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Oily Rag Attitude

Gold Nest Egg - Financial Concept

Gold Nest Egg - Financial Concept

We’d all be better off if we saved more (or any!), but sometimes that feel nearly impossible. The good folk at Oily Rag know a thing or two about stretching your dollars – so check out their idea for putting away a bit for a rainy day…

This week we are going to do some living off the smell of an oily rag revision, by looking at the most important things you can do to build a savings nest-egg.

First, let’s review why it’s important to save. In a word – life, liberty, and the pursuit of happiness. OK, while that’s more than one word and pretty much includes everything, it’s really about you and your family having the financial freedom to be independent.

There are of course many reasons why so many people have an oily rag attitude.

1. It’s fun!
2. It saves you heaps of money!
3. Waste not, want not!
4. Its good for the environment!
5. Avoiding waste means you will have money for the things that are really important!
6. It means you have more money left over at the end of each week to save and invest. Wise investments will keep growing so one day your investments will be working for you, and you won’t have to work for someone else.

The most important thing to appreciate about frugal living is that it’s an attitude – even wealthy people can live an oily rag lifestyle! Most oily rag folk are not highly motivated towards being wealthy – they just want to be comfortable and happy. We believe almost anyone can, over time, become comfortable and happy by living an oily rag lifestyle.

Here are the key elements to an oily rag attitude.

1. Making every dollar stretch as far as possible to extract its maximum value. Examples include buying a near new second hand vehicle instead of a new one, saving on vehicle running costs by buying a small car instead of a gas guzzler, buying an energy efficient appliance, buying house branded groceries instead of branded products, having lemon flavoured water available for the kids instead of buying fizzy drinks, taking a cut lunch to work instead of spending up large on donuts at a lunch bar. The list is endless. The oily rag website at has literally thousands of ways to stretch one dollar into two dollars’ worth of spending power.

2. Save part of every single dollar you earn. Those savings will compound and become a sizable nest-egg if left untouched.

3. Avoid debt in the first place. Debt is savings in reverse. Just as compound interest will benefit the saver, it will harm those who are indebted. Very dumb debt is borrowing for holidays or for buying depreciating liabilities like cars and boats. Investment debt is quite different and involves a different set of issues.

4. If you have debt, invest the savings you are gaining from an oil rag life style into debt repayment.  Investing in your personal mortgage is like receiving a risk-free, after-tax return equal to your mortgage interest rate. On a risk-return measure, that’s a heck of a lot better than having spare money sitting in the bank, or buying risky shares. Spare savings should go into increasing mortgage repayments.

Start saving early and retire rich. This is not hype, its basic maths. The point here is to save, and to start saving early in your life. We appreciate one can’t wind the clock back, but if you have not started to save, today is the day to do so. KiwiSaver is a great place to begin – if only because of the various subsidies it offers.

So, it’s all about attitude. It’s fair to say oil raggers are far too self-confident to get sucked into the keeping up with the Jones’s vortex.  Don’t forget, the ultimate goal is financial freedom.

We would love to hear from you with tips or questions to share with readers, so please contact us via the website at or by writing to Living off the Smell of an Oily Rag, PO Box 984, Whangarei.

By Frank and Dr Muriel Newman. Read more here.