Original artwork by Madoline Hatter available on a variety of merchandise at Mozartini

As we learn in grade school science, everything on this Earth is composed of many smaller things, which in turn are composed of even smaller things, etc., etc., etc. The same principle applies to finance and fortune. I have often read or heard of people who, though they wish to become wealthy, opine that doing certain things or forgoing certain pleasures simply isn’t worth the time, effort or sacrifice to save a few cents or dollars.

What many seem to forget is that a fortune doesn’t consist of just one thing. A million dollars isn’t acquired all at once or not at all. It is most often accrued over time and not without sacrifice or effort. Before we go any further, I would like to state that I am not perfect and that the following is mostly a lesson and reminder for myself, but hopefully also prove helpful to you. In the past few months, I have made many regrettable purchase decisions (recent examples: Pepsi and Cheetos), by giving in to impulse and forgetting the big picture.

Breakdown of a Million Dollars

It is important to remember that one million dollars is composed of many smaller dollars, which consist of yet smaller components - quarters, dimes, nickels and pennies, without which one couldn’t have even a single dollar.

A Few Examples of Big Things Made of Little Things

• A mountain is built of individual grains of dirt.
• An ocean is composed of individual molecules of water.
• You are composed of organs, which are composed of tiny cells, which in turn are composed of tiny organelles and so on, without the existence of which you would not be here reading this scintillating piece of writing (which is composed of 818 individual words, which are composed of 5,093 little characters.)

A Penny a Day

The chart below calculates the amount of dollars 1, 5, 10, 25, 50 and 99 cents can become if one unit of it is saved (or picked up) each day of the year.

Note that this chart does not count:

• Interest or Dividends if invested
• Leap Years

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While browsing the WiseBread Forums today, I came across an interesting thread in which a member asks: Is “Simple Living” Just Another Term for “Giving Up”?

Several members responded with various opinions:

• There is a difference between simple living and forced poverty.
• Not everyone enjoys the rat race.
• It’s a choice.
• It’s a form of retirement.
• Some live the frugal life because they have no other choice.
• Frugal does not mean “easy,” but instead takes work and ambition.
• It’s the means to an end.

I thought I’d add my own opinion to this and go more into why we live the way we do - sort of a continuation/elaboration on Our Family Financial History which tells how we came to be where we are today. The answer to this question, as evidenced above, is different for everyone depending on your station in life - age, personal goals and lifestyle preferences.

For us, the last answer, “It’s the means to an end,” is closest to our view of “simple living” or “frugal living.” For me, simple living is not just another terms for “giving up.” I like to think of it as “saving up” and making it possible to “live it up” in future years.

Though, I think this has much to do with where we are agewise in our lives. Madoline and I are in our late twenties and we have many years ahead of us. But for someone at midlife, retirement or late-life, it would probably be different.

Our Reasons for Frugal Living are:

• To pay off our house as soon as possible
• To save up to attend graduate school
• To save up for a replacement car when the time comes
• To make sure we and our pets have enough (or more) to live on in later life
• To be able to live as comfortably and healthily as possible in later life
• To be able to help extended family who may need assistance
• To be able to travel and see the all the places we’ve been wanting to see
• To own a small farm on which to keep horses, sheep and dogs
• To be free of debt and worry
• To be able to have the things we want be they large or small
• To be able to pay our taxes - sad, but true

Frugal Living as a Choice

At this time in our lives, we cannot really afford to not live frugally. Our business is still in its development stages, and we are still considering other career paths. Because we prefer to avoid debt and our business is small, we have been using our cash to invest in sewing machines and materials for the business.

So for us, frugal or simple living is a choice because our present lifestyle is also a choice. At this time, we’d like to have a shot at making our business work because we prefer to work for ourselves and be able to work from home so we can be with our dogs who are our closest family. This is the reason we bought our house where the closest city is 40 miles away. We could move to a large city and get full-time jobs if we really wanted or needed to, but for now, we want to try to make our business work.

Frugal Living as a Means to an End

One of the ways in which we hope to make our fortunes is by investing. This also requires some capital other than regular savings and and emergency fund. So that is another reason we live frugally - to save as much money as possible to invest.

How about you? Do you live frugally? If yes, what are your reasons? And if no, why not?

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To celebrate our new Money Tree blog theme (if you’re reading this post in a reader, come and check it out!), I thought I would post a facetious poem that Madoline wrote a while back. The quote in our new header comes from the first line of this poem titled ‘Tis Not a Crime to Pinch a Penny.

‘Tis Not a Crime to Pinch a Penny by Madoline Hatter ‘Tis not a crime to pinch a penny A single cent’s as good as any Of the hundred that’s a dollar A hundred being only taller A cent to none is surely better For you are that much less a debtor.

For anyone who is curious, the images in our new theme were also designed by Madoline. The Money Tree graphics in varying stages of leaf and bloom, are available on a variety of merchandise such as mugs, cards, t-shirts and more in Our Fourpence Worth Store.

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Madoline and I have been thinking about investing for some time now but really have no clue when it comes to stocks and how the stock market works. Then recently, I happened upon a site called Wall Street Survivor, an online stock investing game where you can learn to trade stocks risk-free online in real time.

The stocks in the game reflect stocks in the real stock market today, with only about a 15 minute delay. (You can upgrade to real-time quotes for a fee.) So, when the real market is closed (on weekends for example,) the stocks don’t update until they re-open and trading in real life begins again.

You start the game with $100,000 (in virtual money, of course) that you can use to trade with. You research the stocks and buy and sell as you see fit. For a beginning or aspiring investor, this is a perfect and fun way to learn about the stock market. I’ve only been playing for about a week, but have already learned some things. And despite it all being virtual, you still can’t help but moan and groan when your stocks go down and cheer when your portfolio grows.

They are also currently running a contest: Play to Win $50,000 - Fantasy Stock Trading Game.

A few features of the site are:

• Research tools for comparing stocks
• Records of stocks’ histories from 1 day, 5 days, 1 month, 3 months, 6 months, year to date, 1 year, 3 years, 5 years and 10 years.
• Daily personal ranking amongst all players
• Loyalty points for logging in, trading and referring friends (points can be redeemed for prizes and gifts)

So join in the fun and learn how to invest in the stock market and get a shot at winning $50,000 (real money, I think) while you’re at it!

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