Showing posts with label international stock market. Show all posts
Showing posts with label international stock market. Show all posts

Saturday, January 19, 2019

The Lucky Fool

“It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributes his success to some other, generally very precise, reason.” – Nassim Nicholas Taleb, Fooled by Randomness

I think we’ve all met some version of the “lucky fool” at some point in our lives.

Think of a person born wealthy, with their parents giving them every academic and professional advantage, and then believing that they acquired some small measure of success in life through sheer talent and hard work.

Think of a person who happened to be in the right place at the right time and now believes themselves to be a person of immense skill and value.

Think of the business owner who is immensely proud of their keen business sense and strategies when their success lies on the back of a handful of talented and hard working folks.

Think of the person who works for a struggling business and yet still lives a paycheck to paycheck lifestyle because they’ve never been laid off or fired.

Here’s the thing, though: it’s not just those people. Almost everyone reading this site has, at some point in their life, been the “lucky fool,” myself included.

I was incredibly lucky to be born to two parents who genuinely cared about my future and genuinely did the best they could to put me on a solid path. They imbued me with some strong values and character and a lifelong love for learning. I wasn’t “destined for success” from birth, but I sometimes convinced myself to feel that way.

I was incredibly lucky in college to meet three wonderful mentors who did far more than I realized at the time. W., M., and V. were all there for me at key moments in my growth from a lost small town kid to a functional professional, yet I was often convinced at the time that my own smarts and ambition forged that path for me.

I was incredibly lucky in the success of The Simple Dollar. If I had founded the site a few years earlier or a few years later, it would have never become successful. Several of the early choices I made regarding the site were completely off the cuff decisions made in a flash and without any long term consideration, but if I had made different choices, the site would be long gone. Yet, there have been many times when I was overly proud of the site’s success and took it for granted.

I was the lucky fool at those moments and at many others.

So, what’s the problem? The problem is that it’s incredibly easy to overlook the role of luck in what we have, and that makes it easy to assume that our luck will hold in the future.

When we tell our personal story to ourselves, it is really easy to look back on highly fortunate events and believe that those events were much more influenced by our personal traits than they actually were. We weren’t lucky to get that great job – we deserved it. We weren’t lucky to meet that wonderful person – we were just attracted to each other. It can go on and on and on like this.

While there’s definitely an enormous benefit to having personal characteristics that contribute to luck and to taking actions that can increase one’s chances of luck, the fact remains that luck plays a very large role in our success, one that we often downplay when we think about our life.

Yet, at the same time, many of us strongly buy into the idea that bad luck just comes out of the blue and there’s no way we can predict it or do anything about it. Even worse, we also often assume that bad luck just won’t happen to us. Very few people sit around envisioning what will happen if their car doesn’t start or if they get into an auto accident or if they get really sick. It’s not part of the vision most of us have for the future – rather, it’s usually a vision of a relatively straightforward path into a future that’s similar to our current state, maybe somewhat better or worse depending on our outlook, but a pretty straightforward path.

What does all of this add up to? We wander through life strongly underestimating the impact that sheer luck has on our life, both in terms of opening the door for opportunities (which we attribute to personal skill or “deserving it”) and in terms of avoiding pitfalls.

We are all the “lucky fool.”

So, what’s the real actionable idea we can take from all of this? It’s simple: when we put forward effort to increase the chances of good luck and to decrease the chances of bad luck, we actually do make our future brighter. We create a future where we can get away with being the “lucky fool,” seeing fortune come our way and reducing our chances of misfortune.

Creating Good Luck in Your Future

I actually covered this topic in an article several years ago, Ten Tactics for Improving Your Luck. Here are those tactics, which almost universally point toward improving one’s fortune (though some also work to minimize bad luck, which we’ll get to later):

1. Keep a notepad and a pen in your pocket at all times.
2. Keep a reasonable amount of cash on you at all times.
3. Don’t get into a desperate debt situation.
4. Be social.
5. Establish relationships with many people who share your interests.
6. Help others out when they need it.
7. Shop at places where extreme bargains might be found.
8. Have confidence that you can do something challenging.
9. Know the actual value of lots of items in a particular specialty.
10. When you need something significant, tap your social network instead of buying blindly.

All of these strategies are extremely useful when improving your “positive luck,” or the good fortune that might come your way. You improve your positive luck by having useful knowledge, having a lot of relationships, being a positive influence in the lives of others, and retaining your useful ideas instead of just letting them drift away.

In my experience, I’d suggest that three specific strategies stand out head and shoulders above the pack in terms of creating positive luck in my life.

First, cultivate and maintain as many positive personal and professional relationships as you can, but do it in a way where you are giving something to the relationship without expecting something in return. Get out there to social events – personal and professional ones – and get to know lots of people. Follow up with them via email or texting or social media, and make an effort to keep up with that contact. Learn things about them and share things that they might find useful. Simply ask how they’re doing, particularly in terms of the things they seem to care about. If you hear they’re having troubles, check in and ask how you can help. If you can find ways to “multiply help” – in other words, do something that doesn’t require a huge effort from you but is incredibly valuable for them – just do it and don’t worry a bit about being “paid back” or what it will get for you in the future.

I’ve found that the more positive relationships I cultivate and maintain, the more opportunities just seem to open up before me. Not only that, this strategy tends to help a great deal with minimizing bad luck, which we’ll get to in a minute.

Second, build up some areas of useful specialized knowledge. By “useful,” I mean things that others are willing to pay for or things that you can use to make money with some regularity. For example, having a specific marketable skill in your professional life falls into this category, as does having some plumbing or electrical or carpentry skill, as does having an intimate knowledge of the value of certain collectibles so you can easily “flip” them if you have the chance.

The more areas of knowledge that you have with which you can help others or identify opportunities for profit, the more luck will shower down upon you.

Third, don’t let the good ideas in your head float away. If you have a good idea that would be useful at all to revisit in the future or to share with someone else, get it out of your head immediately and into some sort of system where you’ll see it again soon.

My system for this is a pocket notebook and/or the Evernote app on my phone and/or the Reminders app on my phone. If I have an idea or thought that deserves any kind of follow-up whatsoever, I write it down in one of those three places immediately, and then I’m able to deal with it at a later time by either taking some personal action on it or passing it along to someone who finds it useful.

I write down things I want to think about later. I write down potential article ideas. I write down noteworthy things I learn about people I meet. I write down upcoming sales that might be of interest to me or to a friend. Then, once a day, I revisit all of this stuff and do something useful with it.

I could write detailed posts about each of these things – and I have, over the years, though my systems for doing each keep evolving over time.

Minimizing Bad Luck in Your Future

On the flip side of that lucky coin is the “bad luck” side – the unfortunate events that you never see coming in life. When we look ahead into our future, we almost never see the unexpected bad event coming. We can’t imagine those things happening to us. Yet, they happen to people all the time.

People lose their jobs. People get a pink slip. People get seriously ill. People get in car accidents. People get depressed. People get dumped. People get divorces. It happens over and over and over again in the world.

There are lots of strategies for how to respond to those things, but I want to discuss five specific strategies that you can do now to minimize the chances of negative events as well as minimize their impact.

First, have a strong emergency fund. Ideally, you should have an emergency fund that equals several months of your living expenses, but if you’re just getting started, aim to have $1,000 set aside in a savings account. Remember, cash is king – it can come through for you when you don’t have any credit and your credit cards are maxed out. It can come through for you when your identity’s stolen. It’s pretty much the safest asset you can have, and that’s why it’s perfect for emergencies.

My personal recommendation is to automate an emergency fund. Set up a separate bank account to hold your emergency fund at another bank, then set up an automatic transfer of $10 or $20 a week into that fund and never turn it off, and then never touch the emergency fund until a genuine emergency hits. $10 a week puts $500 a year into your emergency fund; $20 puts $1,000 a year. You can do more than that if you’d like, but that’s a great start.

Second, cultivate lots of strong and stable friendships in your life and stick with them even when the other person is struggling. The friendships where you come through for people when they’re struggling are the friendships where others are likely to come through for you when you’re struggling. It’s never a guarantee, of course – I’ve experienced some people simply abandoning me during times of trial – but I’ve found that if you stick with someone during their life changes and difficult moments, they’re likely to have your back when you’re down, and that can make all the difference.

This is probably the single best strategy there is for simultaneously cultivating good luck and preventing bad luck, because it helps with both types of luck. Strong friendships can open opportunities. They can also stand with you when the chips are down.

Third, stay healthy and get adequate sleep. Eat a healthy diet with a lot of vegetables and fruits. Get at least some exercise. Get plenty of sleep each night. These simple steps derail so many illness and health related misfortunes that the benefits can’t possibly be overstated. It also helps you to feel good in the present so that you perform well at whatever life throws at you.

Fourth, keep your resume strong and keep your skills fresh, no matter how secure you think your job is. If the government shutdown has taught us anything, it’s that even the most stable of jobs are never a lasting guarantee. It took less than a month for federal employees to go from incredibly stable jobs to missing paychecks and considering career changes.

You can prevent this kind of outcome from happening to you by keeping your skills fresh and marketable and keeping your resume updated at all times. Keep an eye on the skills that are desired in your field in other positions. Sharpen those skills that you currently have and learn the new ones that come into your field. You want to be in a position such that if your job disappears, you can easily apply successfully for another position and have a strong chance of getting it quickly.

