It turns out African safaris aren’t cheap. You either spend a lot to sleep at a fancy lodge, or a lot to sleep in a tent. I slept in a tent, but then you realize the only thing separating you from the lions is a thin layer of nylon.
I thought I was going to die, but it wasn’t until the safari was over and I was in Zanzibar that I was even close to that. Pulling on my t-shirt in the bungalow I put my hand through the rusty metal ceiling fan which made a gash in my wrist. It took 45 minutes to drive to the nearest hospital to get stitches.
Even though I was convinced I was getting tetanus, I never felt guilty about spending the thousands of dollars to take this trip. Why not? Because I’ve always said that you should spend money on the things that really matter to you, and for me that’s travel.
(Plus, studies prove that experiences make you more happy than buying stuff.)
Most personal finance experts tell you that you need to stop spending money, even on the things you love. A coffee? Fuck you, you can’t afford it. A night out with your friends? Nope, you’re staying home and making a condiment sausage:
I want you to not have to worry about money, and to have the freedom to live your life the way that you want. That was my goal six years ago. Now, I had no idea how to accomplish it but I learned how, and I’ll show you what I know.
MOST PEOPLE AND WEALTHY PEOPLE
Most people that earn $50,000 spend $50,000. Most people that earn $75,000 spend $75,000. Most people that earn $100,000 spend $100,000. And on and on. That’s why most people live paycheck-to-paycheck, even the ones that earn a lot.
But here’s the secret wealthy people know: Money isn’t something that you spend, it’s something to be leveraged.
If you focus on earning more of it, and you only spend on the things that matter to you, then you have money left that you can leverage. Let’s break this mindset down further.
EARN MORE MONEY
The best way to earn more money is to take your existing job and get paid more to do it. I get it though, asking for a raise is scary.
“What if they say no?”
“What if they think I’m just being greedy?”
“What if they fire me just for asking?”
If you’re a top performer and you know you deserve a raise then put in the work and get one. I wrote about how to do this (even with word-for-word scripts you can use).
Okay, so maybe you can’t get a raise for whatever reason. That doesn’t mean you can’t earn more, because anyone can make an extra $1,000 a weekend if they develop a skill people are willing to pay for. Here are some ideas:
- App development
- Book illustrations
- Video animation
- Website development
You can learn all those things online for free or cheap. Check out Code Academy, creativeLIVE, Khan Academy, Lynda.com, and Udemy. Some colleges have even opened up their curriculums. I have a friend who became an app developer by taking Stanford’s free class.
Key takeaway: Your top focus should be earning more money, because it’s limitless.
SPEND AS MUCH AS YOU WANT (WITH ONE CAVEAT)
Most people buy things they don’t need, with money they don’t have, to impress people they don’t like. Once I stopped doing this, I went from spending $48,501 a year to spending $35,715 (25% less). Here’s what that looked like over four years.
“Those of you who often over-commit or feel too scattered may appreciate a new philosophy I’m trying:
If I’m not saying “HELL YEAH!” about something, then say no.
Meaning: When deciding whether to commit to something, if I feel anything less than, “Wow! That would be amazing! Absolutely! Hell yeah!” – then my answer is no.”
He’s talking about how to spend one of your resources, time, but you can apply it to another one, money. Every time you make a decision about how to spend it, it has to be a “Hell yeah!” or it’s a “No.”
For me it looked like this:
“Should I spend $1,000 a month flying airplanes as a hobby so I can say I’m a pilot?”
“Should I stop at the gourmet grocery store to get one of those ultra-organic chocolate bars made by some Brooklyn brand and they cost $9.50 but whatever?”
“Should I go out for lunch every day to that Italian restaurant where they cover the tables in crisp white paper and serve you water in a wine glass?”
“Should I get that incredibly expensive coffee every morning where it takes nine minutes for some guy to make it using a bunch of test tubes and he talks about terroir and I thought that was just for wine?”
“Should I travel the world and force myself to live outside my comfort zone and get lost every day and cut my hand in a ceiling fan and have to ask strangers if they can help me get to the hospital but they only speak Swahili?”
Key takeaway: Spend on the things you love, and cut out everything else. (And no, you can’t love everything.)
Okay, you’re earning more money, you’re only spending on the things that matter to you, so now you’re ready for leverage. What does that look like?
Well, Elon Musk made $165 million when he sold PayPal to eBay. He could have retired at 30 or whatever but instead he decided to put all his money into three companies: SolarCity, SpaceX, and Tesla. Now he’s worth billions.
Or take Jeff Bezos. He was recently asked if Amazon will ever make a profit:
“So, it’s kind of like we built this lemonade stand, you know, twenty years ago. The lemonade stand has become very profitable over time. But we also decided to use our skills and the assets that we’ve acquired over time to open up a hamburger stand, and a hot dog stand, and so on and so on. So we’re investing in new initiatives.”
- Start with $100
- Invest that $100 in skills or assets that will eventually net you $1,000
- Invest that $1,000 in skills or assets that will eventually net you $10,000
- Invest that $10,000 in skills or assets that will eventually net you $100,000
- Invest that $100,000 in skills or assets that will eventually net you $1,000,000
- And so on…
Key takeaway: Start with $100, and keep on leveraging up the ladder.