Delay Lifestyle Inflation for Exponential Growth

Let’s say you’re making $100,000 a year. You’re probably pulling in somewhere close to $6–6.5k per month after taxes

Let’s say you normally have $4k of monthly expenses. You aggressively save out of your paycheck (well beyond 20%) and you’re keeping 2-2.5k per month. 

Suddenly one day, you meet a genie who magically doubles your income. 

If you keep your mindset around savings, you think “great, now I can double my monthly savings and still have even more spending money each month. It’s a win-win!” 

You wouldn’t be wrong for thinking that. But I’d ask you to temporarily change your mind. 

If income grows linearly, savings grow exponentially

Your expenses are $4k a month. Your income went from 6 to $12k. Instead of raising your spend to $8k, what if you changed absolutely nothing about your lifestyle for a bit?

Instead of saving 4k a monthy, now you’re saving $8,000.

  • It would take you a year in your old salary to save $24k.
  • It would take you six months to save 24k with a doubled salary and expenses.
  • Keep your lifestyle the exact same, and you can do the same in 3 months. 

It’s not just a matter of “slightly more income, slightly grow everything.”

Change the way you think. You can do YEARS worth of earning in an exponentially shorter amount of time. You are doubling your lifespan in one sense if you can restrain yourself, because you are freeing up more time on the backend.

You also have more immediate capital to put to work and invest, and let compounding interest again work exponentially in your favor.

In real life, we rarely get the opportunity to double our income in a moment. But we do double and triple it over the years, especially when considering what you earn very early on in your career. 

Some amount of lifestyle inflation may be inevitable, like the cost of supporting another person—a spouse or child.

But if you can wait to inflate your lifestyle, even for a few months a little bit, you can reach ambitious financial goals years ahead of schedule. 

Why I’m Writing This

This lesson may seem rudimentary, and in a way it is.

Yet I know several people in real life who are making multiple six figures ($200,000+) and still live paycheck-to-paycheck. I have zero condemnation for how they choose to live, but I lament the opportunity it seems they’re leaving on the table!

Don’t miss out.

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