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Old 04-19-2017, 07:57 PM   #61
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When people think about the idea of "good with money" they seem to mostly focus on not spending too much, LBYM, paying off high interest debt, diversifying investments, saving for retirement, and such financial hygiene.

A harder (for some of us) type of "good with money" is making sure you spend enough. Not being unnecessarily frugal in a way that impairs your quality of life. Making sure you use your money to buy as much happiness as money can buy. Not being so focused on wealth accumulation and preservation that you fail to use the money for enjoyment. That sort of "good with money" is probably less often discussed, but I guess equally important.
I'm always good with money that way
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Old 04-20-2017, 12:50 PM   #62
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Speaking of counting money, I do not just count the money coming in, but also that going out. While I do not have a strict budget, I want to know where we are each year with respect to the target that I have in mind. I always keep track after the fact of all expenses to detect any telltale sign of lifestyle creep.

Yesterday, I was looking at my Quicken screen, and amazed myself that our spending YTD was lower than the first 4 months of previous years. Then, my wife reminded me that the upcoming trip expense, much of it already paid, was probably not accounted for. Duh!

What happened was that we booked a flight from LAX to CDG as it was less expensive than from our home city, even if we had to book Southwest flights to/from LAX. While booking the SW flight, I saw that they offered $200 for applying for their credit card, which is $100 after deducting the $100 annual membership, I went for that. They also said no foreign transaction fees, so I have been using it to book hotels, Airbnb, and to pay for the car rental.

And I have not gotten around to enter this new credit card account into Quicken for the latter to download all transactions. After doing that, I then saw that the YTD expenses were brought up to the same as last year. Hah! My wife has been paying all the bills. I only use my Quicken to do a higher-level look of where we are, so missed this credit card account.

I never spent as much time "counting money" like this when I was still working and bringing in money. Now that I have to live off my investments and savings, I pay more attention.

And seeing that the stash grows despite withdrawal for spending is indeed fun! If the stash shrank, it would no longer be fun, but then I would have to "count" even harder.

PS. The initial card bonus paid for much of the SW flight to LAX. Then, we waited to book the flight coming back to see if there would be better deals. My wife finally booked that, and by that time we had enough expenses on the card that the mileage on it was enough to get us a free flight back. Son of a gun!
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Old 04-21-2017, 06:17 AM   #63
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I do not think that I am particularly good with money. DW says that I am. I would say that it is more common sense mixed with a tinge of financial astuteness. Or rather being financially aware if you will. Our financials would indicate that I am good with money. More good fortune than anything else.

Some of our relatives would be in the 'poor with money' category. To a large extent I would say that their desire for instant gratification has always trumped their common sense or their ability to handle money even in the most basic way.
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Old 04-26-2017, 07:35 PM   #64
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I do not think that I am particularly good with money. DW says that I am. I would say that it is more common sense mixed with a tinge of financial astuteness. Or rather being financially aware if you will. Our financials would indicate that I am good with money. More good fortune than anything else.



Some of our relatives would be in the 'poor with money' category. To a large extent I would say that their desire for instant gratification has always trumped their common sense or their ability to handle money even in the most basic way.


+1. I've been good and bad with money but I have always had a vision that I would invest and become wealthy enough to not have to work when I'm old. In my 20s, pre-internet, I found a book called "Get Rich Slowly" (no relation to the more recent blog), which explained how 401ks and mutual funds work. It made my own path pretty clear and I reinforced it with more knowledge and DW and I have built up seven figures and no debt slowly but relentlessly.

Other people I know, some far smarter, educated and accomplished, just don't have a vision for their future like I do. Money comes in and money goes out because spending is like a gas - it expands to fill all available space.

I only wish I'd had a vision in my 20s to retire by 50. I had no concept or role model for that. Accordingly, the financial plan that a planner did for us at age 30 called for having enough to maintain our lifestyle at 59.5. I'm 51 and, if present trends continue, I'll have exactly enough for that at 59.5. I might trim lifestyle to go part time before then though.
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Old 04-27-2017, 07:04 AM   #65
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I can do math. Good at sums. P&L's,balance sheets, cash flow statements and margins are not strangers to me. I understand the difference between red ink, black ink, depreciation, and retained earnings.

If you understand math, numbers, margins etc. it goes a long way toward living within your means and avoiding debt-especially consumer debt. Leads to value based purchases at the right time for the right price. Allows one to push the boat out and splurge once in a while without much thought to the expense.
Yep. I also learned compound interest when studying for actuarial exams and was fascinated by it. I think it helped me look at the big picture when taking on (or considering) monthly payments. I have Ting on my cell phone (which I bought outright). Next month I'm dropping Comcast in favor of Google Fiber (Internet only) plus Netflix. Cars have been a low priority- buy something used and reliable, take care of it, drive it till it's no longer reliable. Any one of these things is small on a month-to-month basis but over a period of years it adds up.

More money left over for plane tickets.
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Old 04-27-2017, 07:20 AM   #66
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Yep. I also learned compound interest when studying for actuarial exams and was fascinated by it. I think it helped me look at the big picture when taking on (or considering) monthly payments. I have Ting on my cell phone (which I bought outright). Next month I'm dropping Comcast in favor of Google Fiber (Internet only) plus Netflix. Cars have been a low priority- buy something used and reliable, take care of it, drive it till it's no longer reliable. Any one of these things is small on a month-to-month basis but over a period of years it adds up.

More money left over for plane tickets.
I majored in economics in college and took a finance class which explained more how compound interest worked.

My favorite TV quote about interest is from a Seinfeld episode. Remember this exchange between Jerry and George in "The Junior Mints" episode?

George: "Yeah, interest. It's an amazing thing. You make money without doing anything..."
Jerry: "Y'know, I have friends who try to base their whole life on that principle."
George: "Really? Who?"
Jerry: "Nobody you know..." [makes a funny face while turning away from George]
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Old 04-30-2017, 06:38 AM   #67
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I'm sure we can all add an item or two on the list that would make it more effective and still keep it simple. I was surprised that how you spend was not addressed. Most people who would benefit from easy to understand lessons in personal finance might be best served to know the difference between "Need" and "Want" and how to apply that knowledge.

Cheers!
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Old 05-01-2017, 09:40 AM   #68
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Years ago, after buying a home, I purchased a little blue mortgage table book.
It was one of the best investments that we ever made.

First off we switched our mortgage payments from monthly to biweekly. That cut a year or two off the 25 year mortgage. Then we upped the payments slightly. That cut another 5 years off. We also paid a portion on each anniversary date.

As interest rates fell we kept our payments the same. It was amazing. With little or no effort or impact on our daily lives our mortgage amortization was reduced from 25 years to 16 years. It became more challenging after that so I plowed my stock plan and commission cheques into it on the anniversary dates.
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