Day 6: Does It Pass the 30X Test? - Seven Dollar Millionaire

Does It Pass the 30X Test?

So you’ve seen something in a shop you really like. You really, really like it. You like it so much you think it might be worth not saving today and tomorrow. You don’t want it, you feel like you need it. YOU DESERVE IT. YOU EARNED IT.

We’ve all been there. The advertising, marketing, packaging and visual merchandising industries exist to make us feel this way, and they’re very, very good at it, but if we give in to them, we won’t become millionaires. If we give in to them sometimes, it will take longer, and if we give in to them more often it will become a habit, and then we will give in to them all the time.”

We can stop by asking ourselves the question: “Does this thing pass the 30X test?”

“Would I buy these $100 sneakers if the price was $3,000? Hell no!”

“Would I still think this shirt looked as cool if the price was $600 and not $20? Absolutely not!”

“Do I feel as thirsty for that bottle of water now I calculate it’s costing me $75 and not $2.50? No way! I’ll find a water fountain, and save the planet the plastic too!”

You see, invested at a 7% return, your money will grow by 30 times over the span of your career. Every 10 years, your money will double. In 10 years, the $100 you were going to spend on sneakers will be $200, and in another 10 it will be $400. By the time you’ve invested for 30 years, you will have $800 in investments instead of memories of sneakers, and after 40, that will be $1,600.

Fifty years of investing will turn that $100 to $3,200. Not just 30X, but 32X. That’s how you become a millionaire, multiplying everything you save by 30X.

And that’s how you stop yourself spending, and make sure you save more, by making everything you think about buying pass the 30x test.

If you’re starving hungry, or about to die from thirst, maybe you would spend 30x, so go ahead. But the rest of the time, get that money into your saving and investing account, and watch it grow.