Tag Archives: financial planning

Consumerism and Wealth Cumulation

I’ve been controlling our spendings quite closely for the past few months. You may say about 6 months ago I went through my financial awakening. At the moment I have a much better understanding of what my assets are and how much wealth I’ve accumulated. The fact my finances are under control makes me feel much better and inspires me to do many things I didn’t think of doing before. I am much more motivated to think creatively more often and take pleasure in finding solutions that avoid spending money at all or at least save me a fair amount.

The reason I looking closely at my finances was because me and my girlfriend were getting more and more into debt and had no plan of paying it all back. A few simple steps helped us pay back around £2000 credit card balance within 4 months. I’m proud of this even more because this happened towards the end of the year and beginning of 2010 so Christmas time when we had to buy gifts and pay for my travel expenses.

When I read financial advice blogs most give the same advice to pay back your debts, save for emergency fund, control your spending and take advantage of compound interest. These come in varying orders but in general they are mostly the same. What very few of them mention is what is the purpose of this tactics and as some of them suggest that you may become wealthy at some point they fail to mention what you do with this accumulated wealth and all the assets.

I guess some of these people are trying to save enough for retirement. Which is probably a very good idea knowing that your health may be failing you by that time and you may no longer be able to work. But is this it?

This guy managed to become financially independent at the age of 30. This is so cool and I can’t help to think it must feel great not to be forced to go to work every day. Which is a quite an achievement.

But I can’t help to think “what if”. I keep asking myself what am I going to do once I’ve accumulated enough assets to be able to quit my job.

– What if my assets lose they’re value suddenly?

– What if I’m unable to enjoy the value of my assets for whatever reason?

– What if aliens invade the earth?

These questions make me feel the whole idea of wealth accumulation is flawed. I mean it’s OK as long as everything is fine. But if something goes wrong globally you’re as fucked as everybody else. You may say this applies equally to those who have accumulated lots of assets and those who haven’t so what’s the problem? Well, the problem for me is I’d rather enjoy living my short life before something bad happens either to myself or to all of us. I know I’m a fatalist :D.

Let’s think about the world’s economy for a while and how it functions. The global village is growing in strength. Despite the credit crunch we still seem to be doing quite well thanks to the global interconnections. If one place is short of corn it can be easily delivered via plane. So places where nothing is produced may be abundant within the next few years. They will be full of people whose only skills are related to administration of goods and funds while the production is taken care of in other less developed locations. If for any reason transportation of goods becomes impossible these people will be in big trouble – you can’t feed on money!

In my opinion the world economy is in a highly deregulated state at the moment. We rely on so many factors to sustain our lives at the moment such as energy and food supplies it is fairly easy to imagine the whole population can be controlled by suppliers of products we rely on to live.

To me financial independence is an illusion. You are only financially free while living in a society that can only survive as long as the economy keeps growing. Once it starts to decline the results will be fatal.

The answer to this for me is self sustainability i.e. a state in which you can rely solely on your own skills to survive. Unfortunately, I’m very far from that at the moment. Being stable financially is still an important goal for me. But let’s not forget money isn’t everything and remember to live our lives while living within our means.

10 Easy Steps to Prepare for the Trip of Your Life

Fear is the only thing that stops us from what we want to do. You may call it conscience, pride, love, responsibility but underneath all of this is our fear of moving on to something that we have never done before. Fear of travel like any phobia may be cured. Here’s a few things that may inspire you.

I. Ask, and it shall be given you

World’s not as bad as it seems. Most societies function on the basis of trust and respect. People do help one another most of the time. It is true you may encounter something not exactly nice abroad but the same may happen at home. I moved several times in my life and after moving to the new place I was always surprised by how nice people were in this new place. After a couple of years it turns out they’re just normal. Just like in the previous place. The truth is, though, positive attitude is contagious and if you’re acting naturally people you meet will reciprocate it. If you need something remember to try and ask for it. You may not get it the first time around and you will not get it all the time, but people will help you most of the time

II. Have a plan

I’m planning on leaving my job in two years. Me and my girlfriend are saving aggressively to put away enough to travel for at least one year. After that we’ll find jobs again and decide if we wan’t to travel again or stay in our cosy dwelling.

