We can remember between 5 and 9 digits.
So, why do we value our thoughts so much?
Gaze at a flower and it is marvelous. — Look with a mental projection in your head, and you only see a representation. You look at the thought of a flower.
You could not accurately describe how a flower looks. How it smells with words. You have to go beyond thought. Beyond words.
So let’s try to be like a child. Let’s try to open our eyes and just see.
Let’s marvel at the flowers.
I discovered the secret how you can achieve your goals.
A secret that can change your life. Forever.
When we look at people who lost weight, at people who got rich, at happy people, at people who mastered a craft, we only see the results.
We see what they are now. And not the path that let them there.
We do not see the hours of hard work they put into it. The errors they made. The times they wanted to give up.
One reaction to this is to be overwhelmed. What they did, we cannot do…
The other reaction is to imitate them. But one has to fail it that if one only looks at the results.
So, now let me propose something different.
Focus on the small everyday steps. Stick to them.
Read the secret again. It’s too easy to forget. It’s not popular these days. It never was.
The reason is that going from A to B, one step at a time, does not look or feel glorious.
Energy and persistence conquer all things.
Benjamin Franklin
Small everyday decisions compound over time.
Example 1: Money
You invest $200 a month. It’s easy to do for most persons. Also, easy not to do.
It will not make a big difference at first. You will hardly notice how your savings increase. You’d rather keep the money.
But after 20 years, you will have saved $232.777,50. Here comes the fascinating part: Your investment will return $1370 per month. Not bad at all.
Here comes the fascinating part: Your investment will return $1370 per month. More than you ever saved.
You could even stop saving at this point and have a fantastic retirement nest-egg.
Example 2: Health** You go for a walk every day.
In your youth, you don’t notice much. Just having some fun. Enjoying the sun.
Down the road, walking has massive health benefits. Less risk for diabetes, lower weight, better mood and many, many more. It also saves a lot of money.
Example 3: Happiness** Boy Scouts do a good deed every day. Try it — not only will you make the world a better place to live, but you also will be happy.
Or say thank you to a colleague every day. This changes everything if you stick to it.
The sky is not the limit:
That’s one small step for [a] man, one giant leap for mankind
Neil Armstrong
The one step. For the one man.
It was billions of steps. Years of hard labor of thousands of men. Many mundane, seemingly insignificant things.
Culminating in the one step everyone sees.
I realize that all of this sounds unimpressive. After all, we all do small steps — right?
The problem is: there are 1000 good excuses for quitting. I don’t see results. I don’t feel well today. The weather is fantastic outside.
So one walks into different directions. No wonder it is overwhelming to come from A to B.
So stick to one direction and go. One small step. 5 minutes - it does not matter. Do not quit. No day off. No matter what. You will be surprised where it takes you.
Today, many products have only one use. Waffle irons, rice cookers, fondue sets, popcorn makers, toasters…
While many of these appliances are good at what they do — I do not use them regularly. They are wasteful.
I live in a small flat and I prefer not to waste money — so I love to have only a few items with multiple use.
They are essentials, versatile. You find many of them in every household. They are so common, that they are often overlooked.
Just a few examples:
Knife: letter opener, vegetable slicer, garlic press, weapon, fruit peeler
A big pot: rice cooker, water cooker, store food, a fryer, fondue, popcorn machine
Paper: transports messages, packaging, insulation, for art, fire starter
Vinegar: ingredient, insect catcher, descaler, cleaner
Duct tape: Remember MacGyver?
Using items for different things requires you to learn small new skills — often these skills are learned faster than it would take to order a specialized appliance.
You are rewarded with a new skill, more money, more fun and more space in your life.
Before buying something new, I try to think about the stuff I own. Lots of stuff. With many, many uses.
Can I use these water bottles as weights? Aren’t these books a nice stand for my notebook? Why not use this egg-carton to grow plants? This used box - great for my socks. Beat that IKEA.
I do not read advertisements. I would spend all of my time wanting things.
