The 10 Rules to Financial Independence

Share On:

Share on facebook
Share on twitter
Share on linkedin

I believe 30 is a big milestone. Ever since I was at university, I told myself, either I was going to make it, absolutely kill it, or be a failure by the age of 30. Two painful years of working 90+ hours a week in investment banking put me into overdrive to figure out a way out of the rat race.

I set a goal to achieve a $1 million net worth by the age of 30. And by the looks of things, I should be on track to get there. Over the last 5 years, I’ve continued to grow my net worth with a variety of income streams and savings strategies.

That being said, I have 10 cardinal rules that I follow to financial independence:

1.  Spend MUCH Less Than What You Earn

Living within your means is a great start. However, living BELOW your means is where the real magic happens. The surplus money you generate is the fuel behind long-term wealth building. Use this financial capital to invest in real estate and stocks.

If you start making $50,000 a year at 22 and save $10,000 a year every year, you’ll have about $270,000 by 35. To save, you need to cut your expenses or grow your income. You can see my article here on cutting your expenses and living like a minimalist. To grow your income, build multiple sources of income!

If you save $10,000 a year starting at the age of 22, you will have close to $300,000 by the age of 37.

2. Set Goals, Large and Small

Like mile markers in a marathon, goals help you identify the distance to your destination. Setting small goals builds the habits and momentum you need to attain long term goals. Together, short and long term goals fuel your journey towards financial independence.

For me, my goal is $1 million by the age of 30. To reach that goal, I would need to save about $40,000 my first year working at 22, increasing that amount to over $80,000 at the age of 26.

3. Pay Yourself First

This is related to #2. Make “you” the first line item in your budget; personal saving and not spending. Think of your savings account as the first bill you pay each month. Don’t make expenses or bills an excuse for not saving.

Automatic transfers are easy to establish and make the saving process painless. Every month, you need to transfer a % of your paycheck directly into your stock brokerage account or savings account. You can then invest it directly into the stock market or other income-generating assets.

4.  Avoid Credit Card Debt

Credit cards have their place. When used to accumulate points for travel or cash-back, they can generate significant value. The danger comes when credit cards are used to fund choices that lead to living beyond your means. DO NOT use them if you cannot pay off the balance at the end of the billing cycle. Credit card companies charge you interest rates of 25%+ for any unpaid balance. They ARE NOT free money with no strings attached. Avoid credit card quicksand by learning from my mistakes.

5.  Invest for Your Future

Financial independence demands that you think about the future, all the while living in the present. How early you retire is determined by the amount of savings you amass during your 20s and 30s. That being said, you should focus on the following:

  1. Picking up a side-hustle
  2. Starting a side-business

If you want to increase the cash you have coming in, pick up a side hustle like consulting through Fiverr or driving for Uber or Lyft. You won’t find any love for this job, but it is a quick way to make additional cash that you can throw into investments.

If you want an additional stream of income that is more fulfilling, start a side business. In my case, I started Million Dollar Tips not only to help people elevate their lives, but to also build an audience. Unlike a side hustle, there is no guarantee you will make money. However, a side business will provide you with more upside if you are successful.

6. Do not Fall Victim to Lifestyle Inflation

There is a surprisingly weak correlation between income and one’s savings rate. This seems counterintuitive – we should expect those who make money to have more disposable income to save. However, this is not always the case.

A lot of high-income earners fall victim to “life-style inflation.” When they start making more money, they buy fancier things to match their paycheck. If you don’t manage your money while you have none of it, you’ll never be able to manage it when you have a lot.

7.  Maximize Your Tax Deductions

If you are self-employed, be sure to write off any expenses and allowable tax deductions. If your employer offers 401(k) at work, you need to ensure that you are contributing enough to get the full employer match.

If you are not taking advantage of the employer match, you are leaving money on the table. A properly utilized 401(k) is the simplest way to become a millionaire.

8Minimize Your Investment Fees

If you are invested in the stock market, you need to watch how much you are paying in investment fees. I personally recommend investing in index funds or ETFs, which have much lower investment fees. Over the long term, it is proven that only a few active managers can outperform the stock market. Simply put, index funds with LOW FEES are likely to give you a better ROI over the long-term, net of fees.

Charles Schwab’s No Load Index Funds are an excellent way to invest with minimal fees.

9.  Bump Up Your Savings Rate

There are four categories I always examine when I want to bump up my savings:


If you own your own home, the simplest way is to rent out a part of your house or an unused room. It will generate an extra $400 to $1,500 to help you pay down your mortgage. If you rent, lease the smallest and least costly house or apartment you feel comfortable with.


If you live in a major city, go sell your car and buy a bus pass. When adding up your car payment, repairs, gas, and insurance, you will, on average, spend $700 / month on a car. 30-day bus passes are usually $80 to $120 depending on the city.

Food and Restaurants

Go buy your own food and plan meals around what is for sale at the grocery store. I personally saved $400 a month by not eating out at restaurants, which you can read here. Happy hours, dinners, lunches…. it’s a huge money suck. I started saving $30 a day by not eating out. Nowadays, I only spend money eating out for special occasions such as birthdays or holidays. The end of a work-week happens every week, so there’s no point in shelling out $20 or $25 for happy hour.

The Latte Factor

This refers to the $6 coffees and all the other small spending that add up over the course of a year.

10.  Talk About Finances

If you have a significant other, one of the most important things is ensuring healthy finances. In order to do so, you need to talk about money with your partner.

My girlfriend and I have almost opposite views on money. However, we talk about money all the time and set expectations. As a result, we are always on the same page when it comes to spending.

Hello and Welcome!

My name is William. I am a private equity investor and the owner of Million Dollar Tips. Over the last 5 years, I have been committed to growing both as a person, and as a professional.

Look at where you want to be in five years, and commit yourself getting there today! Want to learn a new language or earn a million dollars? We’re a community dedicated to help you getting there.

We are here to assemble a central depository of tips, tricks, and life hacks to help people take control of their personal, professional, and financial goals.

Our mission is to empower you to elevate your life, one tip at a time.


Trending Posts


Many of the offers that appear on the website are from which Million Dollar Tips receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all available offers.

Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, or any other company, and have not been reviewed, approved or otherwise endorsed by any of these entities.

%d bloggers like this: