The Gone Fishin' Portfolio. Alexander Henry Green

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      As it happened, I had just returned from a two-week investment expedition to China. During my trip, I had visited with many laborers who made less than $150 a month. Yet the average Chinese worker—acutely aware that the government provides no social safety net—saves over 47% of his income. (I'm not suggesting for a moment that an American could live on anything close to this. But it was a powerful lesson in fiscal discipline nonetheless.)

      “Too many Americans don't save anything,” I reminded the moderator, half-jokingly, “because they're spending money they don't have on things they don't need to impress people they don't like.” Judging by the look on his face, that wasn't the answer he was expecting.

      Look, I realize that when you're young and starting out in life, saving may not be a priority. When you get older and you have kids (and perhaps elderly parents) to support, saving can be tough, too.

      But most of us could get by—by hook or by crook—on at least 10% less than what we're living on today. If we pay ourselves that 10% (or more) first, it will make a world of difference 10, 20 or 30 years down the road.

      Of course, it's not hard times that keep most Americans from saving what they should. It's a lack of discipline, something at which I used to excel.

      As a young man in my 20s, I worked as a stockbroker in a local firm. I soon began earning a six-figure income. Not long after, I bought a spanking-new lakefront house, got the ski boat, the Jaguar XJ6 and all the other toys. I saved virtually nothing.

      When my friends came over for parties—which were frequent—most of them assumed I was rich. I was nothing of the sort. Wealth is not the same thing as income. If you earn a lot of money and blow it every year, you're not rich. You're just living high. Wealth is what you accumulate, not what you earn. And it certainly can't be measured by what you spend.

Fortunately, because I was working in the financial services industry, I learned the importance of saving before it was too late. Take a look at Table 2.1, for example. It demonstrates the enormous advantage of beginning to save early. No matter what your age, it's never too late to begin.

TABLE 2.1 Effects of Saving $500 a Month at a 10% Annual Return

Year	Savings
1	$6,335.14
5	$39,041.19
10	$103,276.01
20	$382,848.45
30	$1,139,662.66

      As Stanley and Danko wrote in The Millionaire Next Door …

      Affluent people typically follow a lifestyle conducive to accumulating money. In the course of our investigations, we discovered seven common denominators among those who successfully build wealth.

      1 They live well below their means.

      2 They allocate their time, energy, and money efficiently, in ways conducive to building wealth.

      3 They believe that financial independence is more important than displaying high social status.

      4 Their parents did not provide economic outpatient care.

      5 Their adult children are economically self-sufficient.

      6 They are proficient in targeting market opportunities.

      7 They chose the right occupation.

      In short, they discovered that your net worth is essentially a result of the choices you make. To save as much as you can, you need to make the right career decisions, the right lifestyle decisions and the right spending decisions. It takes forethought. It takes discipline. And it means making hard choices.

      If this sounds old-fashioned, so be it. Most of us are not talented enough to found and run some fabulous new technology company. Your income alone is not likely to make you rich. So the quickest way to jump-start your investment program is to start saving more.

A MATTER OF HOW WE VALUE THINGS

You do need balance in your, life too. You can't be happy—now or in retirement—living like a miser. The trick is to find the right balance between saving and spending. Each day there are choices you can make that will help you—or hinder you—on your way to financial independence.

      If you keep in mind the choice between consumption and freedom, it becomes easier. Do you really need that new car—or would you rather keep the old one and become free to live where you want, with whom you want, doing what you want? Do you really need that new set of golf clubs—or would you rather keep your old ones and live where you want, with whom you want, doing what you want?

      Ultimately, the choices are this stark. Because it doesn't matter how high the returns are on your investments if you haven't saved enough. Or, worse, if you're trying to dig yourself out from under a mountain of debt.

      If you're looking for a bit of inspiration, consider Billy and Akaisha Kaderli. Years ago, they were profiled on both Kiplinger.com and Bankrate.com. The Kaderlis live in an active adult community in Mesa, Arizona, even though they didn't meet the community's minimum age requirements when they first moved there. The couple ditched the rat race when they were 38 years old and have already spent more than three decades in retirement.

      When they first retired, the Kaderlis sold their home and simply explored the world, traveling between Venezuela, Mexico, Thailand and the Caribbean island of Nevis.

      Most folks would say they are living the dream, playing golf, traveling the world and socializing with friends whenever they want. How did they do it? Not by striking it rich, but by being frugal.

      They are an example of what some call “extreme early retirement.” In their late 30s, Billy and Akaisha decided they were working too much, enjoying it too little and paying too much in taxes. Most of us would simply shrug and say, “That's life.”

      However, the Kaderlis decided financial freedom was a lot more important than accumulating more stuff. According to Akaisha, “Every time I looked at a latte or a new pair of shoes, I decided I didn't need them. If you're clear about what you want, it becomes easier. You can either buy this or be days closer to your goal.”

Contrast this point of view with the materialistic mindset of many Americans, who often find themselves stuck on what psychologists call “the hedonic treadmill.” Instead of thinking about financial freedom, they're obsessed with thoughts of a bigger house, a fancier car, the best new restaurants and, of course, the latest ultra-high-definition TV.

      I won't argue that these things aren't desirable. And, who knows, a bigger house may be a great investment (although not if you pull the equity out and spend it). But if you want to enjoy extreme early retirement, the key is to earn as much as you can, spend more frugally, and religiously save and СКАЧАТЬ