No. of Recommendations: 4
Paul Wrote I think its easiest for those like Julia Roberts who make $12MM per picture.

Well it would be much harder than you think for people like Julia Roberts to follow your 1/3, 1/3 and 1/3 rule. For starters taxes on the last $11 million are well beyond 33%. Taxes could be 45% of total income in some locations. Most such people have agents who take between 5% and 10%.

But back to normal people - my approach was very simple when I was working. Every time I got an increase in pay, I saved half the take home portion - used the rest for spending. I even applied that when social security payments ending during a work year. Over time I did take the funds I had saved and made investments.

There is one unintended consequence of this approach - one slowly gets into a position of living below your means without feeling like a deprived individual. Of course this approach works best when one is in a mildly inflationary period, so take home pay increases.

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