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:
A 15 mile drive or bus ride to work
A casual $100 shopping spree during the month
Restaurant and bar spending of $150 each week
Purchasing a new car financed at $330/mo
Before understanding the hidden green, you may see these like this:
Oh, that’s about $3.50 each way.
I know, but those shoes are so sick! I had to get ‘em.
Yep, that’s $150/wk, duh.
Sounds like $330/mo. I’m guessing it’s probably a little more.
This is how a huge mass of our population sees them. But we’re different here. Here’s how we see them:
1. A 15 mile drive or bus ride to work
Oh, good thought! That’s around $3.50 each way or $7 a day. So it’s $35 a week. (From a couple neat calculations explained below,) I see that’s $26,320 of driving in ten years!
You know, I could totally bike that bus ride and stash that $26,320. Heck, even if I drive half and bike half I’m adding $13,160 back to my stash.
Or, I know a couple peeps at work who live near by. I’ll pick a meet up spot, shoot out an email to co-workers, and set up a carpool. If I get 3 peeps involved, I’m adding $19,740 back to my stash! And, I get 3 new friends!
2. A casual $100 shopping spree during the month
That’s a closet full of $17,300 in new shoes, clothes, and half-used bathroom products in ten years!
Goodness, I don’t really need this stuff. They’re all just rogue purchases anyways.
If I really want something, I’ll make sure it fits within my savings ratio first. And if it fits, it ain’t no thing! I’ll get it! If it doesn’t, I can totally wait a month. And if I really want it at that point, I can grab it then. Thanks for the $17,300, self!
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3. Restaurant and bar spending of $150 each week
Holy smokes. That’s $112,800 of toilet flushes in ten years!
I could totally cut out the work lunches and weekend brunches. And I could definitely organize grub-nights at my place, picnics at the beach or BBQs in the park. But there’s a time or so each week where I do enjoy grabbing some grub, a coffee, or a beer at spots with my friends. Let’s give myself $30.
The difference goes right in my stash. And in 10 years, I’m saying, “Hello, $90,240 dollars!” Boom, boom!
4. Purchasing a 2016 Toyota Highlander financed at $330/mo
$330/mo? Anytime something that expensive is showing a monthly payment, there's got to be something missing.
Ok, it is a $30,000 list price, $2,700 in taxes, and $2,800 in registration. That’s $35,500. Sheez! And we haven’t even got to insurance and gas.
With just a quick guess, I’ll be driving somewhere around 10,000 miles a year and definitely want the car for 5 years. That’s 50,000 miles. I’m grabbing a 2005 Toyota Matrix with 90k miles for $6,000. I’ll save $29,000 right off the bat. And in 10 years that savings itself will have packed $57,000 on to my freedom stash!
If these four occurrences were you, and you made these changes -- we just added $190,860 to your wallet in 5 minutes!
You see, everything costs way, way more than the price tag shows.
So here’s the magic tool: When you’re looking at something, see how much stashing the money will give you rather than getting the item. To see this:
Multiply any weekly purchase by 752
Multiply any monthly purchase by 173
Here’s one way I put this to play. After I surf with friends, we often grub at this Mexican spot. As I walk up to order, I see a super burrito and a Coke for $12. And I see two tacos and a water cup for $5.
I choose the two tacos and agua for $5. As I walk from the register, I literally pull my phone out and transfer $7 over to my savings.
I have an absolute killer time chilling with my bru’s each week. And I’m also stoked because in 10 years I’ll have $5,264 more in my freedom stash.
So now you know the hidden cost of everything. Go use the Rule of 752 and 173, and start adding to your freedom stash!
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