So I’ve been blessed to be able to make and save a decent amount of money and it’s allowed me to live comfortably in a new country for a bit of time, but I started to wonder what else I could do with my money. It doesn’t make sense to spend it on things I don’t need or want, but I felt like there were better ways to save it too (and maybe eventually give it). I had read about personal finance before and then I started reading more advanced finance techniques, the goal of which is to achieve what is called Financial Independence or FI for short. As I’ve read more and more about what people have done to achieve Financial Independence, I realized it was a rather big topic, but luckily I found the Choose Fi podcast and found an episode they did called The Pillars of FI. This episode summed just about everything that needs to be accomplished to achieve FI and since I heard it right around New Years, I decided to make achieving all the pillars my new year’s resolution for 2018. Yeah, I think I’m kind of cheating a bit, because I’ve already done a few of things and no I won’t achieve FI this year, but I think putting these things in place will get me closer to that goal, so I felt like I should just try to wrap it up now. Let’s review shall we:
I’m going to break it down by what I’ve done and what I am going to work on this year rather than exactly the order given above.
What I’ve done so far/Improving on a bit
- Index Fund Investing: I’ve been doing index fund investing ever since I read about it from Ramit Sethi (I believe I’ve read Mr. Sethi’s writings since senior year of college give or take 2 or 3 years before or after; I have also frequently recommended the book I Will Teach You to Be Rich for people who want to start learning more about money in general). Basically, index funds allow you to invest in a wide array of stocks and bonds with minimal fees and have historically shown to beat most mutual funds. For this year, though, I’m kicking this into higher gear by increasing my savings rates (more on that later in the post) and investing more in them and following the index fund recommendations of Jim Collins, who lays out his very simple investment strategy here.
- Buy Gently Used Cars: I have no intention of buying a car any time soon, but this definitely is something I am looking into more and more if I ever do. I’ve only bought my last car which was new, but with cash though (never had a lease on a car and don’t ever intend to get one), and it had sat in the show room for a year, so it was discounted. My parents and my siblings have gone car shopping together the last few times we went and I think we’ve done a decent job of it now with better negotiations.
- Travel Rewards: I think travel rewards were my gateway into this community. After my first trip to London, I was sitting at the airport thinking “wow travel is expensive. There has to be a way to make it cheaper.” I got to searching the internet and sure enough I found out about credit card rewards for travel. Using them, I’ve gotten several heavily discounted flights and hotel stays that I would have ordinarily paid for. It’s great and I will likely be writing about that more in the future.
- Cut the cord and Premium Cell: I’ve never had a cable subscription and don’t have any intention of getting one. I do own a smartphone, but I use them for long periods of time and I use phones from Oneplus which have been stated over and over as the best phones for the money. I’m also on a family plan and it’s discounted from being employed at a place that has a discount.
What I am working on
- Affordable Housing: This is definitely something I am looking to work on. I don’t live in cheap places for sure as I value my comfort quite a bit (growing up in a small home made me want to live in a larger place for sure). I need to stop doing that though. As soon as I get out of my lease, I’m planning on getting a cheaper place for sure.
- Crush Your Grocery Bill: Also something I struggle with because I live in a newer city and love trying new restaurants. I also haven’t been planning meals very well so I do tend to waste food every now and again. To change this, I need to view restaurants as social gathering place more and also just cook more at home.
- Tax Optimization, Multiple Streams of Income, and Savings Rate and the 4% Rule: I decided to combine these three because a) this is what I really need to work on and b) they all go together. This year, I decided to up my salary contributions to my retirement accounts to boost my savings rate in the hopes of decreasing my taxes. I had avoided doing this for a while, because I liked the idea of money for stuff. I’m done with that now, by cutting out more stuff and investing more money. It was actually pretty easy to do automatically, as a lot of companies just have a website that just lets you change your contribution amounts on the fly just in case you have to bring it up or down for any reason. Then with the remainder of your money, feed it back into the streams of income or index funds. What about the multiple streams of income? This falls in line with the tax optimization. I need to figure this part out, but having some kind of side business making some money into me is essential. This year I’m going to be spending more time researching this and by the end of the year, I hope have something set up to help my taxes and get me income outside of my job.
Not caring about
- College Hacking: I have no children, so this doesn’t matter to me. That said, for the parents out there, there are a few countries with free college for foreigners.
So that about sums up what I am trying to do this year. Have any tips or questions? Let me know in the comments.