How to Save More Money and Bulletproof Your Future

Written by Charles Ngo
Written by Charles Ngo

Most of America is fucked financially.
Let’s look at some uncomfortable figures:

These numbers are horrible.
What about the future?
By 2030, 800 million jobs around the world will be automated according to a study by McKinsey.
The local McDonald’s is starting to have more Kiosks instead of cashiers, and companies are racing to launch self-driving cars.
We’re going to have a generation of people who will be jobless and won’t have any savings.
Oh, and I don’t expect the government to help anyone out.
Why are we all so bad with personal finances? I don’t even know where to begin.
I’m surprised a subject this important isn’t taught in schools. We learn about physics, chemistry, algebra, history, etc. But no one’s going to teach you how to balance your checkbook or the math behind credit cards.
Conspiracy theory: Having a financially responsible population is bad for the economy. The economy grows when people are spending money and racking up debt. The economy doesn’t grow if everyone’s saving money.
We’re also bad with money because most of our parents’ generation were bad with money. The term “Keeping up with the Joneses” came out in 1913! Being bad with money isn’t a millennial thing.
Personal finance should be simple in theory – it’s just math right? But you’re combining the math with psychology, ingrained behaviors, and social pressure. It’s tough.
Last year, I spent a lot of effort trying to understand my own personal finances more.
I’ve always had a talent for earning money, but my saving habits were nowhere near optimized.
Everyone thinks earning more money is the key, but that’s only part of the equation.
If you don’t have your spending under control then it’s like you’re pouring water into a leaky bucket.

Image by Costasz

A few things did trigger my interest in mastering money.
I moved from Miami to New York City.
I threw away thousands of dollars worth of “stuff.” Clothes I never wore. Items I barely used. It made me think about how much money I wasted.
The second reason is I realized there was a disconnect between how much I thought I was spending, and how much I actually spent.

Last year I took a trip with my girlfriend to Machu Picchu. In my mind, I thought the trip was $2,000 total. When I calculated the final bill it was close to $5,000.
Imagine running a business where you don’t know the real numbers – it’s dangerous.
So last year I put a lot of effort into saving money: I created a budget, read several books on the subject, and I tracked every single penny I spent.
The results? I cut my spending by 50% even though I moved to one of the most expensive cities in the world.
Here’s the best part: My happiness has gone up.
I’m not “sacrificing.” The difference is I’m living with more intention.  
I’m going to share with you some of the ways that I learned to save money. I’m not going to preach to you that you need to stay home and eat more, or that you should make your own laundry detergent.
We’re going to attack things at a psychological level. You have to master the mindset before you touch the tactics.
One note before I get into this article: this article isn’t written for everyone. I’m a high earning millennial with no kids.
I wrote this for other people like me.
I can’t relate to a single mom with 3 kids, or someone that’s struggling in a developing nation.
But regardless of the circumstance you’re in, I hope you find some value in what I’ve learned. This is coming from the perspective of someone who has fucked up a lot with money.
Let’s save some money!

1. Figure Out WHY You Want to Save Some Money

This is the most important step.
Before you begin on this journey you have to understand why you’re doing this.
We’re tempted to spend money on a daily basis. If you don’t understand your purpose for saving money then no technique’s going to work.
Here are some of my reasons.

I Want to be Prepared For Anything

I started seeing some blood in my dog’s poop last week. The vet thinks he ate something bad on the street and he caught something.
Long story short, I had a bill of $750 for his treatment.
It’s not a big deal because I have an emergency fund for situations like this.
But for someone else? They may not have that $750.
So, the dog goes without treatment. And this situation becomes worse. The dog dies.
Or you can put that $750 on your credit card. By the time you pay it off it’s closer to $1,000 with interest.
A black swan is an unlikely event that has horrible consequences. You don’t know what the event will be, but you should be prepared for them.
Job losses, medical bills, etc.
I see GoFundme fundraisers every week.
Someone gets into an accident and they can’t afford the hospital bills. Or their child gets sick and insurance won’t cover their treatment.
Imagine life or death being boiled down to how much money you have.
It isn’t fair. It isn’t the mark of a developed country.
But this is the reality we’re in.
Studies show that the “rich” are more likely to get organ transplants
If something happens to my future children or parents, I want to make sure I have the funds to give them the best treatments possible.
Security is underestimated.
Imagine being to handle ANY emergency thrown your way.
What if you lost your job and couldn’t find another one for over a year?
I don’t know what will happen in the future – I just want to be prepared for it.

