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Copper Cotton
Copper Cotton
Copper2Cotton is a money blog following one person's journey to reach $1 million net worth. This blog will not only show the author's progress, but also give financial tips and insight for anyone who wants to be wealthy.

When I first dived into the financial independence world, I marveled at the discipline of these folks. The FI community saves upwards of 50% of their household income. If you’ve been reading this blog, you know I’ve always been a good saver. I naturally put away 20% of my income. But even I found the savings rate of the FI community more than I could ever imagine for myself.

Why and how could these people save so much? They must be dumpster diving, right? Well, two years and approximately seven months into my FI journey, I can tell you there are two things required to reach a savings rate of 50% or better.

The first thing you are going to need to save 50% or more of your earnings is a damn good reason. A very specific financial goal and number has to be in mind. Once you have your FI number written down along with all the steps you plan to take to get there, you are well on your way. You are focused and you will have all the internal motivation you need. This is important because at some point you will hit a wall and be faced with “to buy or not to buy” and you’ll need to convince yourself more than once that depriving yourself today means not depriving yourself in the future.

The “why” we strive to save so much in the FI community is common knowledge. The more of your income that you manage to save, the more you can invest and the quicker you can reach financial independence.

For example: if you are 35 years old and you put away $2,000 a year and receive a 7% return, you will be a millionaire when you are approximately 87 years old. (Yikes!). But if that same 35-year-old saves $24,000 a year he or she can retire at 55. That is a crazy 32-year difference! And that person can retire perhaps sooner if other income sources, like a pension, social security or a reduced cost of living via a fully paid-off mortgage or downsizing, becomes a part of the equation. The math is straight forward; the more you save, the faster you reach your FI number which, as you know, is 25 times whatever you spend annually.

Now that you have your “why” down, the second thing that you will need is patience with yourself. We live in a microwave society and we want things fast. I had to get rid of debt and my endless list of wants and must-haves, before my savings rate would leave the 20-30% range. What was I willing to give up? What could I do with less of?

This is a conversation that I continue to have with myself. And equally as important as the trimming you do to create the savings, is actually following through by bumping up the automatic withdrawals to make it actually manifest in your net worth.

Currently my savings rate is at 45% but it took me two full years to get there and there is still room for improvement. My goal is to hit 50% by November and hover in the 55-60% range permanently. I have no desire to go beyond that because I believe anything above that range would throw my life out of balance. I know that saving 10%-15% more than I’m saving right now will not change my quality of life. However, it will pinch enough to keep me hustling and reaching for a new level.

So, that’s what it takes to be a super saver: A damn good reason and patience.

Do you know what percentage of your life energy you’re saving and investing each month? If you do know, the next question to ask yourself is could you be doing even better?

If you don’t know how to get started on your FI journey, start with figuring out your net worth. Knowing my net worth has made all the difference on this journey. My goal is to make certain that it goes up every single month. This is something that I’ve managed to do for more than two years. The tool I use and recommend for calculating your net worth is Personal Capital

It is a fight to build wealth no matter where you are in the process. Everything around us conspires to take money out of our hands. But you must fight the good fight. Continue to save, invest, and grow your net worth even when it seems impossible. Save your pennies (copper) until they become dollars (cotton).

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