The average American should expect to live about 78.7 years, according to the Centers for Disease Control and Prevention.
If you’re lucky, you’re going to spend about one-third of that time sleeping. With the remaining hours, the idea is to spend as many of them as possible doing what you want to do and as few as possible doing what you have to do.
How do you maximize leisure hours and minimize labor hours? In the short term, you work smarter, not harder. In the longer term, you become financially independent at the earliest possible time.
Following are some proven techniques that will help you spend more of your remaining time at leisure. Some are things that will help you find more leisure time immediately. Others will help you make that leisure time permanent.
1. Attitude adjustment: Think time, not money
Almost every resource you have, from physical possessions to money, is potentially renewable. The number of hours you have on this planet, however, is finite: Once used, they can’t be replaced.
Keep that in mind, and you may find yourself spending less, saving more and reaching financial freedom faster.
If you go to the mall and spend $200 on clothes, that’s $200 you could have invested. If you had earned 12% on that $200 investment, in 30 years you would have accumulated more than $6,000. Ignoring inflation and assuming you could live on $5,000 a month, forgoing those clothes today means retiring more than one month earlier.
Of course, you need clothes. But maybe you don’t need $200 worth, or maybe you could have gotten them for less. It’s your choice: expensive stuff today or leisure time tomorrow.
This is the philosophy I’ve been preaching since I wrote my first book, “Life or Debt,” back in 2001.
2. Make goals
Early retirement is an example of a goal — something specific you intend to achieve by a certain date. Create both short-term and long-term goals, and you’ll reach a life of leisure a lot faster.
If you want to arrive at a fun destination, you don’t get in your car and drive around aimlessly, hoping you’ll eventually arrive. Same thing with goals. Say something specific like, “I’m going to have a $10,000 savings account on this day next year.” Then, do whatever it takes to make it happen.
You’ll be amazed at how easy it is to achieve the things you set your mind to. And if you don’t make it? Try again. Nobody’s going to shoot you.
3. Ask for a raise
The more you make, the more you (hopefully) save and the sooner you become financially independent. There are two ways to get there: Make more where you are by getting a raise, or find a higher-paying gig.
The key to getting a raise is proving to your employer that you’re worth more than you’re currently receiving. See “10 Tips to Remember When Asking for a Raise.”
The key to finding a higher-paying job is either to leverage your knowledge into a higher-paying position elsewhere or to train yourself for something that pays more.
And for heaven’s sake, if you’re currently working in a job that could be outsourced to a robot one day, start planning your next move now.
4. Spend less than you make
Sound simple? Many people don’t know whether they’re spending more than they’re making until their debt reaches up and bites them in the budget.
At the end of every month, compute your net worth by subtracting what you owe from what you own. It won’t take long.
If you’ve gotten richer, you’re heading for Leisure Town. If you haven’t, find out why and fix it.
5. Make your money work harder
Say you set aside $1,000 a month. If you earn 1% interest on it for 30 years, you’ll end up with more than $400,000. Earn 10% on it, and you’ll end up with more than $2 million. Those earning 1% have a nice nest egg. Those earning 10% are not only permanent residents of Leisure City, but their kids might also move there one day.
“But wait!” you might say. “There’s no way to earn 10% risk-free. And if I lose my money by investing in things like stocks, I’ll be worse off because I’ve also lost the time it took to earn it!”
True. But as with love, when it comes to money, there’s no reward without risk. Act cautiously, but don’t miss an opportunity. Learn a little more, then earn a little more. Check out “7 Ways to Slay Your Fear of the Stock Market.”
Can’t stand the thought of stocks, real estate or other risk-based investments? At least get the highest possible rate on your savings by stopping by our Solutions Center and shopping around for the best rates.
6. Small and early, not large and later
These are the main (legal) ways to get rich:
- Marry well
- Build or lead a valuable business
- Capitalize on exceptional talent
- Get exceedingly lucky
- Spend less than you make and consistently invest your savings over time
Even if you think you’re on track for any of the first five, why not do the final one just to make sure?
Even if all you can save is $5 a day, compound it at 10% for 30 years and you’ll end up with more than $300,000.
Fortunes are rarely made by investing a big chunk of bucks all at once, nor are they often made late in life. Wealth most often comes from starting small and early. Check out “7 Proven Ways to Supercharge Your Savings Today.”
7. Pay yourself first
Payroll deduction is among the best fixes for struggling savers. With this approach, you have money automatically taken from your paycheck and transferred to a savings or retirement account. Your employer may even allow you to directly deposit paychecks into multiple accounts.
Also, send any additional income from raises, bonuses, cash awards or other windfalls straight to savings. If your air conditioner breaks down or it’s time to take that cruise, you’ll have a nice sum of money waiting for you in the bank.
8. Round up your savings
Some banks, including Bank of America, have programs that automatically round up your debit-card purchases to the nearest dollar amount, and then transfer the extra into your savings account.
For example, say your tall vanilla latte costs $3.50. Under this system, your bill would be rounded up to $4, with the extra 50 cents deposited into your savings account. That creates a painless way to inch closer to your goals.
9. Save your change
The low-tech version of the round-up program is stashing away your spare change at the end of each day. Keep it in a jar, mug, glass or piggy bank. When the container is full, turn that change into a bank deposit. Turbo-charge this plan by stashing single bills as well as coins.
