What is a fresh start? Why it’s not failing, but succeeding to start over and over again

Today I opened a new excel sheet. I guess many others did the same. However I wanted this to be special. I wanted to start all over again, to summarize my goals for a year. I did not want to wait till new-year’s eve. I wanted to start now. Don’t forget: „there is no tomorrow!” if you want to start, don’t wait for a special date, start this second!

Start

It feels great. I know I did such earlier and I know I will do the same later on before a year would actually pass by. But I also know that by doing so, I will get closer to my goals and focus on them better.

My goals:

(regarding finance, I wrote many others (like jogging), but will focus on financials here)

Write a budgeting plan for the entire year and also for each separate month.

– estimating correctly 10 out of 12 months the budgeting.

– 9 out of 12 months keep the budgeting plan.

Read 10 books on self development or finance (stock market, personal finance), also to adopt as much new techniques or ideas read in these books. How these techniques would be implemented, I would follow-up in writing and note.

So only 2-3 points apply to finances the rest are personal goals, however the reason why I wrote this post is to underline how important it is to focus on the goals, measure how you are progressing and to see what you are actually doing to reach them.

I also made a list of what tools I am using to reach my goals.

I had these written: discipline, living below your means, learning new things, applying what has been newly learned, decision making, focusing.

I wrote these down to see what I believe are my skills and attributes and a year later I want to judge if I would agree on these and if my acts and proofs would support this.

Failures: I did mention these too. I know I won’t reach all my goals, but the point of setting goals and trying to reach them is to get closer to them. It doesn’t matter if you are on a train or just walking to your destination. You will get there. The better you work, to quicker you get there, that is what matters. I will get there quick, but will make mistakes.

Corrections: for sure I will have to make corrections in the budgeting and the rules I applied. But I also made a promise to myself that I would write down everything I correct and keep track of them. If I make only a couple of corrections it is okay – by my opinion – however if there will be dozens of corrections, then I am planning wrong and have to reevaluate.

I listed what I am proud of today. The amount of savings I have, the languages I speak, some skills I have. I asked myself, if within a year I would acquire any new skill that I would be proud of. Honestly I don’t have a plan what the new skill could be, but will work on it. (Perhaps cooking? 🙂 )

Fun facts: if everything goes as planned, I’ll be able to save roughly $ 6.300. However $ 2.150 will depend on the family business of airbnb. I did not include anything linked to my stocks, that’s a seperate leg I want  to stand on, and either have to wait (as these days we are entering a bear market) or can be a positive surprise.

As you read the above, I think we can agree that planning, budgeting and self-improvement are all very important. Please join me in writing a list of goals, budgets and or anthing else that motivates you, so that we can reach our goals!

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The temptation of a better(?) job

running with money
Weeks ago I was approached by a headhunter for a job at Citi bank.
The job would be a classical outsourced job from London to Budapest, in which I would do mid-office tasks related to brokers activities: booking, checking, reporting and making suggestions based on forecasts.
I had an interview with the headhunter, then I had an online personal and numerical test.
(By the way my favorite exercise: you have 9 balls, one of them is lighter than the rest. You have a classic 2 sided scale, which you can use only twice. How can you surely identify which one is the lighter ball? Took me about 10 minutes to solve… My solution / general solution will be in the bottom of the article.)
Then I had a video conference interview with a woman and a guy from London. They asked me some sweet questions on SWAPS, futures, options, derivatives… Honestly, I love finance. I know that I don’t know as much as I want to, and I told them that I do know what these are, but I am not as much familiar with them as I’d like to be.
They kept on asking, at one point, I really thought the final moment came and it’s pointless to continue.
The interview was later over and I walked home happily that I achieved to be an interesting candidate for a relatively good position at bank like Citi, for a position that can clearly be linked to finance. (My current job is also linked to finance – collection analyst – but it’s not so strongly financial.
Anyways, 4 days later my phone rang and accepted another round interview.
I would roughly get a net $ 1.400/month or $ 16.800/year for this position.
(Keep in mind we earn less in Hungary for the same job as in the western world, but we have an active state pension system (won’t get a dime from there by the time I’ll turn 70), a state provided medical system, free higher educational system and so on…
So honestly this job would mean roughly +25% more income, +55% disposable income that I can save. Tempting isn’t it?
The real bad news for me was that instead of working from 8:00-17:00 (current job), I would work from 9:00-18:00, but with usual overtime it would be rather till 19:00.
Both my current and offered job’s offices are nearby (10min by walk vs. 15min by metro – I know how the distances are great but took a lot of effort organizing my life this way).
So why do I praise this extra 2 hours free time so much? Well to me that was the decision point. I tell you why.
Right now, I do have extra time, even during my work: to arrange personal things, like phone calls or anything else that can be done in an office but is not work related. Now it is okay to disappear for 30-45 minutes then shift that time to later work time. From what I learned of the new job offer, I realized that there I would have less free time due to overtime and also during working hours.
Furthermore, I wouldn’t get paid for the overtime so actually it’s not that better of a deal at all.
Additionally, I want to get passive income or income outside my paycheck.
As from a previous post you might remember, with my family we started an apartment business via Airbnb. That will be additional income and for that I need my time.
A plus for the new job would have been that it is more linked to finance and I could improve my financial knowledge further, but the cost in time is too much for me.
I hope I am making a right decision, but in the bottom of my heart I simply know I am.
Funny, whenever I tell anyone that I am not taking the job with higher salary, they stare at me and don’t understand…
The solution for the numerical exercise: you measure 3 vs 3 balls, this way you know which 3 balls has the 1 lighter ball. If the 3 vs. 3 is equally weight then it’s in the batch of 3 you left out, if the 3 vs. 3 is not equal, then whichever group was lighter. Then you do almost the same with the 3 balls, weighing 1 vs. 1 and this way you’ll surely know which one is the light ball.

