Rich Programmer, Poor Programmer
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I was reading Rich Dad, Poor Dad on the way to work (I am slowly learning the art of reading in the sardine tin that is the Tube.) My third management/business/finance book in three weeks, oh no! As usual what the guy talks about makes a lot of sense, it is just actually applying it which is the hard bit. It got me curious about the rest of you and how you handled your finances. I am bad with money, nay, I am terrible with money. Money pushes me around a lot and I am getting so sick of it. I earn a good enough salary and don't have that many expenses, but I still end up with a nice fat zero at the end of every month. What really gets to me was that I can start renting a flat at R2000 per month and still end up with zero while right now I am not renting and yet I still end up with zero. That tells me that there was R2000 floating around which I somehow spent a month on nothing much really. So I have decided to get serious, and strict, about my money habits and was wondering what your situation was like. Do you live month to month? Do you have some nice investments or savings accounts? Are you banking on a retirement fund to get you through the last 30 years or so? Basically, are you smart or stupid with your money? And what can you tell me that actually works or doesn't work? regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
I think I am reasonably smart with my money. I agree with the general trend of start and save something. It does add up. Also split were the savings go. In corporate USA I place the bulk of retirement savings into my companies 401K tax deferred plan now at the max allowed of 8%. It started smaller 2% but then each year I would raise it with any salary adjustment. I never noticed the increase in my savings. Secondly I have an external taxed fund that I now put $100 a month in. I deliberately had any direct access not activated so I would have to go through the funds advisor to get to it. I still can but it takes 5 days. Lastly I have a short-term savings (poorer interest) but I can get to the money by driving to the banks ATM, medical, major purchases, etc. It is not in my checking account so it is a deliberate decision to get to it. All of the above are automatic deductions. It appears to work. This last year I purchased 2 cars (one for my daughter and one for my wife) and paid cash for both.
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I have never been ruled by money. Whether I have it or not, it doesn't bother me. Several years ago I was on a sh!te salary, yet I was still saving (without trying to) at about £200/month. This was due to my lifestyle. I don't drink/smoke, and I didn't really socialise in my time off, spending my time at home (in rented accomadation) playing with my computer or watching my Jackie Chan collection. I have found that since I am being paid more now (almost 2*), I am not saving at all. I still don't drink/smoke or go out. But there is one big difference, I have a girlfiend (yes a girl fiend!). She comes with two kids. The food bills; clothes bills; Mortgage (which is not bad at all); and then her presents (she likes designer stuff - read Gucci/Armani/Cartier etc). Its the presents which are killing me off really. At the moment, I am just treading water, and thats with my yearly bonus and trading all my holidays in for cash. If I lost the girlfiend/kids, installed a paying lodger etc, I could be saving at about £15000 a year. But then love gets in the way. Roger Allen Sonork 100.10016 If I'm not breathing, I'm either dead or holding my breath.
Roger Allen wrote: £15000 That's about $45,000 Oz. :omg: Us guys do some damn stupid things for :love: (but I admire you nonetheless ;)) cheers, Chris Maunder
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Paul Watson wrote: Do you live month to month? Not now - but then again I've been working full-time for less than a month :) But, I'll be damned if I spend the rest of my life desparately waiting for that next paycheck. There's no guaruntee that it will come, but there is a guaruntee that you're utterly screwed without it and that you'll need to work long past retirement age. The best way to figure out where your money is going: Go through two months and only use a credit card or debit card (easier said than done if you're not in America). This way, at the end of the month you get to see in excruciating detail exactly what you spend, where you spent it, and how much the $3 here and $2 there actually adds up to over the course of a month. Of course, don't forget to pay the credit card bill in full :) If that's not possible, though, I'd suggest taking a chunk of money out at the beginning of every week and only spending that, while saving the receipts of everything you buy. Then at the end of the week total up you're receipts and look at where your money is going. Doing this, I realized I was spending an extra $80 a month by getting a latte everyday. I reclaimed about $40 a month by foregoing to latte for a plain coffee... Whatever you do, make sure you can save alot of money over the next 20 or 30 years so that, when retirement age comes, you can actually spend each and every day relaxed and doing what you want to do :) -- Russell Morris AFLAC Software Research Center "WOW! Chocolate - half price!" - Homer Simpson, while in the land of chocolate.
