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.
Sometimes it can be hard to stay motivated on the road to high savings. After all, what are they other than a number in the bank. I remember when I was saving for new computers and $700 might be classified as half a computer, but when I reached $4000 I was beginning to have problems putting it in perspective given that my original motivation was to buy a house and $4000 might be classified as 1% of a house. 1% how exciting, huh? What about the other 99%?
Luckily my work used to be right next to a car dealership and I would pass it every time I went to the supermarket to pick up some fruit for lunch.
I started counting my net worth in cars!
First, I noticed that if I kept saving, I would be able to buy an ugly green beater in cash next month. I would walk by that car every day and think “Ha, I can buy this one in cash”, or “Dude, I pwn you!” (obviously cars are dudes too). After about half a year, I was up to a couple of cars. I used to fantasize about walking into the dealership with a suitcase full of small bills and present it when they asked me about financing choices.
My girl friend was not as psyched about savings as I was, but one day we walked past a car dealership and I was talking about my saving plans and pointing out how I could buy that, that and that car, but not quite that car (it was a big Mercedes) IN CASH. After that she was hooked too and immediately cut down her expenses and starting saving a lot of money.
So thank you car dealerships for putting nice big stickers on all your cars to compare my net worth too. It has been very motivating for me! Thank you!
