Inflating your lifestyle is a lot of fun if you can do it in a consistent way. We’d say this is easier to keep on track if you have multiple hobbies that require physical effort versus cognitive effort. That is the one item we see in common between people who are able to keep a flatter spending pattern. Think about the number of people you know who are healthy and fit, they generally spend more time doing physical activities which cost significantly less. If a person’s only skill is making money, this typically leads to a lot of lifestyle inflation as their entire personal well-being is tied to money. They view income and net worth as their identity. This leads to a needy personality. Luckily, you’re here so if you’ve successfully executed with Efficiency, you’ll recognize our timelines. We’re going to show a good example of how to use your time once you’re rich.
1) Focus on the Business Income: As of 2018, you’re still going to pay a lot of taxes if you make more money. The good news? Any business (large or small) will pay less in taxes. Why? Well you have a lot more deductions, you can expense numerous items from rent to food to internet bills. This means your effective tax rate is significantly lower with this income relative to anyone making good money with a standard W-2 (practically no deductions in sight). While we’re sure there are a few ways to make business taxes higher, we’d argue that there are too many ways to reduce the effective tax rate. Changing it from an LLC to an S Corp, moving states, employing a relative etc. All of these things can reduce the “effective” tax you’re paying. As you can see we view any cash flow savings as a “reduction in tax” since it decreases the operating income line.
With this in mind, it means that all of your actual time during the day should be spent increasing your business income. Remember, this is only the time you’re dedicating to work. If you’re still in the classic W-2 and S-corp income class, it means you should give up on the W-2 side. It won’t give you a good ROI and it increases your risk (tied to someone else’s decision making). Don’t bother doubling down on the W-2 as you’re essentially going down the rat race where you have to expend an exorbitant amount of time playing some internal politics games as well.
2) Spend Half of After Tax Gains: Every month your income will be volatile. Anyone who has succeeded knows the one benefit of a W-2 is the consistent flat check. It is predictable and boring which is good for cash flow and bad for building net worth. With this is mind, we’d say spending at least half of your incremental after tax gains is easy and safe. If your income goes up by $2,000 in a month, you can spend another $1,000 and invest the rest. If for some reason you have a bad month, and you’re -$1,000 from your usual income, unfortunately you don’t get to spend any more money and have to cut back! This up and down will help you avoid the big recurring expenses in life: unsustainable mortgages, unsustainable luxury goods and other recurring monthly payments. Keep it simple and give yourself a variable monthly expense line, this will increase your flexibility. It isn’t fun cutting back costs when you hit a rough month, but it sure is better than increasing stress in your life.
3) Ramp Up Physical Activity: Once you start marching into your 30s, fitness becomes a status symbol. Unsurprisingly, all those long hours you spent in the gym pay off when you’re older. Being in tip-top physical shape past 35 is going to make you stand out like a sore thumb. Most people give up everything to be well off (looking terrible by this age), making you a stand-out person. If you’ve kept your body fat low and didn’t develop the classic protruding stomach you’ll be well ahead of everyone.
Luckily it doesn’t stop there. If you’ve kept your diet in check you’ll also have healthy skin, a full head of hair and vision that hasn’t deteriorated (go ahead and get Lasik if you need it!). Being in shape with terrible looking skin (lots of stress lines) will negate a lot of the benefits of being in shape so you’ll pay special attention here. If you’re looking to adjust your skin tone, we’d do research on the products women use given that they take it a lot more seriously (try to reduce wrinkles at any cost).
4) Spend a Ton of Time Socializing: At this point, there is no reason to be bored. You’re going to have a lot of free time and the money to spend on activities. Some people enjoy building massive empires ($100M+ annual revenue businesses) and others don’t see a need for it. Surprisingly we’re in the latter camp as we’ve seen how much work it takes to get to $100M+ in annual revenue (it is an enormous headache). We’re not going to say that it is “bad” to try and become a billionaire, all we’re doing is highlighting the choices we’d suggest considering. Imagine being financially set with all the free time to do whatever you like versus being “time poor” and having all the money in the world. We’ve always viewed money as a tool to get what we would like and that was free time to enjoy the rewards.
At the end of the day, we’re all animals and having a good set of people to talk to is going to add a lot of activity to your typical week. The one problem is that you’ll need a diverse set of people. Ideally you’ll have a few people younger than you that you’re helping for fun (because you think they are nice people), a large chunk of people your age and a handful 5-10 years older than you. This will take a long time to develop given that you still want to increase your income for the fun of it. After about 2 years you should be set in terms of your social circle with minimal need to branch out aggressively.
5) On and Off Effort: The last strategy to utilize is the “on and off” work schedule. This means you work extremely hard for one week, then do nothing the next week. Similar to training in the gym, apply the same concept to work. You’ll push extremely hard and then take your foot off the gas the next week. This creates a nice ebb and flow where you’re still engaged mentally but you’re not killing yourself constantly like you did in your 20s. Unsurprisingly, you end up being incredibly efficient with your time with this schedule. When you’re busy there is a natural ticking time bomb going off in your head so you crank out the hours intelligently.
