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It’s Not About Big Wins vs. Small Wins

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I was just reading Ramit Sethi's post of 7 things I learned from 9 years of I Will Teach You To Be Rich. I love when people boil down years of hard work to a few simple ideas.

I love it more when brilliant people like Ramit does it.

What I don't enjoy is when they assume their way is the only way and take arrogance to an epic level in an attempt to support it. Sometimes I think he takes lessons from Judge Judy on how to be annoying. For some, that's their schtick and it works for them... so good enough.

He has a few things that he focuses on, but for the most part he's against frugality. Vehemently against it. Here are a few quotes from the article:

"... She does online sales, and she made a rule for herself that each time she does a monthly webinar, she takes 5% of sales and spends them, guilt-free, on anything she wants.

I love this!

A $2,000 bag? Get it."

"It’s easy to talk about cutting back on lattes, disabling the oven light to save $0.03 over 2 years, and never ordering appetizers. Great! You’ll save $11,000 in 30 years and hate your self every day of your life."

"None of us wants to live like a penny pincher. Do you really want to know how to make your own laundry detergent and save $0.32/year? Who wants to live like that?"

I'll be the first one to tell you that you should figure out what your time is worth and make judgments appropriate to that. I've been saying that for years. The people making their own laundry detergent are saving a lot more than 32 cents a year and it ends up costing them just a few minutes of time. Many have done a simple calculation and determined that it is worth their time.

I have yet to ever hear anyone suggest that they disable their oven light. Though a frugal blogger has shown that using the oven saves you a couple cents in reducing the number of times you open your oven door. Saving 32 cents a year or disabling an oven light to save 2 cents a year is ridiculous.

As for getting the $2,000 handbag... well if that's just 5% of your monthly webinar sales, it's somewhat reasonable. Just know that person's webinar sales is $40,000 a month or $480,000 a year. If you make less than that, you are going to need to save up for it or violate the 5% spending rule. What percentage of people do you think reading the post make $480,000 a year? Far, far fewer than 1% right? Maybe .0001% since he has a wide readership. So why focus on an edge case that's irrelevant to almost all his readers.

However, the other examples, skipping appetizers and the daily lattes are simply smart thinking in my opinion. Restaurants in general give you tons of food, more calories than most people should eat in a sitting (from a health standpoint). So why add more food and expense to that? Plus if you are going to add more food clearly the wise choice would be a dessert at the end, right?

The lattes are another thing as well. It's not complicated math to add up how $3 lattes (roughly the price of one at McDonalds, plus some tax) adds up to around $1000 a year. Consider for a minute that 64% of Americans don't have $1,000 in savings. A single latte-free year, would more than double the savings savings of most Americans.

What are you going "hate your self every day of your life" more for? Not having a morning latte or being on the brink of a financial disaster. Only you can answer that question, but I'd pick the later.

Ramit then goes on to make a case for a few big wins:

Or... you could focus on the 5-10 Big Wins in life and never have to worry about ordering your morning coffee: Investing early. Negotiating your salary. Starting a side business. Finding a Dream Job. Optimizing your credit. And a few others.

You can listen to the experts who tell you to keep a budget and cut back on lattes. The truth?

  1. They don’t even do this
  2. Why don’t they ever talk about Big Wins like earning more? Answer: They don’t know how.

I love the big wins as much as the next guy. They are a big portion of what I highlight in my post about fixing your finances. Many of the things he highlighted are no-brainers. No personal finance blogger or guru is advising people to have bad credit or wait as long as possible to invest. They aren't going to tell you get a terrible job or just "suck it up" if you are underpaid.

It isn't about big wins vs. small wins, because it isn't an either-or situation. You can do both. If you are smart about it, you can use the small wins to help you fund the big wins such as starting a side-business or investing early.

Do the experts cut back on the lattes? It depends on your definition of experts. If you are talking about David Bach who has sold millions of books on the topic, maybe not. However, he doesn't have to now that he's sold millions of books. When you sell millions of books, you won't have to either. If you are talking about personal finance bloggers who (mostly) just trying to get by like every other average Joe... yes these "experts" (their level of expertise varies of course) tend to skip the lattes.

Do the experts never talk about big wins? Well considering the examples of big wins Ramit listed (Investing early, negotiating your salary, starting a side business, finding a dream job, optimizing your credit), I'd say darn close to 100% of experts talk about at least some of them. And certainly the experts know how to invest early and get good credit. This stuff isn't rocket science.

