How to be financially successful in your 20s

How to be financially successful in your 20s

Millennials are coming of age and changing the world as we know it. They’re about to be the most influential generation since the boomers. But they’re also facing strong headwinds. The pandemic has hit many young millennials in their peak earning years. Encumbered with historic public debt, rising home prices, stagnant wages and less money to spend, young millennials will need more financial nous earlier in life to get ahead. If you’re a young millennial and want to know how to be financially successful in your 20s, this post is written for you.

What does financial success look like in your 20s?

Success is all about achieving a desired outcome so let’s first establish what that outcome should be for your finances in your 20s. You can’t hit a target you don’t know exists right?

What success looks like for you will be personal. But at a minimum, you want to be doing better at wealth building than your millennial peers. In some areas of finance that really matter, you’ll want to be doing A LOT better. If you’re a high achiever, then financial success in your 20s is all about setting yourself up for financial freedom in your 30s, which leaves you half a century to do work you love and enjoy a beautiful life. Sound totally fly to you? Let’s get on with it then.

Whether your aims are for total financial freedom or to simply be more financially secure, by the end of this post you’ll have tangible and concrete goals and steps to help you on your way.

The millennial financial footprint

Gross generalisations are generally unfair 🙂 so we’re going to take a look at some annual research statistics about millennial finance. Since recent stats are hard to find, we’ve had to dig back to 2015 for some of our benchmarks which are from the US.

Income – average millennial income in 2015 was a tick over $56,000. That’s gross. Take home income would be a smidge less than $50,000.

Expenditure – on average is just north of $47,000/y.

Savings – this leaves implied savings of, well, diddly squat and explains why around half of millennials report living paycheck-to-paycheck.

Debt younger millennials report having student debt of around $26,000 and credit card debt of around $4700. Of those with debt, 16 percent say they owe $50,000 or more. 

This all paints a grim picture for many millennials and it’s likely things have gotten tougher since 2020. The good news is that with different money habits, you can be different. And the pandemic just might be a great opportunity to get ahead for financially savvy twenty something millennials.

Your twenty-something financial habits

Here are the financial habits you need to set in your 20s if you want to be successful with money:

  1. Earn more than you spend
  2. Avoid bad debt
  3. Save like crazy – 30% + of your take home income
  4. Start investing those savings in assets

It sounds easy but if it were, everyone would be doing it. So let’s break it down with 5 steps that you can start today if you want to be a financial success in your 20s.

5 steps to be financially successful in your 20s

Here’s 5 steps you should be taking in your 20’s to be financially successful. None of this is financial advice my millennial money masterminds. These are the 5 things we wish we’d known when we were in our 20s to win our financial freedom earlier.

Step 1 – Put your finances first

Literally no-one does this in their 20s, so if you can pull this off you’ll be well ahead of the pack.

Putting your finances first means becoming financially literate; learning about how to build and manage wealth and then starting to apply what you learn.

The first thing to know is that school doesn’t teach you anything useful about building wealth. All it does is teach you how to get a job, which is not going to translate to financial success or freedom. The other way people learn about wealth is from their parents. So if your parents are good money managers then you have a head start. If not, you’re starting from scratch. But that’s ok! Scratch is where we started and we got ourselves financially free in about 8 years.

Our tip is to focus on these things:

Learn about assets, liabilities, good debt, bad debt, cashflow and tax effective income and investment structures.

Here’s how to start today for under $100

  1. Read our blog. We mean all of it. Start here and here And we’ve got a total bonus for you – its free!
  2. Read these books on building wealth – sign up for Audible for less than $15 a month and get to it.
  3. Watch this webinar featuring wealth educator Robert Kiyosaki about investing in assets and using good debt. It costs a buck.

We promise won’t regret the hundred dollars spent.

Investing in yourself and your financial knowledge is the one thing most likely to determine where you end up in the next few years.

The learning doesn’t end once you’ve nailed these concepts, but there’s enough information in these resources for you to start applying what you’ve learned. Steps 2 to 5 assume you have your head around these concepts and are ready to put them to work.

Step 2 – Get an internet side hustle

The problem with wage earner income

Wage earner income is generally the go to income source straight out of school for most of the population. But it’s also the most highly taxed and time consuming type of income. Having come through 2020, wage earner income is also looking a tad risky. Earning all of your income through the one source that is out of your control means you’ve got nothing to fall back on if that source is suddenly taken from you.

What we are saying is wage earner income is likely where you’ll start, but it is not where you want to put all of your effort. There are income streams that don’t trade time for money directly and you can set them up to be far more tax efficient than a job. Meaning you’ll get to keep more of what you earn. Earned income is not how the rich make their money, if you get my drift…

In your twenties, spend the extra time you’d spend at work to get a promotion on smarter ways to make your money from multiple sources.

These smarter ways take time to build up – so you need to start now!

To be financially successful in your 20s the aim is to build alternate income streams using the skills you already have as… well, a millennial.

Learn how to make money online

Millennials are the first digital native generation which is a killer advantage when it comes to making money from the internet, so go and get yourself at least one alternative internet income stream in your 20s.

Why internet income? Internet income is super powerful because it gives you leverage. Leverage is when you do something once with a fixed cost or time, and it pays you over and over. The internet is where you can use Google, algorithms, coding, bots and online marketing to make money multiple times from one piece of work.

Millennials are really the first generation in history born online. Your 20s is when you need to put this early mover advantage to work.

