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Reverse Investing

By Edited Apr 27, 2016 0 0

What the Heck is Reverse Investing?

I'm sure most reading this understand the basic principles of typical investing, which is spending money now, to earn more than the original money spent.  

A good example is real estate.  You buy a house outright, and rent it out.  You've created an income stream for as long as the house stands, and over time, your initial investment plus more is returned to you.  Standard investing.

But this article isn't about that.  This article is about reverse investing.

It's just that, it's the opposite, or inverse of standard investing.  It's about spending more now, to spend less later. What do I mean by this?

Let's suppose for the sake of simplicity that you're a male, and currently use a mach3 razor.  You spend about 25$ every 2 to 3 months on replacement razor heads, and about 10$ a month on aerosol cream, when suddenly, a surge of testosterone overwhelms you, and you think "You know, straight razors are just so much more badass than today's puny razors".

So you head to a local shop, or online to buy a nice cut throat.  You spend about 200$ on a nice strop, razor, shaving brush, and shaving soap.  Now, a decent straight razor will last about 5-10 years, the brush will last 3, and a 6$ soap bar will last about 9 to 12 months.

Now for the math.  The 100-150$ you were spending on replacement heads?  Gone. The 120$ on aerosol cream?  Gone.  Within a year of your investment in that razor, you've saved 20-70$ more than you spent.  Plus another ~370$ for every year the razor lasts, which could be 10 years for a higher end one.

Now, bear in mind that this is merely one example from a person's life.  There are a vast multitude of ways to reverse invest in everyday life, and long-term around the house.  The main thing to take away from this article is that buying quality products that will last you a lifetime is a far greater bargain than bargain hunting.

The beauty of this?  

It gives you just as much return as traditional investments, but rather than give you more external income, it makes your internal income more efficient, so you can spend more money on things you love, or use more money on traditional investments to manifest more external wealth.


A neat spin

You can also try combining traditional and reverse investing.  Take solar panels for instance.

The great part about those isn't just not paying for electricity for the rest of your life, but having a source of income depending upon how much electricity you actually use.  You see, with solar panels, you can sell any unused electricity back to the grid.  So not only are you saving, you're also gaining.  


So stop reading and go think of ways to save your money by spending more!




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