5 Easy steps to afford your luxuries without going into debt

Learn the simple five-step process that can allow you to enjoy the lifestyle you want without compromise or debt

Enjoy life without compromise—and credit card debt—when you use investment gains to fund all the luxuries that you want to enjoy. Here’s how to get started.

Luxury cars, designer clothing, and Instagram-worthy vacations are all a lifestyle that we want. Sadly, too many people enjoy these fruits of life by going into serious debt.

The truth is that you can enjoy a good life without debt. How? By simply putting your money to work. With the right saving and investment strategy, you can realize gains that allow you to live the life of your dreams!

Here, I will lay out the five steps that will allow you to enjoy a debt-free luxury lifestyle.

Step 1. Change your Mindset

First, you need to get rid of the idea that you can spend without paying for it upfront. 

Yes, credit card companies entice you with high limits and no-interest introductory rates. However, all credit cards charge higher rates over time. With rates reaching over 30%, that $1,200 iPhone purchase can end up costing you thousands of dollars more. 

Create the mindset that you will only pay for luxuries with gains from your investments and you are ready for a wealthy life without regret. 

Step 2. Set Your Goals

As a sea captain before going out to sea, that needs to know where to sail, you have to know where you're going before you get there.

• It’s not enough to say, “I want $1 million dollars.” You should really sit down and think about what luxuries you want and what will make you happy.
• Without having concrete goals, you will endlessly chase money and never reach a point of fulfillment.
• Write down what luxuries or experiences you want and assign an amount. This will help you create a realistic financial goal.

Step 3. Start Saving 

Now it is time to start funding your investments. This is done by saving at least 10% of your income. 

In order to save every month, you need to pay yourself first. That means the first 10% of your money goes straight into your savings. 

Additionally, save about three to six months of your income in case of emergencies. You never know when an unexpected medical bill or layoff could adversely affect your saving and investing goals. 

Step 4. Create Your Investment Strategy

Now it is time to invest. Be sure to think for the long term. Avoid volatile investments that could scare you into selling at the bottom.

The world’s great investor, Warren Buffett, recommends that average investors place their money in a low-cost index fund. Buffett recommends Vanguard’s S&P 500 Index Fund (VOO). This fund may seem boring. However, the fund’s historic 9% return has outperformed over 90% of professional Wall Street investors over the past 20 years!

Step 5. Cash Out Your Gains and Enjoy Life! 

As your investments appreciate, it is time to enjoy the fruit of your money’s labor! Be sure to wait at least 12 months to begin your withdrawals. This will allow you to pay the lower long-term capital gains tax rate 

Start Today on Your Wealth Path to Tomorrow

The earlier you begin to save and invest, the more time your investment can compound and grow your wealth. Begin today by saving at least 10% of your income. From there, open a brokerage account and invest wisely. Your path to wealth without debt is easier than you think.