Here is new excerpt from ONO that tells the story of two men with very different financial strategies. You will see how a little patience and delayed gratification can pay off big time for you in the long run.  It is in times like these that Family First Entrepreneurs need to carefully consider their financial strategies.  Hope this is helpful.

Wally and Fred

Wanting Wally works 60 hours a week as a salesman, makes $80,000 a year, and has every toy he ever wanted. Because of his spending habits, he has limited himself to investing $2,500 a year, and that is only because his accountant reminds him to fund his IRA. Because he has no spare time, Wally isn’t able to work his investments entrepreneurially which then affects his return on those investments, so he earns an average of 5%. He can afford some of his wants, but because he has so many, he has to borrow at an interest rate of 10 percent to purchase the rest. Because of this, he has an annual net loss year after year, but he has a lot of nice stuff to show for it.

Now take Frugal Fred. He works 40 hours a week in a welding shop as a machinist making $36,000 a year. Fred is very conscientious and tries to save as much as possible. Through his efforts, he saves $6,000 a year and lives on the rest. He buys used cars, dresses conservatively, and lives a happy, yet thrifty, lifestyle. Over time, that $6,000 a year will increase at an incredible rate because Fred made it his business to learn how to invest it and to be wise with his money.

Wally may have the higher paying job, the material possessions to show for it, and after 30 years, he may have over $300,000 in his IRA, but unfortunately, the amount of money he has borrowed and paid in interest to fulfill his wants far outweighs his retirement account.

Fred on the other hand—even without the high-profile, high-paying job—has created wealth for himself. His financial wisdom and discipline allowed him to end up with over a million dollars in the bank. In other words, Fred has options to do whatever he wants, whenever he wants to do it. All it took was a little patience and careful planning.

Two Extremes

Now some of you may be thinking that old Fred led a boring life for 30 years while he was accumulating his wealth. He never had any fun and he didn’t have any nice things. You may be correct, but remember that I used him as an example at one end of a scale. I showed you what was possible if you made huge sacrifices to build wealth. I also gave you an example of the other extreme—Wanting Wally. Unfortunately, the Wally example is not as far-fetched as you’d think. There are millions of people like Wanting Wally alive today.

Let’s get back to Fred. Let’s paint a picture with a little more balance. We’ll put Fred in a scenario where his wife spends ten hours a week working entrepreneurially from home. She earns the family’s fun money. At fifteen dollars per hour, she can put 600 dollars worth of fun into the equation and now Fred’s family has a little more balance.

I’m not asking you to deprive yourself of the good things. I’m asking you to consider how much they really cost and then, instead of “deprive,” use the word, “limit.”  Limit spending, save money and invest it entrepreneurially to build wealth.