The FJJ method explained
I have come to a conclusion recently. It matters very little how much you earn in the long run. What matters the most is how much you save. This is only presently worth mentioning because I see the following metrics thrown around:
- How much can you save as a percentage of your income (many strive for 50%)
- How much your net worth should be based on income
- How much you should spend on a car, vacation, etc...
- How much you earn in general
Which, in my opinion, ends up confusing a lot of people and making them concerned about the top dollar that they can earn. My point with this article is that your peak salary doesn't matter as much as you think it does, it is more about how you utilize it. Also as many know it can be hard holding down a well paying job above 100k, so you wouldn't want to do it if you didn't have to.
Lets say you work 100k/yr job salary. After taxes it is about 60k, you can then save 50% of your income after tax and come out with $30k/year as savings.
Lets say you work 120k/yr job salary. After taxes it is about 72k, you can then save 50% of your income after tax and come out with $36k/year as savings.
Lets go back down to work 100k/yr job salary. After taxes it is about 70k, you can then save 50% of your income after tax and come out with $35k/year as savings.
Notice i was perfectly ambiguous about the tax as a percent, because it is something you can take effort to control, and many people don't pay attention to it even though it is massively important.
Notice above that it makes marginally little difference in the long run between making 120k salary and 100k salary if your expenses and taxes are not kept in check. Also notice that it is very easy to save as much money as someone in a higher bracket by living life and being frugal.
To put it bluntly, there are two major expenses in life that need to be reduced; these are your taxes and your living expenses.
I have it on good authority that you can easily get your taxes below 15% by employing the strategies we discuss here at FJJ. Bernie Sanders himself cleared 14% on 200k/yr + with ease. And of course I explained to you how he did it in fairly simple terms. Keep in mind not to hold anything against the elite but instead learn from them as the tools they employ are available to us all.
The other habit you need to develop is living cheaply. Trust me, it is just as fulfilling as living with more junk and partying more. Reading books, lifting weights, dating beautiful women, dancing, playing music. These things and many more are all available on the cheap if not for free. Might I suggest you replace some of your expensive hobbies with these above and they will help you retain your sanity and pave the road to early retirement.
Below you will see a graph of what is easily achievable by following our methods. I myself handily beat 16% taxes just like old Bernie. Also a spending ratio utilizing only 34% of your pretax income is highly achievable and not really a stretch for most people.
Like I have said before, pay attention to the things in this blog and you will get ahead with ease and style. Maybe a little faster than you could have without us.