Milton Friedman – Four Ways To Spend Money

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Here's a little economic lesson for today. Milton Friedman, in his book “Free to Choose“, detailed the four ways to spend money:

  1. You spend your own money on yourself.
  2. You spend your own money on someone else.
  3. You spend someone else's money on yourself.
  4. You spend someone else's money on someone else.

You get the best value for your dollar if you stay within #1. Here's a video clip summarizing his economic theory.

Milton Friedman - Four Ways To Spend Money

Larry Ludwig

Larry Ludwig was the founder and editor in chief of Investor Junkie. He graduated from Clemson University with a bachelor of science in computers and a minor in business. Back in the ’90s, I helped create some of the first financial websites for firms like Chase, T. Rowe Price, and ING Bank, and later went on to work for Nomura Securities. He’s had a passion for investing since he was 20 years old and has owned multiple businesses for over 20 years. He currently resides in Long Island, New York, with his wife and three children.

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