How to Buy Anything Without Touching Your Savings

Summary

The speaker outlines four ways to acquire anything: using past money (savings), income money, debt money (future earnings), and new money. Emphasizing a unique approach, they share how they leveraged existing resources to purchase a building by creating 'new money' through underutilized assets. The speaker stresses the importance of generating new money rather than draining savings or relying on debt. This mindset of being resourceful and using time or additional efforts to fund desired purchases is framed as a behavior adopted by wealthy individuals to enjoy money without risking financial stability.

Takeaways

• 😀 Different ways to buy things: past money (savings), income money, debt money, and new money.
• 😀 New money is generated by utilizing underused resources and finding ways to earn beyond regular income.
• 😀 Wealthy individuals often use their time, skills, or assets to create 'new money' for specific purchases or goals.
• 😀 A personal example of buying a building involved generating new money from existing resources to cover costs.
• 😀 The concept of 'sawdust money' refers to finding creative ways to utilize underused assets or time to generate income.
• 😀 Rather than spending savings or income, wealthy individuals make money specifically for a desired purchase or goal.
• 😀 A key behavior for wealth-building is finding ways to generate income for specific purchases without relying on savings or debt.
• 😀 Paul McCartney's example of writing a song to pay for a swimming pool highlights the idea of using existing skills to generate new money.
• 😀 Creating space or deprivation can increase your demand for money, forcing creativity and resourcefulness to meet financial goals.
• 😀 Wealth comes from managing lifestyle inflation by increasing new money, not just income, while keeping expenses low.
• 😀 A shift in mindset: the joy of generating money for a specific goal can outweigh the actual purchase itself, leading to increased motivation and satisfaction.

Q & A

What are the four types of money mentioned in the script?

The four types of money are: past money (savings), income money (money earned regularly), debt money (money borrowed with a plan to pay it back using future earnings), and new money (money earned from utilizing underused resources or taking extra steps).

What does 'new money' refer to, and why is it important?

'New money' refers to money earned from utilizing underused resources or creating additional income streams. It's important because it helps avoid draining existing resources like savings or income and allows for more financial flexibility when making large purchases or investments.

How does the speaker view the purchase of the building?

The speaker views the building purchase as a way to generate new money. Although the building was not strictly necessary at the time, it was intended to serve multiple business purposes, such as hosting events and meetings, thus potentially paying for itself by replacing venue costs.

Why does the speaker advocate for using new money to make purchases?

The speaker believes that using new money allows for flexibility and creativity, as it avoids tapping into savings or income. It also allows individuals to make purchases without creating new liabilities or depleting important financial resources.

What is 'sawdust money,' and how does it work?

'Sawdust money' is the concept of using existing, underutilized resources to create new income streams for a specific project or purchase. It’s about leveraging what you already have in creative ways, such as using extra time or assets to generate money for a particular goal.

How did the speaker suggest his friend could afford a new building?

The speaker advised his friend to choose the bigger office, but with the condition that he would pay it off within a year. This was to ensure that the investment was manageable and based on a clear plan to use existing resources or generate new money to cover the cost.

What is the significance of the swimming pool analogy?

The swimming pool analogy, based on Paul McCartney’s approach, suggests using creative means to earn money for a desired purchase. In McCartney’s case, he wrote a song to fund a swimming pool instead of using savings or income. It illustrates how you can use your resources to create new money rather than relying on existing funds.

What does the speaker mean by 'making yourself poor'?

'Making yourself poor' refers to creating a sense of deprivation or a threshold where the need for more money is heightened. This can motivate individuals to generate new money by pushing them to think outside the box and find additional income sources.

How does the speaker recommend balancing lifestyle and spending?

The speaker recommends not increasing your lifestyle expenses relative to your income. Instead, focus on increasing new money, which can fund the desired purchases without affecting your main financial resources. This keeps spending in check while still achieving goals.

What is the overall mindset for spending money effectively as described in the script?

The mindset for effective spending is to use money as a tool for enjoyment and growth, not as the end goal. Instead of using income or savings, one should aim to generate new money through creative or additional work, ensuring that purchases align with financial goals without draining core resources.