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Always, always, always live well beneath your means. Unless you are idependently wealthy and would never need to really work the rest of your life including retirement.
Some of the wealthiest people I know still drive around 10 year old Chevy and ford pickups. You wouldnt know they are worth millions just meeting them on the street. Conversely many of my past and present clients live lavish lifestyles and I've seen many go bust over the last 15 years.
You are who you are and more money won't change that, it only intensifies it for the good or the bad.
Me I've always been very, very cautious to live several notches below my means.
Also goes over well with my prospective client not to see me in a new vehicle year after year. Makes them think I'm giving them the best deal and not trying to get rich off of their particular job.
Yes, but my savings rate must also increase with income.
In 2009 to early 2010, I lived on literally $1000/mo in California while I looked for a job, having finished grad school without a job lined up. Once I started working (starting at 30K then quickly raised to 40K), I tried to continue living on $1000/mo, but the temptation was too great to spend even just modestly more. I eventually gave up and upped my budget to $1500/mo.
We do allow our lifestyle to increase with income increases. We try to limit our lifestyle increase to be only 10-20% of the income increases
What was your income when you started following that rule? If I follow the same rule I will be a millionaire in less than 20 years (not that I want to, because that means I can't have any kids!)
What was your income when you started following that rule? If I follow the same rule I will be a millionaire in less than 20 years (not that I want to, because that means I can't have any kids!)
110-120 2-3 years ago, now 200-220 it does start adding up quickly and our lifestyle has still advance a good deal and since we've never lived on 200k it's not painful to implement. My wife and I are DINKs
My wife and I married at age 30. Neither of us had much when we married but we started earning good livings. We desired things and we spent what we made enjoying the good life. In our mid 40's, still enjoy a good income, we started to think about retirement. We took a few financial investment courses. Paid a fee based financial advisor to come up with a plan for us. We started investing in the future with IRAs, solid stocks, etc. We could still enjoy the good life but we also cut a few corners. Like 2-3 star hotels instead of 4 star hotels while on vacation. Cheaper scotch. Keep a car for more then 4 years. Join a less expensive country club. $50 shoes instead of $120 shoes. We became debt free by our early 50's. We retired at age 62.
One of the biggest things in our favor was we opted not to have children so we were DINKs. Dual Income No Kids.
Just to add to what you're saying....if you'd figured this all out at age 30, instead of your mid 40s, you probably would've been able to retire at 52 instead of 62.
Just to add to what you're saying....if you'd figured this all out at age 30, instead of your mid 40s, you probably would've been able to retire at 52 instead of 62.
Woulda couldas don't help anybody once it's done and in the past. A lot of people would love to retire even at 62. They just don't realize it's possible to retire sooner with the right strategy. I feel like I'm figuring it out way late and I'm only 37. If I knew what I know now in my early 20's I might have been able to retire by 40! But c'est la vie. My goal now is to retire by 50, which is still far ahead of most people.
Good question. Usually its not big material things that I buy when I have an increase in salary, but stuff that costs money but enriches my life. Rescue animals with big vet bills attached, donating more to charity, having children. I still feel as "broke" as I did in college, but now I have a home, car and a family to care for.
So I guess my answer is "yes" but I'm happy with the decisions I've made on how to spend my money (for the most part).
I agree, I'm not that into material things. If I was going to to something for myself it would probably be takiing a vacation or something along those lines but I tend not to spend money on myself so extra money for me typically goes to helping out a friend with some medical bills, buying some nicer xmas presents for people, etc.
Woulda couldas don't help anybody once it's done and in the past. A lot of people would love to retire even at 62. They just don't realize it's possible to retire sooner with the right strategy. I feel like I'm figuring it out way late and I'm only 37. If I knew what I know now in my early 20's I might have been able to retire by 40! But c'est la vie. My goal now is to retire by 50, which is still far ahead of most people.
YOu bring up a great point. I have my "FU MONEY" number. For me its 600K which is basically 24k a year times 25 years. I'm young so that may be a bit less than I truly need. Basically the amount of money I need to not work for 25 years. I know 24k a year to some probably sounds like poverty level but I already have a couple properties, have a 401k and some other savings in addition to this money I'm talking about. I live a pretty simple life as is my bigggest expenses are housing and I'm actually researching and planning on doing some tiny living whether it be RV'ing, vandwelling, living on a sailboat or getting a tiny house or storage auction house so actually once I make that step my living expenses will be cut by about 3/4
This may be a bit overoptimistic but I'm thinking I can retire by 36. If I get married or have kids this whole thing goes out the window but for myself will work fine.
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