And the lockdowns of 2020 proved a watershed for internet commerce. More of the world moved online than ever before so its no surprise that we think that is where there’s money to be made.

If you want to know more about leveraged income options, check out this page as well as our Fat Stacks blog where we share tried and tested passive income ideas.

You will need leverage to build wealth and get to financial freedom faster because in your 20s you don’t have access to a lot of capital. Deploying capital (savings and borrowings) is the other primary way you can build wealth and get to financial freedom. If you were in your 30s, we’d look at ways to build wealth using capital.

Step 3 – Become a seriously savvy saver

We’re not talking here about curbing your avocado toast munching, latte-swilling habits (a stereotype I know but a fun one). You need to get serious about squirrelling away your disposable income to be financially successful in your 20s.

Why? Because your savings rate is inversely correlated with your working career. In other words, the more of your income you save, the less of your lifetime you’ll need to spend at work. In your 20s you should be smashing this savings gig out of the park.

Also, because if you want to leverage other peoples money to build wealth in your 30s, you’re going to need some of your own money behind you.

How much should you save?

To put this question in context, average savings rates in the US, UK and Australia are around 10 to 15% of take home income. This won’t make you financially successful in your 20s. It won’t get you to financial freedom. Ever.

You should be aiming to save at least 30% of take home income in your 20s. If you want to be financially free in your 30s, it needs to be more like 50%.

In Australia the average weekly earnings before tax for a 21 to 34 year old is $58,600 a year, or roughly $49,000/y post tax. That’s $942 income a week. If you save 30%, you’ll have $650 a week to live on. Now that’s not a lot, which is why 30% savings is already way better than most twenty somethings.

But, here’s the clincher. You’ll also be saving $14,600 a year.

And this is where compound investing and youth make magic together. $14,600 invested, with a regular investment of $280 a week (your savings) gets you to $255,000 after 10 years. That’s with an annual compound return of 8%, which is less than the long term stock market and real estate return in Australia. We’ll talk about what it means to invest and get 8% annualise returns below.

In the meantime, let me shout it from the rafters – saving is massive part of being financially successful in your 20s. If you want to start your 30s with a net worth of a quarter of a million bucks, we’ve just shown you how.

Saving tips

To master saving you need to learn how to budget and practice delayed gratification. This is tough, when it seems like your besties are out splurging all of their disposable income (because they probably are!). Saving is about trade offs. Every dollar adds up and everything you don’t buy now will get your closer to financial security and if you want it, financial freedom.

  1. If you can’t afford to buy it outright, don’t buy it.
  2. Budget your online streaming, food delivery and ride sharing expenses – young Aussie millennials are spending way more on these things than they realise.
  3. Put your savings somewhere you can’t get to them easily.
  4. If you have to use credit, pay it all off in the interest free period. No exceptions.
  5. Use your online bank app to track income and expenses and manage your money.
  6. Under no circumstances should you be tempted to upgrade your lifestyle as your income grows. Keep it humble,

If there was a silver lining to the whole damn lockdown situation it is that we’re saving a lot more of our money. If that’s you, don’t be tempted to spend up big when restrictions ease! Invest that money instead.

Step 4 – Start regular investing in real assets

If you’ve invested time in your financial education, then you should have an understanding by now about assets and liabilities and how to use them to build wealth.

Your mission, in the game of money, is to accumulate assets and avoid liabilities. The younger you start, the greater the compounding benefits you receive. Huzzah!

Investments are only assets if they put money in your pocket each month. These are not easy to find or build – if they were everyone would buy them. You have to be creative. Here’s some investment classes you might think about that can put money in your pocket each month depending on what and when you buy. Some will get you more than an 8% annualised return (with more risk), some less. The lower down the list, the more capital you’ll need to get started. You may get to property investing by the end of your 20s, if you’re super disciplined with saving and investing.

  1. Bitcoin, Ethereum or other cryptocurrency with demonstrated real world use cases
  2. Digital assets – building, buying, renovating selling them
  3. Dividend stocks
  4. Exchange Traded Funds
  5. Investment properties

Consider dollar cost averaging in to your investments if you don’t have much in the way of savings to start. A regular investment will smooth out price bumps and also help you take full advantage of compounding over time.

Our Ms Mogul blog features a bunch of posts to to help get your head around the crypto asset class as well as the best resources to get you started in cryptocurrency.

When you get the capital behind you, think about buying an investment property before buying your own home. Also, think about buying a cheap home and doing it up while you live in it. These are all strategies we’ve used to build wealth and keep more of the money we make. If you want to know about our specific investment property strategy to build wealth and rental income, you can read all about it here.

Step 5 – Crush your credit score

Once you’ve built up enough capital you’ll probably want to leverage good debt to invest and build wealth, for example by buying investment properties. To do this, you’re going to need a good credit score.

Makes sense right? You need to demonstrate that you are financially responsible before lending institutions will lend to you. So what’s a good credit score and how do you go about getting one?

If you’re in the US, you’ll probably have a FICO score. The Australian system uses similar ratings to FICO, which are:

  • 800 and above — Excellent
  • 740-799 — Very good
  • 670-739 — Good
  • 580-669 — Fair
  • Below 580 — Poor

To borrow money for investments, you’re aiming for a rating of ‘Good’ or above.

