How to live frugally and achieve Financial Independence: Here are the steps I follow, and this is how I was able to achieve this goal by 28. Enjoy! Add me on Instagram: GPStephan
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The first rule of Financial Independence: Saving.
In order to achieve financial independence, you must save your money and live below your means. And how long it will take you to achieve financial independence depends entirely on this: how much income you make, and how much of it you save. This is what Mr Money Mustache, a financial independence blogger, calls “The Shockingly Simple Math Behind Early Retirement” - and based on your own income and expenses, you can calculate within a few minutes how long it’ll take you to retire.
The second rule of financial independence: cutting back expenses.
For the sake of saving more money and moving up your FIRE timeline, you MUST do what you can to save more money. The first, and biggest expense we ALL have is housing. It’s reported that 30-50% of a person’s income JUST goes to housing… that’s too much. And there’s a better option where you might be able to cut down your housing costs ENTIRELY, and this is what I’ve been doing:
This is where you buy a multi-family home, like a duplex, triplex, or fourplex, then live in one of the units and rent the others out. You could also buy a single family home with a detached guest house, or maybe a basement you could rent out to bring down your cost of living. Typically, when done right, those other units will cover the entire cost of owning the building - and all of a sudden, you’ve got a free place to stay.
Besides housing, another large expense we tend to have is our car. If you’re a car guy like me, and want to drive something fun and cool, you can buy a car at the bottom of its depreciation curve, drive it a few years, and sell it for about the same price you bought it for.
Then, lets focus on entertainment…and when it comes to achieving financial independence, I think it’s important you find a healthy balance. Go ahead and enjoy life, you don’t need to be locked inside all day just for the sake of saving money…but, be mindful to spend money where it matters the most FOR YOU.
Or with travel…some people LOVE traveling. I found it doesn’t need to be expensive: you can learn the art of credit card churning for signup bonuses…and travel for free.
The third step of achieving financial independence: Staying out of high interest debt.
This kinda goes hand and hand with cutting back and saving, but most people don’t realize just how much high interest credit card debt or high interest medical bills or huge student loans hold you back. Throughout my entire life, I’ve made sure to stay out of ANY debt that’s not a low-interest car payment or a low-interest, fixed rate mortgage. That’s IT.
The fourth step of financial independence: INVEST.
This is another very, very simple one. The principles are as easy as this:
-First, take advantage of your 401k, Roth IRA, and HSA accounts because these save you on taxes
-Second, Invest consistently, long term - put a set % from each and every paycheck into your investments, no matter what. Ideally, at least 20% of your paycheck, minimum. Preferably more.
-Third, don’t time the market - invest long term consistently, regardless of where the price is.
-Fourth, invest in a low-fee index fund that covers the entire market - like VTSAX. Vanguard and Fidelity both offer extremely low index fund fees.
-Fifth, wait. Let the markets do their thing.
And here’s when you find out when you’re financially independent: you can retire when your investment portfolio becomes 25x what you spend every year, also known as The Trinity Study.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
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By Stock Chat

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28 thoughts on “How to live frugally and achieve financial independence”
  1. Avataaar/Circle Created with python_avatars Austin Heath says:

    Love the frugal partying concept 😂

  2. Avataaar/Circle Created with python_avatars Oluwafelami Ajikobi says:

    Thanks for this Graham. I should subscribe and listen to you more.

    I’m still struggling with earning enough yet as I’m in my early 1-2yrs of my career, fresh out of school but I trust following your advice early with be of tremendous help to achieving my financial freedom early.

