I’d like to explain … well … why this website exists.
Afford Anything promotes a handful of radical ideas:
#1: You can create financial freedom — the ability to quit trading-time-for-money, because your investments cover your bills.
#2: Financial freedom comes from building multiple streams of passive income.
#3: You must wage a rebellion from social norms. Stop caving to social pressures and keeping-up-appearances. Extraordinary results come from extraordinary (not-ordinary) choices.
#4: Embrace the habit of ruthless prioritization. Slash costs that don’t matter so you can spend freely on whatever you love most.
Through ruthless prioritization, I’ve traveled to 35 countries (and counting!) and invested my way to financial freedom.
Maybe you want to buy a vacation home, switch to a more fulfilling career, or open an animal rescue shelter.
Guess what? You can make it happen.
Once you figure out the money piece of the puzzle, your choices and options explode.
You don’t have to work in a crummy cubicle. You don’t have to punch a time clock. You don’t have to serve irritating clients.
You can spend more time with family and friends. Work less, live more.
You can create the awesome business, nonprofit or community group that you’ve dreamed about starting.
You’ll work on your own terms, call your own shots, and rule your own life. The choice is yours.
Interested in learning more?
Here’s a list that summarizes 12 of Afford Anything’s bedrock principles and underlying values. This list might make you a millionaire … or at least, richer and more free than you are now. 🙂
#1: You Can Afford Anything. You Just Can’t Afford Everything.
Don’t tell me your values.
Show me how you spend your money, and I’ll know what you value.
Don’t tell me, for example, that you “can’t afford” to save money, travel the globe or plan for retirement if you’re simultaneously buying nice clothes and hitting the bars.
There’s nothing wrong with clothes and bars if it’s a deliberate, conscious choice. But don’t claim that bigger goals are out-of-reach. You’re the captain of your own ship. Spend with your eyes open.
Don’t utter the self-defeating phrase “I can’t afford it.” That’s weak. It’s disempowering. It’s a limiting belief.
Instead, ask yourself: “How do I afford everything else in my life? How do I afford my iPad? My new-ish car? My restaurant habit?”
There’s nothing wrong with buying an iPad and enjoying a five-star meal. The problem emerges when you blindly adopt those habits while simultaneously claiming that you “can’t afford” something else.
#2: Look for Answers, Not Obstacles.
With the exception of, say, colonizing Jupiter or understanding why Celine Dion is so popular, you can accomplish pretty much anything.
It won’t be easy. It won’t be fast. But you can make sh*t happen.
Start a fist-fight with your limiting beliefs.
Instead of saying “I can’t,” start phrasing your questions with, “How can I?”
- Instead of: “I can’t save another dime.”
- Try: “How can I shave an extra $50 from this month’s spending?”
- Instead of: “I can’t find any good real estate investments nearby.”
- Try: “How can I find good real estate deals? How can I get comfortable with foreclosure auctions and short sales? How can I find properties that aren’t MLS-listed? How can I invest in other cities and towns that have better deals? How else can I get creative?”
#3: Money Doesn’t Buy Stuff. It Buys Choices.
It’s fashionable to make trite statements like “money isn’t everything,” “money doesn’t matter,” or “I’d rather be happy than rich.”
Those sentiments, frankly, are baffling.
Why would most people work 8+ hours everyday, only to claim “money doesn’t matter?”
Clearly it does matter; that’s why most people wake up to an alarm.
When people say, “money doesn’t matter,” they’re trying to say, “buying fancy crap doesn’t matter.”
That’s a sentiment I endorse.
But it also misses the point.
The highest and best purpose of money isn’t to fill your life with $10,000 diamond-encrusted headphones (yeah, that’s a thing); it’s to maximize your choices and freedom.
Want to switch jobs? Let one parent stay-at-home? Move to the beach? You’ll need cash.
I’m not saying you need millions. But you’ll need some money. Money brings you mobility and opportunity – which are far more valuable than big-screen TVs and random gadgets.
Money (in sufficient quantity) even gives you the freedom to quit your job, if you choose. Once you have enough investments, you’ll decide exactly how you spend each day.
You can choose to keep working, if that’s your calling. Or you could choose to stop.
Your decision is entirely in your hands, and “How can I buy groceries?” isn’t a question that enters the picture, because you’ve already conquered that part. You’re exercising choice.