Finally, minimize your debts. Debt not only swallows your money in the form of interest and finance charges, it also increases your total monthly bills, meaning that you’re forced onto a financial tightrope where you have to keep a high paying job just to keep the balls in the air. This means that even the slightest career misstep or health misstep or relationship misstep can send things quickly into chaos. The fewer debts you have, the smaller your total monthly bills are and thus the easier it is to stay afloat when things get rough.

The key to this in the short term is to cut back on your unnecessary spending and put that money toward eliminating as many of your debts as you can. Take little steps like making coffee at home instead of stopping at Starbucks and buying a lot of store brand nonperishable foods and household supplies. Consider bigger steps like cutting out cable and just using Netflix or Sling for home entertainment or shopping around for a better cell phone plan. Take even bigger steps like shopping around for better insurance or moving to a more cost-effective place to live. The key is to cut back on your spending just enough that you’re not reliant on credit cards any more and can instead start paying them off (and funding that emergency fund from the first tactic).

Final Thoughts

Overlooking the role of luck in our life story is a mistake we all make. It only becomes a problem when we refuse to consider how luck will impact us going forward, in both a positive and a negative sense.

Step back and really consider how both good luck and bad luck brought you to where you are now, and then consider what your path forward will be like if you adopt strategies to increase the chances of good luck and decrease the chances of bad luck.

That way, you can truly be lucky, but no longer the lucky fool.

Good luck!

The post The Lucky Fool appeared first on The Simple Dollar.

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Friday, January 18, 2019

A Frugal Person’s Guide to Coffee

Over the last few years, I’ve really begun to appreciate a cup of coffee in the morning, particularly on days when I need to tackle a lot of tasks that require focus and ideas. My personal preference is cold, black coffee, cold brewed in the refrigerator and consumed without sweeteners or cream (I’m actually sipping a cup of this as I write this article), but everyone has their own particular way that they like their coffee. Sarah, for example, likes hers quite hot with a bit of cream in it.

Of course, a morning coffee routine can be quite expensive. I used to drink coffee pretty regularly back in the day, but I did it by stopping at a local coffee shop on my way to work and dropping $6 or $7.

Even if I were to go to Starbucks and buy a venti black coffee, I would pay somewhere around $3. If my wife got her preferred drink, it would be somewhere closer to $5. (And I don’t even particularly like Starbucks – it usually has a “burnt” taste to my tongue that I don’t enjoy.)

If that $3 cup of coffee was an everyday thing, I’d be dropping just shy of $100 a month on coffee. That’s just not sustainable for me.

What do I do instead? I brew cold brew coffee in my own refrigerator, using 3/4 cup of coffee beans ground up with 32 ounces of water. This produces the equivalent of two venti coffees from Starbucks. This is about 2.75 ounces of beans, and I typically buy 42 ounces of this coffee for $20. That bag provides about 16 batches of my cold brew coffee, with each “batch” providing two 16 ounce coffees equivalent to that $3 venti from Starbucks. My cost for coffee, in other words, is about $0.62 for the same amount of coffee that I’d pay $3 for at Starbucks, and it’s substantially tastier in my opinion and doesn’t require much effort or equipment.

My wife basically does the same thing, except that she usually adds cream or some sort of flavored creamer to her coffee. The cost of her additives, on average, seems to add about $0.30 to the cup (depending, of course, on her specific choice of flavor additions), bringing her typical venti-sized coffee up to just shy of $1, but you’d be paying around $4.50 to $5 for the same thing at Starbucks.

Let’s break down exactly how I do this, step by step.

I use a simple cold brew coffee tool – no expensive machines. The one I use is very similar to this one, in that it’s basically a small glass pitcher with a fine sieve that you can insert into it, with measuring lines along the side. I picked mine up on sale at a local store for $10. I’ve made literally hundreds of batches of coffee with this, meaning the cost per batch of coffee is getting down in the one cent range.

Why do I choose cold brew coffee? It’s really easy to prepare. It doesn’t require extra filters or anything. It’s also less acidic and really smooth, and you can adjust the strength by how long you let the grounds sit in the water. It’s really easy to clean up, too.

You really don’t need anything more than this, except…

If you want to use whole bean coffee – and I really recommend it, because using freshly-ground beans is really flavorful and doesn’t require nearly as much grounds to make great coffee – you’ll also need a grinder. You don’t need anything fancy here, either. The one we have has been in steady use for ten years and seems to no longer be made; of the ones available easily on the market, I’d probably recommend this sub-$20 Mueller grinder. We grind coffee twice a week or more and have done so for ten years, meaning the cost per grind is now below a cent.

That’s it for equipment. Everything I need to make coffee for a very long time costs less than $50 and doesn’t ever need new filters or anything like that. It’s a fixed cost. The only additional cost is the beans.

My favorite “bang for the buck” coffee beans, as noted above, are Eight O’Clock Coffee original beans, which I buy in a large bag and keep sealed. It’s not the best coffee in the world, but it’s really good and I’d have to pay multiples of the price to get somewhat better coffee.

So, what’s my process?

In the morning, if I empty out the pitcher of coffee, I simply make another batch. I rinse everything out, then I measure out 3/4 cup of whole beans and grind them at the coarsest setting on our grinder. Then, I put those grounds right into the metal cold brew filter, fill the pitcher up to the 32 ounce line with cold water, and put it in the fridge. The next morning, when I pour myself some coffee from this pitcher, I toss the grounds, usually right into the compost.

If I happen to want hot coffee, then I just microwave some of the cold brew stuff until it’s piping hot. Some mornings, when Sarah’s in a hurry, she’ll snag some of my cold brew and microwave it rather than making her own. She has a drip coffee pot that she got as a gift in college that she’s still using most of the time, when she’s not pilfering my cold brew coffee.

Most mornings, I drink a single sixteen ounce cup of coffee, which, if you’re comparing to a typical coffee mug, is about two of those. The cost for this, if you’re including the residual cost of the cold brew coffee pitcher and the grinder, is about $0.65. As noted above, a similar sixteen ounce coffee at Starbucks is about $3, and the price is much higher at other coffee shops.

In terms of quality, I prefer what I make at home to Starbucks (because Starbucks has that vague “burnt” taste that I mentioned earlier), though I have had coffee at coffee shops that I probably prefer to what I make at home (though I’ve never really done a side-by-side comparison). I know that when we have more expensive beans, usually because they were gifted to us, I sometimes prefer the more expensive beans and I sometimes prefer my old Eight O’Clock standard, but the quality difference in the pricier beans is not enough for me to start buying much more expensive coffee.

I drink coffee about five mornings a week, so the total cost in a given week is around $3. Seriously – I drink coffee for a week at home for the cost of buying a single cup of what I like at Starbucks, and I prefer what I make at home.

What’s the take-home message here? If you’re in a routine of stopping for coffee on a frequent basis, try altering your routine and making it at home. There are lots of methods for doing so, most of which are quite easy and involve minimal cleanup, and it can be really tasty. My belief is that the method I describe above is about as easy as it gets for coffee at home and I’m really happy with the quality of coffee I get from this process.

Good luck!

The post A Frugal Person’s Guide to Coffee appeared first on The Simple Dollar.

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Why Internal Solutions Trump External Ones

If you’re reading this, you’re likely a problem solver of some kind, and the problem you identified was likely related to your personal finances. Finding a solution to that problem led you, in some fashion, to The Simple Dollar – maybe it was a Google search or a link from a friend or something else.

Financial problems come to us in various shapes and sizes and they appear in a number of different ways. Maybe you lost your job and are really struggling to make ends meet. Maybe you’re just treading water financially and your debts aren’t really going away. Maybe you’re in good financial shape but you’d like to prepare yourself financially for a career change because you’re unhappy with some aspects of your career. All of these approaches have a central theme in common: we all want to improve our lives.

When a problem presents itself in life, we tend to attack it in a number of different ways, depending on our personality. Some of us turn it over and over in our minds, trying to decipher the specifics of the problem as clearly as possible. Some of us simply try to work around the problem. Others want to quickly face it head on and dive immediately into a search for solutions.

Personally, I tend to stew over a problem for a while, writing it out in my journal and digging into it until I’m sure I understand what the root cause is. Then, I start researching methods for fixing that root cause – I’ll do Google searches and read books and even talk it over with friends who have handled that problem.

Sometimes, if I’m lucky, a solution will just fall into place. Someone will give me the key to fixing the problem and suddenly everything’s better. At other times, I have to figure it out on my own, make changes to my own behavior, and put in a lot of work.

External Versus Internal Solutions

The first type of solution is what I call “external solutions.” External solutions are solutions that come from an external source that we have no control over. Maybe your great uncle Winthrop suddenly leaves you $200,000. Maybe you buy a lottery ticket and win a price. Maybe a friend says, “Hey, I have an extra freezer in my garage and you can have it.” Maybe your boss suddenly comes to you and says, “Your hard work has been noticed and so here’s a ten percent raise.” These types of solutions have varying degrees of likelihood – there are steps you can take to somewhat increase the chances of external solutions, but they’re really not solutions that can be relied upon.

External solutions, in my mind, are in the land of daydreams and luck. They’re things that are wonderful if they happen, but you can’t really rely on them. That doesn’t mean that it’s not worthwhile to cultivate them and increase the chances of their occurrence (here are some real ways to increase your “luck” and a discussion about how hard work complements “luck”), but if a real problem is pressing you, don’t expect an external solution to save the day.

My interest is in the other kind of solution to problems – the “internal solutions.” Internal solutions are ways in which you can solve a problem via personal action, but you have to make the decision to take that action. These usually involve some sort of personal effort and typically a significant amount of it.

