How to save hundreds of dollars every month on your grocery bill.

Being a chef I know first hand how easy it is to overspend on food and as a father of 4 teenagers I know how hard it is to keep everyone happy while still staying on budget. I need to make it clear that even though I am a classically trained chef and do it professionally for a living, it is actually my beautiful wife who does most of the cooking for our family, this is comparable to the landscaper who has to worst looking yard in the neighborhood because after doing something for 8-12 hours a day, the last thing you want to do is come home and do it again. I am a big believer that we should all treat our homes like a business and constantly monitor our income and expenses and look for ways to increase or decrease either. In food service establishments we refer to the major expenses as Prime Costprime cost are Food, Labor, and Alcohol. We refer to them as prime cost because they are the primary non-fixed cost of running your business and if you control them you can significantly increase your profit margins. The long standing industry average for food cost is 32%, meaning that 32 cents of every dollar earned went to purchasing food. Obviously just like our households every business is different and will have a different food cost percentage goal, think fast food versus fine dining. Often times as a consultant I spend long hours breaking down individual menu items food cost to see where we can save money or if we need to charge more, some items will have a higher food cost by than others, like a burger compared to a steak. It is interesting to note that even though the fast food restaurant may have a lower food cost percentage the steak house may actually make more profit per plate sold, think a burger that cost $1.00 to make and is sold for $3.25 versus a steak that cost $10 to make but sells for $24.99, the steak may have a higher food cost as a percentage but you are putting $14.99 in your pocket each time you sell one versus $2.25 per burger sold, now obviously the fast food restaurant probably has a much higher volume than the fine dining restaurant so their money is made through sheer volume.

selective focus photography of beef steak with sauce

Now how does all of this relate to our everyday household food budgets? Well to start with the first thing a good restaurant owner would do is set a budget for food purchases based off of expected sales for a certain period, this would be the same for us and each household would be different based off of the number of people living in the house and the income being earned in the home. Since we don’t sell the food we purchase to anyone and only produce it for our own consumption we need to reverse the food cost equation to represent food purchases as a percentage of our personal or household income. So someone earning $45,000 a year who wanted to set a food spend budget of 15% of income, should plan to spend $6,750 a year. Now since a year is a long time to wait to see if you are on track or not, we need to break that down into smaller periods to help us track our expenditures a little closer. Let’s say monthly, so $6,750 per year would give you $562.50 to spend on food that would need to last at least 30 days. Here is where we get back to the point that each household just like restaurants are individual entities and need to be treated as so. A household of one is different than a household of four, the household of one will only need to cover their own consumption so will obviously spend less money overall than the family but because most items aren’t sold in single servings the single person will most likely spend a larger percentage per person on food each month. The family of four will likely spend less per person and depending on whether it’s a single or double income household it may have a much larger food cost percentage of income but because the food can be prepared in larger quantities and each item needed will be stretched across a wider use, they will probably have a cheaper per person cost overall.

photo of woman eating pizza

Now all of this is great but how do we save money? Well now that you have a budget to stick to and a period to spend that money in, we can now plan out four weeks worth of meals with our budget in mind. The first week of the period will have a much higher cost as we will need to purchase items that we don’t currently have but that will last for not only this period but most likely several months, things like salt, pepper, oil, seasonings, dressings, condiments, etc… Next we need to purchase the actual food to make the dishes on our menu, the most highly perishable and in most cases the biggest waste of money in homes is produce, therefore produce should be purchased as close to the planned day of use as possible and rotated appropriately. Next the more expensive items like meat and dairy should be purchased with an eye on quality and value. Once the first week’s food is purchased we can see how realistic our budget is and how much we have left to spend for the remaining weeks in the period, we will also see if our forecast for consumption amounts are correct, are we eating more or less than planned. Once all of this is figured out we can now plan around any life events such a birthday parties, anniversaries, etc.. and allocate extra money to those weeks. One of the most important things going forward is to take a weekly inventory of the items you have left over form week one, we do this first to make sure we don’t purchase these items again unnecessarily and to see if maybe we need to make some slight adjustment to our upcoming week’s menu to utilize leftovers. I can not stress this enough, controlling loss of produce from spoilage, honing in on production amounts, and taking good inventories of what we have on our shelves will save a family thousands of dollars each year alone. Once this is perfected then additional savings will be found in learning to cook with less desirable cuts of meat, to greatly reduce the overall cost of a dish and looking for good sales on staple items.

