Whether someone wants to get their debt paid off or if they want to really focus on investing for their Financial Freedom goals then this might help. We told the boys that if we would have tried to live off our old wages and just saved all raises and bonuses, we ever received we could have reached our Financial Freedom goals even soon.
You may be saying that isn’t realistic but anything is possible and I bet there has been people that have done it. Even if you took some of your raises for any expense that may have increased over the last year and still pocketed your bonus check you would be much better off.
As always, I am not giving you any Financial Advice and you should seek advice from your Professional Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.
Sticking to your Budget
Back when I was working in my early years my pay outpaced my cost of living for my basic needs. I moved up fast over the years and got some really nice bumps. If I only was taught this rule. But instead I just let my lifestyle increase. I got nicer place to live, nicer furniture and fixtures. Bought nicer vehicles and went on more exciting vacations. Ughh. LOL
This is why we are teaching our boys this rule so maybe they don’t make the same mistakes we did when we were younger.
Then Bonus checks is a whole other story to talk about. Bonus checks are basically free money if you don’t count on them as part of your pay. For me the companies I worked for, bonus checks were not guaranteed and we were told not to plan on them.
With human nature we didn’t listen to them in our younger years and we spent the bonus checks on normal wants and not needs. We pretty much got used to them and factored them in our income and budget we had.
One Million Dollars
Think where we would be if we took all of our bonus checks we ever received and invested that money. I started getting bonus checks at age 18. If my average bonus check was just $5,000 a year, I invested that check each year and I earned 8% on that money for 37 years. Then that money could have grown to $1,015,352 by the time I was age 55.
That $1,015,352 would have been a nice addition to our other investments that we have from our 401K’s, Brokerage Accounts and other investments we could be Financially Free right now if we would have spent less than we made during our life time.
So besides saving raises and bonus checks during your lifetime if you can live on a budget and follow the financial freedom lessons, we taught our boys you never know how young you could be if you wanted to retire early. Choices and Consequences.
Maybe for a fun study make a list if you can find your info what you made for income each year since you started working after you were out of school. Then list the bonus checks and raises you got each year if you can remember. Then if you can list what your basic rent was back then and how much it went up each year. For my own numbers my wages went up way more than our basic expenses went up.
The problem was we didn’t follow this rule in our younger years and ended up spending more money than we made. We got caught up trying to live like others around us. We bought too nice of houses to live in and then would want to put more money into them even when we had no savings. Then we would get a new job and have to move and start the drowning cycle of debt. We lived this cycle for over fifteen years until I finally met a solid mentor to help with personal finance.
Are you Investing all or part of any raise you receive at work? If you aren’t are you planning on doing it? Are you saving any Bonus checks you get from work? Are you living on a budget and saving towards your Financial Freedom goals? What percentage of your total income are you Investing each year towards your Financial Freedom each year?
I like talking to people about what they are doing and what is working for them. I know it isn’t a perfect world and things happen. I know some years you can have a smooth year for expenses and the next year maybe you have a large car repair or house repair. With saving your raises or part of your raises and all of your Bonus checks you might be even better off and those years where things happen to you it will be no big deal because of your Financial Freedom Investments.
We like to say Investing Money instead of Saving Money to the boys because as you know a Savings Account or money under your bed doesn’t really make any money and normally never keeps up with inflation. So, we want our boys to Invest their raises they receive and invest their bonus checks also. Investments we want them in is diversified in Retirement Accounts, Brokerage Account Stocks, EFT’s and Mutual Funds, Real Estate and more. Ideally their investments will create a great Passive income they could live on in their Retirement years.
Here are some positive quotes I like;
“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett
“There is no way to happiness; happiness is the Path.” By Buddha
“Change Your Thoughts – Change Your Life” by Wayne W. Dyer
Let me know your thoughts about this blog and let me know of others you would like me to do in the future. I feel we can all learn from each other. That is why I am in the helping people retire early, enjoy life more and be more successful. Also, please see my Disclaimer page.
Don’t give up on your dreams; don’t let others talk you out of your dreams. Make your dreams happen. Make it happen today.
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Sources and Resources from Podcast (Available in Show Notes)
- Gas Price 1965