I get this question a lot. “I’ve already set up my automatic infrastructure and I’m investing money every month. My 401(k) is maxed out and I have sub-savings accounts set up. What else should I be doing?”

So you’ve already handled the basics of personal finance: automation, negotiation, using my Scrooge Strategy advanced tactics, and you’re earning more. Maybe you have $10k in your account and you’re wondering what you should be doing next.

There’s always more to do. But be clear: Lots of people expect that after you handle the basics, you beat the next Mario level and get access to “secret” personal-finance investments.

While many people want “secret” alternative investments — despite all evidence pointing out that they don’t beat the market for individual investors — the truth is much more prosaic. It’s not sexy, but it will make you rich. Today, if you’re already handling your finances and are looking for the next step to get ahead, I’ll show you how to use the 10 Year Savings Strategy to leave your friends in the dust.

Step 1: Admit you’re like everyone else

If you’re already handling your money, you make more than you spend each month, and you’ve even implemented a Conscious Spending Plan and investment (as described in my personal finance book), this is for you.

The 10 Year Strategy involves asking people ten years older than you what they wish they’d saved for, and starting to save for that.

Sounds obvious, but it requires admitting that despite your superior financial abilities, you’re still going to have the same expenses as everyone else. Young people love to pretend we’re going to millionaires, work from the beach, and somehow magically make money and have low expenses all our life.

Here is what will happen to you as you get older:

1. Yes, you WILL have a nice and very expensive wedding (even if you’re a hypocrite and think you’ll have a “small, beautiful” wedding)
2. Yes, you WILL have kids and want to buy them nice stuff
3. Yes, you will need things like family health insurance and life insurance and homeowners’ insurance and family vacations and other things that you can’t predict right now because you’re not in that life situation
4. Yes, these expenses WILL come up. People like to believe they’re the exception. BUT YOU’RE NOT. YOU WILL HAVE KIDS. YOUR KIDS WILL BE WHINY AND REQUIRE LOTS OF DIAPERS. THEY WILL POOP ALL OVER THE PLACE AND REQUIRE 10X MORE PAPER TOWELS AND CLOTHES AND CRIBS. PLEASE BELIEVE THIS.

How The 10-Year Savings Strategy works

From my book:

If you’re in your 20s and you ask someone in their 30s what they wish they’d saved for, they’ll say things you’d have NEVER thought about:

• Diapers
• Homeowner’s insurance, health insurance, life insurance
• Family vacations

I want to show you how much this will affect you, so yesterday I put out a quick survey to people in their 20s, 30s, and 40s. I got over 2,000 responses, and the results are fascinating.

What people wish they’d saved for in their 20s, 30s, and 40s

Really fascinating data in there.

People in their 20s wish they’d saved more for travel, in their 30s it starts switching to retirement, and by their 40s, people are predominantly concerned with retirement. When we’re younger, we save for ourselves, and as we get older, we increasingly care about saving for our family. These trends are similar for nearly everyone.

As I wrote in my book, “…ask your parents what they worry about most. I’ll bet you their answer is, simply, ‘money.’”

So you’re making more than you spend, possibly maxing out your investment accounts, and this sounds reasonable. So why don’t people do this? Let’s take a quick detour down whiner’s lane to see why most people don’t take the simple step of implementing the 10-Year Savings Strategy.

Why they don’t do it #1: “I hate the President / bailout / taxes”

I recently did an online web chat with over 600 people from a newspaper site. I was walking them through some of my Save $1,000 in 30 Days tips, and yet many of them wanted to complain about taxes, bailouts, furloughs, and the government. As you know, I have little patience for people who debate minutiae and get nothing done. For every single complainer, have they ever read one good personal finance book? Have they maxed out their accounts or, if they don’t have enough money, earned money on the side?

Of course not. Because it’s easier to complain and to point fingers than to do anything about your money.

Here’s a common exchange I have with complainers:

• Complainer: “Hard to save when the governor is taking 50% in taxes and wasting it!!!!!!!”
• Seemingly calm yet-about-to-explode Ramit: “Yeah, that really sucks…so what do you suggest?”
• Complainer: “Who knows. But this state is headed for DOOM!!!!!!!!”

