There's an old man who lives down the street. I don't know his name, but every day I see him walking up and down the road with his cane. He moves slowly. He always wears the same thing: faded denim pants, a lightweight tan jacket, and a bright orange cap. For one hour every day — rain or shine — he walks up and down the street. Every day. We live on a steep hill, but he only walks on the flattest part. He's been doing this for months.
We've exchanged greetings before, but I've never asked him about his routine. Does he do this for exercise? Is he recovering from surgery? All I know is he's out there every day, making small steps, walking for an hour. I don't know where he's going, but he does.
The dangers of going cold turkey
When a person decides to make a lifestyle change, whether financial or otherwise, there's a temptation GO ALL OUT. With the zeal of a new convert, she leaps headlong into the life of the frugal, for example, giving up everything she held important before.
"God grant me the serenity to accept the things I cannot change, courage to change the things I can, and the wisdom to know the difference." — Reinhold Niebuhr
Recent volatility in the financial markets and a weakening US economy have tested the resolve of even the most patient of investors, and cast a shadow of doubt upon the most resolute in personal finance. What if the stock market continues its decline? What if the economy slips into recession? What should I do, if anything, to protect my investments? Where can I find the answers?
While these questions are normal in the face of uncertainty, the problem with them is that they are reactionary and seek answers from external sources. Those kind of questions suggest we have not sought answers from internal sources and, perhaps, have failed to ask questions that may be a bit more difficult, such as "Who am I?" and "Where am I going?"
On Saturday morning, a young man knocked at our door. He wanted to sell us new windows. Kris tried to brush him aside gently, but he was persistent. He didn't leave until he'd scheduled an appointment to give us an hour-long in-home presentation about his company's product.
"We do need storm windows," Kris told me after he'd gone.
"That's true," I said. "But I don't like buying from door-to-door salesmen."
In 2004 Dr. Michael Lynn, associate professor at the Cornell University School of Hotel Administration, produced a paper entitled "Mega Tips: Scientifically Tested Techniques to Increase Your Tips" [PDF]. If you work in a restaurant, reading this pamphlet could help you increase your earnings. But if you don't work in food service, knowing these techniques may help you separate good service from subtle manipulation! Lynn writes:
The techniques described [here] were mostly tested in low to mid-priced, casual dining restaurants. Thus, these techniques should work in such informal operations as [Applebee's, Chili's, Denny's, Olive Garden, Outback Steakhouse, and TGI Friday's]. On the other hand, these techniques may not work in more formal, upscale restaurants such as Chart House, Morton's of Chicago, or Ruth Chris Steak House. In fact, most of the techniques would be inappropriate in the more formal atmosphere of fine dining restaurants.
Among the scientifically-tested techniques to improve tips are these:
Yesterday morning was a rough one for me. It's a day I both dread and crave every year: Steve Jobs' Macworld Conference keynote address. I'm a Macintosh fanboy from way back, and as other Mac fanboys can attest, there are few things more dangerous to our wallets than new products from Apple.
In fact, there's almost a ritual to the whole thing. In the weeks leading up to the Jobs' speech, the rumor mill begins to grind. Will there be a new iPhone? iPod upgrades? A tablet computer? After the holiday hubbub has died, visions of shiny new laptops begin to dance in our heads.
On the morning of the keynote address, geeks everywhere eagerly refresh browser pages containing live coverage of Jobs' speech. Yesterday, Nickel and I sat drooling over our keyboards and chatting via instant messaging while watching the updates stream in.
A few weeks ago, J.D. and I were chatting when he asked me what it felt like to be debt-free. He'd read on my blog that I had no debt and was curious if I'd write about it for Get Rich Slowly. In particular, he asked me to communicate both how I managed to pay off my mortgage (the biggest debt most people have) as well as how it felt when we did so. I was happy to accept his offer.
Just to note, the purpose of this post isn't to debate whether or not paying off all debt is a good idea (versus only making mortgage payments and investing the rest, for example), so I've purposely left it out. My goal is simply to tell you our story — what happened and how we did it. From there, you can decide whether or not this path is for you. Since my wife and I are debt-haters, this option simply seemed natural to us. In addition, I can also tell you that living ten years without any debt has been a great feeling.
In the mid-90's, we moved to the southern part of the U.S. Here's how we paid off our mortgage in 1997 and haven't had one since:
This is a guest post from Karl Staib.
A few months ago, J.D. wrote an interesting review of Voluntary Simplicity, a book dedicated to living a stress-free life. What I found most interesting was not the review, but J.D.'s introduction:
For years, one of my goals has been to achieve a "pastoral lifestyle". This amuses my friends, but it's true. By "pastoral lifestyle" I mean that I want to create for myself a life that flows at a slower pace, a life removed from the concerns of the day-to-day world.
Note: While I think this is a good idea, it's clear that many readers strongly disagree. Before deciding whether to try this, please read the arguments in opposition.
Earlier this year, on a whim, I did something a little odd: instead of just paying my monthly cable and internet bills, I wrote large checks, pre-paying for several months of service. I didn't have a reason for doing it at the time. I had a momentary surplus of cash, and it seemed like a good way to use it. Maybe I ought to have tucked it into a high-yield savings account, but it seemed just as good to me to pay five or six months ahead on these bills.
As it turns out, I love this. I know I'm not paying any less money than I normally would, but by pre-paying my bills, I feel as if I don't have them. I feel as if I'm getting my cable and internet for free. In fact, I'm probably going to write checks at the end of December to cover each of these bills for all of 2008.
We are what we repeatedly do. Excellence then, is not an act, but a habit. — Aristotle
We tend to define our lives by the big events: graduation, marriage, children, a big promotion, retirement. What often gets neglected are the little things we do every day, the little things that make the big events possible. As Aristotle said, it's what we "repeatedly do" that produces excellence. When it comes to money and wealth, what do you repeatedly do?
Financial security cannot be reduced to a simple formula. Like excellence, it is the result of your daily habits. An individual with high income who has poor daily habits will fail to find financial security. But a person with relatively low income can achieve financial freedom through the power of good habits. So what are the habits of wealth?
This is a post by Michael Mihalik, author of Debt is Slavery (and 9 Other Things I Wish My Dad Had Taught Me About Money).
Wouldn't it be great to be financially secure — to never have to worry about money?
What would it take to get there? In fact, what exactly is financial security?