If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.
If you have a high speed (DSL or faster) internet connection and you like music but find yourself frustrated with radio stations playing the same music over and over again head over to Pandora.
Pandora has a team of musicians analyzing songs for tone, sound, tonality, etc. I believe they call it the DNA of the music. You then enter a song or artist you like and Pandora compares their DNA to other tunes or artists with similar qualities. Best of all, it starts streaming songs to you for free. You can then rate them “thumbs up” or “thumbs down” to teach the database what you like. This does not seem to work too well for me, but then I just enter another song I like and things get back on track. This is a really great way to learn about new artists and best of all, it’s free – well as free as your internet connection anyway.
Now the down side is that Pandora, due to licensing restrictions, work more like a radio station than a CD. For instance, you can not replay a song and there is only a limited ability to skip songs. However, you can change “stations” and make new stations as often as you like.
One upside or downside depending on your view is that you can easily click through the menu when a song is playing and get directly into the amazon page. The danger here is that you suddenly find yourself wanting to buy CDs you didn’t even know existed before. I warn you, the temptation is great! 🙂
I’m a big fan of amazon. I buy almost everything media on amazon. This might not be the most frugal choice right off the bat. However, I buy almost all CDs, books, and DVDs used, and amazon has the biggest used market I’m aware off.
So here’s how I work it. As I’ve mentioned before, when I see something I like, I don’t buy it immediately. I put it on a wish list. Amazon makes this very easy of course. Then after a while (typically a month) I check the wish list again. If I still want it, I keep it on the list. If not, I delete it.
Now with used CDs and books, two sellers will often try to underbid each other. This way they can run prices very low because they are of the impression that buyers only buy from the cheapest seller. So if you watch your wish list daily, you will sometimes see used prices dropping fast. The reason is that amazon sellers have an easy way of seeing whether they are the ones currently offering the lowest prices and lot of them want to be the lowest on everything. When this happens, you find yourself in a Dutch auction, so you have to buy before someone else does. I wish it was possible to set up limit bids on amazon just like on the stock market. That would be most awesome!
Originally posted 2007-12-23 16:27:00.