Don't Burn Your Financial Freedom

Now that we've taken the Red Pill of Freedom together, it's time you understood something...

Society has had its turn brainwashing you… and its my duty and honor to set things right.

The biggest lie you’re told by society about money and earning a living is that it will take you forty years to have enough cash stashed away to be done working.

This is asinine. After all, I think we can agree that the “40-hours a week for 40 years” plan for retirement is an incredibly mind-numbing and soul-killing proposition.

If you're a walking example of living the Art of Financial Suckiness, yes it will take you forty years. But you're smarter than that.

As a little preview before we get too technical, let me reveal something to you:

"Your personal savings rate determines how long your working career will have to be. The higher it is, the shorter your working career is ahead of you."

… and since this aspect of money is completely within your control (unlike salary, sometimes), and you see the benefits of what you’re working to accomplish, I hope you’ll become motivated to crank up this savings rate from where you are now. More in depth on this later.

You see, money comes and goes. It's completely within your control for you to decide how much of it you keep.

You have cash coming into your bank account, and cash going out. In order for you to crank up the "goings in" and minimize the "goings out," you need to INTIMATELY know your own personal financial situation and make any progress.

Although it's boring and dry, some of my stuff here discusses the merits of budgeting and tracking expenses. And although you'd probably rather shatter your own kneecap than read through it all, you NEED TO READ IT AND INTERNALIZE IT. Why? Because you need to know where your cash is going…. so that the demons keeping you poor are laid completely bare.

Once you’ve "exorcised the demons," you can cast them out forever. And then, you can just sit back and watch your savings pile up.

Don't Waste Your Hard-Earned Cash

As I’ve tried to explain to you earlier, you're doing all this not just for the sake of being frugal, or having tons of money... you're doing it to make sure your future is secure, free, and enjoyable. And it’s about simplifying your life by taking out unnecessary crap that is costing you time, money, causing frustration, and resulting in waste.

If you spoke with my wife, you’d find out I’m a special kind of person. As I drive around town, associate with colleagues at work, walk around my neighborhood, go to church, work on projects around our house, etc, I can’t help but notice both the WASTE and the VALUE around me in almost all forms. To me, everything you have or own also has a value. Also, everything you own has a certain degree of waste attached to it, depending on how well you are using that "thing."

You see, a part of my soul dies when I see someone figuratively flushing greenbacks down the toilet. It sickens me. And when it happens in my own home, it ignites a fire on my insides.

I get the feeling some people in this world must experience some kind of sick, demented joy from withdrawing hundreds, even thousands of dollars from their bank ATM and lighting the bills on fire, like The Joker here. There is simply no other explanation for the rampant waste and stupidity in all aspects of society.

I’ll outline many dollar-torching methods below, in case you are interested.

I can tell you from experience, that if you’ve just caught the vision and are starting out with this new way of life, it’s likely that in most of the spending categories or life, you can expect to be cutting expenses by at least 1/3 or half—and you'll be cackling joyously as the money piles up when it's all said and done. When I began myself, I cut out ENTIRE CATEGORIES OF WASTE, and many of my expenses were cut by half or more.

Ways to Start Saving More Money NOW

I run with wild financial crowds—at least, I read their personal financial blogs. Some of these people out there are absolutely INSANE—many claim to make a great living over 100k per year, yet manage to live on less than 20% of that. They’ve cut out the fat BIG TIME—most of them are too extreme in fact for me and my family. But we do well enough, and we’re going to do the same with you! But get as extreme as you like!

Each of the issues below deserves its own article, which I just might cook up a little at a time for you… but in the meantime, here are a few ideas for you to stew over:

Get rid of car debt. If you have a car loan, the interest is eating into your future freedom. Sell the car, downgrade to one with your equity in the current vehicle and some spare savings. Get a car that's efficient for gas mileage.
Pay off student loans ASAP. Make extra payments as often as possible to cut down principle and reduce the interest that is cutting into your wallet. If the loan is smaller, consult your accountant about the implications of paying it of with a home equity loan and paying lower interest on the balance. The extra savings go right into your investments.
Pay off excessive Credit Card debt. If you have credit cards, pay them off ASAP. The interest on a $5000 card that is maxed out could be costing you a thousand bucks per year. Insane! Only put as much on the card as you spend every month for necessities, and pay off the balance every month without penalty. Get a high cash back credit card to earn free money, gift cards, checks, etc. I use one, and frequently get cash back for free that I use to fix up my house.
Reduce wasteful “entertainment” expenses. Cut your cable or satellite company. Instead, subscribe to Netflix or Hulu for $8 per month.
Reduce excessive phone expenses. Get rid of your paid land line. Get a cell phone plan for as low as $10 or $20 per month that includes data ( Republic Wireless or T-Mobile). Ditch the expensive iPhone plans, or your grandfathered "unlimited" data plan you've been clinging to, especially since you don't even use the data.
Rethink your overblown internet bill. Shop around for providers for internet. You can get blazing fast 20-50 mbps plans for less than $40 per month. If your company is taking you off their “promotional period”, call them up and tell them you want to stay on with them, but you see similar value at other companies for lower prices. They will keep you on the promo price. I do this every year.
Stop eating out every lunch—brown bag it. This could easily save you hundreds per month.
Banish vending machines from your life. They no longer exist. They are money-suckers. I have a friend who easily spends $5 per day at those suckers. Pretending these don't exist would save him $110 per month.
Start shopping at bulk food stores to reduce grocery costs. Buying in bulk allows you to cut costs on groceries in the long-term by sometimes 25-30%. I recently did a price check on some of the items I buy regularly at the regular store vs Sam’s Club, and found I was overpaying by 15-40% on some items.
Plan out menus and learn to cook. If you plan what you are eating, and buy just what you plan for, you reduce the amount of times you go to stores and end up making impulse buys. This also reduces the temptation to go out to eat because "there's nothing to make” for dinner.
Stop buying your morning coffee. Are you seriously paying $3 per day for coffee? That’s over $60 per month in costs. If you’re going to indulge, buy a coffee machine. It will cut your costs long term by at least half. Personally, I don’t even drink coffee or tea.
Quit drinking alcohol and smoking cigarettes, period. This one goes without saying. These items are a complete waste of money, time, and are addictive. Cutting out beer, wine, and tobacco will save you at least $100-200 per month.
Shop online for stuff. Amazon rivals all local shopping in most cases. If you end up shopping a lot with them, consider signing up for Amazon Prime—free 2-day shipping on all items they sell. This is especially worth it for birthdays and Christmas time.
Clothes: Shop at second-hand stores, consignment shops, or even online. It will save you a ton, and many second hand stores have awesome clothes. It’s not just crap there, don’t be fooled
Appliances: If you have to replace something, spend time surfing Craigslist or your local online classifieds. Stupid people sell nice crap for super cheap all the time just because they want the latest model! Take advantage of this stupidity.
Go through your house and sell stuff you haven’t used in six months. Put up ads on Craigslist to sell things you aren’t using. Why store it and let it take up space in your house? It’s worth moola that could be working for you! SOMEONE OUT THERE WANTS TO BUY YOUR CRAP!
Stop hiring contractors like plumbers to fix things like a leaky sink—its easy to save money fixing things yourself or learning new skills using YouTube!
Car repairs—learn to change your own oil, buy your own tires, and replace basic stuff like spark plugs and filters. It will extend the life of your car and save your wallet, saving you huge on labor costs.
Daycare costs—if you can reduce expenses enough and have a two-parent household, you may be able to have one person quit their job and stay home with the kids! This actually reduces tons of stress and complication in life.
Insurance—raise your deductibles (since you never get hurt anyway right?), which usually lowers your monthly premiums. Also, make sure you're not over-insured. Do you have full coverage on a vehicle that's only worth a few grand? Case in point. This alone saved me $40 per month. There are tons of ways to save here. Consider high-deductible insurance plans, or health care savings plans, which are the cheapest and most economical.
Miscellaneous home costs—consider things you buy regularly that you end up just throwing away. Paper towels are an example… why buy something you have to just throw away, when you can buy something that is renewable or reusable?
Utilities--ask your power company for an analysis on your energy usage compared with neighbors. Maybe make a few changes to how you use lights, water, etc.

Congratulations. You owe me at least $500. That’s how much I made / saved in my first month (about $200 per month after that) by making the changes above. I’ll send you my bank account numbers later.

Like I said above, I’ll likely do some pages in the future about how I saved money in each of these areas specifically. Until then… let me share some absolutely FASCINATING numbers with you I cooked up recently, to show you how real all this crap is I've been lecturing you about... in other words, how realistic is the early retirement plan I've been raving about? And how long will you have to work if you continue at your current rate?

And the Math Shall Set You Free