For example, if you observe that you’re just treading water financially and you decide to solve this problem by changing your own spending habits and using that surplus to get rid of debts and start saving for retirement, that’s a prime internal solution to a problem. If you observe that your career isn’t going anywhere and you decide to solve this problem by getting some certifications and polishing your resume so that you can move to a new position, that’s an internal solution. If you observe that you’re overweight and you decide to solve this problem by counting your calories and learning how to naturally consume fewer calories during the day, that’s an internal solution. Internal solutions are all about actions you take to cause a particular outcome, whereas external solutions are actions taken by others that cause an outcome in your life.

Often, when people say that something is hopeless, they believe the only route to success is either an external solution – outside of their control and usually among the high-benefit but low-likelihood end of the spectrum – or a prohibitively hard internal solution – radical frugality, working four jobs, etc. Because external solutions are out of our control and many internal solutions are very difficult, we often buy into the notion that change is basically impossible.

High Intensity Versus Low Intensity

While people sometimes find success due to an external solution falling on their lap and people occasionally find success pushing through a high intensity internal solution, I’ve found that most of the success I’ve found in my life in terms of solving life problems comes from low intensity internal solutions.

A low intensity internal solution is one where we are directly taking action to cause the change we want, but that action isn’t an intense life change in and of itself. Low intensity internal solutions are things we can pull off in our life with relative ease. Often, low intensity internal solutions come off like common sense – when one occurs to you, it feels like a “why didn’t I think of that?” idea. They feel like common sense.

My belief is that low intensity internal solutions are almost always the best solutions for life’s problems. They don’t rely on others to “save” you, they don’t require major life changes, and they’re not complicated, either. They just work. They might not individually create an enormous change in your life, but they nudge the trajectory you’re on in a meaningful way and that really adds up over time.

Why Doesn’t Everyone Use Them?

So, why don’t we automatically solve all of our life problems with low intensity internal solutions. There are a lot of reasons, but four of them bubble to the surface.

First, low intensity internal solutions still require effort. They’re not effortless. They usually require a burst of up-front effort or a small amount of ongoing effort to implement. You can’t just sit on the couch and watch it magically happen with zero effort.

Second, people believe that the only way to really change is either an external solution or a high intensity internal solution. People often buy into the idea that they can’t change their life without a huge windfall coming in or a radical shift in their life in which they give up tons of things that they actually value. They don’t even consider low intensity solutions.

Third, people feel like low intensity internal solutions are just common sense and blow them off. I can’t tell you how often I’ve been told that the solutions I used to turn our financial life around were “common sense,” as though that somehow invalidated them. They might be “common sense,” but the vast majority of Americans aren’t actually doing them… so maybe they’re not as “common sense” people think they are.

Finally, they’re often not very glamorous. People want to hear the story of how someone lost 115 pounds in a few making major life changes. They don’t want to hear the story of someone who lost 25 pounds over several months making a straightforward life change. They watch “The Biggest Loser,” not “The Moderate Loser.” Low intensity internal solutions usually don’t feel like the big splashy life change that attracts people, so they get overlooked.

How Low Intensity Internal Solutions Turned Around Our Finances

Let me make this very clear: our financial turnaround wasn’t a high intensity solution, at least once we got past the “honeymoon” phase; rather, we just used a handful of low intensity solutions that stuck around. Our solution wasn’t a radical life change, but a lot of small tweaks. The basic flow of our life didn’t really change at all, honestly.

For example, I used to spend a ton of money on books. Instead of going to the bookstore frequently, I just switched to going to the library to browse books. Instead of hitting Amazon when I hear about a great book title, I just switched to using my library’s online book reservation service.

Sarah and I used to eat out a lot. Instead, on a night-by-night basis, we made an effort to eat at home. Simple change: unless it’s really really difficult, we’ll just eat something we made at home. Often, it was something really simple – a pot of spaghetti with some sauce on top or some scrambled eggs and toast. Over time, cooking at home got easier and easier and now I’d honestly rather make a meal at home than eat out regardless of the costs, and eating at home is way cheaper.

We used to go out with friends a lot. Our only change here was that we just started hosting stuff at our house – potluck dinner parties followed by a movie or a board game or something like that. Over time, we started accentuating friendships that were really on board with this and de-emphasizing friendships that weren’t.

We used to buy name brand everything. Rather than buying the name brands, we just started buying store brand everything and only switched back to name brands if there was a problem. This is the definition of low intensity change.

The thing is, each of these low intensity solutions alone wouldn’t bring about big financial change, but none of them were really very hard, either. What we did was simply do a bunch of them at once and, because they were pretty easy (especially with a bit of practice), most of them just stuck as new normal life behaviors.

That’s really the secret of low intensity internal solutions – they usually just end up feeling like the natural way of doing things if you do them for a while. It feels normal to buy everything in store brand form. It feels normal to cook almost all meals at home. It feels normal to have our social lives revolve around dinner parties at home and community events. It feels normal to get almost all of my books from the library. I could list a lot of these things – they’re just things that have become normal for me now, but they cost a lot less than my old, bad way of doing things.

For me, whenever I’m wanting to make changes to my life, I look at low intensity internal solutions first. I might want to make big radical life changes to see big results immediately, but I’ve witnessed time and time again that it’s the little low intensity solutions that really stick and really add up to meaningful change over time.

Low intensity internal solutions have helped me fix a lot of relationship problems. Low intensity internal solutions have helped me navigate career changes and put my career on a great path. Low intensity internal solutions have helped me improve my health. They always come through when I see a problem and I want to make changes.

My Process for Finding Low Intensity Internal Solutions

Over the last decade or so, I’ve developed something of a process for taking a problem I see in my life and solving it via low intensity internal solutions that eventually just become my normal process of life. Let’s walk through those steps.

The first part, of course, is noticing and identifying the problem. Something’s not right in my life. I’m unhappy with something. What is it? I usually spend some time thinking about this, because I don’t want to go off making changes to things that aren’t really the source of the problem.

What I usually try to do is look for specific things I don’t like, then ask myself why those things are the way they are. I repeat that “why” question five times, and then that fifth answer is usually very close to the core problem.

This isn’t a snap judgment kind of thing. If I notice some things that are out of place in my life, I try to evaluate each of them and see if they lead back to a common core problem.

When I’ve identified a core problem that i want to solve, I try to identify all of the choices in my life that I’ve made recently that are leading to this problem. I focus on my choices. I don’t worry about external events. I don’t worry about other people’s behaviors. I worry about what I chose to do.

If I don’t feel like my relationship with Sarah is going well, I start to look at how I’ve behaved recently in relation to her. How have I been acting as a husband when we’re together?

If I feel overweight, I start to look at every situation in which I consume food. What am I doing in each of those situations?

If I feel like I don’t have enough money to go around, I start to look at every situation in which I spend money. Are each of these decisions wise?

What I’m trying to do is identify all of those little choices I’m making in my life that have led to this problem. Then, I try to look for patterns in all of those choices. What little decisions do I make over and over again? What situations come up over and over again?

For example, what do I do each day when Sarah gets home from work? Maybe if I adopt a better routine when she gets home, like maybe greeting her with enthusiasm and giving her a kiss and asking how her day went, I might be able to connect with her.

What do I do when I feel hungry in the afternoon? Maybe if I eat an apple instead of grabbing some chips or something else unhealthy, I might reduce my calorie intake with little effort.

When I’m getting food for a meal, maybe I can just put half as much food as normal on my plate and eat it a little more slowly and then decide if I want more rather than piling on the food. I don’t have to put some sort of huge restriction on my eating – just be a little more mindful of it.

The goal here is to look at all of the decision points during the day that led me to having this problem and ask how I can tweak some of them in a low intensity way to produce a better outcome.

I don’t want to go from eating 3,000 calories a day to eating 1,200 calories a day. That won’t work in the long run. Rather, I want to go from eating until I’m basically uncomfortable to eating until I’m sated.

I don’t want to go from spending money on every frivolous idea I have to basically spending no money at all. That won’t work in the long run. Rather, I want to find ways to channel some of my interests down a path that doesn’t require as much spending.

Most of these solutions are common sense. If you see a pattern in your life and you don’t immediately see a solution for it, don’t hesitate to go hunting for an answer – that’s what Google is for – but don’t be surprised if the solution feels like utter common sense.

The trick, then, is to maintain this low intensity behavior tweak over time. Usually, it’s not a matter of effort but a matter of being mindful; you’re so used to doing things in the bad way that the good way doesn’t even pop into your mind.

For me, two approaches really work here. One is a “thirty day challenge,” where I try to make one or two of these changes and keep that change front and center in my mind. Here’s a great guide for utilizing meaningful thirty day challenges in your life. The other is simply keeping a list of the changes I’m working on, reviewing it each morning, and then asking myself honestly whether I tried my best to adjust each behavior in the evening by literally sitting down and giving myself a score on that behavior. I found this concept in the wonderful book Triggers by Marshall Goldsmith; the key element is to ask yourself “Did I do my best today?” and not focus on results, but rather on effort.

Final Thoughts

Don’t spend your energy wishing upon a star and hoping an external solution will fix everything. Unless you’re extremely lucky, this won’t happen, so don’t devote your time and energy to daydreaming about it.

Don’t try to make enormous radical life changes, either. Again, unless you’re extremely lucky or extremely self motivated or a massive external change has happened in your life to force some of those changes, radical life changes probably won’t take, either.

Instead, focus on finding those smaller changes, ones that over time can become your normal behavior. Look for the tons of decision points in your life that have contributed to the problem at hand and look for how to tweak those decisions, then focus on maintaining those tweaks until they feel normal.

