Posts tagged ‘save money’

My money motto: “what do you have to show for it?”

Have you ever had a job, stint or contract, which is long in the rear view mirror, which you are not only happy it is in the past, but was a bad experience? We have all had these jobs and experiences.

But not appreciating that job is different from gaining something out of it: if not the experience, then the money at least! It may be in the past, but have something to show for it, mainly some saved money.

From March 2017 through March 2020 – a stint ended by Covid – I drove part time for Uber. That is 3 years of working long weekend hours, night shifts away from my family and young son, and lots of mileage of wear and tear on my car. And while I did generally enjoy the job and learnt a lot from it, it is not something I would want to do again. It was a once and done type of thing. But here is the thing that made it worthwhile: in addition to using the income to pay for things, bills and vacations at the time, I also got to save more than half of that money. I wanted to be able to look at it when it was all said and done and be able to show something for this sacrifice I made. And yes, I considered the job as a sacrifice as it put me away from my family for long hours and nights. Not to mention, it was my second job besides my FT job. So it was tiring on the body.

Fast forward to March 2020, when the Covid virus started spreading and all the ensuing lockdowns, I quit my Uber driving job, and started working from home for my FT job. While working from home in the first two weeks, the stock market started to decline dramatically, to the point where a lot of stocks lost more than 50% of their value. I kept watching the market and by March 22/23, I made my move and bought several blue-chip, high yielding stocks, at amazing bargain prices. All, or at least most of it was from money I had saved from my Uber driving!

So I basically diverted this hard earned money to investment that has since gone up by over 35%, and I am getting regular and compounding dividends. As of last check, I am just over $1,500 in annual dividends.

Compare that to the alternative where I work Uber for 3 years, earned decent money, but never made that simple decision to save some of the money earned. I would basically have nothing to show for it. Thank god the reality is one where I get to enjoy the fruits of my decision to save a lot of the money earned, and be lucky to have had that money during a generational market downturn.

No matter what your revenue source is, be it a full time job, an online or driving gig, a side business etc.: always treat it like it won’t be there forever and need to save some money from it to make it a worthwhile investment of your time, effort and sacrifice.

It is a no brainer you need to save money. But it is even more important when it is a difficult side gig, one that puts you away from family and loved ones. The least you can do is to save some money from it so that you can look back at it and have something to show for it.

New Saving Idea for 2022: ‘Junk to Health to Wealth‘

I am no slave to junk food. I may eat it once or twice a week, sometimes with the family. But despite it not being a daily habit, it still goes a long way towards causing damage to both my pocket and health, especially with the rising prices for food of late.

So for 2022, I have a new saving goal in mind, which will help improve two hugely important areas of my life: my pocket and my heart, both in an almost literal sense.

Junk to Health to Wealth

The idea is simple: on the days I know I would go out and eat junk (usually over the weekend) I will withhold those purchases and instead save that money. At first, I thought I would just keep the money and spend it on something else, since it was part of my ‘personal spending money’ anyway. But I thought it is more effective if I diverted this saved money to a new saving program or even into a piggy bank. Why? To be able to physically see the result of this diversion initiative. In other words, in 6 months or 1 year from now, I will not only be able to go on the scale and see a difference in my weight , I should also realize some nice financial savings from this junk food boycott or reduction.

Putting it in OKR terminology

If you are thinking this in terms of ‘Objectives and Key Results’ , it could read something like this:

Objective: (based on historical data of how often I ate at junk food places and how much I spend) : To save $500 a year and reduce my weight by 7 lbs for the year by reducing how often I frequent these places.

Key results:

  • Visit max of once a week (from two)
  • Spend a max of $7.50 a visit
  • Skip at least once a month from the remaining regular visits.

If I eliminate my visits from 2 to 1 visit a week , this alone would result into savings of $375 per year, based on 50 weeks. If I can also eliminate one extra visit per month, that is another $90, putting me close to my goal of saving $500 from this ‘Junk to Health to Wealth‘ initiative.

While the numbers look clear and the advantages are numerous, this will not be without challenges and distractions. There will be those random days and weeks where you are out with the family and are too far from home or can’t wait , so you just do the easy thing and buy junk. That is fine. We should almost build those in and try to make up by skipping the next visit to eat junk.

Good luck if you decide to do this and let us in the comments below how it goes.

I was Determined not to Enjoy my Pay Increase

If you get a significant pay raise, what do you do with the extra money? Say you get a 10% raise or $5K, assuming that works out to $175-200 per pay.

Do you just spend it? Do you allocate to a category in your budget? Or do you pretend like you never got it and simply roll it over to your savings?

I don’t know about you and we are all different but I personally did a mix of 2 and 3: assigning some to existing categories in the budget (bills, charity) but the majority went to savings.

The idea is simple and this concept is not my creation by any means: I never had this money , so the idea is to shift it to something else , this way I am not getting used to it. Otherwise, if I started using it for leisure and entertainment, then force to shift it to saving, it will feel more like a pay cut than raise.

If you do put it towards saving, best to automate the process. If you have a saving program through your employer-or better yet one where your dollars are matched- that makes things easier. If not, sign up for a high saving program or an index fund ETF where the long term appreciation could be in the 5-10% range, depending on which one you choose.

Another idea would be to redirect it all to a new long term savings goal, such as saving for a new car, home renovation, a grand vacation plan. That is, the goal is for something that is 3-5 years out, allowing you enough time to build a good chunk. For example, if your 10th wedding anniversary is three years away, and you would like to take the family on a European tour that will cost over $10K, then the new pay raise can be fully shifted to that goal. Automate the process, forget about it and when it is time to book the vacation, the money will be waiting for you, with no need to dip into debt.

