Part 7/10:
The challenge here is lifestyle inflation: as income rises, expenses tend to grow proportionally. Wealthy people maintain discipline, living below their means to prevent expenses from ballooning. Small choices—such as choosing a modest home, buying a reliable used car, cooking at home—are strategic moves that create savings.
For housing, living below one's means can save tens of thousands over years, and for transportation, opting for a modest car over a financed luxury model can free up funds for investments.
The 20% for Fun and Flexibility
The final, often misunderstood, part of the system is dedicated to enjoyment—20% of income earmarked for entertainment, hobbies, spontaneous purchases, and life’s pleasures.