How to develop your PLAN

[Russ H]

Note: There are many ways of developing your PLAN.
This is just one approach.

I will edit this first post over the next few days, adding more steps. (it's taking longer to write than I figured)

There are many ways of developing-- and implementing-- a PLAN.

Here's the approach we have used:

Step I: Core Values and Character

A. Who are you, really?

Too many people try to set their goals based on how they see themselves through the eyes of others (or the media), not how they really are.

Example: You are out of shape. So you join a gym, but never go.

The result (not going to the gym) makes you feel as though you've failed at achieving your goals.

But that might not be the case.

The real reason may be you hate working out inside a gym. Or that it's too far away.

If you tap into who you are, deep down, as a person, you can often set better goals.

Examples of CORE traits:

-You love spontaneity.
-You really love the outdoors.
-You value being fit.

Goal: Walk/Run/Bike/Hike 3x this week. Next week: 3 or 4x. Next week: 4 or 5x

This combines something you vallue (being outdoors) with something you want (getting fit). And it takes advantage of your spontaneous nature, since you can walk/run/hike virtually anywhere.

* * * * *

So first, find out who you are. Your deepest values and morals.

And remember that discovering who you are is a journey-- you're never done. So always be ready to add things on to this category, and revisit the subsequent steps.

Work on this list for a good 30 minutes before you go to the next step.


B. Sometimes Wanting is better than Having

Most of us have something in our closets or garages that we really, really wanted but, after getting it, didn't use.

Why?

Oftentimes, it's because what we've chosen does not line up with who we are, deep down.

Think about the things you wanted-- lusted after-- but once you had them, the thrill was gone.

Make a list of those things.

Now, see if the things on that list line up with your core values.

If they do, ask yourself, "Why do I not like this _______?"

Your answers will help guide you in further defining your core values.

They may also help you see how much time/money is wasted when we pursue things that don't really fit who we are.

* * * * * * * * * *

C. What do I really want?

Now that you've identified some of your deepest traits, what are the things you like to do, that are in line with these traits?

This is by far the most difficult part of the exercise. Because it's easy to tell yourself you really want something-- but it's hard to know if doing that thing will be fulfilling.

So start with the CORE stuff you worked out (examples):

-Family
-Health
-Happiness
-Being outdoors
-Being around other motivated and passionate people

(These are some of ours; yours may be very different)

Next, dream a little. What are things that you like to do, that fit in with the list you made?

For instance: Taking a walk with the family feeds two of my core needs. And if we are all motivated and pasionate during the walk-- and happy-- then WOW!

Walking outdoors with a happy family becomes a very fulfilling activity (for me).

But it's not something I would have picked as a high priority activity, before I identified my core traits.

Work on your things-- but don't limit yourself to your original list.

If you find something that you love to do (like sex), but it's not on your original CORE list, put it on the list.

It's not unusual for you to come up with *more* CORE items during this part than the previous two.

***** ******

D. Fun Stuff

This is one of the easy parts.

As fast as you can, write down at least 20 things that you LOVE to do.

You may not have done them for a while.

Don't take more than 10-15 minutes for this-- this is not something to "think deeply" about-- this is light-hearted reminiscing-- Thinking about stuff you've done in the past, and enjoy doing.

When you have at least 20 things (30 or 40 is OK, too), get 2 different colored highlighters.

Mark one set of things that you currently do every day or every week (like, go to Starbucks, or listen to your favorite radio show/station)

Use a different color for stuff you haven't done in a long time, or at all.

Get your list of core traits/values/characteristics.

If you want, you can give each Core trait an abreviation (e.g., F= Family, = Happy, H= Health, etc).

Now, look at your "Fun Stuff" list you just made, and next to each item, list any core traits it ties in with (if any).

**************

EXAMPLE:

Walking Outdoors w/family (Ex, Out, F, , H, P)

Ex = Exercise/fitness
Out = Being Outdoors
F = Family
= happiness
H = Health
P = Spending time w/passionate and motivated people

***************

Go down through the entire list, and see what happens. You may have some activities with LOTs of CORE items. And you may have some with none at all!

This doesn't mean that the non-CORE activities aren't important. On the contrary- it could mean that these activities feed some part of you that you have not yet identified as a CORE part of who you are.

So go through the "non" CORE labeled things, and think about them. What do they do for you? What part of your soul do they satisfy?

If you come up with new CORE items, great. If you don't, that's fine, too.

But whatever you do, DO NOT take any items off your "fun stuff" list if you have no CORE attributes next to it.

Unconsciously, we do things that feed our soul. And if you find any "fun things" that don't make any sense when compared with your CORE traits, perhaps you are feeding a very important part of yourself-- but have not yet identified this as a CORE part of you.

Remember, CORE traits are yours, and yours alone. They don't have to be admirable qualities. They just ARE. YOU.

(EDIT: Made a few changes, to tighten things up)

* * * *

Next step: Taking Action (I'll post this soon)

 

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[Russ H]

Before we start, a working definition:

Financial Freedom means never having to work again. Ever. You have enough money to live the life you've chosen, without having to go to work, or do any kind of regular employment or self-employed activity. For the rest of your life.

This does not mean you *can't* work. Simply that you don't have to, if you choose not to.

Part II: Taking Action

You are already taking action.

But are they the *right* actions for financial freedom?


*****************************


It costs money to live. Food, shelter, clothing-- everyone needs the bare necessities.

Problem is, too often we get caught into consuming *more* than we really need.

A Cell Phone, Cable TV, New cars, new clothes, and new home decor items to match what we see on TV and at our friends houses.

And let's not forget all of the other great toys we love: Boats (incl personal watercraft), Going out to movies or dinner (or for a drink), getting a great cup of coffee (Decaf Latte, Grande, skim milk, please). Or how about that great bottle of wine . . .

Fact is, all of these things are fun-- but few are essential.

The first part of TAKING ACTION is figuring out your bare essentials.

What are the things you must have to live?

Examples:

1. A house. Do you need a house, or will an apt do? And if you own a home, does it have to be a 2400 square foot beauty in a great neighborhood, or would that 1200 square foot row house 8 blocks away (and in the same school district) work just as well?

2. A car. Do you need a newer car? Do you tell yourself that the reason you buy a new car is that you can't afford the time lost for the problems with an older car?

Do you actually believe that? :nono:

Imagine yourself driving yourself and the family around in a 6 year old mini van. Or a 10 year old Toyota with 80,000 miles on it.

Are you wincing?

If you have already achieved financial freedom, and don't have to work for a living, you can drive whatever your plan allows. It might even be a spiffy new car. Or perhaps even your dream car.

Are you in the SLOW LANE?

If you still get all or part of your income from being an Employee, or you own your own business (Self Employed) but have lots of loans and car payments, then guess what?

You are taking the SLOW LANE to wealth.

Why do you have that new car? That 3 bedroom house? Why did you put all that stuff on your credit card last year?

As long as you care more about what other people think of you than what you think of yourself, you are going to spend a LOT more time in the slow lane, slogging it out day after day at the J.O.B. (or your own self employed business), trying to get ahead but never really making that huge BREAK from SLOW LANE THINKING.

Why? Because as long as what you drive, where you live, and what you wear are more important to you than being financially free, you will be loading your life up with all kinds of useless junk that you feel pressured to own.

Imagine if you got rid of EVERYTHING in the next 6 months. Sold it all on Ebay and Craig's list. Sold the car, sold the house, sold the clothes.

Started over.

What could you survive on?

I'm not suggesting you do this. But you need to get your mind in this place-- to really seriously consider what it takes you to survive.

