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.
Recently, I came across the expression in the title and I really like this way of putting it.
In “these trying economic times”, incidentally an expression which I hate, sacrifice has come to mean giving something up, rather than exchanging something to gain a better position, like in chess.
That said, I sympathize with the idea that being frugal beyond your means sucks. When I decided to become financially indendent, I did not know all the little money saving tricks to get full value for a quarter of the price and all I could do was to spend less and get less. Conversely, now when I read list of frugal “tips”, I find myself shaking my head and mumbling “Isn’t this stuff obvious!?!”. Once frugality becomes second nature, frugality no longer feels like deprivation. Conversely, not being frugal feels stupid or ignorant, which it kinda is.
However, having the “means of frugality” is worth a lot, as previously noted. Thus, frugality is key to early retirement, if you want some certitude in achieving it (you can probably forget about “making it” in leveraged real estate for next decade). After all, in the end, wealth is not about how much you have, but about what you can get.
Originally posted 2009-06-30 04:28:48.
