Welcome to Penny Wise, Pound Wise!

Welcome to Penny Wise, Pound Wise!  With this initial post, I am giving some background as to what this is all about.  It’s quite likely that you’ve heard the phrase “penny wise, pound foolish” before – whether you’ve considered what that really means or not is a different story.  The phrase means, in the most general sense, that one is being smart about small things but forgetting to address the big things, usually as such things relate to finances.  For instance, a person might go out of his way to save 12 cents a gallon on gas when filling up his tank, but will think nothing of driving a large SUV around town to tackle routine modern urban tasks, even for short neighborhood trips such as picking up drycleaning or fetching a pint of ice cream.  To state the obvious, this person might save a couple of bucks each time he fills up his tank [relative to going to the slightly more costly gas station], but in the long run he is spending hundreds or thousands on the probably-needless driving of the SUV.

This topic is of interest to me, and probably lots of others too, because it is the smart management of both the pennies and the pounds that is likely to result in great financial prosperity over time.  Whether you consider financial prosperity to be having $100,000 of wealth or $100,000,000 of wealth, a few things remain the same for the vast majority of people – You have to strategically manage your expenses, big and small, you have to consume less than you produce (largely related to the previous point, of course), you have to maximize your earnings as best you can, and you have to strategically manage your savings and investments.  While it is true that a few people, whether by chance or brilliance combined with chance, are able to become wildly wealthy without thinking about being penny wise and pound wise (e.g. someone who wins a lottery jackpot, or someone who launches just the right iPhone app at just the right time), we must all remember that this is extremely rare.  How rare? A reasonable estimate, in my opinion, would be about one thousandth of one percent.  So in other words, probably not you or anyone you know (unless you went to Stanford or work at a VC firm, in which case you might know someone in this boat… but it’s probably still not you). 

But despair not.  You can amass great wealth too.  Whether you’re from a very poor background, a working class background, a middle-class background, or a professional or upper middle-class background, you can make it to the top.  It just takes time, attention, discipline, and dedication.

With this blog, I cover topics that can help you get on the road to wealth.  Some topics will address ways you can cut costs, giving you money to invest.  Other topics will be on investment avenues themselves.  My hope is that this blog can serve as an inspirational springboard that can be used to spark ideas and get people off and running on saving money, investing money, building wealth, and securing their futures and destinies.  You’d act amiss to not read other material on the topics I raise as well – while I know a lot about saving, spending, investing, etc., this blog provides my own point of view, and fairly limited information relative to all there is to know.  Not all entries will be relevant to all readers… so read and capture takeaways from what IS relevant to you so you can move your financial needle as best you can.

With that, we’re off.  I hope the entries that follow are of help to getting you to think more about how to live frugally but comfortably, invest strategically, and eventually become very wealthy (key word being eventually, of course)!