It’s a Powerful Feeling Watching your Money Make Money.

Every month I update an excel sheet that contains my net worth.
It’s amazing to see it go up each month for work that I didn’t do. Stock market went up! Crypto went up! (let’s pretend it did lol)
Spending money on a fancy car? My net worth goes down because it’s a depreciating asset :-(.
We chase after emotions.
Do you feel better from spending money, or earning money?

Earning money is my drug.

I Don’t Want to Work Forever

You don’t have to work until you’re in your 70’s.
There’s a movement called Financial Independence. It’s where you have enough money saved up that you can live off the interest. After that, you don’t have to work ever again.
Think about how much money you could live on per year.
Let’s say $50,000. Divide by 4%. If you can save $1,250,000 then you can withdraw $50,000 a year according to the trinity study.
Easier said than done. I know. But it’s not impossible. Compound interest is powerful. These people retired in their 30’s:

Everyone has their own number.
LeanFire is when you’re aiming for a simple life.
If you can save up $500,000 USD then you can withdraw $20,000 USD a year. That’s more than enough for some people to retire at a low cost of living city or country. You can always get a part-time job or side income to supplement.
I’m not looking to retire anytime soon even if I hit my number. I’d die of boredom.
But I have been doing affiliate marketing for 11 years. Real talk – I don’t want to be running campaigns in my 40’s. 
I have a lot of passion projects and ideas outside the industry I’m interested in pursuing, but they wouldn’t be as lucrative as running campaigns.
So I want to grind hard the next few years so I have the freedom to pursue stupid ideas.
Those are my three whys.
I like luxury.
I like eating at Michelin star restaurants.
I like staying at the Ritz Carlton or Park Hyatt when I’m traveling.
I like buying expensive clothes.
But I don’t like them enough compared to my bigger goals.

2. Sorry, But You Need a Budget

One of my core life principles is that you can find the truth in numbers.
I remember when I first got into productivity several years ago. I installed the program RescueTime to see where I was spending my time.
If you asked me how much time I spent on Facebook I could’ve said an hour a day at the most.
The program said I spent up to 3.5 hours a day on Facebook.
I struggled to gain muscle for years. I slept well. I worked out hard. And I ate “a ton”. Why wasn’t I gaining any muscle?
I knew I needed to track macros, but I kept putting it off. One day I decided to start tracking my macros. There was a learning curve and it was annoying.
I made more progress in the next 6 months than the three years prior.
See a pattern here. You can’t make progress without tracking data.
If you don’t budget your money then you won’t know where it’s going.
I know most of you have a look of disgust when you hear the word “budgeting.’ But here’s why I refused to budget for so many years.

I Argued it Took too Much Time.

I don’t have time for that!
How much time do I spend budgeting and making sure my numbers are right?
30 minutes per month. That’s it. I do it myself even though I have an assistant.
I use a software called YNAB.
It automatically imports all my spending, and I just have to “categorize” everything.
The more you use it the easier it gets. The software starts “learning” what goes where.
The only hard part is I have to manually breakdown where my spending is going for each purchase.
BTW use this software, Mint and PersonalCapital aren’t going to cut it.

I’m a Perfectionist

I’ve tried budgeting over the years and I always failed.
I would keep track of my spending for several days, and then things wouldn’t add up. The numbers looked funny, or I’d forget what a charge was for.
Or maybe towards the end of the month, my actual spending was nowhere close to what I initially budgeted.
Because things weren’t perfect…I’d quit. Does this sound familiar?
Give yourself permission to fail.
You’re NOT going to get it perfect initially. Budgeting is a SKILL.
Skills improve with practice.

I Didn’t Want to Know the Truth

I always thought I was really good with money. The truth is that I wasn’t anywhere optimal.  
I thought that I didn’t spend that much eating out. The numbers showed I spent $1500 a month eating out.
You need to track your spending and to create a budget. It sounds a lot worse than it actually is.
But you can’t make progress if you’re not measuring. Simple as that.

