Spending Money Fail! How We Spend More Than We Realize

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Lately, our car air condition started making odd sounds and slowly it seems like the air coming out of the system is less and less cool.  So based on this, my wife decided that when she took the car in for an oil changed, that she would have them recharge the air conditioner too.

Now as you may now, I’m a diy guy of sorts, and I wanted to have a crack at it myself, but unfortunately, I’ve been too busy with my day and side jobs to take the time to do it.  So my wife went ahead and scheduled to have it the oil changed and air conditioner fixed.  The plan was that we would drive the car in, then I would drive her home in my car, then we would go back to Panera Bread (with our kids in tow) for lunch.

Panera Bread

Panera

The cost for both the oil change and air recharged was discounted because my wife found some coupons, thus making the total expense for both around $140.  So the recharge of the air conditioning cost a little over $100, not too horrible, although I’m sure I could have accomplished the task for a fourth of the cost or maybe even less.

The Spending Money Fail!

The funny think was I worried about this expense all day, thinking what a waste of money it was.  And honestly it was a waste of money, since I could have done the task for a lot less!

What I find funny now though is there I was working on my laptop at Panera, occasionally thinking how expensive it was to fix the car, not taking into consideration that we spend at least $50 at Panera that day!  And what really trips me out is that sometimes we’ll go to Panera twice a week (although it doesn’t usually cost $50 because my daughter gets something from Wendy’s beforehand).

So in a two week’s span, We’ll spend about $140 on food that is instantly consumed without a second thought, whereas the recharging of the air conditioner which will last for at least five years caused me considerable financial agony for that day.  In a nutshell, I was worrying about a little pinprick in my financial dam, while behind me (not in my financial vision apparently) was a cannon hole letting my money gush out at a horrible rate in comparison.

Financial Grade for that day… F!

Cheers,

MR

 

Working Alternative Work Shifts For More Money

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Yesterday, I took a personal day off from work and used that time to spend the day with my two kids (one is 11 years old, and the other is 8 years old).  Surprisingly we all had a great time and it got me thinking that perhaps it would be nice to spend more time with them as they grow over the next few years.  The problem is that work gets in the way, but what if I (or we) were to work alternative shifts instead, and at the same time make more money?

For instance where I work at my employer has both a second and third shift.  So let’s say I asked to be put on the third shift instead of the first shift.  Let’s examine the results if I were to be assigned to such a shift:

  1. I’d instantly make 20% more money because of the shift differential.  Cha-Ching, instant bonus!
  2. I would be sleeping when my kids are either sleeping or in school.  During the time they are in school, I’d be home before they get off of school, and this would work out perfectly.  During the summer, I could get a little sleep during the morning or afternoon, depending on what is going on.
  3. Since hardly anyone works 3rd shift and there isn’t much work to do for part of the shift, I might be able to work two jobs at once!
  4. I could even take my laptop in to work and do some side income work related tasks, obviously knowing that I need to do my shift related work first.
  5. There is even the possibility of juggling two jobs and working side income opportunities for a maximum of time usage.  Although this might be difficult, and the “Side Income” tasks would have to be fairly simple in nature.
  6. I would have more time to look for better paying jobs, which in turn might mean a dramatic jump in base pay.
  7. I would be able to work my side businesses during the day, when more people are available for meetings and talking.
  8. Another benefit would be that I could meet with professionals and city workers about issues concerning my side businesses.

Second shift would have some similar benefits, but because your working prime hours (when the kids are home), to me, it wouldn’t be as beneficial to work this shift… unless you could do it while telecommuting in to do it.

I think if you aren’t particularly crazy about your job, and you really value the time with your kids (and obviously get along), this might be a great opportunity.  I think the key to making it worthwhile is if you are willing to fully utilize the advantages of such a shift.  If you aren’t willing to take advantages of the perks, then even with the shift differential (usually 20%) it might not be worth it.  Personally, if I were working third shift, I would try to at least double my income!

Bests,

MR

Progress On Financial Independence – Still Swimming to Shore

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I’m totally debt free and I wrote an article about it called “Stop Drowning in Debt, Start Swimming To Shore” and then in a follow up article called “Progress on Achieving Financial Independence – Swimming To Shore“.  And now, I feel like it’s time for an update on my process towards financial independence yet again!

