Save as soon as possible
Alan Corey is no stranger to attention: he has shared his money-saving tips on CNN, CNBC and many other outlets. He wrote a book called A Million Bucks By 30 and the title pretty much explains it all.
With a $40,000 salary and (at one point) a three-month Ramen noodle binge diet, Corey gradually stashed away cash. As he explains in the book, compound interest is a powerful force. It can work for you (retirement plans, savings accounts) or against you (credit card debt).
For those so financially strapped they can't even afford his book, and for readers with the most profound cases of ADD, here are his top 10 tips for would-be millionaires.
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"Automatic direct deposit into my secret checking account and my 401(k) - 401(k) was another way to shield money from myself," he told us.
Corey believes in "hiding" money from yourself: make it inconvenient and a hassle to get access to the money you plan on saving... and save as much as humanly possible (compound interest, remember?). Just as a former alcoholic would be wise to avoid bars and liquor cabinets, a former spender should stay away from their own money.
At one point in his book, he suggests to his girlfriend that she drop her HBO service and invest that money instead. He even presents her with a spreadsheet showing her what this investment would grow to in 25 or 26 years. (She breaks up with him, but the advice is still totally solid.)
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"Using public transportation."
This tip is straightforward enough: you save money by using mass transit and public transportation options. Cars are one of the worst investments out there, gas is never that cheap, insurance is costly, and so on.
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"Only going to the ATM once a week."
Corey had a technique where he only took $100 per week from the ATM. If he ran out before the next scheduled withdrawal, he just had to tough it out -- if he saved his money until the weekend, he could splurge on beers or some entertainment.
(We asked him if he still does that; he does, except now his budget is $200 a week -- millionaires can afford to live large.)
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"Using a coin purse."
Uh, all right, we draw the line at a coin purse! But seriously -- all those coins can add up. Why let it go to waste in between your couch cushions or in the dryer?
Even if you don't end up using a coin purse (Corey is a bit hardcore about saving, in case you haven't noticed), at least develop some strategy for retaining change. Either use a debit card so you eliminate coin change entirely, or save it up in a piggy bank.
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"Finding free entertainment."
Art galleries, museums, the park -- all of them are potentially free. Corey notes in his book that gallery openings, in particular, can be free and a fine source of wine and cheese. Good idea.
We would add that wine stores are another good source of free alcohol ... one near my apartment has a free wine tasting every weekend. Hit these like there's no tomorrow.
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"Reading, reading, reading. I devoured books, magazines and blogs on investing in stocks and real estate, or about high-wealth individuals, bargain hunting or negotiating."
Reaching your goal may become an all-consuming process. Absorb as much good information as possible.
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"Using the Corey Open House Method when buying a house for investment purposes."
Corey believes that if you know very little about real estate, attending open houses is a good way to learn -- you're surrounded by more seasoned buyers asking intelligent questions. He also believes buying properties in undervalued areas is an important wealth-building strategy.
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"Having roommates and charging them rent (and other passive income from rent)."
It's good to be the king, I suppose.
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"Making income through side gigs (making extra cash, but keeping me busy so I couldn't spend money)."
If you're busy working, you can't spend your money. It's that simple. Corey made extra cash through lectures, selling unusual things on eBay, etc.
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"Keeping my day job."
Unless you have a burning desire to put all of your expenses on high-interest credit cards until one of your investments hits it big, keep the day job -- it's a reliable source of income, and don't forget to pile cash into your employer's 401(k) plan (hopefully they're matching).
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