Russell Morris wrote: while saving the receipts of everything you buy Funny story that. Whenever I am over here in London everything (food, travel, accomodation, snacks, clients etc.) is a company expense. With the Rand/Pound exchange rate I cannot afford to even pay for a packet of crisps without claiming back. But to claim back you need receipts and it has really built into me a great habit of getting reciepts for everything, even when I am back in SA. It HAS helped me a lot in seeing were my money is really going and what comparitvely are my problem areas. The other day I bought a 24p pack of WAlkers crisps. I asked for a reciept and the Pakistani tender guy laughed his head off. He stopped laughing though when he saw that I was serious... lol I am not welcome back there (cafe-in-da-wall at the Oval station.) Russell Morris wrote: Whatever you do, make sure you can save alot of money over the next 20 or 30 years so that, when retirement age comes, you can actually spend each and every day relaxed and doing what you want to do While that is a good idea, I am not willing to work for the next 20/30 years, not a chance :) I have to temper saving with investment with a bloody good business which brings in the money. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
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Roger Allen wrote: £15000 That's about $45,000 Oz. :omg: Us guys do some damn stupid things for :love: (but I admire you nonetheless ;)) cheers, Chris Maunder
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simons wrote: huh? Are you working overseas all of a sudden, Paul? Just out here in London for a month on some new projects. Going back on the 3rd of Feb. To All Londoners, how the hell do you live in this dismal city? :) regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
Nobody lives in London, they commute in from the surronding areas. :-D Which part of London are you stuck in? Michael :-)
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Roger Allen wrote: £15000 That's about $45,000 Oz. :omg: Us guys do some damn stupid things for :love: (but I admire you nonetheless ;)) cheers, Chris Maunder
Chris Maunder wrote: That's about $45,000 Oz. Admittedly, I would only manage to save that if: 1: I stopped my impulse buying (I collect videos etc) 2: Lived off 8p cans of baked beans (would you like to socialise with someone who lived of that! X| phew!) Maybe I am just lucky in the way I live, that I would be able to save that kind of money (If I had the chance to) Chris Maunder wrote: Us guys do some damn stupid things for It was more desperation for me! ;P Roger Allen Sonork 100.10016 If I'm not breathing, I'm either dead or holding my breath.
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xicoloko wrote: but what makes you hate London that much? I don't hate the place. It is an amazing pulsating heart of an empire. It is 1st world all the way. The business is great, the money is there and there is plenty to do. BUT I come from Cape Town, South Africa. A city with it's own mountain in the middle of it. With island beaches, forests, huge outdoor areas, hot days and the magnificent ocean. You can hike, camp, suntan OR you can go clubbing at night, dine at fine restaurants, watch movies etc. etc. I am not much of a social person. I like clubbing, but for the music and atmosphere. London is for social people. There is no real outdoor life (Kew Gardens does not count) and the only alternative to being a hermit is going to pubs, clubs, theatre, movies and restaurants. Thats it. Also I own a car back in Cape Town and I love to drive. I like being in control of my "transport." In london it is "wait for bus/tube/train, get on bus/tube/train, sit through ten stops, get off bus/tube/train, work, repeat." I think bottom line is that why would I want to live in London... no reason. CT has it all for me and I love it there. LO is not my type of city. I come from Africa, I need space and hot weather. LO has none of that. But saying all that to visit LO is AMAZING! I blew myself away the first three times I came here. Visited everything and anything. Such history and so much stuff to do. But once the tourist bit is done... well then you have to be a social animal to carry on enjoying it, and I can't abide by that. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
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All I can say is: start saving. Get money taken out of your account automatically and into a managed fund or something. My rule of thumb is always have enough money put aside (working for you, but still available) so that if you lose your job tomorrow (or for some other reason are unable to generate income) you'll be OK for 3 months. cheers, Chris Maunder
Chris Maunder wrote: so that if you lose your job tomorrow (or for some other reason are unable to generate income) you'll be OK for 3 months. Agreed... but I prefer to save for 6 months... "Good Jobs" are not so easy here in Brazil... Mauricio Teichmann Ritter Brazil mauricioritter@hotmail.com
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Nobody lives in London, they commute in from the surronding areas. :-D Which part of London are you stuck in? Michael :-)
Michael P Butler wrote: Nobody lives in London, they commute in from the surronding areas LOL true! I think of London though as one big seething mass of people with tube bits stuck between them. It reaches out to all the suburbs and gorges itself on them :) Michael P Butler wrote: Which part of London are you stuck in? Staying in Clapham Common and working at the Oval (all Northern Line.) regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
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Roger Allen wrote: £15000 That's about $45,000 Oz. :omg: Us guys do some damn stupid things for :love: (but I admire you nonetheless ;)) cheers, Chris Maunder
That's why I appreciated my (ex?)-girlfriend. (She is away at Uni). Not only is she not interested in the latest designer fashions, but even if she was, she would much rather be earning her own income. She hates being financially dependant on people. Tha type of attitude definately works for me :) - Jason SonorkID: 100.12194 :bob:'s your uncle