adult blond board brunette

So how do you forecast how much food to make and how much food to buy, it’s very easy. Let’s look at the family of four. We have 4 people who will eat 6 ounces of meat and 3 ounces of each side, so 4 x 6/16 =1.5 pounds of meat needed. Easy right, well wait anytime you cook something you have what I call production waste which is basically the loss of water and or fat which causes the end product to weigh less than it started out at. so let’s say we will lose 10% of the weight during cooking, so (4 x 6)/16 x 0.10 = 0.15 pounds or 2.4 ounces, in this example we would need to add 10% to our original amount needed to compensate for the lost weight during cooking. With the sides this isn’t really an issue and with items such as rice or pasta they will actually multiply both weight and volume during cooking by as much as three times the original amount. If you can control your protein cost also known as “Center of the Plate Cost” your sides will not add much to the overall cost of the plate.

chef cooking food kitchen

So to sum it up, make a budget, plan menus around that budget, figure out amount of food needed to produce meals, purchase food, and record leftovers or shortages to help better forecast for next week. Keep track of expenditures from week to week to see if you are running a surplus or deficit of funds in the food budget to make sure we don’t exceed our budget in the last week of the month. All of will add up to massive savings that can be used to fund a Roth IRA or even a 529 account for a child’s college tuition, saving $3,000 or more per year would go a long way to covering your children’s education cost or towards your retirement goals. Just as we discussed a restaurants PRIME cost of food, labor, and alcohol, if you can stay away form debt and control your housing, food, and transportation cost you will be well on your way to financial success.

Thanks for reading.


Pan Seared Salmon over Toasted Farro with Lemon Scented Asparagus

6 ounce Atlantic Salmon

1 Cup Farro

1/2 Tomato medium diced

1/4 yellow onion small diced

1/4 Cup Chopped Parsley

1/8 Cup Olive Oil

1/2 Lemon

6 Spears Asparagus – trim at ends 2-3 inches from bottom

Salt, Pepper


In a small pot add 2 tablespoons of olive oil and when hot add farro, with a spatula move continuously around the pan until lightly toasted, add 1 – 3/4 Cups of water or stock, season with salt and pepper, and turn to low, cover pan and simmer for 20 minutes or until farro is tender. Remove from heat and add in tomato, onion, and chopped parsley, Add 1 teaspoon of olive oil and toss

Turn oven to 350 degrees, Turn stove eye to medium, Add Oil to a saute pan, when hot add salmon skin side down, let cook for 1-2 minutes season with salt and pepper and flip over, with fork gentle remove skin and season again with salt and pepper, let the salmon cook until it gets a nice sear and then flip back over and put in oven for 5 minutes, toss asparagus in a small amount of oil and season with salt and pepper, add asparagus to the salmon pan over salmon and return to oven for 4 minutes.

Remove salmon pan from oven and let sit for 3-4 minutes, put farro mix in middle of plate and top with Salmon seared side up, lay the asparagus over the plate resting on the salmon and squeeze the lemon over the entire plate being careful to not drop any seeds, eat and enjoy.


Calories – 681

Protein – 43

Carbs – 57


The reality of working in the food service industry. Why I love it and why I tell kids to stay away from it.

