7 Lifestyle Habits That Cost You $20,000 Every Year (And How I Fixed Them to Retire 25 Years Early)
These small changes added up to big results, allowing me to retire decades earlier than I ever thought possible.
Look, it’s simple: Your habits either build wealth, or they drain it.
I was 25 or so and I thought I had my finances all figured out. As an analyst at JPMorgan, understanding money was literally my job—no luxury cars, no crazy spending—just the essentials. But when I took a closer look at my own habits, I realized there was a big gap between what I knew and how I was actually managing my money.
But I was blown away when I finally sat down and ran the numbers. It wasn’t the big purchases holding me back—it was the small stuff I barely thought about.
I ran the numbers on every little habit I’d brushed off, and the results were shocking. Those small, everyday choices were quietly stealing from me $20K a year.
In this free issue of The Multiplier, I’ll share how I identified and broke these habits for good—and how you can do the same.
1. The Convenience Tax
The Real Cost: I used to justify small convenience purchases all the time—daily coffee, takeout, quick snacks. But when I ran the numbers, it hit me: the average American spends $2,375 a year on these things, according to a 2023 Bankrate study. If you invest that amount at a 7% annual return, it turns into $150,831 over 20 years.
✅ What I Did:
Started bulk-buying my go-to convenience items to stop impulse spending.
Brewed my coffee at home for a fraction of the cost and made snacks in bulk.
Allowed myself one “convenience day” a week to make it manageable.
2. The "I'll Invest Later" Fallacy
Fifteen years ago at around 25, I made the decision to start investing. Back then, I wasn’t saving much—just $500 a month—but the numbers were clear:
Start at 25: $500/month grows to $1,197,811 by 65.
Start at 35: The same $500/month only reaches $566,765 by 65, assuming a 7% market return.
That 10-year delay costs $631,046—but it’s more than just numbers.
Starting early gave me the flexibility to plan for early retirement, while delaying would’ve meant working at least an extra decade.
✅ What I Did:
I automated my savings right away—even when I felt like I couldn’t spare the money.
Every three months, I increased my contributions by 1%. It didn’t feel like much at the time, but it added up fast.
Watching the compound growth over the years was all the motivation I needed to stick with it.
If I hadn’t made that choice 15 years ago, I wouldn’t have the freedom I have today. The best time to start was back then—the second best time is now. Don’t wait.
3. The Emergency Fund Reality
I didn’t have an emergency fund when I was young. I thought I could get by without one—until I realized how much it was quietly costing me. Federal Reserve data shows that 37% of Americans can’t cover a $400 emergency, and with an average credit card APR of 24.59%, that $400 grows to $498.36 in just six months.
It gets worse. A JP Morgan Chase study found that households without emergency savings pay an extra $1,750 a year in high-interest debt and fees. That’s money you could be saving or investing instead of throwing away.
✅ What I Did:
I built a 3-month emergency fund before focusing on aggressive investing.
I kept 1 month of expenses in my checking account for immediate needs, with the other 2 months in a high-yield savings account to grow safely.
Anytime I dipped into those funds, I replenished them before spending on anything discretionary.
Having that safety net didn’t just save me money—it gave me the freedom to invest with confidence and avoid expensive mistakes. If I could go back and start sooner, I would.
Source: Federal Reserve Economic Well-Being Report 2024
4. The Income Ceiling Trap
Early in my 20s, I realized that relying on a single paycheck wasn’t going to get me to financial freedom. Every early retiree I’ve met—people I know personally and admire—had multiple income streams before they reached financial independence.
This aligns with a Fidelity study, which found that 75% of early retirees had more than one source of income. Here’s how the math worked for me:
Primary job: Covered 100% of my base income.
Portfolio Consulting Side Hustle: Added an extra 12-25% to my earnings.
Investments: Grew at a 9-13% annual return, on average.
It wasn’t just about earning more—it was about creating options and reducing risk, even when life threw curveballs.
✅ What I Did:
I leaned into my most developed & marketable skill and turned it into a side hustle.
Packaged that skill into a service I could sell, which quickly started generating income.
Set up one passive income stream within the first quarter—small at first, but consistent.
Every single early retiree I know swears by this strategy.
5. The Status Symbol Trap
Long time ago I decided to stop financing new cars—and it was one of the best financial decisions I ever made. Experian’s 2023 report shows the average car payment is $725/month, eating up 31.8% of income for most buyers.
A $40,000 car financed at 6.5% APR costs $46,880 over 5 years.
If I’d invested that money instead at a 7% return, it would’ve grown to $48,947.
✅ What I Did:
Bought reliable used cars with cash.
Invested the money I saved in index funds.
Focused on growing net worth, not impressing anyone.
Skipping the new car freed up thousands and gave me a head start on financial freedom. Trust me, it’s worth it.
Source: Experian State of Auto Finance Q3 2023
6. The Financial Illiteracy Tax
Also, I started noticing how much money was slipping through the cracks—fees, subscriptions I forgot about, and credit card interest I didn’t need to pay.
A 2023 study shows the average American loses $1,171 a year this way.
Over 10 years, with just 7% growth, that’s $16,847 gone.
Here’s where it really adds up:
Investment fees: Just 1% extra in fees can shrink your portfolio by 28% over 30 years (Vanguard research).
Unused subscriptions: The average household wastes $273 a year (Mint study).
Credit card interest: Median households pay $1,155 annually (Federal Reserve).
✅ What I Did:
I reviewed my investment expense ratios and made sure they stayed under 0.2%.
Set up a quarterly reminder to audit all my subscriptions.
Optimized my credit card usage for rewards and avoided interest charges altogether.
These small changes saved me thousands and put that money to work instead. It’s amazing how much wealth you can build just by plugging these leaks.
7. Time Poverty's Financial Impact
When I was promoted to VP, my schedule became extremely overwhelming, and I found myself paying for convenience just to save time.
At first, it felt worth it—until I counted that time scarcity leads to a 13.2% premium on household purchases.
Here’s how it was costing me:
Convenience meals: 2.5x the cost of cooking at home
Last-minute travel: 26% more expensive
Rush shipping: About $165 annually
✅ What I Did:
Started batch-cooking meals weekly, which saved my family about $3,900 a year.
Began planning major purchases 30 days in advance to avoid rush pricing.
Scheduled monthly financial reviews to stay organized and avoid last-minute expenses.
By making a few simple changes, I regained control of my spending—and freed up money to invest in my future.
The path to financial independence isn’t about pinching pennies or living a joyless life. It’s about understanding the true cost of your choices and making small, intentional changes that compound over time.
If I were starting from scratch, there are a few frameworks I’d rely on to fast-track the process. They’re simple, practical, and focused on what actually works—no gimmicks, no noise.
But here’s the thing: You don’t need everything figured out to start. One small change today is all it takes to begin. The rest will follow.
The best time to start was yesterday. The next best time is today.
Thanks for reading today’s issue of The Multiplier!
Cheers,
- Mike
Some let emotion drive their entries instead of following a systematic approach to market timing. That's why disciplined position sizing and systematic entry points save me more than any fancy trading strategy ever could.