The rest of the article is actually pretty good with some solid advice. Ramit loves to talk about the psychology behind money and this is helpful. It's particularly helpful in understanding why he'd be against frugality... he can't sell his "premium-priced" (his words, not mine) courses to those people. I think he believes it is better to mock them, so they don't waste his time... which is fair because, again, he's doing extremely well with his schtick.

The article made me chuckle in another way. In one sentence, he says, "That means it’s 'free' to try all the free ebooks, the $7 online courses, the 'guru' webinars... but ultimately, we start to realize we’re wasting our most valuable resource of all: time." Let's look at two things and ask "what saves someone more time?" Is it:

1. Skipping the lines at the $3 latte shop and making your coffee at home.
2. Taking Ramit's Earn 1K class.

I'll go with option #1. (For full disclosure, Ramit's Earn 1K class is about earning $1,000 a month. Still, there's a lot of time involved in taking the class... and then even more time involved in implementing the results. I'm not saying that you shouldn't start your own side business, but let's not dismiss the value of how frugality can save you time and money.)

Posted on February 10, 2014.

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8 Responses to “It’s Not About Big Wins vs. Small Wins”

  1. Glen Craig says:

    I’ve been thinking about this exact issue recently. I totally agree that there isn’t one answer for everyone. The thing with personal finance is it’s “personal.” Everyone’s situation and values are different and you can’t say there’s one way to do things. You really have to approach your finances as a way at looking at your values. What is it you want and value? The lattes are fine if you can afford them. If it’s important to you then make sure you find a way to have the money for it. But sometimes you have to sacrifice for bigger values. If you aren’t making rent then yeah, cut out those lattes.

  2. I agree with you that there is plenty of room for big wins and frugality. I don’t understand why small startups start by renting out the swanky office. I was just talking to one startup founder who has 3 employees working out of his apartment. But you wouldn’t know it from the 100k/mo regular users of his site!

    I think that the people who rail against frugality never gave it a chance. I’ll admit that I’m one of those people who said I could “never” cut my dining out budget. Yet, when push came to shove, I did it — and I’m perfectly happy without it! In fact, I think I’m happier living frugally than before. I covet less stuff. I don’t waste time shopping. I focus on the things in my life that money can’t buy. And I’m much happier.

  3. Lazy Man says:


    I agree there’s really no one answer for everyone. I recommend that people should be mindful of both sides and pick and choose their battles. For me, the value of appetizers isn’t there… and they are one of the things I sacrifice so that I invest early… one of the “big wins.” The end result is that I’ve been able to build a level of financial freedom that, to Rebecca’s point, makes me happier.


    I think the start-ups get the swanky office mostly to show that they are a real business. This confidence is helpful with the VCs, when it comes time to get the round of funding.

    I think Ramit has given frugality a chance. I think he’s talked about in his college days. However, now it really isn’t part of his image or his brand. It’s hard to sell products (classes) to people who are focused on frugality.

  4. Stephonee says:

    Sure, Big Wins work and are important. But it’s kinda like the two “debt snowball” arguments (should you pay the debts off in order of interest rate or in order of debt size?). One is mathematically right, and the other might have some psychological benefits.

    If you’re not in a place to make a big win (or you’ve made all the ones you can for now), small wins can help keep your momentum for saving and improving your finances going.

    So I say go ahead and wash some ziploc bags, and make your own laundry detergent, while you wait to hear back on a job offer (or whatever).

  5. daizy says:

    I am glad that you mentioned that his personality can be annoying. I read everyone gush about him and then went to his site and found it incredibly annoying. I have not found a side business yet that does not totally stress me out. Frugality helps me simplify my life so that I don’t have to be out shopping or networking or always searching for the next opportunity to make money. I find it exhausting. I am definitely a type B personality.

  6. Lazy Man says:

    I stressed a little about mentioning the annoying personality. I really don’t want to be negative about anyone, in any way. Then I thought about it a little more and decided that I have to be true to my readers and take a stance.

  7. […] I wrote "it's not about big wins vs. small wins" and in that cited an article from Ramit Sethi about someone buying a $2,000 hand bag. […]

  8. […] It’s Not About Big Wins vs. Small Wins “It isn’t about big wins vs. small wins, because it isn’t an either-or situation. You can do both. If you are smart about it, you can use the small wins to help you fund the big wins such as starting a side-business or investing early.” […]

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