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Want To Save $130,000?


A WSJ article by Lauren Lipton (1/30/14) was titled: Posh Hair Cutters Push the $1000 Envelope. My mind immediately went to how much I save by having my hair cut for only $18. Hmmm…that is a saving of $982 per cut. Assuming one visit per month, that is $11,784 per year. If I invested the $11,784 in dividend stocks paying about 2.75% for ten years, I’d have more than $130,000 in the bank. I sure am glad I don’t live in Manhattan.

Of course, not every hair cut or styling on Madison Avenue gets $1000. Some are discounted to $500. The savings over ten years? A hefty $67,000. If you get a New York haircut at the discounter “Wal-cuts” (not a real company) for a mere $100, your ten-year invested savings will be $12,000. If you get a “street-corner” haircut for $50 (cash only), you will have about $5000 in the bank after ten years. 

Now I know some of you are thinking, Dick, you need to spend more on haircuts; it will help your image. Maybe so. But the point of this post is that small savings that seem insignificant on a monthly basis can add up to big savings when viewed over a ten year horizon. I recently cut our monthly utility bills by over $100 per month by making a few simple phones calls. If I save it instead of spending it, I’ll have an extra $12,000+ in the bank in ten years.

There are few things that hurt businesses, families, churches, etc., more than short-term thinking. Instead of asking, What is the impact over five or ten years?, we ignore changes, savings, investments, and relationships that have a long-term payback in favor of short-terms ones. Why is Warren Buffet the best investor on the planet? He’s not a stock trader or company flipper. He buys stocks and companies and holds them—almost forever.

If you expect to be alive ten years from now (I do), there are things you can do now that will have a big payback then. What will 15 minutes per week spent getting to know each of your employees be worth in ten years? How about losing one pound per month instead of a crash diet? If you buy a $2.50 (instead of $5.00) cup of coffee on your way to work, you’ll have an extra $6000 in the bank in ten years. Would a 30-45 minute walk, 5 times a week, stave off diabetes or heart disease for you? Would one hour of training every month for you and your employees make a difference over time?

Today would be a good day to get started. 2032 will be here before you know it.

By the way, I do tip the barber, so the actual cost of my hair cut is $23. So, my ten-year savings compared to Julien’s on Madison Ave is a bit less than $130,000. Rats.


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© Copyright 2022 by Dick Wells, The Hard Lessons Company

One response to “Want To Save $130,000?”

  1. Scott Layden says:

    Excellent post. I’m reminded of my UCLA real estate professor who wouldn’t fix a dent in the door of his 10 year old Cadillac because he couldn’t get a good price on it, and always thought in multiples of the loss of future value of money. I drove my 1992 SAAB (still in my driveway), for almost 20 years with the same thought.

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