If you're new here, this blog will give you the tools to become financially independent in 5 years. Here's how I did it and here's a few dozen online journals from other people who are currently doing it. This is not some stupid get rich quick scheme. The method is robust and replicable (no need to win the lottery, sell your business, or win at real estate), but not easy; much in the same way that a diet results in weight loss but is hard to follow persistently unless you set your mind to it.
The key is to save 75%+ of your net income and invest it in income producing assets (bonds and dividend stocks). This is done by running your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. See this post on how to enjoy a middle class lifestyle on $7,000/year (Please read it, especially the part about the lentils!). There is a "21 day" step-by-step plan for how to get beyond 75% in the left side bar. Also, check out my answers to Frequently Asked Questions which also covers common misconceptions regarding my personal budget, blog income, retirement, marriage, children, health care, etc. I also suggest reading About ERE in the top menu bar.
If words are corrupt, thinking is corrupted too. Hence, if you can change the meaning of an original word, you can change the way men think. I find this double-plus interesting.
Recently, a new term has entered the field of personal finance: Sacrifice.
Originally sacrifice means
- Giving something up to gain a better position. For instance, a chess piece can be sacrificed for a better position that leads to later material gain.
However, lately sacrifice has come to mean
- Giving something up. Period.
This has cut the original point of sacrificing out of the equation and thus the average man is now giving things up with no particular plan of gains. This is excusable during shock events like job loss when spending is cut. Yet, if this new meaning of sacrifice becomes adopted, the thought that a better position is obtainable by sacrificing consumption is eliminated.

Originally posted 2009-06-29 00:08:56.