How I Earned an Extra $40,800 in Two Years Without Lifting a Finger

how to earn an extra $40,800 in two years

Despite the fact that I have the best roommates in the world, I’ll occasionally remark, “I’m tired of having roommates.”

And Will replies: “Are you $1,700 per month tired of it?”

I don’t need to respond. The answer is obvious. The minor inconveniences — sharing a refrigerator, waiting to use the washing machine — pale in comparison to the additional $20,400 per year that our roommates contribute to our mortgage. It’s a total no-brainer.

In the past two years of living with roommates, we’ve collected $40,800 — enough money to buy a rental house that provides a stream of income for the rest of our lives. (More on that below).

But before I get there, I want to clarify that this isn’t a post about living with roommates. It’s a post about an ever-important concept called Opportunity Cost, critical to anyone who wants to supercharge their wealth.

Yes, we could move into a one-bedroom apartment, and perhaps someday we might. But as long as we live in our three-bedroom unit, we face a trade-off: Will and I could either live solo, like a “normal” couple, OR we could accumulate an extra $20,400 per year without needing to lift a finger.

(And as someone who types on a laptop for a living, I mean “lift a finger” literally. I get paid to lift my fingers.)

Normalcy carries a massive opportunity cost.

Normal Sucks

When we were in our early 20’s and fresh out of college, living with roommates was “normal.” But we’ve gotten older. Times have changed.

Will is almost 35, and I’m within spitting distance of my 31st birthday. We’re long past that collegiate stage of life, and over the years we’ve watched our friends escalate their lifestyles. Our friends now maintain vacant rooms — “guest rooms” — in their homes. They’ve purchased furniture, financed cars, bought diamonds.

Meanwhile, Will and I are the freaks who still live like college kids.

I can’t decide whether it’s ironic or fitting that we’re also the most financially stable. Zero debt, except the mortgages. Owners of five houses, two of which are paid-in-cash, and three of which are rapidly getting paid-off. Maxed out 401k, IRA, HSA. Huge emergency fund.

None of that grew on trees.

To illustrate the awesome power of understanding opportunity cost, let’s check out a super-simple real-life example.

Here we go:

Income: Our two roommates each pay $850 per month, for a total of $1,700 monthly. (They also cover half the utilities, but they use half, so we’ll call that even.) That means two years of living with roommates creates $40,800 in income.

Meanwhile …

Investment: A few weeks ago, we purchased a rental property for $46,000 in cash.

Coincidence? Maybe not. (Thanks for buying us a house, roommies!)

Let’s forget EVERYTHING else that Will and I do to amp-up our savings. Let’s forget about the fact that I launched my own business a few years back, growing it from $0 to six figures. Let’s forget about the fact that I drive a used Honda Civic, eschew cable TV, wear the same clothes again and again. Forget ALL of that.

Look ONLY at the fact that we have roommates. Notice that this single decision alone brought forth enough income to buy a house in cash.

Wowza.

But wait — let’s take one more step (just for the sake of over-doing it).

This rental house will command around $900 per month. Let’s say that half the rent will get gobbled up by operating expenses (taxes, insurance, vacancy, management, repairs, maintenance, bookkeeping, accounting). At this ultra-conservative estimate, this property will net $5,400 per year in passive cash flow.

Over the span of 40 years, this means we’ll earn $216,000 (in today’s dollars) — and that’s assuming we blow that money on champagne and caviar. If we re-invest that money, instead, it morphs into even more. The simple decision to have roommates for just two years could translate into $500,000+ over our lifetime. Wowza!

So let’s rephrase this question:

Imagine that a Magical Genie appeared before you, encircled by a haze of swirling mist and spicy perfume. (If it helps, picture the blue Genie from Aladdin.) After you recover from your initial shock, the Genie bequeaths you with a gift of $216,000. The only catch? You’ll need to spend two years living with two pretty cool people. You can choose these people, of course, and continue living in your own home.

Would you accept that deal?

Duh.

When You Make Decisions, Imagine the Aladdin Genie

It’s easy to focus solely on out-of-pocket costs. When you swipe your Visa, the price tag is unmistakable. But most people overlook opportunity cost — the hefty price tag that comes with each decision.

Every choice is a trade-off. And sometimes those trade-offs come at the cost of lowering our income, which shrinks our capacity to flex our investment muscle.

So whenever I make a decision, I like to imagine that a Magical Genie is offering me “a gift with a catch.”

