The two of them biggest Most household expenses are housing and transportation. Actually, They account for more than half of the average household budget. this U.S. Bureau of Labor Statistics Consumer Expenditure Survey The study found that in 2022, the average household will spend 33.3% of its budget on housing and 16.8% on transportation.
Remove these fees and your savings rate will be over 50% in no time. Imagine how quickly you could build wealth if you invested half your paycheck like real investments property?
I don’t have to imagine. My wife and I live entirely off her (meager) income and use all of my savings and investments. In the past five years, our net worth has increased fivefold.
Before you write me off as a lunatic or a fire bug, hear me out. Granted, I have both – but that’s why these crazy ideas are so fun.
From two cars to zero
Once upon a time, my wife and I, like most American couples, each had a car. But cars are expensive, and it’s not just a matter of paying for them.
Owning a car means Not just Monthly car loan payments but also Pay for car insurance, gas, repairs, maintenance and parking. this annual cost of ownership A new car costs over $12,000. oops.
In 2015, my wife and I emigrate Fly to Abu Dhabi. We initially just assumed we would each rent a car because that’s what people do, right? Every adult has his or her own my own carthe ending of the story.
but we stopped actually Never tire of asking ourselves: Do we actually each Need a car? She has a half-hour commute to the school where she works, but our apartment is a little out of the way. walkable area. Can I not drive during weekdays?
We decided to try sharing a car and see what would happen. Within a few days, it became clear we had nothing to worry about.
Then exist In 2019 we moved to Brasilia. We asked about accommodation options and the school said most teachers live within a 20-minute walk of the school. So we stop and think once Again: Can we live without cars? not at all?
The city is very walkable, with countless restaurants, cafes, bars, and grocery stores within walking distance of our apartment. Again we decided to give it a try.
Sure enough, we don’t have a car and live a very comfortable life. We walk, bike, and occasionally take an Uber to get where we need to go. If we wanted a weekend getaway, we rented a car.
Last year we moved again to a new city. In Lima, Peru, my wife once again had to drive to work, but this time we decided to continue A rideshare agreement with another teaching couple.
I don’t miss owning a car at all. Actually, I’m afraid of moving somewhere with a “drive anywhere” mentality.
get rid of car
What does it take to get rid of a car? It requires intentional planning of where you live.
It helps with moving to a walkable location. you can Expand your movement radius You can also ride a bicycle. I often travel around our city by bike or electric scooter.
Living together as a couple can also help. it is a lot of It is easier for two people to share a car than it is for one adult to live without one.
add, telecommute Also helpful. Although I can work from anywhere in practice, I choose to work in a shared office space. This still leaves many options for living within walking or biking distance of the “office.”
Bottom line: In order to live comfortably with one less car—or no car at all—you have to make a conscious choice about where you live. But it can save you five figures a year that you can use to make financial independence.
That doesn’t say anything about the health benefits of walking or biking over driving. There is a brilliant saying circulating on the Internet: “Driving costs money and makes you fat; driving makes you fat, and driving makes you fat.” Cycling can save money and burn fat. I like it.
Get rid of your house payment
You have several options for getting your rent or mortgage forgiven.
In our case, we enjoy free housing provided by my wife’s employer. This is a great perk of Serving in international education.
But you don’t have to be an international educator to take advantage of employer-provided housing. Many jobs come with free housing. Do a little Research online to see what kind of work you do possible Provide this benefit like this.
A more common practice among BiggerPockets readers is burglary, certainly. it could mean classic Multifamily housing hacker model, you buy a two- to four-unit property, move into one of the units, and then rent out the other units. Or it could mean any number of other home invasion hacking tactics.
When I bought my first home a few years ago, I rented go out A spare bedroom. My roommate’s rent paid for three-quarters of the mortgage.
A friend of mine rented it go out Her Airbnb apartment has one bedroom and one bathroom. she found if she rents There are two long weekends every monthit Pays most of her rent.
My cousin rents out her entire apartment on Airbnb. She would have a meltdown with her fiancé whenever someone booked them.
My SparkRental co-founder and her husband Host a foreign exchange student. The monthly stipend is enough to cover their mortgage.
“Brainstorm, get creative, and solve hacking problems” Brian Meiggs, Founder beer money network, told BiggerPockets. “Is it possible to rent out a storage room? Parking space for a car, RV or boat? Can you set one up? Adu Is your home cheap? Keep working on ideas until you find a way Cancel your house payment.
Don’t write off “rental investing”
The first property I bought was not a house. It was a rental property.
Likewise, today, I live in a rental apartment on another continent. Am I worried about losing ownership of my home? Absolutely No – because of me have interest More than 2,500 units across the United States
You don’t need to be a homeowner to invest in real estate. You don’t have to be a homeowner to do house hacking.
Don’t be like Jones and think of homeownership as your only option. “From a cash flow perspective, your home is a liability, not an asset,” Chad Ackerman points out. left field investor, In conversation with BiggerPockets. “The less you spend, the more money you have each month to invest in actual investments, such as investment properties, real estate syndicates, stocks, notes or funds.”
Chad should know. he and me share passion Passive real estate investments, especially syndicated investments and note investments.
These are our investment types go in Join SparkRental’s Co-Investment Club together. We meet monthly to review passive investments together and club members can partial investment They can use it sparingly if they wish.
By investing a small amount every month, you can Average dollar cost of your real estate investment. And nowhere does it say you have to be a homeowner to do this.
Intentionality and lifestyle design
You can have anything you want in life. But you can’t have it all.
I have to spend 10 Spend a few months of the year overseas and enjoy free housing, low cost of living, and great travel. As a trade-off, I can’t just pop over to my dad’s house for dinner on Tuesday or go to my nephew’s baseball game.
You can choose to live somewhere that doesn’t require you to own a car. You can find ways to get out of your housing payments. There may be trade-offs, but until you explore all your options, you haven’t made a conscious, intentional decision to determine whether the trade-off is worth saving thousands of dollars each month. Is it worth a few years of financial independence if you continue on autopilot?
take these decisions out shadow, And shine some uncomfortable light on them. You may still decide to keep doing what you’ve been doing, but make these decisions consciously. calculate only How much money can you save by giving up your home payment or your car. Calculate how many years it will take to achieve your goal.
If you could quit your day job in five years instead of ten, would it be worth making some changes? Only you know the answer.
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Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
