My Journey in my 30s

I made the mistake of squandering all of the money I earned in my 20s AND through my mid 30s.  I had some money in retirement accounts by the time I got married (for the first time), but it really wasn’t a lot.  It was at age 35 that my life and my financial life would change forever.  I had no kids and was traveling the world in my early 30s when I met a girl and she had kids (yes, plural).  When I realized that we would be settling down, it was obvious that we weren’t going to live in my 3 BR condo so all of the going out and wasting money had to stop immediately.   It meant I had to make enough money to take care of a family and save for our future and more immediately, a home where we could live (did I mention her mom was moving in as well?)

The minute I changed my mindset and actually had responsibilities, everything changed.  I looked at my crappy financial picture and said it’s time to start saving and getting rid of my debt.  It’s time to change my spending habits and focus on being able to take care of a lot of people and not just myself anymore.  At the time, I was living with a roommate knowing I had about 9 months to figure all of this out and how to finance a home that we could all live in and be happy.

Leading by example, I paid down as much of my debt as I could as fast as I could.  My web business was generating about $150,000 per year of which $100,000 was profit so I had some money to work with.  I stopped eating out, going to bars, spending on clothes and looked at ways to save.  I had a small condo with three rooms and one roommate.  I brought in another roommate to cut down on my mortgage expense.

The period we’re talking about was in 2009 right after the big real estate collapse.  On one hand, it was great because homes were going into foreclosure left and right.  On the other hand, getting a loan when you were self employed was literally impossible.  I was able to do two things over the next 9 months.  The stock market was in shambles so I invested some money into beaten down stocks like Bank of America (trading at $5 per share) and into some other stocks.  Through those investments I was able to generate $20,000 in profits.  From the profits of my business and reduced costs from my mortgage and spending, I was able to put away about $7,000 per month.  Over the next 9 months, I was able to save up approximately $70,000.

When the 9 months was up, I was astonished and super pissed off at myself for the first time.  I was able to save and put away that much money in 9 months? I was pretty blown away by my own accomplishment while simultaneously pissed off that I had saved nothing nor invested anything up until that point.  While I squandered my money in my 20s and 30s and saved close to nothing, here I was with a goal and a plan and a drive to reach that goal.  Unreal.  If I just had some goals earlier on, I would have been much farther along in my path to financial freedom.

My fiancee at the time and I were able to find a house in north county San Diego for $547,000.  The home was in foreclosure and many other homes just like it were selling at bottom dollar.  My timing was great at that time and my goal was to put down 20% to get rid of the PMI.  I also needed some money in an emergency fund in case of an emergency.  I did borrow some money from my parents to put down on the house and a few months later, we were in and I had a roof for everyone.  Here are some great things about that house:

  • It was inexpensive enough that I was able to provide a roof for everyone and more importantly, it allowed me to save extra money to pay off my parents and not have to stress about a mortgage payment that would rule my life
  • I was lucky to purchase the house when the market was at its lowest.  I knew that it could only go up in value.  That said, over time, almost all real estate increases in value over time so even those people who bought their homes at the top of the market in 2008, were rewarded in 2021 with insane housing values.   While your house is probably your largest investment, don’t get caught up with the value.  It will go up and down.  The one thing you should keep in mind is that you can always look at interest rates or ways to cut down on the monthly expenses for the house.
  • When I bought the house, I knew that the monthly payments were low enough that if I had to move, I could easily rent the house and make positive cashflow.  I purchased the house near a military base and the officers that worked about 1/2 mile away had a housing allowance close to $3,000 per month and some would receive $4,000 per month.  My house expenses on a $417,000 loan with a low HOA and property taxes came to about $2,200/month.  My worst case scenario if I had to rent that house out was a positive cashflow of $800 per month.


The best part of the story?  If you have been paying attention, I owned a condominium in Orange County.  I could have just sold the condo and used that money to put down on the house.  The condo I had for 7 years had equity and was cashflow positive from the rent.  At that time, the housing market was as low as it could be, so while I would have been able to get some cash out of the condo, the value of the property was low.  My goal was to generate enough money to purchase a new home AND keep the asset I had generating money.  Was it hard?  Yes.  But at the end of the year, I reached my goal and I had purchased a home that was far below value in bankruptcy and another property generating some positive cashflow.


I moved into that house and got married and my wife and I had a baby boy.  It started out great. Into my late 30s, I started focusing on setting up retirement plans and worked on budgets so the family would be taken care of and we could travel and do fun things and still save money for retirement.  There was only one problem.  My wife didn’t believe in budgets or controlled spending or any of that saving stuff.  No matter how hard I approached the topic, she felt that any type of budget was some sort of “control” issue.  What was supposed to be the beginning of an amazing family dynamic became the most challenging time of my life.  We had an American Express credit card that had to paid off every month.  I stayed at my office late and tried to figure out how to pay off a credit card that was 3x or 4x as much as when I was living by myself.  To make matters worse, my wife lost her job and stayed home and shopped more.  It was not awesome.

Data released by financial firm TD Ameritrade found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money.  This is where your financial journey can be the most affected.  When you decide that you want a life of financial freedom and you don’t want to work until you’re 65, you absolutely must have a partner who can work with you and not against you.  How can you save money when your partner is spending it and doesn’t have the same goal as you?  This is where the disagreements come in and fights and then stress.  Marriage wasn’t fun anymore.  I sat in my office day in and day out trying to think of ways to pay my bills and generate more income to save, but my wife kept spending more and more.  I started to have some mental breakdowns as I couldn’t keep up the monthly spending much less saving for anything.

