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14 Money Tricks I Learned Spending $1M/Week

One Million Dollar Bill How to Spend $1m/week
Featured in the Physician on FIRE’s Sunday best 8/14/2022

Today’s guest post on ways to save money through optimizing your spending is by Adam of BlindLuckProject.com, a blogger who focuses on helping others achieve a better life through more than just luck. Adam is a firm believer in creating your destiny and overcoming obstacles; for him, that meant retiring early (aged 32) and not letting blindness hold him back.

Before Adam’s post-corporate life, he was a supply chain manager at a large aerospace company, where he oversaw a weekly budget exceeding a million dollars a week. Resultantly, he’s spent more money than most people will ever see in their lifetime and is a prime candidate for sharing the tips and tricks of the trade! 

So, without further ado, I’ll hand off the remainder of this post to Adam.

How To Spend Like A Pro

The 14 Money Tricks I Learned Spending A Million Dollars Per Week ($52M/Year)

Table of Contents (Click to Jump)
Intro
How Much Is $52 Million?!
1. Everyone Has An Opinion
2. Don’t Go Broke Saving
3. Know The Total Life Cost
4. Selling Unused/Underutilized Items
5. Renting Is Often Cheaper
6. Your Word Is Worth More Than Your Wallet
7. Simplicity Is More Important Than Saving Money
8. Capital Allocation
9. Be The Bad Guy
10. People Will Try To Scam You
11. People Will Sue You
12. Contracts Can Be Broken
13. Time Is The Most Precious Asset
14. Mistakes Happen
In Closing

Intro

Before I retired at 32, I was a supply chain manager for a large aerospace company. There, I was responsible for a team of five buyers whose sole job was to spend money. 

Well, okay. It’s a little more complicated than that; after all, we had a business to run! 

The company regularly needed parts, had to maintain machines, purchase trucks, contract out service workers, stock the breakrooms, and ensure someone cleaned the bathrooms regularly.

Since my department was responsible for all these things and more, we were constantly busy! 

In this article, I will share the fourteen tips and tricks I learned while being a supply chain manager. I hope that you will learn from my experiences so that you can better control your spending habits without relying on luck.

How Much Is $52 Million?!

We need to start by highlighting just how much $52,000,000 is, as it’s hard for our lizard brains to comprehend such an astronomical figure.  

$52,000,000 is equal to:

  • 923 Average US Salaries: ($56,310/year)
  • 102 Average US Homes: ($507,800 as of Q1 2022)
  • 309 Average US Retirement Savings Balances ($168,000)

Keep in mind the numbers above are for one year of spending; the company I worked for spent this much every year!

Now that we have a more quantifiable understanding of $52,000,000, let’s look at how to spend this money most effectively.  

1. Everyone Has An Opinion

Money is a very personal thing for many people; that’s why we often refer to household finances as “personal finance.” 

The initial thing I noticed when I took my first purchasing job was that everybody had an opinion about how to spend the company money. I mean everybody. 

Well, guess what: it’s not their money. When it comes to your spending, it’s your money, and you have the final say on when and how to spend it. 

In my previous job, the company hired me to spend their money because they trusted my judgment, not the shop people, not the head of engineering, and not the sales team. 

In your personal life, your friends, family, and coworkers all have an opinion of what’s best for your hard-earned cash. While it’s okay to listen to others’ input when asked, you ultimately need to decide what’s suitable for your financial situation and goals. 

So, get comfortable telling people no! 

2. Don’t Go Broke Saving

Don’t go broke trying to save a dollar was probably one of my favorite sayings I often reiterated to my team. 

Often, we had salespeople lining up out the door to talk to us about the latest deal they could get for us if we would buy a little more. Still, remember something is 100% off if you don’t purchase it. 

The takeaway during this section is only to buy as much of something as you need for the immediate future. Buying five years’ worth of printer paper isn’t a winning strategy. Yes, you got a great deal, but it tied up a lot of cash. Further, you now have boxes of paper everywhere that are in the way and are at risk of getting damaged or stolen when an employee thinks they need paper for personal use at home.  

Remember, discounts only matter if you had planned to buy a given product or service in the first place. 

