I see Dave Chilton on TV in the Dragons Den and I often say to Karen, my wife, that if I ever meet him again I will surely buy him a beer, as some sort of tiny "thank you" for possibly the most important book in my early investing years.
In his own words, for the follow up book, "The Wealthy Barber Returns" he says :
"I’ll admit that The Wealthy Barber Returns is certainly not comprehensive. Neither my knowledge nor a mere 200 pages would allow for that. And by no means is it the definitive word on how to manage your finances. (Sadly, that doesn’t exist.) In fact, you might disagree with some of my opinions - I’m sure that many in the industry will. But I’m confident that what follows will make you think differently and more wisely about your saving, spending, borrowing and investment decisions."
I like that, mainly because he is once again saying that it's all about thinking differently about everything to do with your money, and after all, as we've already discussed, you're selling your mind, body and soul to earn that money.
So, having a good think about what you do with it, well, that makes sense does it not?
Maybe I'll not buy him a pint, just shake his hand and thank him...
Monday, January 9, 2017
Sunday, August 11, 2013
Every Expense Spared
It is human nature that we all, at one point or another, want to reward ourselves for something we've done, some little gift or treat to give ourselves a pat on the back, or just cheer ourselves up.
Nothing wrong with that.
What is an issue though is the old saying "no expense spared" which basically means, it does not matter what it costs, it is a reward and it does not matter what it costs.
Of course it does, and what it costs, over the long term, affects the end game.
I've adopted a little opposite catchphrase, basically, every expense spared, but making sure that the reward is still a reward, that the pat of the back is still there, that if I need cheering up, it does not have to cost the moon.
A good example of this is the cost of hotels and this story actually goes back a decade or so, to those days that we nicknamed our "polo pony" days. We booked a four-star hotel for one night in Toronto (we lived 60km away) and it was $240 for the night.
What did we get for our money?
Well, we arrived there as we could book in after 3.00pm, checked in threw our stuff in the room, maybe gazed in wonder at the room for ten minutes (it was almost a small apartment) then headed out to the pubs and clubs of Toronto.
We arrived back at probably 11.00pm and basically drank a bottle of wine while watching one of the TVs (there were two in the room) and then slept, woke up in the morning, showered and then checked out to go for breakfast.
Two hundred and Forty dollars, plus taxes probably, maybe even parking was extra.
It was the post mortem of that trip that made the pair of us realize that there was little "value added" by paying over the odds for a cold hotel room (we could have payed a hundred bucks less at a three-star) plus of course, we had to pay for our own breakfast.
It was then that we investigated the higher end bed and breakfast scene in Toronto, I think we bought a book that listed the top 100 B&Bs in the area, and the prices usually topped out at $120 for an overnight stay, including two cooked (and usually very impressive) breakfasts.
It was an example of backing away from the "no expense spared" philosophy and actually obtaining a better experience, a more personable experience and saving enough money to have another one at a future date.
Nothing wrong with that.
What is an issue though is the old saying "no expense spared" which basically means, it does not matter what it costs, it is a reward and it does not matter what it costs.
Of course it does, and what it costs, over the long term, affects the end game.
I've adopted a little opposite catchphrase, basically, every expense spared, but making sure that the reward is still a reward, that the pat of the back is still there, that if I need cheering up, it does not have to cost the moon.
A good example of this is the cost of hotels and this story actually goes back a decade or so, to those days that we nicknamed our "polo pony" days. We booked a four-star hotel for one night in Toronto (we lived 60km away) and it was $240 for the night.
What did we get for our money?
Well, we arrived there as we could book in after 3.00pm, checked in threw our stuff in the room, maybe gazed in wonder at the room for ten minutes (it was almost a small apartment) then headed out to the pubs and clubs of Toronto.
We arrived back at probably 11.00pm and basically drank a bottle of wine while watching one of the TVs (there were two in the room) and then slept, woke up in the morning, showered and then checked out to go for breakfast.
Two hundred and Forty dollars, plus taxes probably, maybe even parking was extra.
It was the post mortem of that trip that made the pair of us realize that there was little "value added" by paying over the odds for a cold hotel room (we could have payed a hundred bucks less at a three-star) plus of course, we had to pay for our own breakfast.
It was then that we investigated the higher end bed and breakfast scene in Toronto, I think we bought a book that listed the top 100 B&Bs in the area, and the prices usually topped out at $120 for an overnight stay, including two cooked (and usually very impressive) breakfasts.
