My wife hates it when I claim I’m lazy.  But laziness can be a virtue. 

I’m not like most people.  I want to spend more money, save less money, become financially free before most people and have a decent-sized bank account.  It’s not a pipedream.  I’ve actually done it on a teacher’s salary.  And if you’re young and willing to embrace your inner sloth, you can do it too.

But the financial service company, Vanguard, doesn’t know the motivating secret.  They recently posted a statement, followed by a question on Facebook.

“Fifty six percent of 18-34 yr olds say they’re saving $0 for retirement! (via How can young investors be encouraged to think long term?”

The answer is really easy.  To get young adults to think long term, they should strive to be lazy and spend more of their income during their lifetimes.  Who wants to scrimp in their 20s, 30s and 40s, so they can have bucket loads of money in their 60s, 70s and 80s?  What a waste.

I’m talking about spending more money during a working lifetimes AND ending up with more money for retirement.  Here’s an example:

Joe Smith studies law in college. 

He becomes a lawyer at age 26, but he doesn’t know how to be lazy.  So he spends the money he makes.  OK, this might not make sense if you’re a “worker” who’s used to his or her nose on the grindstone, but stay with me.

Joe starts saving at age 40 for his retirement.  And he socks away $2000 per month for 20 years.  In total, he “saves” $480,000 ($2000 per month x 12 months x 20 years).  That’s a lot of money to save.  And what Joe saves, he doesn’t get to spend. 

If he makes 8% per year on his investments, he’ll grow his savings to $1.18 million.  The poor guy isn’t much of a thinker.  To build a $1.18 million investment portfolio, he has to save $480,000 of his salary.

Call Joe a sucker for punishment.

Tim isn’t really smarter than Joe.  But he’s lazy. 

There’s no way he wants to save $480,000.  He works at the same law firm as Joe, makes the same annual income, but wants to spend more over his working lifetime AND end up with more money than Joe.

Tim starts investing just $200 per month ($6.66 per day) at age 18, which he puts together from the odd weekend job.  From age 18 to 26, he keeps investing the same amount.  If he makes 8% per year on his investments (the same return that Joe makes) he’ll have $27,570 at age 26.

When the law firm hires Tim (at age 26) he starts investing $600 per month and keeps it up until he’s 60.  He earns the same salary that Joe did.

By the time Tim is 60 years old, he has $1.6 million—nearly half a million dollars more than Joe.

Tim ends up with $1.6 million, compared to Joe’s $1.18 million.

But Tim was able to spend nearly $100,000 more than Joe while he was working…on fun things, like holidays, toys, and dinners on the town. 

Joe is a worker.  He saves more and ends up with less money.

Tim is lazy.  He saves less (spends more) and ends up with nearly half a million dollars more than Joe.

It pays to use your head and be lazy, like Tim.

I started to invest money when I was nineteen. 

And I recommend that all lazy kids do the same.  I spend more money than my “harder working” friends, and I have more money.

It’s important not to brag, but this needs to be shared.

And it does a decent job, I think, of answering Vanguard’s question:

“How can young investors be encouraged to think long term?”

By embracing their inner sloth, that’s how.

For more information, check out my book, Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School.