The Shortest Route to Wealth: Why Consumption, Savings & Investment Need a Diagonal Approach

Would you take a longer, inefficient path to your destination if a direct shortcut existed?

Most of us unknowingly do exactly this with our finances. We consume first, save later, and invest whatever remains—not realizing that this approach follows an inefficient, longer path to wealth creation.

Instead, a diagonal approach—where investment takes precedence alongside savings and limited consumption—can accelerate financial growth. This isn’t just a metaphor; it follows a mathematical and economic principle. Let’s explore how.

The Mathematical Analogy: Linear vs. Diagonal Efficiency

Understanding the Traditional (Linear) and Efficient (Diagonal) Paths

Imagine you are at Point A (Income) in a rectangular field and need to reach Point C (Wealth Creation). There are two ways to get there:

1?? The Traditional Path (Linear Relationship) – Travel from A to B (Consumption) and then from B to C (Savings → Investment).

• Distance covered:

• This represents Income first going into Consumption (L), then Savings and Investment (W)—a sequential process with inefficiencies.

2?? The Diagonal Path (Efficient Approach) – Travel directly from A to C (Investment before unnecessary Consumption).

• Distance covered:

• This approach eliminates unnecessary detours, allowing a faster and more effective journey to wealth creation.

The Percentage Reduction Formula (Efficiency Gain in Wealth Building)

To measure how much more efficient the diagonal path is:

Efficiency?Gain=

• When L = W, the efficiency gain is 29.3%—meaning taking the diagonal approach to investment saves almost one-third of the time and effort.
• When W > L (meaning excessive consumption), the gain is even higher—showing that reducing unnecessary spending leads to even faster financial growth.

Applying This to Consumption, Savings & Investment

Now, let’s translate this mathematical efficiency into real-world financial decisions.

The Long Route: High Consumption & Delayed Investing (A → B → C)

When people prioritize consumption, then save, and invest last, they follow the linear approach (L + W).

• Their wealth accumulation is delayed.
• They take unnecessary detours before reaching their financial goals.
• The time to build wealth is longer than necessary.

?? The Shortcut: Investing Alongside Saving (A → C)

When a portion of income is directly allocated to investments before unnecessary consumption, it follows the diagonal approach

• This accelerates financial growth.
• Compounding begins earlier, increasing wealth significantly over time.
• The path is shorter, faster, and more efficient.

Real-World Example:

Consider two individuals: 1?? Person A (Linear Path): Earns $100,000/year, spends $60,000, saves $20,000, and invests only $20,000 per year. 2?? Person B (Diagonal Path): Earns the same $100,000/year, but directly invests $40,000, reduces unnecessary expenses, and still maintains essential consumption.

Over 10 years, assuming an 8% return,

• Person A accumulates $43,178 in investment growth.
• Person B accumulates $86,357—double the wealth by just taking the diagonal approach!

Key Takeaways: The Diagonal Strategy for Financial Growth

? Reduce Excess Consumption: The more you spend unnecessarily, the longer your financial journey.

? Save with Purpose: Idle savings do not generate wealth—investment does.

? Invest Early & Directly: The sooner your money starts compounding, the faster you build wealth.

? Eliminate Unnecessary Detours: Consumption should be structured around investment goals, not vice versa.

In essence, don’t just earn and save—invest with intention. The shortest path to wealth isn’t about how much you make, but how efficiently you use it.

What’s Your Path?

Are you still taking the long route to wealth, or have you started using the diagonal shortcut?

Comment below and let’s discuss!