In October 2023, my passive income took a significant $150,000 hit, representing a decrease of 39%, following the purchase of a new house. It was funded by proceeds from selling public stocks and bonds.
The decision to buy the house with cash was agonizing, as we didn't need a nicer home. It also meant we would technically no longer be financially independent since our passive income wouldn't cover all our living expenses anymore.
However, driven by my desire to provide a better life for my family, I chose to take the risk. Over the next six months, life became stressful as cash flow tightened.
I had violated one of my 30/30/30 home-buying rules, specifically the one about ensuring 10% of the property's value remained in liquid assets. I vow never to make that mistake again.
Despite enduring a difficult period, I've emerged stronger. After writing about the negatives of my decision, I now want to reflect on the positive aspects of earning less passive income. Overall, ironically, earning less passive income has improved my life. It has made me more content as a father and more satisfied as a man looking for meaning.
So for those of you who currently have no passive income or are still far from accumulating enough to cover your expenses, I hope this post will motivate you.
The Best Things About Earning Less Passive Income
Here are the five best things about earning less passive income, followed by some deep-rooted psychological reasons why I decided to derail my financial independence journey.
1) Paying fewer taxes feels better
This year, I spent about six hours doing my taxes—a tedious and time-consuming task. One of the biggest annoyances is inputting all the K-1s from investing in private funds. However, since I handle my own taxes, I get to see firsthand how much I'm paying in taxes each year and make strategic moves to optimize my tax liability and plan for the future.
With about $150,000 less in passive income, I anticipate paying about $35,000 less in federal and California taxes next year. This reduction in taxes feels satisfying considering the six-figure sum I already pay annually in property and income taxes.
Everyone has a threshold for the amount of taxes they find acceptable to pay each year to support our country. Some will discover this threshold while others may never earn enough to reach it. Some are even OK with paying no income taxes.
A Better Balance In Taxes I'm Comfortable Paying
Fortunately or unfortunately, I've surpassed the level of taxes I'm comfortable paying. I've tolerated the discomfort because it takes over $300,000 to afford a middle-class lifestyle for a family of four in San Francisco today. However, this $150,000 decrease in passive income serves as a welcomed tax adjustment that provides a sense of relief.
In my view, the ideal income is up to $200,000 per person or $400,000 per couple. With this income level, most of your income falls within the 24% federal marginal income tax bracket, which I consider reasonable. If you can live on less, then even better. The 32% federal marginal income tax bracket is quite a jump.
2) A healthy return to budgeting and frugality
For years, I haven't prioritized budgeting and frugality. It became an afterthought as I consistently paid myself first by setting aside a certain percentage for saving and investing, then spending the rest freely. However, with $150,000 less in passive income, I've been compelled to reassess our household budget and implement necessary changes.
Upon review, I realized we had become lax with some expenses. For instance, I was charged $9.99 a month for Apple TV for 18 months without watching a single minute—a cost I promptly eliminated. Similarly, we discovered a $150 monthly charge for a massage app subscription, which we promptly canceled after using up the remaining credits. Those sneaky expenses!
The need to be more frugal prompted my wife and me to discuss our discretionary spending. Consequently, we've reduced food delivery orders and increased home-cooked meals, leading to weight loss and improved health for both us and our children.
The rise in food costs have also encouraged us to eat less. Personally, I feel hungry more often, which serves as a reminder to not take basic necessities for granted.
3) Reduces the chances of raising spoiled and entitled children
Financial independence allows for flexibility and freedom, which can be beneficial, but it also poses risks when raising children. Without careful guidance, children may develop a sense of entitlement, believing life to be effortless due to their parents' financial stability.
To counter this, we've engaged in household chores like gardening and landscaping, demonstrating the value of manual labor to our children. When they see mom and dad pull weeds and haul large bags of rocks and mulch, they can't help but participate. The same goes for cleaning our house, washing our car, and doing general maintenance around the house.
Children need to witness their parents' commitment to work to understand the importance of diligence and perseverance. Merely chauffeuring them to school isn't sufficient; each parent should engage in meaningful work to set a positive example.
Earning less passive income has alleviated my concerns about raising spoiled children, one of the biggest worries as a FIRE parent. Over the past 20 years I've seen way too many grown adult children still live at home with their parents and struggle to launch. Too much coddling and providing by parents is more dangerous than we know.
4) Made me figure out ways to make more money
While my Provider's Clock initially led me to prioritize maintaining our passive and online incomes after our son's birth in 2017, I overlooked optimizing our income streams. However, the $150,000 reduction in passive income served as a new catalyst for me to explore additional revenue sources.