Franz Kafka
Often I feel bad after watching an ad, reading an article about the next health gadget, after watching Apple keynotes or browsing on Amazon.
I feel like I have a hole in the stomach. I have to fight internal fights. Shall I buy the thing I didn’t even know about a few minutes ago?
Often I loose and buy. Despite knowing better.
Worst of all — it became apparent to me that these holes in my stomach cannot be filled by stuff. They appear again and again and again.
Here is what I do since about a year - and it works quite well. I got rid of many ads:
For all other ads: Try to catch yourself watching as them. When you catch yourself, go on with your life.
For example, I look at tobacco ads quite frequently. I have no idea why — I don’t even smoke.
They work against your financial freedom. They work against your happiness.
Do not let them punch holes into your stomach and your purse.
Photo by Linas Drulia on Unsplash
How often do you get surprised by live and are not prepared?
How often do you use your credit card to pay for these little emergencies?
In this blog post, I will show you how to be prepared financially next time.
How next time the car breaks down it will be no financial catastrophe at all.
Let me first start with a little theory.
There are two types of rainy days: Those that you expect and those you don’t.
Occasionally you even know when a rainy day happens: You have to pay your expensive vacation in October.
For other rainy days, you do not know when they occur - but you can still anticipate them. For example, your old car might need repair once in a while.
More examples of expected rainy days:
Rainy days in this sense are not necessarily bad, but if you are not prepared, they can be really stressful.
I love cruise vacations, for example. Sometimes they were (to) expensive for me. I didn’t have all the money when I had to pay the bill. I was anxious and even sold some of my retirement nest-egg to pay the bill.
Or you might use your credit card to pay for Christmas presents or the car repair. The next years you have to pay extra for this. Year after year. The tragic thing is: You should be able to finance these rainy days on your own, feel a lot better and save a ton of money in comparison.
Hard to gain financial independence like this.
The second type of rainy days is those bad moments in life. Moments that you did not anticipate — at all.
These moments range from surprising to really hurtful, and some of them have the potential to ruin your families finances.
In my young foolishness, I thought a long time that these rainy days are relatively unlikely to happen. Boy was I wrong.
My father recently died, far too young. He prepared for this rainy day, very well, in fact. He spared us to worry about money in this very, terrible situation.
Also, getting laid off is always a possibility. There are no save jobs. Just look around.
Or you can certainly get too ill to work really, really fast.
Let me show you how to prepare for rainy days.
First, I want to make you a list of all expected rainy days. Add the name of the rainy day and how much money per month you think you need to be prepared.
Don’t overthink this.
Remember: you did not save for rainy days yet. The most important thing now is to just get started.
Your estimations will get better and better over time.
Example 1: Christmas is in 6 months from now. Last year, you needed around $300 to cover all expenses. So $50 for Christmas it is.
Example 2: Your car is old and might need repair. You have no idea when, you have no idea what it will cost. So, you guess $30 per month.
Add up the amounts. The number is what you have to save for expected rainy days.
Does it seem big? Unfortunately, you will still have to pay it if you save for it or not.
Now I want you to think about unexpected rainy days.
This might be uncomfortable.
What happens if you get so ill that you cannot work anymore?
What if you get laid off tomorrow?
Can you stay in the flat/house? Would there be enough money to keep the car?
Against some of these risks, you need to insure.
For example, if you have a new house, a non-working wife, and 2 small children - what will they do if you die tomorrow?
I will not cover insurances here.
But please do yourself a big favor: Before you shop around for term life insurance educate yourself. Buy a good book on insurances. There is a lot of money to be saved. The book will page huge dividends!
Time to automate your savings for your rainy day and emergency fund.
You need to save, monthly, the amount that you calculated for your expected rainy days plus something extra. As much extra as you can in fact. For now.
How big should your emergency fund (for unexpected rainy days) be? I recommend 6 months worth of your monthly expenses.
You don’t have to do finish in one month or even a year. In fact, it is really unlikely that you can do it in this short of a timeframe.
But even $1000 in your emergency fund make a huge difference.
