I’m listening to a great book on Audible right now called Set for Life by Scott Trench - Dominate Life, Money, and the American Dream, and I want to give you some tips from it.
While the author states that his primary audience is 20 somethings just getting started, in median income jobs of around $50,000, I find what I’ve heard so far to be applicable to any age range and any income because the premise is to be cash rich. He calls for an immediate goal of $25,000 in cash so that you have options that others who are debt heavy don’t have. This $25,000 will of course have to ratchet up if you make more. He’s calling for one year of living expenses in the bank ASAP.
For example: he clearly defines how our largest expenses such as rent or mortgage payments can hinder us from that savings goal, while the smaller, lifestyle type of expenses such as clothing and entertainment expenses are minuscule in comparison and won’t adversely affect your goal to the $25,000 like a huge monthly rent will. He also doesn’t advocate for being a hermit, staying in all the time and not socializing because you don’t budget for that.
I started life in my 20s first in the midwest, where after a year of college I went back home and went to work. I lived with two of my high school buds in a condo that was dirt cheap because hey - small town midwest. We all had a bit of money in the bank, all had cars, all like the ladies, bars, and other vices I won't mention right now, and we were happy guys with no worries.
I then moved to NYC and went to FIT, the highly competitive and most grueling design school in the USA. Life changed fast! I paid almost three times the rent in a tiny apartment with two classmates and had a bedroom that was little more than a big closet. I worked my way through school, and with a little help from my parents, managed to live okay.
We had a favorite bar on the block and I could do that a few nights a week, but couldn’t keep up with other friends who had rich daddies. Still, I was in NYC and that became my new home and lifestyle. I resonated with big city life much more than I ever did with small town America, where I never really fit in. And the ladies? Well, at FIT, straight guys are the minority so yeah, every party we threw - our apartment was right around the corner from school and we took huge advantage of that - was jam packed, wall to wall with hot FIT co-eds. Life was very, very good for us.
Your mindset has to be on wealth and your budget has to support that. So, what it takes to design your life so that you can live happily while keeping your big expenses down, and your contributions to your savings up. Get an understanding of what debt does to you and embrace the power of cash in the bank.
Any purchase you intend to make should be weighed against the consequences your savings goal will incur. If you’re a big city guy, do you really need that car? Your insurance is more, there’s never a place to park - hint: STRESS! - or if you garage it, damn that’s costly. And how often do you really use it? Some research I did recently shows that the average cost of car ownership - and this is across the US so it’s watered down - is close to $1000/month. Ponder that for a bit and then think about selling that money pit.
Scott’s message is frugality in your early years of professional life so that you can have the luxury of travel, choosing a career you really want, and being who you really want to be in your 30s, 40, 50s, rather than working just to get the paycheck to pay the bills, dreading every day you throw your body out of bed to face the grind yet another day, week, month, year.
Make smart expense choices by honestly assessing what it takes to be happy and productive. Get a smaller place for now and don’t sweat going out with your friends a few nights a week. Walk those six blocks to the gym rather than immediately getting an Uber.
Cook! At home! Buy real food at the grocery that’s two blocks from your place and fire up that stove. Have dinner parties with your friends. Everyone brings something and everyone pitches in with meal prep and drinks. Never tried it? I guarantee you it’s more fun than hitting a bar and forking over $65 plus tip, yelling at the top of your lungs so someone can hear you, and waking up the next morning hungover and croaking out your syllables.
Go get it, you goal directed beast,