For example:

There’s a cloud-storage system called Dropbox that can backup and sync your photos and files. The first 2 GB are free, but you can snag 1,000 GB for $99 per year. Since I’m naturally prone to frugality, I debated whether $99/year was worth the price.

Then I pictured the opportunity cost:

Imagine that I lost all my files and photos. The Magical Genie appears before me, and says “For $99, you can have it back.” Would I take that offer? Of course.

In other words, I make decisions by imagining the cost of NOT getting that item — the opportunity cost, the missed chance. Sometimes, this results in refraining from a purchase. (Imagine that I wore an old pair of earrings to a conference. A Magical Genie says, “you can wear different earrings.” Eh, boring. Still not interested.)

But other times, this makes the decision a no-brainer — like in the case of upgrading Dropbox, living with roommates for two extra years, or deciding to spend my surplus $46,000 on investments rather than crap.

(By the way, I think it’s hilarious when people imagine “investors” as Wall Street-types wearing fancy suits. My investment analysis involves daydreaming about 1990’s cartoons.)

(If you like that, tweet it.)

Objection, Your Honor!

I imagine that a few objections I’m going to hear include:

“But I can’t earn that much renting a room in my house! I only have one spare bedroom — and it would rent for $500, max.”

Work with what you’ve got. That’s $6,000 per year, enough to max out your IRA without needing to pitch a dime of your “earned income” into that retirement account. In other words, that renter can buy your retirement.

Another way to view it: That’s $12,000 in two years, which is enough to pay cash for a car.

“But I value my privacy. I don’t want to live with a roommate.”

Do you $500+ per month value it?

“Yes.”

That’s totally cool — as long as you’re deliberately deciding.

What’s the Afford Anything mantra? You can afford anything, but not everything. Every decision comes with a trade-off. You can either rent out your spare room, OR you can log extra hours on-the-job to earn the equivalent amount of money. Your life, your choice.

The key, though, is to avoid the deprivation trap: “In this economy, there’s absolutely no way to get ahead!”

Wrong-o. There are plenty of ways. Hundreds of ways. The paths you choose are up to you. Be deliberate. Be intentional. Accept the trade-offs. And don’t complain that you’ve run out of options.

“I already live in a one-bedroom.”

Awesomesauce!! If you want to live solo and frugal, downsizing is the way to go.

“I have kids.”

Will’s Dad had roommates who helped pay the mortgage, back when Will and his sister were in elementary and middle school. Why do you think Will is so enthusiastic about the idea?

By watching his Dad pay the mortgage via roommates, Will saw awesome role-modeling — frugal parenting through harnessing opportunity and working with what you’ve got. Plus, he got a chance to live with grown-ups from around the world, which broadened his horizons and turned him into the mature globetrotter he is today.

“This blog post is too long.”

Oh, fine. I’ll finish now. And as a parting thought, let me reiterate that this isn’t a post about living with roommates, per se. It’s a post about recognizing opportunity costs — and being deliberate about the trade-offs you’re willing to make. You can afford anything, but not everything, and every choice will impact your path, for better or worse.

Join The Revolution
Get FREE Tips on Building Wealth and Living an Epic Life.




“I Don’t Want to Be Ordinary” — Can This Woman Escape the Ordinary?

blog 37 copy

A Reader Says: I Don't Want to Be OrdinaryHere’s a recent reader question that grabbed my heart. One reader said:

“I am a single woman with children who believes I can live a great life traveling and making life grand, in spite of the statistics out there. Do you think its possible? Can you offer some saving/investing tips?”

I’m so glad you wrote to me. YES, I think it’s possible to live any life that you desire. I absolutely, completely, 100 percent believe that.

Ignore the statistics. You’re not a stat. You’re an outlier. The upper end of the bell curve. You’re unique.

How do I know that? Because you dared to ask. You wrote to me — a complete stranger — for advice. Most people wouldn’t do that. Most people would sit on the couch watching American Idol reruns.

Most people — regardless of their age, income, family or financial situation — don’t have the courage to dream big. Most people spend the whole day saying self-defeating things like:

  • “I’ll never be rich.”
  • “I could never afford that.”
  • “People like me don’t get to do things like that.”
  • “Good for her, she gets to galavant and have fun, but I have to (fill-in-the-blank with crummy obligation).”