Nearly 50% of the United States population has worked in the food industry at some point in their life and recent reports show that 1 out of every ten people on average currently works in the food service industry. This shouldn’t come as to much of a surprise though as it’s a well known fact that humans need food to survive. In fact Americans spend around $800 billion a year dining out, at the one million plus locations across the country. Who are these people that work hard day and night to ensure an endless supply of tasty morsels for everyone? The majority tend to be women and minorities but in higher end establishments the kitchen staff are predominately white males, white males also dominate the management jobs, making up the majority of food service managers in America. While salaries vary depending on geographical location and the type of establishment, the median salary for food servers (waiter or waitress) is $9.81 or a little more than $20,000 annually. The average salary for kitchen staff varies but here are some estimates.

Dishwaser –  $8.89 per hour – $18,490 per year

Prep-Cook – $9.77 per hour – $20,320 per year

LIne Cook –  $11.12 per hour – $23,130 per year

Chef –  $21.57 per hour – $44,870 per year

Restaurant Manager – $50,000

man making pizza dough


Obviously this is just the average so some earn less and some earn significantly more. I personally know Chefs and managers that earn over six figures, especially ones that run large scale operations or multi-unit operations. Many of these high paying jobs offer great bonus plans based off of controlling operating cost, sometimes referred to as Prime cost, prime cost are usually considered food, alcohol, and labor cost, they are called Prime cost because they are the largest non-fixed cost and will fluctuate depending on how busy the establishment is. If you as a manager or Chef are able to control your Prime cost there usually is and should be a nice monetary incentive attached,

So what does the normal day of a restaurant employee consist off? Well for a server there is dealing with the general public to start with, but as if that isn’t hard enough, add to it the fact that they are either drunk, or in a hurry to eat. The server is responsible for setting the table, taking the orders, relay orders to the kitchen and the bar staff, delivering food and refilling beverages, busing tables, rolling silverware, and typically cleaning the front of the establishment, and all of this in hopes that the guest will leave a large enough tip to help offset the $2.13 they earn per hour. Most servers have to work nights and weekends as those are the prime times to earn the best tips, so when everyone else is getting off work and preparing to go enjoy themselves, the servers are getting ready to serve them.

woman wearing brown apron standing near table

The average day of a cook can vary widely depending on the type of establishment they work at. Usually their day will start with food prep, food prep consist of cutting the meats and vegetables, making sauces, and anything they will need to have ready for service that night. Just like the servers, cooks usually work nights and weekends as those are the busiest times and will typically pay the highest wages. During the nights there are also busy periods because most of the public eat dinner within a relatively small time frame, so the cooks whole day is a lead up to an extremely difficult and hectic 3-4 hour service where they will prepare a hundred or more dishes in that time. Once the service is over the cook will put away all of his items and clean and sanitize his work area, this includes sweeping and moping. In contrast to the server who has a monetary incentive to work hard and serve as many people as possible because the more people served equals more tips received, the cook has zero incentive to produce a better product or serve more people because regardless of their increased effort, their compensation will not change.

Both the server and kitchen staff will spend 8-12+ hours a day on their feet with almost zero down time, both will receive cuts and burns, with the potential for some serious injuries do to the simple fact of the dangerous environment they work in filled with hot pans, sharp knives, and slippery floors. What makes this so bad is very few can afford health insurance and most if any can afford to miss work for more than a day.

brown and white bear plush toy

I realize that I have made the industry I love sound horrible and nothing like what you see on the food network. Well reality check, becoming a celebrity chef is about as common as becoming a professional athlete. While I am grateful for the new found popularity of chefs, who seem to be hawking every product imaginable, from pots and pans, to cook books and clothing, I am also worried at the influx of people to the industry who think since they love cooking at home and hate being in an office all day, that they should go to culinary school and be a chef. The same goes for the young kid who thinks he will go to culinary school and after graduating, will quickly either own his own restaurant or have a TV show. Sorry to burst anyone’s bubble but the reality is a culinary degree is no guarantee of success, in fact some of the most successful chefs and managers have no degrees at all. Even with a degree, anyone entering the industry should expect years of hard labor for not much more than minimum wage, In fact most employees of the fine dining restaurants can’t afford to actually eat there.

