Learn to Live Like the Rich

"The poor buy things, the middle class buys liabilities, and the rich buy investments." --Marotta Asset Management, Newsletter

I put this mantra right up there with 'spend less than you earn' in terms of simple, straightforward financial principles to live by. Check out the following article, written by an asset management firm, called Learning to Live on Your Own. Here's an excerpt:

The people who are struggling financially buy things and clutter their homes with them. The middle class buy liabilities such as boats and vacation homes and must spend money every month to maintain them. The rich, in contrast, buy investments. An investment is anything that pays you money.

Now that you are learning to live on your own, learn to live like the rich. The frugal millionaire enjoys both financial security and peace of mind. Living well within your means is a skill you may not have picked up from your parents or in school. Rather than learning from the so-called school of hard knocks, consider the following suggestions.

And don't forget to also check out Learning to Live on Your Own Part 2.

Create a Weekend Budget

If I were to graph my spending over the course of a week, I would see a graph that looks like a mountain range - low, low, low Monday through Friday then a HUGE spike on Saturday and Sunday. After holding back all week (save for a few online book purchases), my credit card explodes into the retail world on weekends, spending on breakfast, lunch, dinner, clothes, movies, drinks, you name it. Sound at all familiar? It might if you're used to working and laying low during the week, then splurging on weekends. Try experimenting with a weekend budget. I've found that I have a hard time sticking to a monthly budget since it stretches over what seems like a long period of time with lots of moving parts (although I'd like to stress that I do pay my credit card in full every month). I find it easier to break my budget down into manageable chunks, more specifically into smaller chunks of time. If you're interested in an experiment to help manage your weekend spending, try the following formula for determining your weekend budget:

  1. Add the take-home amount of your paychecks within a given month to get your total allowance
  2. Add up your essential expenses (rent, bills, gas; don't forget to include savings in this category)
  3. Add up your nice-to-have expenses (things you really like to do/have each month but ultimately could live without, like coffee, personal grooming, other recurring purchases)
  4. Subtract 2 and 3 from your allowance
  5. Divide the remaining amount (hopefully you've got some leftover!) by four. This is your "weekend budget." Spend on whatever you'd like each weekend as long as you stay within this amount. If it helps, take that amount out of the bank in cash and distribute that across your weekend activities.

Not sold on the idea? Try it out for a weekend and see how it goes!

Got a better budgeting idea? Let us know!

Balance Within Each Day

Just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, you perform better when your thoughts, feelings, emotions, goals, and values are in balance.” --Brian Tracy

I work at a large, corporate company. I hear a lot of talk about "work/life" balance. I'm a personal believer that work is part of the greater life picture, and that by trying to separate it and hide it as something to balance against, we're doing ourselves a great disservice. I believe in life balance - in doing what I can in small ways to move toward a more balanced life, which starts with a more balanced day.

I can get overwhelmed when I think about "life" balance. Am I living in accordance with my values of personal vitality (diet and exercise), personal growth, excellence (professional and personal), while at the same time building and maintaining close relationships with my friends and family? That, my friends, is a LOT to think about. I find it helps to think about balance in small bits - balance within in each day. For example, what can I do tomorrow to live according to these values? I can go to the gym, call a friend, prioritize my tasks at work and set ten minutes aside to think about something I'm really passionate about. By aiming for balance within the day, and repeating that, I move toward balance in life without getting too overwhelmed.

What can you do to move toward balance tomorrow?

Make the Most of Apartment Living

I'm in the process of moving and have become obsessed with all things HGTV: color, interior design, living big in small spaces. I've always been lazy about decorating and personalizing apartments (or my room when I lived at home) - I figured what's the point when its not mine and when I could easily be moving again in six months? I also had a pre-conceived notion that any personalization would be difficult to do myself, and/or too expensive to purchase. But with a minimum amount of research and web browsing, I've come to realize that it doesn't take much to make a space really feel like home. Here are a few of the best articles I've found - please share in the comments if you have any tips or resources to add!

Happy Living!