Just read The Intelligent Investor written by Benjamin Graham

hurdles

Wow! After spending the first 15 minutes with the book, it just felt great! It felt like someone is finally talking to me about the things that really interest me. Like having meat someone in a foreign country that finally speaks your language.

Not that I am such a great mind like Benjamin Graham, you can also look on this as if a child is listening to grandpa’s most exciting stories.
I love statistics, figures, numbers and investing. I think I’ve just swallowed the red pill from Matrix and I arrived to the land of value investing and cannot ever return to the stupidity that surrounds us everywhere.
I own stocks. Roughly 90% of my money is in a single growth stock, the remaining is in a stock of a company that I believe would fit Mr. Graham’s criteria. Still, the market’s are falling as of today (24.08.2015), but at the age of 31, I am happy. I am happy, because I want to experience the selloff, I want to see that I can buy stocks at bargain prices. I am learning and becoming a better investor. No one can stop me! (Perhaps except my future mother in-law 😀 – just kidding)
After heaving read the entire book, I know that my portfolio will need quite a change. I’m on track reaching my goals and I just shifted to a higher gear.
Life is great because of this single book that is not promising anything, but giving meaning to the financial ups and downs of Mr. Market.

The power of family

Family
I previously wrote an article on how we don’t have to be alone and how we can rely on our money to help us along the way of our financial life.
Now I’d like to highlight the power of family – later on I will write on the dangers as well.
My family consists of 3, my Mom and my brother (my Dad passed away when I was 3).
We love each other, also there’s a very high level of trust.
This is something very valuable which is undervalued in many families.
When you ruin family relationships, you are ruining your business opportunities too.
We can be in 3 different places, representing the same interest – that’s powerful!
We can lend one another with 0% interest rates with no risk!
We can share our financial experience and knowledge, combine the knowledge of various subjects and prosper further.
The reason why this topic came to my mind is because we recently bought an apartment to give for renting for tourists coming to Budapest.
My brother and I didn’t have money to buy such. My mom did.
My mother is getting old and it is very hard for her to move around downtown. I have moved downtown a year ago and speak English (hope you can support me on this fact 🙂 ).
I am not much of a technical guy, wouldn’t know how to fix stuff around a house. My brother is superb in solving such issues.
Here you go. I think this is a perfect example, when 3 people can increase the size of the cake and by doing so get a much larger portion of cake, then if they would do things on their own.
The power of family. (If you are interested, we decided to split the profit 50% my Mom -25%-25%).
We are however different. My mom is ultra conservative on finances. My brother burned himself once by starting a company and took him 5 years to end that nightmare – starting a business is very hard here. Now he spends much money on his car, which he loves. I’m into NYSE now and wish to educate myself.
An additional asset my family has is real-estate. I won’t go into details but the point is that we have excess that we don’t use now. Once the apartment is making money and we have proven that we can handle it, then we would consider to invest further into this business, by selling and buying new properties that fit the purpose.
We are able to do so because of the excess real-estate we have. Why and how do we have such?
Because of family.
My family has an unwritten advice/rule. Always add to what you inherit, never loose from that. It’s not yours, but your children’s, even if they are unborn. You can be free to invest with what you make, but stay very cautious and conservative when handling assets and wealth what you inherited.
So I truly feel blessed coming from such a family and I hope and wish that I will be able to pass on the wealth and knowledge.

