Welcome to the series with the most important financial lessons our school system doesn’t teach. Articles in this Don’t Live Broke Series explore in depth each of the 7 Golden Rules of Wealth Accumulation.
Hello best life seekers!
Welcome to the Beginning Money Series where we explain the secret money formula underpinning financial freedom and success. Last week in Rule 1: Know Your Wealth we did some deep diving into our personal finances to create a snapshot of where we are currently. From there we can navigate to where we want to be.
Rule 2: The Midas Lifestyle is the bread and butter of financial freedom. I can’t stress enough how much of a lynchpin it is. This one money behavior underpins everything. EVERYTHING. If you can’t master Rule 2, then all the following rules are left unsupported, especially money-maker Rule 3.
But you are a true life seeker. You want to know the secret. You’re ready to implement it too because that’s how badly you want out of the rat race.
So take a nausea pill because the following truth is going to make you sick. But don’t worry, we at My Best Life Secrets have life hacks to make that truth easier to stomach. Also, you must remember that the 7 rules of the secret money formula work together, supporting and reinforcing each other, so its importance should be taken into context with the other six.
Nausea pill ready?
Let’s dive in!
Rule 2: The Midas Lifestyle – The 70% Principle
Ready for the secret, best life seekers? The secret money formula requires you to live on 70% or less of your net income.
This means all your necessary expenses need to come under 70% of your net income and you can have fun with the rest until you reach that 70% threshold. Not included in the 70% is money you set aside for investments which we will later discuss in Rule 3: Make Money Work For You but it does include travel, vacation, saving for a new car, TV, etc.
I already know what you’re going to say. That’s impossible! I can’t pay my bills as it is! What do you want me to do, live like a pauper? Life is supposed to be lived to its fullest, not spent eating ramen noodles and not having any fun! This is bullsh*t!
Whoa whoa whoa!
Let’s take a step back and calm down.
Best life seekers, what life are you envisioning for yourself? You’re on this site so I presume you are sick of the rat race, of living paycheck to paycheck and not being the master of your own destiny. Best life seekers, you want this life to shine. You want to shine and live your best version now!
So do I.
But before you can run, you must walk.
Now let’s go back to the 70% principle and start to understand what it really means because when coupled with Rule 3: Make Your Money Work For You, you are going to grow powerfully free and quit the rat race.
Rule 2: The Midas Lifestyle – Focused Like a Laser
Those people who say the secret money formula requires fiscal discipline are missing the point. It’s hard to have disciple or restraint when you don’t know why you’re doing it or have a larger desire pushing you to stick with it. Without a goal to drive us, we just spend our money and wonder why we’re treading water at the end of the day.
Best life seekers, how clear is your goal? Is it ambiguous or is it a burning desire? If you just hate your job and want out of the rat race, that will not drive you very far. A more powerful goal to inspire you is saying that within three years you want to become a digital nomad who makes $50,000 a year trading stocks while living in Thailand during the winters, South Korea in the springs and falls, and Japan in the summers. That’s a far more specific lifestyle goal.
Again, what is your vision for your life? What will it take to make you commit to spending only 70% of your net income and putting aside the other 30% (Rule 3) to make that vision happen? Because that is the real truth of the 70% principle.
Do you want that Starbucks coffee or do you want to move to Rome? Are you okay with dropping $70 at the club Friday night or do you want to put that money into your business fund so you can be your own boss? Do you really need a 5th jacket when that money could go to learning a new skill that might double your value and double your earning potential?
What is your dream because it’s probably going to take money in some form to get there. The 70% principle is all about using your money wisely to focus on and achieve that dream. Jettison the unnecessary and those things that cost money but don’t serve you in your dream. If you’re not yet rolling in money or living the life you desire, it’s going to take laser focus to get there and that means fiscal enforcement in pursuit of your best life.
Rule 2: The Midas Lifestyle – Life Hacks
Best life seekers, are you thinking the 70% principle means living in austerity and never tasting any of the good life you work so hard for every day? Here at My Best Life Secrets we don’t play that game. We’re all about maximizing life experiences.
Money is all very well and good but it’s not the only currency. Chances are you have heard of credit or debit card reward programs. This is one life hack to live better off the sweat of your labor without dipping into savings. For instance, some credit cards give 5% cash back or provide free hotel nights or earn you airline points. If you’re using a debit/credit card without a reward program, you are leaving money on the table. Million Mile Secrets tells you how to maximize these reward programs. To illustrate, I regularly use my accrued mile rewards for international and domestic flights, easily saving myself $400-$1000 each trip. My free hotel nights have saved me hundreds as well all over the world. Another travel hack is utilizing Airbnb, saving you massively on travel accommodations and tourist experiences.
Sites like Groupon, Goldstar, Restaurant.com to name a few provide deeply discounted prices for things as diverse as rock climbing classes to a dinner at a Greek restaurant to theater tickets. I’ve enjoyed many a great $50 dinner for $25 split between two people.
Or maybe you’ve always dreamed of learning Italian cuisine but don’t want to fork over the pricy fees at a local cooking institute. Why not YouTube Italian cooking videos for free, then have dinner parties with your friends for the dishes you’ve learned? Want more culture? Many museums and national parks have free days every year you can take advantage of. AAA offers $10 movie tickets so you don’t have to pay full price in expensive metro areas.
That doesn’t even touch the opportunities that come from volunteering. My friend volunteers as an usher at a local theatre and gets to see a number of plays for free. When I was younger, I volunteered at film festivals to watch tons of free movies. Love concerts? What about volunteering at a music festival?
These are just simple life hacks and only a few examples but they illustrate a different ways of paying for experiences rather than using money. They’re especially useful while getting your financial house in order. What if you could use them to cut your good life living expenses in half? These are great ways to enjoy life without sinking your financial ship.
And we haven’t even discussed the multitude of ways to cut your expenses. For instance, when my rent increased to $1400 a month, I moved out of my apartment and rented a room at my friend’s house for $700. It was just us in a five bedroom house, with a front and backyard, beautifully kept and wonderful to live in for several years. And just like that I saved $8400 a year. In other articles we’ll share expense-cutting life hacks.
Maybe you’ll never use these life hacks once you’re living your dream but they might help you travel faster down the road to your dream.
Rule 2: The Midas Lifestyle Wrap Up
Maybe you’re already living the 70% principle and are wondering what to do with the remaining 30%. Or are you living on 110% of your net income and think the 70% principle is bullsh*t? The 7 rules of the secret money formula work together. They are in essence patterns of behavior or habits. How you use your money outside necessities and beyond the 70% is very key. Keep focusing on your lifestyle vision and working on your financial foundation and this principle becomes achievable more quickly than you think.
Are you wondering why this rule is called the Midas Lifestyle? Answer: because once mastered, you’ll be generating income like crazy and this income is where all the freedom originates. Next week we explain why and where to allocate that remaining 30% of net income in Rule 3: Make Money Work For You.
- Don’t Live Broke Series Introduction
- Rule 1: Know Your Wealth
- Rule 2: The Midas Lifestyle
- Rule 3: Make Money Work for You
- Rule 3: Debt Payoff Option
- Rule 4: Stash Your Cash
- Rule 5: Don’t Dig Money Pits
- Rule 6: Body of the Gods
- Rule 7: Hustle
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