You won’t notice a radical change overnight, but you will notice that your life trajectory begins to change for the better.

Good luck.

The post Why Internal Solutions Trump External Ones appeared first on The Simple Dollar.

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Thursday, January 17, 2019

Lincoln’s Axe and Frugality

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln

I love this quote from Abraham Lincoln. It’s such a clear analogy about the value of preparation. Cutting down a tree is hard work, and it is much, much harder if you’re using a dull axe – your strokes are far less efficient and you’re likely to become worn out well before the job is done. You’re much better off getting the axe nice and sharp before you head out to chop down that tree.

This same phenomenon is true with almost everything one might do in life – hard things are made easier if you properly prepare for them.

In my early professional career, I used to keep this quote as a printout in my cubicle (and, later, my office) where I worked as a programmer. I found that I was almost always better off spending lots of time preparing for tasks so that when the time came to actually perform, I was very efficient and accurate at the task at hand.

That meant doing things like learning about the nature of the data I handled and what it actually meant, learning about software development techniques and new languages, documenting operating procedures, and writing lots of software libraries and functions that I could use later. In short, I spent a lot of my time sharpening the figurative axe.

The truth is that we’re faced with this choice all the time in modern life. Do we get started right away, or do we invest some time in advance to make that task go more smoothly and efficiently? Often, that prep time doesn’t feel like we’re doing anything – we can feel like we’re making no progress on the task at hand. Yet, preparation often drastically reduces the amount of time and energy and money we have to invest in a task.

This pops up frequently even in frugality. With frugality, much like everything else in life, sharpening the axe is usually the right choice.

Here are five clear examples of frugal tasks where “sharpening the axe” and doing some prep work ahead of time will save you a ton of money and often end up making the task so much more efficient that you don’t actually lose any time overall, either.

Sharpening the axe while getting groceries: Before I ever go to the grocery store, I’ve written down a meal plan for the next several days (usually planned with help from the grocery store sale flyer) and I’ve assembled a grocery list from that meal plan so that I’m sure to be getting the things I need for those meals and not buying extra things.

This makes the actual time at the grocery store buying groceries incredibly efficient. I have a list in hand that already includes a lot of sale items. It also includes all of the things I actually need and doesn’t include anything extra. When I’m at the store, I can just fly through the aisles following just that list and I’m automatically grabbing things that are on sale. I can buzz right through a store with that list and the total bill at the checkout is usually very agreeable.

Sharpening the axe while deciding where to shop: Spending time shopping at several different local grocers to figure out which one offers the best prices overall for the things you buy can take some time, but once you’ve done that, you can settle in with a regular grocery store and feel confident that the prices on the shelves are very competitive and that you’ve chosen a store with a good efficient location for your needs.

This takes some time, sure, but the time spent getting regular groceries at several stores and then saving the receipts for comparison, then comparing those receipts to determine which store saves you on the things you buy most often is an incredibly efficient use of your time. It allows you to figure out the best store for your grocery shopping needs, and then you can just automatically shop there with confidence going forward and you’ll simply spend less money on groceries by default.

Sharpening the axe while shopping for a car: Rather than going to a car dealer and getting “sold” on a particular car, the “sharpening the axe” approach involves doing some research to figure out exactly what you want before you ever set foot on a dealer’s lot. This involves sitting down and considering what exactly you want out of a car, then turning to trusted publications like Consumer Reports to identify makes and models that match your needs.

For example, you might have this vague notion that you want a “family vehicle,” but with some thought, you might realize that you want a “reliable late model used van,” and then you turn to Consumer Reports to find that the most reliable used vans in the three- to six-year-old timeframe you’re looking at are Toyota Siennas and Honda Odysseys, so then you can go shopping for those specific models in those specific years.

Once you know what models you’re looking for, you can canvas the websites of lots of dealerships before ever going there, and you can also check other services like Craigslist and eBay Auto to potentially buy your vehicle directly from a seller. You can get a sense as to what you should pay for such a vehicle by researching blue book prices and have all of that information ready before you ever set foot on the lot. That way, you’re not wasting time looking at models that don’t match your needs and you’re not going to spend a lot of time negotiating, either. The car buying process becomes much faster and you get the car you want at the price you want.

Sharpening the axe while buying insurance: If you have insurance needs or simply want a better rate than you’re currently getting, the time invested in figuring out what insurance features you need before you ever shop around, and then taking that information to several insurers to get quotes, can seem like a lot of effort. But if you do this, you’re likely to get an insurance package that’s much more in line with what you actually need for the best possible price. You can also research specific insurers to see how friendly and available they are for customer support and claims.

Sharpening the axe while making meals in advance: This is a wonderful example of how preparation in advance can make a huge difference on a busy night. Simply make a bunch of meals in advance that freeze well, and pop them in the freezer. Do it on a day where you’re not particularly busy so that you can devote the time to making several casseroles or batches of soup.

Then, when you’re actually trying to thread the needle on a busy evening, you can just pull a meal straight from the freezer and pop it in the oven with no prep time at all, enabling you to have a quick and inexpensive but delicious home-cooked meal for your family, even on the busiest of nights.

You can use this same philosophy for some of the more time-intensive meal prep tasks for the week ahead. If you’re going to need beans for Tuesday’s dinner, cook them on Sunday and save them in a container in the fridge so that the meal prep on Tuesday is far more efficient. Chop tons of onions and peppers when you have them in abundance and store them in one-cup quantities in freezer bags so you can just dump them right into a skillet as needed. Meal preparation offers countless opportunities for preparing pieces in advance so that the actual task isn’t overwhelming.

The core principle behind all of these ideas is this: Any time you can spend a little bit of time and effort up front to clarify exactly what you want and what the most efficient approach is to get it will save you a ton of money and the time and effort will usually be recouped, too.

You can almost never go wrong by investing downtime in preparing for a task that you know is coming up. It’s a far better use of your time than just spending that time on idle distractions like looking at your phone or channel surfing. You’ll save time when you need it most and quite a lot of money by using your downtime to “sharpen the axe” for more cost-effective and time-effective behavior later.

Good luck.

More by Trent Hamm:

The post Lincoln’s Axe and Frugality appeared first on The Simple Dollar.

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Wednesday, January 16, 2019

Paring Back: The Power of Minimalism to Tidy Up Your Home and Your Finances

Have you decided that 2019 will be your year of decluttering, minimizing, and consuming less? If so, you’re not the only one. As Becoming Minimalist founder Joshua Becker discovered, the topic is on a lot of people’s minds.

Becker’s new book, The Minimalist Home, was released on Dec. 18. Within an hour, Amazon was sold out. By that evening, Walmart, Target, and other smaller online booksellers had run out of copies, too.

A few days after the publication date, Becker wrote to his newsletter subscribers that his publisher had misjudged the popularity of the title — it sold more copies in the first week than his previous book, The More of Less, had in two-plus years.

The timing was a perfect storm of holiday gift-giving and New Year’s goal-setting, but it probably also helps that his process as defined in the book is practical and approachable.

“My specific approach is that you go room-by-room through your home, easiest to hardest, finishing entire spaces along the way and noticing how that positively impacts your life,” Becker says.

But it’s not the only emphasis. Becker’s approach takes decluttering and shows you not only what to keep and what to discard, but ties all of it to a greater purpose. He pushes you to ask, “What is the life I want to be living?” After asking that question, you then figure out what items you need to keep in order to fulfill that purpose.

Minimalism and Your Money

Becker also addresses minimalism from a bigger financial perspective. Making more money, he writes in the book, is not the answer to getting ahead financially, and there are two primary reasons why.

First, while there is some opportunity in our lives to earn more money, Becker says, “I don’t think most people have the time or the space in their life to make that the never-ending strategy, right? I mean, we all have limited time and energy and we can certainly do some things different and rearrange our lives to make more money, but eventually that strategy reaches an end point where we have to spend less.”

The second reason, he says, is that what usually happens when people make more money is they just spend more money. They’re not able to get ahead financially unless they’re also making changes to spend less while earning more.

And owning less, he adds, actually creates a bigger opportunity to live more.

“Owning less frees up money. It frees up time. It frees up energy. It frees up calm. It results in less and less stress and less worry. And so what it does is it frees up our lives to pursue our greatest passions,” Becker says. “Owning as much stuff as possible is nobody’s greatest passion. It’s just what society tells us we’re supposed to do, and so people do it without even realizing they’ve sacrificed their passions along the way. By owning less, we are freed up to live more, to live whatever life it is that we wish we were living instead.”

Examples Becker gives in the book range from travelling around the world, to volunteering time at a nonprofit whose cause is important to you, to spending less time in the office and more time with your kids.

And speaking of kids — Becker says when it comes to minimizing, in his experience, kids are pretty flexible. “People tend to be very scared of ‘my kids are going to fight against this.’ I didn’t find that to be the case, and I don’t think I am unique in that situation.”

He does note that he and his wife did not start the process with their kids’ possessions; they tackled their own stuff first and had conversations along the way explaining why they were doing what they were doing.

“I think having those conversations in ways that kids can understand and [learn] what they are going to get out of it will resonate with them,” he says.

There’s only one potential exception, Becker says, and that’s if you’re dealing with older teenagers. If a 16-year-old has lived her whole life one way, that child can be more set in who she is, and change can be more difficult.

Of course, minimizing can challenge adults too. It’s the emotional side that tends to scare people off, Becker says. “It can be very difficult to get rid of specific items or specific categories of things and people tend to stop when it becomes emotional and difficult.”