Put the money where you can access it fast. But don’t keep it on your checking account. Rescue it from yourself, please!
Without a budget: Start a savings plan and save automatically, directly after your paycheck arrives. The key is automatically. This is no decision you should think about every month.
With a budget: Keep track of all the categories separately and save manually every month. This has the advantage of you knowing that you used too much money for car repairs and need to increase your savings a bit.
This is the hardest part. I definitely failed to do this, before I started to budget.
Do touch the expected rainy day money, when expected rainy day arrives.
Many rainy days will not be rainy at all if you planned for them.
Your emergency funds though are for emergencies only.
It makes sense to define what is an emergency and what is not an emergency in advance. Maybe write it down to remember.
Having an emergency fund feels great. It took me quite a while to fund mine, but I am not troubled about money anymore.
Many things that would otherwise be catastrophic won’t be.
If I die, my loved ones have enough money to bury me.
If I get laid off, I have half a year to search for the perfect new job and am not forced to take the first offer.
The even bigger effect has the saving for the known rainy days.
As I mentioned, many of them are not rainy at all anymore.
It’s time to pay the vacation? No problem. Not at all, I saved for months to be prepared.
The other thing you will learn is to save.
When you really manage to save 6 months in expenses only the sky is the limit. You obviously can save for retirement or for whatever you love.
I wish you less and less rainy days from now on dear reader and if you stand in the rain, that you at least have an umbrella with you.
Photo by Nico Smit on Unsplash
Today, our society tends to move more and more towards specialization. You can buy everything prefabricated, and you are supposed to hyper-specialize in your job.
When it comes to your life, you should really consider if this makes sense for you.
Here are some examples, what we do on our own. Many examples are mundane — but that is just fine, considering that many people cannot boil an egg, without a special appliance.
Every morning, we stand in our kitchen and prepare a meal tailored exactly to our taste. Additionally, we have complete control over all the ingredients - which is great since we both are on a special diet.
It’s cheaper and healthier than to buy a meal every day — and best of all, cooking is a skill, and we are getting better and better.
Jupp. It probably doesn’t look great, but this saves money and is relatively simple to learn.
For the ladies, this is probably a bigger challenge — but it should save you gals even more money.
We have a little garden and are starting to grow our food. I won’t argue that this is cheaper in every case — it isn’t — but It’s great to do it.
Some of our furniture is hand-made by us. You really don’t have to buy every piece of furniture. It’s wonderful to have some pieces custom-made by you.
If a device is broken, we try to fix it. Occasionally this is beyond us — but often it works.
My point is — you don’t have to buy everything. Use your money and save money to build the skills you want. You don’t have to be perfect.
This is very rewarding.
As a retiree you will probably be very happy to be into knitting and soldering or to have acquired other new skills.
Photo by Shir omani Kant on Unsplash
I love reading. When I was young, my parents heavily subsidized my book purchases. So, I formed a habit of buying a ton of books.
When I became a programmer, this started to become more and more costly. Every few days, the postman delivered my books.
When I started to budget and tried to invest money, I noticed that I spent between 100-200 Euros on books every month.
This means 18,000 Euros over ten years. Quite a big sum.
I managed to get my book related expenses down to 20 Euros per month with these tricks. Spoiler: They are obvious — but only in hindsight.
Most of my non-technical books I get from our local library now. It has quite a wonderful assortment of great books. And: Every time I ask for them to buy a new one, they buy it for me.
I enjoy being there. It gives me a sense of community to share all these books with many people.
For books that the library doesn’t have, I buy used book over Amazon Marketplace. And after I read them, I sell them.
This makes even expensive books very affordable.
For work related books, my employer is happy to order them for me. And I can give these books to my colleagues and have them at hand in our company’s library.
So, you see: I still love books. I read as many as before. I enjoy walks to the library — and all the book-loving people there.
I do not have shelf after shelf full of books at home — but that’s fine with me.
I save a ton of money — and still enjoy reading.
These are the kinds of things, you have to watch out for — where you waste money, without improving your life.