Credit score tips

  1. Open a savings or checking account – most will already have this, but if not it’s way past time
  2. Establish a steady income paid into your bank account
  3. Put some bills in your name and pay those bills in full, on time.
  4. Get a low limit, low interest credit card and pay it down each month
  5. Don’t use all of the available credit on your credit card. Stick to less than 50%.
  6. Check your credit history and credit score once a year.

The final word – here’s to your financial success twenty-somethings!

So here’s what we would do if we had our time again, to be financially successful in our 20s:

  1. Become top 5% financially literate among peers
  2. Build multiple income streams – get an internet side hustle
  3. Save at least 30% of your income and don’t spend more as you make more
  4. Dollar cost average invest your savings aiming for 8% compound returns at least
  5. Pay your bills and your credit card each month and check your credit score annually

This my millennial co-conspirators in wealth is what financial success looks like in your 20s if you want to be financially secure in your 30s. If you want financial freedom, then your mission doesn’t end here. Take a look at this post to help you free your 30-something self. Here’s the good news for you – because you started in your 20s and are ahead of the game, skip straight to step 9. It’s time to put the pedal to the metal and win back your life.

Til next time, have fun, be happy and do good!

How to be financially free by 30

How to be financially free by 30

Congratulations on the most important decision you’ll make today. Maybe even this week. Hell, this year! If you are new to personal finance, your future (hopefully 30 year old) self will thank you for it. Because you are about to learn how to be financially free by 30.

So turn the music down and your phone onto silent. It’s time to become a money badass.

How long does it take to be financially free?

If you really knuckle down to it – a realistic expectation is 7 to 10 years. It took us 8 years but we started in our 30s.

In reality, how long it takes you to be financially free depends on where you are at today. If you’re thinking you’re going to be financially free in 2 years, it’s pretty unlikely. But 7 years is doable depending on how aggressive you are about it. And hopefully you’ll read our blogs and learn a few short cuts along the way.

The three key ingredients to cooking up your financial freedom fast are:

  1. your income
  2. your savings
  3. your time

If you want to know how these combine to serve up a great big steaming hot dish of financial freedom, check out this post that explains the concepts.

How to be financially free by 30 – in 12 steps

Here are 12 steps to be financially free by 30 that will totally transform your life if you want them to:

  1. Value your financial freedom above everything
  2. Spend more time learning than earning
  3. Set financial goals
  4. Kick bad debt to the curb
  5. Nail a monthly budget
  6. Start a side hustle
  7. Save your butt off
  8. Make friends with your credit score
  9. Get a lawyer (to structure your future investments)
  10. Get leverage and buy or build assets
  11. Pimp your assets (manufacture value)
  12. Reinvest your equity and income

Once you’ve done these steps, rinse and repeat…The ‘rinse and repeat’ should go on until your assets produce enough income to cover your expenses. Once you reach this point – boom! You’ve made it.

Oh, and order matters peeps! Some steps must come before others. If you mix the order, there’s a risk you mightn’t have the financial wherewithal to be successful. Now let’s take a quick look at what you need to do for each of these steps.

1. Value your financial freedom above everything else

This first step is about mindset. No its not all rah, rah unicorns and fairies. It’s just a simple fact. If financial freedom isn’t your most important value, then you’re unlikely to get there. You certainly won’t make it by 30.

The reason? Because it takes trade-offs, sound decisions, dedication and commitment. If you want to be free by 30, you won’t be able to do what other twenty-somethings are doing. But it can also be really fun and its totally freakin worth it.

I can’t help you with this step. All I can say is that Step 1 is going to be tested at every other step along this journey. Not everything is going to go the way you planned. Your values are what will keep you full steam ahead when this happens.

“Be unapologetic about your financial freedom. Be a Mogul. Build wealth. Keep it. Learn to live off it. “

Flip the bird at anything or anyone that tries to distract you. You’re gonna need that single-minded focus to get where you’re going….

2. Spend more time learning than earning

You need to kick things off by learning about finance. This is particularly true if you’re in an employee in a wage earning job. There are a few things you’re going to need to change about how you earn money if you want to be financially free. There’s a whole game of money you need to know how to play, with a tonne of tricks to it. But we’ll get to that.

Dedicate a minimum one hour a day to reading about personal finance. I used to do it on the commute to work each morning. Hell, you can even put on an audio book if you drive to work. You can learn and earn at the same time, just get started today with your learning and keep on with it.

What you need to know about personal finances to become financially free

Here’s a little bonus for you. Personal finance is a huge space and we don’t want you to get bogged down at the start. So just focus on this helpful list of what you need to know about, with links to the best resources to get you started:

  • The rules of money – what are assets, liabilities and cashflow, and how can you use them to become financially free

This is the resource that changed how we think about money and got us started – the Rich Dad education suite.

  • Financial freedom strategies – what works and what will work for you

Here are the financial freedom books we learned the most from. And here are the financial freedom strategies that we have used and know work (most of which we learned from the Rich Dad education).

  • Tax effective investment and income vehicles – how to earn income so you can keep it (pay less tax!), how to benefit from corporate tax deductions, and how to use family and discretionary trusts

There’s no, one compelling resource that will give you all the answers here. We’d suggest starting with the Rich Dad education to learn about how to earn income tax-efficiently. Then google ‘tax’ for the particular type of assets you’re looking at – whether it be property, stocks, digital assets.

  • Personal finance products and how to use them to your advantage – credit cards, offset accounts, ETFs, managed funds, loan products, loan to value ratio

Here’s where we explain each of these products and how they’re relevant to your financial freedom.

