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1 Simple Decision That Gives You Financial Independence

A recent survey showed that 60{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c} of us don’t keep a budget. Close to 20{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c} hasn’t a clue where their money goes each month, yet 43{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c} do spend more each year than they earn. Almost a third pay no attention to interest rates on their credit cards, even while carrying an average debt of $15,000 per household.

How can this head-in-the-sand approach to managing money end in anything other than disaster? Look at our economy over the last two or three years and the answer is obvious: it doesn’t. You can’t ignore the basic laws of economics. You can’t spend more than your take in without paying the consequences.

For over thirty years I have followed a very simple plan to financial stability. It allowed me to treat my family to Christmas in Hawaii several times, maintain a timeshare condo in Florida for 20 years, have a vacation home in the mountains of Arizona, live in a nice home with a pool and spa, and stop working when I was 52.

I didn’t hit the lottery. In fact, I wouldn’t buy a lottery ticket under any circumstances. I didn’t hit it big in the stock market. In fact, I am extremely conservative in my investments and suffered no major lifestyle changes during the last several recessions.

What I did is so simple, so easy to implement and so effective that anyone in virtually any financial situation can do what I did. It doesn’t matter if you are single, have a family, take care of your elderly parents, or live in a yurt in Mongolia. It doesn’t even matter what your income is. So, what is the one key?

Live beneath your means. That means spend less than you make. Ignore the siren call of instant gratification. Realize that credit costs you. Understand that risky investments are called that for a reason. Don’t be greedy. Remember the Turtle won the race.

As I’ve noted, we didn’t spend the last 30 years in a tent in the wilderness, living off road kill and fish. Our lifestyle was comfortable. We were not (and still are not) minimalists, though I like that approach to living. My wife and I agreed very early that we would do three things without fail: spend at least 30{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c} less than we made, save and invest that 30{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c}, and never carry credit card debt. We lived beneath our means.

Living this way means turning your back on the consumer society that fills our every waking moment. TV is not a medium for entertaining you. It is a delivery system for making you feel unsatisfied. Magazines and newspapers contain more ads than editorial content.  Every sense of yours is under assault to buy more, spend more, charge more, and risk more. To not do so is almost unpatriotic.

I am not going into detail on how you live beneath your means. Common sense will get you most of the way there. Thousands of books and web sites can educate you on the basics of budgeting and smart investing. There is really a very simple path to financial independence and anyone can follow it. Maybe not at the 30{54c12dad2cc2b53ae830e39915b1a3e70288dbcbbeb8bbf8395437c5dc3c512c} level we managed, but if you spend less than you make and are committed, it will work.

Written by Bob Lowry. Bob hosts a blog, A Satisfying Retirement Lifestyle,  to help you achieve the type of retirement that leaves you happy and productive.


Erin shows overscheduled, overwhelmed women how to do less so that they can achieve more. Traditional productivity books—written by men—barely touch the tangle of cultural pressures that women feel when facing down a to-do list. How to Get Sh*t Done will teach you how to zero in on the three areas of your life where you want to excel, and then it will show you how to off-load, outsource, or just stop giving a damn about the rest.

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