That’s why money matters.
#4: The Best Thing Money Buys is Time.
You can choose to spend you money however you’d like. But I recommend you spend money buying the world’s most rare, precious asset: Time.
Time is the great equalizer. Everyone gets 168 hours per week. We can’t change this; time is limited.
Our time also has an expiration date. (That’s a polite way of saying that we’re all going to die.)
Nobody knows when our Final Day will come. It might happen in 50 years. It could happen tomorrow.
(Whoops, it’s not polite to talk about our impending mortality. #PartyFoul).
Money is unlimited. If it slips away, we can make more. Once time is gone, it’s gone.
Time is our most limited — and therefore our most valuable — asset.
Why squander and waste time while clutching onto pennies?
At the day-to-day level, this means you shouldn’t be an extreme cheapskate (unless it’s genuinely need-driven).
Don’t squander your Saturday visiting three grocery stores because bread is cheaper at one, bananas are cheaper at the second and milk is cheaper at the third. Spend the extra $10 buying all your groceries in one spot, so you can devote those two hours to enjoying a long, lingering brunch with your family and friends.
Don’t waste hours clipping coupons, making reusable toilet paper, washing your dental floss and bisecting dryer sheets. Pay the extra $5 so you can spend an hour kicking a soccer ball with your kids in the backyard.
Spend your money buying back your time.
#5: Rebel Against the Norm.
Society holds strange expectations around how we should spend our money.
If we spend $15,000 on a Honda Civic, nobody questions the purchase. No one asks, “How could you afford it?” or exclaims, “Wow, you’re soooo lucky!”
But if we spend this same $15,000 on a scuba-diving trip through the South Pacific islands, people raise eyebrows. They assume we’re filthy rich, or we’re up to our eyeballs in credit card debt, or we’re sponging off some sexy benefactor.
Nobody seems satisfied with the simple, honest answer: “I hustled hard and I spent waaayyy less than I earned.”
If we buy a house for ourselves, nobody questions the purchase. No one says, “Wow, you bought a two-bedroom fixer-upper starter home?! You must be loaded!”
But if we buy an investment property, people raise eyebrows. “Are you some fancy-pants investor? Where did you get that kind of money?”
We’re spending the same amount of money as our next door neighbor, but we’re buying different things. They bought a boat; we bought investments.
Society says that’s weird. They’ll raise eyebrows, ask questions and make assumptions. Be okay with that. You’re part of a rebellion.
It’s a rebellion against mediocrity. A rebellion against following the herd and getting the same results. If you spend the way that everyone else does, you’ll carry the same debts that they do. You’ll work until you’re 68, then look back and wonder: “Is this all there is?”
You deserve better.
#6: You Make Money Going Into the Deal.
Speaking of not following the crowd –
Do you hear people say things like:
- “Damn, this stock dropped. I want to break even. I’ll hold onto it until it comes back up.”
- “I paid too much for this house. But that’s okay. I’ll make it back when I sell it.”
- “I don’t know how much the insurance/taxes/maintenance for this investment property will cost. But if they’re high, I’ll just raise the rent.”
Here’s the hard truth:
- Your stock doesn’t care whether or not you ‘break even.’
- Your homebuyer doesn’t care what you paid.
- Your renters don’t care about your overhead.
Successful investors don’t hope that the market will save them from their mistakes. Hope is not an investment strategy.
Your investments don’t succeed in the future. They succeed in the present, when you score a sweet deal on an undervalued asset.
If you’re hoping that a house or stock “hopefully rises in value in the next few years,” you’re speculating, not investing. Want to be an investor? Start with one hard truth: You make your money going in, not coming out.
#7: Fix the Right Problem.
Some people utter clichés like, “it’s not what you earn, its what you save.”
That’s half-true — but also half-false.
Many people have nailed the frugality aspect of the game. But despite their fantastic financial habits, they’re still struggling – not because they have a spending problem, but because they have an earning problem.
That’s the first thing we need to fix.
I hear from readers who say they’d love to save 50 percent their income, but they only earn $22,000 per year. After taxes, insurance and deductions, they’re taking home $1,500 per month. Rent guzzles half. The remaining $750 needs to cover everything else — utilities, groceries, gas, cell phone, clothes, contacts, computers, co-pays.
Their problem isn’t a lack of savings. It’s a lack of income.
