1. Spend less than you earn.
2. Learn about investing and develop an investing mindset. Investing can mean stock, but also a personal skill like cooking or a small business, a thing you can rent out, whatever.
3. Repeat.
My friends live paycheck-to-paycheck and I got $300k stashed in cash and a mix of investments. I'm not living for the money, but this world is full of costly stuff you definitely do not need - and it really surprises me what people are spending money on.
I got $300k stashed in cash and a mix of investments
Why?
I can understand if you're saving to buy a house outright for cash, or to invest in a startup that needs a chunk of capex at the beginning, or something, but just sitting on a pile of depreciating cash assets is silly in an economic market where retail inflation is running at ~10%. If you're literally just holding cash because you can't think of anything fun to spend it on then that's quite sad.
There's something to be said for having some cash, despite inflation. Obviously you want enough to cover short-term emergency situations. But beyond that, the advantage of cash is that it's liquid AF and having a stockpile can enable you to take advantage of opportunities that you might not be able to seize if you don't have cash on hand.
No, you don't want your entire "life savings" in cash stored in pillow-cases under the bed, but you do want enough cash where the value of "enough" varies depending your circumstances.
For all we know it could be 10k cash and the rest investments.
Could be, but regardless, it's very unlikely that his investments are beating inflation at the moment so the point still stands. By holding on to the money its value is shrinking.
I've always thought that a good metric is that if you had to leave the US in a real hurry (not sure if it would make a difference, but for e.g. Yellowstone is going to explode), do I have enough liquid to charter a private jet to somewhere else.
Probably $80K to $100K for that, plus extra for snacks. :)
One irony between investing and spending is that people often use "investment" to refer to a big expense whether it provides a return or not. It's a dangerous mindset.
It's an "investment" in the sense that you are getting some conceptual return on it, even if the return isn't financial. For example, a $300 pair of boots is an investment, because you expect to get more than $300 worth of utility over the life of the pair of boots.
Sounds good. Having clients before you start is essential. Focus on delivering good work, document it, so the next conversation with a potential client can be quicker.
I never really wanted to do consulting and freelance work, but through my network I got to a point, where more projects are lined up than I have time to do.
Also, one thing that helps me a lot is to just live frugally. Even though I charge a bit below market value I still could build up a financial cushion, so I do not have to work for the next 15 years or so, if something should happen.
One thing I observed (in me and others) that when tasks seem too simple at first, your brain automatically tries to add a bit more sophistication to the whole project - so you do not feel that dumb, and also to not look that dumb.
After a few years maintaining systems, I do not use the word "simple" for anything software or computer related anymore. I'm glad if something works as advertised - and I'm delighted if I see people putting in effort to make someone else's life easier.
People, who appear smart may well indeed be just a little frustrated. Not the person who makes things more complicated or ask complex questions is smart - that difference seems to escape some of the even smartest people.
As for working with these people, I don't know. You have to endure them, make them aware of the tradeoffs that are made, in the best case show them something simpler, that accomplishes the goal.
I feel everyone who's in a bad place now, uncertain about the future.
My approach has been often to take a mixed-risk approach, and it seems to work out well. First, no debt. Second, long-cash. After working for about ten years in relatively low paying roles I have something like a runway of about 25 years - that is I would not need to take on any job for 25 years while keeping mostly my current standard of living (plus be happier, as I would have more time).
I plan to work for about 5 more years, then switch from a high-stress environment to cool projects that do not need to make lots of money.
The key has been to continue to live like a student, we have a small cheap flat, go out eating maybe once a month, no car, no expensive hobby, little distractions.
With a faang salary, I probably could have achieved that not in ten, but in two years.
That's why I'm a bit curious why people are so stressed out.
This falls apart when you want to get married and have kids? It’s certainly possible to find a frugal partner but kids still cost a lot of money in general
I agree but IMO there is still a huge amount of discretion involved. My wife and I are routinely stunned at what other families spend on their kids clothing, hobbies, family vacations, etc. We hear a lot of grumbling from our kids about it too, but we both feel it is better both for our wallets and the kid’s upbringing.
Yep. Living frugal has big advantages. You can just walk away if you need to. I don't have 25 years saved up (well, maybe I do counting retirement savings and I am getting pretty close to that 59.5 age where I can access them) but I can go a good while without working. Our cars are 20+ years old and still going strong, our mortgage on our very modest house will be paid off in a month or two. You have to be willing to trade status symbols for freedom.
Demographics is the killer force, basically with a MINT background, you can find a job almost instantly. You may not earn a top salary, but you'll earn enough to get by well.
Given Europe is in the worst crisis since WW2, I'd say job market is fine.
I did some of these things and I slowly getting over them, thanks to some very generous colleagues who can overlook my downsides.
To be honest, some of these problems are less the problem of an individual but the environment - where we constantly have to or we want to point out the value that we provide.
Some things are even more painful, and I'm glad I'm recovering from them, like over-communicating. Some people have so little to provide in terms of value that talking becomes the main output - and that usually slows down projects.
I'm also recovering from being bossy after having worked with managers who were basically never bossy at all - it's such an important trait, yet relatively rare.
Seeing a bunch of opportunities of similar proportions. It's ugly work, but my theory is that this it why it pays.