3727: 11 Tips From My New Millionaire Friend by J. Money of Budgets Are Sexy on Building Wealth

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[00:00:54] This is Optimal Finance Daily, 11 tips from my new millionaire friend by J Money of BudgetsAreSexy.com and I'm Justin Malek. Welcome back to the podcast where I read an article to you every day of the year with permission from the authors. So let's get right to it as we optimize your life. 11 tips from my new millionaire friend by J Money of BudgetsAreSexy.com.

[00:01:26] I don't know what y'all are drinking these days, but you're dropping off some mighty fine nuggets around this blog lately, and I'm loving it. I think you need to merge together and come up with your own financial blog or something. But for now, you sit there and listen to this gem my new friend Mark posted, and you enjoy it. He was kind enough to share his financial journey with us, and it was a nice refresher of how this money stuff all comes together. Check it out. Quote, I'm a millionaire.

[00:01:56] Been investing in mutual funds for 40 years. Never made more than $70,000. Paid cash for everything. Still have an allowance of $100 a week. That is for gas and if I want something new. I've been debt-free for 15 years. I often sit back and ask how I did this, and then remember my mom,

[00:02:17] who at 16, worked in the shipyards during World War II, never graduated from high school, but gave me a book called Your Last Dollar. I still live off of $40,000 a year and no longer work, outside of a part-time job as a coach, as I love high school kids. End quote. Look at that. An average guy making average money with not-so-average results. And people say it's hard to become a millionaire.

[00:02:45] You just need a simple plan and some time. Let's go over all 11 tips he dropped in this jam-packed paragraph. Did you catch them? Number one, invest for the long haul. Not for two or three or even 10 years, but for decades. Mark did this successfully for over 40 years, longer than most of us have been alive. And he kept going through all the booms and busts and utter nonsense.

[00:03:14] You need this long-term mentality so you don't trick yourself into chasing the quick wins and get off track. It's all about harnessing time. Number two, funds get the job done. Yes, you can try your hand at stocks and get your research or luck on and pray you hit the jackpot. But let's face it, not even professionals get it right.

[00:03:39] For most people, sticking with mutual funds is a safer bet, or my personal preference, index funds, since the costs are much cheaper. You won't beat the market and have bragging rights amongst your friends, but matching it is better than underperforming it. And it's one area I don't mind being average. Number three, it doesn't matter how much you make, you can still save.

[00:04:05] While $70,000 is surely a lot of money for most of us or the world, keep in mind, it's not the case when you're nearing retirement. And even so, it probably took Mark 10 to 20 years to make it up to that level. So for decades, he was making substantially less. Regardless, putting money aside every paycheck, no matter how much you make, will add up over time, and especially over 40 years.

[00:04:32] Do the best you can with what you've got, and then up it every time you get a bonus or raise or any other types of promotions. Mark is proof that any of us can become millionaires over time. Number four, pay cash for everything. Imagine never going into debt again. How much time, money, and stress that would save. Using cash is surely one way to ensure that.

[00:05:00] You may not reap as many credit card rewards that way, and in full transparency, I'm a credit card budgeter myself, where I put everything I can on cards and then pay them off in full each month. But for the general public, cash is the safest way to go. And plus, the research always shows that you spend less using cash than plastic anyways. Number five, give yourself a weekly allowance. This is one of my all-time favorite budgeting tips.

[00:05:30] Not only do you give yourself some fun blow money to do as you please, but you also free yourself from having to track every last penny and burn yourself out. Another nice side effect is tricking all your friends into thinking that you're a normal person just like them, when deep down you're as financially nerdy as it gets. Number six, become totally debt-free. He didn't outright say, but I'm assuming that being debt-free for 15 years

[00:05:59] means Mark doesn't have any mortgages either, which of course can never steer you wrong, whether you could make more money investing or not. I only know one person who regrets paying off their house, and I shake my head every time I'm reminded. Number seven, appreciate how fortunate we are to live in today's world, where we reap the benefits of those who fought and died before us, and in which the life expectancy is much higher than it's ever been before.

