In 2016, after accumulating nearly 1milion USD (about 22 billion VND), Steve Adcock decided to give up his job in order to retire at the age of 35 with his wife. Steve asserts. “We should all apply the following 5 principles to gradually build wealth, get rid of the worry of food and money.”
1. Set financial freedom goal
The first rule is the most important, and it has little to do with money. It’s that you want to achieve a certain goal, you have to really want it enough, be consistent enough for it to become a top priority in life. I focus on making significant changes to my financial habits. Instead of leaving money idle, I invested more. I also started saving 70% of my income. It was hard at first, but it got easier and easier as I kept reminding myself that everything I needed to cut out was stuff I didn’t use or needed.
2. Increase your income:
Although my monthly salary is also quite high, I am always thinking about how I can use all my skills to actively increase my income as much as possible, outside of my main job at the office.
I started a website about finance, often write sharing articles. This extra writing job has helped me earn an average of 1,000 USD per month (about 22 million VND). Courtney also started a Youtube channel documenting our trips, bringing in an additional 400-500 USD (about 9-11 million VND). And with some spare time left, I made a few hundred dollars more through freelance writing.
3. Invest in a rising asset:
Of course, just relying on savings and working hard is not enough to help you retire early. My wife and I have built most of our wealth on investing in assets that have the potential to increase in value like stocks and real estate.
The idea is very simple. You buy an asset for a certain price. Over time, the asset increases in value and “Boom!”, you are in possession of something much more valuable than you spent.
In the years that followed, by investing in assets that had the potential to increase in value, we increased our savings exponentially. When it comes to investing, it’s never too late!
4. Know exactly where your money is going
One of the most effective ways to clear debt is to know exactly where your money is going. Every penny matters. This is a basic principle, but a lot of people overlook. A few simple actions can make a big difference in your financial management:
– Look at the bills instead of throwing them aside. Make sure you understand every line detail on your invoice.
– Spend only after paying fixed bills, savings, retirement money…
– Do not ignore small expenses like coffee in the morning, going out to lunch and getting an extra bag of beef .. all these little habits are affecting your financial goals.
5. Eliminate unnecessary needs
My wife and I currently live a very frugal life, and we couldn’t be happier. We cut cable TV and use streaming subscriptions for half the price. We only spend 50 USD (about 1.1 million VND) per month to eat at the restaurant. We buy new clothes less than twice a year. We only upgrade our phone if it breaks completely.
However, you don’t have to cut everything. This principle is about re-evaluating the priorities in your life. I can spend comfortably on things that bring lasting pleasure and cut costs on temporary vanities. It’s important to acknowledge what makes you happy and what doesn’t.