Why Being A TIGHT WAD is Hurting Your Business

This post is inspired by a skype conversation I had today with someone I've been talking with on and off about internet marketing.
This particular guy is making about $800 a month mostly with article marketing. This guys is nearly there. He bought the IM t-shirt and is wearing it. He asked me what he could do to expand his earnings.
I said why not take most of what your making now and reinvest it into your business.
I mentioned outsourcing articles. That way he can get more content out, more backlinks, get more traffic and sales.
Purchase a particular script I recommend for tracking affiliate sales. This way he would find out exactly which articles are generating the most converting traffic so he could heavily build back links to those articles to make more money
Putting asides a couple hundred of his monthly earnings to invest in some paid advertisement. This could lead to boat loads of cash once mastered.
3 thing that would benefit his business that cost money.
He thanks me for the tips but was like I only want to expand my business using methods that don't cost.

I tried to explain getting this stuff doesn't actually cost because he's making $800 a month and when using these tools right can really help expand his earnings.
He still wouldn't have it.
I mean wtf.
Invest into your businesses people. I say that with love.
It's not like this guy is broke. By day he is an insurance claims rep. His house is paid for, car is paid for. He is single. He just doesn't spend money.

 He's tight. Very.
I was talking on the phone with a marketer that helped Jermain Griggs get started. Jermain Griggs is the founder of hearandplay.com.
Well we got to talking about how Jermain got started.
He jumped into IM with $20,000 to spend.
This is huge. Lots of money.
But for the entire next year, anything he made he reinvested 100% of what he made back into his business. Now he makes something like 12million a year but for that first year he sacrificed everything he made.
That's someone who knows where he wants to go with his business and isn't afraid to invest into his business.
Why are people so afraid to invest into their business. Throwing a little of what you make back into your businesses can go a log way and can take months even years off how long it will take to establish substantial success.