<i>photo: Andrey Popov</i>

Half a dozen years into my career, an older and wiser builder showed me that if I put my mind to it, I could rapidly make my way to financial independence. Work would then be a choice, not a necessity. I’d rise every day free to do what I liked, unfettered by monetary necessity.

That sounded good to me. I went for it. Likely my thinking and strategizing was not quite so clear in my mind as I see it in retrospect. But I did know that I wanted to stay in construction. I liked the work, from bidding and estimating to orchestrating the trades and driving nails at a jobsite. I liked the camaraderie among workers and builders and felt valued when clients referred my company to their friends.

I could also see, however, that construction is, financially speaking, a marginal business. Failure rates are massive; consistent profits are hard to come by. I concluded that building a company with the intention of eventually selling it was not my best path to financial freedom. There was not likely to be a robust market for not-so-good businesses like construction companies. (Generally speaking, I was right. As I explain in my new book, Building Freedom, A Construction Pro’s Path to Financial Independence, selling a construction company is likely to be difficult but not likely to be lucrative.)

Instead of conceiving of it as an eventually marketable commodity, I viewed my construction company as a money pump. If run properly, it could pump out enough cash to provide me with adequate pay, reward my employees generously, build up capital reserves, and provide funds for the investments that would set me free.

Smart Frugality

My design for that company rested on two principles, both expressions of frugality. First, it was lean. And I mean really lean. I hope to go into the particulars in a future article. For now, it is enough to say that no overhead cost was incurred that was not essential to support high-quality production at jobsites—and that “lean” does not even imply “mean.” Worthwhile frugality is about caring, careful, efficient, and effective use of resources. It is not miserliness.

The second principle emphasized creation of an “employee centered” company. Employees are a construction company’s most precious resources. Investing in them is smart frugality. That's what this article is about.

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