  • Side hustles and secondary income streams (for when you get to Step 4).

Here’s a link to our growing list of secondary income and passive income ideas. Remember to check back as we keep adding to this list.

3. Set 1, 2 and 5-year financial goals. Reverse engineer your 1 year goal.

Some people hate this step and some love it. We say just do it. Write down what you want (financially), why you want it (usually not financial) and by when. Set a 1-year goal, a 2-year goal and a 5-year goal.

“If you fail to plan, you plan to fail.”

Financial freedom goals

Be specific and write down your financial goals as though you have achieved them. Here are some examples to get you started:

  • It’s September 2021 and I have eliminated my credit card debt.
  • It’s July 2022 and I have a side hustle doing X that earns me an extra $X per month.
  • It’s December 2021 and I’m saving X% of my income each month
  • It’s July 2023 and I make $X in annual income
  • It’s July 2022 and I own X investment properties
  • It’s December 2021 and I currently invest $x per month of my savings into X

Now here’s the bit where the rubber hits the road. Backwards engineer each of your 1-year goals, month by month. Write down and map out what you will need to do each month for the next 12 months to hit that goal. Excel is a great way to do this.

Check back on your goals from time to time and track your 1-year goal closely. Do everything you’ve written down.

If you’re not willing to take this step, then do not pass go and do not collect $200. Just kidding. But maybe financial freedom isn’t your most important value.

This is also where Step 2 comes in handy. If you haven’t swatted up on assets, liabilities and cashflow, you’ll probably have no idea what steps you’ll need to take to hit your 1-year goal.

4. Kick bad debt to the curb

Bad debt is a trap that keeps you poor. Simple as that. Don’t buy anything with borrowed money unless it puts cash in your pocket at the end of the month. Want a car? Save until you can pay for it in full. Same goes for a holiday.

“Delayed gratification my friend, is the secret sauce to your financial freedom.”

Pay down your most expensive debt first. This usually starts with a credit card. Pay down your credit card to zero. Arrange in your bank app to set up an auto sweep of your credit card each month so that you pay zero bank interest. Never use your credit card to withdraw cash.

Pay off your car loan or any personal loans you may have taken out.

Cup up your store cards unless you use them to buy things you need (like groceries) and they pay you cash rewards for doing so.

Any time you feel the urge to buy something, calculate what it’s worth in terms of hours of your life. Divide the cost by your hourly wage. Ask yourself “Is this new TV worth the 28 extra hours I’m going to have work to pay it off?” It sounds dramatic, but it works for me. 90% of the time, my answer is no! (and that’s how I know financial freedom is my most important value).

5. Nail a monthly budget

We recommend a monthly budget because it allows you some flexibility to move the timing of expenses around. It’s easier to manage your money and still come in on budget at the end of the month. But if you’re bad with budgeting, we’d suggest 2 weeks. If you want to nail your budget it’s easier when you practice these habits:

  • Pay yourself first – set aside your savings as soon as you are paid
  • Put your savings somewhere you can’t get them
  • Have some reward money set aside for when you make budget for 3 or 6 consecutive months – budget this in.

6. Start a side hustle

We say start a side hustle but what we mean is increase your income. We did this with a side hustle because you can structure it in a way that means you keep more of the money you make.

You can also increase your income by negotiating a raise at work or getting a higher paying job, but you’ll also lose more your ‘hard earned’ to tax. Why? Because wage earners pay the most tax. Pfffst!

We started some side hustles, set up in a corporation. You might want to skip to Step 9 before you get started on this step. Get some professional advice from someone qualified in tax effective income and investment structures. This advice can help you keep 15% more of the money you make (in Australia). And you get a shed load of tax deductions. So even if you have to pay for this advice, it should pay you back in spades.

By far the best side hustle this side of 2020 is Airbnb. And as you haven’t hit step 10 yet, you may be interested in this post on How to earn money on Airbnb without owning property. Yep, without owning any property yourself. You can set it up and be earning thousands in extra income all within 6 months. We know this because we did it.

We’ve had a lot of success with this side hustle. Just check out how much we made in one month with this one apartment that we didn’t own.

If Airbnb is not for you then check out our other passive income ideas.

7. Save your butt off

There’s lots of different theories about how much of your income you need to save to be financially free. There’s a direct correlation between how much you save and how quickly you get to financial freedom. You’re not saving to have cash in the bank though, you’re saving to invest.

Your savings rate is the key defining factor that makes you different from folks that follow the conventional route to retirement. If you’re saving 10% to 15% like they are, expect to work for 45 years like they will.

“From our experience, you need to be saving 50% of your income and then some.”

But if you’re at 47% don’t sweat it! There’s two ways to save more:

  1. cut back non-essential expenses
  2. make more money

This is why you’re starting a side hustle before you knuckle down on your savings. Starting your side hustle first is designed to boost your savings rate (because that’s exactly what you should be doing with the side hustle income). It will generate momentum, and keep you on your financial freedom path.

8. Make friends with your credit score

You’re going to need this when you get to Step 10, so start now.

What is a credit score, why is it important, and how do you get a good one?

A credit score is a rating that lenders like banks use when they decide whether to lend you money or not. It’s based on how much you borrow, whether you pay what you owe on time, and how many credit applications you’ve made.

A credit score is important so that you can leverage ‘good debt’ to invest later on. Good debt is used to buy assets that put money in your pocket each month.