A Work Day
Wake up around 8am: Instead of looking at emails first thing in the morning, you should go ahead and eat something healthy (fruit, eggs, nuts, meat). These items are better consumed in the morning (exact opposite of the standard cereal breakfast) and take a walk. We’d say 15-20 minutes of walking while listening to music or anything meditative would be a good choice. Spend another 15 minutes showering and getting changed.
9am Work Begins: At this point, you should be ready to go. We’re vague about “getting changed” since you may work in your pajamas for all we know (working online). The good news is that you’re now mentally engaged to work. By allowing your body to wake up naturally, you won’t be responding to emails with a flurry of typos. Crank out the basic email clutter that comes in around this time and move on to the next task.
One Focus Item: If it takes 3 hours or 8 hours, we’d then focus on one single item to get done. You won’t do anything else but eat and drink until the task is done. This creates a good habit of intense focus. Even if it will take you a full week to get done, you’ll crank out all of the hours in a similar manner. You’ll work straight through with brute force (focus). We’ve never believed in the idea of “working taking a break and coming back”, there really is no difference. In college you likely did the same thing, cramming last second for the exam. This is a situation that forces you to get into a state of flow. Meaning you’re more likely to get quality results by cramming as all your focus is on a single task. Similar to athlete sprinting.
Mini Tasks: Alternatively, if you have two small tasks, then it is perfectly fine to break up the day. We’d guess that more of your tasks will be big projects. That said, if there are small projects here and there, we would go down that road. Do one task to completion, take a break and have lunch with friends (not employees/co-workers) and then come back to do the second task.
Shut Down at 9pm: We have a hard cut off, there is no need for more than 12 hours in a day anymore after you have made it. We’d guess most of your work days will last between 6 and 9 hours. Given that you’re likely a work-a-holic if you made it to financial independence by ~30 years of age, having a hard stop is important. Your body won’t enjoy more than 12 hours in a day so there is no point in doing it. Oh and by the way, no more red-eye flights. Those are officially over! Unless you’re absolutely forced to, try to take the “Chairman flight” meaning flights that are coast to coast in the middle of the day so you don’t have to adjust your body clock.
Reading/Wrapping Up: Work days should be extremely difficult, simply working, eating, drinking and that is it. You’ll cut off at 12 hours so you still have time to go to the gym and read for an hour before sleeping. This cut off allows you more than enough time to do both and you can even shut off your cell phone on the heavy work days.
An Off Day
Wake up Around 8am: Wake up time is unchanged since we want to keep the same daily schedule. Jumping around does not help you as you’re forced to adjust your body clock over and over again. Go ahead and wake up at the same time. The one item we would add is an additional 10-15 minutes of stretching after your walk in the morning.
Run a Reverse Day: The benefit of free time is being able to go “off schedule”. Going to the gym at 1-4 pm is ideal as you’ll miss all of the people who go at lunch and all the 9-5 workers. You also have free reign with equipment access. Before you had this luxury you’ll distinctly remember how crowded every single facility was. This is similar to a morning commute. If you had this in the past, those days are also over as you can move around when the traffic is low (ideally walking or taking a subway, no need to take an Uber black if it’s going to be slower anyway).
Sunlight: Another major benefit of free days is the ability to soak up more of the day. It is much better for your body to be out during the day. Humans were not built to live inside concrete building staring at a computer screen while the sun is shining outside. So take the time to go outside when it is hot out and eat lunch/exercise outside as well. Vitamin D deficiency is a serious issue for people with white collar jobs and there is no excuse for you to be in this camp anymore!
Intermittent Fasting and Dieting: Another good “life hack” is to put your intermittent fasting and high quality diet days on the off weeks. Since you won’t have a lot of cognitive work (typically causes people to eat more), you’ll be able to utilize some will power and keep the diet 100% clean and your appetite in check. We know that many of our readers are in their 20s with metabolisms that are through the roof… the problem is that this slows down later on. We believed the same thing many years ago and eventually it does slow down. The good news is that in shape people will have a significantly lower rate of decline.
Conclusion: There you have it, if you’re not interested in becoming a billionaire and are financially set that is how we’d structure a typical day/month. You’ll make sure the following items are checked: 1) your income is still growing each year, 2) your fitness levels are at peak levels with no exception – age adjusted of course, 3) your social circle no longer centers around one industry, 4) you oscillate on and off weeks to give yourself some stress combined with off weeks and 5) structure a “reverse day” which gives you the ability to take advantage of the best parts of each day (avoiding the crowds). Remember, money was just a tool to live a better life. No point in being rich if your life is just as stressful as it was before!
