Traditional Values

“Price is what you pay. Value is what you get.” – Warren Buffett

The phrase traditional values can mean different things to different people. As a gay person, when I hear this phrase it makes me cringe because it’s often used in retaliation to the idea of gay marriage. If we set this connotation aside, then I guess there’s a part of me that buys into traditional values especially as it relates to investing and saving money.

Terry Savage at MSN Money writes, “So who needs to attend to the age-old principles of building wealth? Why bother spending less than you earn -- and invest the difference -- to create wealth? Many people wonder: “Why place a premium on traditional values?” Whether in business or personal life, values and valuations have been turned upside down.”

She recommends the book, “The Millionaire Mind,” by Dr. Thomas J. Stanley. “He surveyed nearly 1,000 of the nation's millionaires, and what he found may surprise you. They live comfortable lifestyles, but are not wasteful. Most of the millionaires in the survey report they buy expensive shoes, but almost all have them resoled. For the most part, they remain married to supportive and responsible spouses who run economically productive households -- from clipping coupons to buying household supplies in bulk. Bottom line: They spend less than they earn.”

This is the ultimate traditional value… spending less than you earn. The other biggie is delaying gratification.

Rob Landley at The Motley Fool describes his take on this concept, “Put more succinctly, all investments involve delaying the gratifications of today for far greater rewards tomorrow. It’s like getting up and swinging a tennis racket every morning for an hour -- only to win the local tournament with your mother a decade hence.”

“Of course, there are no guarantees of anything. There’s the risk and uncertainty of being hit by a meteor in five minutes. But clearly the worst investment decision of this century has been not to invest. When it comes to money, the losses are evident at either extreme -- both for those who’ve chosen to take early rewards rather than invest and for those who’ve dropped their core savings into a passbook account at the local branch. They both missed the wide-open middle groove: methodical savings and careful long-term investment. It’s sad, because I know they could’ve gotten it with a little training.”

“Investing is a mind-set and takes some work, but I’m convinced it’s one that the majority of people on this earth can enjoy. We invest every time we stop ourselves from spending the rent money on movie tickets (or just the $14.95 there for a chocolate bar and Sprite) and plink it into brokerage account. To be honest, for me, researching stocks and managing a portfolio to maximize returns is the easy part. It’s the discipline of saving I’m still working on.”

I can say the same thing in a different way... My real estate portfolio is cranking with a nice passive income stream but I still could learn a few things about how to spend less in my daily life.