Live Frugally or Die Broke

A Lesson From The Past

I’ve been a very busy individual as of late. I just moved apartments, as I stated in my last few posts. The move is now complete and I find myself in a financial black hole once again. The moving costs sapped my bank account and car problems have plagued me as of late. That being said, I feel rejuvenated and young once more. It’s as if I moved everything in search of the fountain of youth and found it. I’ve been trying to relax lately and have been participating in activities in which I enjoy.

Today my new roommate and I went exploring in forests located in Northern Minnesota, which have never before been touched by human activities. It felt absolutely invigorating and I’ve never felt so alive and young before. At one point in our journey, we came across an old farmstead that has probably never been revisited since it was abandon. The site was approximately evacuated during the 1930s. We were stunned at the old relics laying around and spent a few hours treasure hunting.

Back To Reality

The site of the historic ruins I found sent my mind reeling. How could such a thriving farm site fold up and collapse? It was for the same reasons we are experiencing now. It is coming apparent we are headed for a depression. We have officially been in a recession since December 2007 and it shows no signs of slowing. I was talking to an investor (now my landlord) about the current state of economic affairs. He asked me, “Where the hell are we supposed to put our money now?” He raises an excellent point. We have nowhere to turn as a flight to safety. Treasury bills, money market accounts, and equity markets are either risky or pay nothing. Real estate has collapsed and will continue to be devalued, despite what the talking heads at CNBC tell you. My answer to him by the way, “The only way to make money is to become an entrepreneur.”

Launching Your Business

I read an interesting quote the other day from Dave Ramsey. He said, “Money flows from those who don’t know how to manage it, to those that do.” My landlord, an intelligent investor, has been going to a lot of liquidation sales lately. These are businesses that have failed and he is buying up their assets in large quantities. We have plans to launch a new business in the coming months. Of course if you have debt right now, you should focus on paying that down, as that is a guaranteed return on your money. For those without debt, you should be looking at something you do well and begin building a small business of your own.

If you look back at the start of many businesses. Most began in the late 1930s including; HP, Ocean Spray, and Yellow Book. Today these companies are thriving. How was that possible? These individuals had the door slammed in their face time and time again. They had nowhere to turn, so instead they developed an idea and they never gave up. Stay the course and build upon your small business idea, hire individuals that once worked for talented companies but have since been laid off. Take the assets from the weak and learn from their mistakes. When there is crisis, there is also great opportunity. We are about to enter a golden age of American ingenuity.

Silent Budget Breakers

I’m probably not the kind of guy who should be ragging on people to stop their bad habits. I know I have had a few in my day. A bad habit can be a black hole for your budget and sink your finances in the blink of an eye. This article won’t be a hoo-rah session for breaking bad habits. You know you shouldn’t be doing them and are most likely well aware of the consequences to your financial health. That being said, alternatives can be found.

The worst habit for your health and financial well-being is most likely smoking. I was a smoker in the past and have been trying hard to quit. I have some great (free) resources now that I can utilize to work out that financial kink in my life. I’m sure there are dozens of free support programs you can find online by using Google. My state has a free quit plan, as well as my employer. If you do have to smoke, I learned there were always cheaper ways to carry on the habit, other than paying out the ears. You could try making them yourselves, which although still as toxic and deadly, are far cheaper. As the taxes increase, eventually none of us will be given a choice whether or not to smoke.

Lean and Mean

Unhealthy foods are a very serious financial risk. Not only do they create serious medical bills down the road, they can be detrimental to your pocket book. I’ve known some of my customers in the pizza delivery business are spending well upwards of $100 a month on pizza alone. These people are less productive workers and often become sick more often throughout the year. I am also not so great with healthy food choices. My girlfriend on the other hand is very conscious of healthy choices. We try to cook homemade meals to spend more time together. Her diet often becomes mine as well, with the dishes she makes.

I’ve made a solid effort to pick up organic items, I see on sale, every time I go to the grocery store. I can honestly say it feels great to eat organic food. For the first time in my life, I purchased a variety of organic foods at the grocery store including; a real pineapple, a coconut, and a fresh salmon. I was surprised that the satisfaction I received from this food, was well worth the price I paid. The next time you go grocery shopping, I strongly suggest you try and mix it up. I wouldn’t overpay for organic produce but I have noticed, when the expiration nears, deals can be had.

“Laziness travels so slowly that poverty soon overtakes him.” -Benjamin Franklin

Not Time For Laziness

The bad habit I am most venomous about stems from laziness. Laziness is a trait that will bankrupt most people and keep them in a financial rut forever. In much the same way overweight people need to exercise, bad spenders need to get frugal. You have to identify the problem and then work twice as hard to correct your mistake. Most people know they have to live frugally but are too depressed, strung out, or feel they “need” to keep up their big spender life styles. Make no mistake, to live frugally means going through a great deal of pain. When you overspend like most Americans have, there are consequences.