Archive for category: Art of Money Making

This is what most of us often do.

We tend to be thrifty on items we deem necessary and can be thrifty on.

True, instead of constantly buying your meal from restaurants or fast foods, you can bring your own lunchbox. Instead of being at the mall every weekend to watch a movie, you could wait for the DVD version to come out and watch from the comforts of your home. That way, you will not be tempted to go elsewhere in the mall and possibly spend more than what you intended. Instead of buying sodas outside, you could settle for healthy H2O. Instead of buying that new game you’ve been wanting, try to search online for a torrent download. I know, the method is illegal but let’s face it, it happens.

Bottomline, there are ways to get what we need and want with the cheapest alternative we can find.

BUT.

With all the income saved from being thrifty, I bet that money goes somewhere else we could call “luxury”.

Remember the lunch and movie savings? I bet they go to fine dining experience every weekend. Or maybe, the money is spent on some new clothes and shoes. Or maybe, to some new gadget you’ve been eyeing upon but do not necessarily need.

Bottomline, the money saved goes elsewhere where it WILL NOT earn. This is saying goodbye to savings and investments.

True economy consists in making the income exceed the expenses.

If your clothes are in good condition, then you don’t need more to cramp your closet. You don’t need branded labels to cloth yourself. You will not die from eating plainer, if not healthier food. Mend old items if they could still be mended. Live simpler and save so that, in whatever circumstances, unless some accident happens (I hope not. Knocks on wood), there will be a margin in favor of the income. The money saved can be placed in some form of investment so it could go on accumulating, and in this way, a great turnabout can happen.

Such attitude will require training but once you get used to it there will be a great feeling of rational saving than in irrational spending.

There is a simple cure against extravagance and for mistaken economy.

1. Get a notebook. Create two columns. One notebook labeled “necessities” and the other “luxuries” or “Wants”.

2. Everyday, write down every expenditure you have.

By the end of the week (or even month, if you prefer to total everyhing at this timeframe), you WILL see that necessities take only a small portion of what most of us can earn.

According to a quote from a personality named Dr. Franklin,

“it is the eyes of others and not our own eyes which ruin us. If all the world were blind except myself I should not care for fine clothes or furniture.”

We are often driven by what society dictates is cool and necessary when in fact, we can live without the “hip” and the “new”. Trends are good but constantly following the trend can lead to an individual’s economic downfall.

Basically, each one of us have to concentrate on what is “necessary” for our existence. Being aware of this will help us achieve the concept of True Economy.

9/1/2010 0 comments Read More

True economy?

According to a plurk conversation I had with a friend, “We are mere vessels of what we earn”.

Ergo, no matter how much we earn, if we are to survive, the money will pass by our palms and we are left with mere quantities to satisfy our ‘wants’.

I say ‘wants’ because our needs will definitely take a priority. Utilities, mortages, bills, food, medicine, transportation to work, etc. We complain so much of the priorities for the mere reason we can’t get any of what we ‘want’.

Whoever said handling money is easy. It is EASY to earn it. Everyone can EARN it regardless of what background they have. There are many jobs to take but as human nature would dictate, we are picky on where we want to be. The more difficult thing of handling money is how to manage it according to what we need to survive. The road to wealth is easy. It is as plan as the road to the mill. In known theory, it consists of simply spending less than what we earn. But, with so many temptations around and the way media and society illustrates how a ‘cool’ or ‘affluent’ man should look like, retail takes a higher priority over savings.

I’m not dictating or preaching. I’m stating a fact based on reading, observations and personal experiences. True economy is often misunderstood. Often, the concept of saving is done in one direction and is squandered on others. Let’s place this on a simple example:

When you get your salary, you will automatically deduct a portion of it for your rent, utility bills, food, etc. Then you will set aside another portion to place it on your bank “savings” account. Then, you will take a big ‘chunk’ of your salary to get that new Ipod model when your previous one is still working fine. You are just wanting to get the new Ipod model because it looked cooler and you wanted bigger space for your files. And I for one, would only question the reason of the bigger hard disk when you won’t be able to fill all that space unless you are in the music industry and it is a neccessity to lug around thousands of mp3 for work.

I mean really.

Then you will get sick and you complain you don’t have enough money set aside for emergencies or meds. You have forgotten to pay for your insurance and your health card is nearing its renewal date.

So where are the priorities?

We know how to save on one side of the spectrum but we tend to forget the other neccesities.

To state another example, on our way home riding a taxi from my dad’s doctor for his check-up, I noticed the run-down wooden houses along this street. They were small, crowded, dilapitated looking-homes BUT, from the outside you can plainly see a 24 inch plasma TV. And I could see a kid on the doorstep looking sad and tired white eating some street-food. A kid that small should be inside the house and be taken care of than left near the street with drunk men loudly cheering from some rowdy story nearby. I bet the kid’s dad could be one of those noise drinkers.

So what then is true economy?

It is understanding what we have and we work hard to make it grow. It is understanding the sacrifices of some of our ‘wants’ to be prepared for emergencies in the future. It is able to balance our needs and wants to achieve a comfortable place to live.

In short, we need to discipline ourselves on what we ‘need’ and ‘want’ and work around what we have to achieve both sides.

In theory, easy. In real life, let’s WORK on it.

8/17/2010 0 comments Read More