Your credit score is something that you need to build up over time. It’s a history of your behaviour with money. If you’re in your early 20s, you’ll be at the start of this process. If you want to be financially free by 30, you’ll need to go about consciously building your credit score as early as possible.

You can get your self a good credit score by:

  1. Getting yourself a credit card and showing that you can pay it off in full each month
  2. Paying your bills (mobile, rent, etc) on time each month
  3. NOT making excessive credit applications – just the one credit card with a small limit is enough.

9. Get a lawyer (to structure your future income and investments)

Not all income is equal. There is highly taxed income and then there are rich people that pay very little tax because they paid for good advice instead. Those rich people don’t earn highly taxed income. They structure their investments and income in ways that allow them to pay as little tax as possible. They also use the same structures to claim tax deductions that are not available to average income earners.

All of this means that if you want to keep the money you earn, you need to get good advice on how to set up your investments and income. This should ideally happen before you own assets or income producing vehicles, as its tough to change ownership once you’ve started and often there’s a cost (a tax of course!) to do so.

We’ve probably spent around $10,000 on tax effective structures and advice over the last 10 years. But that investment has paid us back around 18 x. Not a bad return…

10. Get leverage and buy or build assets

When we say leverage, we mean either capital or programming code. No, you don’t have to be a programmer. If you are lost at this point take a look at this page where we explain these two different types of leverage you can use to buy or build assets.

  • Financial independence (the traditional way) uses capital (or other people’s money) to build wealth.
  • ‘New financial independence’ uses the internet (or code) to build wealth.

What you’re trying to do is buy and build assets. An asset can be digital – like a website or cryptocurrency. It can also be tangible – like property or a business. If you remember the Rich Dad education resources from the beginning, then you’ll know this one vital thing:

An asset is something that puts money in your pocket.

Don’t buy assets that cost you money each month. That won’t get you financially free by 30.

Everything you’ve done so far has led you to be successful at Step 10.

  • Step 1 is your mindset that has gotten you to this point…
  • The knowledge you’ve gained at Step 2 means you know what sort of assets to buy, why ‘good debt’ is a critical financial freedom tool, and how to manage both.
  • If you’ve completed Steps 5, 6 and 7 you should have a nice nest egg to invest.
  • Steps 4 and 8 have helped you build up a great credit score, which means the banks will lend you capital.
  • Because of Step 9, you’ll know what ownership vehicle to use for the asset, regardless of whether you build or buy it.

11. Pimp your assets – manufacture value

Step 11 is just about squeezing the most out of your assets – both in terms of income and capital growth.

You can’t do it with all assets, but you can do it very effectively with the following types of assets, which makes them great leverage options.

  • Real estate – by buying well and renovating cleverly
  • Companies – by building the business and earnings
  • Digital assets like websites – by improving them and their monetisation.

You can also maximise your assets using a range of new online services, technologies and platforms that are collectively referred to as ‘the share economy’.

We’re big on using the share economy to generate more income from our assets.

You should be too, if you have a goal to be financially free by 30.

12. Reinvest your equity and income

This final step is about compounding your income and capital growth.

Your aim is to grow your assets to a sufficient level that they produce enough income to cover your expenses.

Some examples here might be:

  • Refinancing a property investment and drawing out any equity. Then using that equity as a deposit on your next investment.
  • Diverting business earnings into business growth
  • Automatically reinvesting dividends into more dividend producing stocks.

You want to look to do this once every 12 months.

By the time you get to Step 12 you need to have the lived experience of every single previous step. Especially if you’re leveraging further good debt. You need to know exactly how to manage cashflow and risk. You need to have a buffer built up in savings. Your lender will look for these things in order to lend to you. By Step 12 you’re officially a money badass so you need to have the skills of a badass to make it.

The final word – how pass ‘go’

Remember Monopoly? Well, just like in Monopoly you can roll the dice on your financial freedom and pass go in plenty of different ways. How you become financially free by 30 is ultimately up to you.

But unlike other blogs with their vague ramblings about how to be financially free, this ‘step by step’ guide is tried and tested. We know it works because we’ve done it.

We muddled through in 8 years. Now, with this guide at your fingertips and our kick-ass blog, you don’t have to.

So what are you waiting for?

Til next post, have fun, be happy, do good.

If you dig the vibe here, please share our post and help us get the word out!

A wealthy mindset: How we 10x-ed our net-worth by thinking differently about wealth


If you want financial freedom stop spending all of your time at work.

I know, it sounds backwards right! Different to everything you learned from your parents and at school.

Well if you’re stuck in a 9 to 5 grind and want out, maybe it’s time to think differently?

Here’s a story about how we 10xed our net worth by learning to think differently about wealth. In this post we’ll share what we learned and what we did with that knowledge. There’s no catch dear readers. Once you read this, you’ll discover that you can do it too.

Living the Aussie dream

I started my money making life in my early 20s in a respectable job as a wage earner with a university education. Sound familiar?

As expected, I quickly worked my way up the ladder to an executive position and then fought tooth and nail to win a coveted diplomatic posting to one of Australia’s Embassies overseas.

When I won that posting, I’d worked for 4 years and amassed a measly $7000 in savings. Granted I was young and just starting out with basic household goods to buy. But it wasn’t a good showing for 7,800 hours of work. My wealth had grown by less than one dollar for each of those hours I’ll never get back.