If your life's dream was to get a college degree, and you had to work nights to attend classes during the day, you could live pretty frugally, right? Live in a small studio, walk to work and class, and live on cheap food. IF THAT WAS YOUR DREAM, you could do this, right? Many people have.

Becoming financially free is no different. If you truly dedicate yourself to the task, you will change your priorities. Buying that new car is now less important if it's going to add 5 more years on to your "have to work" time.

An example:

If you had to drive around an old Toyota pickup truck for only 1 year, knowing that at the end of ONE YEAR, you'd no longer have to work again for another day in your life, would you do it?

Let's say it would take 3 years to retire if you drove the truck, vs 8 years if you got to drive around in a new Honda. Is driving around that truck still worth it?

Each and every decision you make adds years to when you will retire.

The car you drive, the clothes you wear, and the house you live in-- EVERY LITTLE THING ADDS UP ($$) AND MAKES IT HARDER TO GET OUT OF THE SLOW LANE.

Load yourself up with lots of stuff, and it will take a looooooooong time to be financially free.

Think of yourself as a huge semi, full of stuff you don't use, trying to make it up a long, steep hill.

How much faster could you scale that hill in a small car with little or no stuff inside?

Prepare to Enter the Fastlane

Get some basic reliable wheels, a small, modest place to live, and wear basic clothes, and you will be able to stop working for a living years-- or even DECADES-- earlier.

That's really all it is. Each thing we buy sucks away at our freedom. The more stuff we get, the longer it takes to be free.

So the first question of TAKING ACTION is: How little can I live on?

What do I need to survive?

And once you know the bare minimum it will take . . . how much does that survival existance cost, per month?

***********

Coming Soon:
-Survival vs Happiness
-Do I *have* to live like this?
-The logic for living on less
-How long wil it take?
-My Dream Life

 

[yveskleinsky]

I tell ya- there have been two major pieces of advice that I've gotten from this thread.

1. The tendency to just shrug this exercise off and think that it won't make a big change in your life is huge! The fact that you had said that when you did this exercise you thought the same way, but did it anyhow with big results- made me do it. I guess originally thought, "Yeah, I get it- latte factor crap. I can just skip the lattes and it's the same as doing the exercise". That, and I thought this type of exercise is more for people who have no idea about what's going on in their financial life. I mean, I pay my bills, I have money in the bank and I live within my means- so I wouldn't gain anything from this exercise. Wrong! Now that I've been doing this for 2 months, my financial life is much improved- and it's become kinda fun!

2. I had chalked up about $1100 of my first month's expenses as one time expenses because they were for furniture- so they "didn't really count". You had made the comment that every month we can justify expenses that "don't really count"- there is always some reason, birthdays, Christmas, office party, new furniture, etc. Pay attention to these- as they can really be the dark horse in your race to financial freedom!

Aha's that I've had:

1. My level of attention to my finances is good, but to get to where I want to be- it needs to be great. ...and this is just the first step.
2. This exercise is not about tracking lattes- it's about waking yourself up from financially sleepwalking.
3. The changes that you will make in your life once you "wake up" are amazing- and there is a trickle down effect.

I hope this encourages other people who are or were unmotivated to do this exercise. If you do this exercise, you will make changes in your life- consciously and subconsciously- you owe it to yourself to do this.

 

[Rawr]

bump.


also,

"
For years, I read books that gave me all kinds of good ideas and strategies for wealth. I felt that if I understood the concept, I had gained the value of whatever exercise the book wanted me to do.

I was wrong.

As in life, the key to success is doing. Not reading about it and thinking how cool your life will be if/when you do it.

We talk about the fastlane all the time here.

The fastlane is about doing.

Not just talking or dreaming about it.

Doing it. "

Some of the best words ever uttered on this forum. Russ H is the man.

 

[AroundTheWorld]

A few years ago, we decided to make some changes. We wanted to travel for a while.... Hubby wanted to sail, but I wasn't quite ready for that, so we went with a big RV trip instead.

We rented out our house, and gathered up all our possessions for a garage sale. Each family member was allowed to keep only a backpack, and whatever they could fit into it. Everything else was sold. Kitchen appliances, furniture, sports equipment, all of it.

Sitting in the sun that weekend, out in the back yard while people offered 5 cents for some little trinket I used to "love" was very strange. I went through periods of sadness, excitement, and regret.

In the end, there were a few things I could not part with:

Pictures
Books

All those things, along with our really important paperwork were put into a container and stashed away somewhere. Anything that did not sell at the garage sale was taken to the salvation army. Then, we hitched up the travel trailer, piled into the car and took off.

We stopped, literally on our way out of town, and had a good bye BBQ with some friends. Just as we were getting ready to drive away, someone asked how long we were going to be gone. Hubby said "Oh, only about a month." People looked at us like we were crazy. We later realized that it was use of the word "only." Everyone at that BBQ had a job, and were only given 2 weeks in a whole year for vacation time.

We rolled down the road, with all of our worldly possessions right there with us(except our investments). We were in our only car. All that we owned was coming right along behind us in our travel trailer.

Before I started the entire process, I would have thought that eliminating nearly all of our possessions would have been really difficult. At in little moments, here and there, I did have a little pang of sadness. I missed this little trinket or that little what-ever-it-was.

However, the overwhelming feeling I had was one of freedom. You mean.... I can go anywhere? I am not tied down by all of my possessions? I don't have to spend time and money buying, maintaining, cleaning, and walking around them? My home is the world? Checking out some place new is as simple as hitching up and filling the tank? (Oh, and not forgetting the kids)

Eliminating all that clutter is VERY liberating.

 

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[Sid23]

Russ - thank you for all the work you've put into this thread.

I think I just discovered what it feels like to understand the difference between WANTING and your true VALUES.

Throughout the process of creating my plan, I know I've WANTED to have my work outlive me in the form of creating buildings. But I realized something very important about my VALUES today.

i'm at work today, working on creating buildings and trying my best to acquire the knowledge to become excellent at it. My best childhood friend is in town for 24 hours. Right now he is taking a tour of San Francisco, walking around, seeing the sites, having a beer out by the Bay, etc.

As I was walking back to my office after lunch, it hit me. I realized I didn't want to go back to my office. I wanted to be with my friend. I wanted to catch up, laugh about old stories and have a beer with the guy who was my best friend for 17 of my 29 years.

No building in the world could ever mean more to me than spending the day with my friend. Not Trump Tower, not anything.

WANTING and VALUES. There really is a difference. WOW.

I am on the verge of tears as I am writing this. I think that means I'm on the right path. :smxB:

 

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[Russ H]

Rep points for you, yveskleinsky.

Your insights are *exactly* why I did this thread.

For years, I read books that gave me all kinds of good ideas and strategies for wealth. I felt that if I understood the concept, I had gained the value of whatever exercise the book wanted me to do.

I was wrong.

As in life, the key to success is doing. Not reading about it and thinking how cool your life will be if/when you do it.

We talk about the fastlane all the time here.

The fastlane is about doing.

Not just talking or dreaming about it.

Doing it.

-Russ H.

 

[yveskleinsky]

Okay,

My core values are:
- honesty
- accountability
- learning something new everyday
- cultivating awesome friendships with awesome people
- loyalty
- stability
- happiness and laughing...a lot
- helping others who want to help themselves
- stability (organization in every aspect)
- personal development
- being a good friend
- trying new things- pushing my comfort zone
- squeezing every drop out of life (trying new things)

Things I like to be around:
- campfires
- pine trees
- good friends
- alcohol :smxB:
- my dogs
- people who laugh a lot
- good conversation
- passionate and motivated people...people that are achieving their dreams
- anything creative...rehabbing a house, painting a picture, writing, etc.

