The RB40 family is on vacation near Palm Springs and today we have a guest post from FI Fighter.
Life is all about balance. If you work too hard, you’ll burn out. If you don’t work hard enough, you’ll never get anywhere. When it comes to securing a better financial future, chances are high that you’ll have to put in a good amount of effort to succeed. When the passive income starts to pile on in, a lot of people can get sucked in, becoming even more motivated than when they first started! There’s nothing wrong with being motivated, and oftentimes in life success breeds more success. However, one should never lose sight of today, even as they stockpile savings for the future. Tomorrow isn’t guaranteed to anyone, so remember to also enjoy today!
As a person on the journey to early financial independence, I know how much “sacrifice” a person needs to make in order to get there in a relatively short period of time. My goal is to retire at the age of 30, which forces me to accelerate my wealth building at an even more rapid rate. I try and save 70% to 80% of my earned income each and every month. People who are used to spending (and buy into the whole consumeristic lifestyle) may scoff at that savings figure. How can a person who saves so much of their earned income possibly enjoy life? You’re probably guessing that I eat top ramen every meal and live under a rock, right?
Finding the Right Balance
I’m happy to admit that I don’t do either. Actually, when I eat out, I tend to eat quite well. I just don’t need to indulge in the fanciest restaurants, so my dollar goes much further. I even drive a luxury automobile (although this purchase was a mistake, I’ll admit). Further, I have lots of hobbies and am starting to travel on a regular basis. Honestly, even though I don’t spend that much, I really don’t feel like I’m missing out on life. Here are some tips to help you enjoy the present on the cheap.
Travel hacking has got to be the greatest tool out there to help someone travel for free, or cheap. There are more sophisticated means that require more advanced study, but just know that this game can be highly lucrative for anyone. There are ways to easily rack up enough travel points to fly first class around the world for free. I’ve signed up for 8 credit cards this year and am starting to reap some benefits. Currently, my plan is to travel out of town once every month. I’ll be in Maui in December. I recently came back from Chicago and Sedona. When I travel, I don’t spend much of my own money, but I’m guessing I still travel better than most folks who do!
Here are some pictures of the free benefits made possible thanks to travel hacking. Let’s save the best for first! My brother recently returned back from a trip to Bali flying first class for free. I’ve racked up enough points to also do so, but am saving my own rewards for next year.
Free First Class to Bali:
A few months ago I was in Sedona for vacation. I stayed in downtown Phoenix at a really nice Westin hotel.
Free Hotel in Phoenix:
Free Access to VIP Club Lounge:
Sightseeing and Entertainment
If you are taking care of business, you deserve to enjoy a little! Since my passive income doesn’t well exceed my expenses yet, I’m still reluctantly employed. However, that doesn’t mean I can’t use the current cash flow to have fun. As long as you don’t lose sight of the big picture, a few bucks (or hundred) here and there won’t make or break your financial goals.
To stretch your dollar as far as possible, indulge in the local experiences, but don’t break the bank for any one event. If you’re eating out, use Yelp to find the best spots, but instead of dining out at $$$$ restaurants, go to the ones that are $$ yet are still worth trying. In Chicago, everyone said I had to try Lou’s deep dish. It was only $20. In San Diego, everyone loves Phil’s BBQ. Again, $20 just about covers it. Cheap experiences can too be memorable!
Chicago: Lou Malnati’s
San Diego: Phil’s BBQ
I enjoy good food, which costs money. If I find myself spending a lot on food, I scale back on other things. When I visited Milwaukee and Chicago, I ate well. So, when it came to sightseeing, I saved money by avoiding guided tours. I simply walked around and took pictures. Still a great experience, and free!
Milwaukee: River Walk
When I was in Sedona, I didn’t spend so much on food. Instead, I used my money and went on a guided jeep tour that other tourists recommended. So, again, it’s all about balance. Sometimes I’ll spend more on food, other times on entertainment. Enjoy your vacation, have fun, but still keep in mind your long term financial goals. This does get easier with time and practice.
Sedona: Chapel of the Holy Cross
Sedona: Pink Jeep Tour
I own six guitars. I have the latest iphone 5s. I am seriously not deprived in any way. For anyone looking to pick up a hobby that allows you to get a lot of bang for your buck, look no further than to guitar and music. If you love music, you could easily shell out $500 for a night out at a local concert. Or, you could pick up a quality guitar and spend the rest of your life working on your guitar skills. Which $500 investment goes farther? I would even argue that the latter will end up being way more satisfying when all is said and done.
The iphone 5s is a luxury… I don’t need one, but it sure makes my life a lot easier. So, how do I own one if I’m a frugal investor who’s trying to save 70 to 80% of my earned income? Easy, don’t buy one and have your tenants pay for it instead! If you don’t have tenants, use your dividend income!
You can become wealthy tomorrow and still enjoy today! It’s entirely possible and one shouldn’t feel like it has to be an either/or proposition. Actually, if you try too hard to succeed, you might burn yourself out and not even make it to the fun stuff. I’ve been good this year, and put in some hard work to acquire three rental properties. As a result, I don’t feel guilty for enjoying myself just a little. And you shouldn’t either! In fact, I’m even rewarding myself, regularly scheduling trips out of town. A trip to Maui next month will be my ultimate reward for a successful investing year. Find that right balance and you can have your cake and eat it too!
FI Fighter is an early financial independence seeker who aims to get there by 30. This day will arrive when the passive income and semi-passive income streams bring in more each month than is needed to pay bills. Let the journey continue!