How To Save 99% Of Your Income

What's up you guys? It's Graham here. So, I thought this would be fun to get back to the basics and cover every technique that I have used along the way that's allowed me to save nearly 100 percent of my income and essentially live for free. That includes how I'm able to own my home for pretty much nothing out of pocket, how I'm able to travel anywhere in the world without spending a dollar, probably able to drive a Tesla for $78 a month, and every other master Jedi money-saving trick that I have learned along the way to stretch each dollar as far as it could possibly get.

Hold on one second. Mom, no, I don't want hot dogs tonight. I told you I wanted pizza. Oh man, she always does this when I'm filming and bothers me.

By the way, one of the best ways to save as much money as you can is to move into your mom's basement and then borrow her car when she's not using it, and then use your credit card to go and buy you things so you don't have to pay for it yourself. Seriously, it works wonders and is one of the best ways to save as much money as you possibly can. I'm just kidding, that's a joke! I've just found ways to be really creative with my spending, and by doing so that allows me to save more, invest more, which means I have more freedom to go and do what I want—like spending half of this video trying to get you guys to destroy the like button for the YouTube algorithm.

So, with that said, let's get into the video, and I'm going to be sharing every way that I have used to save about 99 percent of my income, starting with this. But first, I just want to clarify that regardless of how much money I make, for me, learning and figuring out different ways to save money is fun. Even as a kid, I was just that weird person who got more enjoyment from saving and investing than I ever got from spending. So for almost my entire life, I've just found creative ways to stretch one dollar as far as it could possibly go.

My rationalization was really just the entire concept of what's known as FIRE, which stands for Financially Independent Retire Early. This is the methodology that if you save and invest enough money, eventually you're gonna reach a point of financial independence where your investments can cover your day-to-day lifestyle without you needing to work. And once I heard this concept put into words, it was just eye-opening for me.

To me, it's so much more than just being frugal and saving money. It's really about prioritizing your life around the things and experiences that mean the most to you and then cutting back on everything else that doesn't fit. It's about building the life that eventually leads to complete freedom to do what you want when you want to do it without finances holding you back, and once you reach that point, the possibilities are limitless.

Doing this is a lot of creating a schedule where almost every day just feels like a Saturday, and I have the ability to work on the things I find the most enjoyable. But anyway, point being, this video is not just about being cheap; it’s about realizing what’s really important and getting the most value from your money as possible. That way, you could have enough money left over for whatever freedoms and luxuries you like.

These are my top money-saving strategies that have made the biggest impact for me. Now, the first is by doing what's called house hacking, and this is what's led me to own my home here in Los Angeles for zero dollars out of pocket while still getting to live here for free. If that sounds too good to be true, let me explain how it works and how I've done it.

To start, house hacking is when you buy a multi-family property like a duplex, triplex, or four-plex. Then you move into one of the units and rent out the others to cover your cost. You might also be able to do this with a single-family home with a guest house or be able to rent out a basement to cover your overhead. Typically, when done right, the rental income from the other units should cover all of your overhead and expenses of owning the building. And when that happens, essentially you've got a free place to stay.

Now, in order to do this, it typically requires you save up about 10 to 20 percent of the cost of the building as your down payment to buy the property. But once you have that amount, you can leverage the property for pretty much free housing for the rest of your life. For myself, I bought a duplex that needed a decent amount of work, so I spent a few months fixing it up. I then moved in, collected rent from the other unit to cover my mortgage, and within about two years, I was able to do a cash-out refinance to recoup my entire investment within the property. This meant at that time, I had zero dollars of my own money invested in the deal.

The property was able to cash flow enough to cover my entire payments, meaning that I had a place that I could live in for nothing out of pocket. For anyone who wants more details on this and how it works—because I could easily talk another 10 or 20 minutes on the subject—I'm going to be linking to another video down below in the description for anyone curious.