Things I like to do:
- dinner parties with good friends
- jog
- walk my dogs
- rollerskating/ ice skating
- teach...I love that "a-ha" moment with kids or teens
- laugh
- creative conversation
- visit this site
- flirt with my husband
- organize something (very OCD habit of mine )
- meet new people
- try new things
- eat sushi and drink saki in large quantities
- dream big
- break my big dreams down to little dreams to see how it could be done
- push myself
- watch an episode of Law and Order after work with a glass of wine
- work on my house

 

[Bilgefisher]

Russ,
Very interesting you posted this today. Ive been following this thread and doing whats asked. Today I figured out my monthly expenses again. Yikes. I thought I was on top of things, but it appears not.

A suggestion for people that forget to write things down. If you have a debit check card, purchase everything with this, no matter how small. Make sure its a check card, because some institutions charge you for debit purchases and not credit purchases. (Which is odd since it all comes from the same place). Yes it may seem weird purchasing your starbucks with your check card, but it works. Then pull up your account online and it will list everything you purchased. At the end of the month tally everything up by category and total expenses. Everything else, you can track either through your checkbook or writing it down.

 

[BeingChewsie]

I have been working on this and have the first and second part done:

Core values: What is important to me

*privacy
*family
*reading
*health
*Acceptance
*love
*teaching
*being helpful
*a "society of two"
*being in control over time alone and time with other people
*no drama
*no unorganzied chaos
*quiet
*animals
*traditions
*traditional things/lifestyles
*consistent routines
*being home

What I like to be around:

*oceans
*sunsets
*dogs
*my sig other/my son
*christmas lights
*kitchens

Things I like to do:

*Read
*Make sandcastles/walk on the beach
*Fall asleep listening to waves at the beach
*cooking
*drinking white wine
*sex
*spending time alone
*spending time with my sig other and my son
*word search puzzles
*afternoon naps
*teach
*Forgot to add watch Law and Order SVU

I know my bare essentials, I drummed my life down over a year ago so I could work less and spend time with my son. I only use a debit/check card, never have cash. I got a paypal debit card attached it my bank account, so I can track every dime I spend(minus my rent) just by logging into paypal and I get cash back on every purchase because I use my paypal card. I cut my expenses down to bare bones and there are "no little extras" that creep in anymore. I have to be disciplined.

Little extras we do get like vacations, my kiddo doing extra stuff like golf/karate, seminars, or anything like that comes from RE Taipan, he is above and beyond in the good to us department. Those things are total freebies/bonus points for me and my son.

I have really been enjoying this. It is a great exercise. There were no real surprises in my core values, a pretty consistent theme about privacy and being alone with just my sig other and son runs through those and my choice of activities.

Looking forward to the next part!

 

[wildambitions]

Russ,
Yes I have, my husband has, and then we combined a list (2000). I think that was how we came to the decisions that we had to make the drastic changes that placed us into the bare essential living era. From there we set up a five year plan to get us restablished financially (2005). We sat stagnant for about a year, not sure of what we wanted to do next and then last year again to where we are now.

Ironically, I coppied your post to complete again last week and happened to do it at the same time (different location) as Yves (I keep telling her great minds think alike :smxB.

Something that we also did was to list our core values with which were most important to us. (If we had 5 values, we numbered them in order 1 having the highest value). When we compared our lists they were not the same. To survive as partners (I would think that this might also work with business partners) we needed a complete list that took into account each others values.

I read in the book series "Light Her Life & Light His Life" to always remember that one persons core values and morals are just as important to them, as yours are to you. This was particularily deep for me.

Anyway, I was approaching the exercise for my personal life because I knew that my husband and I needed to start setting up our next five year plan. Our next plan should get us to the "comfortable" stage financially (RK stages: secure, comfortable, excessive cash) and if desired will be able to continue toward the excessive cash stage.

For my own sanity I have to have all areas of my life in order before taking on a new area - especially one like a new business (ad)venture. Now that I know where I am personally I will be able to duplicate the process and develop my business plan(s). This part is challenging for me because my husband loves the concept but is not as willing to make many sacrifices to gain big rewards. Financial security is very high on his list of core values. I am the opposite, but my family core value has priority over everything except God (personal choice). At this point, it becomes a balancing act. Once I knew that from the exercise (yours or any one of many others that I try to do often) it became much easier to develop a plan that will work for us.

 

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[randallg99]

Kudos to Russ... he is really hitting it on all cylinders with this thread and there is lots for all of us to learn.

This imported list for one weeks activity from online account does not include cash purchases made ie lunches and little deli stops... also does not include any major household expenses. Most of the money spent is on food and clothing for kiddo. Could we have saved some money? You betcha.

but, I have stopped fighting my wife on trying to reduce expenses and instead I am focused on how to produce more income.

My planning included shifting the energy and focus diligently to increasing revenues and cutting expenses in my businesses. I have also reduced expenses in my maintainance with real estate holdings and have made deliberate attempts to increase rents where allowable. I have also spent more time learning about institutional debt and mortgage holdings and have profited nicely in the markets as a result.

The mental perception in developing and executing a plan has allowed this incredible shift in paradigm has prevented me from expending energy on futile efforts ie fights about how much the card is swiped at Target... anyway, this list looks different than it would have if we did not have a young child. We used to travel to NYC often and visit Philly for nice dinners with friends at minimum $100 per couple. But the list below includes a couple of dinners out, some ToysRus visits, CVS, Target, BJs, Supermarket and I think we are actually not spending as much money on ourselves as we have in the past...


Date Amount
9/24/2007 $(303.20)
9/24/2007 $(42.10)
9/24/2007 $(20.83)
9/24/2007 $(114.72)
9/24/2007 $(62.79)
9/24/2007 $(41.72)
9/24/2007 $(16.26)
9/21/2007 $(65.00)
9/21/2007 $(19.08)
9/21/2007 $(8.07)
9/21/2007 $(145.15)
9/20/2007 $(13.75)
9/20/2007 $(58.00)
9/19/2007 $(7.16)
9/18/2007 $(20.50)
9/18/2007 $(41.82)
9/17/2007 $(64.44)
9/17/2007 $(61.28)
9/17/2007 $(41.38)
9/17/2007 $(12.00)
9/17/2007 $(128.06)
9/17/2007 $(23.20)
9/17/2007 $(14.62)
total $(1,325.13)

 

[yveskleinsky]

Groceries/eating out: $326.87 (OMG!)
Lawn Care: $80
Cleaning: $120
Wedding Gift: $100
Hair appt (for wedding) $100
Car Payment: $325
Student Loan: $250
parking: $24
Gas: $120
Hair cut: $45
Shopping: $262.47
Mortgage (Max Relax): $600.
Mortgage #2: $250.
Utilities (Max Relax): 278.58
Catalog order for school: $33.75
Mortgage (Cozy Cabin): $792
Utilities (Cozy): 104.50
Credit card payment: $3349.47 (not normally this high- ordered 2 pieces of furniture)
Walmart: $77.15
BofA: $250.

Total: $7488.79

So after regaining consciousness from the shock, here's my explanation, and here's what I learned.

1. The cabins pay for themselves- I was just listing expenses, not income.

What I learned...

