Michelle Mcgagh decided that she would not spend a single penny on things that are not necessary. This means no movies, no cab(no bus even!) and no meals in fancy hotels! She documents her experience in a Moneywise article which is of interest to all the people interested in frugality and financial freedom.
Some important tips she shares are
1. Check your spending :- Unless you know how much you are spending, you can not control it.
2. Needs vs wants :- Make sure you need the stuff you are spending your money on!
3. Set a goal :- This could be overpaying your mortagage or building the retirement account.
4. Pay yourself first :- Keep the long term money aside and then spend.
The other tips she shares are Pay cash, Get organized, Get others on board, Do not get suckered into deals, Look to the past and finally Get out of your comfort zone.
It is important that you need to be convinced of the necessity of being frugal and equally important is the organization you put around your efforts to get there.
Here is a powerful story about how a comfortable life, ability to enjoy ones job and relationships and astute investments can lead up to wealth.
Robert Morin who worked as a librarian for nearly 50 years at the University of New Hampshire library has left $4 million to the school as his estate. He was able to build that fortune completely with his salary as a librarian. One may be astounded as the only way to riches is perceived to be entrepreneurship leading to huge success in business. This example just shows that an ordinary person in a job with average pay can build a substantial fortune with frugality, finding pleasure in your work and relationships and astute investments over a very long period of time. Let us see how this worked for Morin.
1. Frugality :- “He would have some Fritos and a Coke for breakfast, a quick cheese sandwich at the library, and at home would have a frozen dinner because the only thing he had to work with was a microwave,” He lived alone, rarely bought clothes,and drove a 1992 Plymouth.
2. Find pleasure in your job and relationships :- “His whole life was the library,” said Edward Mullen, Morin’s longtime financial adviser. He spent spare time reading almost every book — in chronological order — that had been published in the United States from 1930 to 1938. Morin cherished his time with the many students and staff he met over nearly half a century at UNH. “He loved talking with students, especially the students who worked at the library,” Mantz said.
3. Astute investments over a very long period of time :- Morin said he met Mullen in the early 1970s, a time when the librarian had been stashing nearly all of his income in a checking account and certificates of deposit. Mullen helped him expand into mutual funds and annuities, which complemented the sizable savings Morin was accruing in a retirement account. I think the fact that he did not withdraw any amount from the corpus and let it grow for almost 45 years also contributes to the growth of the corpus to the astounding number.
This should convince anyone that serious wealth can be an outcome of frugality.