We’ve discussed the curiosity of financial hoarding as well as one way in which to eradicate the disease by revealing our desires for public shaming. If we feel ashamed, we simply don’t spend as much money. Some folks found it a little strange that I find delight in getting judged for having spending desires. After all, we should keep our thoughts pure in order to reach salvation.
The truth of the matter is that my love for saving money almost always trumps whatever negativity or difficulty I’ve got to endure to save more. The pain of working 14 hour days in my 20s was no match for the joy of having more savings in the bank. The delight of making active income keeps me engaged in retirement for 2-4 hours a day despite generating enough livable passive income to not have to work. Each comment I get about being wasteful for even thinking about spending money on a new vehicle or a watch makes me happier because it reinforces my desire to save more in order to save the children.
I even sacrificed eating tons of yummy cheeseburgers from Shake Shack and In N’ Out Burger since 2000 just so I can always fit in my pair of Diesel jeans I bought for $140 on 5th Avenue in NYC. The guilt of spending over $50 for a pair of jeans at the age of 23 made me want to stay in shape forever so as to never have to buy another pair again! (Read: A Weight Loss Tip To Die For if you’re serious about permanently losing weight)
Another reason why I’m obsessed with saving money is because I’ve been ripped off one too many times. From the Mumbai taxi driver who takes the scenic route to my hotel, to the electronics salesman who strongly pushes a product despite knowing it will be on sale the next week, to borrowers who promise to pay me back but never do – I’ve been thoroughly traumatized by my money spending experiences that I figure if I never spend money, I’ll never lose!
HAPPINESS IS ALWAYS THE END GAME Read more…
Although the community won’t let me spend money, I still enjoy buying things for others throughout the year and during the holidays. To love is to give after all!
Like many of you, I absolutely hate physically shopping for things during sales. Places like WalMart, Target, and Best Buy go absolutely crazy! From the stress of finding a parking spot to the pressure to buy something quickly before selling out, feeling anxiety while shopping just isn’t worth it.
Shopping online is the absolute way to go. That said, I always go to the store to test out the product anyway, especially if it’s an electronics product like a TV. Seeing is believing and I don’t fully trust the quality descriptions of products written online just yet.
The following outlines my holiday shopping strategy that maximizes discounts and minimizes stress. I’d love to read about your shopping strategies as well.
THE HOLIDAY SHOPPING STRATEGY GUIDE Read more…
Holiday shopping mania season is upon us and I’d like to help you save! We already know the main reasons why people go into debt are due to greed, stupidity, entitlement, desperation, and insecurity. The debt article offers five solutions on how to eventually become debt free. Based on a recent social experiment on Financial Samurai I’ve managed to figure out how to make you severely curb your spending to the point of absolute monk-like frugality. Before I show you how, let’s get a snapshot of the overall US personal savings rate to put things into perspective.
As you can see by the chart above the US personal savings rate is roughly 5%. At a savings rate of 5%, it will take someone 20 years to save up enough money to replicate one year’s worth of income. That’s pretty pathetic. At least the 5% is an improvement from the 2.5% figure seen between 2005-2007! (Read: How To Save More For Retirement If You Don’t Make Much) It took a colossal financial meltdown to scare Americans into tripling their savings rate for several years. Now it’s back to spending all we have thanks to the bull market.
It’s my hope that every single reader saves at least 20% of their after tax income every month by maxing out their 401(k)s and IRAs where available. If there’s still disposable income left over after general living expenses, save even more in laddered CDs or open a brokerage account like E*TRADE to start investing in simple index ETFs. If you can get to a 50% savings rate, that’s when financial freedom starts becoming a reality.
My mission is to get people to build their savings muscle as large as possible so they don’t look back 20 years from now and kick themselves in the face for being so undisciplined. You may have all the enthusiasm in the world for your job after graduation. But trust me when I say your enthusiasm will fade after 10 consecutive years of work. Now it’s time to demonstrate how you can join me in saving a ton of money with this one strategy.
HOW FINANCIAL SAMURAI SAVED ME OVER $100,000 IN A DAY Read more…
The following is a guest post by Colleen Kong-Savage who is in the middle of changing her financial habits after a recent divorce. I’m a big proponent of tackling specific financial habits one at a time vs. all at once to increase our chances of change. Let’s see how Colleen did with her no eat out challenge in Manhattan. If you’d like to write a guest post, please feel free to e-mail me.