I’m pretty sure you can all guess what happened next.  Bye Bye spending wife.

Step Eight – It’s Time to Evaluate

By the time you reach this step, things should be very clear to you.

  • You know what your income is
  • You know what your expenses are
  • You have taken the time to cut expenses you don’t need and paid down your bad debt
  • You have created an emergency fund and have enough to survive for 4-6 months without a job or income
  • You have started to put your money into investments that will generate interest

The knowledge you now have to continue on your journey is invaluable.  The only problem here is going to be time and generating enough money to invest to be financially free.  This is dependent on where you are in your life and what your goal is for monthly cashflow that you need to live on today and in retirement.

In my previous steps, we discussed the difference between net worth and passive income and cashflow.  The net worth number means nothing if you don’t have enough passive income to pay all of your bills now and then also in the future when inflation increases, housing costs increase, healthcare costs increase and so on.  To be honest, your net worth number is cool, but having enough passive income to pay your bills is far better.


This is where you need to figure out and determine what your investment needs to be to reach your goal.  In the last Step, I gave you an example of a couple that was able to put away $1,000 per month for 10 years and generated a total amount of about $172,000.  Now, let’s assume that couple started at age 50 and now they are 60 and considering retirement.  If they kept that $172,000 in the real estate account generating 7% interest and got paid every 3 months, they would receive $1,003 per month or $3,012 every quarter.  This was a couple that had $10,000 in expenses every month.  Assuming they didn’t take the principal out of the investment (the $172,000), they would not be able to live on this amount.

I have been using an example of 7% interest as an example, but most experts will tell you that in retirement, you will have your money in far safer investments that most likely generate closer to 4% interest.  That’s even worse for the 60 year old couple because it means their $172,000 is only generating $573/month.

I know this sounds depressing, but I am hoping that most of the people reading this blog are not in their 50s and who are just trying to start saving now.  The most important thing you have in investing and being financially free is time.  You really can’t wait any longer.  That said, if the 50 year old couple was making $120,000 a year in after tax income and was able to cut their expenses down to $3,000 per month, here is one more example:

  • $1,000 rent
  • $750 food
  • $300 shopping
  • $100 gas/car expenses
  • $500 entertainment
  • $0 credit card payments
  • Total: $2,650

The couple’s kids have moved out and are on their own and they have downsized their living expenses and currently need $2,650/month.  This is a far cry from $10,000.  I am going to assume that couple has $50,000 in savings.  That couple making $10,000 per month now puts aside $7,000 per month.  So, starting with $50,000 and $7,000 per month over 10 years at an average rate of 7% interest compounded annually, the couple would have $1.34 MILLION in investments.  Wow.  If that couple keeps the principal investment in an interest account in very conservative investments that generate 4% interest per year, that would be $55,650/year or $4637/month.  Add in some money from social security and this couple would be generating about $5,000/month with their $2,650 in living expenses.

As bad as your situation might be, with DEDICATION, FOCUS and a GOAL, you can reach a point where you will be financially secure.


My biggest regret is that I didn’t save much of any money I earned from my 20s through my mid 30s.  If I had some online tools that tracked my net worth and I could see what I was spending, I would have saved more and probably been on a house on the beach by now.  The good news is that I did start in my 30s and started to understand that I had to change my habits.

Depending on what age you are and when you want to retire will determine how much you need to save to reach your goal and how much you need to invest on a monthly basis in passive income investments.  Obviously, the closer you get to retirement and the less you have saved, the harder it’s going to be to save enough.

Start Saving Immediately – In Your 20s

If you are in your 20s and you’re reading this and you have no wife or kids, now is the best time to start your journey.  Figure out your expenses and your income and start saving.  You hopefully have a job or some sort of income.  If you put aside $300/month for 45 years at 6% interest (as an example), you would have $1,031,000.  If you save $400/month, you would have $1.37 million.  It’s basically $200 for each check.

Saving in Your 30s

As time grows shorter, you have less time to save which means to hit your goals, you would need to save more.  In your 30s, you should have a career path and been in a job long enough that you can save more toward your goals.  If you save $500/month for 35 years, you would have $830,000 assuming a 7% annual interest.  If you save $600/month, you would have $996,000 and if you save $700/month you would have $1.16 million.

Did you notice something about these two examples?  The 20 year old saving HALF US MUCH as the 30 year old was able to save more over the additional 10 years than the 30 year old saving twice as much with 10 less years.

This is power of compound interest!

You might be asking yourself.. well, how much are you saving?  Meaning me.  My wife has an amazing job and makes $100,000/year.  We have maxed out every one of her tax free deductions (more about this later).  She has a 401(k) where money is deducted each paycheck and none of it is taxed.  It goes into an investment fund and the money grows tax free until we decide to pull it out of the fund which can’t be accessed until after age 59.  The best part is that her employer matches up to 3% of her donation.  So, she gets free money from her company on top of the money she puts into the retirement account and none of the money is taxed until it’s withdrawn.  The max donation any individual can make to a 401(k) is $18,000 per year.

For me personally, I have a company that is organized as an S Corporation.  This allows me to have a retirement called a SEP IRA where the company can put money into a retirement account for me.  I am allowed to donate up to $54,000 per year to put into a tax-free retirement account.  I currently put aside about $2,000 per month that is automatically withdrawn from my business account to the tax free investment account.  So, between my wife and I, we are putting aside over $4,000 per month (when you factor in her company’s match) automatically.  I don’t see the money as it’s just withdrawn each month.  

