One of my favourite financial phrases is “penny wise, pound stupid.”
Simple example: driving ten miles away to save five pence per litre on filling up your car.
This shows you value saving roughly £2 on petrol more than your time, and is being penny wise – just in a not so smart way.
When coupled with something that wastes much more than just £2, that’s where the pound stupid bit comes in – saying leasing a £1,000 a month brand new Range Rover but still making that ten mile out of your way journey each week.
Penny wise, but pound stupid.
I was reminded of this phrase during our time in Jersey, as over here they have £1 notes, as well as the coins.
This can play tricks on your mind, thinking these notes are more valuable than they actually are.
Other examples of being penny wise, pound stupid include…
– Shopping at Lidl and Aldi, but buying a new kitchen every few years.
– Investing in your education and paying on a credit card, but not clearing the balance every month.
– Reducing your outgoings, but paying a financial adviser or wealth manager to invest that extra money for you.
That third example is the one I’m going after through my Guerrilla Investors community.
In my mind it’s the most pound stupid example, as in some cases once you’re tied in to this approach it can be expensive to get out (without taking into account the fees you’ll have paid upfront and over the years).
My recent email about St James Place is the proof.
Suggestions for reducing your outgoings can be found in my Spend It Wisely booklet, this goes out in the post to all new subscribers almost immediately after signing up.
Never needing to pay a financial adviser or wealth manager?
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All the best,
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