Percentage Savings Rate
Let’s be honest. Saving money is dull, dull, dull.
Whereas spending money is bright, shiny and dopamine-fuelled.
Yet, if you’re to succeed at not sucking at money -for your whole life – then, in the words of an iconic Apple advertising campaign…you’re gonna need to “Think Different”.
You’ll need to “Think Different” from the flock about saving and its logical opposite, spending. (And, oh the irony…about upgrading to the latest iPhone, iPad Pro and MacBook Air).
The Primacy of Percentage Savings Rate
As the table below shows, your percentage savings rate is the predictor of how long you’ll have to work for “The Man”. Or, how soon you’ll be able to “Stick it to The Man”.
What this critical table shows is how long you’ll have to work for as a function of your ability to save and invest.
|Savings Rate||Comment*|| Years to |
Source document Mr Money Mustache
* Anonymous Dad’s opinion only
Spoiler: if you’re an average or below-average saver, you’ll essentially be working forever. Sad. But true.
So, how do you avoid that fate? It’s very simple, you just need to “box clever” with the following set of combination punches:
- Automate your savings (Emergency Fund) and investments (FU Money & Financial Independence)
- Get out of debt
- Decrease your spending
- Increase your income
- Avoid lifestyle inflation
We’ll look at these factors in other chapters. So, don’t fret – you’ll have all the information you could reasonably need.
“If [more] information was the answer, then we’d all be billionaires with perfect abs.”derek sivers
Information is a good start. Because ignorance isn’t always bliss. But remember to take action – as soon as you’re ready.