And you know what? Whether you think you can, or think you can’t — either way, you’re right. Life is completely what you make it. Especially if you live in a free, first-world country. Then there’s really nothing stopping you.

Regarding the second half of your question — do I have any saving or investing advice? Of course I do. But I won’t tell you to clip coupons (ugghh) or invest in index funds (though I love ‘em!), because those are tactics, and tactical maneuvers are secondary.

The best advice I can give anyone is to align your spending with your values and priorities.

Almost every financial stress that I see is the result of people spending in a way that’s misaligned with their priorities. It leads to staggering debt, bankrupt college funds, meager retirements, and — perhaps most terrifying of all — cubicle jobs. Eek!

But when you can kick back and say, “The most critical thing is food, water, medicine and safety. Let me make sure I can pay for that, not just today but years into the future. And after that, my real dream is …”

That’s the moment when driving an old car no longer feels like a sacrifice. Would you rather drive an Audi or quit your crummy cubicle job? Would you rather have granite countertops, or the flexibility to take a major career risk?

(By the way, I realize I might sound like I’m anti-luxury items. I’m not. I’m pro-anything that’s a conscious priority. And I’m anti-anything that’s not.)

In my own experience:

When I was 22, I wanted to travel more than anything else in the world. I wanted it so badly I could taste it. I thought about it constantly. And I aligned my spending with this top value.

That meant that I lived incredibly frugally. I lived in a tiny, tiny studio apartment (I could reach the kitchen sink from the bed — I’m not kidding.) I drove a car that was older than me. I wore thrift-store clothes. And I saved almost $30,000, which allowed me to travel the world nonstop for more than two years.

But another example:

Right now, my priorities have shifted. I don’t want to do a two-year round-the-world trip anymore. I want to build streams of passive income — so that my money can buy time. I want to live in a comfortable home, work on a MacBook, and enjoy a gym membership — even if it comes at the expense of travel. So my spending has shifted to align with my new priorities.

That’s what it’s really all about. All the details that financial bloggers talk about — insurance premiums, coupons, the price of gas — those are all just details. That’s minutia.

Step back and take the big-picture view: is your money flowing in the same direction as your values and priorities? If so, you’re in the right place. If not, make a change.

It’s as simple as that.





Forget the Steak. Create Your Own Sizzle.

blog 45 copy

Forget the Steak. Create Your Own Sizzle.There’s a little nugget of wisdom that people in the advertising industry whisper among themselves:

“Sell the Sizzle, Not the Steak.”

That advertising motto is crucial in their efforts to squeeze more money out of customers. (No disrespect. That’s their job, and they do it well.) But what do they mean by that?

Steak — A commodity. It’s a slab of dead cow meat.
Sizzle — The fun, the friends, the merriment. You want to hear the sizzle of your warm meal as it comes out of the kitchen on a blustery winter night. You want a cute server to deliver it to your table while your best friend regales you with a hilarious story that makes you burst into hearty laughter. You want, just for a moment, to forget about your headaches and relax.

We don’t want a slab of dead cow. We want the sizzle. Advertising’s job is to get us to conflate the two ideas. They want us to associate the restaurant’s brand name with positive emotions. With laughter. With relaxation. With the beautiful, fleeting joy of being alive.

You don’t have to spend $14.99 to find the bliss of life.

When you find yourself wanting steak — create your own sizzle instead.

Here’s what I mean:

The sizzle, as you know, is free. Every cliche says so. Money can’t buy happiness.” “The best things in life are free.” Our society pays lip-service to these ideals, and deep down, most people believe that the platitudes are true.

But most people don’t live their lives accordingly.

We have to eat something. Steak, tofu, beans — we have to put calories in our mouth every day. Preferably delicious and healthy calories, and preferably in the company of family and friends. We’re not anti-social hermits, and we’re not willing to sacrifice our health for the sake of saving a few bucks.

That’s fine. Eat the damn steak. Or tofu. Or whatever you want to eat. Invite your buddies over and grill out in your backyard. Because that’s also where laughter and joy take place. That’s where the sizzle happens.

You can create your own sizzle. You don’t need to buy it.

Here’s a mindset exercise that might help:

Next time you watch a restaurant commercial, imagine eating that meal alone, in a hurry, while on a conference call with an abusive boss. Not as much fun, right? That means you don’t really want what they’re selling. You don’t want the $14.99 meal. You want the sizzle, and you can create that elsewhere.

