I was just reading about how former New England Patriot’s tight end Rob Gronkowski, aka Gronk, managed to save all $54 million of his NFL earnings. His strategy was to live off the endorsements income and save the football money. Simple.
Turns out lots of famous people have had similar savings strategies, living frugally off one stream of income while saving and investing the rest. Jay Leno, for example, saved every penny he made doing the Tonight Show and only spent his standup earnings.
Well, guess what? You don’t have to make millions a year to employ a similar strategy. I did, and it worked beautifully.
During my 23-year career in the tech industry, my savings philosophy was equally simple: Live off the income, use bonuses to pay down debt – home mortgages and car loans – invest whatever was left over, and save all the stock options I vested.
Also we’ve never held credit card debt. We just use them for convenience and pay them off monthly, religiously.
You might find this hard to believe but I never sold a single share of company stock awards until after I quit the tech industry at 47. By that time we had paid off our mortgage and any other loans and were debt-free when I started my consulting business.
The only exception was that once or twice I did have to sell some shares to exercise options before they expired, but that was a small percentage of the total and totally necessary.
That’s why my wife and I lived in a crappy old house on our beautiful property in the Santa Cruz Mountains until we could cash out of my stock options and build our dream home.
Look. Saving money can be tricky and difficult. My advice, and I’m apparently not alone, is 1. keep your strategy simple; 2. be disciplined about it; and 3. live frugally, and never beyond your means. It works.
Image credit Steven Zwerink / Flickr