But, about to embark on a well paid overseas gig, I then took that $7000 to a free financial planning session paid by the government and they helped me invest it in managed funds. They took their fees of course. Before I got on the plane I signed up to a stock market newsletter and bought a couple of stocks on the Aussie exchange. I had an inkling I needed to invest, but that was all I new to do at the time.

For the next three years I was living my dream – a diplomat in China earning Aussie dollars, spending Chinese Yuan with a large whack of my living costs paid by the government. All in return for being on call 24/7 as the frontline of Australian sovereign border to North China and North Korea.

It was a great experience and one of the highlights of my employed life.

The gravy was, at the end of that three year posting I came back to Oz with $160k in the bank. I felt rich! It turns out you can save a lot of your Aussie income when your living costs are in Chinese Yuan. And one of the stocks I bought took off to boot. Booyah!

Incidentally, I returned to Oz with $160k in my pocket right after the GFC. This was just as the 7% interest I was earning on bank savings began its free-fall to the 1% savings rates of today. A tangent, but a related one.

Back to the story….

With $160k behind me, I thought I’d take a leap of faith and change careers. So I went back to uni and re-trained in environmental science because, folks, that was all I knew to do… $15k in student loans later I had a Masters in front of my name. I didn’t think this way at the time, but all that degree did was put me in debt and prime me for another job as a respectable wage earner.

That new job came along and whaddayaknow I was suddenly a renewable energy expert kicking off a new career working the same old 9 to 5 grind.

When sh*t got real

3 years into that ‘new career’ the government I worked for was subject to its largest cut backs in history. 14,000 people lost their income earning jobs.

I was a contractor at the time. My head was at the front of that queue for the chopping block. As the main breadwinner – sh*t had gotten very real for me.

What to do, what to do? I had some cash in the bank but faced the looming prospect of unemployment. How did I get into this position?

I’d done everything I’d been told to do – I gotten good grades, a higher degree, a respectable job. I had parents who were wage earners and an unspoken understanding that this was also the path cut out for me. I’d worked hard and saved studiously. And yet, I was facing zero income and little hope of local reemployment due to cut backs

I remember I was angry and confused. Over the months I spent dodging and weaving to keep my job what crystallised in my mind from the anger in my gut was this – I didn’t want to be reliant on someone else for my financial security ever again.

Fast forward to 2020 and you hear the same familiar shattering of reality for tonnes of people across the globe.

But at that pivotal moment in my life, I realised I needed to DO different to GET different.

‘If you always do what you’ve always done, you’ll always get what you’ve always got.’

– Henry Ford

And so began my unconventional financial education. I say unconventional because it wasn’t about finance per se. Also, it was the first education I’d had that was not from a school or university. It was all about a subject I’d had zero personal experience with and one they don’t teach in class.

How the rich make money.

Lessons from a Rich Dad (how to build a wealthy mindset)

One of the first financial educators that came into view for me was Robert Kiyosaki. Kiyosaki is a well known financial educator and successful investor and entrepreneur. I can’t quite remember how I stumbled across him but looking back now I’m super bloody grateful I did.

Kiyosaki’s Rich Dad lessons opened my world and blew my mind. The Rich Dad teachings were just different to everything I’d learned and utterly challenged everything (I thought) I knew about money and wealth.

I knew if I could learn to think differently in the Rich Dad way, I could ‘do different to get different’. So I focussed on reading everything I could from the Rich Dad education suite and attended Rich Dad webinars.

Multiple books and online events later I’d distilled down to six the take away lessons that resonated with me. These six lessons taught me to think differently about money.

Here are the lessons I learned, and what we did with them.

Lesson #1 – Become financially literate and learn the rules of money.

There are a bunch of rules that govern wealth creation and that are not taught in school. Who knew right?

Some of them are revealed below and many of them Kiyosaki talks about in his books and online webinars.

If you want to make money you need to learn the rules of the wealth game and become financially literate. Not the finance degree kind of learning. The wealth building kind of learning. You need to learn about where to focus your time and effort, what to invest in, and how to keep the money you make.

What we did.

We put aside some of our surplus income each week to invest in our financial education. Not learning from schools. Learning from successful and wealthy people. In my spare time I read books, attended webinars and took courses. I focussed on everything the Rich Dad lessons had to say about money.

If you want to become more financially literate and learn the rules of money – start here with a Rich Dad webinar like we did. If you read on you’ll see how learning the Rich Dad lessons and rules of money – and then applying them – has paid off for us. We now have a life we couldn’t imagine when our Rich Dad journey started.

Lesson #2 – Savers are losers.

In school we’re all taught to get a job, save up, get a mortgage and pay it down with 100% interest over its life.

Kiyosaki teaches that this system is obsolete. Why would you save money when they’re printing more of it?

Savers have been losers since 1971 when fiat currency was de-pegged from the gold standard and government’s started printing as much money as they needed to keep economies out of trouble. Just check out the money printing that’s been going on.

how to build wealth
US dollar money printing

People are still walking around scratching their heads 13 years after the GFC about why the stock market keeps going up and up and in Australia, the US and the UK house prices are hitting record levels. It’s not the price of these assets going up in isolation. It’s their relative value in fiat currency. If you’re saving your money in fiat currency, you are going backwards at a rate of knots. If you’re trading from asset to asset in the same market, you’re less impacted.

What we did.

In 2011 we took the $160k in savings we’d had in the bank for two years and decided to invest most of it. We have only ever kept an emergency buffer as cash in the bank since learning the plummeting value of fiat currency. Cash is trash peeps.