When my wife and I married about 7 years ago (2nd wife btw), she had no retirement savings and I had about $20,000.  Over the past 7 years with maxing out her retirement accounts and deducting money for my SEP IRA with the investments growing, we were able to save about $350,000.  Between the two of us, we started basically at age 40 with $20,000 and now are on our way to greater wealth.  If we had both saved earlier, we wouldn’t have to put so much money aside now, but the point to this entire blog is that it’s never too late to get started.

Step Seven – Your Climb is Starting to Accelerate

The path to wealth is becoming clearer and clearer now.  Hopefully by now, you have started or finished paying off your credit card debt and you have started to automatically put together an emergency fund that is growing each month.  At the end of the day, nothing has changed in your income but your Net Worth is already growing and you are starting to see additional money that can be used for the next phase of your adventure.  Maybe you even went to your boss and got that raise or promotion and you have all of this extra cash just sitting around accumulating.


Young grasshopper, it is now time to start understanding how really rich people make their money and live a life of freedom.  Here, I am going to explain that having a lot of money doesn’t buy freedom or retirement.  In other words, while your net worth is a great gauge for how much you’re worth at any given time, the number itself means nothing and won’t contribute to you being able to live life with no financial worries. What the heck does that mean?  Here is an example of what I mean.

Let’s say for example you live in a middle class neighborhood and your monthly expenses are $10,000 per month.  This covers your mortgage, your family’s expenses and all of the money you need to live every month.  As the money-making asset in the family, you and/or your wife need to generate $10,000 in income to cover your expenses.  Any money above expenses can be automatically saved for an emergency or maybe put into investments.  Well, let’s say tomorrow you win $500,000 in the lottery (after they take out a bunch of taxes).  Does that mean you get to quit your jobs?  Does that money buy you financial freedom?  Unfortunately, it doesn’t.   Let’s say you and your wife quit your jobs because you’re loaded with cash now.  If you never changed your lifestyle at all and your expenses are still $10,000/month, that lottery money would run out after 50 months – a little over 4 years.  That’s not a very long time.

The example shows that just having a lot of money will not allow you to live a life of freedom.  By the way, using that same example, even if you won $1 million, it would last just a little more than 8 years if you had no other income.  That assumes you didn’t change your lifestyle at all, didn’t buy any toys, didn’t upgrade your home, etc.  So, if just having a lot of money won’t help you achieve the freedom you want, what will?  The answer is PASSIVE INCOME.


What the heck is passive income you ask?  Well, passive income is money that you earn without lifting a finger.  It’s money that you earn by breathing and sleeping and doing close to nothing.  How amazing is it that you can make money in your sleep and doing almost nothing at all? The American dream provides the opportunities to do this in a number of ways.  First it’s important to understand how this works and then I’ll go over how you can generate passive income.

There are many opportunities where you can invest extra money into places that will give you a return on your investment.  The most common ways (actually the only three ways I know of) you can earn money in your sleep are the following:

  • Owning a business
  • Real Estate Investment
  • Stock Market Investment

That’s really it.  There are only three ways to earn enough money to be financially free.  When you look at the richest people in the world (Jeff Bezos, Warren Buffett, etc), you will notice that every single individual made their fortunes in one of these three areas.  If you want to be wealthy and you want to live a life of freedom, you need to have passive income and these are the only three ways to do it.  

So, how does Passive Income work?

The concept is fairly simple.  In the example above, we had a couple with expenses of $10,000 per month.  In that example the couple are the only asset generating money.  That’s it.  Two people making over $10,000 per month in their jobs.  The family doesn’t have any other way of generating money.  The concept of passive income is that if that couple were to put money into opportunities like the ones listed above and those opportunities generated money back to the family, all of that money could start to offset the $10,000 in expenses.   If that couple put so much money into opportunities that those opportunities generated over $10,000 per month in income, then guess what?  They would not only have assets/investments (in their net worth column), but they would have enough income from those opportunities to not have to work anymore. What do I call this? FINANCIAL FREEDOM!  

The minute your passive income covers your expenses, you have arrived at the middle of the mountain!  You can work when you want, where you want or do whatever you want knowing that your passive investments will cover your expenses.  Technically, if nothing changed in your financial picture, as far as expenses you could actually retire (assuming you will never need more money for health reasons or other surprises). 


Here is an example of how passive income can start to help offset your expenses.  With the advent of the internet and crowd funding, there are companies that purchase and rent out apartment buildings and residential homes.  In the past, it took hundreds of thousands of dollars to invest in an apartment building or to purchase investment property.  Now, through companies like, you can invest with hundreds of dollars in apartment buildings all over the United States (they do require a $500 minimum investment).  By crowdfunding from hundreds and thousands of small investors, they can combine the small investments into large amounts of capital they need to buy and manage buildings.  They buy the buildings and manage the tenants and the maintenance and you get a small percentage of the profits plus a small piece of ownership of the real estate. Based on how much you give them, they pay out quarterly dividends to you based on the profits they make. For purposes of our example, let’s say the couple gave $1,000 for investing.  According to their web site, they generated a return of 13% last year.  This is a really high return for an investment, but we will use this rate of return for our example. 

Let’s do the math here.  The couple invested $1,000 with  At a return of 13% annually, that means the couple would generate $130/year in interest or $11/month.  The couple still has their initial $1,000 investment, but they are getting free money – $11 per month.  It doesn’t sound like a lot of money, but here is where compound interest starts to kick ass and generate even more money.