[00:06:28] Not to mention how nine-tenths of our problems really are first world issues, and that we can live off a lot less and still, shockingly enough, be just as happy. Number eight, read about money. You're obviously already interested in money, or else you're listening to the wrong show right now, but books and blogs can really make an impact with how you think and act with your money, especially when you find the ones that click.

[00:06:55] I tried to find this book that Mark's mom gave him so I could check it out, I'd never heard of it before, but didn't have much luck. Although there is a Your Last Dollar and How to Keep It by Edgar T. Isaacs and Richard S. Lindner from 1976, which could possibly be it. Number nine, live off the same amount of money as time goes on. You know when you get a raise or a new job, and all of a sudden you're earning more money than you ever have in your entire life,

[00:07:24] and so you go out and buy new stuff, and are now all of a sudden spending the same amount of money as you're earning. That's called lifestyle inflation, and it's one tricky b****rd. Catch it early on and get used to spending roughly the same every month, and your pile of cash to save or invest drastically goes up over time. You don't have to save every last penny of it, of course. You still want to live a little, yeah?

[00:07:51] But getting into this habit now will help you reach financial freedom a lot sooner. I can promise you that. Because remember, the less you need to live on, the less you need to retire. Number ten, do stuff you love for money. Even though Mark has enough money to live off right now, he still does stuff he enjoys that also happens to pay. Imagine if everything you worked on brought you joy like that.

[00:08:19] It's a great position to be in, and there's nothing saying you have to stop earning once you give up your 9-to-5. Figure out what you're good at and enjoy, and then see if there's any cross-pollination you can land on, and start working it on the side. Many of the side hustles we share here were born out of specific interests that turned out to be pretty profitable. The perfect combination. And number eleven, the boring stuff works.

[00:08:46] You'll notice there wasn't anything new or sexy going on with our friend's plan here at all. He just kept his expenses in check, funneled away as much as he could over the years, and then let the magic that is compounding do the rest. It's not always easy, but it's doable. And I reckon Mark would say that any of you could become a millionaire too, by copying. You just listened to the post titled,

[00:09:15] Eleven Tips from My New Millionaire Friend, by J Money of BudgetsAreSexy.com. And I'll be right back with my commentary. Back in 2010, I started tracking every penny coming in and going out, in a spreadsheet. Back then, I wanted to know where my money went. These days, I'm thinking more about where I'm headed. Monarch makes that easier by putting my accounts, investments, spending, and savings goals in one place. I still care about every penny.

[00:09:45] I just don't want keeping track of them to become a second job. I like that it doesn't just show what I've spent, it helps me plan bigger purchases and see whether I'm on track while there's still time to adjust. And the AI Weekly Recap flags spending spikes and upcoming expenses. It's like having a financial advisor in my pocket, a heads up instead of another spreadsheet to manage. Write your own money story with Monarch.

[00:10:11] Use code optimal at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code optimal. New and exclusive holiday decor just launched online at the Home Depot. Check out the viral Grand Duchess collection with smart holiday lights you can control from your phone.

[00:10:36] Easily customize the twinkle across trees, wreaths, and garlands to match your holiday vibe. Create stunning light effects, then switch it up with the top of your fingers. Even the man in red will be impressed. Shop the holiday decor you want online only at HomeDepot.com. Thank you to J Money. I do want to push back a little on the idea that Mark is proof that any of us can become millionaires. We have a paragraph about his finances.

[00:11:06] We don't know what his housing costs were, whether he was supporting anyone else, or what happened during those 40 years. If you're having trouble covering basic expenses, hearing that income doesn't matter probably isn't all that helpful. It can even make it sound like you're doing something wrong if you haven't gotten the same result. I wouldn't take that from this story. What I would take from it is that Mark found an approach he could keep doing for a long time.

[00:11:35] And even after reaching that million dollar mark, he still had an allowance, which is kind of interesting. He didn't decide that having money meant he no longer needed any limits. I think that's helpful in a story about becoming wealthy. He had reached the number, but he hadn't stopped paying attention. So thank you again to J Money and Mark, of course. And thank you for spending part of your day here with me. I'll be back tomorrow as usual, so I'll see you there, where your optimal life awaits.