chef preparing vegetable dish on tree slab

However there are some great things about this industry for those that are willing to put in the time and effort to rise to the top. First it is fun and some of my best memories are of being a line cook and hanging out with my coworkers after a long shift, there is a certain bond that is built among food service staff because since they work different hours than the general public, it almost becomes a sort of counter culture. Secondly you are constantly surrounded by great food and beverages that you of course have to taste, most employees eat for free at work, which can be a huge cost savings, I know I used to eat 2-3 meals a day at work. One of the best advantages is the fact that once you work in the industry and deal with a demanding public, some of which will complain no matter what you do, all while dealing with the pressure of working in an extremely fast paced and hot environment, everything else will seem easy. I personally think everyone should work in food service at some point in their life, if every other industry was held up to the standards and expectations of food service the world would be a much more efficient and happier place. Last but not least, once you learn the core foundations of cooking or serving, you can pretty much get a job anywhere in the world just by walking in and asking for employment.

Personally the industry has been good to me and I have been able to raise and support 4 kids and a wife from working in it. I have worked at some of the most beautiful settings in multiple states and meet some of the most amazing people. My kids have come to my work before and thought it was the best job in the world because I got free food for them, some of the jobs I would bring them to see the beautiful marinas, golf courses, and stadiums, they loved it, of course they didn’t see me slaving away in a hot kitchen for the other 5 days a week. So when my kids talk of getting into the food service industry I always try to steer them away, my oldest daughter has worked in fast food, at a local independent restaurant, and at a college as a concierge attendant but I make sure to tell her to study hard in school so she can be the one being served and not the one doing the serving.

Thanks for reading,



Who the heck is ChefonFIRE???

Who is ChefonFIRE and what is he all about. For almost 20 years I have spent time in the hospitality industry, holding every position from dishwasher to owner. I spent years as a manager, owner, or consultant working for and with some of the best people in the industry and have enjoyed almost every minute of it:) Along my way I noticed that the vast majority of people in the industry from hourly to management worked extremely hard but had very little if anything to show for it. Having been blessed to have been educated about money from an early age, it bothered me to see so many people that will be destined to a life of had work with no end in sight. I believe you see this in other industries as well such as nursing, where the individual is passionate about serving others so much as to actually neglect themselves. One day after sitting with my oldest daughter who works in the hospitality industry at a concierge company, we were going over her finances as well as her plan to attend college and purchase a car. We looked at her savings account, checking account, the 529 college savings account, and even her ROTH IRA that she started. Later at work I had a casual conversation with two individuals about their boss not giving them a raise even after they had explained to him that they needed more money to live off of. I started to explain that he doesn’t pay them based off of their financial needs but based off of the contributions they make to the business and the value they add to it, but then it hit me, they didn’t need a raise, they needed someone to teach them about money, about saving part of their income and investing it, just like my daughter was doing at 16 these people in their thirties needed a financial plan.

blur breakfast chef cooking

Enter ChefonFIRE. I decided then and there to help as many people as possible to gain control of their finances and financial futures. I started this blog to educate newbies to the investing world, what everything meant and how retirement was possible for anyone. So many people I spoke to believed they needed to be rich to invest in stocks, or have a high income, most were shocked after opening a 401K and contributing enough to get the company match that they barely noticed any difference in their take home pay. For many that worked at a publicly traded company it was fun to have them purchase a share or two of their company and say now you are part owner of this company, they always smiled. For anyone that has never worked in the hospitality industry, it is a hard and unforgiving industry but if you are willing to work hard and put the time in, you can be rewarded greatly. Imaging being at every party but only you are the one serving, going out to the bar every night but you are the one cleaning it up later, cooking for hundreds of people with a hundred different expectations and preferences who complain about everything, getting burned, cut, spilled on, and yelled at, all while standing on your feet for 10-12 hours in a hot kitchen or crowded dining room. One thing I always told the young cooks or servers when talking about saving for retirement was to look at the old chef or server who had been doing it for 20-30 years, they were worn down and tired looking but with no alternative but to continue working because they were 100% dependent on the next paycheck, I would say wouldn’t you rather be sitting in the dining room eating with friends at 60 rather than working in the back?

