Wednesday, September 3, 2008

Lifestyle savings etc. a nice comment from an enlightened person

Lately, thoughts have been springing into my mind as to what I should save for, what my real goals in life are, etc. I was navigating through some links and landed on this post about Lifestyle inflation. More than the post, this comment from Ron made a lot of sense. He sure must be an enlightened person. With his kind permission (haven't received it yet, since I have no way of communicating except leaving a comment on the same blog), I publish it here for my future reference and for any readers. I hope to emulate him some day..


Some very interesting comments and I see everyone is very committed to saving…but I wonder for what? What are you saving for, why do you want to earn more money? I am not being facetious; I really want to know the reason behind your efforts.

One of the seven habits: Begin with the end in mind. I see the blogger has a goal of a million dollar net worth…same question…why? What will having that net worth accomplish? And what are you measuring? And what is the nature of the net worth you are after, specifically?

I mean, do you want a million in equity (say, in real estate) or a million in the bank earning 5%? Two totally different scenarios.

Many people fixate on some number but it is often like leaning the ladder of success against the wrong wall. My clients come to me with that same idea sometimes; that is, to grow their net worth to some magic number as if it will resolve their financial issues somehow.

Look, as a goal I guess a million is as good as any but, really, if you are saving just to reach a number…what is the life you want? What would an ideal day look like, feel like?

Money is a tool…but for what? To build the life you want, IMO. So isn’t that the real goal? What is the life you want and, now, break that up into pieces and cost those pieces out:

The house I want: $x
The car I want: $x
Number of kids: $x

So on and so forth. Then you add that all up and you will have a bottom line and that is your real goal.

I wanted a small but comfortable home in a safe neighborhood and a five year old car that I would keep for five years and then sell and start over. Cost for that: $1,000 a month where I live. Plus expenses: Another $1000 a month.

My savings earn me $15,000 a year ($300K at 5%) and the rest I earn working three days a week doing what I really enjoy doing and what I would do for free if I could afford to do so. And I also manage to save some of what I earn so my savings are growing, as well.

I am married and we have a daughter and we look for all the world like a typical middle-class family. But we pay for it all with 24 hours of work a week; meanwhile both spouses work in all the other houses on the block.

We are not better or smarter, we were just able to decide what we wanted, price it out, and fund it with just enough work to get the REAL job accomplished (the life we wanted). Four day weekends are great!

Good luck!


1 comment:

Anonymous said...

Hi, I try your solution and it works, but when I run my program i get two files one with the first name, and the second one modified with the date. I only have one FileAppender any idea?