Here’s a couple examples from my life:
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Safety Razor. I get a better shave and it’s like $15 for 100 razor blades, which lasts me a couple years. Way way way better than the disposable multi-blade Gillette things, which sell 5 heads for $20.
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Handkerchiefs. I am prone to allergies, so instead of constantly buying disposable tissues, we now have a stack of handkerchiefs that can just be used a few times and then thrown in the wash. This has also saved me loads.
What about you?
This comment generally only applies if you are earlier in your career or don’t have much to spend (earning will result in more money than saving). If you’re already making a middle to above average income, you’re likely better off reducing spending and increasing investments — 99.99% of rich people (including the minority born poor) don’t get rich through their labor (wage); they get rich through assets, whether through owning and building a business, or buying and holding shares in them.
I agree to a large extent! There are some interesting caveats though (mainly that I’m not in the USA). Six years ago I had a Vietnamese company license and 0$. I’m only very recently anything like “middle class” so I don’t have much experience with it.
The company license was key (as you say), but not due to growing it as an asset – it was more accurately an instrument to extract remuneration based on the value I deliver, instead of just the amount of time I spend. It also gave me control of how I spend my time. That meant that early on, I could only tackle low-value work and times were tough… but eventually I could solve more expensive problems and demand far more than I could as an employee. Selling solutions as a contractor (especially to foreign companies) made a ton more money than selling my labor as an employee.
In other words, my company is not worth much money as an asset, because without me, it’s non-functional. I also work with a lot of foreign VCs and am convinced that private equity inflates valuations pre-IPO by enough that there’s a lot less upside to capture than there used to be. Gone are the days when a private investor could buy e.g. Microsoft shares and see a 30x upside. Also, I’m in Vietnam – we do have a functional stock market, but the volume is much lower and stock ownership less attractive overall. Anyway, overall it would be hard to sell my company.
So there is a decent argument that my optimal path really is though labor – but definitely not through “wages”. Working for wages was always a mess where I only got paid half the time, and had to work all the time. Also it means my visa status depends on my employer, which has always lead to flagrant abuse. With my own company, I get more stable visa status.
I’ve also been offered equity for my work. However, I have said no 100% of the time and this has never been a mistake so far. One day maybe, but equity is a weirder prospect here than in the USA.
So I focus on selling the solutions to the most expensive problems I can solve. That’s put me on track to a home + modest retirement for my wife and I. That’s “enough money” for me and I will likely go back to academia and volunteer work ASAP. I have no desire for millions of dollars – even if I can maybe see a possible path to it.
I wish you and your family the best in that endeavour.
Can I ask what job/s you did starting off?
Ah, I was foolish enough to do web development in the developing world. It seemed like a good idea at the time – as the economy grew, I reasoned businesses would need websites – so I started a company to do this. In truth, it was really hard to bring client expectations in line with reality, most businesses were rent-seekers and did not want to invest even a small amount in their future, and I had stiff competition from undocumented migrant workers from the West that did not have any overhead. I barely scraped by at the time, and now platforms like Wix / Facebook / Grab / Lazada capture nearly all of that market anyhow.
Those were the early days of running my company. Later, I got into prototyping, which was a vertically-integrated margin business instead of a horizontal volume one (the former is much easier to run in Asia!). There is very little competition in my niche, but pivoting was brutally hard due to my low income at the time. I also got into writing about the things I was working on, which helped pay the bills. In many ways, my time spent here is an experiment in reflecting on some of the lessons I’ve learned.
Before that, I managed a branch of an Australian advertising company. That was my first job in Vietnam. I replaced seven or eight people. I received my salary less than half the time – but what can you do when your visa depends on your employer? Those years were quite bad too.
Prior to immigrating, I worked in medical research, and before that I was a scientist. Those years were pretty easy (even if they did not seem so at the time), but also around then I became acutely aware that I had no future in my home country. Looking back, I’m grateful for that – I had no right to see that far ahead, or with such clarity. It was pure luck that I had all the right ideas in my mind at the same time.
Did you have to do a lot of study to acquire those positions?
Medical research and science? Yeah. 3 years undergrad and 2 grad school, at a research university. One year between them, where I taught myself advanced statistics, experimental design, and Linux system administration. Undergrad was just a blur of studying and exams, but after that it was a bit better.
Long story short, medical research is a surprisingly complicated way to be poor. Salaries are way lower than I thought. I could have earned more money just working in retail, and the hours were worse (e.g. the clinic was always open during a clinical trial).
I also co-founded a tool sharing nonprofit and taught myself electronic engineering and some software, starting in grad school but continuing until I emigrated. After I got here, I just sort of took the first job I could get, so no initial studying for that one. I started studying software engineering more seriously starting around then.
I study around 2-3 hours per day.