In closing anyone can attain financial independence. The great thing about it is that it’s not about how much you earn but about how large a  percentage of your income you can save compared to your monthly expenses. So even the $10-$12 an hour line cook can take steps to lower his expenses, which will automatically increase his ability to save, all while lowering the total amount he needs to retire. In retirement you won’t need to replace income so much as be able to cover expenses. Learning this puts control back in the hands of the saver and makes saving for retirement not only a reality but a responsibility, that many feel empowered by.

I hope you enjoyed this short article and thank you for taking the time to read it.




Trying to decide between using a Traditional IRA or a ROTH IRA? This can be the cause of a lot of debate and has caused more than a few arguments. Traditional wisdom has always said that if you are young or not earning a lot of money at the moment then you should use a ROTH to take advantage of your current low tax bracket, this is assuming that you will be in higher tax bracket when you begin taking withdrawals from the ROTH. On the flip side if you are in a high tax bracket then a traditional IRA might be better because you benefit from realizing the tax break now and hoping that you are in a lower tax bracket in retirement. For the most part this still makes sense and is sound advice for most people, however those of us aspiring to early retirement may need to look at it from a different perspective. First let’s explain the Pros and Cons of each account.

The Traditional IRA – An Individual Retirement Account is designed for anyone that wants to make post tax contributions but have those contributions deducted from their taxable income. An IRA is an account you set up at any brokerage you decide upon and invest in any type of investments you want. Currently an individual can contribute up to $5,500 per year and up to $6,500 per year if over 50, this is considered a catch up contribution amount. The contributions go in tax free and grow tax free, this is advantageous as it allows higher income earners to defer the taxes and let the money compound over time tax free. Withdrawals can be made penalty free after the age of 59 and a half, withdrawals can be made earlier than that but there will be a 10% early withdrawal fee plus taxes that are due, DON’T take early withdrawals……. In general it is best to hold index funds and stick to an investment portfolio you feel comfortable with for the long run.

The ROTH IRA – The ROTH IRA is an account that allows an individual to contribute post tax money but the money will grow tax free and withdrawals will not be taxed either. So after 20-years of compounded interest if you have a million dollars you actually have a million dollars and owe zero taxes on it. Usually a ROTH account is best for someone young or not earning a large salary yet as they will not be in a high tax bracket and could expect to be in a higher bracket later in life. The ROTH has the same annual contribution limits of $5,500 and $6,500 for someone over the age of 50. I personally love the ROTH because it gives you a lot more flexibility in retirement to choose when you take contributions, this has major benefits as you can better control your income which allows you to stay within a certain tax bracket. Let’s say for instance you want to lower your taxable income for some reason, the ROTH has no required/mandatory withdrawals so you could take out as little as you want to offset other sources of income. You could also use a ROTH to bridge the gap between early retirement and age 59.5 when you can begin taking penalty free withdrawals from a 401K or IRA. Another huge benefit is that since you technically never have to withdraw the money a ROTH account makes a great inheritance vehicle, especially since heirs won’t owe any taxes on the withdrawals either. A ROTH could be the perfect place to park a little money to help cover all the cost of hard/physical assets that will be passed on to loved ones.

In closing I don’t think it is necessarily an either or scenario but a how much to allocate to which account. If you are a high earner I think you should put the majority in the traditional IRA and maybe $500 a year into the ROTH, if you have a 401K then max that bad boy out and put any other extra funds into a ROTH. If you have children and they have earned income, mowing yards, dog walking, baby sitting, etc…. start them a ROTH and help them to become Financially Independent a decade or two earlier than you did.

