Get The Big Things Right

Personal finance blogs are notorious for extrapolating small expenditures and telling you how much you’ve squandered away. If you spend $5 on latte’s every day then you’ve given up $25,000 in 10 years (assuming you’ve invested it at 6%).

They do this in part because there’s only so many ways we can say you need to save money. But, the reality is you only need to get a few things right to make it.

Housing. Car. Job. Done.

 

Housing

The amount a bank offers to lend you for a house is too much. This number isn’t based on what will make you happiest, it’s based on a statistical analysis of what you’ll be able to repay. So do yourself a favor and aim to borrow less.

If you're renting, aim to pay less than 25% of your gross income.

Car

Don't buy a luxury car. Pay with cash. The best car if you want to retire early is used. The best car if you want to retire very early... is a bike.

 

Job

Find something you like, even extreme early retirement takes 10 years.

Be aware of the future earning potential in both careers and industry. Look ahead to what jobs you would like in five and ten years, what do they pay? To get a kick start check out the 50 highest paying jobs.

Be careful with how much you take in student loans. I'd rather go to a local college vs. ivy league if it avoids an extra $200,000 in debt. 

 

It's that simple. Cheaper house, reasonable car, good job. Have a latte.

 
 
Rich people have small TVs and big libraries, and poor people have small libraries and big TVs
— Zig Ziglar