Since October 2023, I've successfully found tenants for my old house, sustained my publishing frequency at three posts a week instead of my previous goal of two, updated numerous old posts, initiated new business development deals, and submitted my second book with Portfolio Penguin for final editing.
Experiencing a financial setback reignited my drive for financial success, which brings a sense of reassurance. One concern I had after retiring early in 2012 was whether I could generate additional income if necessary. After all, re-entering the workforce after years of retirement can be challenging.
Now, I strongly believe that when faced with adversity, most of us have the ability to increase our income sources. This newfound confidence is essential for achieving financial peace of mind.
5) Earning less passive income makes me more appreciative, leading to greater happiness.
Although my net worth didn't change with the purchase of a house, transitioning from stocks and bonds to real estate made me feel poorer and less free. That doesn't sound like a good thing, but in actuality, I ultimately feel happier as a result because I feel more appreciative.
Years of financial stability can make us take money and freedom for granted. A trap akin to why companies replace disengaged employees and why seemingly perfect couples split. Losing a significant portion of my passive income has made me value what I once had more deeply, igniting a desire to regain my previous financial standing.
The journey toward financial freedom is far more exhilarating than simply maintaining it. Today, I feel like a recent college graduate, eager to tackle new challenges with a wealth of experience.
Be aware of the emotional letdown
If you achieve financial freedom, it may lead to questioning what comes next, potentially stirring feelings of discontentment. There is what is called “the trough of sorrow,” a depressing feeling many people who work so hard to achieve something, and finally do, sometimes experience. Having a purpose to earn, therefore, becomes deeply gratifying.
With a newfound purpose to provide a better home for my family, I've found greater happiness. As a man, I feel a natural inclination to work and support. Merely indulging in leisure activities eventually loses meaning, driving me to seek deeper fulfillment through intense competition and meaningful pursuits.
Perhaps this craving for meaning is why I continue to participate in intense league tennis competition instead of just casually hitting with friends. The pressure to perform is thrilling!
Final Benefit of Earning Less Passive Income: Rectifying Regrets
If you want to save money on expensive therapy, take up writing. After spending a couple of hours writing this post, I realize I may have intentionally reduced my passive income to address two major regrets:
1) I regret not working longer.
In my post titled “If I Could Retire All Over Again, Here Are The Things I'd Do Differently,” I delve into my regret of not working several more years. In hindsight, retiring from a lucrative finance job at age 34 in 2012 was shortsighted.
Departing at the onset of a decade-long market upswing in stocks and real estate was a missed financial opportunity. Had I extended my tenure by five years, my family's financial security would likely be stronger today.
Reflecting on this decision, I'm disappointed that I lacked the perseverance to endure three-to-five more years in the workforce. My original plan, conceived in 1999, aimed for retirement at age 40 in 2017, fueled by aggressive saving and investing. However, the stress and chronic physical discomfort eventually became unbearable.
To reconcile this regret, I wrote a book about how to negotiate a severance package to buy back time. I’ve spent since 2017 as a stay at home father to make the most out of my freedom. I've also committed to reentering the workforce either through part-time consulting or a full-time job once both kids are in school full time. By pushing myself to work for the next three-to-five years, I aim to mitigate the disappointment I feel for not doing so in my 30s.
Today, the opportunity is in artificial intelligence or working at a promising startup. The challenge will be in finding that ideal job and sticking it out for three-to-five years after being used to so much freedom.
2) Most of all, I regret having children late.
I regret investing significant time and energy into pursuing wealth during my 20s and 30s. Yes, it's easier to say now after having achieved my target net worth, but still I regret not focusing more on family.
The primary source of my regret lies in becoming a parent later in life. Welcoming our first child just two months before my 40th birthday, five years later than I deem ideal, leads to this sentiment.
I waited because I felt compelled to achieve a certain net worth before embarking on parenthood. Raising kids in San Francisco or New York City is expensive. However, recognizing that time holds greater significance than money, I regret not having those extra five years to spend with my children on the back end of my life.
Rather than opting for early retirement at 34, I wish I had pursued a better work-life balance. Having children while working would have provided me with a greater sense of purpose in my career. Kids would have also allowed me to benefit from parental leave and subsidized healthcare insurance, which now costs us $2,500 a month.
I'm envious of modern knowledge workers who can work remotely and enjoy leisure activities during weekdays. Employees who can quiet quit and remain employed have it great. Had such arrangements been available in 2012, I likely wouldn't have left my job prematurely.