Here’s another example. Sorry, fellas, this one is girly:

When I see a cute dress, I’m tempted to buy it. But it’s not the dress I want. I want the feelings associated with the dress: fun, free, beautiful, confident.

The problem is that no $32.99 dress can buy that. What will really achieve the feeling of “fun and free?” Breaking away from the cubicle. Taking a vacation without putting in a formal request.

What will really make me feel “beautiful and confident?” Toned legs. Strong arms. Skin that glows as a result of nutrition, water and plenty of sleep. And no dress, no matter how flattering, can compensate for a lack of time spent leading a healthy life.

So I tell myself, “Forget the dress. Work on your abs.” Don’t spend money on superfluous commodities. Use your money to buy time. And use that time to create the sizzle.






Thanks to Jakeprzespo for today’s photo.

Money Doesn’t Buy Stuff. It Buys Choices.

blog 77 copy

The casual observer might think this is a website about money.

It’s not. It’s a website about choices.

Wealth isn’t about having stuff; it’s about having opportunity. It buys the flexibility to quit jobs we hate, walk away from bad living situations, and plunge into new hobbies or projects.

How Money Buys Freedom

Most Afford Anything readers understand that wealthy people have options. But money doesn’t just buy freedom for the rich. It gives everyone choices, just to different degrees. Freedom starts with the first dollar we earn.

Searching for the Next Big Thing

We pave our future with each penny we spend. Most people will make similar selections with their first few bucks: we’ll prioritize food, water and electricity. Few would opt otherwise.

But as we climb above the poverty line, our options explode at a near-exponential rate. We can eat fruits and veggies rather than Ramen noodles. We can drive a car instead of taking the bus. We can buy new clothes instead of used threads.

Remember graduating from college? Or getting your first steady paycheck? If your experience was anything like mine, those first few months felt glorious. I could fill my gas tank, eat lunch and order prescription contact lenses without my stomach turning in knots.

After six months, I –- like most people –- adjusted to that level of spending. It became the “new normal.” At this point, I faced two choices: I could maintain my current lifestyle and save any raises and side income. Or I could get flashier.

You Could Choose to Be Trapped …

Society likes to pretend that money traps us. “Mo’ money, mo’ problems,” people say.

But money doesn’t trap us. Money sets us free.

Lifestyle inflation, on the other hand, traps us. We want to eat at posh restaurants, buy designer furniture and get haircuts at fancy salons. For a few months it’s a treat, but eventually it normalizes.

So we search for the “next big thing.” Our friends begin driving luxury cars, so we question our wheels. Our friends buy five-bedroom houses, so we question our abodes.

Our friends enter a life trapped by an endless quest for more. Sometimes, we choose to follow that path.

The result? Fewer choices. Diminished freedom. High monthly bills.

Flashy spenders don’t recognize the relationship between money and freedom. They think money is for acquiring “stuff.” They end up just as imprisoned as they were in their young, hungry days.

Choose To Be Different

The solution, though, is NOT to decry riches. It makes no sense to spend your life working while pretending money’s not important.

Money’s most significant role in our lives isn’t to buy luxury cars. It gives us independence. It allows us to quit jobs we hate, travel, and visit sick relatives across the country at a moment’s notice.

These choices don’t require millions. They just require spending a bit less than we earn, week by week.

So no, this website isn’t about money — at least not in the “pursuit of a Mercedes-Benz” sense of the word.

This website is about living on your own terms. The rest is just details.

Join The Revolution
Get FREE Tips on Building Wealth and Living an Epic Life.




Why Delegating is the Best Way to Get a Life

blog 91 copy

Two weeks ago I went camping in the desert, without a phone signal or Internet connection.

why delegating is the best way to get a life

During the 10 days when I was “unplugged,” a handful of urgent issues formed. A nasty virus infected Afford Anything, triggering “malware” alerts every time a reader tried to visit. Google de-listed me from its search rankings until I fixed the issue.

Meanwhile, a pipe in one of my rental houses exploded. Each time the tenant tried to take a shower, water saturated the living room carpet from a ruptured pipe underneath.

In another rental unit, a different tenant had no hot water at all. The gas company needed access to the furnace to fix the issue, but the furnace is locked in the basement. I’m the only person with a key, and I’m 2,000 miles away.

You can imagine the emails and voicemails that greeted my return.

