Author: cbarney.45

What to do with your money

First of all, let me say that I’m NOT a financial advisor. I’m not an expert with personal finances. I just like reading and learning about finances. The below “strategy” is not financial advise to anyone. It is only my current way of thinking about how I want to save and invest my money.

In The Richest Man in Babylon, they say that all people should pay themselves first and save 10% of any income they earn. I say, why not more? If you can optimize your life, it’s very possible to save more money without feeling deprived.

It all starts with having the right mindset (being grateful for what you have and not feeling like you have to “keep up with the Joneses”). You aren’t depriving yourself when you save at least 10% of your paycheck. You’re paying yourself and investing in your future. The first part of the saving should go towards your emergency fund. Once you have that, the savings should be invested (see where I like to diversify my portfolio below).

Second, you need to be intentional with where your money goes. It’s very easy to let your lifestyle creep up to the amount that you make. I remember when I got my first job out of college. I really didn’t make much. It was probably the equivalent of $35,000 for a year. But I felt RICH! After increasing my income, it would have been easy to increase my expenses too. But if I could live happily off of $35k per year, why should I not be able to bank the balance of the money when I make $50k, 80k, or more than $100k? Control your expenses and aggressively pay off all of your debts (with the possible exception being your mortgage).

Third, you need to beef up your investments. Have real, liquid cash for your emergency fund. Obtain credit lines if you don’t have a 3-6 month emergency fund, but keep in mind that credit lines are more like fake liquidity and can be removed at anytime. As far as investing is concerned, if you’re not an expert in a field (where you have a leg up on the competition), I think it is wise to diversify…

1. Some money in the bank (money market accounts, CDs, high interest savings accounts, no fee checking accounts)…this is your “emergency fund” and your everyday spending money. Don’t worry about optimizing your returns here. This is about convenience/accessibility.

2. Keep some money in stocks (primarily index funds…and cover different spectrums of aggression/conservatism, different countries- U.S. vs Europe vs developing nations, different categories – tech vs medical vs natural energy, different timelines, S&P 500, etc.).

3. Keep some money in real estate (your home and rental properties)…this is tangible. People always need to live somewhere. It would be nice to own these free and clear, but as long as they are cash flowing after all expenses are paid (including paying the principal, interest, taxes, insurance, and withholding money for capital expenditures, repairs/maintenance, vacancy, and property management).

4. Keep some money in bonds if you are more risk averse or getting closer to retirement (only in governments that you feel are strong and can repay the debt)…have a lower percentage of your money here.

5. Some money in a small business that you own/partially own (self storage, laundry mat, car wash, pizza chain, property management company, blog, or other “side hustle”).

Finally, after you’ve controlled your expenses, and invested what you can, try to increase your income by earning a raise at your current job, changing jobs/careers, or earning income off of a side hustle.

Rules of being a good parent

Every parent wants what is best for their kids. These “rules” are something quick I thought about for my 3-year old and 1-year old. The rules will grow and modify as they get older (such as teaching them to be respectful, responsible, and have good work ethic, talking about philosophy, etc). But for now, with my limited experience as a parent, I feel these are a good start for any new parent. Read below and let me know your thoughts in the comments section!

Rules of being a good parent:

1. Be interested in them and give them your attention…When you’re with them, be PRESENT. Don’t be on your phone or watching tv. Don’t think about work. Ask them questions and actively listen to them.

2. Don’t be afraid to say no…kids shouldn’t feel entitled to anything. When you said no, stick to your word. Don’t give in because they’re throwing a tantrum. It’s always going to be easier to give them what they want, but is that helping them in the long run?

3. Teach them that actions have consequences – whether those are good or bad consequences depends on the action.

4. Support their interests. You may not like whatever they happen to be into at the moment, but if it’s not hurting them, support them. Be interested in what they’re interested in, even if you have to fake it. Let them be themselves and explore things on their own without you influencing them to like/dislike something. They should figure that out on their own.

5. Tell them you love them. They should know how much they mean to you and they should feel loved and supported. Tell them you love them and that you’re proud of them everyday.

Stop procrastinating. Get started today

Instead of waiting, planning, preparing…just get started today. It’s easy hide procrastination by calling it planning, but you’ll come much closer to achieving your dreams if you just do it.

Get started today, not tomorrow. Then learn from what you did and make a change. Did your new action make the result better or worse? Did you take the right action and just get unlucky? Or did you take the wrong action and get lucky? Don’t necessarily attribute your specific action to the success or failure that day. Look at the trends. Are you consistently seeing positive results or negative?

No matter what, at least you are earning experience which you can learn from, good or bad. Use that to your advantage to propel you towards your goals for tomorrow and beyond.

Adversity, self-improvement, and fulfillment

Challenge and adversity sucks when you’re in the thick of it. It can seem like the hardship will never end. But just like all good things must come to an end, so too must all bad things. Life goes on – it stops for no one and nothing.

The great part about overcoming adversity is that it tests you and lets you know what you’re really made of. When life seems too easy and you’re completely comfortable, we often lack the intrinsic motivation to strive for self-improvement. But when we face difficulties and need to get something done, often times you will rise to the challenge. How will we know our limits if we never challenge ourselves (or are not challenged by outside circumstances)?

Think about how you can push yourself today – how you can test yourself. Have you been living a soft, cushy life for too long now? If so, do you feel that you’ve come close to reaching your full potential or is there more to go? And the other, more important, question…do you even care to reach your full potential? There’s no judgment if you don’t. You need to feel fulfilled and only you can determine that.

Impactful hours

The Wealthy Gardener discusses the idea of how the most productive people take advantage of maximizing their time by adding impact hours and minimizing the amount of hollow hours throughout their day.

We all have the same amount of time in the day, but clearly some people have more impact than others. Clearly some can accomplish more in the same amount of time than others.

Why is this so?

It is because they use their hours more effectively to create better results. Even though they have the same 24 hours as everyone else, they have fewer hollow (aka “wasted”) hours. What would an example of a hollow hour be? Watching Netflix, scrolling through social media, doing nothing to move you forward or achieve your goals.

Your goal should be to fill your day up with more impactful hours. What actions do you need to take to move the needle in getting you closer to your goals?