If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.
If you enjoy the blog, also consider the book which is much better organized and more complete. You can read the first chapter for free, listen to the preamble, or see the reviews (1,2,3,4,5,6,7,8,9, A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,Z). Subscribe to the blog via email or RSS. Get updates on the facebook page, join the forums, and look for tactics on the ERE wiki. Here's a list of all the ERE blog posts.
Yeah, hey what wait, isn’t it the other way around? As regular readers will know I have a manic obsession with turning things on their head and making fun of them (just ask our dog), but there is some truth to this.
Consider the regular idea of making small sacrifices now to get big differences later. Usually the concept of saving small monthly amounts and compounding the interest (a pf blogger favorite) is brought out as an example. However, the small changes may easily be lost in the noise of daily operations. One week of saving $2 a day are eliminated by an extra expenditure on Sunday because the money was there.
Conversely, current big sacrifices are very visible and can not be ignored. And later on they will still cause small ripples. For instance, today I bought another 50 shares of GE stock (I got it close to the 4 year low price) which over the next year will pay $62 in dividends and so and on so forth, hopefully. Not a lot compared to the bigger splash of around $1400, but every three months from now on there will be a small difference from the dividend pay out.
Originally posted 2008-06-20 07:08:05.