But, he says, that’s not the time to stop. “Those difficult questions are questions that we need to be asking ourselves regardless. ‘Why did I buy so much stuff? Why did I waste so much money on these things? Why is this so difficult for me to get rid of?’ In those questions we learn things about ourselves. And maybe we find that our motivations are healthy, but maybe we find our motivations are unhealthy,” Becker says.

“I just think that the greatest fault is when we shy away from those questions,” he adds, “and the greatest benefit is when we sit in them a little while and try to try to uncover more. Learning more about ourselves is always a valuable process.”

If you want to get started in minimizing (and question-asking), Becker suggests three ways to kick off the process:

  • Sit down and finish this sentence: I want to own less so that I can do more of ____. “That moves ‘I want to minimize in the new year’ from ‘I want to minimize’ into ‘I wish I was doing more of this with my life.’ It gets to the deeper motivation,” he says.
  • Minimize something easy, such as your car. This can be “a quick win,” Becker says. “You can usually get rid of everything in 10 or 15 minutes and yet quickly notice how different it makes you feel.” Don’t own a car? Choose a living room or a single space in your home where you feel you can find fast success.
  • Research local charities that align with something you’re passionate about. Maybe there’s a domestic violence survivors’ shelter or an organization that is helping refugees resettle in your city that could use the items you’re getting rid of. It’s a way to open your eyes to some of the needs of your local community. Once you see how much good your excess can be doing in the world right now, Becker says, it will inspire and encourage you even more while going through the minimizing process.

If you’re looking for more suggestions, you can buy the book — which is now available again.

More by Kirsten Akens

The post Paring Back: The Power of Minimalism to Tidy Up Your Home and Your Finances appeared first on The Simple Dollar.

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Tuesday, January 15, 2019

What’s the Point of Working Toward Financial Success?

Debbie writes in:

Love your blog, but you are too focused on the future. What’s the point of working toward financial success if you’re just going to eventually die? Why have a life if you’re not going to live it?

I get some variation on this question about once a month, but something about Debbie’s wording left me thinking.

In a typical year, Sarah and I spend somewhere around 60% of our income, a level we’re pretty happy with since we don’t make tons more than the average American income and we have three children still living under our roof. We save the rest.

Now, we most certainly could spend that other 40% on things that would raise our day to day standard of living, and I have no shortage of ideas on how I might do that. It would be fun to do some international travel. We could redo our entire kitchen.

Instead, we save it, and it’s a model we recommend to readers of The Simple Dollar.

The response I often hear when I tell people this is “why don’t you guys live a little?” The thing is, we are “living a little” – a whole lot, actually. We used to spend every dime we had. Eventually, we discovered this is just a much better path for us. Saving a significant chunk of our income gives us the best life for us that we’ve yet found.

Let’s break down why.

The Average American’s Finances (And Ours, Too)

Let’s start off by looking where we were at to begin with, which was a financial state not that different than the average American’s financial state.

78% of full time workers in the United States live paycheck to paycheck. More than three out of every four people in the United States working at a full time job would encounter some major financial turbulence if they missed just one paycheck.

We were in that boat. We were in a situation where we would often wait to pay bills until the next paycheck hit our checking account. If a paycheck was late, we would often find ourselves worrying about what came next.

The average American my age is carrying $133,000 in debt. Given that the average American household income is around $70,000, that means the average American my age is carrying somewhere around two years of their income in debt, and that debt is accruing interest with every passing day.

We were in a giant hole of debt. Student loans, credit cards, car loans, personal loans. Later, we had a mortgage. It was a huge weight on our shoulders.

That was the reality we were in for years. In truth, we were spending around 35% of our income just on minimum debt payments at the worst of it. We might have been “living life,” but much of our income was going straight into debt payments.

The Real Impact of This Life on Us

At the same time, there were a bunch of other things floating around in our life.

We felt strongly chained to our jobs and at the mercy of our bosses. Every professional bump in the road filled us with worry. If something didn’t go well at work, we were scared because we knew we couldn’t afford a career detour. Losing our job was a scary proposition.

This gave our bosses a great deal of power over us, and they would use it, intentionally or otherwise. They had that financial leverage over us, which meant that we had to put up with treatment that we could have refused.

We felt a constant low level of stress. We didn’t sit around and obsess about money, but the stress of our financial situation seeped into everything. We didn’t want to check the mail. We didn’t want to look at bills or talk about them at all. Conversations about the future were intentionally vague. We couldn’t sit down together and look at our financial future with optimism.

Even worse, every little thing that went wrong became a big magnified worry. If our car didn’t start before work, it was a huge stress. How were we going to pay for the repair? How were we going to pay for a temporary ride to work? How was our boss going to take it if we were late? If something broke at home, there were similar worries. A fender bender was a major source of stress – would this make our insurance go up?

Often, we just put on blinders and tried to ignore those things in the moment, but the background worry was always there. We couldn’t think of our daily lives without it. We couldn’t think of our jobs without it.

That constant low level stress had lots of negative impacts on our lives. We would get sick quite often. I personally didn’t feel all that great most of the time. We argued a lot, usually about little things unrelated to money, but it was just steam being let off from the money stress.

Furthermore, there was the reality that we weren’t making any progress at all on our life’s dreams and goals and ambitions.

We wanted to live in a nice big house where our children could play with the other children in the neighborhood, but we lived in a tiny apartment with no kids nearby.

We wanted to be great parents who weren’t constantly stressed out all the time, but we were constantly stressed out all the time and secretly doubted whether we’d be good parents at all.

We wanted to be able to stop working when we were relatively young and have a few decades of good health to go on a lot of adventures together, but we couldn’t see how we could possibly afford to ever stop working.

Our life dreams were fading away.

What were we getting out of this, though? Surely we had to be getting something out of this, right? Honestly, we spent a lot of money on things that I don’t even remember at all. I assume they must have been fun in the moment… but almost all of them are completely forgotten.

We ate out a lot, but few of the meals were really memorable. My best memories of meals from this period in my life were either eaten at home or at a really cheap ethnic restaurant Sarah and I used to enjoy.

I used to run with a pretty expensive crowd that went out for drinks constantly. I barely remember any of those people or any of the time I spent with them, even if I’m trying to remember them.

I know I used to stop by a convenience store near our apartment virtually every day to buy a bottle of Gatorade and a slice of pizza after work. I’d walk there from our apartment, chat to the person working there, and drop more than $5 on a simple snack. It’s all completely forgettable.

I collected books and trading cards. I remember reading some of the books, but I actually only own a few of the ones I had in that era. The rest have been sold or given away or stuck into Little Free Libraries. I didn’t even read some of them. Most of my attempts at playing the trading card market didn’t go particularly well, with a few nice exceptions, but it was a significant net loss, too, and it’s an experience I can barely recall today.

Money just fell out of our pockets for lots of unimportant things. Forgettable meals. Forgettable entertainment. Forgettable snacks. Forgettable social events. None of it made any sort of lasting impact on our lives. They just made the time go by.

It was an unhappy life. It should have been happy, with a pretty new marriage and an infant child, but it wasn’t happy. You might think that I’m just looking back on it and seeing it as unhappy from my current vantage point, but the truth was I was unhappy back then, too; I was just in a state of denial about the whole thing.

The truth was all of the things we were spending money on were effective at giving fleeting little bursts of happiness, but that happiness faded fast. If we didn’t quickly do something again to bring on that fleeting happiness, we were left with a pretty dreary existence going forward.

Something had to change. And something did.

A Different Path

Sarah and I mutually decided that the best route going forward from this point was to simply cut out as much of that unimportant, fleeting spending as we could. Just rip it out, toss it to the side, and see what was left of our life after that.

Basically, unless something addressed an actual need in our life, we better have a very good reason for spending that extra money. The case for that expense being genuinely important had to be a good one or we just weren’t going to spend the money.

Our idea was that if we cut out everything, the things that were actually worthwhile would become clear and we could bring them back. Everything else didn’t deserve our money until it showed it deserved our money.

Whenever we were tempted to buy something, we simply asked ourselves a few questions about it. Did we really need it? Is it something we could just borrow? Could we have the same thing – or something very similar – at a lower price? Could it wait thirty days to buy it (most desires fade after 30 days, leaving only the important ones)?

We cut out a lot of spending. Over time, we did gradually reintroduce some things, but for a lot of our old expenses, we just found better substitutes.

I became an avid user of the library, which largely replaced my book buying habits.

Rather than stopping at the coffee shop daily, Sarah and I migrated to making coffee at home at about a quarter of the price.

We started making most of our meals at home, too.

Rather than just reflexively going out all the time, we started to look for things to do in the community and things that didn’t involve having to pay someone to do it. We started going on lots of walks around town and hikes in nearby parks. We started getting much more involved in community events.

Rather than buying expensive snacks at the convenience store, I would buy the same thing in bulk and keep them in the closet. I also toned down my snacking, but I didn’t eliminate it – I tried to consider whether I really wanted a particular snack or if I was just doing it out of routine.

We started intentionally accentuating friendships that didn’t nudge us to constantly spend money. The friends that were willing to go play soccer at the park or have a potluck dinner party started becoming more central in our social life, while friends that just wanted to go engage in “retail therapy” or go “out on the town” every single time started becoming less central in our social life.

We mostly moved to buying store brand versions of everything at the store.

The key thing to note is that we didn’t sit around feeling miserable and counting our pennies. We kept doing things that made us happy that lasted – we just cut out the things that didn’t really last for us. We had stuff going on pretty much every evening, and when we didn’t, we’d usually go on a long walk around town, pushing our infant son in a stroller.

