Updated on 12.01.11

Success in the Margins Isn’t Marginal Success

Trent Hamm

A few months ago, I wrote a post called “Two Paths to Financial Success.” In it, I outlined how there are two distinct ways to succeed financially.

One, which I called “success in the margins,” refers to things like frugality, cutting costs, saving diligently, and so forth. The other, which I called “success in the mainstream,” referred to things like entrepreneurship and career building.

Success in the margins, I pointed out, is a sure way to success, but there is something of a cap to that success. You’re limited in how much you can save by your income and your fundamental living expenses. On the other hand, success in the mainstream doesn’t have a cap, but it is far from a guarantee. Entrepreneurship and career pursuit are risky enterprises that often don’t turn out.

Anyway, a reader recently took me to task for referring to frugality and saving as “success in the margins.” In his words, “There is nothing marginal whatsoever about the money you can save by living sensibly and putting some money into investments. It’s practical, anyone can do it, and the positive results can be repeated over and over again. That’s far from marginal.”

I agree completely with his statement. The reason I named it such was not because it is a marginal method, but because it is inherently capped by your income and lifestyle. Frugality, by its very nature, is about shaving away a little bit from the edges and saving what you’ve trimmed. That money comes about from the margins of your life.

For example, one of the first moves I made when I started my financial recovery is to reboot my work commute. Before the change, I would drive by a coffee shop on my way to work and many days I would be tempted to stop in there, have a cup of coffee, and often follow it with a bagel. On my way home, I would drive by an electronics store and a bookstore, and I would visit both of them a few times a week. Naturally, each week, I found myself spending a lot of unnecessary money.

When I changed my commute, I no longer went by the coffee shop, the electronics store, or the bookstore. I decided that it was just fine if I happened to go to them, but with my new route, I had to make the willful choice to go there. The big sign wasn’t hanging out there along my route tempting me.

So, every once in a while, I’d decide to splurge and go to one of the places, but most of the time, I barely even thought about them on my way home from work.

Those coffee shop and bookstore visits were in the margins of my life. They were things that I did, but they weren’t deeply important to me or to who I was. They just filled up some of my time and attention. I barely noticed when I cut them away.

That, to me, is “success in the margins.”

Frugality does not work if it’s removing something you value more than the money you’re saving. If you’re making yourself miserable to save a few dollars, it’s not worth it.

Quite often, when people think about frugality, they don’t think about the margins. Instead, they think about the things they value deeply. They don’t want to lose that valuable thing, so they just toss aside the idea of cutting back.

Frugality works well in the margins. It works when you’re trying a different kind of dishwashing soap. It works when you cut out a routine shopping trip that’s become boring. It works when you give up on and get rid of the pieces of a hobby that you’re no longer passionate about. It works when you make a bunch of meals ahead of time, buying the ingredients in bulk, so you can store the made-ahead meals in the freezer and always have something convenient to make for supper.

So often, these kinds of changes are really easy to make. You pretty much forget about the change once you’ve started doing it, and the only impact it has is the savings that appear in your checking account.

Success in the margins does not mean marginal success. It means finding success in the areas of your life that don’t deeply matter to you.

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  1. Vanessa says:

    From the title, I thought this was going to be about investing. Would’ve been a nice change.

  2. AndreaS says:

    This is article has a good thought.

    The beauty of frugality is that anyone can do it. It doesn’t take a college degree, high IQ, or huge investment in tools and resources. If you reduce your cost of living 10%, as compared to families in equal financial circumstances, the first year that 10% doesn’t seem like a huge difference… but do this for ten years, and your net worth starts to pull away from your peers. They are puzzled how you are doing better. But it is because you’ve saved and invested that 10%, including buying tools, freezer, and other items that help you further reduce your cost of living.

    However frugality does have reasonable limits. I see my married daughter in this situation, where she is doing just about every trick in the book, and still they are treading water, and also behind in medical bills. They clearly need to find ways to earn more money, including hubby finding another day of work (which he can easily do with his profession). But I also see that they do not maximize their free time. There are some hours a day when children are sleeping, or do not require their attention. This time needs to be spent more productively than watching movies and playing computer games.

    For families that are treading water, these little amounts of money than can be saved, and small chunks of time that could be spent better, are all they have to improve their situation and get a little financial breathing room.

  3. Adam P says:

    I think Trent’s really pushing set-it-and-forget-it index fund investing with super low MERs (bond index and stock index).

    That’s a boring but stable strategy. Not much to discuss on it except your preferred percentages in stock/bond/cash, which near everyone assumes is age dependent (eg 120-Age = stock market percent, rest bonds).

  4. Steven says:

    I’m just curious. How much money do you think you spent on books, coffee and bagels? There must’ve been more fundamental problems, but I’m not sure that you’ve ever addressed what those problems were.

  5. valleycat1 says:

    Steven – read Trent’s book, or look at the blog category Road to Financial Armageddon, or read Trent’s first posts from the archives. He’s covered the situation he was in & the road he took to dig out of debt pretty extensively.

  6. Steven says:

    Thanks for pointing that out, I guess I don’t remember that part of the story because he tends to hammer on the same few points over, and over again. For most people, Trent included, I don’t think it’s the small expenditures that end up breaking the bank, but the more fundamental problems. If Trent had his sh!t together otherwise, these things wouldn’t even be a concern.

    Which makes me wonder if it’s really worth the amount of attention that these things receive. I think for most people, solving the larger problems would be more beneficial. Trent didn’t solve his problem by not buying coffee and bagels. He took far more drastic measures. For people who are struggling to make ends meet, they probably aren’t buying coffee and bagels (and maybe they are.) They need “bigger” advice.

    The scope of this blog has narrowed to the point that I’m not sure how useful it is to people who aren’t already on sound financial footing. That’s where Trent is, so I guess it’s reasonable to expect it to happen that way, but it also seem like Trent is struggling with fresh ideas. Maybe taking a step back and looking at the bigger picture could help, not only him, but the people who visit his blog.

    Just my opinion.

  7. valleycat1 says:

    The other thing that limits the usefulness of this blog for a newcomer is that he tags almost everything as Getting Started. If you go to that category, you’ll see it now has over 1000 articles in it. If I were starting down the path today, I’d probably be thoroughly intimidated just looking at that!

  8. Tracy says:

    Well, and if you actually were new and coming in, you’d read this and if you clicked on the tag, you’d read the same posts over and over – it’s bad enough now when there’s a week or two between them – imagine just going into it straight and it’s nothing but ‘books/coffee/electronics on route to/from home’ and ‘things you can do instead of spending money: play board games with friends/cook at home/use the library’ over and over and over and over and over again.

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