Lesson #3 – The rich don’t work for money. They have money work for them (by investing it).

Woaah, what? Takes a minute to wrap your head around, but news flash here – truly rich people don’t have jobs. They don’t work as employees of other people. They’re investors or entrepreneurs or business owners. They certainly don’t trade their time, in units, directly for money. So having a job was never going to make me rich or even financially comfortable. I was always just going to be trading my time for money. No way Jose.

What we did.

We set financial goals around not having jobs. We made financial plans that were reverse engineered with the single outcome of escaping the rat race.

When my friends were busy climbing the corporate ladder to VP and Managing Director positions, I was busy trying to get my ass out of a job.

We decided not to chase promotions at work because the higher up you go the more of your life they want from you. I had multiple friends over this period pushing me toward career ‘promotions’; so called ‘higher paying jobs’. It was clear that they thought I should have been doing better. Several bosses asked me why I hadn’t ‘taken the next step’. I remember smiling and mumbling something incoherent on these occasions. Explaining what I was actually up to seemed an impossibility. Where to even start?

Instead of the path expected of me, I found a wage earning position that paid well but that also had flexible working hour arrangements (accrued time). I spent my accrued work hours becoming more financially literate and investing every last effort and dollar into building my assets column – outside of work.

Lesson # 4 – An asset is something that puts money in your pocket. You home is not necessarily an asset.

This is an underpinning of the Rich Dad financial education – knowing the difference between an asset and a liability. The rich buy assets, the poor buy liabilities. Assets put money in your pocket and liabilities take money out of your pocket. Rich Dad financial education is practical because Kiyosaki talks about what kind of assets to buy and how he went about accumulating them from a time when he was stone cold broke-ass like many of us have been.

What we did.

We started to invest in assets. We didn’t even have a home mortgage at the time – we were renting – but we bought our first investment property instead of a home. Because of the Rich Dad lessons about assets and liabilities, we knew what to look for. We looked exclusively for an investment property that would put money in our pocket. A property that would produce an income in rent and capital growth. We bought a run down dual income property – three apartments on one title with three independent income streams.

Lesson #5 – The rich use the income from the their assets to live and reinvest the surplus into into more leveraged assets

The Rich spend time building up their asset column and then use the income their assets produce to buy what they want. The poor stay poor buying liabilities like big homes, cars, holidays and gadgets that they can’t afford – to look rich.

The rich buy assets using other people’s money (good debt) and manage risk. The poor take personal debt (bad debt) to buy liabilities or are fearful of taking on debt at all.

What we did.

We started to use good debt strategies with our investing. The multi-family property we bought was leveraged at 90% so that we could make our own money go further. We kept as much as our own cash as we could to renovate the three apartments and increase the rental income.

By renovating our first investment property we had created some equity so we used that to buy another investment property leveraged at 90%.

We managed the cashflow from our wage earning jobs and our investments carefully – something Kiyosaki also teaches. And we always kept a buffer in case things went wrong.

The next step we took was to invest in our financial education again. We learned how to supercharge the rental income from our 4 investment properties. If you want to learn more about how we did this, you’ll find the details here.

Lesson #5, about using good debt and not getting into bad debt, was as much about what we didn’t do as what we did.

When our peers were dropping $700k on homes to live in and taking on massive personal mortgages, we didn’t. Instead, we paid $40k with a $360k bank loan for a modest little cottage right by the beach. It was a house we knew we could one day turn into asset that put money in our pocket. We invested our surplus income and sweat equity into renovating the cottage, mostly DIY.

As we watched our friends and peers buy new $50k cars with finance straight off the showroom floor, we didn’t do that either. We bought both our cars as either demo or second hand models no more than 2 years old and paid cash for them.

When maxing out your credit cards on retail therapy and expensive nights out was the norm, we didn’t buy stuff we didn’t really need. Instead, we used our rewards credit card to get maximum value from our home offset account (reducing our interest payments and getting cashback). We paid the credit card in full every month and rolled it into a mortgage package so the bank waived the annual credit card fee. This credit card strategy uses smart structuring and is a total home loan interest killer. It’s something a lot of folks can do, but simply overlook.

Lesson #6 – Taxes are your single largest expense. The rich don’t pay taxes – the educated upper middle class pay all the taxes.

Kiyosaki teaches that high paid employees pay the most taxes. Just look up income tax rates around the global versus company tax. The worst place to be if you want to keep the money you earn is an employed professional.

Corporations pay less tax than individuals as an incentive from government to create tax paying jobs. Investors pay the least taxes.

The lesson we took away? If you want to keep your money, earn it as an investor or in a corporation. Far out brussel sprout. I couldn’t believe I’d been a tax mule all these years and so ignorant about it…

What we did.

We structured our investments in trusts and companies. We focussed on moving our income streams from the highly taxed employee basket, to the low tax corporation basket. Eventually we’ll move more and more of our income into the investor basket.

We currently earn and then spend and then get taxed for 75% of our income.

Before our Rich Dad education we earned, got taxed and then spent for 100% of our income.

Changing the way we earned income has reduced our personal cost of living by thousands per year due to favourable company tax rules. Our net worth has also benefited by $130k to $170k by using the rules of money we learned from our Rich Dad education.

The final word – our wealthy mindset results

Building a wealth mindset and applying the Rich Dad concepts that we learned in the Robert Kiyosaki webinars has set us financially free. I’m happy to report that I’m no longer an employee. 🙂 I’m free to do what I want each day – which is play with our beautiful Vizslas, set up our new home, start our homesteading project and write this blog.