Others complain that they simply don’t have enough money to save significant amounts of money. “If that’s true,” I tell them, “then you simply need to earn more money.” They don’t like to hear that. Often the responses are:

• “Craigslist is only paying $10/hour” (So? You have to start somewhere. Or you can develop your skills to get a higher-paying job. Or network. Just get off your ass! Note that my readers have earned thousands and thousands of dollars following my strategies to earn more.)
• “Easy for u to say but u dont have kids” (True. I wish it were easier, but it’s called “work” for a reason)
• “I’m too exhausted after work and kids to get a part-time job” (That’s your choice, but if you make no changes to your work situation, why do you expect your finances to change?)

Complaining is fun for about 10 seconds. Then you realize that these same people will be complaining for the next three decades, while you’ll quietly be automating your money and growing your bank account and investment accounts each month — automatically.

I can’t emphasize this enough: Complaining is contagious. Even though I’m an eternal optimist, even I find myself complaining about the world when I get around these people, so I avoid them like the plague.

Yet there’s an even more insidious type of excuse that is all-too-common, especially online.

Why they don’t do it #2: “That’s too simple”

This excuse is common around programmers, kooky Ron-Paul/real-estate/gold fans, and reddit users. “Oh Ramit,” they chide, “long-term indexing doesn’t work! You’re just telling losers to stay losers by trying to “match” the market. You need to invest in [insert crazy investing strategy here, including "only alternative energy stocks" or "only bonds" or "opportunistic stock purchasing with alternative strategies including hedge funds and private equity"].

For many people, especially those who deal with highly technical information in their day jobs, something must be difficult to be useful. Yet as a professor in the much-maligned communications department at Stanford told me, “The value of this material is not in the difficulty, but in the usefulness.”

There are some valid reasons for this skepticism — including the fact that most personal-finance advice is terrible, boring, and trite — but to object to the overall strategy is to throw the baby out with the bathwater. Many of these people love timing the market (even though market timing doesn’t work). They love the allure of hedge funds (even though hedge funds are not as impressive as you think).

Yet they insist that the current buy-and-hold strategy doesn’t work and that saving for expenses ten years down the road is “not enough.” Unfortunately, you can’t simply be skeptical and call that a strategy. To have any credibility, you need to show me real, peer-reviewed research showing that your strategy is better than the time-tested approach of low-cost indexing. Otherwise, you’re simply another pie-in-the-sky dreamer.

Let me add one more thing: Nobody cares what you think. Or what I think. What matters is if you’ve executed on your plan. If you ask these people if they’ve invested using their “alternative” strategies, the answer is invariably this: “Oh, uh…not yet.” Try it. It’s fun to ask.

A few months ago, I wrote how I intentionally bulked up by strategically gaining 25lbs in one year using psychological techniques including commitment and attribution theory.

I picked one person to help me: my co-worker, Brian. No, he isn’t a huge bodybuilder. And no, he doesn’t read Men’s Health every day or bring a giant jar of creatine to work every day. But out of all the people who offered advice, Brian is the only person I know who consistently goes to the gym almost every single day. I’d rather learn from the person who is boringly disciplined rather than someone who has sexy ideas.

I didn’t pick the person who had the fanciest weight-training strategy. I picked the guy who went to the gym every day.

Here’s another example from Ian Rogers:

I told Kid Rock I was doing the Cool J workout and he laughed, “You are the worst spokesman for his book! Just what he needs, a skinny white kid telling people, ‘hey look at me, I did the Cool J workout!’ That’s like me wearing Russel Simmons clothes!” Probably true. But I’m also probably one of the only people on earth who did everything the book told me to for six months. I completed the LL Cool J Platinum Workout 100%. In its entirety. End-to-end. Anyone else? Anyone?

Exactly. It’s not about the difficulty, but the fact that you need to get it done. So if this seems too simple and you dismiss it, good! The ease of it is a barrier that’s caused you to select yourself out of it. The rest of us will get it done and scoff at you 10 years from now.

When you pick advice to follow, think carefully about how practical it is and how readily you can implement it. You know all these investment sites and blogs? How many of their readers have actually implemented the advice? How many of you have?

The point is action, not ideas. If your neighborhood skeptic hasn’t taken measurable action and isn’t willing to show you what exactly he’s done with his own money, politely smile and calmly walk quickly. And then handle your own finances while he exists in Kooky Kook land.

