The Messy Middle: Balancing 25% Investment Amid Life Changes!

Okay, Tyler’s question is next, and this is another one that we’ve been getting some version of this a lot, so I think we’ve got to talk about it. It says, “How do you guys reconcile increased spending during the messy middle with requiring a 25% savings and investing rate?” I know we’ve done a show that’s going to be coming out soon, all about the middle, but let’s tease it. Let’s talk about this because it’s a good question. It can feel like there’s a lot of things pulling at your wallet.

Yeah, man, we get this all the time. “Guys, you seem so sensitive because you tell us about the messy middle and how there are these thousands of different things pulling you in thousands of different directions. You’ve got no discretionary time; you’ve got no discretionary income.” And yet, in that same vein, you say, “Oh, you’ve got to save 25%. You’ve got to save 25%.” I think it’s interesting. He says, “How do we reconcile the fact and the ‘you must’? It’s not a ‘you must save 25%.’ Let me go ahead and tell you, me and Brian are not policing it. If you do your net worth statement, you did not show 25% this year, we’re not going to show up at your front door and knock on the door and be like, ‘Hey, what do you have to say for yourself, Mr. Muton? Why did you not?’ That’s not the way that it works.

However, if what you’re trying to do is accomplish the goals in life that you want your money to allow you to do – Financial Independence, travel, kids’ college, all the things, whatever those things are for you – getting into the habit of saving 25% of your gross income as early as possible will likely be the most effective way for you to be able to accomplish those goals.

Well, the reason why we tell people to do that in the messy middle is that in the messy middle, your dollars still have a lot of juice. Brian, you have the wealth multiplier thing. If you go to our website, you go to moneyguy.com, we have the wealth multiplier that shows just how valuable your dollars can be in the messy middle. So that’s why we tell you to aspire to 25%. But I’ll be honest, there are folks that just maybe can’t do it. Maybe during this season, 20% is what you can do. That’s great. Figure out when you get a pay raise, how can I go from 20 to 21? Maybe I’m only doing 15%. That’s great. Save something. And your goal, the horizon line that you ought to be moving towards, is 25%. But if you’re not there today, it’s okay to give yourself a little bit of grace and give yourself a little bit of slack because the destination is what we want to focus on, but the journey kind of matters. This thing that we’re doing in the here and now is also important, and you need to give yourself some grace, understanding that.

I’m going to be a little harder in the fact that no, I had the words of my freshman year basketball coach, Coach Corley. He was just yelling at me all the time, and he was like, “Preston, if I wasn’t yelling at you, it means I’ve given up on you.” I think that goes for the messy middle people too. Look, I give grace to my 20-somethings because you’re figuring out the career; you’re figuring out how you make money. But by the time you get in your 30s, where you were fully immersed in the messy middle, if you don’t have somebody yelling that you need to be at 25% because time is of the essence to get up to 25% because the most valuable ingredient to the wealth creation process is time. How can you let that money start working for you and just do its magical stuff with compound and growth if you’re not feeling the pressure on that? Because we’ve gone too soft on you.

I don’t get the best version of you. If you are feeling like we give you so much grace with the messy middle that you actually take the pressure off yourself, you’re actually taking from your future self, and that’s a pressure I need you to feel the weight of. I want you, if you do take that moment in the messy middle where I did this, I wasn’t saving when I was starting my company. I had to quit saving and other things because my priorities at that time were getting the company off the ground. But all through that process, I was scared to death, and I knew that there was a clock without knowing what the timer or the buzzer was going to ring on it was going to be. So I felt that pressure, to where it got the best version to correct what was going on. Because if you, Grace, can be a great thing, if you all know forgiveness, we all need that; we all need to know that there are a thousand ways to create success. But in the background, if you don’t feel like that bear of failure is chasing you down, you’ll never do what you have to, the hard stuff. That’s one of the things I talk about millionaire mission is that I ask questions that I’m constantly asking myself. And am I one of the things I always ask myself: Am I doing the stuff nobody else wants to do? And that’s the thing that you have to ask yourself if you’re in the messy middle. Am I cutting expenses to the bone? Am I actually working jobs and picking extra shifts and hours so that I can increase my income if I can’t cut my expenses anymore because they’re already down to the bone? That’s the pressure, and I want you. I want to harness my inner coach on you and just tell you, “Hey, if I’m not yelling at you, then I’ve given up on you. And you need to put the same pressure on yourself.” For more information, check out our free resources.