Dear FutureMoneyTrends.com Member,
When it comes to becoming financially independent, I believe you’re going to do it. Many of you reading this already have, and this letter today is specifically written for those just coming to the decision to be rich.
In order to buy all these great income-producing assets, speculative trades, and have the peace of mind to venture into our extra income ideas,you’re going to want to take a machete to spending.
Most don’t think they can cut, but I assure you, it’s always possible… you just have to decide how much you’re willing to sacrifice for the short-term in order to come out victorious in the mid-term.
The 3 big expenses most won’t cut, but absolutely can:
- Housing. You can move, rent out your home to rent out a cheaper one for yourself, or live in an area that falls below your income.
Most will balk at this idea, and I totally get it, but I’ll tell you right now, my wife and I were in the top 1% of all income earners in the U.S., living in an area with a median income of $53,000 in a home that was worth just 3 months of our annual income!
By the way, I was perfectly happy. Sure, my friends and colleagues questioned my wealth and probably thought I was living in poverty, but the truth was in 2012, my wife and I saved 90% of our income.
Where you live is your biggest expense, and if you want to cut spending so you can allocate capital to other more fruitful goals, then start cutting here.
- Interest. I don’t want to recommend waiting to invest. However, I do suggest paying off debt like a machine.
Attack the higher-interest debt first, because if you’re paying 17% interest, what’s the point in buying an income-producing asset that yields 7 to 12%? The fact is you’re losing money, so the benefit is solidly behind bringing the debt to zero.
- Taxes. Goes back to moving again for the biggest gain. But you can also look into maximizing your deductions. Even starting a small side business can help make your lifestyle tax friendlier.
Meet with a qualified CPA, ideally one that specializes in businesses(even if you don’t own one) and see what actions you can take in order to reduce your tax bill.
Summary: You’ve got to get in the game, and if you don’t have the free cash-flow to capitalize on the opportunity and choice to be rich, then it will never happen for you. So the choice is clear: make the changes to have what you want, or shelve the idea of getting rich, and just live like everyone else.