The survey responses above are all iwillteach readers, which means they’re (1) nerdy and (2) far ahead of most people in their finances. But even they wish they’d saved more money. You can always save more. When you get down to the nitty-gritty, you notice the differences in what they wish they’d saved for, and in how you approach it (savings account, CD laddering, investing, etc). But if you simply save for the big things in your next 10 years, you will be ahead of the game by far.

Yet most people constantly look for the fanciest next thing…instead of focusing on tried-and-true techniques. If you’d done this 10 years ago, you would quantitatively be ahead AND you’d feel great. But you can always start today.

What are you going to do today?

If you’re not earning more than you spend, automating your money, and maxing out your accounts, that can be your first goal. This is the majority of iwillteachyoutoberich readers.

If you’ve done all that and are looking for the next step, implement the 10-Year Savings Strategy using sub-accounts.

One more thing: You can’t just scoff at this for being too easy and do nothing. You have to consciously choose:

1. I’m going to do this within the week
2. I’m not going to do this because I’m going to do another strategy within the week
3. I’m not at this stage yet…I’m going to pick up your book (or another book, or just do it) and get there

Note: There is no #4 (”I’m not going to do this at all…I’m just going to do nothing”) because that is a cop-out for losers. Get it done.

To implement the 10-Year Savings Strategy…

Now that you know what to do, I run a premium savings program at http://www.scroogestrategy.com — one premium, super-tactical tip per week. I include 2 tips specifically on The 10-Year Savings Strategy, including an in-depth exploration of the best way to implement it, including:

• A script of what to ask people 10 years older than you
• Psychological techniques to get you to take action implement The 10 Year Savings Strategy
• Pre-built spreadsheet of expenses to use

Plus, a super-tactical savings tip every week. Use ScroogeStrategy.com to start saving hundreds today.

A few days ago, I asked you how much you spent on Valentine’s Day. With 1,031 responses, here’s the analysis (RSS readers, click here to see the slides).

| View | Upload your own

Click for a larger view

See my other survey results about money here.

As usual, thanks to Rob from FindABetterBank (give it a shot and see how your bank compares).

If you have any particular data you want to see in upcoming analyses, leave a comment here with an interesting idea. Dumb ideas will be mocked.

Earlier this week, I took a survey on whether people were spending less because of a possible recession. In just over a day, I got 1,000+ responses (like my earlier research on women and gender). I have very low standards, so two successes is enough for me. Today, I’m announcing that I’ll be doing regular surveys on interesting personal-finance topics. If you have an idea, just add a comment to this post. You’ll have access to a large user base and professional analysis. Basically, I’ll do all the work!

Before I present the data, I want to give a huge thanks to Rob Rubin, who’s helping with the analysis. He’s got a great suite of products:
1. First, search FindABetterBank to find banks that match your criteria (high-interest, online, local ATMs…)
2. Once you match, use BankSwitcher (”Switching banks is hard…we make it easier”)

Rob is so great that last night around midnight his time, I pointed out that he was missing my favorite checking account (the Schwab checking account). By 9am this morning, he’d added it to his database. Please check out his sites — they’re extremely useful.

Without further ado, here are the results of this week’s survey! [RSS readers, click here.]

Slide 2 — Women and baby boomers are most worried about a recession.
Slide 4 — Most people have reduced their spending by less than $50/week, but 14% have cut spending by over $100/week.
Slide 6 — Restaurants and recreational expenditures are likely to be hit hardest by lower spending.

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[Too small to read? Click here for a larger version]

What questions would you like to see in future research? Leave a comment here.

Thanks to the 35+ comments on the last post, Rob from BankSwitcher (”Switching banks is hard…we make it easier”) was kind enough to re-analyze the data from my survey on gender and money (n=1,167).

Below, you’ll see red highlighting around areas where there are dramatic gender differences. For example:

• Slide 10: Guess who negotiates their salary more?
• Slide 12: Indulgences by gender
• Slide 16: Feelings towards money are dramatically different
• Slide 19: What personal-finance topics do men vs. women prefer?
• Slide 25: Absolutely staggering differences in perceptions of equal pay

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