What is a person to do to live a less stressful life. A person needs to live below their means and pay themselves first. You can do this in 2 ways:
- Save/invest/trade this money. The income that is generated stays in these accounts and gets reinvested by using DRIPs or reinvested along with fresh capital in new assets. This income can be either capital gains, dividends, distributions, option premiums, or interest.
- Pay yourself first a giving percentage of every dollar no matter where it comes from. You will be increase your means this way in a more tax efficient manner.
This is the most common way people live below their means. No money is taken out until you have enough income to be financially independent or want to retire. The exception is taking money out of an emergency fund it an emergency occurs. In order to avoid debt, you will have to save extra money to buy the things you want.
The Second Way
This way allows you to increase your means as your income increases through the cash flow or capital gains of your assets.
Which way is better? Only you can decide that?