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 enjoy the blog, also consider the book which is much better organized and more complete. You can read the first chapter for free, listen to the preamble, or see the reviews (1,2,3,4,5,6,7,8,9, A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,Z). Subscribe to the blog via email or RSS. Get updates on the facebook page, join the forums, and look for tactics on the ERE wiki. Here's a list of all the ERE blog posts.
Today I went to my new dentist for the first time. I was pleasantly surprised since they did not seem to have a ton of fancy gadgets in their clinic. This generally means that they don’t have huge debts to pay off which should make customers pay less. Not me though, apparently a filling that was done on one of my molars a few years ago now has a cavity below it – botched job – big thanks ex-dentist. This means I need to have a crown put in. It came to $1200!
Now, I’ve written earlier why I don’t have an emergency fund, so how did I deal with this unexpected need for money. Simple. I charged it on my credit card. It’s a capital one card because they were the first company that did not to offer me outrageous (e.g. subprime) terms when I wanted to establish a credit history about a year ago. It was also quite easy to set it up to automatically pay off the balance automatically each month. So when I came home today all I had to do was to transfer the amount from my ING Direct account to the checking account [of my bank] that the credit card draws on. Having cash saved was not an issue. Due to market conditions, I currently maintain a cash position of about 30%. This is useful for picking up stocks on sale or dentist bills as it may be, so there you have it. That’s how my emergency fund system works.
Originally posted 2008-01-28 19:14:49.
