Career Lesson From Die With Zero by Bill Perkins

I am starting a series where I share career insights from books, which can be applied to work. These posts will be titled "Career Lessons From (book title)." I hope that you find the lessons helpful and relevant to you.

In this first edition, I will be sharing from Bill Perkins' Die with Zero

Lesson: Don’t save excessively if you're earning a low income

This may sound counter-intuitive but read on.

The author, Bill Perkins, writes about an event that happened in his early career. He had just graduated from the university and was working as an intern on Wall Street. He was earning a minimum wage salary that barely sustained him. He even took up a second job to earn additional income. He began to save as much money as he could and was proud of this.

A few months later he got into a conversation with his boss and they got talking about his savings. He told his boss the amount of money that he’s saved. His boss told him that he is an idiot to save that money. His boss responded that Bill would certainly earn more money in years to come, so rather than save so much right now, he would be better off spending the money (enjoying the money he had right now.

During a conversation with his boss, the topic of his savings arose, and he proudly shared the amount he had saved. However, the boss criticized his savings strategy, deeming it foolish. The boss suggested that he would be better off optimizing his earnings, rather than saving excessively.

The fundamental lesson here is that if you are barely making a “decent salary” (whatever that means), you should focus on spending the money on enjoying yourself, creating experiences, buying relevant courses and focusing on yourself. It is counterproductive to over-save the little that you are earning early on in your career in the hope that it compounds. As you experience career growth, you will eventually make a higher salary and then your savings will be significant.

Oluwatosin Olaseinde talks about this topic in a related tweet:

As a young professional, here are 5 strategies that you can use to optimize your earnings:

1. Prioritize experiences and enjoyable pursuits - Your life is a sum of the experiences you accumulate. These could include dining at a high-end restaurant, exploring new destinations, embarking on tours, and other leisurely activities. Delaying these experiences until later in life is not advisable. Rather, create a budget for them now and indulge. These activities can enrich your life and broaden your perspective.
2. Buy an online course - There is no limit to learning. It is important to create a self-improvement plan that involves identifying courses that can elevate your career and pay for them. 
3. Invest in your mental health - It is crucial to prioritize your mental health by engaging in activities that promote well-being. You may often work extended hours, commute to work, and feel stressed mentally. You can make investments in your mental health by incorporating healthier foods into your diet, using skincare and beauty products, joining a gym, and seeking counselling or therapy.
4. Invest in continuing education - A growing number of Africans are travelling overseas to pursue higher education. Consider investing your funds to obtain a postgraduate degree, such as an MSc or PhD. Continuing education can be a wise investment for your future.
5. Save towards a goal - To work towards a specific objective, it's important to avoid having unallocated funds. It's better to allocate your money towards your expenses. Having loose money may lead you to spend excessively on unexpected costs, such as black tax. One effective way to save your money is by using a savings app like Ladda (www.getladda.com).

Ladda is a financial tool designed for wealth management. It allows you to save. With Ladda, you can create customized savings portfolios, add funds at your convenience, withdraw as needed, skillfully manage your finances, and attain financial autonomy.

In summary, you should prioritize making your money work for you rather than holding onto it excessively, which can ultimately harm your financial well-being.