The couple in the example above invested $1,000 into the investment and if they took the $11/month and put into their bank, they would always get $130/year.  Fundrise pays out every 3 months so this couple could get a payment of $33 every three months back to their bank account.  We are going to assume now that the couple probably doesn’t need the $33 so they could leave the $33 in the account and that could add to their $1,000 investment and generate interest.  After the first three months, the couple would now generate FREE MONEY interest on $1,033.  In another three months, the couple would be generating FREE MONEY interest on $1,066. If this couple leaves that initial money in their account for three years and never added a dime, in 3 years, that $1,000 would be worth $1,467 and in 10 years (assuming the same interest rate above of 13%), the couple could have $3,594.  So, for an initial investment of $1,000 and not doing a thing except sleep, they made 3.5x their money in 10 years. If you knew that you could more than triple your money by not doing anything, would that be something that would interest you?  Does compound interest sound cool yet?

Let’s go back to our previous example in step six (click here).  Here, we had a couple that was able to save $1,000 every month.  Based on the power of compound interest, if we assume an interest rate of only 7% per year, a couple saving $1,000 every month and putting that into investments would have $71,798 in 5 years.  So that couple would have invested $60,000 and received $11,000 in free money!  Now, let’s say after 5 years the couple stopped putting in any more money monthly, but they let their money sit in that account and just reinvested the dividends only.  Starting at $72,000 and at 7% interest, that money would grow to $100,983 over the next 5 years!  So, this couple put in $60,000 and with the power of interest would have $100,983 over 10 years.  If that couple continued to donate $1,000 per month over the entire 10 years, they would have $171,951.  To reiterate, they put away $120,000 in savings and got FREE MONEY interest payments of $51,951.  Do you see a pattern here?  Free Money.. Free Money… Free Money…

That is a large amount of money.  Time and patience and focus and choices can make that happen.  The only problem here is that this amount of money is great, but it’s not going to be enough over 10 years to allow the couple in our example to retire.  The next step discusses your timing and your goals.


Step Six – Goal Setting Time


By now, you should have a handle on your spending habits, how much income you have and what you have to save each month.  Hopefully, you have gone to your boss and maybe you have some more money in income from either a higher position or a raise.  If not, it’s okay, we will be looking at additional ways to generate more money shortly.  In order to get to the next step, you need to start putting a plan together for the following things:

  • Pay off debt
  • Create an emergency fund
  • Start looking at investment opportunities

Ideally, you would be able to do all of the above at the same time, but I understand that if times are more difficult, it may be harder to do it all.  As you review your finances and your monthly cashflow, you will be able to determine what you can spend and when.


This is the most important aspect of wealth creation.  Debt will simply drag you down.  That said, there are different kinds of debt like credit cards, car payments, school loans and more.  The trick here is that I am not saying you have to pay down ALL DEBT before you can start saving.  If you have $25,000 in school debt, it would be great to pay it off immediately, but the interest rates on those loans might be less than what you would get in an investment.

For example, assume you have a school loan at 4% interest and you are paying off the debt each month plus principal of that debt.  Now, let’s assume you have an extra $100 per month.  Then, assume there is a real estate investment fund that generates 6% interest.  If you put that $100 into the real estate fund, it will generate more money for you than paying off that school loan.

So, what’s my point here?  You need to organize your debt into the highest debt interest to the lowest.  In general, I recommend:

  1. Get rid of your credit card debt first – with interest of around 17% – 25%.  If you already have the mindset to get rid of your debt, here is an excellent trick!  If you open a new credit card with a different company, many credit card companies will give new customers an interest free period of 6 months to 1 year on balance transfers.  SO, if you move a $10,000 debt to a new account with no interest for one year, you can work on paying off that balance and pay ZERO interest.  There is only one caveat.  You have to cut up the first card.  You CANNOT use both cards for buying more stuff!
  2.  Car loan – ideally, you would be able to figure out how to pay off your car.  According to Lending Tree, the average monthly car payment in the U.S. is $563 for new vehicles, $397 for used vehicles and $450 for leased vehicles. Overall, Americans owe nearly $1.4 trillion in auto loan debt. Auto debt makes up 5% of American consumer debt.  You are here because you want to be different!  Big Surprise – You don’t have to have a car payment.  You don’t need to be like everyone else.  To be wealthy, you need to make sacrifices and $563/month is a huge amount each month for many people.  I personally had a car payment of $550/month.  I paid down my car and refinanced the loan after two years and now I have less debt and a $320/month payment.  My goal is to continue to pay down the debt until I have no payment and then use that original $550/month for investments.
  3. Other loans.  Look at other loans you have and determine if it makes sense to pay off.  I purchased a travel trailer with an $11,000 loan.  The loan cost was “only” $110 per month.  During the pandemic, I made it my mission to pay off all of the loans I could and get rid of any of the smaller loans I had.  This is where most people get busted.  The “only” $100/month for a trailer and “only” $40 per month for a Peloton membership and “only” $6 per month for another subscription.  The next thing you know, you have “only” $500 in monthly payments.  Get rid of the things you don’t use and subscriptions you don’t need.
  4. Mortgage loans.  Most mortgage loans are now less than 4%.  If you don’t have a loan lower than 4%, you better be on the phone right now with a mortgage lender to refinance your loan and save that monthly payment.  Again, this is not a loan worth paying off since the rates are so low and your extra money can generate more money elsewhere (more on that later).  Plus, you are getting a tax write off on the interest you are paying every year, so really the interest rate for most people is almost nothing.


The worst thing that can happen in your journey is an accident or an unexpected charge you weren’t expecting. An emergency fund is money that’s set aside for unplanned expenses, such as a medical bill, home repair or loss of income. Using emergency savings to cover unexpected expenses is better than paying with high-interest credit cards or taking out a new loan.

