A penny spent ..... is a penny earned..

No, It's not a typo and no, I'm not under the influence of anything. Here I'm going to explain another unique concept I came up with which encompasses three different philosophies.

Why "Greed is Good", why "credit" is good and why you need to spend...

Now, let's begin with a simple example. Suppose you earn $1000/month and you save 25% of it (a very conservative estimate...for some people it might be as high as 50%). Anyways, so after every 4 months you have saved a months salary. So if you stopped working after one year, you could live for another 5-6 months. Isn't that a wonderful life.....If you thought "Yes", you might wanna exit the page..!!

Now take the second case. Your monthly salary is the same at $1000, but now you spend $1100. So what do you do??.. you borrow..simple. So the next month either you cut down your personal spending to $900 and return the $100 (assuming no interest) or you borrow again. Now , most people would say that the first option is the correct one since people may not be able to borrow indefinitely into the future.

True, but there's another option...... generate extra $200 as income for the next month...return the loan and cut back "just a little".... So if you keep continuing this process for one year, guess who will be making more money....you or the first person ??...... This was to prove that "Greed is Good".

Now to demonstrate the second point about credit. Say company A has a lot of debt and company B has no debt. Assuming both are operationally sound and company A does not go into default, which is a better company. You might be tempted to say B, but I'd rather prefer A. In order to service the debt, company A has to generate a minimum amount of revenue year on year wheres company B's managers have no such incentive. Company B's managers can afford to have a bad year....not company A. You see my point......guess who's more motivated to perform ????

So coming to my last point. Spend more than you have.....only then will you be inclined to earn more than you do now....and the cycle goes on..!!!!!

"If you are living within your means..........you lack imagination"