Courtesy of Ramit Sethi
Ramit Sethi.
- Ramit Sethi is an entrepreneur, CEO, and author of personal-finance bestseller "I Will Teach You To Be Rich."
- He writes that he spent years agonizing over small expenses, terrified that he would be wasting his money if they didn't turn out well.
- But then, he realized, successful people and high earners think about small expenses differently - if they get any benefit at all from what they've purchased, it's worth it.
- Now he knows that wasting some amount of money is unavoidable in the long run, and worrying about it every time an opportunity presents itself wastes something more important: your time and energy.
How many times have you caught yourself or someone else say the following?
- "I've been thinking about seeing that movie ..."
- "I've been thinking about visiting that city!"
- "I've been thinking about buying that book. I'm just going to put it on my wishlist."
And in the end … you don't do anything.
We tend to overthink our purchases and investments - as we often should - but many of us do so because we're afraid of making the wrong decision. Worse, we worry that we're wasting our money.
As a result, we often miss out on investments - big or small - in ourselves that could actually impact our lives in a productive way.
I want to share with you one of the key differences between the psychology of those who are wealthy and the average person: High-earners think about this "waste" very differently. For example, when you "think about" buying that book, what you're actually saying is that you're really worried that you are going to end up "wasting" $10.
But is it really wasted money?
It's not surprising that when you're starting off with managing your money you want to be very vigilant of where you spend it. But this behavior manifests in interesting ways. For example, you might see people online who comb through every possible review for a book, devour every free blog post that author has written and then say, "Oh, I don't know. What do you think? Did it help you with this esoteric thing?"
And still they avoid buying that book because they're not 100% certain every cent won't go to waste; when in reality, with every minute they spend "thinking" about buying it, they're missing out on opportunities to learn powerful lessons that they can positively apply to their lives.
Then on the other end of the spectrum, someone who is more comfortable financially will say to themselves:
"You know what? I don't care if 90% of this book is irrelevant to me. If I could glean just one lesson, that is incredibly powerful for me."
I don't worry anymore about wasting money on books because I think books are the single best investment you can make. My rule is that if I ever *think* about buying a book, I JUST BUY IT.
Of course, before I reframed my mindset about "waste," I was also nervous about making the wrong decision. I used to agonize over going to a restaurant that I liked and risking ordering something different - because I don't go there that often, and what if I don't like that fish dish?
Then I gradually restructured my way of thinking.
What I learned over time was that, for example, if I ordered the fish dish that I've never tried and didn't like it, then I at least confirmed that I didn't like it. It means I gave it an earnest try instead of merely missing out and remaining in ignorance by default. Then I can confidently order the chicken dish that I know I'll like.
The point here is, worrying about waste is a poor use of your mental resources. The truth is that you will waste some of your money.
You will order the wrong dishes.
You will make the wrong hires.
You will buy the wrong books.
These are inevitabilities in our lives, but when you come across the right "thing," the lessons can have a lasting impact. And oftentimes they can be so powerful that they make up for every other "wrong" decision you've made.
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I would encourage you to reframe waste by asking yourself:
Am I afraid of waste?
Notice all the subtle ways you're subconsciously protective of your money and petrified of waste. Think about the way you...
- Talk about taxes
- Talk about tipping
- Talk about treating your friends, your parents, or even your partner
There is going to be waste in any system that has sufficient scale - whether it's your personal finances or even the Pentagon.
Waste itself is not the problem.
Wasting your time by doing nothing and opportunities for learning or developing relationships is.
Rather, reframe your idea of waste to focus on giving and receiving value.
Ramit Sethi is the author of the New York Times bestseller, "I Will Teach You To Be Rich," and writes for more than 1 million readers on his websites, iwillteachyoutoberich.com and GrowthLab.com. His work on personal finance and entrepreneurship have been featured in The New York Times, Wall Street Journal, and Business Insider.