How do you start an emergency fund?  The first step is to create a new bank account for the fund.  An emergency fund needs to have enough money to cover 3-6 months of core expenses like monthly living expenses (home mortgage or rent), utilities, food and other necessities.  In your cashflow analysis, you should have a good idea of what you spend each month.


One of the great things about today’s society and technology is the power of automation.  One thing we discussed here is the elimination of subscriptions.  Well, why do you even have subscriptions?  Because companies know that these are automated expenses that you just take for granted and pay because they are a pain to cancel and they are automated every month.  Well, the beauty is that it goes both ways.  There are a number of ways to automate your income savings. If you create a new bank account for your emergency fund, most banks like Chase bank have a feature that will allow you to transfer funds automatically every month from your main account to your emergency account.  You create the setting, the amount to transfer and the date.  I recommend creating the date on the day after you get your paycheck.  I have automated settings to transfer $250 out of two monthly payments to a real estate fund account I am trying to build up to purchase real estate.  It’s automatic and I don’t think about it, but I can tell it’s really cool every few months to see an extra $1,000 in that account.

On a more broad note, automation is what is going to make you wealthy.  Going back to the Millionaire Mindset, at some point, you will have money making more for you while you sleep.  WHAT?  How is that possible?  I’ll explain that in a bit, but this is what you need to understand now.

YOU PROBABLY SPEND WHAT YOU HAVE IN YOUR BANK ACCOUNT AT ANY GIVEN TIME!  For example, if you make $5,500 per month and take home $4500 per month after taxes, you have to pay all of your bills out of that money.  If your bills are:

  • $1,250 rent
  • $750 food
  • $500 shopping
  • $500 gas/car expenses
  • $500 entertainment
  • $500 credit card payments
  • Total: $4,000

This leaves $500 left over.  Most people’s first reaction would be “Cool. What can I spend an extra $500 on today?”  If you look at these expenses above, a couple of things stand out. 1) this person has $4,000 in expenses each month.  Does this person have $16,000 – $24,000 in emergency savings?  2) none of the money above is going to savings.  This person is doing just fine spending $4,000 per month and getting everything they want and need.  In this person’s case, I would suggest two things:

  1. Create an automated setting to move $250/month into the Emergency savings fund
  2. Use another $150 to pay off credit card debt until it’s zero (up to $650/month)
  3. Personally, I would use the last $100 to buy something extra.

Now, the FIRE movement people would tell you to move shopping to $100, food to $500 if possible, spend every extra dime on credit card payments and make entertainment close to zero.  Like I said, I don’t think you want to miss out on everything in life to save every penny, but this is where your choices will determine how fast you climb the mountain.  If you decrease your spending, move the payments over to your credit card and emergency savings, you could have that funded in 6-12 months. Otherwise, it could take longer.  It’s up to you.

If the person above can cut expenses to the following:

  • $1,000 rent
  • $650 food
  • $300 shopping
  • $500 gas/car expenses
  • $300 entertainment
  • $500 credit card payments
  • Total: $3,250

This would leave $1250/month left over.  Once the credit cards are paid off, it would leave $1750 left over.  Without making an extra dime, this person could put $1,000/month away, STILL HAVE $250 for expenses and fun left over and have an emergency fund funded within one year.  By the way, with that extra $250 or other money, start using your debit cards to pay for things.  You can’t keep racking up credit card debt.  Using the debit card will control your spending.

Did this person make sacrifices?  Yes.  Maybe they moved into a smaller place and spent less on shopping and a little less on food.  But at the end of one year, they would be protected in case of an unexpected event.  More importantly, they would have a lot of extra money to start investing!

The biggest takeaway here is that you will not miss the money that is automatically moved to your savings account.  You will adjust your living expenses and your spending habits to account for having less money from each check.  The automation is truly out of mind as it just happens automatically.  I understand that living paycheck to paycheck is hard, but I’ll tell you once you start seeing the money accumulate (and your Net Worth numbers start increasing), you will start adding to the automation.  Got a raise?  Add to the automation!  This is where your journey will really start to accelerate.


Step Five – Your Crossroads


We are on Step five.  This is your first big challenge on your expedition.  Can you change your habits and not purchase the jacket you saw at Nordstrom Rack or Macys and instead put that toward paying off the balance of your credit card?  Can you choose not to eat out and spend $75 and use that to pay off that credit card faster?  At this point in time, you haven’t made any more money so the only avenue you have to continue your journey is to change your buying and spending habits.  It goes without saying that the more choices you make to forego buying more crap and more luxuries and instead focus on paying down the debt, the faster you will climb to your next plateau in your journey.


As you start paying down your credit cards and your car loans and your other debt, a funny thing will start happening.  When you check your NET WORTH, your overall worth will start to increase.  “How can that be?” you say, “I’m not making any more money and I am not making any investments yet.”  When your liabilities decrease (ie your credit card balances go down, your home mortgage loan decreases, your car loan balance decreases), guess what?  Your overall net worth starts to go up!   You have the same assets, but less debt.

Here is where you can start really making a difference.  What if you were really ready to get rid of all of your debt quickly and move even faster to your ultimate goal?  For almost everyone, the most expensive cost of any cashflow sheet is living expense.  How much are you paying for rent or mortgage?  If you have a sizable debt obligation, can you move home for a while to save while paying down debt?  Can you move in with roommates?  Can you rent out a room in the house you live in?  If you can save hundreds or thousands here, you can pay off your debt in no time and move on.

