The Finance Castle

Now that I’m out on my own, I usually have at least a few hours a day to brainstorm on what I’d like to accomplish in the near future. After putting my hours in at my part time job and wrapping up my writing gigs for the day, I’m often left with one thought: What should I do next? There’s a myriad of possibilities for an answer. I could go out and enjoy the sunshine, toss on the Wii and finally beat  Twilight Princess, work on my site portfolio, and of course often times I simply like to sit down and brainstorm for new business ideas.

Unfortunately what happens to be sometimes is that I get paralyzed by the power of choice. Thinking that I’ll feel guilty if I take a break and play a game or that I don’t really feel like adding new content to one of my sites, I’ll kind of mill around in productivity purgatory. I’ll read some entrepreneurship related blogs, halfheartedly note some new business ideas, check my adsense for the day and so on. Afterwards I’ll feel like I hit things with a scattershot but didn’t make much in the way of real, hard progress.

The best way to avoid this is simply to sit down and start doing. I know that I don’t feel like exercising, but I also realize that getting my workout now means I feel a whole lot better later. Hunkering down and adding quality content to my sites will provide much more satisfaction than daydreaming or milling around various blogs with no real focus. Having the discipline to power through these lulls in focus and penetrate the haze of indecision will get you to where you want to be that much faster.

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Naturally in a world where just about everything is at your fingertips, there are dangers involving how you spend your money. Recently released devices and software platforms, however, have introduced a wrinkle into this problem: microtransactions. Iphones, iPod touches, Kindles, Nooks, Steam (a gaming platform for the PC) all give us what we want when we want it and often at very small amounts of money at a go.

Think about it. When you purchase your average song on iTunes it’ll cost you about a buck. No big deal right? Until you open up your Kindle and the latest Twilight book is out (it was a prequel I think?). No problem! One click and it’s yours at just under $10. Hop on your PC and you notice that your retrofavorite game Golden Axe is available to download right now so you can play with a friend! What’s a few bucks, right? Unfortunately all of these seemingly insignificant transactions can balloon into a digital version fo the latte effect.

My Solution:

While I love downloading books and old games as much as the next guy, I have a very simple way of making sure it keeps under control: I link these stores to my spending account. Since it has a finite amount of funds allocated to it each month, I can go ahead and blow my money on music and books if I want to, I just won’t have anything left over to do much else. In the end it works itself out, and I’ve found a happy medium. If I run out of money well, that’s it. No more spending until next month!

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I recently subscribed to a year’s worth of issues from the Caretaker Gazette, after reading many positive reviews from some of my favorite bloggers. The cost for an annual subscription is modest (particularly so if you opt for electronic format only as I did) and I was pleasantly surprised after reading my first issue. While the idea of housesitting is nothing new, I didn’t know there were so many exotic places where it could be an opportunity, particularly overseas. The amount of work required in exchange for your residence varies wildly. Some are couples going on vacation for a few months needing someone to take care of their pets. Others are full time jobs where you’ll draw a salary in addition to being provided a residence.

As you might expect, accomodations can differ quite a bit too. From a room at a hostel in Costa Rica to a quaint cottage in the hills of Ireland to the steel trailer on the grounds of a farm, there’s something for everyone. It also strikes me as a bit hard to break into.  Most of the ads require references from previous experience, which can be tough if you’re just starting out, and doubly so if you don’t have handiman/other applicable skills to maintaining a property.

Still, I did manage to find an opportunity that’s actually just down the street at a historical building looking for someone to live there for security and maintaining the property. If the interview goes well, that would allow me to live rent free for at least 6 months in a 2 bed room apartment in a mansion, not the worst deal I’ve come across to be sure. I’ll keep you posted.

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I take much of my everyday inspiration from other popular blogs that I read everyday. Some are about finance, others about retirement, and still others are simply about life and living the life you want. One such blogger, JD from Get Rich Slowly, talked about how money fits into his life:

I believe that money is a tool that should be used to help build the life of your dreams. After you’ve repaid your debt, saved for emergencies, and funded your retirement, anything you have left over is yours to do with as you please.

This is great for JD, who is finally finding the time to pursue whatever it is that he finds interesting, in this case traveling the world and seeing what there is to see outside his home state. But for many of us, following those dreams can seem like a push-pull towards one goal or another. Do you want to travel the world or save for a house/pay your mortgage early? How much is enough of an emergency fund? What if your dream means giving up the extra income of your 9 to 5 job? In short, where do you find the balance to save for the things you have to, like retirement, a home (if you want one), and pay for insurance while still starting your own business or traveling the world?

Unfortunately there’s simply no right answer, and you won’t get the same answer from the same person you ask no matter where you go. The reason for this is that each of us act differently under the same circumstances. Some people like having that fire lit under them, having to drive toward a goal because they simply have no other choice. Dropping everything and throwing everything they have at a new business idea or designing their own lifestyle despite not having that nest egg or emergency fund actually works for some people, like it did for Naomi over at Ittybiz. The stakes are high and that provides even more incentive to succeed.

Others, (I consider myself in this camp, I should note) would not do well under these same circumstances. Not having a nest egg or an emergency fund to support them if their endeavors failed would only exist a source of worry and stress that would distract them from their goals. For them (and me) it only makes sense to really pull the trigger when it is financially viable to do so. This is similar to a situation I’m in now, where I gave up a chance at a decent-paying 9 to 5 job for a part time contract gig and my fledgling hydra to support me, but it wasn’t something I took into consideration lightly. I do have an emergency fund and severance from my previous employment to that could keep me going for at least a year even without any outside income. The question you have to ask yourself is when are you really going to be ready to make the leap and accomplish your goals? If you need that emergency fund and the mortgage paid off before you’re comfortable, do it.  If you have the drive and fire to go all out on a goal you know will work, fire away. Neither one is the right path, per se, but it’s important to know the right balance for you.

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One of the funny things about personal finance is that your constantly gauging your current financial circumstances and looking for improvement. Often times when you break down just how long it will take to repay a loan or the number of years before your mortgage is paid off, you get a little down on yourself. The numbers are massive and the tasks are daunting, and you may end up wondering why you’re even trying at all. During these times it’s important to take a step back and realize that things are simply not that bad.  It may be hard, but no financial obstacle is insurmountable, and it certainly shouldn’t keep you from being happy in your daily life.

In that vein if you’re looking for a bit of a pick-me-up, I recently came across in article on Yahoo! Finance that shows us that we are a whole lot richer than we think.  Here are a few tidbits to take away:

For example, if you make $52,000 a year (the median American household income for 2009), you are the 58,252,719 richest person in the world (or in the top 0.97 percentile of all moneymakers).

and

Someone who makes half of that ($26,000 a year) is still in the top 10%, ranked 569,942,529 on the Global Rich List.

$26,000 a year here in the United States is certainly viewed as the lower end of the wealth pool, and yet you are still well above the vast majority of earth’s inhabitants. I understand this is of little comfort when the bills are piling up and some jerk is driving past you in his Corvette, but it’s important to keep your perspective when examining your own financial circumstances.

So go ahead and reach for the stars, try to break into that 0.97 percentile if you want. If you work hard enough you’ll get there before you know it, but also remember to be thankful you are as prosperous as you are, and that many others don’t get the same opportunity.

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