You can be financially free if you spend less than you earn.

Today I’ll talk about spending Less. A Lot Less. You can’t break the chains of slavery with a nail file. You must smash them to smithereens with a big steel mallet.

What do I mean by that?


Most of the financial gurus who focus on “un-wealthy” people recommend cutting expenses in small ways. Spending less on cable TV. Buying less expensive coffee.

When I read their advice, I get apoplectic. They must know this kind of “budgeting” won’t do any good. Why do they keep on with it?

The only answer I can imagine is this: It is politically correct.

They will never be criticised by telling people to be more frugal by small degrees. They will be praised by the liberal press. Their books will sell hundreds of thousands of copies.

But their advice is bullshit. The truth is that you will never be able to become financially independent by cutting $10 here and $50 there.

You need a big, big mallet. My recommendation is to cut your expenses by 30- 50%.

I know that sounds crazy. And it may even be impossible, in some cases. But for millions of the middle-class working class, not only is it possible, it is the only option.

Don’t dismiss this idea until you hear me out.

The primary factor in how much you spend every month is the neighbourhood you live in. Huh? 

Listen, I’ve been thinking about this for a long time. And although I’ve never heard anyone else say this, I’m very confident this is true. Your neighbourhood creates the financial culture that presents the spending choices you make.

Let me give you a few examples. 

If you live in a community of million-rand homes, there is a 90% probability that you drive a $60,000 car, take European vacations, send your kids to expensive schools, and spend over a R1,000 every time you go out to dinner.

And even if you live in a neighbourhood of $100,000 homes, you still have a lifestyle that costs you more than you need to spend.

How much you spend on transportation, education, entertainment, and everything else depends very heavily on the neighbourhood you live in.

So if you want to really cut your expenses, you have to downgrade your neighbourhood.

Stay with me. I know you don’t like this.

I have friends and family members who, while not absolutely broke, live in financial stress because they refuse to downgrade.

They live in $350,000 homes in beautiful neighbourhoods and have new cars, but the cost of all these “necessities” is keeping them in debt. Most of them, in fact, are getting poorer every month.

Yet when I suggest they downsize, they look at me like I’m crazy. No, it’s worse than that. They look at me like they believe I want them to suffer. They don’t stop to realize they are suffering already. My advice is the only thing that will take that suffering away.

Holding on to a lifestyle you can’t afford will make you poorer — every month

And it will make you more fatigued and angrier. And it will goad you into making bad financial decisions, such as investing in schemes that promise to solve all your problems in “the short term.”

Moving to a less expensive neighbourhood is the quickest, biggest, and surest way to bring your spending down by 30-50%. It is the big steel mallet. Pick it up. Feel the weight. You know it is the only thing that will break those chains!