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 network, your career, and your financial situation.
Selecting the right flat screen TV, keeping up with current fashion, or getting season football tickets is not important.
I think if you follow these priorities, you’ll do well.
2) Your health
“Take good care of your body, because where else are you going to live?”
It’s hard to feel the difference between a healthy body and an unhealthy body when you’re 25. It’s very easy to feel the difference when you’re 55, because you’ll look like you’re 40 and feel like you’re 25.
Being healthy will make you feel good. Feeling good will make you look good and looking good will make you feel sexy.
Exercise daily. A little is better than nothing but do not settle for mediocrity for your top priority.
I believe the best forms of exercise are: crossfit, kettlebells and clubbells in that order. They’re each so good that you can stick with just one.
Make exercise part of your lifestyle!
The discipline required for this will first transform your body and then your mind.
Also don’t forget to floss daily
Eat good food.
Five servings of fruits and vegetables is not just recommended. It’s vital.
Good food does not mean a hearty steak with sauce and potatoes. It means a well-balanced meal with the right amount of calories and the right composition.
Pick either the Zone diet if you’re into bean counting, the Warrior diet, if you’re an austere Spartan or the South Beach diet, if you think you’re a movie star. These are lifetime diets and not quick short term fixes.
Do not eat “many small meals” as this will never give your digestive system any rest. That approach is only recommended if you for one reason or another needs to eat massive amounts of food.
Never get on a short term diet – they set your hormonal system up for all kinds of trouble! If it took you five years to get fat, it will take you about five years to get lean again.
4) Simplify your living quarters
Avoid stuff and clutter. Make your possessions low-maintenance and low-volume.
You are not what you own despite what the commercials try to tell you.
On the same note, sitcoms are basically designed to portray what the perfect consumer-life.
Resist the brainwash. Eventually 0% APR offers will seem like a joke to you.
Most people buy houses which are way bigger than they need them to be. The reason is mainly to have a place to keep all the unused or rarely used stuff they accumulate. Resist the temptation.
If you already have a lot of stuff, do the following. Divide your stuff into three equally large piles: essentials, probables and unneeded. Take your unneeded pile and give it away to charity or your friends and make them happy. Take your “probable” pile and do a yard-sale. Now you have your remaining pile of “essentials”. Repeat the exercise again with your “essentials”. Your remaining essentials should be able to fit into a couple of suitcases. You’re done.
Do not buy a replacement until you have gotten rid of the previous item.
Now, for every item you buy, buy it as if you’re not going to replace it again for another 10-20 years. Do not buy into fads. A high quality jacket can last you 20-40 years. Major appliances 10-15 years. Utensils a life time.
Notice that businesses do not purchase crappy tools. They buy the best they can afford. Do the same.
When deciding where to live, try to live close to where you work, so you can walk or bike to work. If you must have a car, buy a new Toyota Corrolla or a new Honda Civic. Keep it for ten years. Then buy a similar vehicle. If you must have a bigger car, get the Camry or the Accord. You do not need an SUV or a van unless you’re a family of seven. Four people really do fit into a compact. You are not what you drive.
5) Who to marry
If you are going to marry choosing the right partner is very important. You want to get it right the first time! Be engaged for more than a year before you marry. Get a pre-nup. Try to estimate how your partner is going to turn out in the long run.
Note that people have different personalities depending on whether they’re in love or not. Most couples are only in love for six months – it’s a hormonal thing. Many couples run into a make or break crisis after two years.
One of the best ways to get under the skin of another person is to see how well they do during a crisis (The boat is sinking!). Do they freak out and start praying? Do they overreact? Do they think “everything is going to be alright and someone will rescue them”? These are the people you do not want to marry. You want to marry a survivor.
There is a big difference between getting an education and being educated.
Learn to think and learn on your own. This is a highly valuable skill which is not taught in college. Rather what is taught is what information to repeat and how to repeat it. That is a big difference.
Do not drop out of high-school!
Do not delay finishing your education, because you don’t feel like it. You’re losing valuable time.
Learn a useful skill. Universities frequently suggest that you should study what you like. The reason for this is that if you study what you like, then you’re most likely to stay in the educational system for a longer time and thus be a good “customer” of the university system. If you go to grad school you’ll even serve as a very cheap source of highly skilled labour. The university does not care what happens to you after that. You may have a Ph.D. in ancient Egyptian algebra, but what is it good for?
Sometimes a degree in needed as a stamp of approval to get your foot in the door. Get the lowest degree needed for the doors you plan to enter.
Highly recommended fields of study are: Engineering, accounting, medicine, copy writing, and other applicable “rocket science” skills in high demand.
Not recommended are useless skills such as archeology, ancient history, and strange languages or any kind of skills that can easily be outsourced.
You are not your career. Do not put all your self-worth into one basket, because if your career is temporarily failing, you’ll feel like a failure.