What is money? Not the FIAT-gold discussion, but the essence of money.

morpheus

So we all know the story behind the birth of money, how the ancient people decided to have a common exchangeable value item, taking the place of the barter system.

I think today’s everyday people don’t keep in mind the fact what money is.
In my opinion, it is perhaps the best invention of mankind!
Money holds work, sometimes hard-sweat work.
People get paid for their work. Which is not only their energy, but also their time. We know everyone only has limited time in their life. Some say you can’t buy time. In the end they will be right, however, to a certain extent, you can buy time.
You can pay for someone to do something that you were supposed to do, but you decide to do something else. You can pay your friend to take your wife to the airport, because you want to rather watch a game. Ever seen a billionaire standing in line and waiting? Possibly, but a rare case 🙂
In Hungary we get paid less for sometimes the same work as our fellow Western-Europeans or my American friends. Our energy and time is valued less. I got over this, no big deal.
(Expenses are indeed cheaper, but in the end these circumstances end up providing a lower living standard as the price of many things are the same as everywhere in the world, the price a Mercedes will be the same (or higher due to taxes)).
So I ask myself, would I want to pay $5 dollars for a Starbucks coffee (I work roughly for net $46/day), for which I work almost an hour? No waaaay! Oh and by the way I did not even include that I am ‘only’ able to save 50% of my monthly net salary. – I know this % is great! This is my only reason for financial hope by the way.
I love cars, the above analogy would translate to this question, now including savings: A car I would love to buy, costs around $49.000 – brand new. Would I work and save only(!) for this car, for 8 straight long years? Hell no!
I think too few people ask themselves when buying stuff, how much they work for such. Bringing this thought further, how much time and their energy that item or service is truly worth. Some might think I am Ebeneezer Scrooge, but I’m not. I’m living below my means.
I think it is important not to spoil. The biggest mistake can be to spoil ourselves. As it is ‘me, me, me!’. Then we can spoil our family and friends. By doing so, we would set furthermore a very bad example, and dig even deeper in expectations and sourness (people tend to expect always more and in the end we can’t provide it). Buying unnecessary stuff is valuing yourself low.
My girlfriend expects me to buy an apartment, later a family house (honestly, she thinks ‘we’ would buy these, but as she can’t save with her current salary, the equation is with me alone).
We do have a small 60m2 house which my family gives out to rent. But my girlfriend wouldn’t want to move there as my mom would be too close. But I’m not sure if she understands that I would need to work for 8 long years just because she doesn’t like my mom being close. (Otherwise she loves my mom, at least I think so 🙂 )
cube
I want to have more money. We all do. Some more, some less. Some want other things. There are many other things we can buy with money, so in the end I think people don’t want money bad enough, because they don’t understand well what it actually is. When it is a top priority to become rich, I say it’s a good thing as it could also make you value your time and energy. By doing so – by getting rich – you can increase the value of your time and energy.

My summer holiday in Tuscany – of course having my finance glasses on :)