10. Learn more
When you do have some leisure time, how are you spending it? Hopefully by doing things that will result in even more leisure time down the road.
Instead of keeping up with the Kardashians, how about using your spare minutes to:
- Learn new skills.
- Understand the stock market.
- Figure out a new computer program.
- Flesh out a new business idea.
- Read about real estate.
These are things that could someday result in a lot more leisure time and a lot less labor time.
11. Avoid debt
In the 30-plus years I’ve been offering financial advice, I’ve gotten countless questions about debt:
- “Should I borrow for this, that or the other?”
- “What’s an acceptable debt level?”
- “Is there such a thing as good debt?”
There’s way too much analysis and mystery around something that isn’t at all mysterious. Paying interest is simply giving someone else your money in exchange for using theirs.
Rule of thumb: To have as much money as possible, avoid giving yours to other people.
If you want to labor less and leisure more, pay interest in only two circumstances: when your back is against the wall, or when what you’re buying will increase in value by more than what you’re paying in interest.
12. Spend less
An obvious way to speed toward a fat savings account is to simply spend less. Less obvious: The key to spending less is to avoid deprivation. In other words, reduce your expenses without reducing your quality of life. How? Lots of ways.
- Never buy new what you can buy used. On everything from cars to furniture to clothes, that brand-new sparkle comes at a high price. Instead of heading to the department store, head to the consignment store, thrift shop, yard sale or websites like Craigslist or eBay.
- Always ask for a lower price. People say you get what you pay for. I say you get what you ask for. In addition to negotiating on more traditional things like houses and cars, you can score lower prices on hotel rooms, doctor’s visits, cable bills, car repairs — pretty much everything.
- Stop paying for name brands. What’s in a name? Often nothing more than a higher cost. Paying more is OK if the higher cost means higher quality. But it’s not OK to pay more simply to help pay for some company’s annoying commercials. Check out “20 Things You Should Always Buy Generic” for more.
13. Stop looking rich, start being rich
See that guy in the Porsche next to you at the red light? He’s not rich. He’s a salesman on his way to the home of someone who is.
When he gets there, the rich prospect’s house will probably be average but paid for. The cars in the driveway were probably bought used, and the prospect’s entire wardrobe will be worth less than one of the salesman’s suits.
Diverting your investable cash into things like cars, clothing, vacations and houses you can’t afford may make you look like you’re living a leisurely life, but you’ll end up laboring a lot more.
14. Never make your well-being someone else’s responsibility
If you need surgery, you have little choice but to trust your fate to a professional. But when it comes to your money, don’t ever turn over complete control to anyone.
Seeking advice is always a good idea. But no matter how smart the adviser is, your money is more important to you than it is to the adviser. So, if you’re not doing everything yourself, at least understand what’s going on.
Virtually anyone can learn to navigate finances. If you can’t be bothered to take responsibility for your own money, just keep it in the bank. At least that way you won’t end up ripped off, broke and blaming someone else for your problems.
15. Pay with cash
Using cash automatically makes you spend less compared with using plastic. A commonly cited Dun & Bradstreet study concluded that people spend 12% to 18% more when using credit cards instead of cash.
Reasons for this pattern may include the psychological difficulty of parting with cash or the desire to avoid schlepping back to the ATM to reload your wallet. Whatever the reason, it works.
16. Do what makes you happy
If you love what you do, you’ll never work a day in your life. Finding a job you truly enjoy is easier said than done, but it should always be your goal.
Do you spend all weekend dreading Monday morning? You’re in the wrong job. There’s something out there that will make you happier. Find it.
17. Work smarter
The faster you labor, the sooner you leisure.
There are lots of simple things you can do to work smarter, including:
- Creating to-do lists and sticking to them
- Managing your email
- Beginning every day by prioritizing your calendar
- Delegating whatever you can
- Scheduling a daily “do not disturb” time
- Planning the next day the night before
If you’re not auto-paying your bills and auto-paying yourself, you’re laboring when you could be leisuring. Things you can order online, including entire meals, can save both money and trips to the store.
Use direct deposit, online banking, apps and every other labor-saving technology you can think of to save time, stamps, and trips to the bank and store.
Whether it’s at work or home, the less time you spend looking for things, the more time you have to enjoy things.
Ever go to the store only to find later you already had what you just bought? Ever give up looking for a piece of paper, do the work again, then find the original days later?
Staying on top of your stuff means less looking, more lounging. Step one: If you have too much stuff, get rid of it. The less you have to look through, the more organized you’ll be. See “7 Unusual but Effective Ways to Declutter Your Home.”
Once you organize your stuff, organize your paper by digitizing and storing it in the cloud. It will be easier to find and take up no space. See “7 Foolproof Tricks to Tame Your Paperwork.”
20. Find a mentor
If there are people you admire, there’s nothing wrong with approaching them and asking for their help. Simply tell them you’d like to be in their shoes and would appreciate any advice they could offer on how to get there.
They’ll be flattered, and you may find yourself the recipient of some life-changing and leisure-inducing advice.
21. All work and no play …
While it may seem counterintuitive, taking time to relax can make you a less stressed, more productive worker.
There have been many studies proving that workers who forgo vacation are often less productive. Leisure time is important to ease your stress, reset your clock and restore your energy. So, if you’re feeling guilty for not doing anything productive this Labor Day, stop. This is your day. Enjoy it!
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