Compensation and punishment
I'm attempting to compensate for being an older father by providing my children with a nicer home. It's like a parent who throws money and gifts at a child to make up for the guilt they have for hardly ever being around. In reality, money is a distant second place compared to a child’s desire to be loved.
While I know nothing can replace lost time, a nicer house serves as my gesture of apology for potentially missing out on significant milestones in my children's lives, such as college graduation, marriage, or having children of their own. I have doubts I'll be around for that long.
I know my children are content as long as they have us, regardless of where we live. Personally, I was perfectly content in our previous home too. Therefore, I see this move as a self-inflicted financial wound, a form of penance for past mistakes.
As I continue to grind away, my hope is that my regret will gradually fade. Only time will tell.
Enjoy Your Financial Independence Journey
While I prefer earning more passive income, every choice carries consequences. Now, I must face the price of my decisions.
Yet, amidst this challenge, my vision of returning to my original passive income level and owning a fully paid-off forever home remains a powerful motivator. Though it may take five years, I remain hopeful of reaching my goal.
Best wishes to you on your own path to financial independence. Remember to pause and reflect on your progress, appreciating how far you've come. Embrace the obstacles, for they may become cherished memories once overcome.
Reader Questions
How is your journey to financial freedom going? Are there any other benefits to having less passive income or income in general? Have you found that you can earn more money if you want to? What are some of the regrets you have in work, family, and life overall? Have you ever created a self-inflicted wound as punishment for your past mistakes?
If You Want To Earn More Passive Income
One of my favorite methods of earning passive income is by investing in private real estate. With this approach, you avoid the hassles of maintenance and tenant issues, while still reaping the rewards of potential appreciation and rental income from your real estate investments.
Check out Fundrise. Fundrise offers funds that mainly invest in residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher. The firm manages over $3.5 billion in assets for over 500,000 investors looking to diversify and earn more passive income.
I've personally invested $954,000 in private real estate since 2016 to diversify my holdings, take advantage of demographic shifts toward lower-cost areas of the country, and earn more passive income. We're in a multi-decade trend of relocating to the Sunbelt region thanks to technology.
Fundrise is a sponsor of Financial Samurai and Financial Samurai is a six-figure investor in Fundrise.
Personally I think there’s nothing wrong with exercising some cheap-ass-ness after making a major lifestyle purchase :) I’m going through the same thing too, though in our case it was buying outright a second home in our homeland. And no we don’t want to “airbnb” it when we’re not there. Eff that, it’s our personal residence that we’re using 4-6 months out of the year and don’t want strangers using our furniture, etc. So yeah, it was a significant financial hit, compared to buying another rental property and generating cashflow.
I gotta admit the whole process took a couple years and was rather precarious, from initially selling some rental properties to free up cash/reduce leverage/eliminate debt, to the significant capital gains tax hit, to finding and closing on a property overseas, to managing the new cashflow, all with unknowns. A couple of times I was wondering if it was going to be beans and ramen for dinners! But we also had some good news, with certain expenses and costs being lower than we anticipated. The reality is that making such large and complex moves are never straightforward and you need to be able to deal with the unknowns. So some amount of cheap-ass-ness becomes a default modus operandi to help you deal with that. For us, we still kept all the import things in our lifestyle (regular house cleaning services, gardner, eating out, etc.) but other things that I was less attached to were cut out.
It’s all about personal choices and what works for you, but I was definitely not contemplating going back to any type of job or work. Hell no! I prefer dealing with the occasional boredom, though the challenge of a greater purpose is the bigger issue. When I was busting balls with multiple properties I was busier. But realizing a few years ago that I can slim the portfolio and only keep the best properties (debt free) and still have the lifestyle we want (with more security), that was the smart way to go. I’ve learned to let go of the ego of saying I own more buildings, etc. Because the reality is that owning a lot of shit with debt is riskier than owning less debt free (especially high quality properties that persevere in weaker real estate markets like we’re experiencing now.) It’s akin to moving to a different phase in life- less focus on asset accumulation and more on asset protection. So your ambitions change with that, and it’s a process. This isn’t helped by the fact that it’s hard to talk to many friends and family about this, as they see it as rich people’s problems…I can see them getting out the worlds smallest violin to play as you lament about your personal challenges ;)
Planning is key! I will say that doing some part-time consulting for four months this year made me better appreciate the freedom that I had.
You got to lose something to really fully appreciate it. And that’s what I did. It also helped me show up my balance sheet during a thin liquidity period.