Yet the last thing I wanted to do was respond. I resurfaced from the camping trip in time to attend a financial blogger’s conference, a series of 18-hour days consumed by socializing with some of my favorite online writers.

I could have saved hundreds of dollars by sitting cooped up in my hotel room trying to fix the virus/malware issue … but I would have missed building relationships with bloggers at the conference.

I could have spent hours on the phone with plumbers, getting estimates and quotes for the tenant’s ruptured pipe … but again, I would have missed mingling with my fellow writers.

So I delegated.

I paid someone to fix my site’s malware issue. I found an “interim” property manager and told him how to access the furnace. I called my general contractor, explained the pipe-rupture issue, and effectively handed him a blank check.

This demanded trust.

“Use your best judgment,” I told my general contractor, “and send me the bill.”

I was potentially authorizing a $2,000+ expense, sight-unseen. He and I both knew it. It gave me butterflies. But if I want the freedom to travel, I can’t operate alone. If I want to unplug, I can’t micromanage.

“Whatever choice you make, I’ll stand behind it,” I told my contractor.

“Alright, I’ll tear your house down,” he joked in reply.

You Can’t Delegate Relationships

Leaving civilization behind — leaving cellular towers and broadband – forces me face the fact that I spend 80 percent of my day doing things that don’t matter.

Six months ago I spent huge chunks of time ripping out carpet, painting decks, fixing fences. If a virus had infected my site one year ago, I would have spent hours troubleshooting.

But I can delegate all those tasks. I can tap into people who are far more experienced (and therefore faster) at mending fences and troubleshooting websites.

Meanwhile, I can focus my new-found time in three critical areas: my relationships, my health, and raising capital.

I’m better off paying someone to work the bugs out of my website while I build relationships with other bloggers, thinkers and investors.

I’m better off spending my limited time exercising, preventing future illnesses that could cut my life short and deplete my independence.

And I’m better off raising and managing money, watching the coffers to make sure everyone else gets paid.

There’s a certain authenticity to these tasks. No one can outsource relationship-building. No one can delegate their time at the gym.

These take top priority. The rest is just details.





Forget Your Debt. Just Forget About It. Really.

What if the most common strategies to repay debt are wrong?

Two popular methods are used to repay debt. One focuses on the interest rate; the other focuses on “small wins.”

I recommend reading this post if you want a solid understanding of these two methods. Here’s the executive summary: the “Debt Stacking” method says you should repay the debt with the highest interest-rate first. The “Debt Snowball” method says you should repay the smallest debt first, regardless of its interest rate, so you can feel the psychological “win” of crossing it off your list.

I think both of these fall short. So today I’m going to propose a third method: the Forget Your Debt method.

The Status Quo Stinks

The Debt Stacking method makes logical sense. You’ll save the most money if you repay the loans with the highest interest rate.

The problem is that many people have a hard time motivating themselves to repay a large debt, regardless of its interest rate. No matter how much money they throw at a big debt, the balance never seems to subside. The person feels like they’re not making progress. It’s akin to being on a diet but never seeing the pounds melt away. They become discouraged and quit.

The Debt Snowball method, which obliterates the smallest debt first, can keep you motivated.

But it comes with a large price tag. You’ll make minimum payments on high-interest debt — which means the compounding balance will climb higher and higher.

For anyone who runs a spreadsheet to compare these two options, the hundreds — maybe thousands — of dollars it costs to use the Debt Snowball method is a bitter pill to swallow.

Switch Your Focus

The problem with both strategies is that they both focus on the wrong thing.

The interest-rate method focuses entirely on the numbers, but fails to take psychology and emotion into account. The Debt Snowball method focuses entirely on psychology and emotion, but fails to honor the numbers.

What if there was a method that focuses on both?

Forget Your Debt

Both the interest-rate method and the Debt Snowball method share one trait in common: they force you to think about your debt.

Thinking about debt stinks. It causes debtors to feel trapped, shackled. It breeds discouragement.

I want you to do the opposite: forget about your debt.

You’re Already Free

Debtor’s prisons were eliminated in the mid-19th century, but focusing on debt makes people feel imprisoned.

You’re no more “free” when you repay your debt than you were when you carried debt. (The other way of looking at it: you’re just as free with debt as you are without.)

You still have to put groceries on the table, keep the electricity on, fill your car with gas, put clothes on your back, save for retirement, send yourself or your kids to school, write checks to your insurance company and give the government your tax dollars. Fail to do even one of these things and you’re in serious trouble.

