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@Anonymous wrote:+1 to all other replies
Also, can start saving a $ amount or a % amount.
The savings come from spending less or having more income(ing)
Keep growing that amount above and try to "beat" it over and over each month or year, etc.
I tend to make it a "game" on how little I can can spend.
It seems to be fun and challenging when I have a large home and 4 dependants and a stay at home misses.
Wealth is in the eye of the beholder.
A person could be making $7.25/hr working 20 hrs a week and be wealthier than a person
making $65/hr or $300k a year but spending it like there is no tomorrow or just have much larger bills, liabilities etc.
Be wise with how you spend and save and wealth can come sooner.
High-earners can often cut back their spending, and making a lot of money is not always associated with spending frivolously.
$7.25 * 20 * 52 weeks is about $7500 per year without considering payroll taxes.
Does anyone here know anyone who can support themselves on $7500 per year? A 25 year old in good health living with, and partially fed and clothed by, his or her parents, maybe.
But independently? What if your employer doesn't provide health insurance and you get sick? There are limits to what subsidized exchange plans will do to help. And what if you want kids someday or to not be renting a house with roommates when you're 40?
There are limits to thrift alone.
@wasCB14 wrote:
@Anonymous wrote:+1 to all other replies
Also, can start saving a $ amount or a % amount.
The savings come from spending less or having more income(ing)
Keep growing that amount above and try to "beat" it over and over each month or year, etc.
I tend to make it a "game" on how little I can can spend.
It seems to be fun and challenging when I have a large home and 4 dependants and a stay at home misses.
Wealth is in the eye of the beholder.
A person could be making $7.25/hr working 20 hrs a week and be wealthier than a person
making $65/hr or $300k a year but spending it like there is no tomorrow or just have much larger bills, liabilities etc.
Be wise with how you spend and save and wealth can come sooner.
High-earners can often cut back their spending, and making a lot of money is not always associated with spending frivolously.
$7.25 * 20 * 52 weeks is about $7500 per year without considering payroll taxes.
Does anyone here know anyone who can support themselves on $7500 per year? A 25 year old in good health living with, and partially fed and clothed by, his or her parents, maybe.
But independently? What if your employer doesn't provide health insurance and you get sick? There are limits to what subsidized exchange plans will do to help. And what if you want kids someday or to not be renting a house with roommates when you're 40?
There are limits to thrift alone.
Pretty much this.
There's a set of absolutely necessary expenses that it can be hard to cut back on other than moving and there's only so far you can go down for that matter too before the set of economic opportunities changes. Food (I still eat at restaurants a lot, I keep telling myself there's a time benefit there and there is, but I'm starting to wonder if I can't do better anyway with smart food prep tactics) and moving somewhere cheaper are my last two things to optimize... but there's a lower bound on expenses for the vast majority of people. I don't want to be homeless, I can live in a cheap place virtually anywhere as long as there's Internet and wireless phone connectivity, but that's still a floor: I can't live where there are not many other people basically, can't be disconnected and yet still earn a paycheck.
On the flipside there isn't a hard limit on the top end (glass ceilings notwithstanding): you can always up your hustle to make more regardless of what you do, even if that may be learning a new skill set that simply pays better. As one such example I was on a project recently where a bunch of the people I'd worked with came through various vocational schools back in the early 2000's and they have a solid financial life, and they aren't really even all that good at what they do objectively, but financially they're doing fine. Arguably I did that myself back slightly before that but I just had books and a lab and went for it when I wasn't at work or engaging in beer diplomancy.
There's one benefit though to upping my hustle this past year that I didn't expect: I'm spending less out of boredom, and it's significant, even considering the fact I never really spend all that much anyway compared to most people. My slush fund expenses have dropped by over 80%: Netflix, no longer needed; Amazon prime: same. Kindle expenses, down to maybe $10 / month... I'm just not spending much at all because most available previously bored time gets sucked into work with 2+ gigs or studying better with only one major income stream right now.
End of the day I think the right path is to be ruthlessly objective with yourself and your finances. If you're spending too much, change it... and if you aren't making enough, do something more or something else. We haven't really even dug into the baby boomer retirement phenomenon yet: there will be economic opportunities for those willing to hustle.
@Anonymous wrote:Everyone's top three expenses are housing, transportation and food. With that in mind:
Old cars (or no car!)
Cheap housing (family, friends, roommates)
Buying groceries, making coffee at home, eating at home, and taking your lunch to your work
In a nutshell, this is has been my framework for the last 5-7 years. I am now several years away from paying off my mortgage and after that, I intend to max out all my retirement accounts and retire as early as possible!
Others have said it well enough, if you can, save more than you spend, invest if possible, and consider working more hours / establishing a side business.
Two parts 1) Find somethng to invest "excess" cash in that returns solid yields.. For some its real estate, others stocks, for some gold and silver Find something you can undestand . 2) Acquireing "excess" cash More than likely it wont be by working for some one else unless you get into a high paying job it will be strarting a business that you can provide a good or service that society values but you can provide cheaply.
For several years many years ago i was a partner in a regional CPA firm. I worked very long hours about 4 months a year but was earning well over $100K a year and had time in the off season to burn as well as money. I got burned out. Presently Dw owns a mid sized real estate brokerage firm with about 20 agents. In the past 5 years niether of us have worked over 4 hours of hard work on any day. My afternoons are spent inspecting homes and photographing houses. Dw replying to e mail. For doing this we earn welll over $100K a year and use the extra profits to invest in houses that we fix and flip along with several partners. This is esiest "work" I ever had in my life.
Other then what others have already mentioned, multiple passive income streams is a must.
I make more money laying in bed doing nothing than most people do going to work.
I try to limit my spend per month, but I don't keep a tight budget. I have a minimum goal of how much to save in my bank account. Every few months, I transfer some money to my IRA and invest into regular mutal funds or low cost index funds. My bank account is for short/medium term needs, and my IRA is for long term needs. I'm not too worried if the stock market goes down, because It's money I'm willing to lose. It's money I would have spent on clothes, a new cellphone, or whatever. I know I'll get a positive return long term instead of losing money due to depreciation on new toys.
@Anonymous wrote:Other then what others have already mentioned, multiple passive income streams is a must.
I make more money laying in bed doing nothing than most people do going to work.
"Passive" can be a relative term. If you collect interest on Treasuries, that's very passive. If you own real estate and pay someone else to manage it, that's fairly passive (though the management fee can eat into returns, or the manager may not really care about the property or your returns).
If you're the one getting the call at 4 am about a dishwasher flooding one of your rentals, it's not so passive.