Early Retirement Extreme

Financial independence, frugality, self-sufficiency, ecology, capitalism, and voluntary simplicity

How I became financially independent in 5 years - Part IV - the investments

Published in February 10th, 2008

Posted by Jacob in compound interest, culture, economy, financial independence, financial security, investments, net worth, personal finance, saving

13 Comments

If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting! I posit that most people can attain financial independence in less than 10 years and in less than 5 if they are truly determined. I also submit that many people are not willing to make the necessary changes. [...]

5 ways to help get a prosper loan funded

Published in February 7th, 2008

Posted by Jacob in debt, investments, money, personal finance

3 Comments

As someone who has lent out over $12,000 over the past 1.5 years here is what I prefer to see in a loan request before I bid.

Be accountable! The original idea with peer to peer lending was that a group of people (like a knitting club) would get together and hold each other accountable. Needless [...]

Are you prepared for stagflation?

Published in February 4th, 2008

Posted by Jacob in economy, inflation, investments, sub-prime

3 Comments

A few days ago I heard the recession word used for the first time as in “we are now in a recession”. The real question is whether this is going to be a short one (like they usually are) or whether the double whammy of an inflated stockmarket followed by an inflated housing market followed [...]

The problem with the economic stimulus package and what to do about it

Published in February 2nd, 2008

Posted by Jacob in economy, investments, money, sub-prime

10 Comments

Economically speaking, the government is a zero-sum game that takes money from one group and distributes it to another group with the intention to somehow improve the world. For instance, when the government engages in war, it gets money from taxpayers (through the IRS) and savers (by issuing and selling bonds) and gives it to [...]

How to be happy in the long run

Published in January 30th, 2008

Posted by Jacob in financial security, household, investments, job, motivation, personal finance, standard of living

18 Comments

The following is a list of the things I’ve learned during my first 30 years about how to live a good life.
Take it for what it’s worth.
1) Decide what your priorities are
Your main priorities are your health, food, shelter, and who/if you marry in that order.
Your other priorities are your children, your friends and your [...]

Cash flow diagrams for the poor, the middle class, and the investor class

Published in January 26th, 2008

Posted by Jacob in assets, compound interest, debt, expenses, financial independence, financial security, investments, money, personal finance

16 Comments

Being poor or unable to get credit 100% of the expenses must be covered with wage income. Schematically the cash flow looks like this

Thus you put your time into your work which gives you a wage income that is used to pay for stuff that goes back to you.People with a credit score can go [...]

How I invest when the markets are bleeding

Published in January 23rd, 2008

Posted by Jacob in assets, economy, investments

No Comments

It is times like this when the markets are falling almost on a daily basis that I remind myself of why I invest. I invest for the following reasons.

The main reason is to provide an income stream; usually in the form of dividends. I also tried covered call writing, but this is too much of [...]

So you say my blog is worth $15000 already?

Published in January 21st, 2008

Posted by Jacob in assets, blogging, investments

5 Comments

I came across this tool for calculating the worth of your blog. I got $15000 which is not bad for 6 weeks of writing. I’m not sure exactly how this is calculated though. Is this a pure play estimate of what similar blogs have sold for. Quite possibly it is just a measure of some [...]

Lending victoriously to strangers

Published in January 4th, 2008

Posted by Jacob in carnival, investments, peer-to-peer lending

No Comments

I have written earlier about my experiences with peer to peer lending. Personally, I treat it like an investment no different from any other investment. In my experience the risk/return rates are similar to liquid junk bonds. However, peer to peer lending has a social component to it and it is a lot more intimate [...]

Forget about net worth, consider the bottom line

Published in December 25th, 2007

Posted by Jacob in assets, cost of living, financial independence, financial security, inflation, investments, liabilities, net worth, personal finance, saving

1 Comment

I think the income or p&l statement which catalogues earnings and expenses is more telling about a person’s financial situation on a day to day basis than the balance sheet which is where you calculate your net worth. The balance sheet is more useful when you are considering buying or selling assets. So for example, [...]

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