Rule 3 is to "Live On One Income - Save The Rest"
While this is rule number three, it is one of the most powerful rules that can really change everything.
Why live on one income when you have more?
You work hard for your money, you should be able to enjoy it. The power of living on one income when you have two or more incomes is the savings rate becomes so substantial that you can reach your financial goals in a fraction of the time.
Gratification of your hard work is reduced by decades when you can live on one income. At an average household income, the reduction is already 11 years from a good savings rate (20%) to a great savings rate (50%).
Living on one income is a great savings rate.
If you don't much like going to work, doing a job just because of the money, persisting through the stress of work because you "have to", then consider this strategy to reduce the years of pain. A decade is a long time.
What does it mean to "live on one income"?
If you are single:
It means you should spend at or below your income from your primary job. It's what people call "living within your means".
But taking it one step further, it means if you have a second income from another job or side business, you should still only spend at or below your income from your primary job.
If you are married (or a similar) situation:
It means you should spend at or below one of your incomes from a primary job. The expenses in your home make up the largest costs in most people's lives. But adding a second person shouldn't add much to that cost. A $2,000 rented apartment can likely fit two people as comfortably as one. Internet costs can be shared. The heating cost might be marginally more expensive to heat water.
All other incomes from your spouse or from second jobs or side businesses can be saved.
Save Money Retire Early is written by Jon Lo, a barely 30 something change optimist, and personal finance guy. I believe anyone can be rich or poor, it's what you save that makes the difference.