Save, Hustle, Flow: 3 Steps to Financial Independence and Designing the Perfect Life

Whether you’re considering early retirement, saving for a trip around the world, wondering how to quit your job, or simply want a way to build financial security, it is possible. By rethinking how you consume (Save), rethinking your income sources (Hustle), and rethinking how the place you live helps satisfy your inherent needs (Flow) you can design the life of your dreams. Everyone dreams of a life free of the rat race, where they call the shots, consistently doing something they love, and living in a place that surrounds them with the things they need to be satisfied. As mythical as this all sounds, lifestyle design and the financial mobility it requires are well within reach of the average person.  You just have to learn how to save, how to hustle, and how to optimize the flow in your life.

Part 1: Save

Rethink how to keep more of what you earn, and how to make your savings work for you through investment, and you’re putting yourself one step closer to financial freedom and the lifestyle of your dreams, free of the rat race. The following steps highlight the big ideas for how to save more…

Saving-Step 1: Optimize your consumption habits

Eliminate the expenses that aren’t essential to satisfaction. Focus on small, incremental improvements to create big changes in how you consume.

The first part of the “save” equation is keeping more of what you earn. How do you keep more? You minimize unnecessary purchases, or “waste”, in all aspects of your life. This doesn’t mean living with the austerity of a monk or a Spartan – I actually live on vacation, seeing bucket-list worthy sites, living in comfort, eating exotic food, and lying on beaches for frequent “therapy sessions”.  Optimizing consumption (also known as minimizing) isn’t about eliminating everything. It simply requires examining your life to define what is truly necessary for your happiness and focusing all of your energy (and finances) on those things. In the process of understanding your true needs, you identify and eliminate consumption that is not necessary for your true satisfaction in life. Your needs, and your family’s needs, will be unique but very rarely does the list of things you need to be satisfied match your list of recent (or planned) purchases.

Coffee example:

The average American drinks a bazillion (real statistic) cups of coffee a year from a semi-swanky coffee on a daily basis. Despite the small perceived price, those dollars spent add up…quickly

○ Daily coffee from “Fivebucks” coffee shop: ~$3 per workday / ~$750 a year –
○ Exchange for coffee made at home: ($.20 per cup / $50 a year)
○ Net savings: $750-$50 = $700 per year

Similar examples can be drawn up with unnecessary smart phone upgrades, unnecessary home upgrades, or seasonal upgrades of clothing, furniture, and a wealth of other things. So how do you minimize your life? Check out this article on the steps I used to minimize waste (and keep more) in my life without compromising quality of life

Saving-Step 2: Optimize your investments

Invest your money for long term performance aiming for low fees and reliable, consistent returns on your investment.

First, pay off debt as quickly as possible. Second, invest in something that follows the philosophy of small, reliable, incremental gains over the long term while still reducing waste wherever possible. Some great examples are the broad index funds available, such as VTI from Vanguard. Why? This type of investment consistently returns ~7% annually and allows you to keep your money by avoiding the high fees of mutual funds or privately managed wealth funds. The broad holdings of index funds give you the diversification that pros recommend which creates a less volatile investment (than individual stocks) in the long term. Also keep in mind that in the long term that neither mutual funds nor private wealth managers will rarely beat the market meaning that the extra fees aren’t buying you anything — just delaying your retirement. For more great info on investing (and minimalism) checkout Mr. Money Mustache.

Use the 4% rule to calculate potential income from your investments.

Now, you’re saving and you’re investing, what does this mean for your financial independence? It means that you can take 4% every year of the amount you have saved up (just divide your total savings by 25) forever without having your savings decrease (and it will actually grow by ~3% nearly ensuring that your savings will grow with inflation.

$700 saved on coffee per year = $28 annual income per year

Over 5 years, the same coffee savings becomes $140 of annual income, every year, forever

Sound too good to be true? Checkout this interview and this article on the lawyer, Anita Dhake, who retired at age 33 using this principle

Part 2: Hustle

Create alternate income streams

A “hustle” is simply a non-traditional way of making money based on a product or service you provide. For people who live independently this translates to an income stream that fits their lifestyle better than being a corporate drone. Most hustles are accomplished by first figuring out what a person excels at that is of value to others, then spreading the word that they provided a related product or service, and finally making it easy for customers to learn about and pay for the newly provided product or service.

