3. The Lowdown
Jones
College Degrees
Married at age 25
Both currently work
Total annual income:
$48,000
Monthly Income =
$4,000
Simpletons
College Degrees
Married at age 25
Both currently work
Total annual income:
$48,000
Monthly Income =
$4,000
4. The Houses
Jones
House Cost $200,000
20% Down = $40,000
Mortgage- $160,000
5% Rate for 30 Yrs.
Bought House 1 year into
marriage
Monthly Payment =
$858.91
Not including taxes &
ins.
Simpletons
House Cost $125,000
20% Down = $25,000
Mortgage - $100,000
5% Rate for 30 Yrs.
Bought House 3 years
into marriage
Monthly Payment =
$536.82
Not including taxes &
ins.
5. Transportation
Jones
Bought 2 new cars every
5 years
2 cars at $15k each =
$30k
$30k at 6% for 5 years
$579.98 total monthly
payment
Simpletons
Bought 2 used cars every
5 years
2 cars at $7k each =
$14k
$14k at 6% for 5 years
$264 total monthly
payment
* Please note that I’m not advocating for car payments here,
simply giving a comparison.
6. Eating Out
Jones
Dine out 8 times per
month
4 times at an expensive
restaurant
Avg. meal = $100
2 times at moderate
Avg. meal = $50
2 times at modest
Avg. meal = $25
Total cost per month =
$550
Simpletons
Dine out 4 times per
month
1 expensive restaurant
= $100
1 moderate = $50
2 modest ($25 each) =
$50
Total cost per month =
$200
7. Vacations
Jones
One expensive vacation
per year
Average cost per year =
$4,500
$4,500/12 = $375 per
month
Simpletons
Two vacations per year
One with family = $1500
One simple one= $500
$2,000/12 = $166.67
per month
8. Entertainment
Jones
Expanded Cable and
Internet Package = $150
2 Movies Per Month =
$30
Golf 2x Per Month =
$100
Total Monthly = $280
Simpletons
Simple Cable or No cable
& Internet Package =
$50
2 Movie Rentals per
month = $5
Golf 1x per month = $50
Total Monthly = $105
9. Shopping
Jones
Clothing $50
Groceries - $500
Items for House - $50
Miscellaneous personal
items = $200
Total Monthly = $700
Simpletons
Clothing $20
Groceries - $300
Items for House - $20
Miscellaneous personal
items = $60
Total Monthly = $400
11. The Comparison
Simpletons Spend Less Each Month:
House: $322.09 Less
Transportation:$315.98 Less
Eating Out: $350 Less
Vacations:$208.33 Less
Entertainment:$175 Less
Shopping:$300 Less
Total = $1,671.40
12. The Potential Impact
• $1,721.40 Additional margin
Save/Invest $1,000 per month
At 6% in 10 years = $162K
Paid an additional $200 towards mortgage each month
Home is paid off in 17 years (13 years earlier)
Gave rest to their church- $500
In 10 years they’ve given over $60,000
Doesn’t include paying cash for cars or education savings
All by the age of 41
13. Savings Growth Over 30 Years
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
Year1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
*Plus a Paid Off House
14. The Key?
It’s the small daily decisions
to say no that allow you to
live simply and stay free for
the long haul.