Try always to exceed your job description. Put in extra effort.
Work towards getting recognized in other areas/sectors of your company or other companies. That way you’ll always have a job offer waiting for you.
A good network is just as important as good skills.
It’s better to be employed at a lower wage than unemployed on a higher dole. Aside from money, employment also earns you experience and it builds your network.
If you’re stagnating in your current job, seek another.
Learn about management even if you’re not a manager. Even if you not managing other people, you’re still managing yourself. It will also allow you to spot bad management decisions of your manager – try to stay clear of those.
You do not have a right to work and you do not have a right to a minimum wage. Your working is a transaction you make with your employer and you are both free to end the transaction if the terms does not satisfy either of you.
You must consciously decide why you want to have children and if they are worth the 18 year commitment.
Your job as a parent is not to provide fun activities and special programs for your children in the hope that they may grow up to be successful high-income earners like yourself.
Your job as a parent is not to give your children gifts and money so that they will be happy and love you.
Your job is to provide a good role model whom your children will try to imitate. They will do this because they are children and you are their parent.
They will try very hard to live up to your standards, if and only if you set equally high standards for yourself.
You can not change your kid’s IQ or personality. However, you can change how they behave and what they learn.
Remember, children are gullible and they will believe anything you tell them. The best thing you can do for them is to teach them to think for themselves and be skeptical.
If your kid’s turn out to be well-adjusted adults who can take care of themselves and stay out of trouble, you have done well indeed!
9) Financial independence
Start saving and start saving hard! Put $1500-$2000 into savings every month and increase that amount by the inflation rate (about 3-4%) every year. If you can’t do that you must either adjust your consumption downwards, get a better paying job or a second job.
$1500-$2000 each month is the key here!
For most people it is usually more effective to cut consumption rather than increase the income. Cutting consumption means cutting your liabilities. Move into a smaller house/apartment – maybe in another part of the country even, get a smaller car, cancel the gym-membership and train at home, cancel the cable, get rid of the cellphone, do your own nails/hair, stop going out, stop renting movies, stop buying the newest computer games or DVDs, agree on more modest xmas presents, get a hobby which doesn’t cost much money (computer programming, reading, or singing) or even better, get a hobby which earns you money (like crafts, fixing cars, gardening, blogging, or investing).
Work on delaying your gratification. Don’t let your immediate desires determine your consumer habits. If you think you must own something, write it down on a list. At the end of the month, check your list, most likely you will have forgotten why you wanted some of these items in the first place. Keep making a list every month. If an item shows up on a list five months in a row, then get it, but only if you think that it’s really worth it.
Do not envy your neighbor’s possessions. Remember that most people are all “Big hats, no cattle”.
If you have credit card debt, cut the cards up and pay them off. Do not get a home-equity loan. Do not get a car loan. If you have any of those pay them off as fast as possible. These are deadly to your financial independence.
Student loans are more benign. If you can lock in a low rate, pay them off slowly while increasing your savings.
Start a cash position with your savings. ING Direct, Everbank, and First Immigrant are good. When you have more than a few months worth of pay in that account buy a low-cost low-risk mutual fund and stick to it!
Do NOT buy an index fund. Now is not the time. Find a fund manager who can think on his own and invests in value stocks. If his cash position is currently large and he has a low turn-over, he is likely to know his stuff.
If you want to invest on your own, realize that you’re initially like a person who wants to treat his own appendicitis using kitchen utensils only.
If you learned everything you know about investing from a TV infomercial, you should probably stay away. Whenever you see currently lots of brokerage ads on TV, the general market is very likely peaking, whence these guys need to dump their high-priced stocks on chumps like you. Spend several years educating yourself! Start slowly.
Do not buy Google unless you know something about marketing and advertising that the rest of the world does not!
After about 15 years of high savings, you should be able to retire and keep living a low-consumption life-style. At this point you will be a millionaire, driving a Honda Civic, and your meaning of existence will go way beyond shopping.
10) Buying a house
A house is a consumer object. It’s used/consumed, wears down and has to be replaced. People only get rich buying and selling houses during good times and they go bankrupt just as often when good times turn bad. Generally nobody can predetermine when good times become bad an vice versa.
A house is an expensive proposition, so do NOT speculate/gamble on the direction of the house price. In other words, do not take out a loan, hoping that house prices will go up. Historically, house prices rise with inflation (at 3-4% a year) and not the 15-20% we have seen during the past few years. In addition, historically what goes up must come down. Things revert to their normal. Otherwise there would be no normal.
Approach house buying as if you were investing for the long term. The NAV formula can be used. With the current numbers, if the house price is lower than 110 times the monthly rent for a similar house (look around), you should be buying the house. If the house price is higher than 110 monthly rents, you should be renting. Currently, the most financially sound strategy in the US is generally to rent.
Originally posted 2008-01-30 07:20:50.