We’ve also just bought that new home with cash – all part of the financial freedom plan.

Our net worth is over 10 times what it was when we started applying the Rich Dad rules of money.

We live off the income generated by our assets via tax efficient company structures.

Any surplus income we have we look to reinvest in other income earning assets.

We work as we chose to, because we’ve got new goals in life. Mostly, we enjoy life and our time is our own.

None of this required epic mastery of anything special. We just learned to think differently, build a wealthy mindset and do what the rich did.

Thanks to Mr Kiyosaki and his Rich Dad.

Til next post – have fun, be happy, do good!

And if this post got you thinking about your financial future maybe get yourself to a Rich Dad webinar and please – share the love!

Financial freedom – 3 simple concepts to get started now!

how to achieve financial freedom

So, you’ve googled ‘how to achieve financial freedom’ and landed here. Huzzah! Our website is all about exactly what you want to know – how to become financially free and stay there. It can seem like an impossible task at first – overwhelming with no starting line in sight, let alone finish line. In this post we explain the key steps you need to know and take to get started on your financial freedom journey.

What does financial freedom mean – to you?

Technically, financial freedom is when your return on investments covers 100% of your expenses. But when you ask this question on a personal level most people have to think really hard because they just haven’t even contemplated what financial freedom would look like for them.  So this is the first thing you should do.

Ask yourself, How would you spend your days if you didn’t have to work? Get comfortable with that. It’s where we are headed.

Financial independence means different things to different folks. For us, it’s the freedom to do what we want when we want. And that takes resources. Money for bills, food, water, power, health care and fun. So how do we solve for money, to get the rest of the equation? We’re all about keeping it simple and actionable. Here are the three things to focus on for financial freedom when you’re starting out:

What is financial independence?

In the interest of keeping it as simple as possible, we’ve broken down down financial independence into three primary steps:

  1. Make sure your income is greater than your expenses
  2. Invest the difference (your savings)
  3. Maximise your assets so the income from them covers your expenses.
Financial independence retire early Australia

What is the ‘financial independence retire early’ movement?

Financial independence retire early (or FIRE) is about applying the three key concepts above… aggressively.  The aim is to retire in your 30s or 40s instead of your 60s. So what’s the theory? Well, average personal saving rates are about 10 to 15 %. But that’s not enough for financial freedom. You just have to look at when Joe average retires (65) to know that. On the other hand, hard core FIRE starters aim for savings rates closer to 50 – 70% – either through frugality or by increasing their income. The FIRE movement proves that savings rates are critical to financial freedom.

FIRE investing is other big part of the FIRE journey. Actively making your money work for you. With inflation and negative interest rates one thing is for sure – sitting on your money will not get you to financial freedom any time soon. If you have your stash in cash it’s time to pick up your freedom game.

Your starting point and how aggressive you are with the three key concepts above will determine how quickly you get to freedom. That’s the beauty of FIRE – you can dial it up or down depending on where you’re at in life. You can also choose to focus on the income or the spending side of the equation, depending on what’s right for you. Although, take heed. There is a school of practice that says cutting your spending is way more powerful than upping your income because it has a tailing effect – it lowers the amount you need to live on every month for the rest of your life.  

We at The Live Life Project are not here to argue one or the other. We do both, along with some clever independent wealth management strategies around the treatment of income, tax and debt. We’re certainly not about never eating out or holidaying again – life’s too short for that! We’re about finding ways to have fun and still make smart decisions every day in the right direction.

How to achieve financial freedom – knowing your numbers

If this sounds boring to a lot of people, that’s because it’s boring to a lot of people. I get it. Math was never my jam either. But with the same certainty as death and taxes I can say if you don’t know your numbers you’ll never be financially free.


Financial independence is where you control your money not the other way around. This starts with the numbers. Savings/assets, income, expenses, residual. Put these numbers in a spreadsheet or write them down. There’s also apps for this of course, but we’ll get to those later.

Next, check out this awesome calculator. Put in your numbers. Be honest. It’s not gospel, but I put in our numbers for the last few years and it’s a pretty accurate reflection.

Our freedom

So here comes the big reveal. This is what did to get to financial independence, without revealing all of the juicy details in one post…

  • We saved from 30% to 65% of our net income each year for the last 7 years
  • We invested everything but our buffer money, mostly in property
  • We kept saving and invested this in maximising our assets  
  • We also changed the way we earned our income so that we got to keep more of it – we’ll cover this in a later post so stayed tuned
  • We’ve recently made big life choices specifically to reduce our cost of living
  • Our income from our assets cover our living costs 100%.

Once you’ve put in your numbers look again at your income and your expenses. Making your way to financial freedom is about jigging these numbers – income up, expenses down.

Read through some of our posts on saving, borrowing, investing, digital assets and passive income ideas. These will help you gradually move up the dial on your money management. And this is where the magic begins.

Where to learn more about financial freedom

We have published a bunch of articles that step out the different pathways that you could take to financial freedom depending on where you are in life. Take a read and we hope you can learn something from our experience.

The final word – financial freedom is about how to eat an elephant (figuratively of course)

When something seems massive and unobtainable just break it down into bite sized chunks. You’re already on your way. Make sure you understand the 3 key steps to financial freedom and get to know your numbers. We know these things have worked for us. Stick with it. We know they can work for you too.

Until next time – have fun, be happy, do good.
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