[Average read time: 3 minutes]
The title wasn’t lying, I really do believe we can all be on our way to financial abundance in 3 simple steps.
After listening to the top personal finance experts for years, I noticed many of them had similar ideas on this topic. Tony Robbins, Dave Ramsey, and many others have their own unique flavor, but most of their teachings boil down to a few core principles.
The following 3 steps are really simple. Not only do I really believe they are the start to a better life, I truly feel this is the formula to your version of financial success.
Whether it’s $1 Million or whatever number you choose, the most important thing to remember is that progress is the goal. Am I doing better today than yesterday? If so, great! And how can I do better tomorrow?
The 3 steps:
1. Spend less than you make
2. Pay off your debts
3. Pay yourself 20%.
Don’t overthink things. Do these in order and it’s amazing how fast your life and finances will change. It’s a simple formula, but it’s incredibly powerful.
Even I can’t screw this up. I can’t do step 2 and 3 until I finish step 1. It’s hard to pay off debt or save and invest 20% if there’s no money left over at the end of the month.
First things first, step 1 means make more or spend less – that’s it. This is where the bullshit stops, find a way to make more money and start cutting expenses or I get to die broke. There’s money to be made out there, just do something, anything! Part-time job, side hustle, or rent out a room on Airbnb and make $500-$1,000 per month.
Step 2 is just as simple as step 1. Pay your shit off and use that money to pay yourself instead of making the bank rich. It’s not that complicated. Living paycheck to paycheck and barely getting by? Rent out a room on Airbnb and make $500-$1,000 per month.
Step 3 is where life gets exciting.
Extra income? Check!
Debts are paid off? Double check!
Now it’s time to use that money and finally start paying ourselves.
It doesn’t take much to become a millionaire. Save and invest $500 per month for 30 years and your account could be $1,085,660 to be exact (picture below).
Don’t have $500 per month? Rent out a room on Airbnb and make $500-$1,000 per month. And if you can get really serious and invest $1,000 per month, your account after 30 years can grow to $2.2 Million. Don’t have an extra $1,000 per month? Rent out two rooms on Airbnb and make $1,000-$2,000 per month.
There’s money out there, but do you really want it?
If you don’t know how to get this investing party rolling, start with a free Robinhood account that is the only investment account I have ever used that doesn’t charge commissions. It’s completely free to use and you get a free stock when you sign up when you use this link. If this seems super confusing, I’d be happy to help answer any questions. Just email me email@example.com. We’re all in this shit together.
I am not giving financial advice. I am simply sharing the formula I’m using. You can choose to do whatever you want, but it makes my heart sad knowing all of us and our kids can become part of the 1%, but many won’t take the first step for fear of the unknown.
This doesn’t have to be complicated.
Live on less than you make, pay off your shit, and invest 20% of your income. That’s it.
We all have the power to change our family tree for generations to come. We can be THAT person who will be remembered for doing the shit that needed to be done and 75 years from now, your great, great grand-children who are using the $100 Million dollar trust fund to live their best lives and give to those in need will know it all began with you and $500 per month.
If you enjoyed this article and received value from it, please share it with one person who will benefit from reading it. That is the fuel that keeps me going. Thank you!
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Ed Escoto is a dad to two cool kids! Other than his kids, his passions revolve around creating things and adding life to his years.
He is an Analyst, writer, self-proclaimed minimalist, and the author of seven books in multiple genres. Several of his books became Amazon #1 Best Sellers and #1 New Releases. His most recent book was My First Spanish Numbers Colors Shapes – the fifth book in his children’s book series [DH Books].
Divorced Before 30 was his debut into writing. He shares his story about overcoming the challenges of divorce, moving forward, and becoming a better version of himself. He shares everything: the ups, the downs, and every OH SHIT moment in between.
His life was planned out and then life happened! Married and divorced before his 30th birthday, started several businesses, but most failed, and a career that once focused entirely on numbers is now a combination of numbers, words, and art.