An Under-Appreciated Skill: Leveraging Limited Resources

In a world that’s so hyper-focused on technical skills, “getting a good education”, and getting into “the right career”, it’s easy to overlook the critical importance of what we might refer to as “soft skills”. As shaky as things are in the economy and in the job market today, soft skills are more important than ever. One of those soft skills is a talent or skill for leveraging limited resources. Or put another way, how to make a lot out of a little.

College and career training don’t teach you that, at least not specifically. College, in particular, conveys the opposite – that the sky’s the limit. But colleges are collectively selling a dream, not the reality that people live with every day.

Leveraging Limited Resources
Leveraging Limited Resources

Most of us have nothing that remotely approaches unlimited resources, which is why leveraging what we have is so important. In a world where jobs, promotions, and even raises are no longer as plentiful as they once were, this ability might be the key to our future economic survival.

I’ve come up with ten examples of successfully leveraging limited resources to help make the point. And I’ll bet that you can come up with a few more. They’re kind of random, but stay with me.

1. The $3,000 Laptop vs. A $300 Laptop

Buying the best equipment available, especially when it comes to computers and smart phones, is seen as cutting edge. But is it always necessary?

The person who buys a $3,000 Mac, with all the bells and whistles, but uses it mostly to surf, play games, and message friends is a lot less impressive to me than another who buys a $300 HP, and uses it to make, say $1,000 a month, selling on eBay, managing a stock portfolio, or running some sort of home business.

The premium computer guy is using his technology as a toy. The budget computer guy is using his more basic model to earn additional income. The second guy is an example of leveraging limited resources.

2. A Brand New $30,000 car vs. a $3,000 “Beater”

Two people have roughly equal financial resources. One buys a brand-new car for $30,000. She feels good driving it, but she’s carrying a payment of $500 per month. The second buys a $3,000 “beater” (it runs, and that’s about as good as it gets). But she has no monthly payment, and banks $500 per month.

The second one is clearly doing to better job of leveraging limited resources. At $500 per month, she’s banking $6,000 per year. If she can make her beater last for five years, she’ll have enough money to buy a brand-new $30,000 car for cash.

But my guess is that she’ll probably buy a newer used car, for maybe $10,000, and keep $20,000 in the bank, while continuing to add $500 to it each month. Leveraging limited resources becomes a lifestyle, and one that often leads to a better life. It’s the natural outcome when you can make a lot out of a little.

3. Buying Organic Groceries vs. Growing Your Own Food

One of the more popular social badges these days is “going organic”. That usually translates into paying premium prices for food at specialty organic grocers.

The jury is still out on the benefits of grocery organic – or even if much of it is in fact even organic. But I’m more impressed with the person who grows their own food in a backyard garden. You can’t get any more organic than that.

But there’s more.

I had experience vegetable gardening when I was growing up, since our family always had a backyard garden. There’s something miraculous – even spiritual – about planting seeds in the ground, watching them grow, then eating them a few months later (I think this is why a farmer is more likely to believe in God than an urban office worker). A grocery store is the closest most people get to farming, so they might not ever have this experience.

It’s also liberating. Even if you can grow no more than 10% of the food that you consume in a year, just knowing that you know how to do it can free you from the fear of starvation. The ability to produce food is the most basic human economic endeavor, and it’s something most of us have completely lost touch with.

There’s one more thing…once you taste truly fresh food grown in your own garden, you don’t ever want to go back to the store-bought variety – no matter how it‘s labeled.

Leveraging limited resources doesn’t get any better than learning how to grow your own food.

4. High Powered Job vs. Modest Job + a Side Business

In a way, I feel bad about casting people with high-powered jobs in a negative light. However, since that is the path that society infers that we are supposed to pursue, it needs to be a target of serious examination.

Maybe I have a bias here, but here goes.

