Posts Tagged ‘pens’

In part one I talked about measuring wealth in time and freedom. In part two I will be discussing 5 ways to get started. As a quick note, I would like to mention I wrote this post on my itouch while commuting on the Tokyo metro.

1. Assess your bills and eliminate

Learn to live with less. Look over your expenses and eliminate anything that is not a necessity. When you think necessity, think stranded on an island and what you need to survive. You can always add things back later, but after some time without most things you will find they really aren’t that important.

2. Use cash/get rid of credit cards

Some people might disagree with this so let me explain. Credit cards allow you to spend money you don’t have. Stop carrying them with you. Set a monthly budget including lunch, gas, and spending money. Pull this amount out and don’t go over it. If it helps, only keep the daily amount in your pocket.

3. Create a want/dream list

Figuring out what you want and how much it costs will not only help you set some saving goals and focus your efforts, it also brings to light the things you purchase that aren’t important. Check out The Four Hour work Week for a dreamline template.

4. Make your money make money

There are a lot of things to invest in. Find something that interests you and learn about it. Talk to successful people who are investing in the fields you are interested in and learn from them. And don’t forget, one the best investments you can make is in yourself and your own education

5. Find cheap fun

Learn to enjoy life and have fun without spending money. You can find one list on cheap fun here. But don’t limit yourself to that list. Find something you enjoy and then find a way to do it cheaply. Or better yet get paid for it.

Sit back and watch your money grow! It seems difficult at first, but after you do it for a month then it gets much easier…and eventually fun.

Most people view obtaining wealth and riches as the final goal in life. They feel that if they can get more money then they will be happier and have a more fulfilling life. That with a little extra money the worries will start to disappear and with a lot of money the worries will be gone. i don’t think this is the case. it all depends on how you view wealth and riches.

To me, wealth means freedom. As Robert Kiyosaki discussed in Rich Dad Poor Dad, wealth is measured in time. It is how long you can maintain the lifestyle you want without having to work. I agree with this. Working 40 hours a week, even if you like your job, takes away your freedom.

However, you don’t have to have a lot of money to be wealthy. You can also obtain wealth by reducing your costs and spending. The lower your average cost of living, and the greater your savings, the longer you can live wealthy outside of work. For Example, someone who makes $30,000 a year, and only has an average monthly cost of living (including expenses and spending income) of $1,500 would accumulate an average of 8 months of wealth (8 months maintaining current life style without working) each year. Someone earning $70,000 a year with an average monthly costs of $4000 would only accumulate an average wealth of 5.5 months after one year of working.

$1,500 X 12 months=$18,000 $30,000-$18,000=$12,000 $12,000/$1,500=8 Months

$4,000 X 12 months=$48,000 $70,000-$48,000=$22,000 $22,000/$4,000=5.5 Months

One of the biggest reasons why people never seem to be able to get a head is because there spending increases in proportion (or more) with their increase in earnings. When they get a raise, they buy a more expensive car, a bigger house, a bigger tv, get satellite, and eat out more often at expensive restaurants. No I am not saying that you should save every penny and give up having any fun. What I am recommending is that you decrease your spending overall, and never let your living costs increase by a larger or equal percentage than your increases in salary.

In part two I will cover 5 easy ways to increase your wealth and savings.