Amen to appreciating things that we have. I constantly remind myself how fortunate we really are with what we have achieved. But a big part of that is also recognizing when you have enough. Pursuing more wealth for its own sake not only rings hollow after a certain point, but it also pushes you to make riskier investments to get those higher returns. Unfortunately I know people that strike it rich, lose a lot during a downturn, and repeat the process again in the next real estate cycle. I saw that with the Great Recession of 2008-9, and now again post Covid.
The default American mentality of ‘more is more’ tends to create busy bodies that constantly need to be doing something. I firmly believe in the 80/20 rule, where 80% of my rewards come from 20% of my best and smartest investments. In a sucky real estate market there’s no point in taking risks, and at best spinning ones wheels with actual returns. Lots of private real estate syndications are getting spanked right now and people loosing money, throwing good money after bad with futile capital calls, etc. Personally I’d rather kick back and read good literature, take daily nature walks, and enjoy leisurely lunches in various fun neighborhoods in the city. I’m content dollar cost averaging my monthly real estate profits into an S&P500 index fund and 5% savings, for a future rainy day/opportunity fund.
What do you think of the 80/20 rule as it applies to investment success?
I think it’s a great rule for practically everything. It helps set expectations and provide wiggle room.
I’ve come to realize that many of us are simply not great at forecasting our wealth. We will either way over shoot on the upside or the downside. Hence, intentionality is in order.
I’m all for saving income taxes, but wouldn’t property taxes overwhelm the tax savings on reduced passive income? For a $5 to $6 million house in SF, that would be around $60,000 – $70,000 a year?
Yes it would. It all depends on how much passive income you lose versus how much house you buy.
Got to look on the bright side of things. Can’t have it all.
If you could do it again, would you have worked to 40-45? A lot of bankers moved over to tech after a few years in high stress roles. Especially in SF. Tech is stressful too, but not as bad.
I’m just hitting my FI number now at 40, but am trying to figure out how much longer I’d like to work. I have a good WLB and can travel as much as I want. The job is boring, but pays well.
I think you may have benefitted from staying at the job for awhile longer. Originally I wanted to quit ASAP, but now I’m rethinking that.
Looking back today, I would like to think so. I would have at least tried to relocate to a different city to spice things up again. I was getting bored of the same old grind, but it was also stressful managing an entire region. I no longer enjoyed traveling.
Ideally, I would’ve relocated to Hong Kong, Taipei, Beijing, Singapore, or Tokyo. Or perhaps relocate to the London office. I just needed a change of pace with new motivation.
I really don’t like being bored. Because once you’re bored, you have to force yourself to reflect on whether what you are doing is meaningful or not. I didn’t want to look back on my life with regret, not doing everything I wanted to do for the sake of making more money.
How do you spend your wealth and do you have any other things you would like to do?
Boredom is the issue. That’s what drove me to FIRE in the first place.
I mostly spend it on travel, home renovations and just picked up golf. I have a paid off home and new car. I’d like to do more travel and some bigger renovations before I quit. I’m not sure what else I would like to do with my time though.
Gotcha. How about kids?
I found that once I had kids, at least 50% of my time and energy went towards them.
No kids. I can imagine though.
Gotcha. With no kids, feel free to YOLO and spend to your heart’s content!
But I would do your best to try to find something you love doing and not be bored. With nobody depending on you, you have a luxury to explore freely.
Any ideas on how to find that? I’ve spent almost 20 years doing the same thing. I find it hard to even come up with ideas.
When I first began my FIRE journey 10 years ago, I was in a 9-5 job that sucked the energy out of me. But now, a decade later and self employed, I’ve found a balance (about 12 hours / week of work, 12 hours / week of volunteering) that has essentially made me forget about FIRE. I finish my work by 8am, spend the whole day with my two young kids, and our net worth continues to increase. No, we’re not technically FIRE, but I’ve found contentment in the balance and that’s all I need.
Sam – you’re a young man! You shouldn’t regret having children later. There are tremendous advantages to doing so. I had my first child at 39, then another at 42, and I’ll be 45 after our 3rd arrives in September. It took us 5 years of trying before we were able to get pregnant with our first. Do I wish we would have been blessed sooner? Sure, but there is plenty of upside to getting started later. I would suggest that you focus on being grateful that you became a father at all. Many young professionals that wait due to career pressures end up never being able to have kids. That is truly something you would regret and second guess until the end of time. We have added motivation to focus on longevity (we need to strive to beat the 79-year average mortality age in the US). The kids are growing up in a much more financially stable situation and college will be taken care of. Most people with kids this age are in their early 30s. As a result, that’s how old I feel (but with the finances of mid-career professional). I don’t feel at all like my chronological age. Hope that helps!