Now, I will say that doing something like this does not come without a lot of work, a lot of patience to find the right deal, and the money to actually go and buy this in the first place. But this is not an unusual or uncommon real estate strategy for people who want to live for free. House hacking is a fairly known method for people who want to leverage their money, invest in real estate, and cut down on their housing significantly.

If you don't have a down payment saved up right now but you still want to cut down on your housing, no worries on that. You could also reduce your cost of living by doing what's called rent hacking. This is where you go and rent a house and then sublet a few of the bedrooms to cover your cost, or similar to this, you can consider living with roommates to give yourself enough time to save up. But overall, for me, house hacking has been one of the best things that I have ever done.

It's estimated that most people spend thirty to fifty percent of their income on housing, so being able to address the biggest expense first will go the longest way in terms of how much money you could save. Besides that, I've also found a really interesting way to save on transportation, and that's by paying very close attention to the car I drive. Then I'm gonna call this one car hacking, and I know that sounds like super shady stuff, and car hacking? It’s not!

I know these are fairly specific one-off examples, but there are a lot of cars out there that you could buy for under market value that have already experienced the majority of their depreciation, that you could pretty much drive for free without losing much value. For example, many used cars reach this point after about five or six years that you could buy at a good deal and then drive without that car costing you a lot of money.

For me, I did this with a Lotus Elise. I've always been really into cars, so in 2009, I bought a Lotus Elise for $30,000, drove it for a few years, and then sold it for $30,000. That car cost me nothing to own besides paying insurance, gas, and doing a few oil changes myself. I've been able to do the same thing with my Lotus Exige S 240. I bought that car in 2014, drove it for five years, and then sold it recently for about the same price that I bought it for.

Those cars are like savings accounts because you can put your money in the car, drive it around for a few years, and then get all your money back by the time you're done with it. Even with my Tesla Model 3, I was able to get the cost down substantially by understanding the tax code and the EV rebates available to me. After doing my research, I determined that if I financed 100% of the car and put the sales tax on my credit card, I'd get back a $3,750 federal tax credit, a $2,500 EV tax credit, and be able to write off the cost of the car against my business, allowing me to drive it for the out-of-pocket cost of $78 a month.

And that doesn't even include the cost of gas savings or being able to invest my money elsewhere at a much higher return than what I'm paying in interest on the car loan. Now, I understand that not everyone is self-employed and can utilize those tax deductions, but even if you're watching this and just want to get a car to take you from point A to point B, you could still get a really good deal on a used car below what it's worth and drive it for free because it's already seen the majority of its depreciation.

Then, at the very least, your only out-of-pocket cost is going to be insurance, gas, and maintenance, which hopefully you find yourself a really reliable car and you don't have a lot of speeding tickets. That way, insurance is not gonna be too high. After that, though, is one of my favorite topics that I talk about non-stop, and that's how I'm able to travel for free using nothing but credit card reward points, and here's how that works.

Credit card companies will offer incredible bonuses just for signing up for their credit cards. People who understand the art of how the system works can use this to their advantage by signing up for a credit card, meeting the minimum spending requirements to get the bonus, then redeem that for all types of free travel, and then move on to the next one and repeat the process again. I absolutely love talking about this because I'm proud to say that I've not paid for a single plane ticket or hotel in over four years now, and doing this is incredibly simple and fun.

For instance, you might be able to find an American Express gold card link that will give you 50,000 points when you spend $2,000 in the first three months. That means if you just go and put all of your normal spending on the card during that time frame to get the bonus, you're gonna have enough points to get two free round-trip plane tickets anywhere in North America when you redeem it for Aeroplan. I've just taken this concept to an extreme by opening up one to three credit cards a year, meeting the minimum spending requirements, getting the points, and then using those points to travel wherever I want without spending any additional money.

Of course, though, if you want to do this successfully, there are a few ground rules. First, obviously, you should never do this if you don't know how to properly handle a credit card. You need to use it responsibly—only spend money you were planning to spend anyway and always pay it off in full by the time it's due. No exceptions! If you can't do it correctly, then don't do it.

