By Get rich the hard way on The Capital
Welcome to Get Rich the Hard Way! Here you will find interesting, actionable, and useful information about: Investing, Stocks, Real Estate, Personal Finance, and like related topics. Thank you from the bottom of my heart for taking an interest in your personal financial success. I am grateful to be able to share my life experience with you and hopefully make you some money. You can learn more at: Getrichthehardway.com and my podcast Get Rich the Hard Way at open.spotify.com/show/704sUYJAhwzcd78bBq2rTx.
If you read part one of this series of posts, I am sure you thought tracking your spending was super hard and just wanted to skip to this part. Well, I have bad news for you. It gets harder! The next thing all very wealthy people do is to cut out everything that costs money that does not create more money. Yes, they take every penny they can get their hands on and use it to invest. It could be in a company they are starting, into stocks, or into their education. But one they won’t do is waste money. Let me give you an example of how you could use money to get money or waste money.
WiFi is important because it gives you access to the internet and allows wealthy people access to information needed to make money money. So they should keep the service because it provides them financial benefits. But for most people, they use it for the internet for entertainment, which does not add value, in fact, it actually wastes time, the most precious of all resources. If that’s the case you should not pay for that.
Once you have mastered the first step of financial success (tracking your money) you can move on to this step where you start cutting costs. I will share how I did this so you can see really how unreasonable you can be. I looked at my first few biggest expenses just as one of my favorite authors Ramit Sethi of I Will Teach You To Be Rich suggests doing.
So I started with my rent bill. I could downsize so I did. My girlfriend and I moved into a three-bedroom house with two roommates and paid way less than before. Then I made sure I bought a very cheap and economical car. Then I looked at the insurance on that car and got the best deal I could. Next, we made looked at how much we were spending on going out to eat and our grocery bill. We cut going out to eat period and took our grocery bill down to under a hundred dollars for both of us.
Then like another of my favorite authors Dave Ramsey of Total Money Makeover would suggest. I started looking at every little expense that was not necessary. So I made sure to cut all streaming services. Yep Netflix, Funimation, Spotify, and the like. I stopped driving to anything other than work and for big grocery runs. Which meant I ended up walking a lot more, which kept me healthy. Because when you only have a hundred dollars for two people, you do not eat very well. And, of course, no more coffees or energy drinks.
The above savings plan helped me buy a house in one year. It is very surprising what you can do if you just stick with it for a while. Now before the hate mail starts coming, I want to say you DON’T have to do what I did to get rich, not every rich person had to do that to get rich. But I promise they did something like that to put their money to better use making money. If you want to get rich, you must save all the money you can get your hands on then invest it.
There is no easy way to get rich. That is why Get Rich The Hard Way is the surest way to get rich!