Building a Rich Life Before 40

Introduction

• Most people drift through their 20s and 30s hoping money figures itself out, but it won't.
• Importance of having proper checkpoints in place by age 40.
• Aim to take control of money without deprivation, guilt, or extreme budgeting.
• Introduces nine checkpoints to become wealthier than imagined.

Checkpoint 1: Zero High-Interest Debt

• High-interest debt (over 6%) burns cash and is a financial anchor.
• List all debts and their APRs.
• Use "avalanche" or "snowball" methods to aggressively clear debt.
• Essential for financial growth and higher-level investments.

Checkpoint 2: Bulletproof Emergency Fund

• Essential to have 6-12 months of core expenses saved.
• Core expenses include rent, transportation, groceries.
• Build a financial safety net beyond mere survival.
• Provides psychological security.

Checkpoint 3: Full Financial Automation

• Investing should be automated, consistent, and feel natural.
• Checklist:
  • Contribute at least 10% of income to investments.
  • Max out Roth IRA and 401k.
  • Automate monthly investments.
  • Increase contributions by 1% each December.
• Avoid panic over small expenses.

Checkpoint 4: Career Mastery

• Income is a crucial wealth-building tool.
• Focus on increasing job skills and being valuable in the workplace.
• Conduct informational interviews with successful people.
• Improve career to change financial trajectory.

Checkpoint 5: Know Your Number and Why

• Define a specific financial goal number and reason for it.
• Avoid chasing arbitrary numbers without purpose.
• Align financial goals with personal visions of a rich life.

Checkpoint 6: Shared Financial Dashboard

• Proactively discuss finances with partners.
• Create a shared system for income, spending, debt, and investments.
• Schedule monthly money talks and review rich life goals.
• Involvement in finances prevents miscommunication and resentment.

Checkpoint 7: Create Your No List

• Identify what you don't care to spend money on.
• Write down 3 things to cut and 3 to spend on unapologetically.
• Helps redirect funds to what truly matters.
• The no list evolves over time.

Checkpoint 8: Simplified Credit Card Assortment

• Avoid managing multiple cards and complex cashback schemes.
• Keep 1-2 solid rewards cards.
• Cancel predatory/high-interest cards.
• A streamlined wallet indicates better financial management.

Checkpoint 9: Financial Vision

• Rich life vision should evolve with time.
• Review annually and adjust based on changing priorities:
  • More of what you want.
  • Less of what doesn’t matter.
  • Explore what's next.
• Provides direction and options.

Conclusion

• These checkpoints align financial habits with long-term goals.
• Suitable for all ages; under 40 should start now, over 40 can also benefit.
• Implement these steps for a roadmap to a richer life.