Fix the right problem.
When a lower-income person asks, “How can I save more?,” my answer is unequivocal: “Hustle.”
Earn more to save more.
Ten years ago, I earned a salary of $21,000 per year. A low income is limiting. I know this from experience.
I also know this: When you start earning $100,000+ per year, life gets a whole lot easier.
Let’s imagine that you hit the six-figure mark. After taxes, let’s say you take home roughly $6,000 per month. You can choose to live comfortably on half of that money ($3,000 per month) and save the other half.
(Do you object to the idea of living on $3,000 per month? That’s cool. Earn more, so you can live on $5,000 or $10,000 per month while still saving a ridiculous chunk of your income. Don’t quibble over hypothetical numbers. Learn the broader point.)
Want real-life role models?
- Julia grew her income from $8.50 per hour to $250 per hour as an artist.
- Erika earned an extra $20,000 on the side while working full-time and attending grad school.
- Randy bought his first income-producing rental property while supporting a family of five.
Let’s return back to our broader lesson …
Imagine that you save $3,000 per month. That’s $36,000 in savings every year. What can you do with this money?
- Build a hefty emergency fund
- Enjoy zero debt
- Max out your retirement accounts
- Buy a rental property
- Then buy another
- Become a rockstar investor
You’ll hit financial freedom in no time. Life can be grand.
Even though you’re saving aggressively, you’re still living well. You won’t need to move your family into grandma’s basement, eat spaghetti for six consecutive meals, or trudge through snow to the Laundromat with a backpack full of dirty shirts.
Clichés like “it’s not what you earn, it’s what you save” are misguided. Your income determines how much you can save, particularly at the lower end of the scale.
Hustle is the how. Everything stems from this starting point.
#8: Mind the Gap
Let’s talk more about that cliché, “it’s not what you earn, it’s what you save.”
The part that says, “it’s not what you earn” is dead-wrong. But the part that cheers “it’s what you save” is onto something. Those savings create a space that I refer to as “the gap.”
The gap is the space between your income and your spending. Your job is to grow this as wide as possible.
At the risk of sounding like Captain Obvious, the two ways to grow this gap are by earning more and spending less.
The core of money-management is simple:
- Create the gap.
- Invest the gap.
- Repeat until the gap can perpetuate itself.
That’s it. This entire conversation, this whole “money thing,” is a conversation about that gap.
When your investments cover your day-to-day living expenses while also growing the gap, you’ve won the game. Your money is making its own money. Your income comes from capital, rather than labor.
Your job, in other words, is to create a gap that immortalizes itself.
Once that happens … drop the mic. You’re done.
#9: Try the Anti-Budget
Hey, I want to let you in on a secret:
Even though I’m a finance blogger, I don’t have a detailed budget.
In fact, I think budgets are restrictive, tedious and boring-as-nails.
And that’s okay. I choose to work with this tendency, rather than fight it.
That’s why I coined the anti-budget, the easiest budget on the planet. The concept is dead-simple:
- Pick a savings rate.
- Pull your savings from the top.
- Relax about the rest.
You don’t need to worry about how much you’re spending on toilet paper vs. cat food vs. shampoo. Just pull your savings from the top. Live on whatever is leftover, guilt-free.
How do you handle that leftover money? First, pay the bills. If there’s more money remaining, treat yourself to whatever luxury you want. You saved first. The rest is yours to enjoy.
“How much should I save?”
You might not be able to hit this right away, but as an ultimate goal, I recommend at least two benchmarks:
- Save $1 out of $5 – I’m a firm believer that everyone should save at least 20 percent of his or her income.
- Save Half – If you’re chasing wealth or financial independence, save half. I know this sounds extreme. But it’s a turbo-accelerant.
When I say “save,” I’m referring to any activity that boosts your net worth, including:
- Crushing debt (making extra payments beyond the minimum)
- Investing in real estate, retirement accounts, etc.
- Literal savings (cash in a savings account)
If you’re a dual-income couple, the quick-and-dirty method is to live on the lesser of your two incomes. Live on one income and save 100% of the other.
If you later literally become a one-income couple (e.g., to care for children), you’re set. You can easily adapt to losing the second income. Plus, you’ll have years of accumulated savings and investments behind you.
