“If you live like no one else, later, you can live like no one else.” –Dave Ramsey
Tim Gurner, a luxury property developer in Melbourne, Australia, made headlines in 2017 by suggesting young people who consistently spent their money on coffee and avocado toast couldn’t afford to purchase homes. While Gurner’s comments raised the ire of millennials, he’s not wrong. Every dollar spent on high-end consumables is one less dollar to invest in tangible assets. Futures are not built on empty Starbucks cups. Those who hold spending habits, as Gurner described, have forgotten that sound financial and business principles should be applied to create personal wealth. The practices of expense minimization, asset allocation, and revenue growth translate equally between home and office.
Many of the 1 percent – the uber-rich – translate these practices in their personal lives. Warren Buffett still lives in the home he bought in 1958. David Cheriton, Stanford professor turned Google stock profit billionaire, cuts his own hair and drives an old VW. Dish Network founder, Charlie Ergen packs a brown bag lunch for work. Aside from being enormously wealthy, these individuals have another common trait. All their parents grew up during the Great Depression and imparted lessons of frugality born out of a life or death level necessity.
More importantly than thrift, the bigger Depression-era example given to these men was that the good times can, and will, come to an end. You might have weathered the financial crisis of 2007–08 and feel like you can survive anything. As bad as that calamity was, the Great Depression was go out and hunt a possum for dinner bad. I guarantee anyone living the high life in 1926 wished they had cut back on their avocado toast intake to prepare for the future.
It’s often said to, “expect the best, but plan for the worst.” Our personal finances should follow this maxim. Your success will buy you security in lean times and is worth far more than an oil drum of mocha lattes.
Avocado Toast and Mocha Lattes: Accelerators
- Take an inventory of your personal financial life.On a scale of one to ten (one being awesome and tenbeing awful), how would you rate it?
- Where would you like to be, financially, in fiveyears?
- What steps should you begin taking NOW in orderto get you one-fifth of the way there over the nexttwelve months?
Dr. Jeff D. Standridge is the best-selling author of “The Innovator’s Field Guide” and “The Top Performer’s Field Guide.” He serves as Managing Director for the Conductor and Innovation Junkie, and teaches in the College of Business at the University of Central Arkansas. Jeff helps organizations and their leaders generate sustained results in the areas of innovation, strategy, profit growth, organizational effectiveness and leadership. Learn more at InnovationJunkie.com.