Living Like No One Else...Later

Justin wants to know at what point the wealth building comes into the Baby Steps. He wants to hit it before retirement age.

QUESTION: Justin in Dallas wants to know at what point the wealth building comes into the Baby Steps. He wants to hit it before retirement age. Dave reassures Justin that he will.

ANSWER: It looks like you’ll have your house paid off in four years. At 31 years old, you’ll have $20,000 or $30,000 set aside just for emergencies, retirement will be underway, college will be underway, and you won’t have a house payment. I think you can go to Aspen. That is four years from now, but you will only be 31 or 32 years old.

When you don’t have a house payment and you make $90,000, if you go blow $2,000 or $3,000 on something in a given month, it doesn’t matter. If you blow $5,000 on an Aspen trip and it took you four months to save up for that, whoopee! You can do that then, because it doesn’t affect your net worth and it doesn’t put you in debt. It doesn’t cripple your family’s future. That’s when you know you can live like no one else.

A friend of mine felt guilty the other day because he bought a new Lexus. He has $20 million. My response to him was, “Dude, would you please shut up? You buying that Lexus is like most people buying a Happy Meal.” It doesn’t matter. He can do that and still hand someone a $100,000 check for Haiti.

There’s this tipping point thing that happens. Mathematically, that’s when you’re debt-free and you get enough money moving around that your money starts making more than you make. That’s when wealth building goes into overdrive. For you, that’s about 10 years out. But you’re going to enjoy some luxuries before that happens.

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