Wednesday, March 21, 2012

Review of How to Afford Anything

I stumbled upon a great article of Ken Rockwell called How to Afford Anything. Since the article is quite long, here are the points that helped me the most, i.e. were the least obvious to me.

Priorization
In short - buy things that you really want. Don't buy things just because it is so easy.

Never buy a new car - as it is one of the worst investments. New car losts a notable value just by you buying it.

Don't buy a big house - instead, try to live just below your means. Why? Because then you will always have more money than you need. This can be abstracted to the rule - try to spend just below what you have, e.g. the 99% and you won't know what to do with the money. The problems raise if you spend just a little above, e.g. 101%.

Real estates not always make you money - you pay lots of things around the house. So buy the apartment only if you intend to live in there.

Patience
Find plenty of time to research products that you intend to buy.

Thrift
"A luxury, once sampled, becomes a neccesity." Don't borrow or even try fancy stuff. You will think you deserve it and you will eventually have to buy it.

Don't take loans - buy only things you could afford. It takes simple math to calculate that all debts cannot be payed. If there were just one person (or 7 billion) and a bank (or a thousand banks) and the bank would borrow 100 dollars to the person and wanted back 110 dollars, but the only place to get money was the bank, the person has no chance to pay his debt.

Don't rent apartment - rent just a room. The rent money is money thrown away. If you must rent, do it just with one room, as it is all you need untill you have enough money for mortrage.

Embarrasment
Ask for a Deal - always when you can. Read a book about deal negotiation.

Return what you don't want or need.


Addiction
Don't go into the stocks market. This is a nonsense in the long-term.

Removing distractions

Removing distractions especially at work can boost your productivity, so they say. I gathered some tips from other blogs and added some more to improve your distraction-freeness.

Have a quite workplace. If you must listen to music, many people find it better to listen to instrumental music only (no vocals).

Clear your desk. I'm a minimalist, so I like my desk clean. I think this could also affect my productivity, but I don't really know.

Close all applications and tabs you don't need. I cannot work when I see 30 windows and always have to think where to click. I have an average number of 2 windows in the taskbar and I am a programmer. I find myself periodically killing windows/tabs, when their numbers exceed 5.

Turn off your IM. Or at least turn off the notification of the new messages. Or at least go invisible.

Turn off auto-check on e-mail. You should check for your e-mail once or twice a day. If you have to look on it more, decrease the frequency of auto-checker checks. Auto-checks of e-mail give false sense of urgency.

Filter through your subscriptions. All the kinds. Clean RSS feeds, e-mail subscriptions, etc. If you use Google Reader, it has this nice feature - 'Trends' - which can help you with the cleaning.

Have a zero mailbox. I have it empty for two months now and I still live happily. Move your e-mail from your inbox when you're done with it. Try to read each of your e-mails just once. Take the wanted action (reply, fix something, etc.) and try to immediately decide if you will delete it or archive it.

Clean your computer desktop. There should be no icon, that you don't want to click multiple times per workday. Now I am on seven.