There is a video on YouTube that I have watched at least a few dozen times. I find the overall message and content of the video that helpful. So I thought you might find it helpful too. You may have heard of Mr. Money Mustache. He is the guy who is famous for his blog about how he retired a few days before he turned 31, so technically he retired at 30. For years he has posted blog posts about how he achieved that. In the video I mention above he starts by listing what he calls “3 Amazing Facts That Will Make You Rich”. His message is mainly directed at a younger audience who are interested in doing what he did, retiring at a young age. But the three amazing facts he starts off listing are actually as helpful, and maybe even more helpful, to someone like myself who finds himself at middle age and needs to make up for lost time due to past mistakes in order to make the second half of my life the best half.
Mr. Money Mustache’s 3 Amazing Facts That Will Make You Rich:
- Almost Everybody Sucks at Money
- Getting Rich Enough to Retire Only takes about 10 Years
- Work is Better When you Don’t Need the Money
Almost Everybody Sucks at Money
This one helped me a lot. I felt like it was only me that had screwed up and not avoided the big money mistakes people make, and it feels like I have made them all. I took out a student loan in 2002 when I attempted my PhD, and not only have I still not paid it off the balance has actually gone up not down. I have bought new cars with loans that had huge interest rates. I have ran up credit card debt and spent years paying the interest instead of paying them off.
Getting Rich Enough to Retire Only takes about 10 Years
When I was watching Mr. Money Mustache’s talk and he got to this point, I thought to myself oh sure, if I’m willing to live off nothing. But he may not be wrong. I have had an interesting experience over the past few years. I decided I was going to start doing a better job of saving money, and with that in mind I came up with the idea of setting the goal of trying to double my savings every year. I took out a piece of paper and made two columns. The first column was the date I achieved the level of savings and the second column was the value of savings itself. I decided to start with the goal of saving $1000, so that was the value in the first row under Savings. I then doubled that number for the rows below it, resulting in values of $2000, $4000, $8000, etc. If you do this you will find that by doubling $1000 ten times, you end up with just over a million dollars. Do I have a million dollars? No. But I am happy to report that so far I am come very close to my goal of doubling my savings each year. Some have taken less than a year and some have taken a year and half to two years, but on the average I am not far off from my goal. The interesting thing I have found about this is that by setting a more aggressive goal of doubling my savings each year, rather than the standard 10% advice we have all heard, I can honestly say I have found it easier to stick with it. The 10% is so small I never felt like I was making progress, but each time I get to pick up a pen and walk over to my refrigerator where my piece of paper with my table I created is held up by a small magnet and get to write that day’s date next to the next value on the table because I just reached that amount of savings it feels so good I find myself energized to get started on the goal of reaching the next level. And if I stick with it, I may have enough to retire in ten years, even though that is not why I’m doing it. So, Mr. Money Mustache may be right after all.
Work is Better When you Don’t Need the Money
I ended the last paragraph by saying the reason I was trying to double my savings each year was not really to retire in ten years. The real reason I am doing it is this one. I have been working for almost twenty years, and I have to attempt that during most of that time I was constantly living paycheck to paycheck. And I’m tired of it. I am tired of constantly worrying about what I would do if I lost my job and could not pay next month’s rent. So, I decided to get serious about saving as mentioned above. I am far from a million dollars, but I have reached the point where I have enough saved that I could live off of my savings for up to a year or more easily if I had to, and it feels good. And I am happy to report work is better now. Mainly because I no longer feel at the mercy of my employer to be able to pay next month’s rent. That within its self is a huge improvement.
What if you don’t want to retire?
Mr. Money Mustache starts off his summary of his 3 amazing facts by saying that what he cares about is not so much our personal finances but “how much better a world we’re all going to get to live in if we all become a bit more rational with our money”. He wraps up his short summary of his facts by addressing those people who love what they do and might not want to retire in ten years or ever. He points out that if that is the case for you, that you will probably continue to work, but will begin to do a different kind of work, the kind you enjoy. He points out that being able to make that change to the kind of work you really want to do makes doing what he describes still worth while, and I agree.
How to be rich, happy, and save the world
I thought I would wrap up by including a link to the video I watched (I’ve watched a few dozen times by now) that includes these three amazing facts. The talk Mr. Money Mustache gave was titled “How To Be Rich, Happy, and Save the World”. The summary of his 3 amazing facts is given in the first 3 minutes, and his overall talk is around 30 minutes long. I think you will enjoy the whole talk and get a lot out of it. I know I did.