The second most expensive cost most people have is a car payment.  There is a common misconception that everyone “must have” a car payment.  My wife decided to lease a brand new Lexus and it costs $550/month.  The funny thing is she works from home and drives the car about 100 miles a week.  Maybe.  She has a fantastic job and she can afford the luxury, but I have to say it drives me up the wall every day I see that thing in the street.  That is way too much to spend on a car that sees the road almost never.  Her comment is “well, everyone has a car payment and I want to drive a nice car.”  Mind you this is a leased car and we have no ownership of it and it’s never driven.  I try to explain that if she had a used car, it could still be nice and we could save money that she could either save and invest or even shop with.

What if you had a car and could sell it and maybe downgrade to something nice and instead of a $500 or $600 monthly payment, you could buy an older car with cash while you pay down debt and get ready for the next leg of your journey?  If you could save $500-$600/month and simply drive a different car for a while, would it affect your life?  It won’t affect your daily life, but that savings could contribute to your financial future.   Mark Cuban is a billionaire who started out with nothing and drove a car he paid $200 for ($1000 in today’s dollars).  I’m pretty sure no one here would argue with his choices.


The beauty of all of these steps is that you will see immediate results!  We live in an age of on demand everything.  We want to see the tv shows or movies we want to see immediately at the click of a button.  We want results immediately.  We don’t want to wait.  When you use the tools outlined in these steps, you are able to login and start seeing the results of your efforts on a monthly, if not daily basis. As you pay down your debts or start putting in saving accounts, you will start to see your debts disappear and your net worth rising.  As you gain more confidence at work and look for ways to increase your income you will subconsciously look for more and more ways to increase your net worth and you will be on your way to your ultimate goals.

My biggest regret in my 30s was that I had a small business that paid my expenses, but because I never tracked my net worth or spending, I just went out and wasted money on everything from restaurants to cars to material things.  If I had something that I could use to easily to track my progress and saving and see that my efforts were resulting in more net worth, I would be far wealthier than I am today.  I just spent what I had, paid down some debt when I had it and spent some more.  Today is different.  You have all of the tools you need at your disposal and the ability to see results of your saving efforts immediately.



Step Four – Sacrifice and Gain

If you have gotten this far, it’s actually pretty exciting.  Only three steps down and you should have a clear understanding of how much you are worth, how much income you are generating and how much money you are spending.  This is where it gets fun and agonizing at the same time.


I have to start with the agonizing part first because it requires you to start cutting things.  It is easier to stop spending on things than it is to immediately make more money.  After the completion of Step Three, you should have an in depth, monthly chart showing exactly what you are spending each month.  I am pretty sure that you have found some things in your chart that are completely surprising.  What?  We spend $1,200 per month eating out?  We spend $1,000 on clothing and shopping?  We spend $400/month on subscription services?  Sometimes, you just have no idea what you are spending until you see it in writing.

So, let the cutting begin.  The first step here is understand how much money you have to work with.  If your income is $7,000 per month and your expenses are $6700 per month, it probably means you’re living paycheck to paycheck.  It also means you have $300 per month to play with.


The next step is looking at the easy things you can cut.  This would be SUBSCRIPTIONS!  Over time (and especially if you have kids), I guarantee you are spending money every month on subscriptions you don’t need.  Here are some example ways to lower your monthly subscriptions.

  • Check your Apple Pay account.  Millions of people have an Apple account and many people are probably paying for subscriptions they don’t even know about.  The following is a link to view and cancel subscriptions –
  • Cut the Cable.  According to a recent report, U.S. Cable & Internet Market Size and Household Spending Report for 2021, The report found that the 82% of U.S. households with a Cable & Internet bill spend $116 per month, or $1,392 per year.  The average cost for broadband internet alone is $57/month.   If you add in Netflix ($13/month for standard package) and one other channel at $6/month (like Disney+), the total cost would be $76/month saving you $40/month.
  • Check your credit card for other monthly services and see if there are competitors offering lower rates
  • Check your mobile phone bill and call your service provider.  Cell phone companies are constantly changing plans and pricing.  You might be able to save $20-$40/month on your cell phone bill by combining family members or cancelling services you don’t need.  Personally, I think the insurance plans are a waste of money.  You can pay the $11/month in insurance or buy a 3rd party insurance plan.  You can pay $69 for two years through companies like Upsie (click here).  AT $11/month through an insurance carrier, you can save $195 over two years.
  • Check your car insurance rates.  There are many companies that will compare car insurance rates (like this one:  and you might be able to save money on insurance.  The big saver here has to do with the coverage.  Check your coverage because you can lower your coverage a bit and get much lower rates.

After this exercise, I have to believe you can find $100-$200/month in expenses at least that you didn’t need or didn’t even know you had.  Ok, now please bear with me.  THIS IS NOT NEW FOUND MONEY YOU CAN JUST SPEND FREELY.  This is money we need for the next phase of the journey.


The average credit card debt of U.S. families is $6,270, according to the most recent data from the Federal Reserve’s Survey of Consumer Finances. I am fairly confident if you are reading this article, that you have at least one credit card and that card has at least some balance on it.  Some of you might have a lot of debt on their cards.  The average credit card interest rate is about 17% APR.  Paying the minimum payments off a large balance will take years.


If you have $12,000 in debt at an average of 17% APR and you were making payments of $200/month, it would take 11 years and 2 months to pay off that debt.  The worst part?? At the rate above, you would have to spend $27,000 in all to pay off your $12,000 debt.

I have discussed a very important concept in these blogs and it’s CHOICE.  You have VERY HARD CHOICES to make here.  You already know what your bills are, what you spend and what you make.  After the first exercise above, you should have some additional money to pay off those credit cards.  However, if you choose to spend that extra “new found” money and not focus on paying off your worst debt cards or other debt or start saving, you can probably pack up your things right now.