3. Know The Total Life Cost

Know the total cost of an item before purchasing it; this is a must, which is why it’s number three on the list! 

Say you find a great deal on that truck you’ve always wanted for ONLY $30,000. But wait, not so fast! You must also consider paying for insurance, fuel, maintenance, vehicle tags/ taxes, and more. 

Therefore, when making a purchase, ensure you understand the lifetime cost of an item before signing on the dotted line.

Everything, including televisions, vehicles, computers, and homes, have extra costs associated with ownership beyond the sticker price.   

Add these extra costs up and make sure the deal still makes sense for you. Often you’ll be shocked to see how expensive it is to own something.

4. Selling Unused/Underutilized Items

Selling underutilized items is often an overlooked area to improve the bottom line; there are two sides to this tip:

  1. If you are not using something, it represents tied-up cash; this could be unused electronics, an old car in your driveway, or the jet ski you thought you’d use but hasn’t been out in years. Sell these items and get your cash back!
  2. When you buy the cheapest thing possible, often the resale value isn’t excellent later on. Sometimes, like with laptops, it’s better to buy the name brand, enjoy using the superior product, and then resell it to recoup a significant portion of the initial purchase price.   
Image description: A garage sale sign into the curb of a residential neighborhood.

5. Renting Is Often Cheaper

The rent versus buy argument rages about homes, but what about other things in your life? In my previous job, I often found that buying a new piece of equipment for our facility did not make sense. Instead, renting it for the jobs we needed was often cheaper, and we didn’t have to worry about it the remainder of the time. There were many benefits to this approach:

  • The equipment was often newer
  • Costs of servicing were nonexistent
  • We didn’t have to store it
  • We could upgrade to better equipment whenever desired

Outside the corporate bubble, there are plenty of purchases where people spend thousands of dollars. Often, it would be much cheaper for these individuals to rent. 

Examples include campers, jet skis, pickup trucks, vacation homes, and more. 

So, take a meaningful look at big-ticket items. Is owning the best option?  

The exception to this rule is anything related to emergency preparations, such as generators. Typically when an emergency strikes a region, there aren’t enough units around to meet demand, and you might not be able to get one in your time of need.

6. Your Word Is Worth More Than Your Wallet

The saying is “money talks.” Still, actions speak louder than words. 

When you negotiate with people, you need to always stand by your word. If you don’t do this, you’ll find people will start charging you more, or worse, might not want to work with you.  

It is in your best interest to treat people fairly in all your business dealings. If you commit, follow through. Don’t promise things you can’t deliver on. When mistakes happen, be upfront and honest about what happened and do your best to make it right.  

If you’re not trustworthy, it won’t matter how much money you have. It’ll be harder to get stuff done.  

7. Simplicity Is More Important Than Saving Money

I remember one company I worked at had twenty-plus suppliers for office goods; they’d buy paper from one company, pens from another, batteries from a third, printer toner from a fourth, and so on.  

The company in this example was only willing to buy from the cheapest provider. As a result, shipments would arrive late or at different times throughout the week, making it challenging to ensure we received what was paid for, etc.  

Yet, at this company, office supplies accounted for less than 1% of yearly spending. Still, employees spent a disproportionate amount of time dealing with these goods. (You shouldn’t have to spend half an hour tracking down printer paper when it runs out.) 

The solution for my prior employer was going down to one vendor, with one order, once a week; doing so saved employees time, which offset increased item costs. Further, the company spent so much more with one particular vendor that it began receiving a 10% discount on subsequent orders.

The lesson here is that if you’re trying to get a job done, don’t overcomplicate the little things. Credit Card Hacking is a classic example of this in the personal finance community. Just keep it simple. Take the cashback.  

Image description: A tangled road or film from point to purpose B. The concept of simplifying a confusion or road in psychotherapy, psychology, or goal achievement.

8. Capital Allocation

Capital allocation is a large and complex topic on which I could write a book. But the synopsis is how much you spend is just as crucial as when cash is needed. 

For example, let’s say I purchase $1,00,000 of aluminum plates for the month; that means I’m out $1,000,000, right? Nope! 

When I bought materials, I typically had a contract that allowed me to pay the invoice sixty to ninety days after delivery. That meant I could have two to three months of the product purchased before I had to cut a check for a single penny. Furthermore, I might have made that aluminum into $5 million in sellable parts during those three months.  

