Quit Like a Millionaire

1. Poverty Can Be a Superpower

Money is the most important thing in the world.

Scarcity Mindset. Growing up with limited resources can forge a "scarcity mindset," where every penny is valued and financial security is paramount. This mindset, while challenging, can be a powerful motivator for achieving financial independence. It's not about deprivation, but about prioritizing what truly matters.

Tools, Not Obstacles. Hardships and obstacles can become tools for growth. They can fuel motivation, guide decisions, and teach valuable lessons. For example, the author's childhood experiences of digging through medical waste and patching clothes instilled a deep appreciation for resources and a knack for creativity.

From Bottom 1% to Top 1%. The author's journey from abject poverty to millionaire status demonstrates that a difficult start doesn't have to define your future. The scarcity mindset, while initially a product of circumstance, became a driving force for success.

2. Scarcity Breeds Resourcefulness

Other people’s garbage was my treasure.

Constraints Spark Creativity. Limitations can actually enhance creativity. When resources are scarce, you're forced to think outside the box and find innovative solutions. The author's childhood of making toys from discarded materials is a testament to this.

CRAP Skills. Poverty can cultivate essential skills:

• Creativity: Finding innovative solutions with limited resources.
• Resilience: Bouncing back from setbacks and adversity.
• Adaptability: Adjusting to new situations and environments.
• Perseverance: Pushing through challenges and never giving up.

Identifying Invisible Waste. Growing up poor can make you acutely aware of waste, both material and financial. This ability to identify and eliminate unnecessary spending is a valuable skill for building wealth.

3. Education is Your Best Bet

If you understand money, life is incredibly easy. If you don’t understand money, life is incredibly hard.

Education as a Lifeline. For many, education is the only way out of poverty. It improves earning power, critical thinking, and the ability to make informed decisions. The author's father's story of escaping forced labor through education highlights its transformative power.

More Than Just a Degree. Education is not just about getting a piece of paper; it's about developing the skills and knowledge to navigate the world. It fosters curiosity, self-sufficiency, and the ability to trade short-term pain for long-term gain.

Long-Term Investment. Education is a long-term investment that pays off in both financial and personal well-being. It's a powerful tool for extending your salary and your life.

4. Follow the Math, Not Your Passion (Yet)

Follow the money first, and you can do what you love later.

Pay-Over-Tuition (POT) Score. When choosing a career, prioritize its earning potential relative to the cost of education. The POT score (Median Salary Above Minimum Wage / Total Cost of Degree) helps you make informed decisions.

Passions Change. What you love at 18 may not be what you love at 30. Basing your career on a fleeting passion can lead to disappointment. It's better to build a solid financial foundation first.

Math Over Emotions. Choosing a career based on math rather than emotions can lead to greater financial security and freedom. This doesn't mean you can't pursue your passions, but it means you should do so when you're not dependent on them to pay the bills.

5. Debt is a Time Thief

IOU = I Own You

Debt Distorts Value. Debt disconnects the value of money from the time it takes to earn it. This makes it easy to overspend and make poor financial decisions. It's like borrowing from your future self.

Compound Interest is a Double-Edged Sword. While compound interest can help your investments grow, it can also work against you when you're in debt. High-interest debt, like credit cards, can quickly spiral out of control.

Slay the Debt Monster. Prioritize paying off high-interest debt as quickly as possible. Treat it as a financial emergency. Cut expenses, refinance if possible, and focus on killing the debt monster before it consumes you.

6. You Are Your Own Safety Net

No one’s coming to save you.

Scarcity vs. Entitlement. The scarcity mindset teaches self-reliance, while the entitlement mindset can lead to dependence. You can't rely on the government or your company to take care of you.

Build Your Own Safety Net. Financial security is your responsibility. You need to build your own safety net that can provide for your needs without relying on a job or the government.

Take Control. You have the power to change your circumstances. Don't wait for someone else to save you. Take control of your financial life and build the future you want.

7. Happiness is Relative, Not Absolute

The past doesn’t matter. What do we do now?

The Hedonic Treadmill. We adapt to new circumstances, and our happiness levels tend to return to a baseline. This means that buying more stuff won't necessarily make you happier in the long run.

Dopamine and Expectations. The brain's reward system is based on relative levels of dopamine, not absolute levels. This explains why the initial thrill of a new purchase fades over time.

Experiences Over Possessions. Spending money on experiences tends to bring more lasting happiness than spending money on possessions. Experiences create memories and don't come with the unexpected costs of ownership.

8. Your House is Not an Investment

Your house is not an investment.

Hidden Costs of Homeownership. Owning a home comes with a lot of hidden costs, including property taxes, insurance, maintenance, and transaction fees. These costs can eat up a significant portion of any gains.

The Rule of 150. To determine if buying a house makes sense, multiply your monthly mortgage payment by 150%. If that number is higher than the rent of an equivalent place, it's better to rent.

Rich People Buy Investments. Poor people buy stuff, the middle class buys houses, and rich people buy investments. Focus on building a portfolio of assets that generate income, rather than tying up your wealth in a depreciating asset.

9. Index Funds are Your Best Friend

The real bank robbers work for the bank.

Low-Cost Index Funds. Index funds track the performance of a broad market index, like the S&P 500. They are low-cost, diversified, and outperform most actively managed funds.

Avoid High Fees. Actively managed mutual funds charge high fees that eat into your returns. These fees are often hidden and can significantly reduce your long-term wealth.

Bet on the Casino. Index investing is like betting on the casino rather than individual horses. You're betting on the overall growth of the market, not trying to pick individual winners.

10. The 4% Rule is Your Escape Hatch

Money is worth bleeding for, but it’s not worth dying for.

The Magical Number. The 4% Rule states that you can safely withdraw 4% of your portfolio each year, adjusted for inflation, and have a 95% chance of not running out of money over a 30-year retirement.

Time = Money. Your time to retirement depends on your savings rate, not your income. The more you save, the faster you can reach financial independence.

Freedom Mindset. Shift your focus from accumulating money to buying back your time. Once you have enough money to cover your expenses, you can finally live life on your own terms.

11. Travel is Cheaper Than You Think

If you understand money, life is incredibly easy. If you don’t understand money, life is incredibly hard.

Geographic Arbitrage. By traveling to countries with a lower cost of living, you can stretch your retirement savings further. This allows you to live a more luxurious life for less.

Travel Hacking. Use credit card sign-up bonuses and frequent flyer miles to travel for free or at a reduced cost. This can save you thousands of dollars each year.

Travel as a Backup Plan. If you experience a market downturn, you can reduce your living expenses by spending more time in low-cost regions. This gives you more flexibility and control over your finances.

12. Taxes are for Suckers (If You Don't Know the Rules)

Taxes are for poor people.

Tax-Advantaged Accounts. Take advantage of tax-deferred accounts like 401(k)s and traditional IRAs, and tax-sheltered accounts like Roth IRAs and TFSAs. These accounts allow your money to grow tax-free.

Tax Optimization. Structure your portfolio to generate income in the most tax-efficient way. Qualified dividends and long-term capital gains are taxed at lower rates than ordinary income.

Legal Loopholes. Use legal loopholes like the back-door Roth IRA and the Public Service Loan Forgiveness program to minimize your tax burden. The rich use these loopholes, and now you can, too.

Last updated: March 21, 2025