The thing is, as we started doing this, lots of good things started happening in our life.

The Fruits of the New Path

The first thing that really changed is that I stopped being scared to check the mail. I knew that we had money in our checking to handle any and all bills as they came in.

In pretty short order – over the course of several months – we paid off several credit card bills, leaving us with just student loans and car loans. At that point, I built up a little emergency fund, so suddenly the prospect of not having the car starting in the morning seemed a little less worrisome. In fact, one winter day, the car didn’t start – something that would have really put me on “tilt” just a few months beforehand. I knew we had the money in savings to handle it, so I didn’t get stressed out. I just made a few phone calls and everything was fine.

It was during that winter when I started writing The Simple Dollar, and looking back, the big thing that I couldn’t help notice was that the low level of financial stress in our lives had retreated. That background stress that was very subtly painting everything grey was going away. It made everything feel better.

Our marriage felt better. We stopped arguing nearly as much, something that has remained to this day. Sarah and I disagree so infrequently that our kids are amazed that we don’t just resolve things immediately and peaceably.

My job felt better. I didn’t feel like my boss had nearly as much power over me. I felt more in control of my career’s future and I didn’t really feel under my boss’s thumb any more. In fact, it was that sense of career freedom that really nudged me to amp up my efforts on my side gigs, one of which was The Simple Dollar.

I felt more in control as a parent. I didn’t feel stressed out by a crying infant like I once did. I remember distinctly when my son was crying just short of his first birthday and it wasn’t bothering me much at all. I knew it would pass, and I remember thinking in that moment that I wouldn’t have been able to deal with that several months beforehand.

I felt healthier. I used to get several colds per winter. Over the last decade or so, I might get one. The last significant cold or illness I’ve had of any kind was almost a year ago. I could barely go a month without feeling sick back in those days.

I felt more optimistic about the future, too. I genuinely felt as though I could see the big goals Sarah and I had for our future becoming real.

And they have.

Today’s Reality

As I write this, Sarah and I (as noted earlier) spend perhaps 60% of our income. Some years we’ve been below 50%; other years, like this past one, had some unexpected bumps and the number was higher. We haven’t come close to spending as much as we earn in any year for more than a decade.

Within eighteen months of our decision to turn things around, we paid off all of our debts – credit cards, student loans, car loans, everything.

A couple of years after our turnaround, we bought a nice family four bedroom house. Four years after that, the mortgage was paid off in full.

Right now, we have zero consumer debt. No credit cards. No mortgage payments. No car loans. No student loans. Nothing.

We both fund retirement savings at a very healthy clip. We fund 529 college savings plans for our children at a healthy clip, too – we want to help them significantly with college, but we want them to bear some of the reality of the cost, too.

I’m really happy with my day to day life. There’s nothing that I truly want to do that I’m kept from doing for financial reasons. If I want to spend money on something, I can do so without worry. The only thing is, I really only spend money on stuff if I’m very, very convinced that it’s a meaningful and worthwhile expense. If it’s not, I either just skip it or I find a cheap or free way of doing it.

Right now, Sarah and I are hoping to “retire” not too long after our youngest child leaves the nest and we find ourselves without children at home for the first time in more than two decades. We’ll probably be in our early fifties at that point and should have enough savings in place to walk away from any work that we do that isn’t completely fulfilling for non-financial reasons.

At that point, we want to explore some different things. We don’t want to just sit around and idle. We want to be able to take on challenges that just really don’t work if working full time for an income is a requirement. I’d like to spend a big block of time writing and editing a fantasy series that’s been running around in my head for years. Sarah and I would both like to do a bunch of local charitable work. We both want to take a long summer and visit a bunch of national parks with just a tent and a bit of gear in the trunk of our car. We want to be able to be a regular presence in our kids lives and in the lives of our grandchildren.

The thing is, those goals are completely realistic. We’re on a path to making them happen.

There’s just one final point I really want to make here.

Back when Sarah and I were really struggling financially, we were spending about 35% of our combined income just to keep the debts paid. We really only lived on about 65% of our combined take-home income.

Today, Sarah and I are in great financial shape. We bank about 40% of our income and live off of about 60% of our combined income. We do have three kids now, of course, which devours quite a lot of expense – we’re feeding five people and the kids seem to have endless expenses.

Still, at the worst of our spending, we were really only spending 65% of our income, and today, we’re spending around 60%. It’s not that different, honestly, in terms of dollars and cents.

What differs is that today, every dollar that goes through our hands goes toward either something necessary or something meaningful or it goes to solidify the future. Every dollar has a purpose. That simply wasn’t true back in those days.

So, What’s the Point of Financial Success?

The point of all of this is simple: if you adopt an approach with your money where you only use it for things that are either truly necessary, deeply meaningful, or to secure a better future, you’re going to have a pretty good life. You’re going to be able to do everything you truly want to do in life without worry, though it may take time to get there.

The trick is really figuring out what’s really meaningful for you, and that’s actually surprisingly hard to do. It is very hard to separate the things that are meaningful from the things that give short term bursts of pleasure, and it’s even harder to do that from the outside when you can only see how a person spends money and not how those choices really affect their life.

It’s much easier, in the moment, to just choose the option that gives the flash of happiness, but if you consistently choose that route, you’ll never build to anything deeper and more fulfilling. Step back and look at what actually lasts in your life and fill it with more of that and less of the momentary bursts of happiness.

You’ll be glad you did.

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Can a Personal Loan Help You Reach Your Goals This Year?

While it’s hard to measure just how many New Year’s resolutions fail, some studies peg the figure as high as 80%. It’s easy to get pumped up about a new goal for a while, but it’s much harder to change your behavior for the long-term. That’s why gyms are packed in January and February but empty out later in the year, and it’s also why so many people start diets on January 1 only to fall back into bad habits by early spring.

On the financial side of things, it’s just as easy to start the year with big financial goals but to let life’s twists and turns knock you off track. No matter how much you want to save money or improve your finances, sticking with anything for a year or longer is, well, just plain hard.

Five Ways a Personal Loan Can Help You Reach Your Goals

While we sincerely doubt that borrowing money is one of your goals for the new year, it’s important to note that personal loans can help you reach some of your goals — and they could even help you save money. Like any other financial product, it’s all in how you use them.

Could a personal loan help you in some way this year? It’s possible, if you borrow with purpose and have a goal in mind to begin with. Here are five goals a personal loan could help you realize:

Pay Off High-Interest Credit Cards

One of the most popular ways consumers use personal loans to their advantage is using them to consolidate high-interest credit card debt. Considering the average credit card interest rate is now over 17% and many personal loans offer fixed rates as low as 5%, it’s not too difficult to see how this could work.

When you consolidate credit card debt with a personal loan, you get several important benefits outside of a lower interest rate. You get a fixed interest rate (instead of a variable rate), a fixed monthly payment that never changes, and a fixed repayment deadline so you know exactly when your debt will be paid off.

Imagine for a moment that you have $12,000 in credit card debt with an average APR of 18%. If you made a minimum payment of just $240 per month, or 2%, it would take you 94 months (almost eight years) to become debt-free and you would pay $10,347 in interest during that time.

If you were able to take out a personal loan at 5% APR, on the other hand, you could pay down the debt in just 54 months (4.5 years) with the same $240 monthly payment. Your total interest costs would work out to only $1,484, saving you almost $9,000.

Consolidate Other Debts

Also note that you can consolidate other debts with a personal loan to save money and simplify your finances. Types of high-interest debt that work well include high-interest car loans and personal loans, medical debts that are accruing fees, and any other debts you have that are charging high rates and dragging you down.

Ideally, you could consolidate all your high-interest debts into a new personal loan with a lower interest rate and better terms. From there, you could focus on debt repayment and building a lifestyle that doesn’t require debt to stay afloat.

Paying for a Home Renovation

While you can use a home equity loan or home equity line of credit (HELOC) to pay for a home remodeling project, you’ll put your home on the line if you do. That’s because these types of loans require you to put your house up as collateral. This means that, if you stop repaying your loan, you could potentially lose your property to foreclosure.

While personal loans tend to come with slightly higher interest rates than home equity loans, they are unsecured, meaning you don’t have to put up your home or any other collateral to qualify. This makes personal loans a better option for some people, albeit not everyone.

The bottom line: If a home remodeling project is on your agenda this year, a personal loan can help you cover the expense with a low interest rate and fixed monthly payment. While remodeling your home may not be cheap, doing so can help you enjoy your property more or make more room for your growing family.

Make Important Home Repairs

Some home projects are essential if you want to avoid pricey bills in the future. You may need to fix a leaking roof before it causes expensive water damage inside your home, for example. It’s also possible you need to replace your HVAC system so your family doesn’t sweat to death or freeze.

If you have a home repair you absolutely need to make this year, a personal loan can help you cover the expense with a fixed monthly payment and low rate. While it’s never fun to have to spend money repairing your home, especially if you need to borrow to pay for it, addressing those repairs now could help you save money in the long run.

Cover an Emergency Expense

Finally, don’t forget that you could use a personal loan to cover a surprise emergency expense you didn’t plan for. Doing so could help you get the cash you need in a pinch without knocking your other financial goals off track.

Imagine your child suddenly breaks an arm and you’re forced to cough up the funds to meet your health insurance deductible in a few short months. Without any emergency savings set aside, you could charge the expense to a credit card at a high interest rate, but you could also take out a low rate personal loan to cover the bills. While either option could help you cover medical bills in an emergency, a personal loan would cost less over the long run.

