Cornelius Vanderbilt, the richest man in the world in the late 1800’s, controlled much of America’s transportation in two sectors – the steamships and the railroads.
He was revered for his ability to minimize costs. His attention to financial details was unsurpassed during his reign.
For example, when he took over the New York Central Railroad, one of the first things he did was remove all of the brass from all of the trains. This cost him a lot of money in removing all of the brass from his rail cars. People thought he was crazy.
Why did he do it?
Brass needed to be polished every day. No brass, meant no more need to pay people to polish it every day.
Eliminating the expense of polishing the brass far and away exceeded the cost of its removal, saving his railroad companies an enormous amount of money in the long run.
Rich people find novel ways to stretch their money.
Poor people, on the other hand, spend their money foolishly. They focus on the short term – the cost of the product always comes first. Quality rarely enters their mind.
They will buy a cheap product, just to have it, despite the fact that the quality of the product is suspect. After a few years, the product wears down and they are forced to buy another cheap product or do without.
Be frugal, not cheap. Being frugal is a Rich Habit. Being cheap is a Poor Habit.
About Thomas C. Corley
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Will Huynh
The rich find novel ways to stretch their money — i really appreciate this. It’s really practical and proves fruitful.
Seriously? The poor cannot afford to buy the expensive “quality” item after rent, utilities, childcare, etc. they are lucky just to buy something that feels their basic needs. I know that I am doing without a lot of essential items because I can’t afford them. This includes a winter coat and boots, new sheets for my bed and other essentials. I am very lucky if I have $10 left over at the end of the month. My savings is $150 and took a long time to accrue that. I can barely buy a crappy coat for &150 but I need one to stay warm. And no I don’t drink soda or fast food or buy lottery tickets or have cable TV. I don’t even own a
car.
Middle-class people can follow rich habits but poor people are unable to do that.