Tag Archives: Inspiration

Learning Budgeting from Children

Children are like wet cement. Whatever falls on them makes an impression.

— Haim Ginott

A few years ago, we were vacationing for two weeks. At the end of the first day, we were thoroughly enjoying ourselves. The weather was great, the coastline was beautiful and meals were delicious. However, there was one big problem.

All About Choices

Your life is the sum result of all the choices you make, both consciously and unconsciously. If you can control the process of choosing, you can take control of all aspects of your life. You can find the freedom that comes from being in charge of yourself.

— Robert Bennett

Every single day of our lives, we are faced with a barrage of spending decisions. Sometimes it can be almost overwhelming. Are we in control of our spending? Or is our spending in control of us? Even those of us who do not feel like we are “out of control” nonetheless often feel like our spending decisions are not always explainable. Why do we say “yes” to certain purchases one month and then “no” to the same purchases the next month? Why do our choices on some occasions seem almost arbitrary?

Create a Framework for Budgeting

High achievement always takes place in the framework of high expectations.

— Charles Kettering

In the first part of this series on budgeting, we discussed the importance of starting the budget process by looking at the big picture. Now let us try to bring those lofty ideals down to earth. When we asked ourselves significant questions about life (listed in the previous article), we found that some of the things that were important to us were the follwing.

Three Things we do not Learn in School

They did not teach us the most important skills in life. There are three areas which are completely overlooked by all western public teaching systems. What a pity that those areas are the ones that are most likely to determine your success, fulfillment and happiness in life.

Start Budgeting!

Budgeting awakes many negative associations. No wonder that one-third of people do not budget at all and two-third say they are unsuccessful at budgeting. Household budgeting often stands for fantasy, guiltiness, irrelevance or negativity.

Why Delay Spending?

Starbucks Coffee
Yesterday we were reading one typical blog post where someone discussed how he had exit the consumerism. As proof, the blogger does not purchase daily morning coffee at Starbucks for €4 like his colleagues anymore. The article was mainly about how the money saved from not buying coffee will produce gobs of money that will eventually enable him to retire early. Is this the right way to think about delayed spending?

Education & Earnings

Starting Point
To be financial independent, you must accumulate wealth to let is work for you. Obvious way to do this is to save money by spending less money than you earn. That is not the only way to do so (eventually not even the best way). But, it is the most straightforward method. Based on that, main focus should be on income.

ETF Portfolio Building

“Cooking Recipe” ETF-Portfolio (Focus Stock Markets)
We hear often one question: How to build an ETF portfolio with X €? Basic information are summarized in this guideline.

Diversification

Do not put all eggs in one basket!
This post explains two fundamental approaches of diversification: Naive and Markowitz. Diversification means risk reducing by spreading capital into different investments. One basket could be one sector, country or investment type.

More Freedom: Living Economical or Working Life Away?

Some Lovely Thoughts
Unusual people live economically, below their means, work hard, save bulks of their income and pursue financial independence aggressively with a sophisticated investment strategy. However, other people work and spend their money for expensive new cars or nice watches. They are not able to build up net worth, sacrifices are too large because of binding habits and social conventions. So, does economical living makes people really free?