Second, it's really important you never pay a single dime in interest. I'm always shocked when people think a credit card will cost them money because they're going to be owing interest on what they spend. So, let's make it very clear: you're not gonna have to owe any interest as long as you pay off your credit card in full at the time it's due.

And third, do not do this if you're about to get a loan on a house or a car. This is because there is a mild impact on your credit score every time you apply for a new line of credit. So, unless you already have an extensive line of credit history, it's probably too risky to open up anything new right before you're getting a loan without giving yourself enough time for your credit score to recover. Doing this could be a really fun hobby that will end up making you a lot of money and free travel and perks and services.

That's also how I've been able to cut my travel budget down to $0. And for anyone who wants more information on this, I highly recommend you check out The Points Guy, NerdWallet, and two YouTubers known as Ask Sebby and The Credit Shifu. They all have incredible information about credit cards, reward points, and everything else involving that.

Next, we're gonna be talking about something that's very close to my heart, and that would be coffee. If there's one thing that I refuse to spend money on, it's this. I've just never seen the point in going and spending a few dollars for coffee at a coffee shop when instead you could make it at home for pennies on the dollar. Because going and spending money on coffee does add up.

For example, if making coffee at home saves you $15 a week, that works out to be a $780 a year savings. And if you just invested those savings every single year into a Roth IRA within an S&P 500 index fund that averages a 7% return adjusted for inflation with dividends reinvested— I said that all in one take, by the way—that could say, like, on this video, over 40 years, that amount will have accumulated to over $178,000.

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Not to mention making coffee at home is a phenomenal way to save money, so come on, it’s just a win-win here! Besides that, another way that I've been able to cut back and save a decent amount of money is by not frequently eating out at restaurants. Now, I totally understand that this might not have as big of an impact on your finances like housing or transportation, but still, every little bit matters, and it does add up for me.

I've been able to really easily cut back on this just by going and making food at home and then bringing it to work instead of spending $10 to $15 on lunch—or instead of going out to eat somewhere. It's really easy to go to the grocery store, spend $7 on food, and make yourself a meal for a fraction of the price a restaurant would charge you. Now, that's not to say that I never go out to restaurants because that's not the case, but even when you do go out, you can still find different ways to save money without much effort.

One of the ways I could do this is just by finding restaurant happy hours, which will often give you a 10% to 50% discount just by going a little earlier or a little later. It's the exact same food at the exact same place with the exact same experience, except maybe you show up at 5:30 instead of at 7, and you pay half the price. Another way to do this is that if all of your friends are going out to a big meal but you don't feel like spending $40 on food, just go and order an appetizer instead.

Usually, those appetizers are just as filling, they're half the price, and you still get to enjoy a meal with all of your friends, except you're saving a lot of money. The same thing also applies with alcohol, and frankly, I think it's a big waste to go out and spend money on drinks, not to mention it's not that good for you. So I prefer not to drink; not only does it save me a lot of money, but I also feel better not having alcohol in my system.

And of course, every now and then, I will order a drink, but what I do is for special occasions, and I value the experience much more than if I just went out and ordered a $12 drink every single time I went out. So cutting back on restaurants but going out on occasion just makes it a much more fun and memorable experience when you do go out. Plus, going and making food at home saves you a lot of money that you can reinvest elsewhere.

And then one more, while I'm on the topic of unusual ways to save money, and that would be by always going and finding free parking. I really should have included this in my interview with CNBC about things I refuse to spend money on because, besides coffee and designer clothes, paying for parking would be one of those things I absolutely love! I just don't see the point in spending $5 to $10 on parking when instead, I could park a block away for free and just walk there.

For me, that's like I'm getting paid for doing a little exercise, plus it saves money! Oh sure, I get it, every now and then, it might be worth it to pay for convenience, or if you're in a time crunch, you need to get somewhere—okay, maybe it's worth it not to have to walk like a mile to get to your destination. But for the most part, if you have nothing else to do with your time, sometimes it’s worth it just to park a little bit further away, save the money, get some exercise, and walk to where you're wanting to go.

