Friday, November 11, 2011
Save Your Next Pay Raise and Live Below Your Means
This s a pretty easy trick for setting money aside. When you get your next pay raise automatically have it sent to savings. Continue to live at your old rate of pay and save the extra. This way you start living below your means. Living below your means is the best way to get rich. The point of living below your means is to be able to do other things with your life and save for the future whether it's getting together that down payment on a house or better yet buying a house cash. Paying off a mortgage is not a bad thing but it is better to buy cash because you are better able to weather the storms of real estate fluctuations. I bought my first apartment cash. I had low maintenance that included my electric bill. I had it easy. But at one point the value of my apartment was cut in half. It didn't worry me much because I knew that I couldn't live anywhere else for the price of my maintenance. I was happy in my apartment. The fact that I didn't have a mortgage to pay made my calculations a lot easier. I could wait it out. The same is true of my house. It may soon be worth less than I paid for it. But that doesn't really matter because right now I'm renting it out and it's putting money in my pocket. Also paying a mortgage doubles the price of a house with interest charges. But it's not easy to buy a house cash. You have to consider what really matters, lower expectations and live below your means.