So why do people feel free when their last debt is repaid? It’s because they’ve spent too much time and energy focusing on debt. They should be concentrating on the bigger picture – and that starts with eliminating the “d” word.

Eliminate the D-Word

Repaying debt is like dieting. If you focus on deprivation, you’ll fail.

Tell yourself “I shouldn’t eat chocolate … and cupcakes … and warm brownies with a delicious scoop of French Vanilla ice cream on top … and I shouldn’t eat pizza with spicy pepperonis and ground sausage and fresh mozzarella … and a steaming bowl of chili with an ice-cold beer … and I shouldn’t have bacon, eggs and a buttermilk biscuit … ”

Neither your brain nor your stomach hears the “I shouldn’t.” If you think about the fact that you’re dieting, you’ll fail.

The trick to dieting is to focus not on the deprivation, but on the abundance. Instead of thinking about all the foods you shouldn’t eat, think about the foods you get to eat: blueberries, quinoa, fresh-caught salmon.

Diets don’t work. Embracing a healthy lifestyle does. Eat more of what’s good instead of less of what’s bad.

A successful diet requires eliminating the “D” word — “diet”.

Repaying debt is the same way. The fastest road to discouragement is to focus on debt and deprivation. You shouldn’t go to the movies. You shouldn’t go to dinner with your friends. You shouldn’t get a haircut.

What a terrible way to live.

Successfully getting out of debt also requires eliminating the “D” word. Shed your “debtor” identity.

Focus on more of whats good rather than less of what’s bad. You’re not trying to repay debt. You’re trying to build wealth.

Adopt a ‘Build Wealth’ Mindset

Adopting a wealth-building mentality can be tough if you’re used to thinking of yourself as a debtor. You have to switch from a mindset of sacrifice to a mindset of creating abundance. Here are a few pointers on how to do it:

#1: Eliminate the D-Word. Cross out all written references to that word. Announce to your significant other, your family and your friends that you’re not allowed to say the D-Word. Place a jar on your kitchen counter: every time you say the D-Word, you have to contribute a dollar to the jar.

#2: Read About Wealth-Building. Buy books, read magazines and blogs, and listen to podcasts that focus on building sustainable wealth. Be choosy. Stay away from media that focuses on cost-cutting as an act of deprivation. Focus on media that celebrates wealth-building as an exciting opportunity.

#3: Remember: You’re Already Free. Take a look at your bills each month. You have expenses just like everyone else: groceries, electricity, gas. Maybe a payment to your credit card is among your expenses, but guess what? Lots of debt-free people have expenses you don’t have, such as caring for an elderly parent or supporting 4 kids.

Getting out of debt won’t set you “free.” True financial freedom comes from having passive investments that make enough money to cover your cost of living. Most people don’t experience that, and those who do enjoy it have spent a decade or more relentlessly pursuing it.

#4: Get Excited About Opportunity. There is a wealth of opportunity (pun intended) to build your net worth. Pick your favorite methods: you can invest in real estate, buy dividend stock funds, start a business … the options are endless. Focus on the opportunities at your fingertips. Once you switch to this frame of thinking, you’ll notice a huge opportunity staring you in the face — the opportunity to save $100 a month or $200 a month in interest payments. This isn’t your get-out-of-debt plan; this is one of many opportunities in a grand wealth-building lifestyle. If you make a few extra payments on that MasterCard balance, you’re not “climbing out of debt;” you’re taking advantage a stellar opportunity.

#5: Make It Visual. Post photos of all the wealth-building opportunities you want to capitalize on. If you want to own rental properties, put up pictures of a building in a location you love. Want dividend stocks? Put up a graph of historic returns. Want to see how much an extra $100 a month towards your car loan will save you? Draw it, sketch it, graph it, and hang it on your walls.

#6: Write an Opportunity List and post it somewhere you see occasionally. If you post it somewhere you see everyday, you’ll grow numb to the sight of it; it will start to blend in with the background. You’re better off posting it somewhere you occasionally see, where it will catch you by surprise. Stick a copy in your sock drawer. Paste a copy to your glove compartment. Try outlandish: Tape it to the inside of your freezer, so you only see it when you open the freezer door.


Thanks to Jason Rogers, Gloria Payne (Morning Glory), Alan Cleaver and Mene Tekel for the photos.