I have been chugging along thinking that I'm doing pretty good financially. I mean I pay all my credit cards off in full each month, and I have 5 months of expenses in savings. ...That's great- but that's only half the picture! I realized that I was spending unconsciously. As soon as I started tracking expenses, I had a really hard time "spending normally". I couldn't help but think about where my money was going, and found myself less likely to buy random things like a diet coke at the store. Also, I became aware of how scattered I was (not that I am aware, I am less scattered). During this exercise, I misplaced my spending log about 4 times, and only saved about 30% of the receipts. Since I have found this exercise to be so valuable, I bought a little book yesterday (.99) that I am writing down all my spending and then I am putting the receipts into a little pocket book. I am really excited about where this exercise will take me in the coming months.

As a side note, I also began writing about who I am, and who I want to be and how to bridge the gap- this exercise has been leading to some interesting realizations about what else I need to change in my life!

Thanks Russ!

 

[Russ H]

OK, let's recap:

If you're truly, madly, deeply involved in this exercise, by now you've:

1. Identified your CORE values and characteristics
2. Examined your needs, wants, and likes.
3. Started to TAKE ACTION-
-tracking your daily expenses
-identified some spending habits and expenses that are, well, eye-opening

*******

And, if you've been casually reading this thread, following along, but not doing the exercises, chances are you're no different than before you started. :smx4:

So, a quick time out to ask those who have read, but not done, these exercises:

Why not?

What's held you back?

*******

Most of us are here because we are working towards being financially free. We feel a deep need-- a drive-- a burning desire to make more of our lives than the 9 to 5 drudge that everyone else around us seems to think is the only way to go.

We think there is another way.

A better way.

*******

But here's the problem: No matter how much desire, or passion you have, or how frustrated you are with a rat race existence, nothing is going to change. Nothing.

Until you start doing.

*******

So, I ask the "readers" (not the doers) of this thread one last time:

What is preventing you from doing the exercises?

You know the answer of course.

YOU are the only thing preventing you from doing these exercises, taking control of your financial future, and moving ahead.

How long will you let this continue? Until you're 50? 70? In the ground?

*******************************

Part Three: WAKING UP! (taking stock of what is essential)

If you've been doing the exercises, chances are you've had a few big surprises, especially this last phase-- tracking every penny going into and out of your life.

What Happened?

If you're in shock right now, that's absolutely normal. For some of you, this is the first time you'e started to become financially aware of what's going on in their day to day lives.

Kinda like waking up from a dream.

When I first did this exercise, I felt like I had awakened and was now living-- a NIGHTMARE!

My first reaction was shock. Then denial ("these expenses were unusual this month"). Then, after I'd tracked expenses for a few months, I discovered-- to my horror-- that I had "unusual" expenses each and every month.

Dang.

Turns out, I was just being a typical American consumer. Eating out, driving my car(s), and buying stuff.

Buying LOTS and LOTS of stuff.

A sickening amount of stuff.

Stuff that I never used. Or used only occasionally.

Stuff, stuff, stuff.

Those of you that are pack rats know just how much stuff you buy and never use-- it accumulates and takes over your life.

And those of you who are adept at "purging" things that aren't used have been spared the awful truth: That you are essentially working hours/weeks/months, to buy STUFF . . . much of which, you never (or rarely) use. By getting rid of it (giving it away, loaning it to friends, throwing it out, or (gasp!) selling it cheap)-- you are like a tub full of money with a slow leak at the bottom. As you constantly get rid of the things you don't use, you don't realize just how much all of this STUFF is costing you.

**********

This realization affects everyone differently.

Some folks who were "purgers" start hoarding-- never letting anything go. This helps identify how much is coming into your life (by stopping the "leak" of purging). But in most cases, it's terribly depressing. STUFF piles up, and you feel out of control-- like your STUFF owns you, and not the other way around.

Others (the pack rats) often start purging-- via garage sales, donations to Goodwill-- anything to rid them of the STUFF.

Neither one of these approaches is particularly healthy-- but both are pretty normal reactions to waking up and realizing just how much STUFF you have and don't use.

*************

Voluntary Simplicity

The route I took, once I realized how much STUFF was weighing me down, was inspired by a quote from Henry David Thoreau:

"Our life is frittered away by detail. Simplify, simplify."

I looked at my life, and at what I spent-- and for virtually everything-- I asked:

"Is this essential to my life? My happiness?"

And most important:

"Can I live without this?"

After doing this for a few weeks, I was stunned.

Virtually *everything* in my life was "nice to have around", but not "essential".

Another way to look at this is: If my house was on fire and I can only save what I can carry, what do I choose? (this assumes that every living creature in your home is already out safely).

What I would grab?

My answers (back when I first did this exercise as a single guy, 15 years ago):

I'd grab my photos from traveling the world. And my guitar.

That's it.

Everything else could go.

Everything else was not essential to me-- and was replaceable, on some level.

Note that this was 15 years ago, when I was a younger, single guy. Now, my list is shorter:

Nothing.

The only things that are absolutely essential to me are my family and pets (which were excluded in the above exercise).

Everything else, while nice to have, is just STUFF.

It can be replaced. And if it can't, I could live just fine without it.

*********

I know what you're thinking.

"He's full of cr*p. He'd grab something if he had the chance."

You're right.

I'd grab my laptop, or backup hard drive, because I have so much of my life in there (past work, etc), and my wallet, because it has my ID and credit cards (enough to survive without anything else).

But both of those things are not ESSENTIAL to my continued existence. I could live without them.

**********

Time for some fun. Remember, this is not a REAL fire (in a real fire, you get you and your loved ones out, right away, and don't go back inside!).

What would you grab?

Could you live without ALL of your stuff?

If not: What is ESSENTIAL to your life?

What are the things you cannot live without? (remember, people and pets are excluded from this exercise).

(Let's assume that, if you have insurance, it would cover the losses within 30 days).

-Russ H.

 

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[Russ H]

OK, time to extend the "STUFF" concept:

If you've been following along, you now know what you absolutely need in case of a fire-- your bare minimum essentials that are irreplaceable, or at least (in the case of prescription drugs), essential to survival.

Now comes the hard part:

Let's assume you HAVE to move, and you must leave most of your belongings behind.

Similar to the fire exercise-- with one catch:

You WILL NOT replace anything. What you take now, is all you will have to live on.

And here's the kicker: You need to bring only the things that will keep you happy, and allow you to continue living the life you choose.

So, if playing video games is an essential part of your life, you must list the game console, the actual games, and whatever device you need to play back/view the games.

If you completely get rid of something (like all of your kitchen items, or your bed), you need to mention how you plan to eat, or how/where you're going to sleep.

This list takes longer.

And it requires a LOT more thought.

It may start out as a total inventory of what you own (GREAT for insurance purposes).

And from there, you may whittle down things to only those essentials.

Whatever you do, remember the 2 rules:

1. You need to keep things required for day to day survival, at a minimum

2. You need to keep anything that you feel is essential to your happiness.

Keep in mind that you can take an inventory and just say, "Here it is."

Or you can look at each and every item you own, and ask, "How does this contribute to my life?"

I did this w/an excel spreadsheet, putting estimated replacement value in the column next to each item, and using another column to mark the item as essential, or not essential, and which non-essentials I needed b/c they made me happy.

You could also do it as a word doc, but it's a bit more work to sort things.

Save it on your PC, and we'll find a place somewhere online where we can post the files.

-Russ H.

 

[AroundTheWorld]

<<< KID COMMERCIAL KID COMMERCIAL KID COMMERCIAL >>>>

My kids also really do better with less "stuff." We have some sensory integration / asperger's type challenges in our house, and getting rid of all that plastic and artificial "stuff" (to include the TV) sure made a huge difference in the house. Friends would often comment on how empty the kids rooms are.... but, our kids were never "lacking" of entertainment or meaningful activities. They have real hammers and nails and wood carving kits. They have knitting needles, and sewing machines and a keyboard and harmonica and books about how to weave baskets and real pots and pans, etc.

