How much of your income should you be saving?

This topic is hard for some to swallow. I'm going to toss a number out as the minimum percentage of your income you should be saving/investing. But I want you to be ready...


"Whaaat?!?!" (that's you with your mouth hanging open thinking I have gone off my rocker and that there is no way you could ever live off of half of your income)

But the truth is, you can live off of half of your income. No matter how much (or how little) you make. The problem is not that you don't make enough. It's that you spend too much. Now I'm going to punch below the belt...I would advise you to save/invest about 70-80% of your income.

I'm pretty sure by now that you might be reaching for that red 'x' in the upper corner. But anyone who wants to retire early and never work another day in their life should stick around. I hope that's you. See, most people today are focused on instant gratification. They want it now, whatever 'it' is. Most young people are all about experiences. I am the same way. I love spending money on experiences, I used to be REALLY good at it! But in my 30's I am wiser now than I was before. =)

I haven't worked a regular job reporting to someone since 2011. And I am never going back. To do that takes some sacrifices. To retire early (I mean extremely young by comparison) you may have to live like you are the poorest person you can think of for the next few years. You should do everything possible to live the simplest life you can imagine. If you have the mental strength to live in a tent on public lands, walking to work, and eating beans and rice you cook yourself for 5 years, then you will have one rich life waiting for you once you retire. The less money you spend, the wealthier your future self becomes...and faster. I bet you think you could never give up the things you think you can't live without. But I want you to read the following questions and answers. Really think about what you are giving up.

Those are just a few of the questions I can answer unequivocally affirmative to. There is so much freedom afforded to those who put off spending most of their income. And the earlier you start, the faster it grows and the earlier you can retire. I kick myself every time I think that I could have had this life ten years earlier had I started saving instead of spending during my initial working years.

Truth is, every dollar you spend today is several dollars taken from your future self. Yep, you are stealing from yourself with every bit you spend because that is money not growing on trees in an investment or retirement account (yes, money does grow on trees; trust me on this). So stop giving yourself the shaft and suck it up while you are young. If you are single and don't have kids, it's pretty darn simple. If you have kids, reducing the costs is harder to do and there will be kicking and screaming, but be the adult and you'll live. Once you get your savings rate at 50% or more you'll see the impressive growth rate it will have in the stock market as you watch your net worth climb. And believe me when I tell you that seeing that will make you want to save even more! And that is the best position for you to be in to retire earlier and richer.

If you want to see what a difference your savings rate makes, use our Early Retirement Calculator and see when you can retire.

Are you willing to save 50-80% of your total income instead of spending it? Got your own savings rate you are proud of? Let us know in the comments below!

Chris grew up in the United States but felt the world calling. After working throughout his twenties climbing the executive ladder, he left the corporate world in order to have the free time needed to focus on family more than money. Since then he has never held a regular job and spends his time honing his skills to make money grow on trees.He now travels the world with his wife and two sons.

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