Posts Tagged ‘Savings’

In a previous post (The 2 Most Important Thins You Can Do) I talked about acquiring skill and getting in better physical shape.  I suggested these are the two most important things you can do in your life to improve your preparedness.  An able body and mind is much more likely to overcome difficult obstacles.  For the most part both of these things are free.  You can gain knowledge and skills with little to no cost.  You are doing it now!  You can also get into better physical shape for free.  Eat better, walk more, ride a bike to work, excercise.  Don’t fret if you don’t have any equipment or an expensive gym membership.  Body-weight exercises like pushups, lunges, planks, burpees, etc are great exercises.  There is one thing I would like to add to the above.  Get your financial affairs in order.

Money – we have a major debt crisis in our country.  Not just the country as a whole but as individuals.  We borrow way the hell too much money.  The median house hold income in the US is $53, 657.  The average indebted household has $15k in credit card debit.  Credit cards average about a 15% interest rate.  The average car loan is over $30,000.  Average student loan debt is $31,000.  Predictably, only 60% of people have at least $500 saved.  What if any little emergency hiccup happens.  Individual job loss?  Death or disability?  Global economic downturn?  This whole thing is a house of cards.  Get out of debt!  Stop borrowing money!  Cut your expenses.  Live within your means.  Start saving money.  Everyone should have a 1 month supply of food and water.  You should also have at least a months worth of money.  Ideally, you should have an emergency fund of 6 months worth of living expenses.  This way you are much more likely to be able to weather a short-term emergency like a job loss.

I highly recommend a couple of websites that I regularly read

Mr Money Mustache – this guy is great, and funny to boot!  He is all about efficiency.  He recommends saving 65% of your income and retiring in 15 years.  Sounds crazy right?  He did it. Check it out!  Even if he doesn’t convince you to save that much, some of his ideas are going to rub off on you.  From his homepage click on “Start Here”.  Read that article and click on all the linked articles.  Then keep reading.  I guarantee this will make you better with money.  One of my favorite articles “The shockingly simple math behind early retirement” shows that drinking Starbucks everyday and having cable TV end up causing you to have to work an additional 8 years.  This compared to saving that little bit and investing it.  Is cable TV and Starbucks worth 8 years of your life slaving away in a cubicle?  Do yourself a favor and start investing some time into mastering money.

The White Coat Investor – I read this guy’s book during my residency.  It is directed at doctors because although we may be intelligent and educated; we suck with money.  His website is full of wonderful advice about investing.  This is what you need to do with the money you are setting aside.  Make your money make money for you.  It’s a beautiful thing.  He loves Vanguard funds.  For that matter so does Mr Money Mustache.  Topics range from financial advisors and student loans to how to execute a backdoor Roth IRA.

The better control you have over your finances the better prepared you will be for… anything!

  • Get out of debt
  • Stay out of debt
  • Save money
  • Invest
  • Diversify
  • Learn to lead a more efficient life so that you don’t NEED so much STUFF

All of these things lead to independence.  Independence is truly a beautiful word that very few of us truly try to apply to our personal lives.  Financial independence is a huge piece of the pie.  Work on it!

As a reminder… (After all repitition is the mother of learning – as our Russian comrades like to say)

Move!  Get out there and move.  Go for a walk.  Walk to the store.  Leave the car behind.  Ride your bike.  Just do something other than sit at a desk or in front of the TV.  Find something heavy and pick it up, lift it over your head, repeat.  Do something difficult everyday.  Do something physically difficult.

Read!  Read a book.  Read for pleasure.  Read for education.  Read the above websites.  Turn the TV off.  The average american watches 5 hours of TV a day.  How is that even possible?  It boggles the mind.  Read a book instead.  Do something mentally difficult everyday.  Add to your mental library.

Save! Put some money away for that inevitable rainy day.

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