Choosing to selectively let REAL / USEFUL / MEANINGFUL things into our children's lives can sure pay off in miles and miles of happiness. Why buy the latest greatest plastic gismo anyway? It'll just break in a month and end up in the landfill - - - or get played with for a week, then lost in the bedroom abyss.

I didn't just do inventory, I did a dumpster and anything else went on ebay. Some of the reasons for that are because of my sons autism. He does better in an uncluttered calm environment. I know people walk into my condo and wonder if I'm either moving out or have just moved in and that is fine. I like Sonya am very cautious and slow about allowing things to start creeping back into my life.

Sue

<<<< YOU MAY NOW RETURN TO YOUR REGULAR SCHEDULED PROGRAMING >>>>>

 

[wildambitions]

Alright, I guess it is time for me to get back into this. Russ, you are right in that our inventory was done as we planned to move. One thing that I wish that I HAD done that I did not was keep a list of EXACTLY what we have in storage with us. I do have a pretty good memory of what is there (even where it is in the storage unit), but I should have made a list for insurance purposes. I think the reason I did not was because everything that we left was not NEEDED. Anyway, back to task...

Right now we do not have anything that has not been part of our plan with us in the new home. We have made many new (planned) purchases because of the new home. Nothing is excessive. Most are creature comforts like furniture that we do not have in storage. Most will not be replaced for at least 10 years. Most were paid for with cash or financed with 0% interest for a year and which we make excessive payments on to avoid having too much "bad debt". The hardest part for us thus far is making sure that we don't get a case of the "gotta have it nows" and make purchases of what we already have back in storage. This is especially true for my auto mechanic husband and his tools.

We have had some trouble making it a priority to go back to our storage facility (back where we moved from) because we don't really NEED any of it. But we are also PAYING to have it stored and because there are SOME things we'd like to have (our bed). So, we FINALLY set a date. AND we told friends back there when it was. (We told friends so that it would force us to actually go through with making it happen)

NOTE: IF YOU HAVE A GOAL AND A PLAN, TELL PEOPLE ABOUT IT. WHEN YOU TELL PEOPLE ABOUT IT, IT MAKES IT MORE LIKELY THAT YOU WILL ACTUALLY FOLLOW IT THROUGH AND ENACT YOUR PLAN AND REACH YOUR GOAL. And the funny thing is, THE MORE PEOPLE YOU TELL, THE QUICKER YOU WILL REACH THAT GOAL.
("I feel, I feel the need for speed! Rep+??? It has been awhile)

OK, so back to the stored items. Our plan is to go back, evaluate with keep, sell or donate. Load truck. Come home and re-evaluate upon arrival home. This is because the are things we don't want or need in our new home but could use here in NM in the cabin biz.

Things I have learned are too many to try to list so here are a few.
1. The one above in the note is HUGE and I have used it many times. Usually you don't tell anyone until you are convinced that you really ARE willing and wanting to enact your plan.
2. When making purchases, evaluate the NEED compared to the WANT. It is OK to purchase a "want", just know that it will detain you getting to your goal by that much. Evaluate if putting off you goal is worth it.
3. Even if you purchase a "want" don't regret it even if it was a poor decision. Learn from the mistake and find a way to not repeat it. I guess that should be true of all mistakes.
4. Change your view of mistakes as "just one more way NOT to do something".

That is it. "Easy? No, but it is simple." I think Jim Rohn said that.

 

[MonstaFlex]

Took the whole day to come up with the three parts, but here it is:

Here is MonstaFlex's Plan Development:

Part I.

CORE VALUES (What Is Important To Me)

- Freedom
- Happiness
- Kindness
- Friendliness
- Accepting
- Growth
- Patience
- Diligence
- Humility
- Health
- Safety
- Loyalty
- Honesty
- Charity
- Family

Things I Like to Be Around

- People who are masters at their tradecraft, so I can be just like them
- Friends/People who have similar Core Values as Me (Accepting/Friendly/Kind/Honest)
- People who help me when I'm down
- Non-conformists/people who do not follow everyone else (Getting on the Fast Lane > Staying on the Slow Lane)
- Friends/others who duel against each other in video games/games in general (like Chess/Connect Four)
- Cold environments like the indoors/the apartment/stores/malls/inside cars/trains/subways
- Brightly lit rooms
- Water/Cold Sugary Bevereges
- Computers with a fast internet connection
- Cats/Dogs/Birds/Other Animals/Pets
- Air Conditioners

Things I Like to Do (Activities)

- Surf The Web
- Being around my family
- Teach my family/friends what I know, even though they make fun of me because they do not see any results
- Occasionally play addicting video games
- Reading/Listen to Audio Books
- Learning new things/Trying out new foods
- Research on (spiritual/success/money) Products/Methods/Reviews
- Help Other People with their problems
- Teach/Give Advice
- Write/type reviews/articles
- Meditate
- Edit/Redit my posts/e-mail to make sure it makes sense
- Recheck posts/e-mail to see if someone/person I sent it to responded
- Make sure I always have a sufficient amount of money as a security blanket, or else I do not go out
- Buy small toys/gadgets/video games/for entertainment
- Eating/Sleeping
- Waiting For/Receiving Packages
- Sometimes play Texas Hold 'Em/Card Games, weightlifting, play basketball, biking, golfing
- Dream about bigger positive situations I want to be in/be by myself and just think about life
- Be around/take part of creative arguments/debates/conversations
- Walk around/sit down in the park or street and just day dream
- Watch funny/dramatic/inspiring/positive/upbeat videos/movies/television shows online

:smx6:

Part II.

Tracking Down Expenses

Water $5
Food $5 (Fruits/Instant Noodles/Crackers)

$10 Weekly at best. So about $40 a month, and $480 a year.

That's about it. It all depends if my parents are tight on money ranging from $5-$15 weekly. Sometimes I don't get anything at all. Other times if I want to buy a book that I am interested in or some program that I want to join, they'll give me $75 at most. Weird part is I'm used to this way of frugal spending, because I have 4 brothers and sisters (2 bros, 2 sisters, and I'm the oldest). I don't drink, drive, or watch movies each weekend. I bought my clothes at Footlocker (6 Plain T Shirts for $20!) My parents own the apartment, and they basically spend their money on the food/laundry/gas/bills. I guess the reason why my parents haven't kicked me out yet is because I don't cost much to keep around...oh and they "love" me.

:smx4:

Part III.

Objects I'd Grab In a Fire

- My Holosync CDs (For Meditation) w/ CD Player and Headset.

Inventory

I'm with NerdSmasher on this Part. All the stuff is really my parents...so to sum it up. Just give me a computer with fast internet and a desk/chair for writing/reading, air conditioner, place to crap and piss/take a shower, cold water, good bed for my back, and some noodles and I'm good to go.

 

[Deege]

Part I.

CORE VALUES (What Is Important To Me)

-Freedom
-Family
-Friends
-Health
-Happiness
-Loyalty
-Working hard to get what i want
-Growth
-Prosperity
-Honesty
-More (brain dead)


Things I Like to Be Around

-People without a negativity "aura" as i like to call it.
-A lot of trees.
-The Ocean
-Family
-Friends
-Computer
-Juice
-All animals
-Non-Conforming people.

Things I Like to Do (Activities)

-Surf, Snowboard, Skateboard
-Chill with friends and family
-Listen to music
-Think
-Sleep
-Hang with the Girlfriend
-Live

Part II.

Tracking Down Expenses

My expenses are minimal, maybe 5 bucks here and there, being only 15 my parents kind of have my back.

