Getting rich slowly is the safest way.
Getting rich slowly is the most reliable way. It may be the only realistic way.
Waiting to win the lottery is waiting to be chosen by a universe that’s indifferent to our existence.
Day trading only makes the banks and brokers rich.
Working at a startup is much better but still involves time, risk and hard work. There are no guarantees.
How do you get rich slowly? Earn more than you spend and put the difference to work in a compounding machine. Then repeat until rich.
How do we earn more? We have to give the world more of what it wants and is prepared to pay us for.
Some of that is inspiration but mostly its perspiration and good old fashioned hard work (e.g. dentistry, plumbing, engineering). Helping other people solve their problems, showing up consistently and doing what we say we’re going to do.
How do we spend less? By breaking the link in our minds between spending and happiness. Do you think you’d be happier if you spent more money? Why?
Maybe you would be happier if you had more freedom and more control over your life?
Learning is good and action is better. I don’t know if everyone can become rich. But I’m pretty sure that everyone can learn to get better with money.
Behold the J curve of compound growth:
Did I mention that £15,000 saved between 18-25 turns into >£1,000,000 at age 65 if invested in the stock market at a 10% return?
The hard part is sticking to The Path. The first 6/7 years may feel B-O-R-I-N-G…so it helps to have other stuff going on in your life to fill the time. Family, friends, fitness and fun.
After 6/7 years of compounded growth, things start to get interesting. And after 20 years of compounding, money is falling from the sky like rain in Manchester. Money becomes undramatically abundant.
Where should we start? We have no choice other than to start from where we are. You should not wait until you have money to start managing it. That’s the wrong way around. Start to manage it now.
Pay yourself first. Track your spending. Save £1 this month. Save £2 next month. Eventually the pounds turn into thousands. Pretty soon you’re talking about real money.
What should your goals be? I’m not even sure you need detailed goals. First things first. Get started now and you can figure out how much is enough later.
But you do need a process. Outcomes are the results of processes. Being rich is an outcome. Earning, saving and investing are processes. Focus on your process.
Think long term. Phil Collins sang “You can’t hurry love” but he could have been talking about building wealth. You can’t control the outcome, you can only control the process.
How should we proceed? Take baby steps in the right direction. Don’t aim for perfect, just try to be a bit better every day. It all adds up.
When should we start? Well, the best time to plant a tree was 20 years ago. The second best time is now.
Get rich slowly, get started quickly.
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All still true as ever in the New Year! Just transferred £100 to my Nationwide Start-to-save account which pays 1% and gives the chance to win £10,000 every 3 months in a draw. I have over £1,000 in it now and it’s a painless way to save. Best wishes to everyone and I am looking forward to getting the Covid vaccine jab so life can start to normalise. On the plus side of Covid – it has cut a lot of pollution and also caused me to save as there’s not much to spend it on. A holiday would be nice though…
Good lord. This one post sums it all up. Every young person should be exposed to this. Whether they listen and do is another story. So basic. So true, so effective. If every parent could just pass this on to thier children. Knowing is power.
Just showed my sister the post as she has 2 young sons. The response I got back was you might not live to 65 so it’s a daft idea🤦♀️
Sadly alot of ppl are just beyond help. 😔 why is it you try and help and it gets shouted down?. So us FI ers we are on our own. I’m 55 dont have to work anymore and feel secure. Even thro the pandemic. Thats worth everything thing to me. Peace of mind.
This post nails the basics really well!
FIRE is actually incredibly boring because it’s a slow process and all happens on auto-pilot once you know your plan.
You’re right about finding distractions – especially sports etc which help to keep the body as health as the bank balance! They also then serve as ways to keep busy once FIRE has been achieved.
Being a few years into the process now, we’re really starting to see that compounding machine work it’s magic.
All the best for 2021 Barney, keep up the great work.
Your sister is not beyond help. If you look at the escapeartist.me booklist, you’ll see that many of the authors deal with the negative effects of seeking status which we are all programmed to do. Your sister also has two children who are also pushing her to buy things that enhance their status. The American stand-up comedian Katt Williams has a bit on how he taught his son to make a playa decision regarding money, which saved him a bundle on videogames.
Teaching others about money is like saving money, slow and steady has a greater effect over time.
Try again and good luck!
“And after 20 years of compounding, money is falling from the sky like rain in Manchester. Money becomes undramatically abundant.”
That’s a concept that’s almost impossible to grasp until you’re there. My wife and I were discussing it after reading your post (thanks!). It is stupidly reassuring to know that whatever happens with your money/accounts, you’re OK.
Nice post Barney! Im about 7 years into the investing process and now slowly starting to see decent gains, even after 2020..I have all the various projections done in google sheets, aggressively paying down my mortgage etc. I guess its really just about patience from now and seeing how i can keep increasing contributions on both fronts.
nice post, barney. this past summer a family friend asked me to help her 2 youngish daughters get started investing when they came into a little windfall. i helped them set up a tax advantaged retirement brokerage and gave them some simple funds to buy. it was easy stuff they didn’t have to pay too much attention to. one of these young gals just got her first job out of college and the other is still a college student. here’s the thing that drives me crazy: i just got a message from the mom about funding that same account we set up in summer. my reply? if you’re working and have the ability to invest make it a regular consistent thing! please! the habit of investing consistently is more important early on than the investment you choose. i hope they follow through.
I read your blog regularly.
I’ve read a lot of your articles.
And I’ve made some steps.
I’m not sure I’m doing it completely right.
But I’ve started my compounding machine last year. £100 a month. Then increased it to £175 a month.
Just upped it by another hundred every month. I’m not going to touch this money.
I dont spend much anyway but I think I was overdoing it.
So now I’m looking to try and increase my income.
Have literally just penned an email asking for my salary to be reviewed. I mean it cant hurt can it? And if not will see if I can do more hours.
But I think the most important part is just actually starting
Like you said in a previous post. Theres no point in saying you know it all, if you haven’t put anything into practice.
The power of compounding. I wish this was taught in schools.
[…] during a Choose FI podcast when they were interviewing Barney Whiter, otherwise known as The Escape Artist. Basically, it’s when your spending increases as your income increases – at first you […]
This is an amazing article thank you. I am in about year 3 of my journey, and my choice of quite ‘out there’ investments and the current bubble means I have fast tracked to a theoretical ‘year 6/7’ gains. I was just considering my options and leaning towards tracking more safely to secure the gains and this has been a great focusing read. Thank you
[…] Get Rich Slowly, Get Started Quickly | The Escape Artist […]
I followed this advice a couple of years ago.
I started up my S and S ISA, it was doing really well, its just had a slight setback the last couple of weeks. But I guess it’s to be expected.
I’m now in the process of trying to earn more, its risky but if it pays off can start to invest a lot more.
I’m still in the early days but hoping to continue-
The notion of investing 1 pound a month and increasing it by 1 each time sounded like practically nothing.
I wrote a quick script to calculate it from 18 to 65, and to my surprise it resulted in ~620k