I have already mentioned this before, but as you analyze your expenses, this is the time where you can look at your income. Many people fear change and they are complacent about moving jobs. However, unless you have some sort of ownership in the company, you have no loyalty to them and they have no loyalty to you.  So, there is one thing I have always said to my wife, “If you are good at what you do, they are lucky to have you and you are not lucky to have that job.”  You are on a mission now.  You can’t waste your time in a job with a company that doesn’t value you and your contributions.  So, the easiest way to increase the money side of your cashflow sheet is to:

  1. Compare your salary. Go online and find your position and zip code and determine if you are getting paid a fair rate for your job title.  If not, go to your boss with some supporting materials and other job postings where companies are paying a higher salary for your same position. Ask for more money!  The worst he can say is no.
  2. Ask for a promotion.  I tell my wife that if the company promotes you with a better job title but not a huge raise, it’s fine.  That job title is most likely worth more at another company and after a couple of months, you can go back to your boss and follow the instructions above.
  3. Go to another company.  I know change is hard and going to a new place with new people can be challenging, but you are here which means you are ready to get out of your comfort zone.  There are millions of jobs available right now and employers are paying more money.  Easily increase your income by finding a new job where they will pay more for your time.

If you are maxed out on your salary and you love where you work, the next area you will want to look at is making extra money doing side gigs (more on that later).  The items listed above are the most immediate way to impact your current income.


I have owned my own web design company for about 25 years.  I am not a self-proclaimed “hustler” where I get in front of hundreds of people to pitch my company for services.  The fact is, I am really good at what I do and I have generated most of my money through referrals and I spend money on Google Adwords to generate traffic and leads.

While I was at a self help seminar one weekend, I sat back and listened to the guy talk about most of the things I have mentioned here in these blogs.  “Get out of your comfort zone.  Think about it and it will come. Starting a business or investment is the fastest way to wealth.”  The guy asked if anyone had their own business and I stood up.  He asked me “What would be the one thing you want from your business that you are not getting now?”  I replied “Well, it would be great if I could make more money with my business.”  And he replied back “Are you good at what you do?” “Of course” I said.  His reply was great, “Well, the easiest way to make more money if you are truly good at what you do is just charge more money.”   I just stood there deep in thought.  Uhhh.  Duhhh.  So I went back to my office and start raising my design fees and my hosting fees and, lo and behold, my revenues went up by 20%.

If you own a company and you are good at what you do, the easiest way to make more money is to charge more for what you do.



Step Three – Where You At? Part II

The next step in your financial preparation for your journey is to understand how much you are spending each month and how much you are generating in income each month.  It goes without saying that saving money when you are spending more than you are earning is extremely difficult.  This process is going to be one of the most difficult because it’s going to take you face to face with what you are actually spending and bring you to the reality of the difficult choices you are going to need to make.


The Basics part of this blog is an introduction to finances that will include words and definitions you absolutely need to know.  The first two big financial concepts are Assets and Liabilities and the definitions are pretty straight forward:

  • Assets are things the generate money
  • Liabilities are debts and things that cost money

That seems pretty simple doesn’t it?  So what are examples of assets?

  • You (assuming you have a job).  Yes, you are an asset and you generate money for yourself and/or your family
  • Stocks and Bonds.  Stocks in companies especially ones that generate dividends are assets.  Stocks can increase in value and generate money from dividends
  • Investment Real Estate.  A home that you purchase for purposes of renting out and that generates more money in rent than it costs is considered an asset
  • A Business.  If you own a business and people work for you and the business brings in more money than it costs to run, it’s an asset

All of the above examples are considered assets because they generate money coming in each month.  So, what are examples of liabilities?

  • Credit cards.  Credit cards provide a way for you to borrow money to pay for items.  If you don’t pay off your credit cards, you are getting charged, in many cases, 17% – 25% in interest.  That is a lot of money and your balance on your credit cards is considered DEBT or a liability
  • Your primary home.  While you might consider a home an asset, if you are spending money on a mortgage every month, it is considered a liability.  You have a DEBT you have to pay every month.  This is not to say you shouldn’t own a home or purchase a home.  There are many tax benefits of owning a home and the value will increase over time.  However, this is an example of a liability because it costs you money.  That said, if you rented out a room and/or constructed an add-on granny flat (Accessory Dwelling Unit – ADU) in your backyard and rented that out to someone, it could turn your liability into an asset
  • Car loan.  Your debt that you owe on a car and your monthly payment is a liability
  • Any other loan.  If you like to purchase toys like boats or trailers or other items like payment plans for braces, furniture or pelotons, these are all liabilities
  • School loans.  This is a debt you owe and considered a negative with a monthly payment
  • Monthly subscriptions – this is a big one people get caught in.  Many companies realized they could get a lot more customers by providing very low monthly payments for products or services.  In many cases, people don’t even realize how many subscriptions they have

In the examples above you can have liabilities that can turn into assets.  For instance, if you purchase a boat and owe $300/month in payments, but you rent that boat out when you’re not using it and you receive $400/month in income, that liability becomes an asset.  You would need to factor in the repairs as an expense since more people are using the boat but again, if the rental money you receive per month is more than loan payment plus the repairs, you’ve got an asset.


