Good Morning,

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This is the Master Money Newsletter where we cut your personal finance sandwich into triangles, just the way you like it (crust cut off).

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Here’s what we have on deck today:

-Your savings rate can change your life

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Let’s dive in, shall we?
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There are 3 certainties in life. Death, taxes, and the fact that your savings rate can propel you to financial independence in a jiffy (who says jiffy anymore?). I’m an old soul.

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If you want to pursue financial independence or F.I.R.E (Financial Independence Retire Early) you have to fuel that fire.

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Your savings rate is the shovel that throws your income into that fire.
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The larger that FIRE grows the sooner you are financially independent.

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But, how important is your savings rate?

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Very important.

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There is a reason I always say that a 10% savings rate won’t cut it on the pod.

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Let me illustrate with a fun-filled chart. Before you move your eyeballs across this chart we have let me explain a few things.

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This chart is based on a 10% rate of return. Where do I get that number? From the historic returns of the S&P 500.

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Is that 10% rate of return perfect? No. That is why I like this chart. Because it gives you a 2% adjustment up or down to that return. So we are looking at 8%-12% returns.

This chart also assumes you will draw down 4% of your portfolio in retirement.

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Line graphs are cool and all. But real numbers are better. Here’s what they tell us:

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P.S if you want to play with this chart on your own it’s located here.

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Are you seeing what I’m seeing?!

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If you follow traditional financial advice you will hear “gurus” tell you to save 10% of your income. If you save 10% of your income, with optimistic returns, you will be working 37.58 years.

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Your life is too valuable to spend 37.58 years in a cubicle.

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But never fear, we have a solution to this problem. We can bump up that savings rate.
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“I am barely making ends meet as it is how can I bump up my savings rate.” ​
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We are going to do a little something I like to call “grow the GAP.”
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No, I’m not talking about the store at the mall that Kanye is trying to revive.
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The GAP is the difference between your income and your expenses. The larger you can grow the GAP the more money you can put towards your freedom.
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The easiest way to do this is to cut out little coupons every week and hold up the line at the grocery store.
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Just kidding. I wanted to see if you were paying attention.

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The easiest way to do this is to focus on $30,000 problems not $3 problems.

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The biggest problem solver of them all is income. Your savings are finite, your income potential is infinite. Here are ways to grow your income: ​
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1/ Negotiate your salary: Start at the place you spend the most time. We have a very systematic way to do this that you can learn about here.

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2/ Search for a higher-paying job: If your job can’t pay more, it’s time to look for another one. People on average earn 14% more just by switching companies. Many earn much more in the corporate world. This is a great option if you have reached a dead end trying to climb the ladder.

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3/ Start a side hustle: Every day I’m hustlin’. Side hustles not only help you earn more but also help diversify your income streams.

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The moral of the story? Focus on growing your income to shovel more cash into your investments. Your freedom depends on it.

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10 Second Tip of The Week ⏱️

If you spend more than you earn, you acquire debt. If you save more than you spend, you acquire wealth.
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​How Much Money You Need to Retire Early ​

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​Growing Net Worth Vs. Growing Income: Which Should You Focus on? ​

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Do ya boi a favor and share this with a friend. If they want to join the Master Money newsletter they can do so here.

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