Think Like a Startup, 2nd Edition

CHAPTER 7 The seeds of greatness

Money can’t really be used for that many things. We can certainly buy countless items with it, but from a category viewpoint there are only a few things we can do with money. Once we understand these categories it really becomes quite simple to accumulate more money and make your life simpler, financially at least.

We start off with two choices once money arrives, say as a number in a computer somewhere: we can either spend it or save it. That’s it, the only two options. And here’s where I have to drop a couple of truth bombs. It may sound like cultural heresy, but there is an infallible, historical truth about money: the ability to save is key to everything. I’m not saying you have to be a miser, but unless you can save a portion of what you earn, you’ll never become self-reliant or live an independent life. It doesn’t matter what ‘type’ of money you earn; unless you keep some for yourself, everything else becomes futile. There are many ways to phrase this truth, and it is useful to cover a few maxims relating to it, to provide both a context and a quantum to how much it really matters.

Spent money vs invested money

American entrepreneur and billionaire W. Clement Stone built his fortune in insurance and publishing, but he was a strong believer in basic financial principles. He once said, ‘If you cannot save, then the seeds of greatness are not within you’.

Wow, what a powerful statement. What I love about it is its accessibility. He didn’t ...