The Bottom Line

In a perfect world, everyone would have a fully stocked emergency fund and plenty of money saved for retirement, too. But, in the real world, many of us are plagued with debt and struggling to get by, let alone save money every month.

Borrowing money is never ideal, but it can work out in your advantage if you take it seriously. By shopping around for a loan with the lowest rate and best terms and keeping up with your monthly payments, you can get the cash you need and potentially even save money without foiling your financial plans.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at

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The post Can a Personal Loan Help You Reach Your Goals This Year? appeared first on The Simple Dollar.

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Questions About Tax Brackets, Compound Interest, Warehouse Clubs, Stamps, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Losing faith
2. Thoughts on simple investment strategy
3. Tax bracket question
4. Compound interest question
5. Costco versus Sam’s Club
6. Question about “forever stamps”
7. Investing for near term
8. VA disability and property taxes
9. KitchenAid
10. Where should I retire?
11. Credit cards for specific purposes
12. Saving old journals

On the wall in my office are three framed pictures that my children drew for me when they were younger using finger paints. In the corner of each, my wife typed out a brief description of what the painting was supposed to be, transcribing what the children told her about them.

They are among my favorite possessions. I look at them at least a few times a day and they provide a constant reminder to me about what I’m doing, what I’ve done right, and what I might do better.

They’re older now. My daughter is a fantastic artist at this point, drawing still life far better than I ever dreamed of being able to do. My oldest son is developing into a skilled problem solver and is likely headed for some sort of engineering career. My youngest has a superb wit and the most insatiably curious mind I’ve ever come across.

Those pictures captured them at a moment in their lives that’s already past, yet when I look at the pictures, I don’t think of my children as they were, but as they are.

It’s pretty impressive what three pieces of paper and a few cents worth of finger paint can do.

Q1: Losing faith

I have worked for the DoE for 18 years and been through a few shutdowns, but this is the first time I’ve simply not received my paycheck. Part of the reason I have chosen to work for the government rather than an energy company is due to the stability of the job and now that feels like it is eroding. I don’t know when I’m getting paid next which is the very type of thing I wanted to avoid in private industry and took a somewhat lower paying job. I am losing faith in the government as reliable. Not sure what to do.
– Dan

After last week’s mailbag focused so heavily on the shutdown, I wanted to dial it back a little this week, so this is the only shutdown-related question. Again, I’m not interested in the politics of the situation, just how it affects the daily life of those affected by it.

In your shoes, Dan, I would probably start polishing up the resume. I get the impression that your finances are generally pretty stable and you can handle a short period without pay.

I would also use this as inspiration to remind yourself that the best kind of financial reliability is when you’re relying solely on your own savings, not the reliability of an employer. When things do return to normal, kick up your retirement savings a bit and get yourself into a place of financial independence just a little faster.

Q2: Thoughts on simple investment strategy

I wanted to get your thoughts on the investment strategy my great uncle told me about. He’s in his mid 60s and has been basically retired for about a decade. He ran a bakery but sold it to the manager about a decade ago and sometimes consults with them but that’s about it. He said that what he did was starting in the early 1980s when he was just starting out, he put a minimum of $100 a month into a savings account and then put in any windfalls he got. The minimum grew as his income did. Whenever the stock market dropped 10% from its peak, he would take half of his savings and put it in the stock market and then not watch again for another six months. He said he blew away the market doing this and it’s why he retired so early. I am skeptical because he sometimes tells tall tales and I think he is mostly retired on bakery money. Your thoughts?
– Alex

So, let’s break this down. He puts $100 a month into savings and then puts half of his savings into stocks every time the stock market is 10% or more lower than its peak, but he only does this every six months at most.

I tried my best to match this strategy in a spreadsheet to figure out whether this would actually beat the market. As best as I can figure, over the period of January 1, 1982 to January 1, 2019, this strategy would beat the market but not overwhelmingly, and it didn’t beat the market for long stretches in there.

I assumed a 3% return over that entire period on money in the savings account, and I only checked the stock market on the 1st of every month. I used the S&P 500 as the number for the “stock market” and assumed he was investing in the Vanguard 500, which basically matches the S&P 500.

Now, having said that, it’s worth noting that sitting on stocks over that period is simply a great investment. On January 1, 1982, the S&P 500 was at 117.30. On January 1, 2019, it’s at 2,584.62. That money he invested back in the early eighties utterly exploded in value. Heck, even as late as January 1, 2009, it was at 865.58 – it has basically tripled since then.

If your great uncle sold his bakery ten years ago and put a lot of that money into stocks, and he’d been doing this investment strategy as you described all along, he probably is sitting on a pretty penny right now.

As for whether you should do it, I don’t think it’s strictly better or worse than just investing that $100 directly every month. It really depends on how the market fluctuates, as all of these strategies do. Your great uncle got rich because he made a 40 year investment in stocks, not because he had a great timing strategy. Anyone with just about any strategy starting in the early 1980s would be doing very good today if they just left the money in the market.

In other words, I think you’d be in great shape if you used your uncle’s strategy. I also think you’d be in great shape if you just put $100 or $200 a month into a broad based index fund and sat on it for the next 40 years. The thing those two strategies have in common is that they’re both riding the long term stock market growth, and that’s where the real money is over the long term.

Q3: Tax bracket question

You wrote: “Let’s say you’re a single taxpayer who earns $35,000 per year. The first $9,275 of your income is taxed at 10%, and…

…the remaining $25,725 is taxed at 15%.


While $35,000 falls into the 15% tax bracket, your effective tax rate is actually 13.7%. The higher your income, the more tax brackets you pass through to arrive at your effective tax rate.”

There is no listed 15% tax bracket for single taxpayers…..
That sentence is thoroughly confusing!

Please explain where you came up with that!
– Tammy

The article in question was written by Simple Dollar contributor Frank Addessi, not by me. I’ll do my best to explain this specific point more clearly.

First of all, Frank seems to have been using the 2017 tax brackets rather than the 2018 ones to explain the principle. His numbers perfectly line up with the 2017 tax brackets, which did include a 15% rate.

The current 2018 tax brackets for single filers look like this:

10% – Up to $9,525
12% – $9,526 to $38,700
22% – $38,701 to $82,500
24% – $82,501 to $157,500
32% – $157,501 to $200,000
35% – $200,001 to $500,000
37% – over $500,000

The easiest way to think of tax brackets is to imagine a big water fountain, one that has a bunch of progressively larger pools. When the little pool at the top overflows, the overflow runs down into the next pool which is a little bigger, and when that one overflows, that overflow runs down into the next pool, and so on. Here’s a picture if you want a visual aid.

So, in Frank’s example, he’s looking at someone who made $35,000 in taxable income this year. You start “dumping” that income into the 10% bracket until it “fills up” at $9,525. At that point, you still have $25,475 to put into the fountain, so we move down to the next bracket. It can hold all remaining income up to $38,700, and so it holds the remainder.

So, that first $9,525 is taxed at 10%, which means $952.50 in taxes, and the remaining $25,475 is taxed at 12%, which means $3,057 in taxes. Your total tax bill is $4,009.50, which is 11.5% of your income.

This person is in the 12% tax bracket and their effective tax rate is 11.5%. Remember, because some of your income always ends up in those smaller bowls with a lower rate, your overall effective tax rate is always lower than your tax bracket.

Hopefully this clears things up!

Q4: Compound interest question

I recently read a blog post about compound interest, which I’ve primarily associated with bank accounts. But the article also seems to associate compound interest with retirement accounts and I was wondering if you could provide some clarity.

One example early on says “Let’s say you have $5,000 in a retirement account, earning 7% interest each year. The first year you earn $350 in interest, which brings your total to $5,350. The following year, interest is calculated based on that $5,350 total … Even if you never deposit anything but the original $5,000, you’ll have $38,061.28 in 30 years.”

I know the average stock market return is 7%, but is it accurate to call that interest? If not, is there some other type of retirement account that genuinely offers 7% interest on your principle every year (as this article seems to suggest)?

Another example: toward the end it says “If you’re saving for retirement, invest in low-fee index funds. Fees of 1% or more will drag down your profit and cut into your compound interest. Index funds will follow the market’s course and provide a solid rate of return. Avoid picking individual stocks, as their volatility can be problematic.”

I’m on board with the ideas of low-fee index funds, but not for fear of high fees “cut[ting] into your compound interest.” Index funds are liable to lose value some years too, aren’t they?

I wouldn’t be giving this as much thought if it came from a smaller blog — but this is Mint. It makes me wonder if I fully understand how my retirement accounts are working, or if I’m missing an opportunity elsewhere. Is the article conflating two topics that don’t really connect to one another? Or is there a way to leverage compound interest to this big of a degree for retirement?
– Max

Mint is using the terms “investment returns” and “interest” interchangeably here in order to reduce the number of different terms being thrown at the reader. I do this myself – it’s a way of making similar concepts seem familiar and not overwhelm people with new terms, especially when they’re asking an introductory question.

They are distinct ideas, but they both have the same effect – if you let them sit for a long time, the growth they provide is powerful.

Your retirement account, assuming it’s invested mostly in stocks, doesn’t return “interest.” Rather, what happens is that you usually own shares in a mutual fund. Each time you put money into your retirement account, it’s used to buy more shares.

Over time, those shares grow in value – maybe not each and every year, but most years. They also regularly produce dividends, which are small cash payments for each of those shares, issued to you. Almost always, dividends are just used to buy more shares of that same investment.

