First Person: Where We’ve Spent Money to Make Money

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Sometimes it takes spending a little money to make money. While our family is pretty good at being frugal, we recognize the fact that sometimes paying for quality matters and it takes a little forethought on certain expenditures to realize financial benefits down the road. And paying more now, can sometimes result in paying less later.

There are certain aspects of our financial lives in which this is more prevalent.

Our Mortgage

We bought our home outright. To some, it might seem somewhat frightening to think about paying cash for a home. They might prefer to hold onto that cash and try investing it somewhere in an effort to make more in returns than they might pay in interest on a mortgage. To them I say, "I wish you all the luck in the world. I just don't want to be the one crying when the market tanks and half my portfolio goes missing."

I'll admit, it's one heck of a large investment to pay cash for a home and each buying scenario can prove different for various buyers. However, in turn, we've avoided the thousands of dollars that often come with obtaining a mortgage and the tens of thousands of dollar in interest that come with taking on a mortgage. And to me, buying outright -- whether it's a home, car, or similar big-ticket item that would require paying a significant interest rate on over the course of time -- is an investment in the near-term to save money in the long-term.

Certain Subscriptions

Sometimes subscriptions cost us cash up front but they end up saving us substantially down the road. Take for example our local suburban newspaper. An annual subscription runs about $25 a year (it would cost $1.50 per weekly issue were we to buy individually at a news stand). This might seem a silly cost to assume with the internet and television available as news sources, but there are often valuable coupons for local restaurants and eateries that we regularly frequent. For example, for one of our favorite restaurants, we sometimes clip coupons for 15 percent off our meal. On a $40 meal, this single coupon adds up to $6 in savings, nearly a quarter of the annual cost of the newspaper subscription itself.

At the Grocery Store

On a more regular basis, we often find ourselves as a family spending money at the store to save, and in turn make, money later. Whether buying in bulk or just loading up on sale items that we might not need at the moment but that we're sure we'll use eventually (and that have a good shelf-life), we manage to spend money in the near-term to recognize savings over the long-term. While these savings might only add up to a few cents or a dollar per item, over the course of the year, they can add hundreds of extra dollars to our family coffers.

Becoming Self-employed

When I quit my stable, well-paying job to become self-employed, I didn't just start making money the next day. It took me over a year to develop regular income steams, and during that year there were still expense to be covered. There were work-related costs like office supplies, subscriptions, and postage. There were regular expenses like utilities, food, and rent. And all the while, there was no certainty of making any real money from my efforts. However, it was a risk I needed to take in order not to have any remorse or feelings of "what if" down the road. Therefore, becoming self-employed may have been one of the greatest risks I took in spending money in the near-term to make money later.

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