I may spend up to 50 of my own dollars a year. (Dont have much of an opportunity to make money at the time being.)


Part III.

Basic needs

-Family and Friends
-Food
-A place to live


What I'd need to grab from a fire?

My Wallet, Cell Phone(Which acts as my music player,iPhone) , A snack, Running Shoes, Animals.

What would I want to grab?

My Computer, My T.V., Guitar, Skateboard.

_______________________________________________________________________

It may seem kind of useless for me to post since i neither have an income or expenses. But this is where i stand, and i want to get ahead before im 18. Way ahead.

Cheers.

Goal for Monthly Income: NaN

 

[LightHouse]

Whew, sorry to bump an old one. Russ i tried to send you a note on this but can not. Anyway, i am a product of my preaching, taking more action and not tracking. IE, when i get the idea i DO it instead of sitting around doing nothing. Typically do not spend on any unnecessaries if i do not have to.

All great and fine right I'm out there doing something making money working towards my goals...... WAIT.... what are my goals? what are my plans to purchase a house etc etc? CRAP....


I have no idea!

Which has lead me back here to the roots of this forum and these threads. I am on the highway with no GPS/directions. I am moving just not sure where. Sometimes that can be a blessing but lets be serious, that blessing can only last until you are in the dark back roads and totally lost!


Lesson learned thus far, While taking action is good, try to figure out where you are going at the same time! If not Start now!!! ahah


Anyway i have condensed the pieces into a work doc that i will go over tonight and DO the exercise. I am going to try to actually make a plan of my life... that way when asked i have an answer and also a direction to base major decisions off of.


Thank you for taking the time to do this Russ!

-Chris W

 

[CardinalsFan]

Core Traits:
-Family
-Health and Fitness
-Happiness
-Good Character
-Active Learning
-Music
-Reading
-People

Things I like to be around:
-different kinds of people
-anything that gets my adrenalin pumping
-anything competitive
-the gym
-my jeep
-the beach and the sun
-outdoors
-music
-parties of any kind
-driving anywhere
-teaching anything
-new things and experiences
-the fam
-people who are better than me at something/can teach me a thing or two


Things I like to do (activities):

-playing and watching any type of sport or competition
-working on the jeeper
-working out and teaching people about health and fitness
-cooking
-going out
-being spontaneous
-traveling
-being with family and friends
-reading
-driving
-anything too crazy for the next person to do
-listening to music
-eating
-chillin
-much more


Goals:

• to live a life worth living, to be excited about every day
• to not have a JOB
• to be financially stable with passive income
• to make time by making a ton of money
• to be loved by the people I love
• to be a valued role model
• to never stop learning

Last Months Expenses:

Brutally honest? I started this on a really bad month…a road trip to vetch and spring break, but here it is anyways.

$391.91-spring break (everything including hotel, gas, food, sunscreen, alcohol, cover charges ect)
$186.99-food and hygiene products
$118.01-gas
$180.51-fast food
$110.76-alcohol and cigs
$57.50-domain names
$50.13-clothing
$26-laundry
$22.02-books

My parents pay my rent most months now and they also cover my insurance. They just started giving me some money for my cell phone so I took that off the list as well.

Total: -1143.83

Last Months Income:
523.66

Net Loss:
-620.17

!!!!Now im freaking out!!!!

but I refigured the numbers and I am no where near that bad on the typical month but I am still spending about $20-60 more than I make each month. What a dumbass…seriously. At least I had saved up for spring break way before I went.

What I would grab in a fire:
Wallet, cell phone, and keys

Inventory:
I have a bunch of crap I don’t need now that I think about it. I’m about to hit up ebay for sure.


Thanks Russ, this really opened my eyes.

 

[kwerner]

I guess I've been hoping for a few "AHAs!" here--

After you started tracking your expenses, and looking at all the STUFF you owned, what happened?

Any AHAs?

EXPENSES
I discovered:

• Eating out is expensive
• Our food bill is one of our highest monthly expenses - and we don't even go out to eat at (nice) restaurants all that often - mostly just fast food restaurants here and there to pick up something quick
• We need to earn more (passive) income! :smug2:
• Traveling is a worthwhile, but expensive, hobby - however, thanks to Jill's tips at the B&P it may get a lot more affordable
• Being frugal with your expenses helps you have more $ for investments / business ventures / opportunities
• If you're still living in the rat race, your expenses shouldn't increase proportionately with your income, the way most Americans do (they begin earning more, so they start spending more) - this only traps you in the rat race for a longer period of time

STUFF
I discovered:

• We have a lot of crap we don't use anymore (ie. breadmaker, household goods, etc.)
• We own waaay too many clothes (especially my wife - she has dozens of clothes in her closet that she's never worn - still have the price tags on them)
• Every toy made for 1-2 year olds is colored yellow, red, and blue and they have an amazing ability to reproduce themselves in the corner of my basement - I swear they're like rabbits!
• Kids have entirely waaay too many toys
• Buy your kids' toys at garage sales (you can get them for next to nothing) - then, when they outgrow them, you can resell them on Craigslist and make a profit (I know it's silly, but it's funny, and it's true)
• We really don't try to keep up with the Joneses (46" in. LCD TV, stainless steel appliances, new car every 2-3 years, etc.) and because we don't, we have extra money set aside for investments / business ventures / peace of mind (aka "security" fund) / opportunities
• It's amazing how many people that we would consider "poorer" (for lack of a better term) than us HAVE the 46" LCD TV's, $500 video game systems, the newest car, etc.
• In my opinion, "poor" people and "rich" people have completely opposite values when it comes to money - "poor" people want to spend money, "rich" people want to earn money (and preferably as passive income)
• Okay, off my soapbox...

 

[ktzn]

Thanks!

This is an amazing thread Russ H.

I have been working on my plan now and i would like to share it with all of you, it is still a raw draft have to take it up again tomorrow just decided i will go through all 18 pages of this post today.
It will always be a draft. I mean im 20 and im developing every day and things change every day so slight modifications will be added but i will keep you updated.
I will also add a "Goal section" to it, i just need to do some calculations before thats possible.

Any feedback hints, tips, tricks, critisim ANYthing is welcome!

ps. there will be some grammar errors and such please do feel free to ignore them for now


Kristian

*********

Step 1: Who am I?
My core values:
Honesty
Being a good friend
Ability to learn every day from every source
possible
Humor
Good health
Happy family
Pushing my limits
Developing myself (both on individual initiative
and from what comes to me in my everyday life)
Being able to walk to the ocean whenever I want

Things I like to be around:

Friends
Family
Cars
Humoristic persons
Persons I feel can give my life more value
Persons with whom I can have a serious conversation
Persons with whom I can open up to no matter the subject
Persons who shares the same interests as me
Cats
Be in south European environment
Bikes (road racer)

Things I like to do:

Travel
Learning
Reading
Driving (car)
Driving (bike, road racer)
Cooking (and experiencing with food and flavors)
Eating a good meal in good company
Dream big
Push my self
Watch Top gear
Networking with old colleagues as well as creating new connections
Meet new people
Laugh
Break down dreams/things and plan how to do them or get knowledge on how they work (technical devices)
Keeping myself updated on the car market
Keeping myself updated with new innovations within Retail/marketing
Watching motorsport (live and in TV)
Talk with my cousins
Listen to music alone
Blogging for my friends and family back in Europe
Buying new clothes

Time since last done
Short
Medium
Long

Sometimes Wanting is better than Having

Remote controlled car, Police force, Different LEGO items, Super Soaker, its just not as fast as in the commercial and I didn’t have the environment to drive around in as you see in the commercials.
Ipod Touch, well it was cool in the beginning but now its just another piece of electronic equipment which is way too overrated. Its an mp3 player with the same number of functions as fancy watch.

