27 Oct

Written by Admin on October 27, 2008

This is a special post by Christine Buske, our guest blogger this week.

The saying goes that in order for you to make money, you need to spend it first. Without a doubt this is true; dentist cannot help his patients without proper equipment, and a computer programmer cannot do anything without a working computer.

When it comes to some aspects of life, being frugal can actually cost you a lot of money in the long run. One of the most common places where people try to “save” is when it comes to tools that help their productivity. Time is money, and if you are more productive or more efficient, then you will see a big return on your initial investment. Whether this initial investment is a smartphone, a better printer, or a personal assistant. Here are some additional tips that cost you money at first, but will let you take big returns straight to the bank.

Be well Equipped

If you work with computers on a daily basis, your productivity depends on your equipment. If you are working with outdated software and hardware, you are going to slow down your output and ultimately limit your income. Upgrade your hardware every few years, and keep software updated.

Consider whether a general upgrade of your equipment could be appropriate. Whether you are happy with your current screen size or not, research has shown that a larger screen can save you 2.5 hours of work per day! Think of how you could spend those extra hours if you were more productive. Basically, when it comes to computer screens, size does matter, and bigger is always better! For some people working with two screens simultaneously can be even better than just one larger screen. Assess what works best for you before you invest. If you insist on being frugal, consider connecting your computer to your flat-screen TV. Newer models can be used as monitors as well, and with just a few cables you will have some options to work with.

This tip is not limited to computers: look at where you are losing valuable time, and which tools could help you avoid this and get more things done. For example, if you bake gourmet cookies for a living (or as a side-job), you would get a lot out of a high-tech blender. Consider how much more output you can produce by putting a few hundred towards better kitchen equipment. Similarly, if you are a professional scapbooker, you need to invest in proper scissors, and other tools.

Take Care of Your Appearance

Here is your ultimate excuse to go shopping: people who are well dressed earn more money. If you dress professionally, you are first to be considered for promotions, and definitely have an extra edge in job interviews. It does not have to take a lot of money to dress well though. As long as you have some good basics in your closet, such as dress pants, skirts for the ladies, dress shirts, ties if you are a man, and a few dark blazers, it is easy to pull a professional look together. Investing in better quality garments will help you look better, longer. They are more durable and as a result you will not need to buy a new wardrobe every year. As long as you invest in classic pieces that never go out of style, you can dress them up – and keep them fresh and trendy year after year – with some accessories.

Aside from just clothing, many people underestimate the importance of good dental work and personal grooming. Christmas is coming up, so why not ask your loved ones to give you a gift certificate for dental whitening, instead of a conventional gift? A regular trip to the hairdresser also falls into the ‘money well spent’ category. If you don’t want to spend too much on this, ask your hairdresser to give some advice about low-maintenance styles that suit both your face and budget.

Upgrade Your Education

Whether you work as a plumber or an accountant, it is important to keep your licenses and certifications up to date. If you’ve contemplated going back to school to get a Masters degree or finish up another college program, now is the time. Sure, taking courses costs money, and the time away from work means you will be earning less in the short run. However, with that additional certification or degree, you can expect an immediate pay increase as soon as you’re done.

Several studies have proven a Masters degree will earn you considerably more money over your lifetime than just a Bachelors degree. Having said this, if you have a high school diploma and don’t want to pursue a 4-year college degree, then a diploma from a community college can still add a lot of extra earnings to your bottom line.

Factoring in cost of lost wages, books, tuition, and other expenses, a 4-year bachelors degree still nets you an earning advantage of over a quarter million dollars. Getting that extra diploma or degree is, in short, well worth the investment.

Become an Online Expert

If you have just upgraded your computer equipment or education, you can invest a little more and see a potentially big return. By setting up your own blog or website, you can start generating a nice side-income online. You can blog about a particular topic, or give advice on certain products. If you are, or can become, an expert in something you are ahead of most bloggers. It costs between $20 and $80 to set up and host a website for a year, and you can make that amount back a few times over if you educate yourself on blogging. Just as some food for thought; John Chow earns more than $30.000 a month from his blog at this point.

Setting up a website is probably the one investment that can give you the largest return. Although the financial investment is pretty small, it does cost time. However, if you could update your website while commuting (if you use public transit), then this is nearly effortless extra cash that doesn’t tie up your regular free time.

Use a Cash-Back Credit Card

Although credit card debt is the worst type of debt you can ever acrue in your life, there are benefits to paying with plastic if you can do so responsibly. Instead of using your bank card for day-to-day transactions, you could use a credit card that offers a cash back bonus at the end of the year. Most cards are offering about 1% cash back, which amounts to $120 if you spend about $1000 a month on your card.

Of course you should never buy more than you need, just for the cash back, but if you are spending money anyways you might as well get some benefit out of it.

Buy an Expensive Coffee Maker

Along with about 50% of the population, I’m sure you really enjoy your gourmet coffee every morning. However, do you enjoy it enough to dedicate at least $1024 from your yearly income on it? How about making a small investment, but being able to get that coffee to go from your kitchen every day. It will not just save money directly, but also indirectly: the time you used to spent in line waiting at your local coffee shop you could spend making more money. Invest in a good coffee maker that can handle your culinary tastes, and within a few months you should have your investment pay for itself.

As an example: a coffee maker can cost about $500 and up. There is no need for you to get the most expensive model available, so let’s assume an immediate cost of $500 for now. Your daily coffee starts at $4 a cup, and can go up to $9 if you like it really fancy. Assuming a $4/cup cost on every work day of the year, we’re looking at about $1024 a year in take-out coffee. After about six months, your coffee maker is paid for and the remaining $524 is pure profit from your initial investment.

Some Final Thoughts…

Of course certain investments will be bigger than others. Which one is right for you will depend on your situation. It is important to see how much you can add to your bottom line by upgrading equipment, education or even your wardrobe. Each one of these investments will provide you with significant payback, but you will have to determine which ones make sense with your current life-style, and which ones need to be addressed more urgently!


  1. 3

    November 8th, 2008

    Good point Jeff: but the cost of coffee beans is definitely a lot less than the cost of a custom-made cup of coffee. Besides, who really wants to stand in line to give someone money to make you a drink? I think people don’t realize they waste a lot of time actually waiting in line…

  2. 2

    October 30th, 2008

    Overall, good concept, but you have to re-do the math on coffee. You still have to buy the coffee beans, or ground coffee. Then there’s the milk and sweetener if you like your java that way. I’m sure that I would still come out ahead, but the numbers will be different.

  3. 1

    October 28th, 2008

    I agree with spending on your appearance. In my business I do not hire anyone who cannot properly represent the company, and that never includes someone with poor hygiene or an unprofessional wardrobe

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