How Much Are You Putting Away?
A lot of things in life are easier said than done. I think this is also true when it comes to saving money.
How does one go about saving money? Well, quite easy really. You simply spend less money than you receive on a regular basis. All the thousands of books, articles and television shows on personal finance really just regurgitate this simple equation. I'm guilty of the same.
You can talk about clipping coupons, skipping a daily latte and finding a gas station that's $0.03 less per gallon than every other gas station in town, but you're simply missing the forest for the trees. You're focusing on small potatoes. If you're really serious about trying to become financially independent at a young age you need to stop cutting coupons to save $1.00 off your $4.00 purchase and cut the $4.00 purchase out of the budget completely. You need to stop thinking about finding cheaper gas and start thinking about how to live without a car, or at least drive it significantly less.
I laugh at all the infomercials you see on losing weight and the new fad diet pill that promises to help you shed 20 lbs. in three months. Or, the new exercise machine that will make it fun to get your sweat on. I really think people need to wake up sometimes. If you want to lose weight, you need to take in less calories than you burn. It's as simple as that. You want to build muscle? Then you need to exercise. There is no magic pill that will all of the sudden allow you to look like David Beckham or Kate Beckinsale. Having a healthy body and losing weight actually requires hard work and patience. Try selling hard work and patience at 3 in the morning.
The reason why magic diet pills sell and why cutting coupons is popular is because they're easy and they're immediate. Saving money and becoming wealthy requires lots of patience, and lots of time when you're acquiring it the good old fashioned way: saving and investing. Unless you win the lottery or inherit millions of dollars from a long lost oil baron Uncle, you're going to spend a lot of your time on Earth accumulating wealth by spending less than you take in and investing the difference. It's as easy as that, but much easier said than done.
When Dr. Thomas J Stanley did research for his book The Millionaire Next Door, he found something shocking to most, but quite obvious to me: that accumulating wealth requires a lot of hard work and patience. You mean people don't get rich by winning the lottery? Say it isn't so.
An excerpt from a synopsis of The Millionaire Next Door:
[/i] [i]"In The Millionaire Next Door, Dr. Stanley shattered the contemporary held beliefs about America's rich - and how they got that way. It is seldom inheritance or advanced degrees or even intelligence that builds fortunes in this country. Wealth in America is more often the result of hard work, diligent savings, and living below your means. The Millionaire Next Door reveals the common denominators that show up again and again among those who have accumulated wealth."
It's the same process with anything in life. If you're constantly looking for shortcuts to anything you want in life - better health, more money, love - you're going to be sorely disappointed, I believe.
[/i] So, it's time to take control of your future and realize that cutting 20 pounds off your weight or saving $50,000 are both easily attainable, but you have to be ready to do what it takes to get what you want. You have to put a plan together and stay committed to your plan.
For instance, I put a plan together when I first started my 12-year journey to early retirement and, for the most part, I've stuck to it to the best of my ability. Here we are more than two years later, and I now have more than $80,000 in my Freedom Fund after funding it with a seed of about $5,000 from my checking account and I've gone from $0 in monthly passive income to my most recent total of $357.82.
[i]You can probably guess where I'd be today if I were still sitting around watching infomercials and waiting to win the lottery.
Make a plan. Stay patient. Set realistic, but challenging goals. Budget your expenses and make sure you're cutting all unnecessary fat from both your budget and your diet. Stay true to yourself and imagine a better you. Track your progress. Be diligent and maintain your perseverance. Try to maximize your income, save as much as you can and invest the difference in high quality, diversified investments.
None of this is easy, but nothing worth having ever is. How bad do you want wealth and health?
Thanks for reading.
How Much Are You Putting Away?