▶️ My Journey Towards Financial Freedom | EP#324

In this, I would like to cover my journey towards financial freedom and what I’m doing as well as how I’ve been practicing financial minimalism over the past several years.

My path to being almost financially free has been:

1. Budget and track everything
2. Cut back on expenses
3. Sacrifice luxuries
4. Find creative financial solutions and shortcuts
5. Invest time and money
6. Evaluate progress and repeat

I feel like it can be simple when you look at it simply. When you remove excuses and reasons, for the most part, you will see all that time, money, and energy freed up for something better like your future. You can start with something small, cut it for 30 days or minimize it, and then once you see how easy it can be, slowly build upon that until you get to the perfect optimized lifestyle for you.

In regards to lifestyle inflation for example, the other day I was mentioning how foolish it is to have more than one car because wealthy people should simply double down on the processes that made them wealthy, like not having multiple cars. The idea is that because you originally didn’t have multiple cars, you could save and invest more enabling you to then have the second car if you wanted. The thing is, to continue growing that wealth, you’re not supposed to add more liabilities that depreciate (given you're not buying cars to collect that go up in value) you should instead acquire assets. I don’t even have one car let alone two. Yet most would rationalize that if you can afford it, you should buy it if you want to. Lifestyle inflation seems ingrained in most of us and if you can rationalize bad financial management for the rich when you’re poor, then while trying to get rich, you'll only get poorer with that mindset. This is truly realized in most gambling institutions very clearly.

You also have to recognize that few people can “afford it” and instead they can afford to pay the loan or the lease so they consider it reasonable if they only have to pay however much per month rather than all upfront. This may sound like I’m judging their financial approach and I’m not trying to be insulting, but I think this is a perfect example of the huge problem people have with personal finance today.

The simple fact that you could afford to do something doesn’t mean you should. Even if it’s going to be off of credit, you feel you deserve to because you’ve earned it, or just that you’ve tricked yourself into thinking you could afford it.

The simple fix here is to create a lifestyle foundation and build your budget around that. What I mean is, determine what is essential to your life and budget everything out around that. You can occasionally audit it to save more but build around that lifestyle. I have all my budget laid out for the month and the year too. This way I know how much I need to make to sustain it and the rest can be invested. That way when I have extra money, I don’t start looking at what I could buy with it, I look instead at what I could invest in with it. This is a pretty drastic change from my previous behavior for years where I was buying everything you could imagine on Amazon and rationalizing why I needed it.

The point being, given you have the basics covered, you can probably invest in your future. A lot of our perceptions of wealth are just that, a perception. You may look at someone and think with all their stuff, they must be a huge success so it’s normal and almost expected that when you get more money, you should have those things too, but really they’re drowning in debt or like my friend, have no extra money coming in to save or invest with. It’s the little things like walking or riding a bike instead of driving or in my case Ubering. It’s things like working out at home instead of going to the gym, cutting your own hair, or saving all your empties for the extra few dollars. A lot of these are really relevant now and sometimes necessary rather than an optional way to save given the circumstances. Live like your broke, invest like you’re not.

Everything above I’ve previously shared in lifestyle inflation or lifestyle foundation which you can find expanded upon here: https://www.publish0x.com/at-scottcbusiness/lifestyle-inflation-or-lifestyle-foundation-xoxlmj

There’s countless amounts of evidence out there that verify this problem where about half of the US are in the middle class and yet one third of them are still struggling with financial security.
https://www.investopedia.com/articles/pf/10/middle-class.asp
https://www.cbsnews.com/news/middle-class-families-struggling-with-financial-insecurity/

Do you practice financial minimalism? Is financial freedom on your to do list? Share what you think about all of this and the many ways you save in the comments below. Also don’t forget like, share, and subscribe!