We’re getting into a routine here of posting our ideas about saving money, but so that we don’t stray off course, let’s run through a quick recap of why we’re doing this.
First, it isn’t about saving on one thing to spend more in another area. It’s about saving overall and putting every nickel, dime and quarter saved into a dedicated investment account that you can use to buy assets.
Second, what’s an asset? An asset is something that makes money for you. The best asset is one that earns you money all day and all night, regardless of what you are doing. Index funds are assets. Rental houses or apartments are assets. Stocks are assets.
Third, you want to continue the process until you have investment’s paying you income sufficient to pay all of your living expenses so that when you decide to retire or can longer work, your have the money in place for support. You won’t be dependent upon your employer’s retirement program that may not kick in for another 20 years. Can’t retire because you’re too young to qualify for Medicare? No problem, you’ve got an HSA tax-free fund to pay for the monthly premiums.
You don’t have to figure everything out all at once. Start off with simply designating a savings account or money market account that you will not dip into for anything but buying income-producing assets. Then start adding to it every time you save money. Over time, it will add up to freedom.