Like I mentioned, it is vital that you understand your current starting point and your net worth, but understanding your cashflow is just as important.  Your net worth is the amount of money you are worth at any given time.  Your cashflow is your monthly income minus your expenses and allows you to determine how much you have to spend or save.  The more expenses you cut out, the more you have to save toward your goal.  Conversely, the more money you earn, the more you can save (assuming your expenses don’t go up).  This is the hard part for many people.  If they get a raise or a bonus, the first thing people think about is “what can I buy with this new found dineiro???”  For a millionaire, you have a couple of choices:

  1. Spend it all
  2. Spend some and save some
  3. Save it all

To be honest, I’m a #2 kind of guy.  If I get a big bonus or raise, I will buy something small as a reward and save the rest.  Again, this is new found money.  You were doing just fine before the money came in and if you put it all in savings, it wouldn’t change your life today, BUT it will add to the steps up the mountain on your expedition.  The more you put away, the faster you can reach the pinnacle.  Because I am a #2 type of guy, my journey might take longer than the FIRE people who put 70% or 80% of their income away.

Throughout this process, the goal is to figure out how to both increase your monthly income AND decrease your monthly expenses.  The point of this post is to understand where you are at today to get started.


In order to determine your monthly cashflow, there are quite a few tools you can use.  The following will give you a start on how to determine your monthly expenses and your income.

As you can imagine, these tools require a lot of numbers.  Many of these should be easy to input like your monthly rent or mortgage, your income from your job or easy monthly expenses like childcare or your phone bills.  The harder numbers are going to be things like travel, shopping and miscellaneous expenses.  This is where people start getting a little confused and disillusioned with this process.  To make this part easier, I recommend the following:

  • You don’t need the exact numbers for every one of the categories but you really do need some idea of what you are spending
  • I recommend using one credit card is possible for all of your transactions
  • If you are using, it will pull in all of your credit card transactions and automatically assign them to categories.  All you have to do is go through the transactions and make sure the transactions are in the right categories.  Once you are done and the transactions are in the right place, will give you summary reports of every category of spending and how much you spend each month
  • This could take a little time, but I recommend you do the categorization for at least the last 9 months.  When you take all of the categories and spending and average it out, you will get a great picture of what you spend.

By the end of this exercise, you will have completed the preparation phase for your expedition!


Step Two – Where You At?

By now, you have read the first few posts and you’re thinking to yourself, “I am ready to make a change.  I am ready to change some habits and focus on a plan to make myself wealthy and generating enough money to retire.”  AWESOME.  You are changing your mindset to put out in the universe that you are going to create a goal and make choices to reach that goal.


You can’t start an expedition or a journey if you have no idea where you’re starting.  Every expedition has a starting point and your starting point is your current financial situation.  Some of you might be further along than you think and some already understand that it will be hard work to get out of debt and will take time to get on a path to success.  The most important aspect is that you ready to make the leap and focus on a better outcome.

The next step is to find an online resource you can use to organize and update your financial status as you move along the journey.  There are a number of personal financial applications you can find online, but I personally use (  This is a web site that ties in all of your accounts into one place and will organize your finances, accounts, loans and spending habits.

If you can imagine that your life and your family is a business, you need to know some simple things to be successful:

  • How much money does the business generate (on a monthly basis)?
  • How much money does the business spend (on a monthly basis)?
  • How can we limit spending and increase the money coming into the company?
  • What are the things the business owns and what are the business debts?

If your business makes $100,000 a year but you are spending $110,000 per year, that business has two options, 1) it will go out of business because it spends more than it generates to pay the bills, or 2) it will have to borrow money to cover the additional expenses.  A business is just like your life.  If you are spending more than you are making, odds are you are borrowing money from credit cards to cover the increased spending.  In this scenario, you will not only hurt your chances of being wealthy, but more likely you will head for bankruptcy.

What a personal web site like Mint will do is give you an overview of your current financial situation:

  • How much money do you have in the bank?
  • How much money do you have in investments like stocks?
  • How much money do you have in retirement accounts?
  • How much is your house worth?
  • How much do you owe on credit cards, mortgages, car payments, etc?
  • How much are you spending each month and in what categories?

Overall, when you subtract what you owe (your debts) from the things you own, you will get a big, giant number called NET WORTH.  This is one of the most important (if not the most important) number you will follow when it comes to your wealth.  Basically this is the number that adds up all of the money you have, the value of your property and your investments and then subtracts all of the money you owe and that is what you are currently worth.  The following is a very small example:


  • $15,000 in the bank
  • $10,000 in investments like stocks
  • $350,000 house value according to Zillow
  • $15,000 current value of car
  • $5000 – bitcoin value
  • TOTAL ITEMS OWNED: $395,000


  • $5,000 owed on credit cards
  • $280,000 owed on home mortgage
  • $10,000 owed on car
  • $25,000 – School loans
  • TOTAL DEBTS: $320,000


$395,000 – $320,000 = $75,000.  In the example above, this person’s net worth is $75,000.

This is the starting point on this person’s journey!


In my previous posts, I outlined the importance of putting your goals and dreams out into the universe.  By creating a system to track your current situation and your progress, some things will start to happen.  You will start to put $5 from that Starbucks coffee you didn’t order into savings or investments.  You can have your bank account or other investment company automatically take some money out of your paycheck and put into investments that will grow.  Then, the really cool thing starts to happen.  The Net Worth number will start adjusting up.

On your expedition, your upward climb in your net worth mirrors your upward climb up the mountain.  The one thing I will tell you is that seeing your numbers increase will give you more and more incentive every day to change your choices, save more and climb the mountain faster.  It’s simply human nature and the biggest incentive at all to see the progress you are making and want to succeed even more.

After you have signed up for a personal financial software platform, go through and connect your accounts and see where you stand.  If you have a ton of credit card debt and no house and your net worth is negative, DO NOT FRET.  Does it suck? Yes.  The goal here is to change your attitude, your choices and your financial situation to move the negative to positive and then through the roof and over the moon.