As long as your meets and wants are met, there is no reason to keep spending any new pay raise you get. It will almost be like a waste. Instead, save it and you will be happy you did when there is a bigger calling for it. Otherwise you will need to use a credit card and go into debt.

One small decision about what to do with your pay raise can mean huge difference for your future.

How to come out of the Covid-19 pandemic healthier wealthier and better overall

Make 2021 a productive year
Make 2021 a productive year

Here is the problem with the current pandemic we are living in, other than the obvious health and economic implications impacting billions around the world: it is the fact that it came almost unannounced and that we have no end date in sight. It would have been much easier if we were told, for example, that the pandemic will last for 6 months (e.g March 10 to October 10) and we all go back to our normal lives after that. But it has been more like a playoff hockey game, where we have 3 periods, followed by overtime that could go on and on until someone scores a goal. While we can see some light at the end of the tunnel, we are far from seeing this thing through. In fact, for Canada at least, we are being told the population as a whole will not get vaccinated in full until early to mid 2022. And considering that pandemic restrictions and curfews started in March 2020, that will be a full 2 years that we will have to put up with living our lives in seclusion and isolation from one another and our usual leisure activities etc. For pre-teens for example, that almost one quarter of their life spent in mandatory isolation from society!

That means, at least for most of us, we have only finished the first half of this boring and dangerous game called Covid19: the second half is yet to start and will last through much of this fresh year and early next year. Unless there is a big breakthrough that will massively scale vaccine production and delivery to Canada and other parts of the world, which doesn’t seem likely at this point. So, with so much more free time on our hands, why not do something useful with it, so that when it is all said and done, these 1-2 years of your life will not be defined by Covid19, pandemic and vaccines, but rather how you used it to advance your life in every area possible. I did it myself already and you can too. Let me go through some of what I was able to accomplish in 2020, and what I would like to continue doing for 2021, until we see us through this once in a lifetime pandemic.

Heath

When the pandemic started, in my first week of working from home and with my GYM being closed, I literally looked at my wife and said: “how will we do this?” it was a week in which I opened the door to our fridge more than I opened any other door in the bedroom or the entire house. That was March. Then came April and something changed. Despite the weather still being cold-even snowy at times-I started to walk, sometimes alone and sometimes with my wife who was off work due to the lock-down. Then in June, as some restrictions were eased, our local trails and hiking parks reopened and i started to frequent them on a semi-daily basis. I also bought dumbbell sets to work out at home, during my breaks from work. To put it into prospective, by the time the lock-downs started, I was around 180 lbs and by new year’s eve, I had gone down to 167 lbs, and body fat from 25% to 17%! That is 13 lbs loss and 8% body fat reduction, with no GYM! All because I took the decision to walk and work out, even with no formal GYM to go to. Last but not least, using my Apple Watch, I am currently on a 203 day move streak, going all the way back to July 12! That is how long I have been active on a daily basis.

Wealth

I am proud to say I spent the entire lock-down so far without once shopping off Amazon, unlike the majority of the population! With not much to do, I saved most of my money and I did two things that will benefit me tremendously for the long term: first, I bought stocks when the market bottomed out in late March, and again during the summer and fall. Every single one of these positions were in blue chip high-yielding stocks. Combined, I will be making over $1800 in annual dividend returns ($450 a quarter) . The other thing I did with all the money saved during the lock-down was to pay off my line of credit balance of $8,500. It would have been close to impossible to do this had there been no lock-down, where i would have otherwise spent my money in a multitude of ways. Between the two (LoC payment + dividends), I now have $600 of net monthly income that I am saving/getting.

Self Development

Depending on how you define this, to me it is the process or steps you take to develop your character, learn new things, or help you reach new goals in life. Going by this definition, 2020 was one of my best years ever. The things I was able to accomplish speak for themselves and prove that you can turn an otherwise terrible year into something productive and better yourself in the process. To start, and this is as synonymous as it gets with the concept of self development, this was a record year for book reading for me. I was able to read a total of 20 books, compared to my average of 3-5 books on average. Not only that, but some of these books were business and technology references, one of which helped me earn an industry-recognized certificate specific to my profession. 2020 was also a year in which I found a huge new interest in audio-books and podcasts. For the latter, I have even developed a new hobby: podcast driving. This is the act of driving for leisure while listening to my favorite podcasts shows. From March to December, I listened to around 500 podcast episodes, in a variety of topics.

Don’t let another year go to waste, start now!

I am not here to download the seriousness of Covid-19 and the terrible human loss for millions of people around the world. But the point is to not let it define us. If 2020 was defined by a pandemic and lock-down, and nothing else for you, you still have time to make 2021 better and more productive year. Start by setting some small but specific short term goals: how about finishing a book, losing 5 lbs, saving $1,000 and so on. As you start and gain some momentum, you will notice wanting to go for more and then the sky is the limit. Think of a snowball that starts small and as it goes down the hill, it gets bigger and bigger.

As you read at the start of this article, I started with a simple question and a simple walk, and those progressed into much bigger goals and accomplishments. And in fact, I am even more fired up for 2021. For January, and thanks to a milder weather so far, I have walked almost every day, for a minimum of 30 minutes. My fear was that I would start gaining some weight back during the cold winter months. Thankfully, that never materialized and I have kept the weight off. As they say, if I can do it, so can you. In fact, you may be be able to do more than I do, depending on your personal circumstances (whether you have a family, kids, full time job etc) . I would love to hear some success stories of how people used these pandemic months and years to better themselves and start a new chapter in their life that will forever change them for the better. Ditch the countless hours of Netflix binge-viewing and Tiktok scrolling and pick a book, go for a daily walk, or start a new online course!