Property and the Pursuit of Happiness

Life, Liberty and the pursuit of Happiness” — The three principals at the heart of the U.S. Declaration of Independence are iconic.

But the original document, the Declaration of Colonial Rights, didn’t mention “the pursuit of Happiness.” It mentioned “property” — as in, “Life, Liberty and Property.”

Political philosopher John Locke is credited with coining this phrase in 1689 when he wrote an essay about “life, liberty … and the possession of outward things.

Although the Declaration of Independence traded “property” for “happiness,” the follow-up forms focus on ownership. The Fifth and Fourteenth Amendments guarantee that as long as you don’t break the law, you won’t lose your “life, liberty or property.”

Our neighbors to the north agree. The Canadian Bill of Rights, written in 1960, guarantees “life, liberty and … enjoyment of property,” although the Canadian Charter of Rights, written in 1982, dropped the “property” reference.

Property = Freedom

Why the focus on property? We can assume John Locke wasn’t flipping houses or trying to get his kitchen remodel showcased on HGTV.

The focus on property goes beyond buying Birkenstocks and iPads. The founders realized that “property” — the right to be an owner — is virtually synonymous with freedom. If you own things, you’re free; if you’re forced to borrow, you’re not. Perhaps that’s why they say possession is 9/10ths of the law.

Imagine you live in a society where you lack the right to own property: Perhaps you’re a woman in a tribal, patriarchal society in which inheritance is passed only from fathers to sons. Without the right to own possessions, you’d have to ask your father or husband for permission to do everything: to buy clothes, to go to the doctor, to take a class. You couldn’t open a bank account. You couldn’t leave an abusive relationship.

Without property — without possession — you’d be stuck.

How Can I Become Free?

People who come out of debt often describe themselves as “free.” They’re no longer living on borrowed money. They own their possessions.

But even people with zero debt are forced to work — often long hours at jobs they despise — to cover their basic living expenses. Without a job, they’d slide right back into debt.

That’s why I often write about how the only way to be free is to become the master of your time. If you work because you choose to, you’re free. If you work because you need to, you’re not.

Financial Freedom: the freedom to never be forced to work for money. You might choose to work for pleasure or fulfillment, but you’re never forced to work for money.

Ultimately, this isn’t a blog about money. This is a blog about freedom. To become free, you must:

  1. Define freedom for yourself
  2. Create a goal
  3. Develop a specific plan
  4. Measure your progress
  5. Persist

In the coming months, I’ll be putting together material to help people develop a path to freedom. My material will be based on three principals: everything I say must be specific, actionable and measurable. Stay tuned.

UPDATE: Here are some of my best posts related to creating freedom:


Photo courtesy PreparednessPro.

You Are Not Entitled to Retirement, Dude

Will you work during your sunset years?

If I had a dollar for every “retirement” book, article and website out there, I’d be a millionaire many times over.

Promoting the concept of “never work again!” has become a booming multi-million dollar industry, employing thousands of people (who are, no doubt, awaiting their own retirement).

Retirement is such a part of our cultural fabric that it’s viewed as a basic human right.

It’s the final chapter in the American Dream: a home, a family, a secure retirement.

But it hasn’t always been this way.

For much of American history, people simply worked until they were too sick to work anymore. The idea that a healthy person would voluntarily stop working — regardless of their age — was considered an extravagance privy only to the ultra-rich.

American culture changed after World War II. Retirement shifted from a luxury to a basic right, an entitlement of age. Corporate pensions, coupled with government Social Security, put retirement within reach of every American worker.

Now culture is shifting again.

Corporation pension funds shrink, Social Security bounces towards bankruptcy, life expectancy grows longer, and people in their 60’s and 70’s remain healthier and able to work.

Retirement is no longer an”entitlement.” It’s a “luxury.”

And it’s one that you might not get …

 … unless you grab it by the reins.

This is at the core of the Afford Anything Philosophy: freedom is yours, but ONLY if you’re a true rebelIf you’re part of the Conformist Masses, you’re out of luck. (Read that post to see what I’m talking about.)

Retirement is not a God-given right. With Social Security in question, pensions disappearing, and your own life expectancy growing, you cannot expect retirement on a silver platter. If you wait even to age 30 before you start planning for it, you’re behind the game.

You can’t depend on Social Security to be there for you. Hope for the best; plan for the worst.

Want to ditch the cubicle and live in financial freedom? Join the revolution.