Lets get to the point.
- Make more money. To save money, you will have to make it first. Continuously set goals and motivate yourself to earn more at least once a year. It is recommended to start your own business and earn more every day; more streams of income means more savings! But minimally if that is too much for you, do this every year you work, you’ll end up ok.
- Invest 10% of your paycheck before anything else. Next, take that income and GROW it! You should understand and take advantage of these 4 investing concepts: Compound interest, Dollar cost averaging, Diversification, and Automation. If you don’t know what these are or how to implement them, Google them. Always invest at least 10% of what you make for your future. Retirement will be the biggest purchase you will ever make, be sure to prepare accordingly.
- Prepare for the worst. Be prepared for worst case scenarios. Treat everyday as your last day, so you do your best and ready for the worst to come. Don’t skip out on insurance and be sure to have an emergency fund. You should have disability, life, car, health, and home insurance. You also need to have at least 3-months worth of expenses in cash in a savings account as your emergency fund.
- Track your money. Get in the habit of tracking your income, spending, assets, and liabilities. Put all these numbers in a spreadsheet and update them regularly. You should know your Monthly Net Income and your Net Worth like the back of your hand. Use a free money tracking app to find out what you are spending money on. You’ll find out really fast if you are spending money on bullshit or on things you actually value. Or you can simply track your spendings daily on an excel spreadsheet. Knowing what you spent on last week really keeps things in check for the present week.
- Be patient. Money does grow on trees, but trees take a long time to grow. Just keep watering that little hole in the ground and you’ll be good one day. Or better yet, grow more trees.
- Don’t borrow money to buy anything that won’t make you money. If you have credit card debt, you’ll never retire early. Devise a plan to eliminate credit card debt asap. As for other debts, like student loans, car payments, and mortgages — the more you can eliminate the better. Don’t buy a car with a loan, because cars go down in value. Don’t buy clothes with a credit card, because clothes go down in value. Unless you are purchasing real estate or a business, you probably shouldn’t borrow money.
- Spend money. Life is meant to be lived. Spend money on what you care about. Travel the world, buy a nice pair of shoes, and go have a fancy dinner. Just be sure to pay cash. It is best to spend only money you grew from your savings, not your savings.
Figure out your target retirement goal: Use the 4% Rule and Multiply by 25 Rule to calculate how much nest egg you need to retire. Basically these rules say that you should have at the minimum 25x your yearly expenses in your retirement nest egg.
Maximize your income now: To build your nest egg, you need income. The best way to maximize income is to develop multiple streams of income (in addition to a F/T job). Some examples: Contract (Freelance) work, Side hustles, Gig economy jobs (like driving for Lyft), Sharing economy opps (like renting out a room on AirBnB) and online income strategies like creating an online resource for sale (like an ebook, an online course, or a video on Youtube).
Slash your expenses: If you really want to retire at 35, you can’t spend all your money on stuff you really don’t need. Downsize your living situation – get a smaller place or move to a cheaper location (overseas can be a great option). Also, reduce or eliminate altogether small expenses. Some examples: cut your cable cord, cook your meals, buy groceries in bulk, drive an old car, get your books for free from the library, grow more income! There are so many ways to cut your expenses – be creative!
If you do these all of the above, you’ll be way ahead of the game! And always keep growing!