3. Stop Trying to Impress Other People

I never felt “poor” until middle school.
Everyone else in my class had the latest Nikes. My mom wouldn’t let me buy shoes outside of Payless.
My jealousy grew during University. I saw a lot of my friends with awesome cars. New BMW’s, S2000’s, G35 Coupes, etc. There I was with a beat up old Acura Legend. I didn’t feel confident picking up girls on dates with it.
And you know birthday dinners can get expensive. There were times when I went out with a group to eat, but I wouldn’t eat anything. I couldn’t afford it and didn’t want to put it on my credit card.
I’d just eat at home and tell them I’m not hungry.
I always had a chip on my shoulder when it came to money.
I went from broke to millionaire within a year from affiliate marketing. While my marketing skills exploded, my personal finance skills didn’t.
I had no idea what to do with all this money.
So I started ballin’. Six-figure supercars. I took girls on dream vacations. Spending $500 on a belt wasn’t a big deal to me.
But deep down, I didn’t buy any of that stuff because I wanted it. I bought it because I wanted people to see me a certain way. I didn’t want people to see me as that broke college kid.
I wanted people to see that I made it. Yea, I wasn’t the smartest kid in school, but fuck it. I made it.
And something unexpected happened a few years. I became a “brand.” Shit, now I have to LOOK the part too. I have to market myself.  
Caring about what people think about you is expensive.
So how do you stop caring about what other people think?
That’s tough to answer.
I think a lot of it comes from age and experience.
I also have a theory that social media makes us spend more. Everyone wants to portray that they’re doing well on Facebook or Instagram.
Maybe you’re ok with that $50/night AIRBNB. But because of social media, you feel the need to spend $500 at the Ritz Carlton.
Gotta do it for the gram.
Post a picture of your new car or new vacation? 200 likes.
Post a picture of your stocks? You’re humble bragging and no one likes you.
Don’t tie your identity to how much you’re worth.
Mark Zuckerberg wears the same outfit every day, but no one questions his wealth.
It’s important not to compare yourself too much with others. You don’t know the complete story.
Someone goes on that dream vacation? It could be financed with credit cards. They could be paying it off the next five years.
Friend got a nice car? He owes a lot of money in taxes.
You get the point.
And I don’t care anymore about marketing my brand. I don’t want to compete with the guys showing off their Lamborghinis.
Instead, I’ll compete by dropping knowledge bombs and creating value.

4. Block Yourself From Advertising

This is going to be an ironic section since my career’s based off of advertising.
Advertising makes you want to buy things you didn’t need in the first place.
Me and my friends didn’t have a lot of toys growing up. We made swords out of sticks and fought. We made houses out of boxes.
We had fun.
But then we got a television and I started watching ads. Oh my god, I want that toy! I want this toy!
The commercials made me want things that I didn’t really need.
Fortunately, we have more control than ever over what ads we see. I don’t watch television anymore. Netflix doesn’t have ads.
And online you can use an AdBlock to block ads.
But I did catch two leaks this year.
I love visiting Reddit when I’m bored. Two subreddits I’m subscribed to are /r/MaleFashionAdvice and /r/ShutUpandTakeMyMoney.
I was constantly buying shit I didn’t need because of those places. So I don’t read them anymore.
Another one is email lists.
Think about what ads you’re exposed to on a daily basis. Block access to them.
The best purchases are the ones that are internally driven.

5. The Dollar Per Happiness Metric

We’ll never agree if an expense is worth it or not.
You might think $25k a year on private school is worth it. I might think it’s a waste of money compared to a solid public school (Disclosure: I might change my mind once I’m a parent, lol)
I spend $600’ish a month on Brazilian Jiu-Jitsu. School fee, private lessons, gear, supplements. You might think it’s a waste of money compared to a $30 planet fitness membership, but it brings me happiness.
How do you decide if something is worth it or not? I came up with something called the Dollar Per Happiness metric.

  1. I rate an expense on a scale of 1 to 10 in terms of how happy it makes me
  2. How much does this cost?
  3. Find the metric.
  4. Compare this to alternatives.

