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Saving your way into the fastlane?

yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
494
192
42
I've read several posts on several websites that espouse the value of reducing expenses as part of the way to get into the fastlane. It seems to me that if I were to try to accumulate $10k (for example) by reducing expenses -that is not very fastlane. Wouldn't I be better off trying to figure out how to better use OPM to get the $10k instead of waiting x number of months to save it through going without? ...Just curious to see what those in the real know have done, are doing and would recommend.
 

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RAiMA

New Contributor
Aug 24, 2007
95
7
17
44
Sydney, Australia
I've read several posts on several websites that espouse the value of reducing expenses as part of the way to get into the fastlane. It seems to me that if I were to try to accumulate $10k (for example) by reducing expenses -that is not very fastlane. Wouldn't I be better off trying to figure out how to better use OPM to get the $10k instead of waiting x number of months to save it through going without? ...Just curious to see what those in the real know have done, are doing and would recommend.
Saving money is not very fastlane, but at the beginning stages saving is essential. If the expenses are always greater than the income, it will hold you back from your dreams. It's just good money management to be able to save more than the spending.

There's no reason why people can't look for deals while saving at the same time. Remember, there's good debt and bad debt. So don't let good debt hold you back from saving.
 

Andrew

Contributor
Aug 8, 2007
190
41
26
One word: flexibility

When you only spend a small fraction of your income on living expenses you can make some amazing things happen.

Wouldn't I be better off trying to figure out how to better use OPM to get the $10k instead of waiting x number of months to save it through going without? ...Just curious to see what those in the real know have done, are doing and would recommend.
This is just about weighing your time. You should not have to "work" to find ways to save money. Nor should those attempts at saving impede on your income productivity. Quite the contrary, spend the money to make yourself more productive.

Good: passing up on weekly shopping sprees. Bad: taking a calculator to the grocery store to spend the absolute least amount of money.

This is all common sense stuff, many people atry to think way too much into it.
 

Legacy Dad

New Contributor
Sep 3, 2007
100
19
23
Worldwide, depending on the month.
I think the reason this is pushed so heavily is most people spend and get in debt up to their eyeballs so when a deal does come along, they don't have a couple grand to pay for closing, buy an option, etc. They do not have a grasp of the basics of budgeting and applying earned income to create passive income.

Venom and I had a long time post on RD.com about the difference between investors and savers.

Savers look for ways to reduce spending and then try to become debt free while nickel and diming their 401k, etc. = SLOWLANE :nonod:

Investors also reduce spending but then put their money and OPM into leveraged assets that increase quicker and then use the velocity of money to replicate this process until they are financially free. = FASTLANE :coolgleamA:

One focuses on reduction and frugality.

The other on velocity and abundance.

Lance
 

kimberland

Bronze Contributor
Jul 25, 2007
825
120
38
Well, frankly I don't like waste.
I don't like paying $20 when I can ask for a discount and get it for $15.
I don't like leaving the computer on while I'm away for the day.
I don't like taking 2 hours to do something that could take me 1.

Is it "fastlane"?
Probably not.

But its part of my belief system
("Live Simply So Others May Simply Live")
and a reminder to myself to make conscious decisions.
 

Yankees338

Bronze Contributor
Jul 24, 2007
1,829
136
81
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NJ/MD
One reason people try to save money instead of trying to accumulate the money through investments or other vehicles is because of their perception of the "risk" involved in investing or other ventures. Some might be too lazy to take the time for investments. There's no "risk" in trying to cut back expenses.

When most people realize they can't afford to live the way they do, they give up and say "well, I guess I'll have to go without this." An investor or another business savvy person would say, "hmmm...how can I come up with a way to make that extra $x amount?" Two different mindsets; two different solutions.
 

Luke12321

Bronze Contributor
FASTLANE INSIDER
Jul 27, 2007
661
196
97
North Carolina
You will never get in the fastlane by saving portions of your weekly check from your regular old job, putting a few %'s in 401k ect. I do agree though, saving is a key to joining the fastlane. I hear people at my work all the time say, "I wish I could go to college but I don't have the money or I can't afford to go into debt anymore." Same goes for investing or starting a business....if you don't have the money and your already in debt....it will be harder for you to enter the fastlane. So I think saving is a part of joining the fastlane but work 40 hrs a week (E)...4% in 401k and reduce expense to bare min. and work hard for a promtion is not fastlane. Your income will rise with your expense at best. As MJ has said before, self-employed or investors income can grow rapidly in a very short amount of time!
 

Bilgefisher

Bronze Contributor
Read Millionaire Fastlane
Aug 29, 2007
1,849
283
73
Aurora, Co
I think saving can be fastlane, just not in the way people think. Until you know which investment vehicle you want to use to get into the fastlane, it doesn't hurt to save and practice good spending habits. Start doing things correctly early, that way its very routine and almost automatic when you get where your going.

No, saving money won't get you rich quick, but the habit of saving money and spending wisely will help you stay rich when you get there.
 

kimberland

Bronze Contributor
Jul 25, 2007
825
120
38
Been thinking about this for a while.

Is spending less than you earn fastlane?
No.
But its a requirement for building wealth.

It comes down to simple accounting.
Income - Expenses = Retained Earnings = Retained Wealth.

Would you invest in a business that negative cash flowed?
Maybe if it was a short term thing
but in the long term, cash flow has to turn positive
or the business will leverage assets til nothing's left.
 

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