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I was reading Rich Dad, Poor Dad on the way to work (I am slowly learning the art of reading in the sardine tin that is the Tube.) My third management/business/finance book in three weeks, oh no! As usual what the guy talks about makes a lot of sense, it is just actually applying it which is the hard bit. It got me curious about the rest of you and how you handled your finances. I am bad with money, nay, I am terrible with money. Money pushes me around a lot and I am getting so sick of it. I earn a good enough salary and don't have that many expenses, but I still end up with a nice fat zero at the end of every month. What really gets to me was that I can start renting a flat at R2000 per month and still end up with zero while right now I am not renting and yet I still end up with zero. That tells me that there was R2000 floating around which I somehow spent a month on nothing much really. So I have decided to get serious, and strict, about my money habits and was wondering what your situation was like. Do you live month to month? Do you have some nice investments or savings accounts? Are you banking on a retirement fund to get you through the last 30 years or so? Basically, are you smart or stupid with your money? And what can you tell me that actually works or doesn't work? regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
I knew a man when I was growing up, a friend of my father's, who came here from Lebanon as a teen without a dime in his pocket. He retired at 40 as a multi-millionarre. His formula was simple. Take 10% a give it to God (he was a devout Christian). Take the next 10% and put it in savings. Live off of whatever is left. Every time his savings grew large enough to make a down payment on an investment property (ie, one that paid back a return) he bought it. It's a formula that I've seen in many books, and I know from watching this man over many years that it really does work. Yet I can't seem to make myself follow his sterling example.... Grrrr... Like most here, I live month to month, check to check. Possibly the only smart thing I've done is to enroll in the investment plan we have at work. In the US we have a plan called a 401K, named after the section of the Internal Revenue (Tax) code that defines it. We can have an amount taken out of our gross pay before taxes, and invest it in an approved plan - usually a mutual fund. The employer usually matches a portion - in my case 50% of what I contribute - and interest earned by the investment is not taxed until we begin to spend it. Despite the falling market of late, mine actually increased 10% last quarter! It amazes me that, knowing that our employer adds 50% to whatever we contribute, we still have employees who refuse to join! Things are turning around, though. I bought an accounting program - Quicken -to track income and expenses. I'm not yet disciplined enough to maintain it properly, but I'm getting there. What is a real eye-opener is the size of the Miscellaneous account each month. That's where the money for beer, darts, cigarettes, sodas, and such lies, and it's far too large! My goal is to reduce that to a minimum, and in doing so, I think I'll find a bonanza... By the way, "Rich Dad, Poor Dad" is an excellent read - I've got it, and I re-read it from time to time... A penny saved is a penny taxed...
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That's why I appreciated my (ex?)-girlfriend. (She is away at Uni). Not only is she not interested in the latest designer fashions, but even if she was, she would much rather be earning her own income. She hates being financially dependant on people. Tha type of attitude definately works for me :) - Jason SonorkID: 100.12194 :bob:'s your uncle
Jason Hooper wrote: That's why I appreciated my (ex?)-girlfriend. (She is away at Uni). Don't think like that or it may become that. Stay in touch. Jason Hooper wrote: She hates being financially dependant on people. Tha type of attitude definately works for me Janina is the exact same way with me. Our problem though is that I love to spend money on her. Plus she does not have a job yet (going into Varsity (Uni)) and so feels doubly bad about me paying her way. I don't mind though, if I have to spend my money on something then her and I are the top choices. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
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Nish [BusterBoy] wrote: I'd probably fall in the 1st to 31st category. I finish my pay in 30 days flat. I mean even if I get a hike or a bonus, I still manage to finish it in 30 days. Or if I have a sudden unexpected expense, still it finishes in 30 days. The whole point is that whether I get more or whether I get less, I end up with zero at month-end Same as me. Nish [BusterBoy] wrote: and I am quite happy with that too. Not the same as me. I hate living 30 days at a time, it is stressful. Nish [BusterBoy] wrote: I mean, it's easier that way. I just need to think for 30 days. When the new month starts I get money again and the cycle continues. My point is that even if I start saving money now, it wont amount to much. But 4 years later when I am earning 10 times what I do now, then if I save each month, I can save in one month or two what I could save in an entire year with my current monetary situation I think this is a prime example of what the rich (or soon to be rich) people know about, and what the poor (or soon to be poor) people don't know about. IMHO that is a terrible way to think Nish. With your first job lets say you earned X. At the time you thought "not bad, not enough to start saving so lets just live and get a raise." Then you got a raise to 2X. However you forgot what you said when you were earning X and once again said "not enough to start saving, lets waits until I get 3X. Meanwhile your expenses are increasing, you are expecting more from life and you are sick of eating two minute noodles every night. So you spend more. At the end of the day you are in the same position as you were in when you were earning X. Then you get 3X, and once again your perspective changes and you say "4X." And so on and so on. I worked out that if I had saved just 5% of my salary from the day I started working till know I would have enough to cater for any emergency, put a deposit down on a flat (instead of just having enough to rent it), help Janina pay for her education and so on. Yet I said the same thing every time I got a raise "I need more before I can start saving." I am still in the same financial position as I was two years ago, even though I am earning three times as much as then. Rich people, and I work for one, know that you get rich not through big salaries or lucky breaks or huge windfalls. You get rich through small savings which add up over the years and get doubly added by
The words of wisdom I always heard were to "pay yourself first." Go ahead and take that 5% and put it into a savings account somewhere. Your other expenses will work themselves out around what you have left. If you let your own "savings" work itself out from what you have left after everything else is paid, then you won't ever get any saved, as you have pointed out. Dave "You can say that again." -- Dept. of Redundancy Dept.
