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.
The lack of activity is a a core measure for intelligent design. Unfortunately, very few, myself included, are behaving very intelligently these days.
Which would be the more intelligent way to feed yourself? To go outside and pluck an apple or shoot something wild and eat it, or to plant seeds every year, harvest, and till? (*) It is certainly clear that the latter ranks high in terms of the sacred “productivity” we worship these days—I guess maybe we still haven’t left the 80s, when being busy and stressed was a badge of honor.
Do less useless things!
(*) See chapter 7 of the ERE book for more thoughts on this.
More accurately, do less things of marginal utility. Spending 20% more effort on becoming 1% better does not make you more than 1% better, even if you rake in 20% more dough. Only insofar that
relative improvement > relative increase in effort,
that is, d ln I / d ln E > 1, are you doing well without stressing out the engine. But maybe it’s just me who thinks in terms of efficiency rather than effectiveness. In most places, it is certainly hard to swing a dead cat without hitting some guru going off about how to be more productive in an almost Tayloristic fashion.
Stop and think about profits for a moment! If you increase effectiveness without increasing efficiency, where are the profits going? Not to you, that’s for sure. If all you’re thinking about is how to become more effective, you’re shooting yourself in the foot. But hey, isn’t that the rational thing to do if everybody else is doing it?
Recommended reading: The Importance of Living by Lin Yan Tang
Originally posted 2011-02-04 23:58:38.
