Buy This, Not That
How to Spend Your Way to Wealth and Freedom
Book Edition Details
Summary
Sam Dogen, the Financial Samurai, isn't just offering advice—he's handing you the keys to financial freedom. In "Buy This, Not That," this Wall Street Journal bestseller unravels the enigma of wealth-building with the precision of a master strategist. Whether you're debating between paying down debt or investing, contemplating real estate ventures without owning property, or discerning the art of spending wisely, Dogen provides a no-nonsense blueprint for financial success. With a proven 70/30 framework and insights into crafting passive income streams, this book empowers you to redefine your financial landscape without needing a fortune to start. Here, the path to living life on your terms is paved with strategic spending, smart investments, and a mindset poised for prosperity.
Introduction
Every morning, millions of people wake up feeling trapped by their financial circumstances, watching their paychecks disappear into bills and expenses while their dreams of freedom seem increasingly distant. The weight of financial stress affects every decision, from choosing where to live to deciding whether to pursue meaningful work or simply chase the next paycheck. Yet within this struggle lies an extraordinary opportunity that most people never recognize. The difference between those who achieve financial independence and those who remain financially stressed isn't luck, inheritance, or exceptional income. It's the ability to consistently make optimal financial decisions that compound over time. When you understand the fundamental principles that guide wealthy individuals and apply them systematically to your own life, you discover that financial freedom isn't a distant dream but an achievable reality. The path requires discipline, strategic thinking, and patience, but every step forward builds momentum that eventually becomes unstoppable. Your journey to financial independence begins with a single decision to take control of your money rather than letting it control you.
Master Your Money Mindset for Wealth Building
Your relationship with money determines every financial outcome in your life, yet most people operate from unconscious beliefs that sabotage their wealth-building efforts. The foundation of financial success isn't found in complex investment strategies or perfect market timing, but in developing a mindset that views money as a tool for creating freedom rather than simply a means of consumption. Sam Dogen's transformation began during his grueling years at Goldman Sachs, where eighteen-hour workdays starting at 4:30 AM left him physically deteriorated and emotionally drained despite earning substantial income. The breakthrough came when he stopped viewing money as a scorecard for success and started seeing it as a vehicle for purchasing his freedom. This mental shift changed everything about how he approached financial decisions, transforming him from someone who worked for money into someone who made money work for him. Instead of spending bonuses on luxury items like his colleagues, Sam developed a practice he called "income tethering," connecting every financial decision to a specific life goal. When buying stocks, he would say "This investment will fund my children's education." When saving money, he'd think "This covers two years of living expenses." This approach made every dollar feel purposeful and every sacrifice meaningful, creating emotional momentum that sustained his wealth-building efforts even during difficult periods. To develop this transformative mindset, start by defining what financial freedom means specifically to you. Write down exactly how you want to spend your time when money is no longer a constraint, then calculate the precise amount of passive income needed to fund that lifestyle. Break this large goal into smaller milestones, perhaps generating enough investment income to cover your coffee habit, then your car payment, then your rent. Each small victory builds confidence and reinforces the belief that financial independence is not only possible but inevitable when you make consistent optimal choices.
Build Passive Income Through Smart Investments
Passive income represents the holy grail of financial independence, creating money that flows to you regardless of whether you're actively working. The wealthy understand that trading time for money has inherent limitations, but money working for money has unlimited potential for growth. Building substantial passive income streams requires strategic thinking and patience, but the compound effects create exponential wealth over time. Sam's investment philosophy crystallized during the 2008 financial crisis when his net worth dropped 35% in six months, teaching him painful but valuable lessons about diversification and risk management. This experience showed him that true diversification meant more than just owning different stocks, it required building multiple types of income-generating assets that could weather various economic storms. He systematically constructed a portfolio including dividend-paying stocks, real estate investments, and online businesses, each contributing steady cash flow that reduced his dependence on employment income. His strategic approach proved prescient when he negotiated his departure from Goldman Sachs in 2012. By then, his carefully cultivated passive income streams generated enough monthly cash flow to cover basic living expenses, providing the financial cushion needed to pursue his passion for writing and helping others achieve financial freedom. The key was starting early and consistently reinvesting returns rather than spending them, allowing compound growth to work its magic over time. To build your passive income foundation, begin by maximizing contributions to tax-advantaged retirement accounts, then focus aggressively on building taxable investment accounts that provide accessible income before traditional retirement age. Aim for a 3:1 ratio between your taxable investments and retirement accounts to ensure flexibility. Start with low-cost index funds for your core holdings, then gradually add dividend-paying stocks and real estate investments as your knowledge and capital grow. Implement the income tethering strategy by calculating exactly how much capital you need to generate specific amounts of passive income. At a 4% annual return, you need $25,000 invested to generate $1,000 yearly, enough to cover a monthly streaming service forever. This concrete connection between current savings and future lifestyle benefits makes the discipline of investing feel more rewarding and sustainable, transforming abstract numbers into tangible freedom.
