🚀 go-pugleaf

On Thu, 29 Sep 2005 07:32:00 -0400, "Nonymous" <noham@nospam.com>
wrote:


>> Very well put John, most people have no idea how much their job actually 
>> cost them. I read "Your Money or Your Life" about 15 years ago and it 
>> changed my life. My commute now is very short as well, one flight of 
>> stairs, a right turn at the kitchen and I'm there. I commute to the bank, 
>> library and shopping on my bike most of the time and it's rare I go 
>> through a half tank of gas a week carting the kids about.
>
>
>Points taken, but the "live close to where you work" idea also assumes 
>you're job is stable, secure, and you're enjoying it enough now (and will 
>still in the future) to want to keep it long term.  Who wants to go and move 
>to be close to work just to be laid off a year later or to have the company 
>go through so bad re-org causing you to now hate working there?

I'm trying to express a different philosophy and worldview in which
that kind of stuff doesn't matter so much.  If you live a frugal (not
cheap, not skinflint but frugal) lifestyle and don't let your work
become your life, concepts like "job security" don't mean so much.

Far too many people (myself included in my past life) let their work
become their lives.  Their happiness is practically completely tied to
ebbs and flows in their job success.  A layoff is devastating, both
emotionally and financially.  The alternative, working at a job you
hate because you have to have the money, is as bad.  Drug and alcohol
abuse and getting joined at the pocketbook to a shrink often follows.

A cute little sound bite that says it all is "do you work to live or
live to work?"

It took a traumatic event (almost burning up in the fire and losing
most everything I had.) to slap me in the face and make me take a new
look at my life.  I realized that I would not get a second chance to
do this "life" thing correctly.  I also realized that I could live
just as well on a lot less income by leaving the rat race.

Once your create a sustainable lifestyle then being tied to a
particular job and income level doesn't matter so much.  You can then
do what you like instead of what you have to do.  It is little more
than an inconvenience to be laid off or simply to decide that you
don't like the work.

Another key is to maintain a current and diverse education.  I've
changed major career paths 4 times in my life and in each case,
self-education was key.  Being competent in many fields is powerfully
empowering.  To put it in the street vernacular, you know that at any
point you can tell 'em "To take this job and shove it."

The French philosopher Proust said that most people end up doing what
they are second best at. No truer words ever spoken.

A major part of living a financially rewarding and independent life is
patience, the kind of patience that for most folks, unfortunately,
comes with age.  I was as bad as anyone else at the "gotta have it
now" thing when I was younger.  I still get that feeling sometimes
when I see a really nifty new toy.  My wiser self slaps the impatient
self and says "settle down, it'll be there later when you've saved
enough to pay cash without pain."

I use a modified Dave Ramsey envelope system
(http://www.daveramsey.com/).  His system is pretty simple - turn each
paycheck into cash.  Label envelopes for each expense.  One for the
mortgage, one for the (ughhh) car payment, one for the power bill, one
for groceries, etc.  Divide the cash up among those.  Have a couple
more envelopes, one labeled "mad money" (one for each member of the
family) and one for "nonessentials".

Pay the bills out of the envelopes.  When the envelope is empty, stop
spending in that category for the month.  When the "groceries" or
"restaurant" envelope is empty, well, time to eat out of the freezer
and pantry until the end of the month.

I don't have debt and my recurring expenses like utilities are well
defined so I don't use envelopes for those.  I do use envelopes for
toys and other non-essentials.  For example, I have one labeled
"MacMillian 50bmg sniper, er target rifle".  When I have some extra
cash, I put some money in that envelope.  When it reaches the approx
$3500 I need for the rifle, I'll order it. 

I have another one I labeled "transportation".  This is a futures fund
to pay for car maintenance and a new car in the future when it's
needed.  For large funds like this, I actually just put chits in the
envelope and keep the actual money in my mutual funds so they earn a
little.  I have the discipline to forget that I have the money
represented by the chits.  Yet another one in the chit category is
"motorhome".  I pay for maintenance on my current motorhome and will
buy a new (used) one sometime in the future with the money.

The envelope system has a very powerful emotional calming effect on
one's patience or lack thereof.  I don't find myself having to
constantly make the decision of "can I get away with buying that rifle
or camera or car or whatever?"  I take the available surplus cash
every week and divide it up among the envelopes according to what has
my attention at the moment.  I keep the tally on the outside of the
envelope so that I know what's there at any time.

I freely rob from one envelope to fund another as my interests change
or needs arise.  The Macmillian rifle one, for example, has ebbed and
flowed for over 5 years now.  I bought a new digicam out of the rifle
fund last year when my interest in digital photography took off.

If you have kids, the envelope system makes it very easy to say "no".
"Sorry, kids, but your envelope is empty because you bought that
Nintendo last week.  You can't go to the concert this week because you
can't afford it."  That also teaches the kids about budgeting and the
real worth of money at an early age.

Not to sound like I'm shilling for him but I've found the Dave Ramsey
course to be among the best money I've ever spent.  I'm a very sharp
guy but those courses made me realize that I didn't know jack-spit
about managing money (after all, I AM an engineer.... :-)  I wish I'd
discovered his methods 20 years ago - I'd be quite wealthy right now.

There is a good little book out there called "Do What You Love, The
Money Will Follow : Discovering Your Right Livelihood" by Marsha
Sinetar.  ISBN 0-440-50160-1.  On amazon for $10.88.  She has written
another book that I haven't read yet called "To Build the Life You
Want, Create the Work You Love : The Spiritual Dimension of
Entrepreneuring"

Some parts of this book is sorta squishy but all in all, a great guide
to a great philosophy.

You know you're doing what you like when you look forward to the
weekend ending so you can get back to work :-)

One other thing I should mention in this thread.  Until one is there,
one cannot possibly realize the peace that comes from savings.  When
you have enough money in the bank to live at your current lifestyle
for a year or more, you simply don't worry about layoffs, burps in the
economy and the like.  This is similar to the peace that comes from
having the house paid for.  The combination of the two means that you
can tell the world to go fsk itself for very long periods at a time.
Certainly long enough to figure out what you might want to do next,
and the money to do it.

When you live from paycheck to paycheck, even if you are able to put a
little back, there is a low but constant level of stress caused by
worrying about what might happen that over time, corrodes the soul. It
wears you out and removes a lot of the enjoyment from life.

Consider the other situation.  Right now if my building burned to the
ground, I could thumb my nose at it and go on my way with no worry.
I'd have plenty of time to figure out what I wanted to do next.  I
might want to rebuild with the insurance or I might not.  There would
be no pressure to make a decision because I could live for at least a
couple of years on my savings.  The only thing I'd lose if the place
burned would be heirlooms and to the extent possible for things like
photos, there are copies stored off-site.

My savings are not that large, very low six figures with a net worth
of no more than half a mil, quite modest for a 50-something.  ALL my
very modest investment income goes back into the investments and I
take nothing out.  I live on my income.  The key is that my expenses
are so low.

Somebody's going to say something about bad health forcing them to do
something they don't like.  Not true.  I have the usual problems of
late middle age including insulin-dependent diabetes.  Healthcare is a
major expense center but because I live so cheaply otherwise, the cost
is manageable.  I don't LIKE pouring almost a kilobuck a month into
that bottomless pit called healthcare but that's life.

I'm not an evangelist for this style of living and normally don't talk
about it all that much. I just want to show that there is an
alternative to living paycheck-to-paycheck and to the "I've gotta
drive 100 miles a day to earn enough to support my debt-ridden
lifestyle" trap.

John
---
John De Armond
See my website for my current email address
http://www.johngsbbq.com
Cleveland, Occupied TN