I am featuring Joshua Sheats for my Words of Wisdom post this week. Joshua is a financial advisor turned personal finance podcast host. This Joshua Sheats quote is probably one of the best I’ve managed to capture in my years of listening to his podcast. Joshua Sheats manages to succinctly capture the purpose of practicing frugality. This pithy statement is one I’m sure I’ll be using years from now when convincing people of the benefits of frugality.
Frugality is the cornerstone of wealth.” – Joshua Sheats
Joshua Sheats is the host of the Radical Personal Finance podcast. This quote was taken from Episode 508 of his podcast.
Context of this Joshua Sheats Quote
Let me discuss the context for today’s quote: “Frugality is the cornerstone of wealth.” Joshua was in the process of describing the basic framework for how someone can save money. Basically, you have three options: buy something cheaper, make it last longer, or use it less. This framework was originally established by Amy Dacyczyn in her book: “The Complete Tightwad Gazette: Promoting Thrift as a Viable Alternative Lifestyle”*
When Joshua explained that a key aspect of Frugality was saving money, he also threw in our featured statement and quickly moved on. While he never made the exact same statement again in the podcast, it was clear that using frugality to build wealth is a key component of Joshua Sheat’s underlying framework of personal finance. Joshua prides himself on being a ‘framework guy’ capable of establishing and communicating frameworks for personal finance better than his competitors. In this episode, he certainly succeeded.
Building Wealth with Frugality
I think this focus on saving money with a purpose of building wealth is important to understand. Frugality is sometimes given a bad name. Practicers of frugality are often called ‘cheap’ by those who don’t understand the goal. The goal isn’t to be a miser and never spend at all. Instead, the practice of frugality simply focuses on improving the efficiency of your spending. By improving the value you receive from each purchase, you’ll be able to end each month with a greater surplus. Surplus savings are the foundation which you build an investment portfolio and reach towards financial independence.
Two key mental models are at play here: gradualism and compounding. I encourage you to review those articles as well because they provide context for how frugality creates wealth.
This post is one of many in my ‘Words of Wisdom’ series. This series focuses on pithy quotes which distill wisdom into a short statement. Consider reviewing my full condensed wisdom page for my useful insights for your investing journey.
*Disclosure: Some of the links on this page are affiliate links. If you make a purchase through one of these links, I may earn a small commission. This commission comes at no additional cost to you. Please do not spend any money on any linked book unless you feel that it will help you achieve your goals.
