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The Toothpaste Test

September 8, 2017

The Situation

Thanks to books like The Millionaire Next Door, we know something about the wealthy that used to be hidden. Most of them live very frugal lives. If you aspire to wealth (or greater wealth than you have), then you should try to live frugally as well. But how likely are you to succeed?

Take the toothpaste test.

What You Should Know

No, I am not talking about a do-it-yourself pregnancy test (if you’re interested in that, Google ‘toothpaste pregnancy test’). I am talking about a measure of how frugal you can be. It occurred to me that toothpaste is the perfect product for this, because of the increasing difficulty of getting the last bit from the tube. Some say there is always one more tooth-brushing left in a tube; the only question is how hard you are willing to work to get it.

And since frugality is correlated with wealth, then how thoroughly you use a tube should predict your ability to accumulate wealth.

• Do you toss a tube as soon as the going (i.e. squeezing) gets tough?

• Do you carefully squeeze from the bottom, pushing the product toward the top, where it can be easily coaxed from the spout?

• Do you use an actual roller device (a number are commercially available) to help you do this?

• After rolling, do you cut the top off the tube, flatten it out with your fist and force one more brushing out of it?

I have heard some pretty funny replies when I ask people about their toothpaste habits. But the humor emphasizes a serious point. Are you willing to endure the inconvenience and effort necessary to grow your wealth?

I have met very-high-income earners who were not. And they arrived at retirement age with virtually no net worth.

I have also met modest-income earners who were. And they arrived at retirement age very well set.

What You Should Do

The primary key to wealth accumulation is spending less than you earn. That is why the most successful accumulators turn out to be surprisingly frugal, Paris Hilton notwithstanding. According to The Millionaire Next Door the great majority of the wealthy do not engage in spending on “status” items, such as a three-story mansion on a hill, a Lamborghini or a $10,000 watch.

Frugality is not the only key to growing wealth, of course. There are many. One is having a single, most trusted advisor who takes a full 360-degree view of your financial life, someone who is concerned with the whole picture not just your investment accounts or your tax accounting or your estate plan. It’s what we call having a PERSONALCFO, and it’s a role we can fill for you.

Okay, next question: When do you stop using a bar of soap?

Contact Jim Waters, CFP®, at 713.964.4028 or

Filed Under: Building Wealth

Written by PartnersInWealth

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