III. Tell your friends

This one’s really cunning. Some people think you shouldn’t tell your friends about your plans because they’ll find millions of ways to stop you. I believe people in general do have a tendency see your plans in black colours. This may be depressing sometimes but at least you’ll get ideas on how to prepare. Just don’t give up because of any generic advice like ‘it’s impossible’ or ‘nobody else do it’ these can be dismissed with simple ‘it’s possible because there are people who did it’. Look for valid positive and negative points. Enjoy the positives and work out ways to overcome any negatives.

IV. Go for shorter trips first

Take a couple of months or even a few weeks off at work. Plan your budget, your route and style of travel. Think of where you’re going to sleep, wash and eat. If you’re planning to spend most of the nights in a tent, make sure you have the right gear, i.e. appropriate sleeping bag and tent. Do everything that you want to do for the trip of your life. Then go back home and check how to make your travel more efficient, more fun, safer, cheaper and more convenient. You’ll be surprised to know how many other people had done that kind of thing before.

V. Learn to save

The more you save during your trips the longer your trip will last. Frugal lifestyle can be learned. Unless your parents are millionaires and want to share their fortune with you, you’ll need to know how to make use of every single penny in your pocket. Start at home, think of ways you can save. Aim at saving aggressively as this is precisely what you’ll need to do. Try to estimate how much you’d be saving a month and how quickly you’ll save enough to start your trip. Then go to the financial planning section on Stumble Upon and look for further ideas on how to save. You’ll be surprised at how inspiring this is. There are some unbelievable ideas on how to save.

VI. Practice DIY

Do-it-yourself skills are helpful no matter if you want to travel or not. They teach creativity and self efficiency. Being able to do something with your own hands gives you a boos of positive energy. You can use your DIY skills to save money for your trip e.g. fix furniture, leaks, electric appliances thus saving on repairs and maintenance costs; also you can prolong the life of your home appliances and won’t have to spend money on buying new ones. You can use these skills as a source of additional income.

VII. Sell stuff you don’t need

Sell everything you no longer use, pay back your credit cards and then destroy them. You’ll unclutter your house, get some more money for your trip and make other people happy.

VIII. Avoid buying

You have to buy food and pay your bills which you can hardly avoid. But buying all the expensive travel gear is just a waste of money. Unless you’re going to a specific region in the world where particular type of gear is required to survive, you’ll not need any of the fancy stuff advertised on Amazon. Most of the ‘professional’ travel stuff is overpriced and simply unnecessary. When backpacking, you’ll learn there’s reallyfew things that you really need:

1. intelligence – is your best friend. It’ll help you make important decisions and react to unexpected circumstances. It’ll help you make do with what you’ve got.

2. knife – traditionally, indispensable traveller’s tool. If you can’t carry a knife through airport security checks, buy a cheap one after arrival. You’ll not need anything fancy. A knife is a knife unless you’re a Rambo.

3. tent and sleeping bags – these items can add to your feeling of freedom and save you quite a lot of money. Check out urban camping on Stumble Upon to get an idea on how to use your tent in the urban jungle. Besides, camp-sites are usually much cheaper in cities and have a shower. It’s important to shower when you travel!

4. money money’s always handy. Play cards or pool to win even more! Alternatively, use it to buy food.

IX. Get second, third or fourth job

The closer you get to your departure the easier it will be to work hard. Save as much money as you can. Plus, getting additional jobs will teach you new skills you can use during your trips or to get a job after you come back.

X. Be positive

If travelling is really what you wan’t to do think of the 9 billion people there are in the world. Almost everybody love to travel. Most of these people will help you live your dream.