So, shares grow in value over time and you’re also rolling dividends in to buy even more shares. The end effect of that is much like compound interest in a savings account – it builds and builds.

Although they’re not the same thing, the exponential growth curve of interest in a savings account and investments in a retirement account are similar. The growth curve of the savings account isn’t as steep, but it’s very steady and always upwards. The growth curve of the stock market investment is really bumpy, but overall trends upward much more strongly than the growth curve of the savings account.

Q5: Costco versus Sam’s Club

I don’t know anything about sam’s club because we joined it when it first came to town years ago and hated it. When Costco came to town, we heard such positive things we decided to give it a chance and have liked it much better. Reasons are several, including those you wrote about – esp. the gas prices as we pass the store every day. Further, they treat their employees really well. most importantly, they guarantee that if the credit card rewards (on their visa card) do not equal the membership fee, they will refund the membership fee. We have only one visa card and it’s theirs as we get a great deal of rewards based on gas alone.
– Jaden

My experience has been that different chain stores have different degrees of quality in different areas of the country. Where I live, the two closest warehouse clubs to my door are both Sam’s Club and they’re both clean and well stocked and well staffed, and both feature gas prices that are consistently about $0.07 per gallon cheaper than any of the stations near them.

There is a Costco in Des Moines (the closest Costco to me) and I found the experience there to be very similar when I’ve visited with friends with Costco memberships. However, having said that, I didn’t see anything that made it worth the substantial additional drive for me.

My experience is that they’re both fine, at least at the locations I’ve visited, and you should check out both in your area if they’re both available (along with BJ’s, another warehouse club chain popular in some regions of the United States).

Q6: Question about “forever stamps”

As you likely know, the largest increase in the cost of a stamp will occur on Sunday, January 27, 2019, as the price of a first class Forever Stamp goes from $0.50 to $0.55 (a 10% increase).

While the best way to save money on stamps is to call/TXT/email rather than mail a letter, sometimes mailing a letter presents a very good value (sending someone a note of appreciation, etc.). Due to how significant this increase is, I would recommended that anyone with no high interest debt who already has an emergency fund try to purchase 2-4 years’ worth of stamps, while anyone else try to acquire at least a 1-year supply of stamps (as long as they can do so without paying interest on the purchase). I’m curious how much of a supply of stamps you would recommend people acquire prior to this price increase?
– Stephen

Personally, we estimated how many stamps we’ll likely use over the course of 2019 (mostly personal letters and holiday cards) and bought them all already. This added up to 200 stamps, so the cost was $100, as compared to the $110 we would have spent had we bought those stamps at the end of January or later.

With a longer timeframe than that, the cost benefit of buying those stamps really starts to shrink. Your annual return starts to sag and you have the stamps for longer, which means there’s a greater risk of some sort of damage to the stamps (the longer you have them, the more likely they are to be lost, burnt, misused, and so on).

This is basically what we’ve done each time there’s been a bump in the cost of “forever stamps.” We’ve bought an entire year’s worth just before the bump in price. It’s not a big savings, but it saves us $5-$10 over the course of a year.

Q7: Investing for near term

You recommend fully investing in the Roth/529 even though they are less than 10 years out from likely needing the capital? I was thinking of them putting 10 or 20% aside for long term, although they are a bit depressed by the .1% interest our local bank returns to them. Any back of the envelope math as to what $2,000, invested at age 16, is worth at age 70?
– Annie

Yes, I recommend putting money into tax-advantaged education and retirement accounts, even if you’re less than ten years from your expected use.

The difference is that when you’re looking at that short of a timeframe, you choose investments that are intended for short and medium term investments, like safe bonds or money markets. They have a smaller average annual return than stocks, but they certainly beat savings accounts and have very little risk of losing money and you’re still able to pull out the gains tax free.

As for your other question, if you put in $2,000 into, say, a Roth IRA at age 16, put it aggressively into stocks, and let it ride until age 70, you should see an average annual return of 7% on that money. So, 54 years of a 7% average annual return on $2,000 gives you … are you ready for this … $77,224.30.

Now, it’s worth noting that $77K won’t go as far in 54 years as it goes now, but it’ll still be a very healthy chunk of money. If you withdraw 3% of it annually (which is a safe bet), that’s $2,317 a year. Yep, if he puts that $2,000 away now and starts withdrawing it every year at age 70, he’ll be able to pull out more than $2,000 a year basically forever and still hand down a big chunk of it to his kids/grandkids.

Q8: VA disability and property taxes

Can a veteran who is on total VA disability with no other income receive a tax refund on his home owners taxes?
– Jim

Property taxes are a deduction from one’s income tax bill. Since, as a person on total disability from the VA, you’re already paying no income taxes, you have nothing from which to deduct.

I don’t know the specifics of your financial state, but if you were to earn a small income, it’s likely that the deduction from the property taxes would take care of the income taxes on that small income.

However, if your income is solely from the VA due to total disability, property tax payments won’t help your income tax bill since you don’t have an income tax bill.

Q9: KitchenAid

it is my understanding that [KitchenAid] was bought out by a foreign company some time ago – surely since 50 years ago – and that the new company has been making them with some parts being plastic that were metal originally. I have seen reviewers saying that the old ones really do last “forever” if one takes good care of them, whereas some of the newer models’ plastic parts tend to wear out. I don\’t remember seeing any mention of whether those plastic parts can be replaced. I think I found this information on consumer information web sites.
– Annie

Whirlpool purchased KitchenAid in 1986. At some point in the late 1990s, it seems that KitchenAid replaced the gearbox in some of their stand mixers with one made of nylon rather than the original one made of metal.

The issue isn’t that the nylon ones wear out under normal use, but that people tend to stress them. For example, the instructions for the manual state to only use the dough hook attachment on speed setting 1 or 2, but people often turn it to 3 or higher. This causes the gearbox to get overworked and cause breakdown issues.

Today, KitchenAid makes two lines of stand mixers – the Artisan and the Pro line. The Artisan has a nylon gear box where the Pro line seems to have the old-style metal gear box… but the Pro line is substantially more expensive.

One note: the reason many people believe that “old things are more reliable” is due to selective bias. People remember the things that worked well in the past and forget the things that do not, and then they compare those things that worked well to everything now, where some things work well and some things do not. That’s always been true.

Q10: Where should I retire?

My husband I are targeting early retirement within 10 years but we’ll be figuring out a location in 3-5 years. We want to spend the next few years visiting a variety of possible locations, narrow it down to a shorter list and then try out a few, staying 6 months to a year. Where would you start? What criteria would you consider? What resources are available, particularly those geared towards retirees (we don’t really care about the quality of local schools these days). Thanks for any suggestions.
– Margaret

If I were you, I’d start by figuring out what you want to do in retirement. What do you want your typical day to look like? Does it involve regular time with family? With friends? Does it involve a lot of time outside in warm weather? Do you guys like cold weather? How do you want to spend your time?

Questions like that should narrow down your target locations pretty quickly. Once you’ve addressed those kinds of quality of life issues, I would focus on cost of living and aim for areas that have a low cost of living while still meeting your other quality of life goals. I like using this cost of living calculator.

Since you’re retiring early, I wouldn’t prioritize access to services too much at this point. Instead, focus on what will give you the aspects of life you want with a low cost of living.

Q11: Credit cards for specific purposes

I have not used credit cards until a few years ago and wondering if the following expenses qualify as recurring payment for which the card gives a cash-back: 1. Monthly rent paid to the apartment landlord (not sure if the landlord would accept credit card though but rent is the single largest toll on my modest purse); 2. Life insurance premiums. These do accept credit card payments and I am about to apply for two.
– Sasha

I think that using credit cards for very tight specific purposes like this is a good choice, as it raises your credit score and likely provides some sort of reward bonus or “cash back” bonus for the card. The key, of course, is paying off the balance in full each month.

You’ll have to check with the credit card in terms of whether or not such payments qualify for the cash back reward. It depends on the specific offer and probably on how you go about the payment.

If I were you, the next step I’d take is talking to my landlord about credit card payments. My guess is that a small business might not accept credit cards, but a large one will.

You may want to consider other strict uses for it as well, such as gas purchases or other regular bills.

Q12: Saving old journals

I loved to learn that you also use the “three morning pages” idea! I have been doing this for years and years, since 2000 at least. Question: what do you do with the old journals? I have a box of them in the garage. I realize I don’t really look at them but it feels wrong to just burn them or throw them away but I also don’t really want my kids to read them because they’re really personal and I sometimes work through hard feelings about motherhood.
– Jenny

Personally, I digitize all of my old journal entries and then destroy the originals. (The exception is journals that I’m hand-writing for each of my kids to give to them when they’re adults that contains a summary of the life advice I have for them along with things like family histories and recollections.)

My process is that when I finish a journal, I put it aside for a while until I realize I’m no longer looking back on it (usually six months or so), then I cut all of the pages out of the binding and scan them all (I use Scanner Pro). Then, I burn the original pages.

That way, I can easily browse through them when I want, search through them using text searching, and they’ll basically go away when I die (I suppose one of my kids might find them if they trawl through lots of my digital detritus, but most likely they’ll just toss out old computer equipment without a second thought).

Most of the stuff I’ve written is simply me working through personal problems, and I really have no interest in rereading that stuff. The valuable stuff, for me, is when I’m working through an intellectual idea, because I often want to revisit the earlier thoughts.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Tax Brackets, Compound Interest, Warehouse Clubs, Stamps, and More! appeared first on The Simple Dollar.

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