Significantly, I saw a net cash flow of $2 million which the company could use elsewhere.

Example:

  • $3,000,000 for three months of aluminum plates
  • $5,000,000 in sales in the same period
  • $2,000,000 net profit

Why is this significant? If a company is good at capital allocation, it can temporarily redeploy the $3,000,000 needed to buy the plates elsewhere in the company, plus the $2,000,000 of profits ($5,000,000 total).

The $3,000,000 that is spoken for but not yet needed is called float. Float is a force multiplier and allows the company to redeploy cash towards more money-making activities. 

Many of the companies I worked for over the years could operate without any owner capital permanently tied up or offer the owner two to three months of float (cash spoken for but not needed for today) to use elsewhere.  

Two to three months of float, when you are spending $1,000,000 per week, equates to $8,000,000 to $12,000,000 in purchasing power, which the owner can reinvest into the business or utilize to buy another company (and repeat the process).  

The beauty of capital allocation is that you can take advantage of it too! A credit card is essentially a thirty to sixty-day interest-free loan depending on where you are in your billing cycle (make sure to pay on time to avoid interest). Another way to take advantage of this is with 0% credit card offers.    

But again, make sure to pay off your credit cards before the interest kicks in.

9. Be The Bad Guy

Remember how I told you earlier how everyone has an opinion on how to spend your money? Sometimes these people will feel very strongly about this, and you need to tell them no. It can be hard to do, but it’s essential.  

For yourself, the people you need to say not to include salespeople, charitable organizations, friends, and family who may “need” money. It is crucial that you feel comfortable sticking to your decision and not waver because others want a different outcome.  

I’ve had grown men in my office crying because their department needed more work, and I was not willing to give it to them. You have to remember while your decision may hurt people who want money from you, making hard decisions ultimately protects you and your family by providing a more secure future for the household.  

Some simple techniques for saying no include:

  1. Saying no
  2. Not promising anything before you are ready
  3. Explaining the deal isn’t right for you  
  4. Explaining that the purchase will occur later

A word of caution:

I’ve learned that when dealing with salespeople, the more urgent they are, the less likely the deal is in your best interest. If the sale has to happen today and the “opportunity” won’t be there tomorrow, the deal likely will not be in your best interest.  

I promise you that a salesperson, charitable organization, or friend will gladly take your money tomorrow if offered. So please slow down and make sure money decisions are on your timeline because the person with the money is always in charge.  

10. People Will Try To Scam You

I’m sure this is obvious in today’s day and age, but it’s worth repeating. Know who you’re dealing with and if you’re not comfortable with something, slow down and verify, verify, verify! Not everybody is looking to make an honest buck, and the more money you have at your disposal, the more likely the scammers will come for you. 

Image description: Unknown caller show on mobile phone screen identified as a scammer.

11. People Will Sue You

This one might not be as obvious, but when you spend millions of dollars, you become a target. Maybe The other party doesn’t feel the deal wasn’t honored, or there is a disagreement regarding the scope of work. 

Whatever the reason is, a lawsuit becomes ever more likely as the stakes increase. 

I participated in four lawsuits during my working tenure, the biggest of which involved more than $12,000,000. While I won all of them, they cost a lot of my time return.  

Here are a few things you can do to avoid litigation:

  1. Be clear with your communications.
  2. Whenever money changes hands, ensure you have a written agreement outlining what is covered.
  3. Document changes
  4. If you have a call and something needs to change, follow it up with an email to all parties clearly stating the change. It can be simple but make it happen. Something like “per phone conversation on X day with X person, we are now planning on X for X price.”
  5. Don’t do business with shady people.
  6. If someone you regularly do business with tries to take advantage of you, seems to forget the original agreement, or is often late or unreliable, stop doing business with them! There are plenty of other people gladly willing to provide what you need in exchange for an honest paycheck. Work with them instead.

12. Contracts Can Be Broken

I was a little hesitant to put this one on the list, but I think it’s an important concept. You may find yourself in situations where it is no longer advantageous to continue conducting business under the previously agreed-on terms. However, doing so is a risky strategy. 

