1. Learn the ins and outs of the US tax system.
The tax code may be one of the most boring and complex collections of documents in the history of the world. But — hidden under all of the Washingtonian lawyer jargon is some extremely valuable information. Information that could shave years off of your working career.
Have you ever heard of tax hacking? Traditional to Roth conversions? The fact that if you make less than $19,500 a year you don’t have to pay taxes whatsoever?? A tax-free life sounds pretty First Class to me.
Luckily there are actual human beings out there that have translated the cryptic tax hieroglyphs into human-readable format.
2. Own vs. Rent doesn’t matter. Size and function do.
There are advantages and disadvantages to owning AND renting. Equity vs. Mobility. DIY vs. Landlords. I know wealthy people that love being homeowners and others that have chosen to never settle in one place. Semantics!
What does matter is the size of your dwelling, and it’s intended purpose. Generally, the more space you require, the more it’s going to cost and the more it’s going to cost to insure. The bigger the place, the more you’ll feel inclined to fill it with unnecessary stuff.
Only buy/rent as much as you actually need and feel the added benefit of an increased positive cash flow. For example, we downsized our house which saves us around $16,500 every year.
3. Eat food that’s good AND good for you.
Food that’s actually good for you never tastes good, right? Once upon a time this might have been true, but the Internet tells us otherwise.
Vegan food can be delicious. Carb-free diets can be delicious. Healthy snacks like fruit, nuts and avocados ARE delicious naturally.
There are entire websites dedicated to providing healthy eating tips and recipes for creating amazing, delicious, good-for-your-body food. Feel free to leave other great health food blogs in the comments.
4. Do something about those love handles.
The most exercise that the average person gets on a daily basis is the walk to and from their car. It’s insanity! What are you doing in line for the elevator when it only takes about 2 minutes to climb 20 flights of stairs!? Exercise whenever the opportunity arises.
Make walking, biking, swimming, and general aerobic exercise a staple in your day-to-day life. Got a few minutes? Do some pushups, lunges, sit-ups or planks. Staying physically healthy significantly reduces the chances of medical treatment, ie. reduced health-care costs.
The easiest way to a long, happy, hip-replacement-free life is staying in shape.
5. Challenge yourself. Set goals. Plan.
When I started this site my intention was to be able to retire within a 7 year period, by age 35. As time went on my cash flow has significantly increased, and my plans have been accelerated more than I could have imagined.
What type of voodoo sorcery pushed me toward success? The simple application of goal-setting.
Create a plan for the next year, next 5 years, 10 years, 20 years. Once you write out a finite list of things that you want to accomplish, and make those goals a priority, you’ll find that you’ll become unstoppable.
6. Stop watching, start reading.
At what point in human history did “unwinding” turn into watching TV for 4-5 hours every night?
Call your telecomm company and remove cable from your account. You have better things to do with your time that are going to empower you in ways that the CBS Fall Lineup can’t. Plus, you’ll save about $900/year — so let them charge you a damn cancellation fee — who cares!
Figure out what your passions are, and start reading about them. There are self-help books about everything from sewing to learning how to master your finances.
7. Avoid small thinking AKA excuses and complaints.
I can’t tell you how many times I’ve heard people talking about the “Government Shutdown”, the “Fiscal Cliff”, “Obamacare”, or countless other Capital Hill talking points. These people have been trained to think that it helps to be informed about the latest crisis-of-the-day in Washington.
They complain about new policies that may or may not be in effect. And they stress out about the “what-ifs”. They also think that their paychecks are under attack by taxes, but don’t realize that we currently paying the lowest taxes in US history!
Choosing to ignore political chatter will put you on the fast track to a First Class lifestyle. No one likes hearing other people complain. Especially about politics, so why join the conversation in the first place?
8. Mock convenience. The hard road is much more satisfying.
America is the convenience capital of the world. From the fact that almost everyone in the country has the following items: A cell phone, a car, access to clean water and toilets, and at least one convenience store or Wal-Mart within a 5-mile radius.
Why are we so obsessed with convenience? It’s because we’re fuckin’ lazy!
Your mission here is simple: Never step foot inside another convenience store, for any reason, ever. That includes Wal-Mart.
9. Optimize constantly.
No matter how hard you try, you will NEVER have the perfect budget. That doesn’t mean we shouldn’t strive for perfection though.
I try to optimize my family’s spending every single month. There’s always at least one category that needs our immediate attention. Anything from eating out to electricity usage to grocery spending is fair game. Not once have I ever had a perfect month, but we continuously try to improve where we lack.
Pare down your spending in all major categories, then focus on the categories that fluctuate the most from month-to-month. They’ll be easy to spot, and when you’re constantly thinking about optimization, your spending in these categories will nearly disappear.
