Monthly Archives

June 2016

Frugal Living

Cut Your Electric Bill 80%

20160630_064758

My insane obsession.

Utility bills left unattended can put a serious dent in your budget. There is good news. You can reduce your electric bill 80% or more in a few short steps. Heating, water, internet and other utility bills can also be reduced by massive amounts with a few tricks.

The old adage ‘A watched pot never boils” is an apt place to begin. Before you can reduce your utility bill you need to know how much energy you are consuming. I get invited to seminars periodically that promise massive energy savings. They offer a free meal and Mrs. Accountant and I are always up to learning something new when a free meal is involved. The seminars are all the same. They try to sell over-priced products, many of which will never work if you understand even a small amount of science.*

Back by the ‘watched pot’ we are beginning our journey to energy reduction. The first step is to record your energy usage. For some reason, when I ask clients to record their energy usage the amount they use seems to decline. Like the ‘watched pot’, energy is still consumed. The water will boil, it just seems to take forever when you are watching the darn thing. Scientists know when something is observed the results can be affected by the observer. In medicine it is called the placebo effect (if you think it will work, it sometimes does, even if it is a gelatin pill). By watching your energy consumption you become aware of how much you are using and start to take steps to stop waste.Continue reading

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Occam’s Razor

Keiths Razor

Keith's razor. Ah, hahahaha! Oh, grow up! This is serious stuff.

Life is more complicated than it has to be. More moving parts do not mean better. Electric cars have one moving the part, the motor; whereas gasoline powered vehicles have several hundred moving parts. More moving parts mean more things can go wrong. When all things are equal, the machine with fewest moving parts that still gets the job done is usually the best choice. Electric cars will outperform old-fashioned gasoline engine vehicles on every front as electric vehicles are improved. Lots of explanations will be given as to why electric cars blow gasoline engines off the road, but the simplicity of an electric vehicle will be a significant reason for the lower costs and higher performance.

Enter William of Ockham, a friar from the fourteenth century. Way back then he told us why electric vehicles, with fewer moving parts, would be a better choice once the technology was worked out. William of Ockham gave scientists a tool we now call Occam ’s razor. What William taught us is that the simplest answer tends to be the correct one. Scientists use Occam’s razor as a tool to break down theories into their simplest components. Therefore, by breaking down the theory into small (simple) testable parts, fewer excuses can be made when the results are falsified. When there are too many moving parts it is too easy to make excuses as to why the experiment failed. With fewer moving parts the test results are more reliable because there are fewer opportunities to give explanations for the test failure due to other circumstances. The same applies to the world of FI (financial independence).


Continue reading

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Giving Up What You Love

HeifersFinancial independence means you can indulge your dreams. By 1995 I had reached a level of net worth where I could realize many of my dreams. Coming from an agricultural background I wanted to move back to the country and have a small farm. Ten acres with a house and barn came up for sale a mile from where I grew up. My dream was now owned.

In 1982 the family farm went through a wrenching bankruptcy. I was eighteen and had no future. Everything I knew related to farming. The pain etched a deep wound in my psyche that never went away. My desire to live in the country was not the whole dream. I had to own a small farm. In my mind I had to understand why the family farm died when I was at such an impressionable age.Continue reading

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How Lucky We Are

Space

Wha'da'ya know. The guy who hates travelling is on vacation and having a good time.

Regular readers around here know Friday night is card night in the Wealthy Accountant neighborhood. Scheduling issues forced us to move card night to Saturday this weekend. As always, we catch up on news and solve all the world’s problems as we enjoy the game. This week was no different.

Roger lives across the road from me. He plays sheepshead, but we never invited him to our game, an oversight we need to rectify. Roger is a low-key man. He is quiet, but quick to help a neighbor in need. I don’t remember how Roger came up as a topic around the card table. We started to sing Roger’s praises when Pete said, “Roger would be unstoppable if he didn’t have so many medical problems.”

We all nodded. Roger is hard working and it is understood his medical condition is not good. I said, “Bob told me a few years ago Roger nearly died it was so bad.”

“It wasn’t good,” Pete said. “He was having a kidney replaced when he had a heart attack on the table. They had to do two surgeries in one.”Continue reading

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Passive Income Whore

Ice cream

Enjoying the good life while the money keeps rolling in.

When it comes to passive income I have an edgy side as the title indicates. Multiple streams of income showing up in your account regardless what you are doing is a powerful force to have on your side. Losing your job is only an issue if your job is the bulk of your income. Business owners know the loss of one client out of hundreds is no more than an annoyance. You can harness the same force in your finances.

Before I list the sources of passive income I have, let me share a short story that happened to me recently. Certain sources of passive income are offered to small groups only. I was fortunate enough in my business to have one of these sources. Mr. Money Mustache, a personal finance blogger named Pete, gave me a plug, including a plug for this new source of passive income. I did not expect a lot. When the numbers were finally tallied I was surprised. The revenue was much higher than I calculated. I shared the info with Pete along with traffic data. He responded with an email saying, “Welcome to the world of passive income.” It started me thinking about all the sources of passive income I have and how passive income cements my finances regardless of the economy or my business.Continue reading

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Words: The Power to Create or Destroy

power_of_words_300x300

https://wendysteele.com/2011/11/

They seem so small and harmless: words. Yet words can create great beauty and wonderful works while at the same time destroy relationships, ruin happiness, disrupt wealth, even bring down empires. Words are a means to communicate. The accuracy of our words makes the difference between building great things and fantastic disasters.  NASA’s Mars Climate Orbiter failed in 1999 because engineers did not convert English measurements to metric. A word left unsaid wasted $125 million and countless hours of work.

Words are just as important in your personal and business life. A miscommunicated word with an investment advisor or when setting up an investment account can have catastrophic consequences. Imagine forgetting to add a beneficiary. A miscommunication could have dire consequences for your heirs. An awesome passive income opportunity is lost when the wrong words are used.Continue reading

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Freaky Friday: Laughing All the Way to the FIRE Lifestyle

Skrattande kvinna

Persons attempting to find a motive in this narrative will be prosecuted; persons attempting to find a moral in it will be banished; persons attempting to find a plot in it will be shot. — Mark Twain

 

Have you ever wondered what people were like when they were younger? What were people who attained financial independence early life like when they were growing up? Is there anything special about early retirees?

A week ago I proposed life is one big joke and then it is over. My original intentions were to add more humorous material. What concerned me were two things. One, writing humor is no easy feat. All too often when writing a joke, crickets fill the room after the punch line. The only fallback for the comedian is, “Well, I guess ya had ta be there.” Two, not everyone thinks the same thing is funny.Continue reading

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Financial Planning and the Death of a Spouse

Graveyard1There are critical times in the course of life when financial independence is at risk of destruction. A lifetime of planning, saving, and investing can go up in smoke in a few short years without an adequate plan to protect the most vulnerable member of a marriage (or any relationship, for that matter) after the death of a spouse or loved one. The trauma and grief after a loved one dies is acute. Deep pain and emptiness creates risks for the surviving spouse. Well intentioned, and lonely, people will try to connect with the bereaved. A couple committed to a lifetime of financial discipline will acquire a massive nest egg of retirement wealth. The surviving spouse is a prime target, a highly desired, person for this reason. Even people with honorable intentions can wreck havoc on the surviving spouse’s finances.Continue reading

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