By: Dividend Sensei
You see ours broke and we lived in a brick house in Alabama where it got to 110 in the summer, and 120 in the house. Heat stroke literally killed one of my dogs.
Well fortunately when I lost my second writing job my marriage totally imploded and I was forced to move back to Minnesota. After years in abject poverty I was thrilled to be in a world of: reliable internet, air conditioning, abundant lighting, and most of all, consistent food. But I never lost my depression era/Venezuela poverty mindset. And that meant that I saved as much as I could, all the time, minimizing my costs to the bone. As my new career blossomed, (I went from writing for one site to three), and I got raises I never spent anymore than I had been living on in Alabama.
In fact in the last three years my writing income is up about 10 fold, yet my expense have remained the same. It’s why my post tax savings rate is now 85% and my dividend retirement portfolio is growing like a weed. And once I finish off paying off my divorce debt then I’ll hopefully be able to get my savings rate to 96%; higher if my income keeps growing steadily over time.
Now I’m an extreme example. Few people in America face that kind of poverty, misery, or starvation, and I certainly don’t recommend it. But my point is that if you can learn to survive on almost nothing, then it forces you to adapt. I learned that all the things I used to think I needed to be happy were superfluous. Movies, eating out, fancy electronics, none of that really made you happy in the long-term. Rather family, friends, and dogs, (my dogs literally saved my life and kept me sane), are what ultimately matters.
I’m not saying that everyone can, or should, do what I did. It’s not practical or possible for most. But I urge everyone to consider taking stock of their lives and their budgets. The next time you get a raise, or a bonus? Save some, most, or better yet, all of it. Turn that variable income into permanent passive income, and start building a financial fortress that can ensure your golden years are truly golden.