What do I REALLY want?

Have a flight certificate and go on a road trip in USA in the air in a small Cessna plane with a good friend. Well being, happy and remembered for what I am and what I do by my closest family but also friends and even the most far away business contacts. Buying my dream house in Tuscany and having 2 dream cars in the driveway one Italian, Lamborghini Murcielago SV 670-4 and the second, German, BMW M5 Touring.

The ability to make a difference, help other people when they need it the most, help my family having some dreams of come through.


Step 2: Taking action

Monitoring expenses:

September 2009
To see these expenses please go to the attached .pdf file for diagram, thank you in advance


Questions to be asked before buying stuff:

"Is this essential to my life? My happiness?"

And most important:

"Can I live without this?"

Part 3: Waking up

What would I grab in a fire situation?:

Taken in consideration of what I have here in New Zealand: I would take my passport and my mobile phone. The simple reason for that is that I can survive without my wallet if I have my passport, my money are safely stored in the bank and not under my pillow. I would take my phone because I will need to be able to call for help and also to make a call to a family member to have a talk about what just happened. My pictures from what I have experienced here in New Zealand are all stored in an online album so I would be able to recover them. Other than that I don’t really have that much stuff with me to New Zealand that I wouldn’t be able to let go of.

What would I need if I moved:

Well as of I don’t have that much right now as stated above I will make this a “moving into something newâ€.

I would need a clean kitchen with some good pans and knives because it makes me happy to cook and I enjoy spending time in the kitchen. I would need a computer in order to keep connected with family, friends and colleagues over various networking media,(eg skype, facebook linkedin). The computer should also be capable of run a few games like Formula one games, WTCC and other racing games and first person shooter like Call of Duty and Counter-strike. I will also need a clean but not flashy bath room, I wouldn’t mind if it was too small to do a full 360 degree turn in it, it just have to be functional and clean. I will need a wardrobe for my clothes and jackets as well as a single bed to get a healthy nights sleep. The kitchen should go into a small living room with space for a couch where the mates could sit and have a beer and enjoy a game of soccer.

Inventory

• Samsung mobile (soon to be replaced by a blackberry 9000)
• Big suit case (When traveling around)
• Small Suitcase (for my papers atm)
• Big Sports bag (For soccer)
• Sony digital camera (To remember things i see in life)
• Toilet stuff, shampoo, perfume, tooth brush etc. (could do with cheaper perfume)
• 3 pairs of shoes (1 work 2 casual)
• Skiing equipment (until next skiing season)
• Sleeping back (Got a bed so will not be needed for a while)
• Ipod Touch (rather want a smaller mp3 player)
• Clothes (Every day living)
• Shirts / suits (dress code)
• Important documents eg. Paper which proves my internship at BMW, work visa for New Zealand etc. (For CV and prove that Im allowed to work within New Zealand)

Need
Dont need
(in brackets youll find explanation)
***********

Lessons learned so far:

• I got more money for this month that i had for September, Its nice to start on a fresh account and being able to track every single penny from the beginning.
• I got more stuff than I need to be happy and keep my day go by.
• I shouldnt complain.
• I gave a few T-shirts to the people of Samoa this week just to slim down the wardrope before Im going to get a few new this or next week, and they went for a good purpose.
• My goal that I had in my head is concerns way more people than i thought of in the beginning.

Soon to come:

• What will my goal cost me, base don average figures that Ill be able to pull from the "interweb".
• How should my economy look like to meet the basic needs of survival if I lived my dream
• What would my financial situation look like if I did well living the dream.
• ...

 

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[Scout]

Been on a bit of a sabbatical from the forum, due to family and slow-lane issues, so figured I would jump back in with posting my plan per Russ’s exercises. So here it is so far:

Step I: Core Values and Character

A. Who are you, really?

My Core Values:

Family
Freedom
Learning
Helping Others
Being Happy
Confidence
Contentment
Scout Law (Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean and Reverent)
Unselfish
Being Positive
Fitness
Active
Creativity

B. Sometimes Wanting is better than Having

Objects I Really Wanted but no longer need/want:

Can’t think of anything

C. What do I really want?

Things I Likes to Be Around:

Nature
Family
Friends
Happy Positive People
Tools
Eccentric People
History
Old Stuff
Good Food
Candy
Live Music
New Places
Guns
Water

D. Fun Stuff

Things I likes to Do:

Time with family
Anything Outdoors
Sports
Woodworking
Redneck Olympics (shooting, axe throwing, blowing things up, mud, cutting trees down…..)
Drinking wine with friends
Antiquing
Traveling
Family Adventures
Swimming
Inventing
Problem Solving
Learning
Conversation
Movies
Painting / Drawing
Collecting
Learning History
Fixing Stuff
Eating
Making Cheese
Date Night
Playing Golf
Reading/listening to books
Drawing Solid Models


Things I likes to Do (sorted):

Currently doing:
Time with family
Anything Outdoors
Inventing
Problem Solving
Learning
Conversation
Movies
Eating
Playing Golf
Reading/listening to books
Drawing Solid Models

Recently but not frequently:
Traveling
Family Adventures

Haven't been doing:
Sports
Woodworking
Redneck Olympics
Drinking wine with friends
Antiquing
Swimming
Painting / Drawing
Collecting
Learning History
Fixing Stuff
Making Cheese
Date Night

Step 2: Taking Action

We have been tracking our finances on a macro level (overall net cash flow) which has helped us greatly realize we are living beyond our income. So know we are going to look at the micro level as Russ suggest to see were we are throwing away $$ to tighten things up. I’ll post after we have done step 2.

At the same time we have been doing a heavy push on getting rid of material stuff that has accumulated over the years as I posted previously.

 

[aardvarky]

Imagine if you got rid of EVERYTHING in the next 6 months. Sold it all on Ebay and Craig's list. Sold the car, sold the house, sold the clothes.

I actually did this. Got rid of everything that didn't fit into 2 medium-sized suitcases, sold almost everything and packed the rest into boxes to drop off at the local Salvation Army. Before I dropped it off, I went through the depressing and tedious process of mentally calculating how much I'd paid for everything in the boxes and what that total came to in terms of hours worked.
It is really illuminating to de-clutter your life. And I'm speaking from the perspective of someone who used to be a super-consumerist. I had more than enough clothes - and shoes - in my closet with price tags still on them. You know, clothes that I meant to wear someday...

Anyway, that experience really changed something. As well as becoming obsessed with providing a service rather than buying stuff. Creating something from scratch is one of the most exciting addictions I've ever known and it's served to pretty much obliterate my interest in buying stuff.

A great mind-trick that works really well for me when I really want to buy something is to turn it around and ask myself - "Who else wants this? Why do they want this? Can I service this market somehow?" And even if I come up with no answers, it gets my brain started on a new line of thinking - one that turns the thought process away from wanting to buy to wanting to sell instead.

It's also really helpful to calculate things based on labor I could hire instead. Like, realizing that the gorgeous peacoat that really tempted me could pay for a full-time writer for a month was enough to make me walk away.

Oh, and in all honesty - all those things that I thought I'd never be able to live without...yea, can totally live without. People still like you even if you don't want to go out to posh dinners all the time. Guys don't seem to care whether you're wearing jeans or a designer dress. And life feels so, so much free-er when you realize you're *mostly* free of the desire to buy stuff.