Hi Joseph, thanks for sharing and congratulations. Sadly, it doesn’t make me feel better. My eyes are tired, and my strength is down, which is highly apparent when I play competitive tennis league matches. But I battle on.
Are you currently working or a stay at home dad? My struggle would be having kids and not being able to care for them during the week while they are young,
I work full-time, but work from home most afternoons. I’m averaging about 3 hours/day with the kids during the week. My “water cooler” breaks consist of going downstairs to hang out with the kids. Not bad.
I’m sorry, but isn’t this a completely off-base statment?:
“With about $150,000 less in passive income, I anticipate paying about $35,000 less in federal and California taxes next year. This reduction in taxes feels satisfying considering the six-figure sum I already pay annually in property and income taxes.”
What you’re actually saying is “I’m fine with making $115,000 less passive income.” Why would you be fine with that, especially when it’s truly passive at this point? You’re literally doing nothing while that money rolled in, yet you’re now satisfied since you are paying less taxes?
You’re great, but this seems a bit out there. Make it make sense!
Sure, I am looking at the bright side of earning less, instead of just the negatives.
I would definitely rather have more passive income, even though I have to pay more taxes on it. But for now, being able to pay about $35,000 less in taxes this year feels good, because I am beyond what I feel comfortable, paying and property and income taxes at the moment.
What about yourself? Where are you on your passive income and financial independence journey? Are there any positives you have experience from earning less money?
Well, we decided to go back to work after having the kids because we faced a lot of negativity from friends/family for not working. It was like we were goaded into it.
I’m not sure what to do with the extra income from working…At first it felt like a rush and we spent some money on things we had delayed buying. But now you can guess whats happening to those deposits. Plus my husband got a significant promotion last week.
You were smart to get the bigger and better house. You probably don’t need that much cash flow and it will recover with time. I’m in admiration of the risk taking and commitment to move up even though you were content.
Thanks. There’s nothing to admire about wanting more if I was content. It’s actually a negative human condition. But as I conclude the post, the new house is therapeutic to make up for two past regrets.
“But now you can guess whats happening to those deposits.” Saving and investing it for even more money? Let me know if I got it wrong.
Decumulation mode is so hard after decades of accumulating.
Sometimes you are very confusing. Since my hubby is retirement age, even if he won’t, we need passive income of 300k. Yes, we live well and yes, we are high earners. Even with 300k we will pay far less taxes than we do now, so my goal is to ramp up the cash flow.
One thing that really bothers me is the continuing fallacy regarding spoiled kids. I don’t know whom all you or your readers hang out with, but in my world, mostly educated Asian/Indian Americans, no one is spoiled. Our kids have good jobs, work and play hard and even if we didn’t leave them anything, they’d be fine.
Some people, including me, don’t know what we don’t know. So I cannot say for certain whether my children will grow up to be entitled and spoiled, or not. Yet, there is a chance because there are entitled and spoiled people in the world.
I am impressed there’s not one spoiled person in your culture. With over 1 billion Indian people in the world, that is truly impressive. Can you share your secrets?
Sam, I can’t speak for 1.4 billion people I’m talking about my circle of family and friends. As 1st generation immigrants and even with my family in India, the amount of money doesn’t matter, your education does and money comes from it. On a diff note, until I started investing, moved to a red state and doing business with the MAGA crowd, I’d never heard anyone dissing education. The Caucasians cannot understand how we as a family of four spend our money together, and why we need to be so educated. One can just finish high school and start earning. Maybe my grand kids or great grand kids will stop paying attention to education and start hustling early for money. Sorry, had to vent, I do get tired of hearing constant criticism about my “spoiled” kids, who are in good jobs and earning well.
Sorry you are getting constant criticism about your kids. Who is criticizing you and them? I’ll look out for their criticism as my kids grow older. So far, I don’t have anybody criticizing them yet.
The Caucasian investment crowd, they think education is overrated, it’s a liberal brainwashing scheme..but I do have the last laugh, as the same people need to see Indian doctors. No worries Sam, you have a good shoulder on your head and your kids will do you proud.
