Can minimalism alone secure your financial future?

Like many Australians, you may be considering minimalism as a way to secure your future. It’s attractive – lower expenses, less stress, and a simpler life. But can minimalism alone truly provide you the financial comfort you desire in your retirement years?



While the lifestyle trend popularized by the Japanese organizing consultant, Marie Kondo, encourages joy from owning fewer possessions, it’s only one piece of the puzzle. True financial prosperity extends beyond disciplined spending and living within your means. It requires growth through intelligent investments - that’s where the principle of ‘paying yourself first’ comes into play.

As a working professional, you might feel like your pay is gone before it even hits your bank account. But what if you prioritized your future needs over today’s wants?

The surprisingly overlooked concept of ‘paying yourself first’ involves setting aside a fixed amount or percentage of your income towards savings and investments before meeting any other expenses. It encourages financial discipline, breaks the paycheck-to-paycheck cycle, and paves the path for wealth creation. But where should this money you’re paying yourself first go?

Cash-flowing assets: Your financial safety net

The answer lies in cash-flowing assets. These investments generate a steady and predictable income over time, such as rental properties, dividend-paying stocks, or business investments. It’s like planting seeds that will grow into a fruitful orchard, providing a consistent harvest year after year.

Imagine Alex and Casey, both in their 30s and holding steady jobs. Their financial habits, however, couldn’t be more different.

Alex’s proactive approach: Prioritizing future security

Every month, before settling any bills or considering any discretionary spending, Alex sets aside 20% of their income towards investments in cash-flowing assets. Despite occasional financial pressures, Alex’s investment portfolio grows steadily, creating a growing source of passive income over time.

Casey’s pitfall: Putting expenses before investment

In contrast, we have Casey. Casey prioritizes all expenses and then considers savings or investments. More often than not, after paying bills and indulging personal desires, there’s little to nothing left to invest. Over time, Casey’s savings remain stagnant, and she misses out on potential investment returns.



While Alex and Casey may have similar incomes and lifestyles, their financial futures look strikingly different. Alex’s consistent investment in cash-flowing assets compounds over time, leading to financial stability and growth. Casey, however, finds herself living paycheck to paycheck, with little progress toward financial prosperity.

The role of minimalism is to help you reduce unnecessary expenses and increase savings while ‘paying yourself first’ and investing in cash-generating assets ensures these savings multiply, paving the way for genuine financial prosperity.

Take Alex as a practical example. By embracing a minimalist lifestyle, Alex trims down excess spending, saving more money than before. He then uses these extra savings to adhere to the ‘paying yourself first’ principle, setting aside a dedicated portion of his investment income before anything else.

Here’s where the third factor comes in - cash-generating investments. Property investment might initially appear intimidating, especially if you’re a novice. It’s completely natural to feel uncertain or even slightly overwhelmed. But it’s precisely such investments that Alex uses to secure his future.



So with careful planning, Alex invests in real estate that provides a positive cash flow. This happens when the rental income surpasses all the costs associated with owning and managing the property, like mortgage repayments, insurance, and maintenance. This excess income then contributes to Alex’s overall wealth, setting off a snowball effect of financial growth.

In conclusion, securing your financial future requires more than a minimalist lifestyle and cutting back on spending. It calls for a balanced approach that combines minimalism with the fundamental principle of ‘paying yourself first’ and strategic investments in cash-flowing assets. This approach not only preserves your hard-earned money but also helps it grow.