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A 27-year-old with $181,000 in the bank explains the simple calculation that keeps him from overspending

pocketwatch wealthy suit
pocketwatch wealthy suit

(He saves 65% of his take-home pay.Jeff J Mitchell / Getty Images)

At just 27 years old, the blogger behind the Money Wizard — who goes by the pen name Sean online — has banked more than $181,000. He's on a mission to retire early, at age 37.

Sean saves 65% of his take-home pay — he earns $80,000 a year as a financial analyst — and still manages to travel frequently.

"Probably what's most driving me [to retire early] — I just want freedom," he told Business Insider. "So many people get caught up in the race of materialism, thinking that next house or next car is what will make them happy. I think happiness comes from freedom. I just want to be able to do what I want, without financial worry."

He saves automatically each month, putting his money into a 401(k), IRA, and index funds. "Saving off the top," he said, is the best strategy for socking away money because you don't miss the cash if you don't see it in the first place.

Ultimately, Sean's philosophy for building wealth is based on calculating the value of his time, in dollars.

"Understanding that, at its core, money is a unit of exchange for time ... every purchase costs me time — the most limited resource we have," he said. Before buying something, Sean often calculates the true cost of the purchase, in terms of the time it took him to earn the amount, to put it into perspective.

"If I buy a $30 dinner, that dinner is paid for in after-tax dollars and is subject to sales tax. If I'm in the 25% tax bracket and the dinner is subject to a 10% meal tax, that $30 dinner costs nearly $45. After considering the time spent working to earn $45, is the fancy dinner still worth it?" he said.

Another example, which Sean wrote about in a blog post last year, is the temptation many of us have to spend frivolously on trinkets or souvenirs in gift shops.

"It's a fast transaction, and you didn't even notice the $25 dent in your wallet,"  he wrote. "Now consider the time spent at work, on calls, and dealing with difficult customers that earned you the nearly $34, which finally whittled down to the $25 in your pocket today. Is it still worth it? Lord help you if that gadget happens to be a $1,000 MacBook…"

Sean calls this "no-thought spending," and he says it can easily take over your bank account if you're not careful.

"This exercise can be applied for nearly every item that scrolls across your mind's never-ending conveyor belt of impulse purchase ideas," he said. "When the buying decision is framed in the quantifiable days, months, and years of life an item truly costs, the Money Wizard thinks twice."

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