If you’re single, yank half your income from the top, anti-budget style. Move this into a savings account at a different bank, so it’s “out of sight, out of mind.” Keep an emergency fund; pour the rest into investments and/or aggressive debt payoff.
“Uh … I’m currently saving zero percent. My goal isn’t to save half – my goal is simply to save something. How can I hit 20 percent, or even 10 percent?”
That transitions perfectly to the next point …
#10: Start the One Percent Challenge.
Calculate one percent of your income by chopping two zero’s from your monthly earnings.
- If you make $2,000 per month, one percent is $20.
- If you make $4,000 per month, one percent is $40.
- If you make $8,000 per month, one percent is $80.
This month, save one percent more than normal. If you save zero percent of your income, save one percent this month. If you save 10 percent, save 11 percent this month.
Next month, boost it by one percent more. The following month, one more.
After a year, you’ll save 12 percent more money than you tuck away today.
Starting at zero? Within a year, you’re saving 12 percent of your income. That’s 2x — 3x better than the average American.
(Fun fact: The personal savings rate for the average American has hovered between 4 to 5 percent during the past few years. But it wasn’t always this way. In May 1975, the average American savings rate stood at 17 percent. By July 2005, it dropped to less than 2 percent. Next time you hit the bars, feel free to use this trivia as a pick-up line.)
Okay, where were we? Ah, right … you’ve started the Challenge. Let’s see how far it takes you:
- After 1 year, you’re saving 12 percent.
- After 2 years, you’re saving 24 percent.
- After 4 years and two months, you’re saving 50 percent — even if you’re starting at zero today.
Raises, promotions, investments and side-income hustles will fast-track your progress even more.
By the way, you can modify this Challenge into earning an extra one percent every month. If you earn $5,000 per month, could you make an extra $50 this month? Could you both earn AND save an extra $50 this month?
If you’re interested, join the One Percent Challenge Facebook group to meet other like-minded people in this community.
#11: Retire Early and Often.
The work-then-retire model is full of flaws. Workers feel frazzled; retirees often feel bored.
I take a different approach: sprinkle mini-retirements throughout your life while you’re on the road to an early retirement.
In other words, retire both early and often.
Work/life isn’t a marathon, it’s a series of sprints. I believe in creating a work/life model that’s based around sprinting, strolling, sprinting, strolling. Hustle hard for awhile, then chill out. Repeat.
Don’t just retire once. Retire constantly.
Here’s what the traditional retirement model typically looks like:
Early retirement is an improvement:
Mini-retirements can last from two weeks to two years. At the short end, it’s an extended vacation. At the long end, it’s a sabbatical.
I recommend a combination of mini-retirements with early retirement. Retire both early and often.
While you’re running intervals, also start carving a path to escape the rat race. Although we’re calling this “early retirement,” you don’t necessarily need to quit your job or shutter your business. You should enjoy the option to quit, if you choose.
Don’t stay beholden to a boss for your survival.
The most accomplished figures in our society – Elon Musk, Mark Zuckerberg, Warren Buffet, the late Steve Jobs – have the freedom to stop working anytime they choose. Their work is driven by passion, not necessity.
Elon Musk isn’t trying to send a million humans to Mars in an effort to pay his mortgage. (There are easier ways to make money.) He has the freedom to do anything he wants. He could live on the beach and spend his days painting and playing guitar.
He chooses to work 100+ hour weeks, not because he needs the income, but because he thinks Tesla and SpaceX and SolarCity are the coolest ideas ever. He wants to leave a legacy.
I understand that 99.99 percent of us won’t achieve that level of wealth, and that’s fine. It takes a relatively modest amount of money to create the freedom to live a passion-driven life.
Build enough investment income to pay your bills. That’s enough to escape the cycle of trading-time-for-money.
How do we create this? Mind the gap. Invest the gap. Create a gap that self-perpetuates.
Once you master this, you’ll have authentic choice. You can keep working or you can quit. You can travel or you can stay home. You can launch a nonprofit, start a sustainable business, or create anything else you dream about.
That’s what it’s all about.
#12: Never Underestimate the Power of Heart and Hustle.
My final lesson (for now): Stop making excuses and start hustling.
Think of your potential income as unlimited, not fixed. Look for answers, not obstacles. Think abundance, not scarcity.
You are powerful. You are unstoppable. You can create anything in your life with enough heart and hustle.
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