C’mon, 10 more seconds, get up that hill. You can do this. I am out of my saddle and follow the rhythm of the loud droning base in my ears: “Thumb, Thumb, Thumb”. On my display I see I am burning over 730 calories and nearing 16 miles of cycling.Another display, on the wall of a dark windowless studio in the middle of New York City shows the blue team, my team, is underperforming the red and green team. I feel the urge to push harder, although the incentive is lost on me because I don’t know my team members. Swerve Fitness, a spinning workout studio, randomly put us together and our team will not interact after the class is over. We will bring back our cycling shoes and call it a day. All this for just $30… really!
Well it is just $30 and I did burn all those calories right! On my way back home I stop at Traders Joe, a very popular supermarket chain, where nowadays you can hardly find non-organic products. Don’t get me wrong, I am pro-organic food and am sometimes willing to pay, on average, 50% more for the word organic. However, I am not sure what organic exactly stands for. It seems to me organic is a very loosely defined label. When I ask the fishmonger what organic salmon means, he answers the fish is farmed but healthier than the non-organic. OK? Well mmmh yes OK. All that for just 50% more… really!
You see when it comes to spending we are easy, especially when it comes to the little amounts. But we forget to multiply these small numbers over a longer period of time. Shall we? A twice a week $30 spin-class plus inflation over a period of 5 years will cost you roughly $15,000. On organic food we spend, on average about $100 more per week than non-organic which amounts to something like $30,000 over five years. Combine the two and you will have $45,000, an amount close to what Warren Buffett invested when he started… really!
We tend to structurally spend more when we earn more. I am not talking about your one-off celebration gift you buy yourself, but I am talking about all the regular big and small things we buy just to keep ourselves on the treadmill albeit looking a lot better. It is a strange process we all are aware of, without giving it much thought. We can do better and you know it. It really pays to delay the instant gratification of spending whether the spending is on small or big items. Delaying spending will give us a great head start in putting capital to work for us and letting it grow organically. Yes you read it right, organic growth can generate great returns: 99% percent of Warren Buffett’s wealth was established after his 50th birthday and a stunning 95% after his 60th.
C’mon 5 more years, get up that hill! You can do this.