It was an example of backing away from the "no expense spared" philosophy and actually obtaining a better experience, a more personable experience and saving enough money to have another one at a future date.
Monday, August 1, 2011
Gravy Train
The recent debt "crisis" in the USA has reminded me to add a post about things not to count on in your plan.
State pensions.
This may come as a complete surprise to those who have their heads buried in the sand, but warnings about the impending doom have been around for decades and you should consider state funded pensions as potential "gravy" in the plan, but do not assume that you will be able to retire in luxury on anything that the government will provide.
The core of the problem is longevity, when pension plans originated, some bright spark pitched the pension age around the point when the average person kicked the proverbial bucket, in addition, original ratio's of working people paying into the system to retired people was high (about 16:1) but all that has changed as the general population is healthier and live longer and the ratio of working to retired has shrunk dramatically.
So, the governments of the world are mobilizing to push retirement ages up, reduce benefits, destroy indexing and lastly, and of particular concern to all saving their own nest egg, means testing potential recipients.
Which typically, for those of you who are responsible enough to be looking after your retirement needs, means that the very schemes that you have paid into all these years may deem you too rich to be awarded any payout.
So, don't bank on any of it.
State pensions.
This may come as a complete surprise to those who have their heads buried in the sand, but warnings about the impending doom have been around for decades and you should consider state funded pensions as potential "gravy" in the plan, but do not assume that you will be able to retire in luxury on anything that the government will provide.
The core of the problem is longevity, when pension plans originated, some bright spark pitched the pension age around the point when the average person kicked the proverbial bucket, in addition, original ratio's of working people paying into the system to retired people was high (about 16:1) but all that has changed as the general population is healthier and live longer and the ratio of working to retired has shrunk dramatically.
So, the governments of the world are mobilizing to push retirement ages up, reduce benefits, destroy indexing and lastly, and of particular concern to all saving their own nest egg, means testing potential recipients.
Which typically, for those of you who are responsible enough to be looking after your retirement needs, means that the very schemes that you have paid into all these years may deem you too rich to be awarded any payout.
So, don't bank on any of it.
Friday, July 8, 2011
Rabbit and the Hat
The last post was added because, here in retirement at my grand old age, I have found numerous older people who are still firmly embedded in the impossibility of it all, regardless of evidence right in front of their eyes.
I can speak, but apparently they do not hear a sound.
Jimmy once spoke about how annoying people could be when they heard about "the plan" or news of where you were in that plan, and their reaction was "oh, you are so lucky" which irritated the man so, as luck has nothing to do with the process.
A magician brings a hat onto the stage and pulls out the aforementioned animal, no luck there, no magic, no miracle, in fact, that man planned to pull his thing out and dazzle the crowd. It was part of his plan, gosh.
The key thing here is that, your plan is not intended to dazzle the audience, it is meant for you, you really don't have to tell anyone (the impossibles) along the way, as they won't believe you anyway, just be sure to be watching when you grab the ears and pull.
Gosh, how did he do that?
I can speak, but apparently they do not hear a sound.
Jimmy once spoke about how annoying people could be when they heard about "the plan" or news of where you were in that plan, and their reaction was "oh, you are so lucky" which irritated the man so, as luck has nothing to do with the process.
A magician brings a hat onto the stage and pulls out the aforementioned animal, no luck there, no magic, no miracle, in fact, that man planned to pull his thing out and dazzle the crowd. It was part of his plan, gosh.
The key thing here is that, your plan is not intended to dazzle the audience, it is meant for you, you really don't have to tell anyone (the impossibles) along the way, as they won't believe you anyway, just be sure to be watching when you grab the ears and pull.
Gosh, how did he do that?
The Cult of Can
It's been a while, but the blog is still here and I suppose blog entries are, on occasion, required.
The other founder member of the millionaires club, or as we call him here on the blog "Jimmy" had said to me numerous times before retirement "If we canney doo it, nobody can" which was spot on.
I'll call this the Cult of Can, the opposing faction to the Impossibles, who, rightly in their own world, believe that they cannot. Good luck to them all.
If you read this, then maybe you are in the Cult of Can, a group of people who believe they can do it, well, belief is a vaporous substance, we don't believe, we know we can do it. There is no reason to make a list of all those things that you can save money on, you already know it, you already live it.
Another thing that Jimmy once said:
"If you don't write it down, you will never do it"
Perhaps it should be called the Cult of Plan.