From Zero to Retired A.S.A.P………

This post will give everyone the basic knowledge to get started on your path to Financial Independence, we will tackle the money, the math, the plan, and most importantly the REASON. To start with we need to define Financial Independence, Financial Independence is when you no longer need to trade time or energy for money. It is when you have saved enough financial capital to continue living the lifestyle you want without worrying about earning money. The goal is for the money you have saved and invested to be working and providing large enough returns (capital gains) that you can live off of the interest and never worry about running out of money. There is a lot of debate as to what the perfect amount to have saved to confidently walk away from your career but for simplicity and for safety we will go with 25 times your current monthly expenses. This would equate to being able to comfortably withdraw 4% of your account balance every year to live off of. This number has been studied extensively and proven to be the sweet spot. Trinity University did a thorough study of historical returns and back tested the 4% withdrawal rate, they found that it had an almost 100% success rate of insuring that the investor did not run out of money after retiring. The really interesting thing is that in most cases the investor actually ended up with more money than they started with even after they had withdrawn 4% to live off of for 30+ years. So where do we start?

The REASON- The reason for Financial Independence in my opinion is the most important part because without the why it’s hard to get motivated to even start and really hard to keep going when progress seems slow or setbacks occur. Everyone’s why will be different depending on their personal beliefs and what is important to them, for me it’s security for me and my families future. Simply saying my why is because I want to be rich is not enough, you need to really define what is important to you and connect your finances to it on an emotional level. I recommend spending time thinking about what a future of financial independence would look and feel like, how would being secure in your future and having the ability to choose to work because you want to not because you have to feel like, how would you behave or act if you didn’t depend on a job to pay your bills. What would you do with your free time, how would your freedom affect your family and friends? Once you have written down your WHY and what it means to you then we need to tackle the how.

The How – The how can be summed up very simply as getting your monthly expenses as low as possible so that you can save as much of your income as possible and so that you require very little income to live off of. So if you can imagine paying off your debts and saving 40% of your income, that means you only need 60% of your current income to actually live off. So lowering your monthly expenses speeds retirement up exponentially as it allows you to save more and at the same time require less to actually live off of.  The chart below is from the MMM website and does a great job of showing just how powerful a high savings rate can be. Below it shows that saving 5% of your income takes 66 years to be able to retire, it means you need 95% of your income to pay your bills. On the other hand a 50% savings rate only takes 17 years to reach retirement because you only need half of your monthly income to cover your living expenses. So let me say this one more time, the lower you can get your living expenses the more of your income you can save to build an income machine and the less you require to live off of.

              Savings Rate (Percent)        Working Years Until Retirement
5 66
10 51
15 43
20 37
25 32
30 28
35 25
40 22
45 19
50 17
55 14.5
60 12.5
65 10.5
70 8.5
75 7
80 5.5
85 4
90 under 3
95 under 2
100 Zero

I’m sure that many of you are saying this sounds great but who can afford to live off of only 50% of your income, unless of course you make a million dollars a year. Well the great part about this math is that it is all about percentages, so whether you earn $10.00 an hour or $100,000 a year the math is all the same. The less of your monthly income you require the more you can save and sooner you can afford to retire. In honestly if you could live with family or friends for free you could probably retire now. The first thing to do is to begin tracking your income and expenses and get a clear picture of what you have coming in and what you have going out. If you spend more than you make you have a deficit but if you earn more than you spend you have a surplus. Managing your monthly finances will allow you to better understand where you are, where you want to be, and how to get there. I have provided a spread sheet to help you calculate your monthly income and expenses and also track your net worth, net worth is the difference between what you own and what you owe. The spread sheet requires you to fill in the amounts of income, expenses, and assets. The cells highlighted in YELLOW or GREEN will pre-populate and should not need to be messed with. Start with the Net Worth sheet and enter all your assets and liabilities, then move on the income and expenses sheet where you enter your income and monthly expenses, if you enter your annual salary at the top it will automatically figure your monthly income. once you enter your monthly expenses then you can enter expenses you could probably easily do without. Next you will move on to the last sheet Retirement Plan, here most of the cells will once again pre-populate for you, the only cell you really need to mess with is the amount of years you plan to live in retirement, remember the earlier you retire the longer you will need to live off of your investments. I know this may seem like a lot of work but it’s not really that bad and will go a long way to help you get ahead. Once you have filled out all the information on the spreadsheet, you should have a good idea of exactly what you earn, spend, and can cut out to save more money. Interestingly if you can increase earnings and simultaneously cut spending your savings and net worth will start to grow exponentially. Once you start to see progress it becomes really fun, actually it starts to become slightly addictive. Albert Einstein said that Compound interest was one of the great wonders of the world, it allows your money to earn interest off of the interest and once you get a decent amount saved your money will start earning more than you do by working, that’s when it gets really fun.

