Issue #007: The magic ingredient to a (financially) happy life 😊

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👋 Hey Money Peeps,

The other week I was asked:

‘If you could only give one piece of money advice, what would it be?’

Now I can’t remember exactly what my answer was at the time, but I do recall answering by giving more than just one piece of advice (which ignores the whole point of the question).

In the weeks since then, I’ve had this question ringing around my head, and I think I finally have the answer.

You ready to find out what it is? better start scrolling👇

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THE ANSWER ⍰

Ready?

LIFESTYLE INFLATION

or

LIFESTYLE CREEP

or

LIVING BELOW YOUR MEANS

The three terms are used interchangeably so I decided to use all of them (my newsletter, my rules)

For those of you who have never heard of those terms before, let me catch you up:

As you earn more throughout your life, the natural thing to do is increase the quality of your lifestyle. Whilst to an extent this is part of human nature, lifestyle inflation/creep is what leaves people living from pay check to pay check with no plan of retiring at any point in their future. Just because you can afford something, doesn’t mean you should buy it.

Why is this the number 1 answer: According to a recent study, almost 70% of the UK and USA are living pay check to pay check. How many people do you know right now that have a car which costs more then their annual salary? because of that people are:

• forced to work jobs they don’t enjoy

• retire past retirement age

• live life constantly anxious and worried about money

Avoiding lifestyle inflation on the other hand allows you to:

• build wealth for generations

• create financial independence

• retire young

Strategies To Avoid Lifestyle Inflation:

For those of you who are familiar with this newsletter, you know I don’t leave you high and dry. So here are some strategies that will help you avoid lifestyle inflation and build a financial future of your dreams:

1. Get familiar with your finances

   You quite simply can’t live below your means unless you actually know what your MEANS are! Time to rip of the band aid and calculate how much you earn and how much you spend, before making some hard decisions.

2. It’s okay to celebrate

   I’m not trying to ruin your life with these newsletters. When you get a raise at work, or come into some additional money, it’s important to celebrate the victories in life. However, instead of splashing all of that cash quicker than you can read this newsletter, why not go out and have an amazing dinner with your closest friends, before returning to your current standard of living?

3. Ask the deeper questions

   Ever heard of ‘keeping up with the Jones’, we’re all guilty of it. Here’s a scene from Borat that sums it up perfectly ’WATCH HERE’ (please don’t watch this if you’re under 12 😅). However, maybe it’s time to ask yourself why you’re trying to keep up in the first place, why not run your own race instead?

4. Make gradual changes

   This might slightly oppose what I’ve been telling you this entire time, but it’s important for me not to be naive. I don’t think any of us want to be living the same lifestyle at 40 as we were living at 20. All I’m saying is be smart and use the three steps above to do the right things at the right time.

👋 Outro

See You Next Week

Thanks again for reading another issue. I really want to make these as good as possible for you, so as always:

PLEASE HIT "REPLY" TO THIS EMAIL WITH ANY QUESTIONS OR TOPICS YOU WOULD LIKE ME TO COVER - I WILL DO MY BEST!

Till next time!

DISCLAIMER: None of the above is financial advice. This newsletter is strictly education and should not be taken as investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and always do your own research.