What is your savings rate?

[Zach Adams]

Happy holidays BP Nation! What a great year this has been for me and my investing! I bought another SFH rental in May and bought a live-in Duplex in November. I wouldn't be where I'm at without the inspiration I've found here as well as the guidance.

One of things in my investing and planning that I really measure is my Savings Rate.  I initially came across this idea from Jacob Lund Fisker and the Early Retirement Extreme folks.  I read his book, and while some of it, no surprise, was a bit extreme, I gleaned some valuable information that I've taken with me into my investing world.  His premise, if you're not aware, is to get VERY aggressive with savings, like 80-90% of your income.  

The ERE folks are very creative about living expenses and greatly reducing them. So already looking at ways of cutting spending and living below my means, I started in REI a few years ago. Another influential character was B Kyosaki and his Pay Yourself First idea, which I've been doing for a long time. So without getting into my whole lifestyle and ways I've eliminated excess spending to boost savings (so I can invest!), I'll just talk in some round numbers.

I got serious about a Savings Rate number and started at ~20-25% net income, which at the time was $1200 (Savings Rate)/mon. Later I boosted my SR to $1800/mon which was around 40%. With my income from my rental properties and the large reduction in living expenses from owning a duplex, my monthly SR is ~$3000 (not including bonuses and commissions from W-2). This is money that automatically gets taken out of my account and there's room after all expenses are met as well. I don't budget myself or go crazy monitoring where my money went. But I am excited at the increase and already have plans to get this number up to $4000/mon in 18 months. Yes, I realize that a bulk of this money is W-2 and not from investing. 15-20% comes from REI. But in a few years I'm going to have the cash to get into a large apartment.

How do you approach savings, planning, budgeting?  I see folks on here that want to invest in RE but have no money.  That has not been my experience.  I'm sure there's plenty (D Lindhal) that did it this way, but I like the Grant Cardone model: need money to invest? make more money! 

Happy holidays and may everyone prosper in 2016!

Zach