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The words of wisdom I always heard were to "pay yourself first." Go ahead and take that 5% and put it into a savings account somewhere. Your other expenses will work themselves out around what you have left. If you let your own "savings" work itself out from what you have left after everything else is paid, then you won't ever get any saved, as you have pointed out. Dave "You can say that again." -- Dept. of Redundancy Dept.
David Chamberlain wrote: If you let your own "savings" work itself out from what you have left after everything else is paid, then you won't ever get any saved, as you have pointed out. David Chamberlain wrote: "You can say that again." -- Dept. of Redundancy Dept. :) corny, I know David Chamberlain wrote: The words of wisdom I always heard were to "pay yourself first." Go ahead and take that 5% and put it into a savings account somewhere. Your other expenses will work themselves out around what you have left. It is just SO hard to do that, to actually make that comitment. I just have to stop procrastinating really. Still hard though. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
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:omg: I read your post twice Paul. Twice! And I don't do that usually. You are so dead right. Two years ago, I had put a figure in mind when I'd prolly be able to save something and now that's nearly what I get every month. I am kinda thinking like 4 years later, I'll startv saving. 4 years! Maybe I am just procrastinating endlessly. Your words of truth have soured me up a little. I hope to recover soon and continue in my foolhardy manner though :-) For a 22 year old VB programmer [with stress on the VB part] you sure speak wisely, buddy! Nish Sonork ID 100.9786 voidmain www.busterboy.org If you don't find me on CP, I'll be at Bob's HungOut
I agree with Paul. The key is the 5%, even if it's very little now. We are creatures of habit. So it's good to start learning how to save now. If you wait until you have the extra money to save you might not know what to do with it. But if you start now you can learn how to invest and you can use that experience and knowledge later on when you are able to save a lot more. The easiest thing to do is get your bank to automatically transfer a small percentage of your paycheck to a savings account. Then invest the sum of that every 6 months or so.
Todd Smith
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David Chamberlain wrote: If you let your own "savings" work itself out from what you have left after everything else is paid, then you won't ever get any saved, as you have pointed out. David Chamberlain wrote: "You can say that again." -- Dept. of Redundancy Dept. :) corny, I know David Chamberlain wrote: The words of wisdom I always heard were to "pay yourself first." Go ahead and take that 5% and put it into a savings account somewhere. Your other expenses will work themselves out around what you have left. It is just SO hard to do that, to actually make that comitment. I just have to stop procrastinating really. Still hard though. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
It really isn't that hard, once you take yourself out of the loop. *What?* If you have direct deposit abilities, set up an automatic deposit to your savings account of $x and let the rest go into your checking account. Then, you don't have to do any work to save. It's automatic. Agreed, it is difficult if you have to extract your savings from a check you just received. But if you let the automatic money gods handle your deposits, then it's easy. If THAT is too hard, then you're really going to have a tough time of it. Dave "You can say that again." -- Dept. of Redundancy Dept.