When dealing with more significant dollar amounts, you can break your contract if the selling party becomes challenging. Doing so requires a plan in place, but it can be a very effective tool in forcing parties back to the negotiating table for a more agreeable deal.  

I’ve found this strategy usually works best when you have something to offer in exchange for more favorable terms; this could be more work, a more extended agreement, or better payment terms for the seller. Sometimes settling the matter with a cash settlement is also advantageous if you no longer need the product or services. While this isn’t always ideal, it can be a clean way to resolve an issue.  

Before you break a contract, I suggest being upfront with your needs and using statements like, “I think we need to renegotiate this deal to incorporate the changing scope of the project.” 

Usually, people will work with you if money is on the table.  

The flip side of this is also true: just because you have an agreement in place doesn’t mean it will always happen. Contracts are not set in stone and are only worth something if honored. If a company goes out of business, there may be no way to enforce that contract.  

In your personal life, you may have a rental agreement with a roommate or tenant renting a home from you. But if the tenant loses their job and can’t make payments, there is often very little you can do to recoup the money owed. 

At the end of the day, an agreement is just a piece of paper. On the flip side, if you are a tenant and need to move before your lease is up, you may be able to renegotiate the lease for a sublet or pay a small lease termination fee.  

13. Time Is The Most Precious Asset

We’ve all heard the saying, “Time is Money.” 

Well, it’s true, and when you’re trying to run a business, you often find that you are always running out of time, and once it’s gone, you can’t get it back. 

When I worked in the aerospace industry before retirement, I routinely spent $1,000,000 to 2,000,000 a year on expedited freight and services to get parts, labor, or equipment faster. 

What is staggering about these payments is that it was $1,000,000 to $2,000,000 annually to do something more quickly; it didn’t give the company more parts to sell or improve margins. The expenditures were simply money spent to ensure the fulfillment of existing contractual obligations. 

Once spent, money is forever gone.

In your personal life, try to automate anything you can. There is no reason to waste your time with monthly reoccurring activities, especially when you risk penalties for doing them late. I’m also a big advocate of delivery services like Amazon or grocery delivery. As long as it ends up in the refrigerator or pantry, who cares how it gets done? There is no good reason to waste time and money running around town when many services will bring it to you for free. 

Image description: A scale showing that time outweighs money.

14. Mistakes Happen

The final tip I want to hit is that mistakes happen. 

The best thing you can do when things go awry is to accept that an error occurred, learn from it (so you don’t make it again), and move forward with your goals in life. Dwelling on the past is like driving using the rearview mirror. Look ahead to ensure you don’t make the same mistakes in the future.  

When spending the amount of money I did, stuff happened. Parts got damaged, and the wrong item got ordered. Or maybe a customer canceled, and we wound up with materials we no longer needed. In an average year, the company would end up with between 0.25%-0.5% waste. While such a figure doesn’t sound like a lot, 0.5% on $1,000,000 per week is a loss of $260,000 annually! That’s around the expense of five average US salaries! 

Often the company would try to minimize these losses by selling the unneeded items on the used market (Tip #4). Still, sometimes it was better to put our time toward more productive tasks and accept the loss (Tip #13). 

In your life, it’s essential to accept that mistakes will happen at no fault of your own. Things like a job loss, unexpected emergencies, or home projects running over budget are commonplace. Don’t beat yourself up over spilled milk, and move forward with the lessons you’ve learned.  

In Closing

There you have it, fourteen tips and tricks I learned while spending $1,000,000 per week. 

I tried to keep this list relatable to the average person’s everyday life. There are some topics, such as capital allocation strategies, that I’ll be writing more extensive articles on in the future. If topics like these interest you, make sure to check out my website BlindLuckProject.com!

Cheers,
Adam, the Friendly Sasquatch


I hope you have enjoyed the fourth guest post in my ongoing feature of various financial bloggers. If you have interest in writing a guest post, please contact me on Twitter.

Author bio: Adam is the friendly Sasquatch over at the Blind Luck Project, a blog focused on helping readers improve their lives by utilizing more than just luck. He retired from corporate world at a young age of 32, and refuses to let anything hold him back, even his vision (Adam is legally blind).


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