Wednesday, 7 October 2015

FIRE first aid or as i said FIRE crash course 1.0.1.

Ok. New post coming. But before i start i want to point to some very pertinent blog post of FI fighter. I just find it interesting and it is worth to take a peek on it. Another good post i found is about th Roseto effect - how to live longer, better and healthier. It is a simple solution, but a very effective one.

Now back to my story. One friend was asking me how can he learn to do what i do? As a close friend he could see the changes on my personal finance and net worth, and as we have at least 20 years from the time we first meet, he realized that i did in this year more than i did in the previous 36 of my life.
But here come with the catch. How can i learn somebody about FIRE in only 2 hours if i just start with the basics after 18 months of study of this phenomenon.

So i made a plan. Emailing books to read on the subject, 1 per week. Record every expense for 3 months on a notebook named with the fancy name of FIRE ESCAPE (i must to admit that i was inspired by Huw with this one). Categorize them after every month. Learn about your money before you start saving. Start budgeting expenses and food week by week, Stick with that amount. Download a running app. I use Runkeeper or Freeletics. A bit of physical preparation. Depending on the person i would recommend some supplements. At least when you start running again after 20 years. For him it was Multivitamins, Multiminerals, Magnesium, Fish oil to burn the extra fat, Melatonin to adapt faster to the new situation and some other things, Joints stuff - the one with condroitin. Make a blog. Put every link i provide on your blogroll. I give him most of the blogs i know. Set up to show the last post. Read them regularly. Now i have 2 Excel spreadsheet that i use. One to record the plan. With 4 pages. Risk. Safe. Dreams. Costs and strategy. Another one is using different pages, one for every income sources like dividends, interests, full time work, royalties, profit, capital gained and rental. Set up accounts. Start small and get bigger at some pre-set periods of time. He started with 8% for risk investment, 4% for safest ones and 4% for achieving childhood dreams (i used this as a helping hand as it is known that achieving childhood dreams can have as a result a dramatically improvement of your motivation. I have the full research on one of my journals,
Setting up the accounts. I went for one P2P account, one property crowdfunding, one for buying shares. He agreed to make a new bank account for this with TSB for the 5% interest, where he will save first a buffer cash sum, ideally 6 months expenses. Then we will set up direct debits for the investments options mentioned before, going with the option pay yourself first, worry about an eventual shortcoming later. As in automatically pay your rent, bills, transport (train pass) and savings first after you are getting paid your wages and make a budget for the remaining amount for food and any other expenses. Took us 3 hours at first and an additional one later instead of 2 planned, but we did it.

What would you do different? I am listening.

P.S. The blog just reach the 1000 readers bar, it is time to celebrate!

1 comment:

  1. It was very nice, as is getting a nice comment from you.
    We keep on bloggin' even as people seem to prefer to stay on Facebook lately.....

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