Naked Economics

Ever wanted to strip down all that complicated, financial mumbo-jumbo from newspapers, blogs and books into something palatable? Consider reading Naked Economics, by Charles Wheelan. It's a fantastic book - written with a sense of humor for those of us who weren't born with an innate understanding of stock markets and bond ratings. As Wheelan puts it, Naked Economics is "not economics for dummies, it is economics for smart people who have never studied economics (or have only a vague recollection of doing so)." While it's not a book on how to invest or what to do with your money, it will get you closer to understanding the basics of how various financial institutions interact and get you up-to-speed on the most widely used economic terms without making you feel stupid.

Pursue The Passion

A friend recently sent me a link to PursueThePassion.com - a site that documents the journey that three college grads took to find professionals in careers they were passionate about. I love this idea, because so often college graduates take the first job they can find, without really thinking about how it will support their own passions and leverage the inner talents associated with those passions. I highly recommend you check out the site (excerpt from their About page below) and their E-Book, Timeless Advice for the Aspiring Individual. Excerpt from 'Our Story':

Pursue the Passion started as a group of three recent college grads who embarked on cross country roadtrips to interview passionate professionals about their career paths. We created this site because we felt that others could benefit from these interviews, and use them to determine a direction to take their careers. It's our belief that everyone should be passionate about their profession.

We have made it our mission to provide inspiration, guidance, and community support to help you find work you'll love."

SPAM Vigilance

I recommend you to take care of the minutes for the hours will take care of themselves.” -Lord Philip Dormer Stanhope, 4th Earl of Chesterfield (1694-1773)

David Allen, my personal idol and author of the book Getting Things Done, has a two-minute rule for answering emails:

If the Next Action can be done in 2 minutes or less, do it when you first pick the item up. [Do this] even if that item is not a "high priority", because it takes longer to store and track any item than to deal with it the first time it's in your head." (p. 131, "Getting Things Done")

I find that SPAM (whether it's for V1Agr$ or a newsletter I don't want) almost always fits in the two-minute rule. Be vigilant about it! If you receive an unwanted email, unsubscribe immediately and delete. Save yourself the annoyance of deleting the same spam over and over again. If you're not quite ready to unsubscribe from something like a mailing list, at least set up a filter within two minutes of receiving the first mailing so you don't have to label each email individually.

Got other tips for handling SPAM efficiently? Let us know!

Organization Tip: Use Consistent Labeling

Here's a tip that has served me well for a while now: label folders consistently across different organizing platforms, such as hand-held devices, bookmarks, computer folders, paper manila folders, email folders, etc. The benefit is that you always know where to find things, regardless of their format. For example, if I'm looking for something related to this website, I know immediately what folder to look for whether it's a Bookmark, a Word Doc, or a paper printout. The consistent labeling allows your brain to relax when looking for something rather than having to guess at where that thing might live. Another great tool for this is Google Desktop, which will index and quickly search files on your computer, emails, and even websites you've visited. 

The Dreaded Snooze...and a Tip for Avoiding it

I completely overslept today. Snoozed first, then in a sleepy haze turned my alarm off completely, stuffed it under my pillow and went back to sleep. For TWO hours. Thankfully by the time I woke up I still had a chance to make it to work before my first meeting. I've got a snooze habit, and ever since I've returned from the holidays its been worse than usual. I wanted to share one of my strategies for avoiding "the snooze" - it's not something I do every day, but it can help for a few days to get you back on track: Write an 'I will' statement the night before on a piece of paper, particularly if you've got a busy morning ahead. For example: "I will wake up at 5:00 a.m. tomorrow. I will not snooze. I will shower at 5:10. I will leave the house by 5:30...and so on." The benefits: planning your morning in advance, writing it down and being specific all help commit you to your plan. And make you feel that much more guilty if you break it. 

Eat that Frog!

It has been said for many years that if the first thing you do each morning is to eat a live frog, you can go through the day with the satisfaction of knowing that is probably the worst thing that is going to happen to you all day long." -Brian Tracy, Eat that Frog!

If there's one principle to live by at work and in life, I truly think this is it. Especially now that my blissful holiday vacation has ended, and I've returned to stockpiles of emails and seemingly endless tasks at work. Brian Tracy wrote an incredibly straightforward book on the concepts of prioritization and avoiding procrastination for important tasks. He says

Your “frog” is your biggest, most important task, and "the one you are most likely to procrastinate on if you don’t do something about it now. It is also the one task that can have the greatest positive impact on your life and results at the moment."