Cash in Hand

Right After Being Debt Free

At first, It was incredibly exciting being debt free, but also sad in that it wouldn’t be easy like it was when I was climbing upwards out of debt.  Now I know many of you think that debt is a hard thing to conquer, and admittedly, it’s not easy, I consider it easier because the payment are easy to record and predict when it will be paid off in a spreadsheet and for the following reasons!

  1. While I invest in the stock market, when I paid off my house mortgage  and car loans, the market out-and-out sucked!  In my 401k, my balance was down considerable and nobody want to invest money in a market that might be down for ten or so years…
  2. There was the risk of slipping back and going into debt of other sorts.  What if I lost my job during the “Great Recession”?  Or I decided to slip and reward myself for accomplishing the feat of being debt free?  It’s a slippery slope to slide down and be in debt again!
  3. At first the time I put in managing my increase in money from being debt free meant that such time would be less than minimum wage… Hmmm, actually it was really less than a dollar per hours for time invested.   Plus all I know to do then was invest the money in the stock market (which I was already worried about), or invest it into side businesses.

Needless to say that figuring out what to do with my money (albeit small at first) was a challenge in a difficult time.  I think if the stock market was still rallying like in the past years, the options would have been a lot easier.

Finding My Financial Path

Since the financial markets were such a mess, I did decided to at least invest some of my excess money in the stock market.  Now this might not make sense, but when the market is down and everybody is pulling out their money out to save their financial nuts, this is the best time to put your money in!  As Warren Buffett says, “Be greedy when others are fearful, and be fearful when others are greedy“, so if the market is down 40%, according to his investing philosophy, it was a good time to invest.  And since he himself was investing in the market at low levels at the time, how could I doubt the greatest investor of current times?

So I increased my 401K contribution and channeled some of my money into the stock market, knowing that Mr Buffett was doing the same!  There was also other saying that made me look at a different path, and those sayings were “Only Fools rush in”, and “Don’t put all your eggs in one basket”.  These sayings are good old common sense and have a lot of merit!  So instead of just investing my money in stocks, I also started thinking of ways to generating money with side businesses.

At first, the stock market kept declining and my side businesses wouldn’t be considered worth it if one looked at my hourly rate (I made a grand total of $5 for the first 5 months).  But I stuck to it and both my investment and businesses improved with time and patience.  While neither the stock market or my side businesses income streams are currently enough for me to retire or quit my day job, I’m now projecting (and hoping really hard) that I’ll be able to walk away from my primary “employed” job in five years if I want to.

Only time will tell, but hopefully in five years (sometime in the year 2017), my “employed” income stream will be optional and you’ll be reading an update about how through carefully planning (and perhaps a little big of luck) I’m at the point where I can quit my “employed” job if I choose to do so.

Bests,

MR

 

 

Alternative Income Level 1 Update

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Two and a  half years ago, I created an article called Creating Alternative Income Milestones, and I’m happy to say that I’ve made it to level 1 already!  I’m about one year ahead of where I thought that I would be in my progress!

In the article Creating Alternative Income Milestone, I mentioned that I wanted to speed up the alternative Income Money stream, but I didn’t have any plans or really any ideas how to accomplish this feat without working another full-time job and saving the money like a fiend!  Well a lot has changed in two short years!  While my levels and goals are still the same, instead of taking thirty years to develop the money stream of dividends and other investment that would total $25,000, I now want to accomplish this feat in less than 10 years.

Obviously, developing a yearly money stream in 10 years is a far cry from when I thought it would take about thirty years… so what has changed?

My Investment asset classes!

Instead of sticking strictly to dividends from stocks and interest from bonds, I’m planning on trying to develop an additional money stream from a few choice rental estate investment properties.  I believe that if I could buy 2 or 3 multifamily units and collect the cash flow from those units, I could beat the thirty years that it would take for me to get to level 5 by just investing in dividends and bonds!

Just as a reference point, below is my Alternative Income (Passive Income) Milestones:

 

Levels Amount Milestones
1 $5,000
2 $10,000
3 $15,000
4 $20,000
5 $25,000

 

While I’m a long way from $25,000 or more in passive (alternative) income, at least I feel it’s a doable option now that I have more detailed plans!

Best

MR