:

    Great article.

    I would offer a counterpoint to one point. I say (within reason) do it for the money, and the love will follow. :) Meaning you should always have maximum money as the focus on the work you do within reasonable guidelines (working hours, for example) and ethical concerns.

    “Do what you love” sounds great, but is often not as responsible as dutifully doing what is financially best for yourself or your family.

  16. Joanne says:

    Well, I loved the summary but wanted more details like others! Tell us how to better manage time. Please.

    And, Orthros, I do believe that passion drives us. My father loved trucks, since he was 14. It’s a pretty blue collar job, driving truck, some would argue that was not the best job suited to take care of his children but my daddy loved it and when he passed away last month, he left his two girls with a home, three classic cars, and everything else he collected for 79 years, free and clear. He didn’t owe anyone anything. And, he did that by doing what he loved. I think there is really something powerful there.

  17. Dave says:

    My tip is – never buy new unless you have to -We shop at Goodwill and Ebay.My personal favorite shopping site is halfpriceretail.net for things you use everyday at a fraction of retail prices(shelf pulls,discontinued items,scratch and dent,etc.Also shop4zero.com is another good one…

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