“Super savers” save more than half their income to achieve financial independence. This strategy involves reducing significant expenses while simultaneously increasing their earnings. This effectively widens the gap between income and expenditures.
“Super savers” are typically ultra-frugal and choose to live well below their means. They seek opportunities to maximize their income by taking up additional revenue sources or investing wisely. This approach emphasizes equally on saving and earning, comparable to a balanced sports team that excels in both offense and defense.
Simultaneously, they also take a diligent approach towards their expenses. They typically avoid unnecessary expenses and highly prioritize saving. They also ensure a continuous flow of money by diversifying their income streams. This multi-pronged approach not only assists their financial security but also helps them to reach their savings goals faster.
One successful super saver, who cleared a six-figure debt, believes that everyone, regardless of their particular circumstances, can expand the gap between their income and spending. She argues that by doing so, one will effectively cultivate a wealth-building mindset. This tactic involves reducing one’s spending, finding additional income avenues, and securing a higher saving rate.
Two key strategies to expand this income-expense gap involve keeping more of one’s income while simultaneously reducing major expenditures. Most super savers focus on bringing down the three main monthly expenses – housing, transportation, and food. This method eases the need to micromanage finances, freeing up more time and resources to focus on increasing income.
Early retirees agree with this method. Their approach involves making initial sacrifices like moving out of city centers, choosing public transportation, and eating at home more. Such lifestyle adjustments lead to significant cost reductions, which led to a shortened working years and resulted in a simpler, less materialistic lifestyle that many find gratifying.
The second strategy is to increase earnings alongside savings. This could take many forms, such as taking on part-time employment, pursuing freelance work, investing in stocks or real estate, or even starting your own business. By diversifying your income sources, you safeguard against potential setbacks. Committing to this strategy will require discipline, patience, and resilience, but the end result, financial independence, is well worth the effort.