Hustling’s finest point is that it revolves around doing what you do well. Whereas most people’s jobs are based on the opportunities life threw their way (whether or not they were talented or passionate about the opportunity), hustling is inherently based on you doing things you are good at, things as natural as breathing. And just like breathing, when something is natural it usually feels good. So how does this apply to financial freedom?

Few people will amass the amount of wealth required for financial freedom in the period they want to by simply saving their current income and investing. You will save a significant amount (with your new view on reducing excess consumption), but you can improve your quality of life in retirement (or during your mini-retirement) by augmenting your income from savings and investments with a side income stream. So, how exactly do you start hustling?

How to hustle

Hustle Step 1: Find your hustle

Identify what you’re good at that is of interest/value to others. We all have hobbies and things we do for pleasure, and these hobbies are usually things that we are good. Although not every hobby will be of value to others, you definitely have one free time activity that is. Maybe its brewing beer. Maybe its arts and crafts creation. Maybe its tinkering on your car. Maybe its landscaping. No matter what it is, you have some free time activity that 1) you enjoy, and 2) others will pay for. What if you’re not sure if people will pay for it? Search the activity in Google. If any sites popup providing coaching and tutorials, offering the service, or selling the bits and pieces you need to do the activity then there is an opportunity to turn your free time activity into a hustle.

Hustle Step 2: Just do it

Practice it until you can perform reliably, and refine the product or service along the way. Don’t quit your job yet, experiment on the side first. Experiment with multiple “potential hustles” to see what fits. As you create your product or perform your service more regularly you will find the most efficient way to deliver with reliable quality and build comfort and confidence along the way

Hustle Step 3: Get the word out

The newly found confidence will give you a great assist in the next step of hustling: tell people about what you do (and how much you love it). The person you’re talking to might not need a unicorn made of chocolate and bedazzled with gummy bears, but they may have an eccentric billionaire friend that has been looking for that exact thing. Or, perhaps this person would be more interested in a white chocolate Care Bear bedazzled with Skittles? In either case you are on the path to getting customers and refining your product based on what people will pay the most for. Note that sharing what you do does not have to be a sales pitch, and it would be awkward if you pitch every acquaintance you meet. On the other hand, sharing your hobbies and passions is a great way to connect with people. Now if the hobby or passion interests someone enough, you can always offer to help…for a fee. Bottom line, tell people about what you can do.

Hustle Step 4: Build a Business around your hustle

Now that you have a great product or service that you are skilled at providing, that you know people want, and that you’re are telling people about, what’s next? Create a business around it. In other words, make it easy for customers to learn about the product or service and to pay your for it.

Make the process of learning about your product/service easy for customers. You can do this by passing out business cards and asking them to call anytime, creating a website as a digital storefront, or starting a Facebook page where you share product details and specials. Once there is method in place for customer’s to learn, make the product or service easily accessible…

Make it easy for the customer to find your product or book your service. This can be accomplished by creating a digital store, in Facebook, on your own website, Shopify, or through Amazon, for your product. For services, add booking functionality to your customer education page (we love Setmore as a booking tool that integrates into Facebook and webpages).

Make payment easy. Cash is simple…but who the hell uses cash anymore? Actually…I do. Don’t judge. Checkout Paypal, Stripe, and Square as options for letting your customers pay you for those amazing p
roducts and services.

Part 4: Flow…to the location that suits you best

“Flow” is the course events take when they aren’t forced unnecessarily. In a location that is great (for you) the flow of your life naturally puts you in contact with things that leave you fulfilled and satisfied. Whether the location offers beaches, social events, solitude, or great schools, the attributes of your location affect how much your life “flows” naturally to satisfying things

When a location lacks the things you inherently need, you are forced to strive harder for satisfaction. This may mean buying things you don’t need, engaging in activities that leave you partially fulfilled, or flying for hours just to find a place “you belong”. Additionally, if a location doesn’t suit your needs then odds are that you are paying for amenities that you don’t value. Maybe the “waste” in your current location is the “zip code tax”, the luxury of being near specific locations, or even prestige of being in the city.