For example:
I would regularly go to nice restaurants in Miami. I’m a “foodie” and a nice dinner for two people would cost $120 with tip.
How happy does this experience make me?: 8
How much does it cost?: $120
Dollar per Happiness =  .067
The local Cuban or Vietnamese place in Miami.
How happy does this experience make me?: 7
How much does it cost?: $40
Dollar per Happiness =  .175
The local hole in the wall has a higher score!
The question isn’t do I want a fancy restaurant vs. a local restaurant. The question is do I want to go to the fancy restaurant one time or a local restaurant three times?
I’ll take eating out three times any day!
Another way of thinking:
You can go to the fancy restaurant for $120, or you can go to the cheap place for $40, and spend that $80 on something else.
There’s a concept called the law of diminishing returns. I also call it finding the “sweet spot”
It means that there’s a certain point where the more money (or other resources) you move into something, the less return you’ll get on it.
Whenever I buy something…I’m now looking for the “sweet spot.”
Let’s say you’re on vacation and considering a luxury hotel like the Mandarin Oriental. It’s $500 a night. (we’re assuming no points).
An average hotel is around $150 a nice.
The difference between staying in a $50 a nice hotel and a $150 hotel is huge. The difference between $150 and $500? The value is not proportional.
Is the “niceness” worth an additional $350?
One thing you have to realize about “luxury” is that you’re paying for the brand name, and you’re paying a premium due to the scarcity.

6. Present Bias

The present bias refers to the tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs between two future moments (O’Donoghue, &, Rabin, 1999). (See also time discounting.)”
I’ve always been a long-term thinker, but most people aren’t.
I read an interesting experiment in a book.

  1. Take a photo of yourself.
  2. Age yourself using an app

It’s hard for people to see the future. But when they saw what they look like in the future, it makes them aware that this is a “real person.” And those people start making decisions better for the long term.

I look like an old-school Hong Kong triad boss.
That’s essentially what saving money is. You’re focusing on the long-term over the short term.
Some of my mindsets to be more long-term:

  1. Self-reliance. I don’t want to rely on my kids to take care of me. I would think of myself as a failure if that happened.
  2. The power of compound interest. You could spend $5,000 on that vacation now. But if compounds over 20 years at 7% a year, then that’s worth close to $20,000.
    1. And it’s even more money if you do it through tax-advantaged accounts like ROTH IRA or 401k.
  3. I think about the worse case scenario. I’m old and can’t work. I have no money saved up. And I have no family. What happens to me then? I don’t wanna end up living in a retirement home eating cat food.

7. Become a Minimalist

Minimalism is trendy now.
I started getting hardcore into it after reading “The Life Changing Magic of Tidying Up”.
It’s about living with more intention, and only living with what you need.
There are a ton of misconceptions about minimalism.

I don’t sit on the floor.
I don’t limit my life to less than fifty items.
Minimalism is individual.
Fewer “stuff” means it’s easier to clean and maintain my condo.
I give myself permission to spend more on quality.
It’s made me intentional about what makes me happy. I have no art in my Condo because I don’t care for it. But there are plenty of house plants here.
Minimalism by its nature is frugal.

We’re in Charge of Our Own Destinies

“If you are Poor at 35, You Deserve it.” – Jack ma
I think about life like Poker.
We’re all dealt a different set of hands in life. Yes, some people do have it easier. They could be trust fund kids born with connections.
Yes, life’s unfair.
But that doesn’t affect you and me. What matters is how we play the hand we’re dealt with.
We’re in our current situations because of the decisions we made in the past.
Your job doesn’t pay you enough? Negotiate. Find another one. Increase your skills.
Your city is too expensive to live in? Get a roommate. Move.
There’s one word that annoys me to no end – it’s deserve.
No one deserves anything. No one deserves that car. No one deserves that vacation.
If you want it, then go earn it.
You reap what you sow.
Does thinking about money making you feel uncomfortable? Then that’s a sign you should start working on this part of your life.
We can’t change the past, but we have complete control over our future. Start making decisions now that your future self will thank you for.
I’ve been thinking a lot about my future.
Most likely I’m leaving Manhattan in a year and moving back to Atlanta. I’ll be close to my parents, lower state taxes, and rents are 1/3 cheaper.
I’ll need a car in Atlanta. *breathe* No more supercars. I’ll buy something normal.
I want to settle down and get married. I don’t need to get a ridiculous engagement ring or wedding. I rather invest that money into our future.

Recommended Resources



You Need a Budget
I Will Teach You to be Rich
The MIllionaire Next Door
Your Money or Your Life
The Life Changing Magic of Tidying up
The Simple Path to Wealth
The BogleHead Guide to Investing
Featured Image by Vitma1978

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                The posts published by Charles are prepared and analyzed, including the author’s own experience…

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