Difference between Investment and Waste

Are you thinking about starting your own business or ditching the grind?

This article will share my personal tips for approaching your first business with the right mindset.

To fully understand these concepts, I recommend checking out my previous article first.

Mindset of Upfront Investment

After reading this, you’ll have a clear understanding of what it takes to get started.

The Difference Between Investment and Waste

Understanding the Concepts

Do you always think about how you spend your money?

If you don’t think about it and you want to start your own business, I recommend you will start considering how you spend your money.

At first, you should know the difference between invetment and waste.

Investment means that expense will come back to you in some form. Opposite to that, Waste means that expense will not come back to you.

The “return” on an investment doesn’t always have to be immediate cash. It could be time saved, new knowledge, or improved efficiency.

For example, buying a high-quality laptop is an investment: it allows you to work faster and more effectively, directly boosting your business productivity.

Taking a course to learn a new skill is also an investment, as that knowledge will increase your future earning potential.

Waste, on the other hand, is a simple loss. Buying a new video game you play once and forget, or buying impulse items that you quickly forget—these expenses offer no long-term financial, professional, or efficiency return.

How to Shift Your Spending Mindset

Identify Your Wastes

The first step in shifting your mindset is to start tracking it objectively.

For one month, use an app, a spreadsheet, or even a notebook to record every single purchase, no matter how small.

Once the month is over, go through that list and ask yourself one simple question for every expense: “Did this purchase generate a future return (time, knowledge, or money)?”

If the answer is no, it’s a Waste.

You’ll quickly see patterns. For many people, common wastes include:

• Subscription Overload: Monthly charges for services (streaming, apps, etc.) you barely use.
• Impulse Food Buys: Daily coffee shop visits, delivery fees, or expensive lunches that consume time and capital.
• Unnecessary Upgrade Cycle: Replacing a perfectly functional phone or gadget simply because a new model was released.

Identifying these wastes isn’t about feeling guilty; it’s about recovering your seed money.

Every dollar you cut from waste can be immediately redirected to fuel your business.

Prioritize Your Investments

Once you’ve identified your wastes, you can begin to prioritize real Investments.

Remember, the best investments are the ones that either save you time or increase your ability to earn.

To start, follow this hierarchy of investment:

1. Self-Investment (Knowledge and Skills): This is the highest priority. Pay for resources like books, online courses, or coaching to directly build the skills your business needs. This increases your value.
2. Tools and Efficiency (Environment): Invest in tools that make your limited time more productive. This might be a reliable laptop, a comfortable chair, or software that automates tedious tasks. This increases your time.
3. Product/Inventory: This is where most people start, but it should come last. Once you have the knowledge and efficient tools, you can confidently invest in the physical products or services that form the core of your business.

By consistently directing money toward these three areas, you move away from being a consumer and embrace the mindset of a true business owner.

Conclusion

The journey to escaping the salaryman grind starts not with a grand business plan, but with a simple budget shift.

By learning to distinguish between a short-term Waste and a true Investment, you gain control of your resources.

Your task now is to audit your spending, eliminate wastes, and funnel that recovered capital into the three critical areas: Self-Investment, Tools and Efficiency, and finally, Product or Inventory.

Embrace this new mindset, and you’ll find the fuel you need to launch and sustain your entrepreneurial life.

I truly hope this blog inspires you to change your life!