The person with a high-powered job is heavily system dependent. He relies not only on his current job, but also on his ability to gain similar employment elsewhere, should the need arise. That employment is often heavily dependent on a relatively small number of very prosperous organizations (to support the high salary level). For that reason, he will work 60 to 80 (or more) hours per week, give up weekends and family time, travel extensively, and swear his allegiance to his employer. He’s making a lot of money, but he’s also paying a very heavy price.

I think that a person who holds a more modest job, but also runs a side business, is probably doing a better job of leveraging limited resources.

There are several reasons why, despite the fact that he earns a lot less money:

  • He’s less job dependent, since he has a second income source
  • The side business could be leveraged into a full-time business, in the event that he were to experience a career-ending job loss
  • He may find that he’s able to self-actualize in his side business, in a way that his job just doesn’t allow (which is very common today)
  • If he were forced to find a new job, his side business will allow him to avoid making salary THE primary concern; if his side business is doing well enough, he may even be able to accept a lower paying job with less stress and responsibility
  • If his retirement plans don’t quite go the way he hopes, he has a built-in backup plan with his side business
  • While he may be spending as much time earning a living as the guy with the high-powered job, it’s almost certain that he has more control over his time, particularly if he doesn’t have to travel
  • He doesn’t live in mortal fear of losing his job

The second guy may not be on the high-end career path that the first guy is, but there are definite benefits to his situation. The second guy probably lacks the education, pedigree, and career connections that the first guy has. But he is leveraging his situation in a way that gives him many more options in the pursuit of earning a living.

5. Dads Spending Time With Their Kids

I’m stepping into the political correctness cauldron on this one, but I’m willing to take the hit if need be. In most situations, a mother will make time for her kids, no matter how demanding the job that she holds. Fathers, by contrast, can disappear, both physically and emotionally. Sometimes it’s a demanding career, sometimes it’s obsession with certain hobbies, and sometimes it’s a bad marriage. Too many fathers find excuses in those to not spend time with their kids.

But like money, time is another commodity that we all have to leverage in one way or another. Time with your kids could be the preeminent example. Kids are only young for a time, and then they are adults. The time you don’t spend with them when they’re kids will be lost forever.

There’s no do-over on this either.

When I was growing up, I was blessed to have a father who was home and available for us. This is not to say that it was a tight emotional father-son arrangement for me, but there were generational issues there. Men of my father’s generation found it very difficult to bond emotionally with their sons. Yet just the fact that he was there, involved, and there if I needed him, made a positive difference in my life. I’ve seen enough kids and adults – both men and women – who grew up with absentee fathers, to know that it makes a difference.

Some fathers prioritize work, justifying it with wanting to provide “the best” for their children. But money and material possessions are not substitutes for love, emotional bonding and direct involvement. Money and possessions come and go, but emotional imprints are forever.

Spending even a little time – and hopefully a lot more than a little – can make a huge difference in your children’s lives. If your kids are young, right now you have an opportunity that you will never have again in your life. Time is a resource, and spending more of it with your kids will leverage it in the best possible way.

I hope I’ve been successful in doing that with my own kids. Time will tell.

6. Charitable Volunteering vs. Charitable Giving

I gave at the office; it’s a virtual cliché. But it’s one that a lot of people live by in one way or another. In Matthew 9:37 Jesus commented “The harvest is plentiful but the workers are few.” In a lot of situations, people are needed more than money. Though it’s often easier to simply write a check, volunteering time can be a better way to leverage limited resources. This is particularly true if you don’t have the money for charitable giving.

But there’s more to charitable volunteering than meets the eye. When you become a “worker in the field”, so to speak, the plight of others becomes more real to you. Most of us know that human suffering exists, but we think it’s somewhere out there. When you volunteer your time, you actually cross paths with people who are living very different lives. You may even find that you are able to positively influence people who are hurting in a much more constructive way than you can simply by giving money.

Once again, this is an example of leveraging time, and time is an even more limited resource than money.

7. An Eye for a Bargain

OK, back to money.

