My ultimate monthly goal is $30,000 a month and I would really like to reach that point by the end of the year.
As many of you know it’s often not as simple as just willing an extra $10,000 a month – it can take a lot of work, sweat, tears and even a healthy dose of luck.
While I work on building up my monthly income, number of clients, number of websites, there’s something else I can do to increase my savings rate: lower my expenses.
Sure, I could cut out the few coffees I order a week, start biking around instead of driving and become vegetarian to save money, but how would my quality of life be? I’m already quite frugal.
For my partner and I, a young couple without many responsibilities, there are a few things we can do to dramatically increase our savings rate and it’s all part of my plan to save 90% of my income:
1) Become Non Tax Residents Legally
I’ve written about our plans to become non-tax residents already, so I wont rehash that, but please consider my tax rate is around 30% of my income. By not paying tax I’m essentially giving myself a 30% pay increase, by simply leaving the country. That’s an extra 30% I can push into my savings account. That’s a big difference. It’ll be really nice getting paid and knowing that all the money transferred into my account is my money.
2) Lower Our Living Expenses
Sure, this is obvious – but we’re going to the extreme. We’re leveraging our currency against a cheaper currency and going to spend our time overseas. Where will we go? That’s open for now, but we’ll be starting on the little island of Bali in Indonesia. In a part of Thailand I really like, for example, an apartment is about $300 per month. Our apartment in New Zealand is $360 per week. By simply moving to another country – one that I really like anyway – my living expenses would become a third or a quarter of what they used to be.
Factor in the flights and some luxuries and I think I’d be sitting at about half of the expense of living in New Zealand, but to a higher standard of living.
Last month I saved about 50% of my income – add in the extra I could save from not paying tax – 30% and the extra from living expenses I think I’d be able to save around 90% of my income, each month.
What am I Going to do with that 90% of Savings?
First, I’ll do a happy dance! I remember being a student and literally having nothing spare each week.
I think I will focus on my student loan, because now that we’re leaving the country it is a liability; I’ll have to pay interest on it now. One thing I am very interested in is investing. I know nothing about it. I understand property investment, however, because we’re applying to be non-tax residents of New Zealand I wont be allowed to own property in the country so that might be something we re-visit at a later stage.
For now I’m focused on getting our apartment unpacked, maintaining my income and making my work more efficient, but I have my eyes firmly on saving 90% of my income.