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That's why I appreciated my (ex?)-girlfriend. (She is away at Uni). Not only is she not interested in the latest designer fashions, but even if she was, she would much rather be earning her own income. She hates being financially dependant on people. Tha type of attitude definately works for me :) - Jason SonorkID: 100.12194 :bob:'s your uncle
Jason Hooper wrote: She hates being financially dependant on people My woman was originally like this. I bought here a few clothes and I practically had to strangle her to allow me to buy food for the home (we didn't live together at that time). She was struggling hard to support herself and her two kids. Doing a full time course and a job to help house and feed them. She was cracking up under the strain. When she finally did accept being supported by me even just a little, it slowely increased until I was paying for all the food (not quite all the time these days). As she lives with me at my own house, she doesn't have to pay accomadation costs and bills. She was also able to give up that job while at colledge. Its probably what allowed her to graduate last December. She now works part time and does bring in some money, but she tends to spend that on herself and her kids. She does buy me things now and again (she wants me to dress well, where I like to slum in old clothes). I just have to ween her off these big expensive purchases she likes to make. Escpecially on my credit card. :( Roger Allen Sonork 100.10016 If I'm not breathing, I'm either dead or holding my breath.
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Hell, I'll be his girlfriend for 15 grand (sterling) a year... ;) ________________ David Wulff http://www.davidwulff.co.uk "My grandfather once told me that there are two kinds of people: those who work and those who take the credit. He told me to try to be in the first group, there was less competition there" - Gandhi
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Michael P Butler wrote: Enough so that I managed to live for six months last year without any money coming in. That is pretty damned good Michael. Read Nishs reply to me and then think to yourself: If he got fired, what the hell would he do? I am in that same position, if I lost my job I would have to get one within a month or I would be broke. And then they repo your car, you cannot pay your rent and you have to beg borrow or steal some money to survive. regards, Paul Watson Bluegrass Cape Town, South Africa "The greatest thing you will ever learn is to love, and be loved in return" - Moulin Rouge Martin Marvinski wrote: Unfortunatly Deep Throat isn't my cup of tea Do you Sonork? I do! 100.9903 Stormfront
Although I spend my days as a programmer, I also do financial planning for families and businesses. Here are a few details about the US that are pretty surprising: Current Statistics state that of every 100 people who will reach age 67 in the year 2005 in the US: 54 will be dead broke (and need to rely on Social security or family). 41 will still be working. 4 will be able to retire ( with around $1M) and 1 will be Financially independent. Most people have been caught up in the commercial lie that more is better, and spend their whole lives aquiring debt. I was in the same situation, Credit cards and car loans. I am now down to my mortgage and one other loan, and I'll have everything paid off in under 8 years. I for one am never going to allow myself to be indebted to anyone again after I get everything paid off. One more interesting statistic, in the US 65% of people cannot put their hands on $1000 cash. If they sold everything they own, and paid off all their debts, they would have a net worth of less than $1000. Start early, and save regularly. It can make a big difference. And make sure that you are getting at least 10% return, or you'll not beat inflation after taxes (in the US, at least). From an internal company e-mail November, 2001 -- "Would the person who stole the ethics training manual from the class last Friday please return it."
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I agree with Paul. The key is the 5%, even if it's very little now. We are creatures of habit. So it's good to start learning how to save now. If you wait until you have the extra money to save you might not know what to do with it. But if you start now you can learn how to invest and you can use that experience and knowledge later on when you are able to save a lot more. The easiest thing to do is get your bank to automatically transfer a small percentage of your paycheck to a savings account. Then invest the sum of that every 6 months or so.
Todd Smith
There's a classic example that illustrates the mistake that most of us (myself included) make. It definately sobers you up if you're no longer just out of college and haven't started saving yet. Here it is: Let's take to hypothetical people, Jane and John. Jane starts saving when she's 21 and invests $100 a month for only 10 years, not saving anything after she turns 31. At that point here total investment has been $12,000 (not counting the interest she's earned) and she just lets the investment (and the interest) sit until she retires at 65. John on the other hand doesn't start to save until he's 35, but unlike Jane he invests $100 a month all the way up until he retires at 65. So, his total investment was $36,000. Assuming an annual return of 8% on their savings, Jane retires with $300,053 while John retires with only $150,023! John invested nearly three times as much as Jane but ends up with nearly half of what Jane does! If Jane hadn't stopped at 31 her total investment would have been $52,800, but her return would have been $489,120. Save early. No matter how little you think you can invest, the return is MUCH greater then saving later. An interesting extreme to this: if you have a baby and immediately start saving $100 a month for him, but do so only until his 6 years old, and that money just sits earning interest until he retires, the return is $1,107,869! Another scary thought is that the magic of compound interest also works in exactly the same way against you... the only trouble is that you pay a much higher interest rate when you borrow then you get when you invest. (Waits for the sound of everyone here cutting up their credit cards.) William E. Kempf