Optimize Your Career and Side Hustles
Your career serves as the primary engine of wealth creation in your early years, yet most people dramatically underutilize this powerful asset. The difference between optimizing your earning power and simply showing up to work can literally mean millions of dollars over a lifetime. Strategic career management combined with well-chosen side hustles creates multiple income streams that dramatically accelerate your journey to financial independence. Sam's career optimization began with a simple but profound realization about the power of showing up consistently. When twenty students signed up for a career fair bus but only Sam appeared at 6 AM, he received a private ride and personal attention that directly led to his position at Goldman Sachs. This experience taught him that reliability and consistent effort often matter more than raw talent or perfect credentials. Throughout his career, he focused on becoming indispensable by developing skills others avoided and volunteering for challenging assignments that showcased his unique value. His side hustle journey started in 2009 with Financial Samurai, initially just a creative outlet during the stress of the financial crisis. By treating it seriously, posting consistently, engaging authentically with readers, and continuously improving his content, he built an audience that eventually generated substantial income. When he negotiated his severance package in 2012, this side income provided crucial financial security and confidence during his transition to entrepreneurship. To optimize your career trajectory, regularly assess your market value and actively seek opportunities for advancement rather than waiting for recognition. Document your achievements quarterly and request specific feedback on how to increase your impact and value to the organization. Develop skills that are both valuable and rare in your industry, positioning yourself as irreplaceable rather than interchangeable with other employees. Launch your side hustle while you still have the security of employment income. Choose something aligned with your existing interests and skills that has potential to scale beyond simply trading time for money. Whether consulting, creating digital products, or building an online business, start small but think strategically about long-term growth potential. The goal isn't immediate income replacement but building an asset that could eventually provide complete financial independence.
Live Like a Financial Samurai
Living like a Financial Samurai means making deliberate, strategic choices that prioritize long-term wealth building while still maintaining quality of life today. This philosophy requires finding the optimal balance between present enjoyment and future freedom, avoiding both extreme frugality that diminishes life quality and reckless spending that destroys wealth-building potential. The approach recognizes that your journey to financial independence should enhance rather than sacrifice your overall life experience. Sam's lifestyle optimization philosophy became clear when facing the decision of buying his first home in expensive San Francisco real estate market. Rather than stretching financially to buy the largest house possible, he developed and followed his 30/30/3 rule: spending no more than 30% of gross income on housing costs, maintaining 30% of the home's value in cash and liquid assets, and limiting the purchase price to 3 times annual household income. This disciplined framework allowed him to build equity while maintaining financial flexibility for investments and unexpected opportunities. His strategic approach extended beyond housing to every major financial decision. When colleagues purchased expensive cars to signal professional success, Sam chose reliable vehicles costing no more than 10% of his annual income. This "one-tenth rule" freed up substantial capital for investments that actually generated wealth rather than depreciating assets that drained resources. The money saved on excessive car payments went directly into building his passive income portfolio, accelerating his path to financial independence. The Financial Samurai lifestyle emphasizes intentional spending on things that truly align with your values and goals while ruthlessly eliminating expenses that don't contribute to your long-term vision. This might mean choosing a smaller home to afford better schools for your children, or prioritizing experiences over possessions because memories appreciate while objects depreciate in value. Implement this philosophy by conducting regular audits of your expenses against your stated values and financial goals. Before any significant purchase, honestly assess whether it moves you closer to or further from financial independence. Develop automated systems that make good financial behavior effortless, such as automatic transfers to investment accounts and scheduled bill payments that prevent costly late fees. Most importantly, remember that living like a Financial Samurai means playing the long game while still finding joy and meaning in the present journey.
Summary
The path to financial independence isn't reserved for the exceptionally talented or fortunate, but rather available to anyone willing to make optimal decisions consistently over time. As Sam discovered through his transformation from stressed investment banker to financially free entrepreneur, "Never fail due to a lack of effort, because effort requires no skill." The principles outlined here provide a proven framework for building wealth, but ultimate success depends entirely on your commitment to taking consistent action despite obstacles and setbacks. Your journey begins with a single powerful decision: choosing to prioritize your financial future starting immediately, regardless of your current circumstances. Whether you're struggling with debt or already building wealth, the next optimal choice is always within reach, waiting for you to recognize and act upon it. Calculate your financial independence number today, then work backward to create a systematic plan that makes achieving that goal inevitable rather than merely hopeful, remembering that every wealthy person started exactly where you are now with nothing more than a decision to change their financial trajectory through better choices and unwavering commitment to action.
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By Sam Dogen
