When thinking about FIRE, people often ask me what should I do to fat FIRE? While an important question, an equally important question is what should I not do if I want to fat FIRE? I’ve had many money-conversations with people living in poverty, high-income individuals, low-income individuals, and HENRYs (a HENRY is someone who is a “High Earner, Not Rich Yet.”). The mistakes that I’ve deduced from my experience applies to all of these groups, but especially the HENRYs.

Mistake #1 - Chasing the latest credit card promotion

Does it really matter if a credit card gets you 2% cashback or 3% cashback? If you're spending enough for it to matter, it's better to focus on reducing your spending…that's 100% cashback! A good alternative is to get a credit card you really like, keep it for a long time, and focus on other higher ROI activities. Opening and closing credit cards for the sake of points doesn’t move the needle on one’s road to fat FIRE.

Mistake #2 - Letting $5,000 keep you from taking a job with good learning opportunities

I’ve changed jobs 7 times. And each time, it was for a learning opportunity or significantly more pay. It’s never been because I cared about a $5,000 raise. These job changes are exciting, but exhausting at the same time. There is a non-zero cost associated with each jump.

Every once in a while I’ll talk to someone, especially new college graduates, who stress over small pay differences: I really like this team and company, but it pays $5,000 less. Should I take it? If the job is truly exciting and you think it will help you grow, take it! Otherwise, keep looking.

A $5,000 a year difference is equivalent to $2.44/hr. After taxes it’s even less.

Similar to Mistake #1, at the end of the day, time is finite. So spend it on activities that will meaningfully move the needle. Or at least spend it on things that will increase your chances of moving the needle. To accumulate multiple millions of dollars, you need to think on the scale of at least dozens of thousands of dollars, not low single-digit thousands.

Mistake #3 - All dream, no action

Have you spent hours listening and reading content from Tony Robbins, Dave Ramsey, and Road to FIRE :) but have never taken any action? I have.

I used to spend an hour a day listening to podcasts and reading about successful business leaders--and I still do. I still dream about making it big, becoming a deca-millionaire, and paying it forward to the next generation. But now, instead of just sitting back and dreaming, I've leaned in and taken control of my future. I've set up my accounts to auto-invest for me, I've chosen a job that maximizes my total compensation, I know exactly where I'm going with my financial projections, and I've started this blog that loses me $10 every month!

Ultimately, there’s a huge difference in the outcome between people who only learn/dream VS people who learn/dream and take action. Don't be that "wantrepreneur." Don't make excuses. And just go do it--and do it consistently.

Mistake #4 - Not thinking like an executive

One of my favorite engineering leaders used to ask me: What should you be doing, that you're not? It reads like something that you would see on a cheesy LinkedIn meme. But it's a very powerful question. It forces me to reconfirm that what I'm doing today is still the most important and impactful thing to do tomorrow. It forces me to look outside of the box that I've put myself in for the past month or year. And that there's a good chance that there's something else I could be doing that will get me to my destination, quicker. Here are some examples:

When I hit $300,000 in net worth, I thought to myself how can I better utilize all of this money? Most of it was sitting in my checking account and letting inflation chip away at it. This was when I started to research how to manage money and officially began my wealth-building journey using index funds.
When I hit $1,000,000 in net worth, I saw that my road to FIRE was going to soon be a reality. I thought to myself, how can I set up sufficient income streams so that I won't need to sell any of my assets to live. I only want to live off of the income my assets generate. This led me to research rental real estate and dividend aristocrats stocks. It completely changed how I viewed cash flow.
When I had to pay 6-figures in income tax, I thought to myself, what do rich people know about taxes that I don't? How can I lower my tax burden? This led me to learn about the different types of income taxes and nuances that have shaped my FIRE number. It has also steered me away from certain investments like REITs, where I'd end up paying much more in taxes. This taught me the importance of taxes and keeping every penny that I’ve made.

Mistakes #1 and #2 are about not getting lost in the petty, non-consequential activities of life. Mistakes #3 and #4 are about not being maniacally focused on the most important things, and actually doing them. If all of the HENRYs can avoid these mistakes, we’d have a lot more fat FIRE people to learn from. Unfortunately, way too many HENRYs are satisfied with collecting enough credit card points to get that “free” flight to Hawaii.

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