Speed up your time to financial independence by simply making more money, what a revolutionary idea!
No I’m not here to sell you on some crazy pyramid scheme, in fact I’m going to recommend you completely forget anything related to pyramid schemes or multi-level marketing (MLM) exists, because well researched evidence points to the fact that 99% of participants involved in MLMs lose money. Even if you don’t you’re almost certainly going to annoy your family, and alienate your friends, just don’t do it. Starting one can be very profitable though if you don’t mind the risk of jail time, like this smart lady who managed to convince thousands of people to buy a cheese making kit earning her €145 million…
No, none of that rubbish, just an honest way to earn a few extra Rand so that you have more to save and invest. But first I’ll start off with a statement. It’s far easier to save more than it is to make more. That’s why whenever someone asks how they can get their finances in order, I always recommend they look at the burn side of their budget rather than the earn. It’s something you have complete control over, and in most cases is filled with excess, waste and debt repayments. There’s bound to be some low hanging fruit, so most people can find money to save somewhere. My wife did that last year, and though I still can’t figure out how, she managed to out-save me without even trying. We figured this out weeks ago, and I still get almost daily reminders…
But sometimes trimming the budget isn’t enough to get ahead, and you just need to earn more.
1) You’re bad at maths because you bought a new car
Quite a few of my friends read my blog. Some of them like Wendy* are even on board with the whole save enough to retire really young idea, but maths isn’t her forte as the following conversation should show:
Wendy: Can you believe Bill* just bought that big BMW*. So stupid, he makes less than I do. What do you think it cost?
Patrick: Well it was about 2 years old, so it’s probably worth around R300 000.
Wendy: R300 000! I’d never spend that on a used car. I’d much rather get a new one for that price. What an idiot.
Patrick: Well the minute you drove out of the showroom in a new R300k car you’d lose R60 000. After one year of owning it your total loss would be around R90 000. After a year of owning his used car, Bill would only lose R30 000.
Conversations like that often have a lot of uncomfortable silence following them, especially when Ms want to be frugal bought a brand new (though much cheaper) Kia a few months back.
*Names and even cars have been changed. I’ve learnt my lesson on using even relatively similar examples before.
I have a machine that prints money. It’s legal too, and operates on nothing more than cheesecake. That’s right, nothing but pure cheesecake. I have two others that operate on a combination of cheesecake and a teeny tiny amount of electricity. My brother has two of these, and I’m buying one for my wife now too so we can use ours together. These machines are really quite common, I’ve been trying to get Orca to buy one that would run on beer, since he often has a surplus of that 🙂
My favourite computer game as a child (yes we had computers back then, much to my son’s disbelief) was Lemmings. In this game you’d have to rescue these humanoid lemmings who were too stupid to do anything else except follow their leader to their doom. Sounds pretty much like our government at the moment doesn’t it?
It’s April fools day, but since I’m still upset that I fell for two of them (Heyneke Meyer returning as springbok coach and myBroadBand launching uncapped fibre for R99 a month) I thought I’d spare you any more stupid practical jokes.
Instead, I’m offering you an antidote to the madness. A kind of an unApril fools joke. I’m going to list out the top seven financial products so dumb, we should all be wishing they were practical jokes instead of reality. So let’s count them down:
OK hands up, who still owns unit trusts? My goodness there are a lot of you on that side of the screen. Unfortunately there’s one on this side of the screen too. And another in the family, hi mom! We’re all a bunch of idiots. Great big foolish money hating idiots. I’m a completely self taught idiot. Nobody does that anymore, we all use coaches and gurus called financial advisers to guide us into idiocy. Before I graduated to idiocy I only used to save and not invest, so I was a moron then. One day soon I plan to leave idiocy behind and move on to madness. Madness is the Cum Laude of intelligence.
So why is it that I’m calling us a um, what is the collective noun for idiots? If we were American I’d vote for a trump of idiots, but since we live in Mzansi maybe it should be a malema of idiots, or perhaps a kraal of idiots. Back on track now, why do I think that ETFs are the holy grail and that unit trusts are the financial equivalent of a Kardashian? Well there are two main reasons I dislike unit trusts, and as someone who gets weird satisfaction in pointing out my current and former reasons for idiocy, I’m going to elaborate on both. Continue reading
In August, my beautiful new wife and I eloped to Paris to have a combo wedding and honeymoon. It was just the two of us, so we didn’t have to worry about what colour the napkins should be. We also didn’t have to worry that mad uncle Eric would drink too much and try join the band, or that someone would knock over the ridiculously ostentatious wedding cake. I was also fairly confident that I wouldn’t end up in a runaway bride skit, because I’m not Richard Gere!
Dear investor Challenge,
Why are your posts always so damn complicated. You keep posting numbers and graphs, but I’m not a numbers girl, unless of course you’re cute in which case my number is 555… Why don’t you come out with some financial advice for dummies like me? I want finance de-complicated.
The names Blonde, Jane Blonde.
Good call miss Blonde. You know, I think this whole industry is built around making people believe finances are only for accounting nerds, or worse, actuaries, but to be quite honest, there’s nothing complicated about it at all. In fact, I’m pretty certain that all the experts and snake oil salesman specifically designed it as a giant smoke screen to keep you thinking it’s complicated so they can keep their high paying jobs, six figure bonuses and holiday homes in Umhlanga, all thanks to the money they take from us while we’re not paying attention. Mark my words, the only interest the majority of financial product sales people have in your wealth, is in how much of it they can transfer to themselves as fees for a service probably badly rendered.
Ignore them. Everything you need to know is so simple anyone can take control of it. So here it is, the three most important rules of personal finance: Continue reading