The other founder member of the millionaires club, or as we call him here on the blog "Jimmy" had said to me numerous times before retirement "If we canney doo it, nobody can" which was spot on.
I'll call this the Cult of Can, the opposing faction to the Impossibles, who, rightly in their own world, believe that they cannot. Good luck to them all.
If you read this, then maybe you are in the Cult of Can, a group of people who believe they can do it, well, belief is a vaporous substance, we don't believe, we know we can do it. There is no reason to make a list of all those things that you can save money on, you already know it, you already live it.
Another thing that Jimmy once said:
"If you don't write it down, you will never do it"
Perhaps it should be called the Cult of Plan.
Thursday, July 22, 2010
Purple Balloon Monkey
I have talked about this on previous blogs, I feel I must continue to talk about it.
There are sharks out there, looking for you to give away your nest egg, often in return for something trivial, perhaps as trivial as a Purple Balloon Monkey.
The so called Reverse mortgage has gone mainstream – they are no longer sold as something for seniors who are house rich and cash poor and need money to make ends meet. Today, they’re marketed as a way for homeowners 62 or older to crack open a giant (yet imaginary) piggy bank.
The pitch is attractive, “Isn’t it time you started to enjoy retirement your way?” and "Why sit on thousands of dollars in unused equity when you can buy stuff?" or something along those lines.
The truth is that all reverse mortgages are costly and complicated. Clearly, they’re a godsend to some seniors who have no other way to pay their bills. But they can be an absolute nightmare for people who don’t understand how they work.
The reverse mortgage, sold on a promise of unlocked wealth and happiness, can often destroy a safe future for the elderly, money that perhaps should be used for residential care in your later years, squandered on consumer products, far too late in the game.
I would encourage anyone considering this method of entering back into the world of debt to do more research, talk to people who do not have a vested interest in stealing your house in the autumn of your life, and as usual, do not fall for a flawed pitch based on the shiny objects game.
There are sharks out there, looking for you to give away your nest egg, often in return for something trivial, perhaps as trivial as a Purple Balloon Monkey.
The so called Reverse mortgage has gone mainstream – they are no longer sold as something for seniors who are house rich and cash poor and need money to make ends meet. Today, they’re marketed as a way for homeowners 62 or older to crack open a giant (yet imaginary) piggy bank.
The pitch is attractive, “Isn’t it time you started to enjoy retirement your way?” and "Why sit on thousands of dollars in unused equity when you can buy stuff?" or something along those lines.
The truth is that all reverse mortgages are costly and complicated. Clearly, they’re a godsend to some seniors who have no other way to pay their bills. But they can be an absolute nightmare for people who don’t understand how they work.
The reverse mortgage, sold on a promise of unlocked wealth and happiness, can often destroy a safe future for the elderly, money that perhaps should be used for residential care in your later years, squandered on consumer products, far too late in the game.
I would encourage anyone considering this method of entering back into the world of debt to do more research, talk to people who do not have a vested interest in stealing your house in the autumn of your life, and as usual, do not fall for a flawed pitch based on the shiny objects game.
Monday, May 10, 2010
Loosen the grip
In my retired world I am reminded, almost on a daily basis, of how important some of the habits I acquired over the last fifteen years of my working life were.
Although, I suspect some of those latent habits had been there from my parents influences, one such thing was that in 1952, when they married, they did not sell the farm to do so.
I'm watching a cute TV show at the moment called "Rich bride, Poor bride" that demonstrates some of the absolute stupidity that brides, and grooms, indulge in for the special day.
In life, staying together and working at happiness has to be more important than that one day, and one of the things that tears couples apart is money and the constant tug of war that the substance can bring in a relationship.
So, if you are planning that special day, remember that it is just one, in potentially twenty thousand days to experience together so don't start the process with a wallet flush, or worse, debt, to attempt to prove to your friends how much you love each other.
Although, I suspect some of those latent habits had been there from my parents influences, one such thing was that in 1952, when they married, they did not sell the farm to do so.
I'm watching a cute TV show at the moment called "Rich bride, Poor bride" that demonstrates some of the absolute stupidity that brides, and grooms, indulge in for the special day.
In life, staying together and working at happiness has to be more important than that one day, and one of the things that tears couples apart is money and the constant tug of war that the substance can bring in a relationship.
So, if you are planning that special day, remember that it is just one, in potentially twenty thousand days to experience together so don't start the process with a wallet flush, or worse, debt, to attempt to prove to your friends how much you love each other.
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