I have been challenged by my brother to NOT eat out for a whole month. My budget needs a bit of a makeover: I’m freshly divorced, unable to shake this nasty case of unemployment after staying home nine years to raise my son.
Lucky for me, I’m OK for the next few years with an alimony check deposited monthly into my bank account, but sooner or later it’ll stop. If I never ate out, I could save $500 a month.
This challenge might be a preview of my future. However, I live in NYC, and how do you NOT eat out in the food capital of America. Last week I snarfed dim sum at Jing Fong including fried mochi balls of sweet lotus paste, at Landmarc I swabbed the roasted marrow out of bones with crusty bread, I had the lamb shank at Frida and fat greasy Pad See Yu noodles from Spice. Global dining is my right as a New York citizen.
Well, let me try a week. See how I do. Read more…
If you’ve been making $500,000 a year for a decade as a 40 year old but only have a $1 million net worth, you’re probably a donkey with some serious financial issues. If you’re making $80,000 as a 30 year old but have a $500,000 net worth I’d classify you as a hero who is on their way to bubbles and unicorns!
I’ve written about The Average Net Worth For The Above Average Person that provides charts on where highly motivated people who want to achieve financial independence should be. The only problem with my analysis is that it doesn’t tie income levels specifically in the charts. This post will bind the inextricably important link between income and wealth to ensure as high a chance of financial freedom as possible.
To create a good net worth guide based on income can be very tricky based on variables such as how long someone has been making X income, the return on investment, and the state of the economy. Hence, a more conservative assumption is to replace net worth with savings. Let’s first understand the current state of the world and break down our assumptions.
FINANCIAL ASSUMPTIONS FOR NET WORTH / SAVINGS TO INCOME RATIO Read more…
There’s a debate raging whether one should include their primary residence or not as part of their net worth calculations. In my post, “The First Million Might Be The Easiest,” I exclude my primary residence in calculating my net worth figure at 28 because it is the conservative and most accepted way of calculating net worth.
The way to calculate your net worth is a personal preference where so long as you are netting out your liabilities from your assets you’re on the right path. Calculating the proper net worth is all about creating different scenarios that match your risk tolerance and financial goals as we’ve discussed in “How To Better Manage Your 401(k) For Retirement Success.”
It does seem strange to exclude what is likely our most valuable asset from our balance sheet. This post will argue why it’s absolutely fine to include our primary residence when figuring out how much we are worth.
A RENTER’S PERSPECTIVE TO NET WORTH CALCULATION Read more…
Over the past four years readers have been asking me how I was able to accumulate a sizable nut so early on. I’ve been reluctant to share specifics partly because it’s embarrassing and partly because I feel it’s poor form, especially during the economic crisis. It’s been eight years since reaching this financial milestone and a way to avoid the Sentinels is by making it as thorough and as helpful as possible for any person just starting out or looking to aggressively build their nut. This post is over 4,600 words long so you might want to bookmark it for later if you’re busy. If the feedback is good, perhaps I’ll share more details in the future.
Growing up in a middle class household made me strong. My parents always drove beaters and frowned upon ordering anything other than water when we went out to eat. I knew my parents were not rich because their incomes were in the public domain as foreign service officers. As a result, I made a conscience choice in high school not to attend one of the two private colleges that had accepted me in order to save us money.
We were by no means poor. We just pulled up to parties in a paintless 1976 Nissan Datsun alongside Audis, Mercedes, and BMWs for the four years we lived in Kuala Lumpur, Malaysia between 1986-1990. I was quite mortified as a kid I’ve got to admit. I knew nothing of expensive shoes because I had none except for my wealthier friend’s hand-me-down Jordans that were two sizes too large. I couldn’t even afford a camera or a Nintendo game system. We led comfortable lives, but didn’t have more than we needed.
I was always curious about my wealthier friends. Many of their parents were business owners so one day I told my father, I too wanted to be a businessman. By the time I was 13 I was hooked on every single episode of “The Lifestyles Of The Rich & Famous,” narrated by Robin Leech. A million dollar house and a $40,000 sports car. What a life! I thought to myself in the 8th grade. Might as well give it a go. That’s when I started really hitting the books.
THERE IS MONEY EVERYWHERE YOU JUST HAVE TO GO FIND IT Read more…