10. Keep job related costs to a minimum.
Here’s the logic: You go to work to get paid, so any money that you spend on/at work reduces your pay by exactly that much. A $10 lunch 5 days a week isn’t just a $50 credit card payment, it’s $50 you had to spend when you were supposed to be EARNING money.
Thankfully, it’s really easy to counter this type of blatant wasteful spending. Here are a few ways to reduce the cost of being employed:
- Bring your own lunch to work. No seriously, this saves so much money it isn’t even funny.
- Bring a coffee pot to work and use it. Why tempt yourself into buying coffee on the way to work?
- Keep a bunch of snacks in a cabinet at work. Peanuts, cans of tuna fish, whatever.
- Carpool. Ride a bike. Rideshare. Public transportation. Stop driving a 2-ton vehicle to move your less than 300 pound body.
11. Buy used, refurbished, or last year’s model.
A great way to avoid the typical Middle Class lifestyle is to stop allowing advertisers to fill your heads with wants and desires that you don’t actually care about (this is another reason why ditching cable is a great thing).
I buy everything used or refurbished. Last year we were able to score a brand-new-to-us yet refurbished vacuum cleaner from Amazon, and we paid half-price. It works exactly like a brand-new product should.
Everything from furniture to electronics to books can be purchased second hand or refurbished. Why would you ever spend more money on something you could get cheaper? If you’re in the market for “new” stuff try typing in “refurbished” after your search term at Amazon. Or just go to Google and type “yard sales”.
12. Upgrade your cell service by “downgrading”.
For the past 15 years cell phones’ services and capabilities have increased at a logarithmic rate. Which means that newer cell phones really aren’t all that impressive anymore. Even Apple, the frontrunner, hasn’t done very much with its flagship iPhone over the past couple years.
So what happens when consumers are satisfied with the current array of top-tier devices? Anyone!?
This is when the cell phone providers have to do something different to attract customers — ie, drop the month-to-month cost of the standard bill.
Companies like Republic Wireless have taken this model to a whole different level. They’re offering a no-contract top-tier phone with unlimited everything for HALF-PRICE with plans starting at $5 that range up to $40 per month depending on features. While you might be leaving your big name provider, you’ll be able to keep up to $80/month every month by “downgrading”.
13. Embrace frugality.
It’s cool to be frugal these days. Seriously. Try posting the words “I just saved $50 at the grocery store” to Facebook and see how many ‘likes’ you get.
My mom (a Baby Boomer) got a lot of her clothes from Goodwill when she was younger and it was horribly embarrassing for her. Second hand clothes used to be ugly, but now they’re awesome.
And saving money is cool again, so you can show off your “new” threads and brag about the price you bought them for. It’s a best time ever to be a consumer!
14. Collect memories instead of stuff/things/junk.
One easy way to live a First Class life is to shift your value system — from caring about having stuff to caring about having experiences.
Oftentimes, people dream about travelling during retirement. Yet they spend their entire working careers buying more and more stuff. Wasteful spending is the reason why many people have to work into their 70s, and the reason they don’t get to travel while they’re still working.
When you’re on your deathbed, you’ll think about all of the things you DID in your life rather than the things you HAD. A significant reduction in spending can help to pad your “vacation savings” enough to be able to travel at least once per year. Internationally, if you do well enough!
15. Buy for life, not for the moment.
When my wife and I got married we bought a house and some basic tools…at Target. Needless to say, the tools didn’t last more than 6 months. At which point, we were forced to buy replacements.
They sell power drills at Target for $25 and at Home Depot for $100. You can imagine the dilemma. Do I spend less money for something that I know won’t last another 6 months OR do I spend the big money ONCE?
This question needs to be asked whenever you’re about to make ANY purchase. Do you want something kinda shitty for less, or something that’s a little more expensive but could possibly last forever?
16. Keep your car running for 200,000 miles (at least).
Financed vehicles cost as much (if not more) annually than the places we live. Yet, when our vehicles start to “get old” and have “high mileage” we trade them in for a new car payment and more insurance.
Your car is a 2009 with 85k miles on it?? That’s practically BRAND NEW!
Have you ever heard of a Haynes Manual? They teach you how to fix ANYTHING on a car. They make them for every make and model vehicle from Chevy to Ford to Qingpi. They’re like $20 and will pay for themselves a million times over if you can keep your car running for the next decade.
17. Build and maintain relationships that make you happy.
If you asked a million people what they wanted in life the most common answer would be “to be happy”. While happiness can only be achieved by individuals, it’s always nice to have a little bit of help from our friends.
Surrounding yourself with people that have a positive impact on your life and distancing yourself from those that drag you down can be very empowering.
It doesn’t take any money whatsoever to be happy. Achieving happiness is the only thing you need to live a First Class life.