One Step At A Time.

The long road to financial independence.

Month: March 2015

The wonderbag

During World War II resources were scarce. So my german ancestors used so called "hayboxes".

The basic idea was this: You heat your food and then you put it into one of these boxes. The food will stay hot for hours and finish cooking inside of the box.

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A tale of 3 electric kettles

I drink a lot of tea and coffee daily and after a few months of heavy use my first electric kettle stopped working.

One has to have an electric kettle. It's so energy-efficient and fast. - right? So I bought my second electric kettle.

This time it could heat water one cup at a time - it also could produce water at the exact right temperature for green tea. At least - until it's cables started smelling and we got really worried that it might start to burn.

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Basics: Keeping subscriptions at a minimum

Subscription burn a lot of money over time. Money that I'd rather spent on something I like.

So here is a simple solution to it - "The subscription clean-up"

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The best things in life are free.


The best things in life are free. Never forget this.

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Good consumer debt?

Debt is common these days.

A lot of stuff is bought on credit cards and now seems to be the time to buy the car - because the interest rates are low.

One thing is still true though — If you buy something on debt, you can't afford it.

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Book Review: The Millionaire Next Door

The millionaire next door has a secret. He does not match your mental image of a millionaire. Not at all.

He doesn't own costly watches, he has a relatively cheap car. He doesn't have his house in a fancy neighborhood. His suit is just about average.

One might even mistake him for a pretty boring dude.

Maybe we are unwise to act like "the rich" - at least if we have absolutely no idea what that really means.

I highly recommend to read The millionaire next door. It will change your picture of how you become and stay rich.

Jack of all trades

Today our society tends to move more and more towards specialization. You can buy everything prefabricared and you are supposed to hyperspecialize in your job.

When it comes to your life, you should really consider if this makes sense for you.

Here are some examples, what we do on our own. Many examples are mundane - but that is just fine considering that many people can not boil an egg, without a special appliance.

We are our own chefs

Every morning we stand in our kitchen and prepare a meal tailoned exactly to our taste. Additionaly we have complete controll over all the ingredients - which is great since we both are on a special diet.

Its cheaper and healthier than to buy a meal every day - and best of all cooking is a skill and we are getting better and better.

We are barbers

Jupp. It probably doesnt look great, but this saves money and is relatively simple to learn.

For the ladies this is probably a bigger challenge - but it should save you gals even more money.

We are our own farmers

We have a little garden and are starting to grow our own food. I wont argue that this is cheaper in every case - it isnt - but its great to do it.

We build our own furniture

Some of our own furniture is hand-made. You really don't have to buy every piece of furniture. It's awesome to have some pieces custom made by you.

We repair our devices

If a device is broken, we try to fix it. Sometimes this is beyound us - but often it works.

What has this to do with retirement?

My point is - you don't have to buy everything. Use your money and save money to build the skills you want. You don't have to be perfect.

This is very rewarding right now.

As a retitree you will probably be very happy to be into knitting and soldering.

Basics: Pay yourself first

Here is a simple technique for saving, that you could start with your next paycheck.

Pay yourself first. Whenever you receive money, put a few Euros onto a separate bank account.

If you feel adventourus, you can automate it.

Practice not touching the money, unless you are in real trouble.

When you save a big chunk, you will likely feel a little broke at the end of the month. Thats ok - it will push you towards spending your money more effective.

Its hard to pull this off - and if you cant do it, you might need a budget - i do.

Try to save an emergency fund - 6 months worth of expenses before even thinking about investing money for your retirement - without building your saving skills and a buffer you are likely to fail.

More about why you need an emergency fund (I have some examples where it saved my ass) and how you might want to invest in later articles.

About wealth

Wealth is the amount of time, where you can do what you want.

How do money and wealth relate?

Much money does not equal wealth

If you hate your job, earn a lot of money, reward yourself with big cars and a big house and spend as much as you earn - you are not wealthy. You are trapped in a situation you hate.

If you are a poor guy and really happy with the world as it is - you are wealthy.

Wealth is not about money. And you should be judge about whether you are healthy.

Of course money can be required to be wealthy - if you can not live a fullfilled life without it.

Wealth, income and expenses

So what if you have a job, but plan to retire early from it? How does wealth work there?

If you spent as much as you earn, every month and you can not live without the money - you will not reach the goal. You will not be wealthy.

If you can change your spending habits and save 25% of your income, you generate 10 days of wealth per month.

If you can save 50% of your income, you generate 1 month of wealth per month.

If can life of 25% of your income - save 75% you generate 3 months of wealth - every month.

I think you get the basic, powerful idea. Maybe you do not have to work forever after all.

Wow.. This sounds unrealistic

I hope you remember the introduction. You have to be content doing this. Otherwise this is all just a big pile of money.

But if you can pull this of it’s not unrealistic at all. This is all just simple math.

Even if you don’t believe me - I invite you to think about these ideas.

Where we will go next

This blog is about how to life a great life with less money, how to save and invest money and how to retire early.

Living the good life with less money: Books

I love reading. When I was young my parents heavily subsidized my book purchases. So I formed a habit of buying a lot of books.

When I became a programmer, this started to become more and more costly. Every few days the postman delivered my books.

When I started to budget and tried to invest money I noticed that I spent between 100-200 Euros on books every month.

This means 18.000 Euros over ten years. Quite a big sum.

I managed to get my book related expenses down to 20 Euros per month with these tricks. Spoiler: They are obvious - but only in hindsight.

The library

Most of my non technical books I get from our local library now. It has a quite an amazing assortment of great books. And: Every time I ask for them to buy a new one they buy it for me.

I enjoy being there. It gives me a sense of community to share all these books with many people.

Used books and selling books

For books that the library doesnt have, I buy used book over Amazon Marketplace. And after I read them, I sell them.

This makes, even expensive, books very affordable.

My employer

For work related books, my employer is happy to order them for me. And I can give these books to my colleagues and have them at hand in our companies library.

Saving is not about sacrifice

So you see: I still love books. I read as many as before. I enjoy walks to the library - and all the book-loving people there.

I do not have shelf after shelf full of books at home - but thats fine with me.

I save a ton of money - and still enjoy reading.

These are the kinds of things, you have to watch out for - where you waste money, without improving your life.

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