It's such an easy way to save money and cut back on your spending, especially if you're in a big city that charges you a lot of money for parking fees. And lastly, for me, one of the biggest reasons why all of this was possible was because I meticulously tracked my expenses. You won't know how much money you'll need to sustain your lifestyle, and you're not gonna be able to effectively cut back on the things that aren't bringing you a lot of value.

Doing this is really simple—I use the websites mint.com and personalcapital.com, which automatically keep a thorough report on how much you make, how much you spend, and where you spend it. Doing this is so impactful that I promise if you just do this for two months, you're gonna be shocked at how much money you waste on things that bring no value to you whatsoever that you make without even thinking about it.

By tracking your spending and knowing exactly where it goes, you're gonna be able to better pinpoint the inefficiencies, cut back, and save money for the things that do matter and want to do. One of the weird money-saving tricks I do is just think to myself: if I save money by not buying something, in a way it's like I've just made that amount of money. Like, if I was going to spend $5 on a cup of coffee driving home, but instead I decided not to go and get the cup of coffee, in a way it's like I just have an extra $5 now sitting in my account because otherwise, I would have spent it.

Thinking this way really rewires your brain and how it perceives saving, and instead reframes it as: I'm not saving money; I am making the money I didn't spend. Now, at this point, some of the things I mentioned might seem like small, non-consequential ways to save money. They just complicate your life and cost you time, but the way I see it is that if you can bring down the most expensive costs first, like transportation and housing, and then pay attention to these small daily items that add up over time, like eating out, parking fees, making coffee, and so on, you'll put yourself in the best position possible to cut back as much as you can and save the most money long-term so it sticks.

Because let's be real, it's not cutting back on all the small costs alone that will save you millions of dollars. Like going to buy Starbucks twice a week is not going to bankrupt you, but instead, it's the attitude that every little bit matters. The type of person to track these small everyday purchases is likely to carry that mentality forward into other larger items that will end up saving you more money.

For me, even now, regardless of how much money I make, I only spend what the rental properties generate, and that's it. I lived extremely frugally for the first four years of my career as a real estate agent to save up all of my commissions, and with that, I invested back into real estate. That allowed me to save 100% of my income as a real estate agent, live off of my investments, and with all the money I make, I could reinvest it back into more rental properties that would make me more money, that would increase my budget.

It's still to this day; I only spend what my investments make me, and that's it. Any other money I make is put back into rental properties, and that way my lifestyle is always 100% covered regardless of how much money I make from other income sources. Really, at the end of the day, all of this is just about doing a few things consistently. It's living below your means, cutting back on the spending that's not important to you, saving the difference, and investing long-term.

If you're open-minded and don't mind putting in the work, there are so many ways that you can get the exact same lifestyle you have right now except at a fraction of the price. By house hacking, car hacking, credit card churning, making coffee at home, not going out to restaurants as often, living below your means, and tracking your expenses, and then saving and investing the difference—if you do that long enough consistently, you're gonna be able to build up a lifestyle of financial independence.

At that point, you could choose to do whatever you want, whatever day of the week it is, for as long as you live—even if that means you just sit in your garage, make YouTube videos about how other people could do that, and smash the like button for the YouTube algorithm. Believe me, doing this is not without a lot of hard work and a lot of discipline. It isn't easy, but if you get in the habit of doing this early on, trust me, it is entirely worth it.

So with that said, you guys, thank you so much for watching, and again, I want to say a huge thank you to our sponsor, Trade Coffee, for sponsoring this video and providing some very good coffee for this video. And of course, in addition to that, if you have not already subscribed yet, make sure to do that and hit the notification bell. Feel free to add me on Instagram; I post pretty much daily.

So if you want to be a part of it there, feel free to add me there. As for my second channel, The Graham Stefan Show, I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, feel free to do that.

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Let me know what two free stocks! Again, thank you so much for watching, and until next time!