Before about 10 years ago I really had no methods to the madness when it came to my finances. I put money in savings when I could, and would go with the standard 401k contributions. Then I started reading and there became three inspirations which really gave me a focus and base methodology for how to structure and grow my financial balance sheet. Two are books that you have easy access to, and the third is my father which I’m going to assume you won’t have such easy access. Ha ha.
Originally printed in 1996 and written by Thomas Stanley, the basic premise of this book is that most people who are “Millionaire’s” have achieved this status by living a very modest lifestyle. They aren’t living in the McMansions, buying the latest gadgets and purchasing / leasing (the total suckers bet) vehicles that are draining to their finances.
These people are saving more than they spend and not succumbing to the “images” of modern day success and excess. It’s a methodology I myself now follow with a strict dedication, and you know what, it makes life a lot easier and removes a lot of clutter as well.
It’s a very inspirational read, and easily found at any library or for a penny + shipping on Amazon. About the best $3 I ever spent.
Written in 2005 by David Bach, the Automatic Millionaire helped to create a baseline and process for how I save and invest.
Automation is exactly what it means. Money is automatically pulled from my bank account placed into savings and investment accounts. I can’t spend money that I “don’t have.” With current online banking systems setting up these “auto pulls” are easier than ever. Automation provides a consistent stream of movement to help build my accounts which I never touch.
Personally I’ve set automation of money to be pulled on a weekly basis rather than a monthly or by paycheck setup. I find that it gives me a more “real time” status of my accounts, and what I have to spend on bill coverage and everyday life. It’s just my preference, but everyone has to decide what they feel comfortable with for their own situation.
This is another easy acquisition through a library or a penny through Amazon. I’ve included links for both books in this posting.
Dear old Dad:
My father is the quintessential “Millionaire Next Door.” We never wanted for anything growing up having all the essentials, and he put three kids through college. We now talk about finances often, and he told me he never made more than $120k in any year and my mom didn’t work “for pay” other than part time teaching assistant and baby sitting gigs. Well Dear old Dad was able to retire at 52 through hard work, frugality and saving/investing.
Dad wore a Seiko and drove a Honda, and he’d wear that Seiko till it died and drive that Honda till the wheels fell off. Nothing fancy but the watch told time and the car got him to where he needed to be. He never succumbed to the “keeping up with the Jones’s” mentality.
My goal is to beat his 52 and retire at 50 years of age. I’m 42, going on 43. I think I can do it at the pace I’m going. I don’t have any kids which financially is a big boon to my progress. Back in August CNN/Money put out a report that the cost of raising a child to 18 years of age is now estimated at $245,000, and that’s just the first 18 years, meaning no college included!
But I do have the Seiko that I bought for $70 online, and the Honda that I purchased at 87,000 miles and paid in cash. No car payments for me. For a single 43 year old guy, it’s not the ultimate chick magnet, that’s for sure.. Oh well, I can live with that.
How do you do your saving?