More Ideas on Achieving Flow

You don’t need everything that the metropolitan “people hubs” offer: few people will visit every restaurant, neighborhood, and show in New York during their time as residents…so if they only experience a fraction of the city is it worth the New York price tag? If what you want is rolling hills, greenery, and the ocean nearby, but you’re not planning on creating a startup, is San Francisco worth the price tag? Would the suburbs of Seattle be a better option? If you can work remotely but love the beach but aren’t concerned with “flashiness”, are LA and Miami really the best options? Or could you do Thailand, the Philippines, or Colombia for a period?  You’ll never know unless you check…so dig through best places to live by what you value to make a list of options and narrow down to the true finalists.

You only need the things that fulfill you, everything else is excess: Do you need nature? Look into Utah and Montana over Colorado. Do you need museums and art? Consider a non-capital city in Europe for a period. Do you need to be social? Nashville, Tennessee has plenty of bars and live music and a price tag that is a fraction of that in Austin, TX.

Sanity Check on “Flow”: Ask yourself these questions as you consider location upgrades
• Do you really need to live in a particular state?
• Do you really need to live in the US?
• Is the salary difference for a lower paying city worth the increase in quality of life and decrease in cost of living?

How to Optimize Your “Flow”

Flow Step 1: Identify the things in a location that provide genuine, deep satisfaction

Sit down and list everything your perfect city would have, and then rank the items. On a separate list, write down all of the things your current city is known for and rank the items by notoriety and prestige. How do the lists compare? If the two lists look completely different, then the flow of your current location doesn’t match your needs. GET OUT!! What does this mean? It is likely not easy to do the things that fulfill you, or, there is a hefty price tag on those activities relative to other, more suitable places. Optimizing the “flow” of your daily life means taking the list of your priorities and finding a location where the city/country offerings more closely match your priorities

Flow Step 2: Identify locations that specialize in offering what matters to you, compromise on as much else as possible

Most people only consider the familiar when sifting through options…but this eliminates a world of possibilities, literally. When most people think of a mountain paradise, they immediately think Boulder, Denver, or some other overpriced Colorado hub. I think Patagonia. I spent a summer in the area with few compromises and lived off ~$1500 a month on average and ~$2,000 when I splurged. That included tons of Argentine BBQ, tons of trekking, lots of wine, and comfy accommodations. If I asked you where to go for a beach vacation…would you say San Diego or Miami? I would say the Galapagos islands in the off season. Lobster dinners, yacht tours, and tons of adventure, for cheaper than my life in San Diego. I can describe a similar scenario for art and museums (eastern Europe), mountainous trekking (Andean countries), food (the Mediterranean), arts &culture (too many to list), and everything else you could imagine.

Flow Step 3: Identify non-conventional places that match your needs for a lower cost (financial and quality of life)

Practice it until you can perform reliably, and refine the product or service along the way. Don’t quit your job yet, experiment on the side first. Experiment with multiple “potential hustles” to see what fits. As you create your product or perform your service more regularly you will find the most efficient way to deliver with reliable quality and build comfort and confidence along the way

Bottom line: when it comes to finding your Flow figure out what matters, compromise on everything else, and save by not paying for the luxuries you don’t need

Putting it all together

Rome wasn’t built in a day…neither was Apple. On top of that, most of us have been steeped in our current ways of working and consuming for years. What’s the point? It will take more than an instant to design a new life. The effects of saving and consuming less will be visible immediately but require conscious and consistent change in habit. Building a successful hustle commonly takes at least a year of concerted effort according to most entrepreneurs, bloggers, and freelancers. Identifying the location that best fits your flow takes deep introspection, questioning how you see your world, and asking question you may have not addressed or considered for a very long time. What does this mean? Put in the time, stay dedicated, and you will get back improved quality of life for as much as you invest in this process of saving, hustling, and optimizing flow in your life.

Interested in more detail on how to Save, Hustle, and Flow in your life?

Join our free 6 week email course and we’ll keep the lessons and thoughts on lifestyle design coming to your inbox.

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