It's so easy to get consumed by emails (or to procrastinate by responding to every single email the minute it enters your inbox) instead of working on high-priority projects or tasks. We whittle the day away doing what should be follow-up work. At the end of the year when you look back on your accomplishments or update your resume, how many of you will say "answered every email"?

Choose your "frog" the night before. Commit to starting that frog first thing in the morning, before checking a single email. At first this is going to be really hard. You've got to stick with it. I found that after getting my highest priority task over with, I felt productive and happy for the rest of the day. As Tracy says,

Think about it – if you postpone your most important task, it hangs over your head all day, weighing you down with dread and guilt. If you knock it off first thing in the morning, the relief buoys you up all day long, literally energizing and boosting your productivity as you tackle the rest of the items on your to-do list.

And don't forget: "If you have two frogs, eat the ugliest one first." Click here to order Eat that Frog!

Own the Day

The trouble with the rat race is that even if you win you're still a rat." --Lily Tomlin

The way I see it, you can either choose to Own the Day or let the day own you. Owning the Day means purposefully taking time to make the day yours before it even starts.

If you let the day own you, it might go something like this: wake up to an obnoxious alarm clock, jump out of bed after snoozing a few times, rush to get dressed, rush to get to work, get annoyed with traffic, get bombarded with emails and requests and interruptions and meetings, rush to get home from work, subject yourself to bad tv, go to sleep, repeat.

Owning the Day means taking some time to think about what you want to do today. What will make you happy? What will help you start the day feeling fresh and move you through it with peace and calmness? I "own my day" in several ways, depending on how much time I have: reading the newspaper, working out, doing at least 15 minutes of yoga, sitting down and enjoying my breakfast (either alone or with friends), having a nice cup of coffee, thinking in my car on the way to work.

If it were up to me, I'd do all of these every day. Actually, it is up to me. I just have to get creative and make the time for it. The point is, if you don't make it a priority to Own the Day and start in a way that is refreshing and invigorating, your day will run right over you, and you'll just be another rat in the rat race.

The Custom Cookbook

Picture yourself browsing through the food section of a bookstore. You pick up a cookbook and it is perfect. The recipes are easy to make, varied according to your tastes, and miraculously you like every single recipe in there! Therein lies the concept of the custom cookbook. All you need is a binder, some sheet protectors, and a few cooking magazines to get you started. The concept is simple - rip out recipes that sound good to you and stick them in your cookbook. If you're feeling fancy you can get dividers and create sections for breakfast, lunch, dinner, snacks and dessert. You can also print recipes online (see the recipes section for websites). The magic is that every time you pick up your cookbook, it's chock full of recipes for things that look good to you (and that you've pre-screened for easy preparation)!

Dream Dinners

As mentioned in the food section of this website, if left to my own devices I would eat power bars, cereal and mac n' cheese for dinner every night. Partly out of laziness, partly out of being exhausted after a long day at work, partly out of not owning a single ingredient to cook with (all perishables are banished from my fridge and pantry), and partly because I just don't know how to cook or what to make.   One of my peers from High School recently got in touch through this blog and let me know about Dream Dinners, an amazing business she co-owns that "helps busy working professionals solve the question of 'What's for dinner?' without going out to eat every day." I've heard about these types of services before, and am so excited to share the concept with you! In Krupa's own words:

Dream Dinners helps busy working professionals solve the question of "What's for dinner?" without going out to eat everyday. Basically we're cheaper than Safeway and the same or better quality (the food is all natural). Every month we have a new menu with 17-18 items. Our customers will choose which of those they'd like for that month and within two hours they can assembly up to a month's worth of meals, or if they wish, we can do it for them. We provide the ingredients, we do the prepwork, and we provide the recipes and cooking instructions. We've recently had a surge in younger people in their 20's and 30's coming in because as they realized, they don't know how to cook. Customers don't have to deal with spoilage because the dinners are good for up to 5 months in the freezer and taste really awesome (the recipes are created by professional chefs)." --Krupa Patel

I love the efficiency of it all, and that you can learn to cook in the process.

