Posts tagged savings ratio
Why Should You Care About Saving If You Could Die Tomorrow?

If you were going to die tomorrow you should spend your money however the hell you want. You want a one way ticket to the Las Vegas Billagio for an bat shit crazy night out with the boys? Hell yes, you go do it.

Shit, I'd say if you were going to die in one month you should spend your money however you want. Though as we get to the one month time frame I imagine we start to think a bit more about our life.

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Looking Back at Three Years Focused On Financial Freedom

I've been on the financial independence fix since I started my job in June of 2013, 2 years and 10 months ago. Let's get a mile-high view of how those years went, from my first day of "real" work till now, and see what it tells me moving forward.

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Enough, and Its Relation to Happiness

Make $1,000,000/yr, and live with a lifestyle cost of $950,000/yr? A 5% savings ratio. You will have to work 66 years till your investments will support your lifestyle.

Make $40,000/yr with a lifestyle cost of $15,000/yr? A 65% savings ratio. You only have 10 years of work ahead of you till you're financially free.

And yes, that $1,000,000/yr and 5% savings ratio situation? It actually happens. Mike Tyson had $400 million and went bankrupt, and so have other rich and famous people.

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Why You Need to Start Investing

US currency (just like gas) has inflated, with its rises and falls, at a rate of 3% over time. This should scare you a bit because it means that unless your money is growing by 3%, you’re actually losing money.

We need a vehicle that is going to combat that -3% and drive us forward to freedom. That vehicle is called investing.

We’re going to begin at the basics. Then we’ll talk about a place where you don’t need a large lump sum of money to start. All you need is a solid savings ratio and a fun-ass life.

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The Rule 752 and Why Everyone Should Know It

So now you know your current savings ratio, and you are in the process of boosting it.

In part, you are knocking 10, 20, or 30 years off your dependence on a job -- adding those years back to you in the form of utter freedom. Great!

Now, let’s uncover the hidden side of a few common occurrences...

If these four occurrences were you, and you made these changes -- we just added $190,860 to your wallet in 5 minutes!

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The One Number That Takes You to Financial Freedom

Check out the chart below... Find your savings ratio. Next to it you’ll see the years of work left until freedom, assuming you start with $0.

At this point you will be able to travel East Asia for however long you want. And when you come home there will be no deadline to find a job. Or at this point you will be able to snowboard Utah’s light pow till you drop in exhaustion on a Tuesday. And then go back out the next three days without constraint because it’s dumping.

You will be able to do this because at this point your money itself will be making enough income to cover your lifestyle cost (your spending). This is called financial freedom.

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