 

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[Russ H]

Here's a sample of what someone could get for working on Part I:

CORE VALUES (what is important to me)

-Health
-Fitness
-Happiness
-Spirituality
-Integrity/Honesty
-Family
-Growth
-Music
-Reading
-Learning something new every day
-Helping Others


Things I like to be around

-Being outdoors
-Sunshine
-Nature
-Music
-Conversation
-Driving
-Helping Others/Teaching
-Growth/New things
-Family and friends
-Passionate and motivated people
-Food preparation and serving


Things I like to do (activities):

-Walking/Hiking
-Travel
-Being with family and friends
-Conversation
-Reading (lots of varied topics, favorites are science fiction and self-actualization)
-Driving (esp top down w/sunshine)
-Almost anything outdoors
-Listening to music
-Eat great food
-Cooking
-Watching movies
-Restore things (tied to growth-- rejuvenation)
(lots of other activities)

.

 

[wildambitions]

Wow, this hit home.

My husband and I were put into the position of having to start over. I would not suggest it to anyone but, it did take us to our core values and needs.

Here's what we learned and some techniques to make it through these times if you are there.

It very quickly became evident of what was really needed and what things were purely wants. We had to plan on each meal of each day not exceeding $1.84 per person. We found ways to save on one meal in order to "splurge" on others. We were no longer able to go "out" for dinner so we planned our own "out" meals at home involving the family as waiters and servers. We made a tough situation a fun and learning experience.

We also learned how to aquire some of the wants that had. Our entire family had been active in hockey (not a cheap sport to be active in). We volunteered a lot of time and traded for that time for fees dues. We provided child care in trade for vegetables from friends gardens.

All of these things were done to teach ourselves how to live for under the $20,000 which was an amount of passive income that we had from a retirement. Neither of us were working.

Ironically, most of our aquaintences had no idea we were living on such a low income. Most actually thought that we were part of the witness protection program, lol.

After understanding what we could do we slowly moved forward in the plan by getting jobs that we loved to do, or jobs that gave us knowledge in an area for future use (construction, auto mechanics) and educated ourselves with personal development and business. We knew that real estate was the business area we were interested in.

Our journey is FAR from over but we are on our way. And even though those "starting over" days were difficult, the education was priceless and we would do it all over again to prevent ourselves from over spending and falling deep back into the rat race.

 

[Russ H]

Step I: Core Values and Character

A. Who are you, really?
B. Sometimes Wanting is better than Having
C. What do you REALLY want?

yveskleinsky-

Most goal books have you list your goals, or wants. And then you figure out how to get them.

This process is backwards.

Because we make a list, do all the work, and then . . . when we accomplish the goals, we feel . . .

NOTHING!

Or worse, we feel bummed out, b/c all of the excitement and fun of pursuing the goal is now gone.

And what we are left with-- what we told ourselves we really, really wanted--

Is not something we really needed.

Before I started using this process, I found time and again that when I WANTED something in the worst way, I could almost taste it!

But then when I finally got it, I never used it. Or I just didn't feel the same way about it that I did before I had it.

The thrill was gone.

Wanting was better than having.

If this happens, there is a disconnect with what you think you want, and who you really are.

(classic example: Girl or guy who is always complaining that they're "attracted to the wrong guy/girl".)

Their "wants" (sexy bod, great car, what their friends think) does not line up with their "needs" (comfort, wit, security, being at ease).

So the first thing we do is try to get your WANTS in line with who you are-- your CORE values/traits.


* * * * * * * *

Start here: Define your CORE values.

The qualities or things that make you who you are.

These are the ones I see from you so far:

I LOVE to create.
I LOVE to see my ideas in motion and to see that they work.

Here's an example of someone else's CORE values/traits:

http://www.thefastlanetomillions.com/showpost.php?p=4911&postcount=6

Have fun! :banana:

-Russ H.

 

[yveskleinsky]

I was thinking today about focus, and had to laugh because I feel for the first time in my life I do have focus! (Even though according to everyone else I don't.) I suppose my core values boil down to wanting to own my time. I don't want a business that consumes 40 hours a week- on a consistent basis. When I had the restaurant I was there all the time because I loved it. I love the service industry, as long as it is 9-5. I don't like property mgmt so much as I dread it when my phone rings. ...not good.

I like to get plates spinning and then passed off to other people.

...I just got back from dinner with WildAmbitions, and I realized that my focus needs to be on apartment buildings. I love everything about them. My concerns (excuses?) are that I don't know enough about how to create value, how to get a good purchase price, how much money I would need to have in reserves, etc. Then I was thinking that maybe I should start smaller (4+ units) to get my feet wet. Is this thinking on track or should I focus on jumping into an apartment deal?

 

[Russ H]

To all who have posted today, Thank you.

Nurturing growth is a passion of mine (and a CORE value).

So I truly love what is happening here.

Is this thinking on track or should I focus on jumping into an apartment deal?

Yveskleinsky-

You have made a *fantastic* start:

My core values are:
- honesty
- accountability
- learning something new everyday
- cultivating awesome friendships with awesome people
- loyalty
- stability
- happiness and laughing...a lot
- helping others who want to help themselves
- stability (organization in every aspect)
- personal development
- being a good friend
- trying new things- pushing my comfort zone
- squeezing every drop out of life (trying new things)

Things I like to be around:
- campfires
- pine trees
- good friends
- alcohol
- my dogs
- people who laugh a lot
- good conversation
- passionate and motivated people...people that are achieving their dreams
- anything creative...rehabbing a house, painting a picture, writing, etc.

Things I like to do:
- dinner parties with good friends
- jog
- walk my dogs
- rollerskating/ ice skating
- teach...I love that "a-ha" moment with kids or teens
- laugh
- creative conversation
- visit this site
- flirt with my husband
- organize something (very OCD habit of mine )
- meet new people
- try new things
- eat sushi and drink saki in large quantities
- dream big
- break my big dreams down to little dreams to see how it could be done
- push myself
- watch an episode of Law and Order after work with a glass of wine
- work on my house

Now it's time to go to Step 2: Taking Action

(hint: we're a few days away from discussing multis or other investments)

1. Figuring out your bare essentials

This part takes some work, unless you already have a budget that you stick to and have everything entered into a program like quickbooks (most folks don't).

That's OK. You don't need to go that far-- yet. But having a bookeeper and keeping track of all personal expenses can be a critical part of exponential growth. Why? Because there are thousands of micro-expenses each month (Starbucks, bottled water, $1+ sodas) that literally can keep us in the slow lane for DECADES.

You don't realize this until you start adding it up.

Exercise:

For the weekend, get a small spiral pad, and pen.

Your first entry: How much you spent on the pad (and pen).

Next, put the pad/pen in your pocket, and go about your regular day.

Each and every time you spend ANY money-- paying bills, buying gum or a drink, lunch, any credit card purchases, etc-- record them in the pad:

.79 small pad
.29 pen
1.19 Diet Coke
5.95 Magazine
4.69 Fast food
129.30 New clothes
54.22 Gas for car
88.50 Electric/Gas bill

and so on . . .

Here's the key: Two mistakes that *everyone* makes are:

1. They forget to write down things (both large and small)
2. Once they start writing things down, their behavior changes.

Try to not let either of these things happen.

Do this for 2 days ONLY (sat and sun).

Then report back.

Please note that you won't be doing this all the time-- this is an exercise to develop financial consciousness.

If you are motivated, try to write down what you think your current expenses are (rent or mortgage, prop tax, insurance, car expenses, etc) each month. For expenses that occur only once a year (like dental appts or vehicle registration), divide by 12.

You're on your way to determining your "bare essentials"!

-Russ H.