Be Thankful

I came across this poem and immediately felt it was something worth keeping. You may have read it before - if so, it can't hurt to read it again. Gratitude is something I work to cultivate every day (not just around the holidays), but it's during these weeks when I'm spending a lot of time with family and away from work that it seems particularly prescient. Be Thankful Be thankful that you don’t already have everything you desire, If you did, what would there be to look forward to?

Be thankful when you don’t know something For it gives you the opportunity to learn.

Be thankful for the difficult times. During those times you grow.

Be thankful for your limitations Because they give you opportunities for improvement.

Be thankful for each new challenge Because it will build your strength and character.

Be thankful for your mistakes They will teach you valuable lessons.

Be thankful when you’re tired and weary Because it means you’ve made a difference.

It is easy to be thankful for the good things. A life of rich fulfillment comes to those who are also thankful for the setbacks.

Gratitude can turn a negative into a positive. Find a way to be thankful for your troubles and they can become your blessings. -Author Unknown

From APathThatFits.com: How to Call a Christmas Truce

A friend of mine, Adrian Klaphaak, recently sent out his December newsletter. In it he tells a story about the wars we fight with ourselves. The questions he posed in the third section were particularly striking to me, and I encourage you to read the full post and take some time to reflect for yourself. Some highlights:

Ask yourself...how am I fighting against myself? Invite the two apparent enemies to have a conversation: what are you fighting for? What am I afraid of? ... How can I make peace in 2008?" --Adrian Klaphaak

Exercise: The Upside of Envy

Yes, envy is one of the seven deadly sins. It can also be a powerful tool to help figure out what you really want, and how to go after it. The other day I was googling something and came across a former co-worker's website. I was immediately hit with a pang of intense jealousy! She left corporate life to open a yoga studio with an accompanying blog and website. I knew I was jealous, but I wasn't quite sure why. It helped me to write it down and actually verbalize why: she followed her passion, she started a business, she's sharing her passion with the world and she's practicing and teaching yoga for a living! I was intrigued. For me, envy applies to many other aspects of life as well, like envy for those who have advanced degrees, own a house, are compassionate and patient, and for more surface-level things like having a stylish wardrobe. Here's the exercise: Take a piece of paper and divide it into two columns. On the left, write the names of people you envy (whether its for something they have, something they do, or even qualities they possess). On the right, list all the reasons you are jealous of them. It sounds strange to highlight jealousy or envy when its something so often associated with being negative. But you can put that jealousy to constructive use by honing in on things you want in your future. I encourage you not to censor yourself - write down everything that comes to mind, whether it's something frivolous (like a fancy car) or more substantial (like generosity). Keep this list with you and add to it throughout the next two weeks. At the end, pick-out five common themes, or five things you envy the most. The good news is that you already have a list of people you can speak with to learn more about how each of them got there!

By the time I was done with this exercise, I had almost all of my friends, family and mentors listed on my sheet of paper. I found that for almost every person in my life, there is something they are doing or that they have that I admire and want to strive for. And that's what makes them great people to have around!

Ode to The Simple Dollar's "31 Days"

One of my new favorite financial blogs, TheSimpleDollar.com, has a featured post called '31 days to fix your finances' that I wanted to share here. While I realize that many people don't have much of a system to "fix" yet, this can certainly help you start to think critically about how (if at all) you are currently tracking your finances, and set some goals about what you'd like to be doing in the future. Check out the article for the full 31 tips/days. Here's what stands out to me as three areas to start with:

1. Breaking Down Your Expenses - How can you spend less than you earn if you don't first determine what your monthly, recurring expenses are? One strategy that's worked for me is to list every bill (including rent) and subtract it from my paycheck. In its most simple form, the remainder is my "budget" for the month. Note - I also include my automatic savings account contributions as part of my expenses. That way I make sure to save before I spend.

2. Pay for your Dreams First - This is one of the central concepts of Robert Kiyosaki's book, Rich Dad, Poor Dad: pay yourself first. Set aside money (again, helps to automate this process as monthly deductions from your checking or savings account) every month before you have a chance to spend it. I have two accounts in a high-yield bank (EmigrantDirect.com or ING.com are good places to start) - one is called the 'Emergency Fund' and the other is for a frivolous goal I've set (to buy myself a diamond ring in 2008). Both serve a purpose. The former account is pretty obvious - saves money for an unexpected car repair or other emergency. The latter keeps me motivated to save money and gives me something to look forward to.