Hits the nail on the head
I am a Caucasian, an immigrant, and investor also. I have a Ph.D in addition to two college degrees in other fields, my wife has two masters. I was blessed to live and work in 7 states some very blue and some red and I would never dare to paint their citizens as education hating, dumb MAGA crowd. In fact two of my highly educated Indian friends voted for Trump twice. I have retired to a red state, live in a county that votes 80% GOP, have wonderful hard working neighbors, most have college degree (even though some work as plumbers, policemen, or electricians), support MAGA and nobody is dissing education like you allege. Education has also been a priority in my family. Our daughters graduated from college magna cum laude, and both were millionaires before reaching age 30 and we all vote GOP. So please be careful what you are talking about.
I’m stating what I’ve seen, the crowd I’ve seen is anot educated, hence their comments. This is the same crowd that makes racists comments about blacks and Hispanics and tells my brown skinned MD daughter that they want a born in America doctor, even though she was born here and got all her education here, from an Ivy League, no less. So yes, I do indeed know what I’ve talking about.
First we need to determine what spoiled means. Second, well behaved educated children from wealthy families are generally viewed as spoiled/ entitled to the class below because they simply have advantages that the other class doesn’t have. What you may think of a basic standard,, like fruit or vegetables, can be seen as a luxury to the kid with nothing in their lunch. The wealthier class also generally avoid mixing, not because they’re snobs but because the lower class has nothing to offer them.
I don’t know if spoiled or entitled are the words we should be so afraid of. I might go after oblivious, unexposed, pompous.
A very perceptive comment. Thank you for sharing.
Looking at others as spoiled and entitled simply because they have greater wealth is common. We judge others easily without knowing them.
Sam, your logic for ideal income continues to bother me. I’d like you to address it. My problem with it is this:
Claim: $200k is ideal for single filers because the leap in marginal tax rate at $192k from 24% to 32% is not worth the extra stress/effort/etc. But the reason it leaps is because the Social Security (OASDI) tax of 7.65% stops at $168k for single filers. So you stop paying OASDI at $168k and start paying 8% more in Federal income tax at $191k. For example:
A Single Filer earning $190k/yr pays a combined effective Federal and OASDI tax rate of 25.6%.
A Single Filer earning $245k/yr pays 26.8%.
You’re paying one entity instead of another, but it hits all the same.
Seems worth it, no?
Everybody has a different ideal income based on their lifestyle and desires. My opinion is based off experiencing various types of income amounts as well as going through detailed budgets today for a household of four in an expensive city.
With the Social Security tax reason, I think it makes sense to stop paying into Social Security tax after a certain income threshold if you are not going to get any of the benefits after paying tax beyond the income threshold when you retire.
What is your ideal income where happiness no longer increases and you feel great being able to take care of your family and why? And what is the income range you have experienced before? Thx
In this light, the tax schedule graduates slowly enough where I wouldn’t set an ideal income, especially if a large portion was passive.
Instead, I would base the ideal upon a certain type of stress.
Money stress = too low
Family stress = too high
Flow stress = just right
My ideal is not so little that I worry about retirement and not so much that I neglect my family duties. So if the income is truly passive, there is no limit.
Can you share a specific figure or range? It would be more helpful. Thanks
For my situation, that would mean roughly $120k total income on the bottom end and $200k active income on the top end. No limit on passive.
Top end is tough to gauge if you’ve never been there before and don’t know what type of personal sacrifice that level of compensation requires.
What doesn’t kill you, makes you stronger-Nietzsche
Great point on lowering your tax bill. That always feels good especially after paying so much in taxes for so long. I also like your point on honing back in on budgeting and frugality. Lifestyle creep has a sneaky way of catching up to us if we don’t keep it in check. That and inflation too. I’ve been trying to lower my food budget in particular this year because costs have gotten so high and don’t show any signs of going back down. I also find writing to be not only therapeutic but also rather contemplative.
Great stuff Sam, thanks.
I’ve been retired for 10 years and my income has only risen at a fraction of the recent inflation rate. As I felt the squeeze of higher prices -I really started to scrutinize my spending. I was in awe of the amount of money I habitually spent on eating out/takeout.
I also stated to examine the utility of things that I purchased online (multiple small purchases from Amazon each week). I learned that more than half of my Amazon purchases might as well have gone straight into the trash, been donated on day one or recycled. So much of what I purchased was never used and yet I had no idea this was occurring.
The result of the income/spending inventory that I did last year has been that I’m now eating much healthier (home cooked meals) + my savings rate has increased from 2-3% to 8-22% each month over the last year (despite my income not keeping up with the inflation rate).
It’s amazing how much I can learn when I shine the spotlight of awareness on my consumption.