  3. Avataaar/Circle Created with python_avatars Daniel Villarreal says:

    Graham, how do you factor in pensions? (Now watch me get a response from a Graham impersonator in the form of a bot or whatever they’re called)

  4. Avataaar/Circle Created with python_avatars Zeke Yeager says:

    You’re a fraud

  5. Avataaar/Circle Created with python_avatars Mahesh Verma says:

    If you want financial independence, first of all stop burning money on luxury brands like BMW, Louis Vuitton, Rolex, Chanel etc. and invest your money in the stock market 💝💝

  6. Avataaar/Circle Created with python_avatars Brandon Murphy says:

    Amazing stuff Graham! Simple rules that anyone can follow. Stuff that should be taught in school.

  7. Avataaar/Circle Created with python_avatars Farhan Nahraf says:

    TNX GOOD

  8. Avataaar/Circle Created with python_avatars Tony Travels says:

    Graham is a perfect example of pointless rich. What's the point when you have cut so many corners and lower your standard of living. At some point enough is enough. Spend some money already bro.

  9. Avataaar/Circle Created with python_avatars Ben Levin says:

    Lol at a lotus driving the same as a Ferrari

  10. Avataaar/Circle Created with python_avatars M D says:

    I found your channel through The Money Guys and it sounds like you're cut from the same cloth. Love your videos!

  11. Avataaar/Circle Created with python_avatars MahanMadeMedia says:

    Appreciate the work you put into your videos and educating in a much more respectable way

  12. Avataaar/Circle Created with python_avatars Roto Coach says:

    Anyone else come back to this video once in awhile for inspiration?

  13. Avataaar/Circle Created with python_avatars Brooks Orlando says:

    It's a lot easier when you're introverted. The combination of $ and time spent socializing young cuts a lot into it. Then when (if) you have a family, that commands time. Time is the commodity that matters if you can utilize it correctly

  14. Avataaar/Circle Created with python_avatars Jim Podolski says:

    but you be CAPPING bro. what kind of job did you have at 18 that paid you that good to save money??

  15. Avataaar/Circle Created with python_avatars Faro Academy 10 Classe says:

    good………..

  16. Avataaar/Circle Created with python_avatars James Aquitania says:

    mê cái gia đình này quá

  17. Avataaar/Circle Created with python_avatars Sbomb Fitness says:

    Dividend investing is a bad investment if you have less than a million invested. I'd rather just buy a rental property and rent it out, or broad index funds.

  18. Avataaar/Circle Created with python_avatars Brendan Merritt says:

    These videos are really good! It is helping me plan out my money.

  19. Avataaar/Circle Created with python_avatars Lily says:

    Since loosing my job as an air hostess some months back I decided to try something else, what I have found most profitable so far is Options trading and forex because with these two I make close to $ 20k monthly it's great and I'm still trying out other sources.

  20. Avataaar/Circle Created with python_avatars Brian McGrath says:

    For the algorithm

  21. Avataaar/Circle Created with python_avatars Biresh Prema says:

    I can’t stop thinking about the irony and insanity of Elon Musk becoming the richest person in the world why they individual who has spent $20billon.

  22. Avataaar/Circle Created with python_avatars Ben Lozier says:

    Chemically not the same thing to stop drinking. BAC starts to drop and you go into withdrawl. Unless maybe had a lil som som to keep the party rolling. Buy in bulk, easy to carry. I see you. 😉

  23. Avataaar/Circle Created with python_avatars jasmine Bora says:

    I like how Graham explains these steps. I heard other people explained the same strategies but his explanation hits home for me.

  24. Avataaar/Circle Created with python_avatars Simon says:

    This video is basically an updated, modern version of the book "the richest man in Babylon" 😁

  25. Avataaar/Circle Created with python_avatars Musical Blockbusters says:

    The fact the subreddit 'Fire' still existed

  26. Avataaar/Circle Created with python_avatars Younes Lounes says:

    You re the best,

  27. Avataaar/Circle Created with python_avatars Lisa Carter says:

    When you invest you're buying a day you don't have to work

  28. Avataaar/Circle Created with python_avatars Lewis Martínez says:

    I wish you have made this vídeo in the early days of YouTube 😅 am 30 right is never to late to start.

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