3. Get Rid of Debts (Slowly but Surely) - Even though I have enough money saved to pay off my student loans, I've made the conscious choice not to pay them all of at once. Why? Because the interest I earn on that money through stocks and index funds is more than the interest I pay on my loans (student loans typically have very low interest rates). I did step up my monthly (automatic, might I add) contribution to my loans so that I don't feel like I'll  still be paying them off when I'm 40. (More on paying off student loans here.) However, the decisions about paying off student loans are VERY different from something like credit card debt, which you should try to avoid and eliminate at all costs (given credit card companies' astronomical interest rates).

Lost among the financial jargon? Check-out our money-related definitions.

Web Services I Love

I have a feeling this will be a recurring post. Earlier this week I told you about Jott.com, my new favorite personal assistant. There are so many other free innovative web services out there, and I wanted to share a few more of my favorites: Google Bookmarks Google Bookmarks are a feature of the Google Toolbar. The feature allows you to add and view Bookmarks from any browser on any computer at any time (as long as you are logged in to your Google Account). You can start by importing your existing bookmarks from Firefox or IE (or any other browser). The other nice feature is that each bookmark can have more than one label, so you can find your bookmarks in multiple categories.

Doodle.ch Event Polls Welcome to the democratic version of Evite. Doodle.ch allows you to create a poll (in under five minutes) that you can send to guests before an event to gauge who is available and when. For example, you provide three options for the day/time of your party, then Doodle will keep a running tally of the most popular choice as people fill in their name. Once the poll is complete, you can make a much more informed decision about when to hold your event.

Mint.com In their own words, Mint.com is a "free, automatic way to manage your money." If you don't already have a system for keeping track of your finances, I highly recommend this one. It can help you see where your money goes each month, complete with beautiful graphs and easy-to-read reports. For those worried about privacy, when you create your account they never ask for your name or bank numbers, just the log-in info for your online accounts.

Got a web service you love? Add it to the comments so we can all benefit!

Bite-Sized Happiness

"Joy is not in things, it is in us." -Charles Wagner

Practically since the beginning of civilization, philosophers have pondered what it means to be happy and to seek happiness. Recently I've taken time to ask myself the same question: What is it that truly makes me happy? When I'm financially strapped, the first thing that comes to mind is often money. But then the question becomes "if I could do anything with that money, what would it be?" I wouldn't be happy sitting on a pile of cash if I wasn't doing any of the things I love. For this reason, I decided to make a list of 20 (simple, low cost) things I love to do, and I encourage you to do the same (in fact, leave them as a comment if you're up for it)! It's refreshing to have handy for a rainy day, or when I need a pick-me-up.

Here's a list of activities that make me happy: 1. Reading the newspaper 2. Reading a book in my favorite coffee shop 3. Going to brunch with friends 4. Watching football on TV/Going to football games 5. Yoga (at home or in class) 6. Walking along the Marina 7. Thinking about my dreams and goals 8. Talking to friends 9. Going out to a nice meal and having a glass of wine 10. Volunteering 11. Dancing 12. Perusing used bookstores 13. Walking my dog 14. Watching cheesy reality tv shows 15. Going to baseball games 16. Going to the movies 17. Listening to music 18. Traveling 19. Camping 20. Making websites

So what is it that makes you happy?

All the Things I Never Forget

First, thanks for visiting the site! Second, I want to ask you a question. How many times have you thought of an idea, errand or task while driving or otherwise out-and-about and completely forgot what it was when the time came around to make it happen? I do carry a notebook for these sorts of things, but given that most of my work is in front of the computer, I've found something even better. Earlier this year my co-worker introduced me to an amazing service called Jott, and I haven't forgotten anything since. Here's how it works: you sign-up for a free account, program the toll-free Jott number into your phone, and voila! Next time you think of something while you're away from your computer, call the friendly Jott operator. She'll start by asking, "Who do you want to Jott?" and you'll say "Self" (sign your friends up so you can harass them too). When you hear the tone, leave your message. Jott takes it from there and transcribes your message into an email, waiting in your inbox for the next time your ready to take action.

I can't tell you how many times this has helped me remember and be proactive about ideas I have at random moments. Plus, it feels like I have my own personal assistant!