A lot of people have an eye for a bargain, but some are so good at it that they never pay full price for anything. Whether it involves extreme couponing, being able to sniff out a sale, or having a talent for buying good, secondhand merchandise, they can always find a bargain. This is a major reason why one person may live very well on $40,000 per year, while another struggles to make ends meet on an income twice as high. When you have an eye for a bargain working seriously, you can always live on less money than others can.

My wife and I have a good friend who was a true master of this talent. She was a stay-at-home mom for much of her life, and living on her husband’s income alone required some juggling. She didn’t just juggle, she embraced it. Her ability to leverage limited resources is a major reason why her family is prosperous today.

She was buying food in food warehouses before it was fashionable. Most of the stuff that filled their home, including her kids clothing, toys and bikes, was purchased at garage sales on the extreme cheap. Anytime she needed to buy something at a retail store, she knew exactly where to go, and who was offering the best price that week. It’s also well worth pointing out that she lived in an area that is notorious for conspicuous consumption. She simply resisted the trend.

It’s hard to put a dollar value on that kind of skill, but my back of the envelope rough calculation estimates this to be worth somewhere between $15,000 to $20,000 per year. If you factor daycare, income taxes and commuting expenses into the mix, she was a homemaker with a financial impact on her family that was roughly the equivalent of a parent with a full-time job.

An eye for a bargain also comes in handy with the next topic of leveraging limited resources.

8. The Ability to Buy Low and Sell High

Had the friend that I just described ever tried selling some of the stuff that she bought at garage sales, she probably could’ve built up a very profitable business. Having an eye for a bargain puts you in a position to buy low, enabling you to sell high. If you’ve ever seen any of those pawnshop programs on TV, then you know where I’m headed with this.

I actually dabbled in this couple of years ago. I bought the book Garage Sale Millionaire by Aaron LePedis. Yes, it does work! We made a few hundred dollars, mostly to expose my son to entrepreneurship (a lesson not lost now that he’s an adult).

This is a classic way of leveraging limited resources. The ability to turn a few dollars into many more dollars is actually quite possible. This is a talent that can be turned into either a side business to earn extra money, or even eventually to a full-time occupation. My son and I met several people along the way who were actually doing it full-time.

A person who can create an income out of “junk” never needs to fear losing a job, and will most likely always have extra money available.

9. A High Priced College Education vs. Lifetime Student

A close friend of mine, himself a college graduate, would often express frustration after interacting with highly educated people. “He has a master’s degree from NYU,” he’d say, “but I don’t think he’s had a new idea in 30 years.” So it is for too many people.

No matter what level of education you have, and even and especially if it didn’t include college, one of the best ways of leveraging limited resources is to put yourself on a path of continuous learning. That’s easier to do than ever, with the Internet. You can research virtually any topic that you choose – and even learn new skills – on the web. YoutTube is an underestimated resource. Though we think of it as being mainly for entertainment, I’ve seen people in various trades turn to it when they come across something that they’ve never seen before. You can do the same.

The economy is changing rapidly, and the education that you or anyone else received 20 or 30 years ago is no longer entirely (or remotely) relevant. There are all kinds of skills you can learn, and learn quickly, just by spending some time on the web. Seriously – that course that you spent 40 hours at in a college and couldn’t master – can be compressed into two or three hours of Internet research. Your motivation makes all the difference. You can even learn an entirely new career using the resources on the web. I did exactly that, so I’m not making this recommendation lightly.

You can leverage the web to create new opportunities for yourself. It’s all there, if you’re willing to invest the time, and take it seriously. A single new career skill can literally be worth the equivalent of a four-year college education. It’s not an exaggeration, it’s the economy that we live in. Identify a need, learn the skills necessary, then fill the need. It’s no more complicated than that.

10. Informal Networking

If you’re following the societal trend toward walling yourself inside your home, protected by a fancy security system (and maybe even a gated neighborhood), and keeping yourself busy with 24/7 electronic home entertainment systems, while largely cutting yourself off from your neighbors, you’re missing a real opportunity.

Yes, people are that opportunity. While we mostly think of networking as helping us to find a job, there’s so much more that can be done. Networking to help you find less expensive ways of doing things, help with specific projects, business opportunities, and yes, even jobs, are all possible.

