What is frugality? Wikipedia defines frugality as having “the quality of being frugal, sparing, thrifty, prudent or economical.”
Some people compare frugality to being cheap. Are they really the same?
Let’s identify them.
Frugal vs cheap
Cheap people measure things in terms of its price cost while frugal people measure them in terms of its value for the money.
Cheap people will simply buy the lowest priced item on the grocery shelf. But frugal people will check and compare products and buy the most practical item they can get.
Cheap people are somewhat unreasonable when haggling and believe they deserve the lowest price possible. But frugal people are reasonable when haggling and believe they don’t deserve a special deal all the time.
I can go on and on about the difference between frugal and cheap, By now I assume you already have your views on which choices are frugal and which choices are cheap.
Frugality can help you achieve your retirement sooner
Being frugal doesn’t really mean you are better off. Yes, you can stack a lot of cash in your bank account, but it won’t make a lot of cash for your retirement days.
While it is good to save money in your bank account, it won’t earn you much money in return. Having emergency cash though means you are ready for the rainy days.
Preferably, saving at least 6 months of your monthly income is a good basis of how much money you should keep in case rainy days do come.
Investing your money in different financial vehicles that can give you 4% and up to return is a good option for you. In this regard, investing in stocks, mutual funds, real estate is a good choice.
Heck, if there are available cooperative near you that one is another viable option for you.
Of course, the higher the return of your money invested is better, but higher yield also means greater risk. Only manage risk you can afford, only use the money you can afford to lose.
There might be an investment that offers a higher return with lower risk. Most of the time though, that’s a scam. Stay away from those too good to be true deals.
Friend, just a piece of advice only invests in the things you understand. I learn it the hard way, together with my longtime girlfriend. We joined a multilevel marketing company and failed because we don’t really understand what we are doing at that time.
Nowadays, You got to be wise with your spending what you save this day can be your base investment in the future. The money you keep will make money for you forever. Do you like the sound of it?
That of course, is investing your money that will earn you passive income for life.
How can it be done, you asked?
I’ll show you it was possible, workable, and will work for you when you do it right.
These are the 2 common choices you can take in regards to achieving passive income.
Is anything that you own that has value and can be used over and over again can generate you passive income.
Rental business is commonly seen in renting the properties you own. Don’t have property? That’s fine, have a guitar, rent it out. Have a vehicle make it for rent and the like.
Next is the investment vehicle that I’m passionate about.
Coop investing and stock market
In here you put money in other people’s business and in return they give you dividend. As simple as that.
Just think of this idea, when you stop working your passive income will continue to supply your pocket. The more money you keep the bigger passive income it gets. What’s more, if that is invested in a much higher dividend bracket.
Want to speed up building up your wealth? Make more money and invest it, reinvest your earning and in few years time you can be close or over to your desired passive income for life.
There will be a time you will stop working and the money that goes to your pocket will stop flowing. Being frugal now will have a good impact in the future you are building.
Being frugal is being mindful of your spending habits, acquiring the necessary stuff first as you select the most practical deals you can get.
Frugality plays a big role in your life when you did understand why you do it and how you should do it to make it work for you.