Okay so we defined our why, we looked at the math behind how lowering expenses allows us to shorten the time till retirement, and we also know how much we are spending and saving. Now we need to see if the amount we are saving each month will get us to our retirement goals. There are many retirement calculators online that will allow you to run the figures but my favorite is the Simple savings calculator from BankRate. So now we now if our savings plan will work or not but where do we save the money………. Funny you should ask.

This is targeted at the standard W2 employee. Here is my recommendation for where and how to save your money. Start with your companies 401k and put in enough to get the company match, this is like free money and everyone loves free money. Next let’s move over to a traditional IRA, my personal favorite brokerage is Vanguard and it only takes about 10 minutes to open an account. Currently individuals are allowed to save up to $5,500 per year in an IRA. This money is post tax but you get a credit on it when filing taxes, so you get an immediate tax savings in the year invested. Once you max out the IRA account we can move back to the 401k. There is one exception and that is if the 401k administrator charges higher than normal fees, (greater than 1%) if this is the case please speak to your Human Resources manager and ask them to research other options, it is your companies duty to provide the best plan they can. Assuming this isn’t the case start putting in as much of your income as you can into the 401k, 2018 contribution limits are $18,500. Maxing out your 401k should be your next goal, all the money put in this account is put in pre-tax and instantly lowers your taxable income. So not only does it lower the amount of taxes you have to pay it allows that money to grow. This is especially advantageous for someone who is in a high tax bracket because once retired chances are you will be in a lower tax bracket. So if you make it to the point that you are maxing out an IRA and a 401k then you are saving $24,000 annually and also not paying taxes on the $24,000. If you have additional income to invest above this amount I recommend utilizing a taxable brokerage account. These accounts are for post tax income and have no limit to contributions, these accounts don’t have any real tax savings but they allow you to invest in anything you can imagine and as long as you keep the investments for more than a year you benefit from the long term capital gains tax rate, to learn more about these rates see my taxes page on this website.

I of course believe in paying off all debts and holding at least 2 months of expenses in cash in a savings account. All of these can be worked towards at the same time. I recommend paying off an debts with high interest rates and leaving debts associated with appreciating or income producing assets until last. I would in fact suggest that if the debt is on an asset that produces enough income to cover the debt payment that it should be moved to the bottom of the list. Also if you have a stable job and feel secure in it I think the emergency fund can be less of a priority, however you must be able to cover any unexpected expenses that might arise without having to dip into your savings or go into debt to cover them. This is not only a plan to get you to financial independence but to create generational wealth. Once you have reached what we call critical mass or saved an amount that spins off enough money for you to withdraw 4% to live off of, not only will you most likely never have to work again but you will likely leave the next generation a massive inheritance. If you couple this with teaching them how to save and live below their means, plus getting them started saving young they will be able to grow that nest egg and change the course of the family tree. Imagine a multi-million dollar account that isn’t touched for another 15 or more years after you pass away………

In a later article for more advanced investors we will discuss how to make after tax contributions to your 401k which can then be rolled over to a ROTH IRA which in my opinion is one of the best inheritance/wealth transferring accounts available. I hope this article has shed some light on the path to Financial Independence and inspired at least one person to begin that journey. Becoming Financially Independent is one thing each of us can do to not only improve our lives but the lives of those around us. We change the world one person, one house, one neighborhood, one town, one city, one state, and one country at time. Thank you for taking the time to read this article and if you enjoyed it please share it with someone you think it might help.