Our 7,100% Investment Return

Reducing your cost of living is sometimes more about the small things than it is the big things. One of those “small” things has created a return of 7,100% on our original investment, or 93.87% per year over the 6 years we’ve been investing in it. It’s amazing how small choices can in turn create such large differences in our overall wealth. What is it that I am talking about? A hair cut kit! That is right, my wife has cut my hair for over six years now with a simple Wahl brand hair cut kit.

To be honest though, it was not always easy to do this. The first hair cut went pretty poorly. In fact, my boss asked me if I got in a fight with the barber. We laughed about my ridiculous hair, and in a few days it had grown to a point where the mistakes were not noticeable. Since then, my wife has become excellent at cutting my hair (and was actually good by the second hair cut). So, lets run the numbers.

Our original investment was $20 for a Wahl Hair Cutting Kit. In my neck of the woods, a local hair cut costs $17 (no tip). I don’t tip less than 20% unless something is wrong, that would run me about $20.40, honestly though, I would just end up handing a $20 bill over. My wife has been cutting my hair for six years. I have my hair cut once per month, that means $20 * 72 months ($1,440 saved). An overall staggering return of 7,100% on our original $20 purchase. Now, you might argue that this is not free money, and I agree. My wife works to cut my hair. It takes her less than 10 minutes to cut my hair and sweep the floor while I take a shower. Let’s round up and say it takes an even 10 minutes. That means she can get 6 haircuts into a single hour. So, $20 * 6 = $120 per hour! My family is making bank by not having to pay to have my hair cut.

Making this small decision actually is more beneficial than just those raw numbers. After all, I would have to drive to said salon. Make time to wait for my appointment, spend gas to drive there and back, and overall the beauticians take more than 10 minutes to cut my hair. For the short time I was using a local salon for this, I averaged 30 minutes in the store total. That means that I save 20 minutes per hair cut by letting my wife cut my hair. 20 minutes * 72 haircuts = 24 hours! That’s right, over the last 6 years, my wife has been gracious enough to save over an entire day of my time by cutting my hair. What a wonderful woman I married!

I hope the impact of this “small” decision is starting to hit you. For fun, let’s run one more calculation. Let us assume that I invested this saved money, and let it accrue interest for 30 years. After all, I clearly do not need the money today, and honestly, at a 70% savings rate, this is probably exactly what is happening with those dollars. In 30 years (assuming an average 8% annual return in the market) I would have a tidy $28,553. Just by making a $20 decision, once a month.

An important note on this awesome cost savings… If I did not trust my wife to make my hair awesome, I would not be able to save all this money. If I had given up hope that she could eventually succeed, I would have quit home hair cuts after the first botched attempt. The interesting thing is that more often than not, trust and perseverance are the two main properties of most cost savings for my family. In areas of teamwork and shared goals, trust and respect for the learning process will be what create success.

What about you? Do you have a simple way to save a boat-load of money, one small piece at a time?

1 Comment

  1. Trevor

    Mr. Getaway, I like the haircut idea!
    My wife and I are in the process of saving about $300 this summer by not running our AC. We use a cooler with ice in it. A fan pushes the air over the ice and out a PVC tube. It can keep a room 75 degrees on an 85-90 degree day. Total cost $25.

    Many people think such peculiar measures are crazy/unnecessary. I think working until your 65 is crazy/unnecessary. To each his own.


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