Capture
I will share the actual expenses, but rather would like to share my thoughts of the trip and how I believe it improved my financial awareness.
Living in Europe has certainly one big benefit: the culturally diverse and beautiful countries of Europe are close! So with my girlfriend and with another couple, we decided to take a trip to Tuscany – Italy.
Captureü
Hard facts:
my car’s consumption 5-6 l/100 km (36-49 mpg if I’m correct)
distance taken: ~ 2700 km – 1677 miles (from Budapest to Tuscany back and forth and further including driving around with the car)
Budget for 2, but having all expenses to be divided with 4 people (accommodation, travel…): $ 950 approximately.
Of course we stayed at an Airbnb apartment and took quite much food and drinks with us, as everything is more expensive in Tuscany – Italy (compared to my home country, Hungary).
So, this year instead of being Mr. Wallet and frustrate all the time whether with our budget, can we make it till the end of the vacation, I decided to split the budget to the travel and pocket money parts. The travel stayed with me, while the pocket money was given to my girlfriend.
I did so, so she has the responsibility and the overview on what we can and cannot afford.
This, I will definitely implement to future trips as it was very relaxing for me. Plus I told her, if we spend anything over the budget, then it’s up to her credit card to compensate – as I was financing the entire trip.
In the end we did go over the budget with $55 and she did feel it.
I think on the long run it will be good to involve her wallet into the travels as well as she is picking up with her salary to mine.
So, I had a great time, honestly the best thing on the trip was to read my new book: The Intelligent Investor by Benjamin Graham. I read about it many times and indeed it’s just fantastic!
While sometimes stopping reading and staring at the waves (in Hungary we don’t have a sea anymore 😦 ) I thought of the market, how a share goes up and down and how trends are changing to new waves all the time.
I also thought how lucky I am to have picked a low consumption car over a cool looking but thirstier model. What a great idea it was to stick to the budget, as it made the planning better and the cost/value of the travel was superb.
I hope that everyone will enjoy a nice vacation this summer and won’t feel as having stepped one step backwards in reaching our financial goals. What value does money have, if we never enjoy it? 🙂

You shouldn’t try it alone. Team up with your own money to succeed!

Money working
When meeting a financial advisor on personal finance, one of the first things you’ll do is to check your life goals, expectations, future events and estimate roughly what that would mean to your finances.
I love those talks!
First thing that hits everyone is that you don’t have a spare dime!
If you work your guts off, you might make it. Live below your means, be always rational, be like Salamon the wise and then you might have a chance.
The second or soon following remark will be that there’s no way the plan will go the way you see it now. Life is full of surprises and unexpected events.
Think of having triplets, having a rough divorce, a sad and unexpected death of a loved one, not to mention such ‘boring’ life events as changing jobs or moving elsewhere.
So you have a rough plan and also know it won’t work exactly the way you wish, but you got an overall feel that you must definitely live below your means to have a decent financial life and retirement.
My advice for the long run and for success, is don’t even think for a second that you can make this on your own!
Sure, you have your family or your spouse with you, but honestly I would rather put them in the liabilities part instead of the assets, when it comes to financials.
A ‘must go’ trip during the summer, an up-grade in level when buying a car, a nice Christmas shopping spree. I’m not blaming them, but with financials, democracy doesn’t work (check out the national debt level of developed democratic countries…).
So who will save you, who can you count on? As in the title of this article mentioned, you can rely on your money!
Yes, these days, when we meet with such phrases in our lives as: outsourcing, pension disaster, recessions, then what can you expect? Get used to it: you won’t always have a job!
Perhaps you might say, that you already knew this. Okay, then that’s good, let’s make it better. Did you count with the consequence of not having the setback on your everyday life due to not having a job? It hurts more than you expect it. If you went through such, then you know.
So what is the solution?! Investing.
It’s no guaranteed solution, actually it is frightening. You might – correction – you will loose. But on the long run you should gain a lot more than what you loose and that’s how your money will turn to a strong team player and in the endgame save you from financial disaster.
Imagine it like planting seeds, some will die, some will be average and a few will be extraordinarily great. A surplus is what all investors are seeking.
(A small note, do NOT mistake investing with speculating.)
Personally I decided to invest on the NYSE. I had gains and losses – no wonder, we are in a nice bull market. It got me thinking. If this is how I perform during a bull market, then what if the market will turn ugly? How can I make money on the long run then?
Again, no guaranteed answer here either, I only have some thoughts.
Investing in real-estate. My plan is to invest in a garage in the next 1-2 years, which is a really small investment (~$10K), promising an estimated ~8-10%/year. This will be able to generate me money in a bear market too.
I could also quit the market and put my money in parking mode and await a nice bear market to buy cheap. The only barrier to this is myself – read The Intelligent Investor by Benjamin Graham. If you have discipline, then this strategy, I believe, is guaranteed, but gotta sit tight when nothing happens and that might take long.
Another thing I highly advise to invest anytime regardless of how much money or what kind of a market out there, is yourself. Educate yourself. I don’t mean learning new languages or getting a higher degree, that would only make you more of a specialist making it harder for you to find a job in the end – read Rich Dad Poor Dad by Robert Kiyosaki – I mean to learn how to invest. This is a skill that if you are good at, will be your most precious, in the financial world.
‘WE’ is better than ‘I’