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.
Monetary cost: $50/month = $600/year which requires savings of at least $15000 to sustain in retirement. Financially, a cable subscription will delay retirement for more than a year for most people. This assumes that one does not buy a new $1200 TV every other year which will double the numbers.
A much bigger cost is opportunity cost.
Opportunity costs: The average person spends 4 hours a day watching TV. That is close to 1500 hours a year. Experts on experts estimate that it takes 1000 hours to become competent in a skill, where competent is defined as being able to perform routine tasks at a level that is demonstrably better than a beginner. It takes 3000 hours to become a Master in a subject, where Master is equivalent skill to a master degree. It takes 10000 hours to become a world expert in a field, that is, the equivalent of a successful PhD degree.
Why not get rid of your TV and learn some frugal skills? Learn to cook. Learn to fix clothes. Learn to repair your preferred transportation vehicle. Learn to invest. Surely, this is a better way to spend your time than to master the arching story lines in Law&Order?
To put things in perspective. If you instead of watching TV did a focused study on food (not just following recipes or heating up pizzas and eating them), then in less than one year, you could learn to whip up a meal from whatever is in the fridge and pantry. In three years, you could cook well enough to cater or work in a restaurant. You would certainly be the chef at family gatherings. In six years, you could open your own restaurant.
If only there was not so much TV on TiVo that had to be watched, right?
Originally posted 2008-08-20 07:07:37.
