Tubegraph

Living frugally to save and invest

5 min read

From: alexhormozi

Living frugally and strategically managing finances can lead to significant savings and opportunities for investment [00:03:07]. The speaker shares his personal experience of living on 15,000 and $20,000 a month [00:00:03], [00:00:10]. This approach was driven by a risk-averse nature and a desire to accumulate capital for future “offensive” investments [00:00:13], [00:00:16]. He viewed his substantial income as a stepping stone to larger goals [00:00:36].

Understanding how to live cheaply is crucial for building a business and investing in skills and experiences that generate income [00:03:07], [00:03:11]. This financial discipline increases one’s risk tolerance, as there are fewer financial burdens to worry about [00:10:20], [00:10:23]. The ultimate goal is to maximize both minimal spending and high earning potential [00:11:38], [00:11:41].

Key Cost Centers for Frugal Living

The speaker focuses on three primary cost centers: food, transportation, and living arrangements [00:00:55].

Food (Mosey Meals)

Despite living on $1,500 a month, the speaker managed to eat out every day [00:00:53]. This was a strategic choice to save time for income generation, as he found cooking and meal prep more time-consuming and less financially sensible than buying food [00:01:08], [00:01:09].

Popular low-cost options included:

  • Chipotle
  • Panda Express
  • Chick-fil-A
    • Purchasing 20-40 packs of chicken nuggets or two sandwiches could keep daily costs around 12, resulting in 700 a month [00:01:35], [00:01:38], [00:01:45], [00:01:47].
    • Grocery shopping for a single person could cost 600 a month, similar to these eating out options [00:02:13], [00:02:17].
  • Extremely cheap options: Bread, peanut butter, and multivitamin are the absolute cheapest route [00:02:36], [00:02:40]. Adding Lactaid milk can provide protein, carbs, and fat [00:02:46], [00:02:48]. These can be combined with one “Mosey Meal” for balance [00:03:01].

Transportation (Mosey Mobiles)

The most cost-effective way to own a vehicle is to purchase a used, 5-10 year old, four-door vehicle in cash for around 100 a month [00:03:53].

A “Plan B” for income involves using this vehicle for Uber or similar flexible work [00:09:40], [00:09:47]. This provides immediate income, flexibility in hours, and minimal risk [00:09:56], [00:10:02].

Living (Mosey Mansions)

The speaker lived in Southern California, an expensive market [00:04:03]. His living situation progressed from sleeping in his gym (technically free, though business rent was 400 a month for his half [00:04:30], [00:04:32], [00:05:04]. This environment was challenging, with multiple dogs and couples [00:04:48], [00:04:58].

The speaker recommends moving to areas where “shit’s happening” and people are active in their lives, even if it costs 400 a month for a room [00:05:14], [00:05:17]. This exposure to higher standards of excellence, though potentially making one feel worse initially, serves as inspiration for what is possible [00:06:32], [00:06:39], [00:06:41]. Being around people who discuss time and money in larger increments (e.g., $100,000 investments, decades instead of weeks) can shift one’s own perspective [00:06:48], [00:06:51], [00:06:58].

The Importance of Connections and Mentorship

Investing in personal and financial growth also involves strategic relationship building. The speaker emphasizes that “handshakes” and connections have propelled his life faster than “hacks” [00:07:12], [00:07:13]. Major deals in his life have stemmed from one or two degrees of separation from people he met [00:07:21], [00:07:23].

Key advice for networking:

  • Accept the first invite: Accepting initial invitations to connect significantly increases the likelihood of forming lasting friendships and connections [00:07:29], [00:07:33].
  • Do prep work: Research the person you are meeting for about 30 minutes and aim to bring something valuable to the table, such as applying your skills to their needs [00:07:47], [00:07:50], [00:07:54].
  • Provide disproportionate value: When offering a favor, “blow them away” with the amount of work to the point of making them feel awkward [00:08:26], [00:08:30], [00:08:34]. This invests in long-term relationships that can pay dividends later [00:08:59], [00:09:01].
  • Not needing anything back: The ultimate leverage in a relationship is not needing anything in return [00:09:11]. This allows one to “stack IOUs” and “load the deck early” so that when a move is needed, there are “blank checks ready to cash in” [00:09:16], [00:09:22], [00:09:28]. The time to dig a well is before you are thirsty [00:09:30].

Mindset and Habits for Financial Discipline

Personal finance habits and strategies are critical for success.

  • Gamify spending: Try to be competitive with yourself about how little you can spend [00:10:09], [00:10:11].
  • Cash budgeting: One effective method is to withdraw the exact amount of cash you plan to spend for the month and stick to that budget [00:11:14], [00:11:17].
  • Focus on discipline, not credit card hacks: Chasing small percentages with credit card rewards distracts from the core goal of financial discipline [00:11:25], [00:11:31].
  • Track finances daily: Make checking your bank account the first priority every morning [00:11:57], [00:12:03]. This builds awareness of money flow, similar to how daily weighing helps with weight loss [00:12:11], [00:12:20]. Awareness improves problems [00:12:31].
  • Reward good behavior: Seeing your bank balance increase provides positive reinforcement [00:12:47], [00:12:50].
  • Use a Google Sheet: Record your daily bank balance in a Google Sheet to track personal records and long-term trends [00:12:56], [00:13:00], [00:13:18]. This visual progress motivates continued sacrifice [00:13:28].
  • Confront financial reality: Avoiding checking your bank account due to anxiety perpetuates financial struggles [00:14:10], [00:14:13]. Money “sticks to the person who pays it the most attention” [00:14:19].

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