A person who is good at networking with other people is always surrounded by opportunity. This is another example of leveraging time, rather than money. But it is incredible the many ways that you can benefit by expanding your people contacts. It doesn’t need to be anything formal, like joining a group. It’s just maintaining a wide circle of contacts who you can turn to whenever you need something. It’s also about being available to help when someone else in the network is in need. It’s amazing what people will help you with if you just ask!

Leveraging can lower your cost of living and help you have more control over your finances. It also has a way of making you feel better about yourself, especially when you begin to realize exactly how much you can do. Personally, I find it to be liberating, and work wherever possible to build it into my lifestyle. I’m still learning.

Can you suggest other strategies for leveraging limited resources? They can be examples you’ve used yourself, or at least know about from others.

( Photo by Images_of_Money )

4 Responses to An Under-Appreciated Skill: Leveraging Limited Resources

  1. I have to add buying a house instead of renting. I always felt that buying was like wrapping an anchor around your neck. My parents are in their 80’s and just can’t give up their big house and all the costs that go along with it. They carry huge insurance policies to protect it in case either one of them gets sick and the medical bills may eat up the equity. The maintenance and upkeep are worrying them to death. They say they can’t sell because they are saving it for their “old age”!
    When I have compared the costs of interest, maintenance and taxes and being stuck in a job or situation i hate just to make the house payment, renting seems like a much better choice.
    I think it’s all part of the “keeping up with the Jonses” attitude.It may be good for the government and the trades people, but not so much the consumer.
    The best thing? I just had a water leak in the basement. All I had to do was call the landlord! He gets to take time off work, make the repairs and pay for it all. Home ownership may not be the best deal even if everyone is doing it.

  2. Hi Rick – That actually is an excellent addition to the list. People who believe that they MUST own are in a trap. I’m not saying that renting is for everyone in all circumstances, but neither is owning. During the housing meltdown I watched people lose houses that they could barely afford to keep when times were better, but they “couldn’t leave their home(s)”. That’s an emotional attachment not an economic one. We’d watch as houses in the neighborhood would slowly deteriorate in the years leading up to foreclosures or home abandonment, because people couldn’t afford to maintain them, let alone make the house payment.

    My personal sense is that flexibility is going to be critical in the years ahead, and we’re going to have to carefully examine any assumptions that we have. The economy just isn’t as stable, predictable or forgiving as it used to be, and we have to adjust for that. That’s a survival skill like any other.

  3. Great list!
    I just did get a ‘new computer’ because of needing to upgrade in order to build some skills (I am taking online classes and getting a discount on those classes!) for that ‘side job’ that will give me an income in retirement and in addition, better use my energy, time, intelligence, talents and skills than my present ‘day job’.
    The ‘new computer’ I just bought was a re-furbished one that I got at Tiger Direct for about $350.00. Had I bought this machine brand new, I would have paid upwards of $1000.00. I used the perfectly good monitor from my older pc for the newer pc and we found a decent replacement monitor for that machine for under $20.00 at Goodwill!
    Refurbished machines usually are ‘like new’.
    One thing a social worker once told me: “The very poorest people, who have to navigate the maze of social services and government benefits, often are wizards at leveraging limited resources. They just don’t know it because no one (including themselves) credits them with those skills.”
    I am not on the dole but I agree with that worker and I think those of us who make less money (a government office job will never be a huge salary although the insurance and benefits are decent) are often more money and value savvy than out more well-heeled neighbors.

    Mary Lyons

  4. Hi Mary – I agree with what the social worker said. But my experience has been that people of limited means in general tend to make better use of limited resources. People who make good money often buy brand new everything without much thought. In their world, convenience (being able to buy something quickly is often more important than getting a good deal. When you have limited income, you find ways to get what you need for less than the going rate. I actually see that as an advantage, even if it comes about through adversity. Considering how easy it is to lose a job or even a career today, being able to survive on very little and to make the best of what ever you have is a necessary skill.

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