Financial Mindset: Here’s a terrible secret that most people aren’t aware of:
Nearly 100 percent of the time, you are either a) making money or b) spending money. Even while sleeping.
That’s because there is still the HVAC, a light on somewhere, and even those ubiquitous “wall warts” sucking down small but measureable amounts of power keeping your toys “at the ready.”
The point is, just like your “wetware computer” (brain) is a bipolar device – doing either input or output – so too, your personal balance sheet is “always running.”
It may seem silly for Elaine and me to attempt to live on just our Social Security, but that is the mindset. You see, I know that if we are not living inside that income, we will be eating through retained earnings (savings).
There are, of course, times when you design your life to “run negative” on the personal P&L. Going on a cruise is one example.
We have three overland trips planned this year to see Johnny Mathis, Tom Jones, and there’s the annual Columnists.com convention. Two of these events are recreational and impose a small drain on the bank account.
Why is it that “fun” runs the bank account backwards? One of the greatest mysteries in Accounting that I’ve never gotten a satisfactory answer to.
I mentioned a few weeks back that I’d picked up one of those non-contact thermometers? $33-bucks for a Infrared Thermometer PM6530B Digital Laser Non Contact IR .
How does this thing monetize?
Last week, we had a real mess of cold weather come rolling through the South. While most people were sleeping, I was up early because when the weather is cold it’s the best time to go “heat sniping.”
There I was, 4 AM, cold as hell out side (18F which isn’t cold unless you’re used to 100F). Walking around the house, the shop, the greenhouse, the car, the truck…anything I could find.
Then I went around the inside of the house, the inside of the guest quarters, bathrooms, under sinks. tons of places.
I was looking for hot and cold spots. I was pleased, for example, to see that my water heater placement in the guest quarters/gym worked out just like I thought it would: It kept all the plumbing in the room warm.\
Going over to the shower, I temp’ed the shower wall (47F but we don’t keep the heat on high in that area) and even down the shower drain to get a sense of the crawlspace there. *38F, so I made a note to keep an eye on what happens when we get down to 15F which may, or many not, happen this year.
All the way round, I was making mental notes on where the biggest heat losses were and what could be done about them.
Heating bills in Texas aren’t too bad. But the summertime cooling bills can be a beast. Since heat loss is a bi-directional item, if you find something that is warm in the winter (above local ambients) then it is an opportunity to save a little money.
Ditto the summer, when cool spots are potential money-savers.
I don’t know what the payback period will be on this little goody, but the idea is simple: Buy the tools (and things, and vehicles, homes, clothes, et all) that will give you the best return in the long-run.
I don’t know why they don’t teach this kind of thinking in schools anymore, but it seemed like something to mention.
Mr. Temp’er also knows his morning cup of coffee hot off the stove is only 170.4F, and that the Thermos of coffee from the previous day is down to 91F.
Garden Planning and the Bank
People spend fortunes on gardens and equipment – and we’re in that group. But, trying to apply some of my more rigorous thinking to it, I got on my list this week to call around to rental places to see how much they want for rental of a garden tiller.
Thinking about renting instead of buying if our old tiller craps out – which it’s bound to some day being over 20-years old.
Our old tiller is on its second engine, now. $99 Harbor Freight Chinese-made which works fine.
On the low-beam, we feed it avgas because the crap with ethanol gums up the carb when not in use – yes, even when you run out the tank.
The real return on a garden comes when you mix in a lot of information. This time around I will be tilling in the manure a couple of weeks ahead of planting, retilling at planting time, adding bags of vermiculite, and using mulch – which I’ve been way lax on in the past.
This year a promised myself I’d read Lee Reich’s book Weedless Gardening.
A lot of people make prodigious use of seeds in their gardens, but this year I also promised myself to keep it simple. Only plant the main veggies that we like from the store.
That means some squash (yellow), a half-dozen tomato plants, a few rows of cabbage and kale. A few herbs, here and there. Onions – Walla Walla’s, too. Mainly, rather than be a Texas Master Gardener wannabe, my focus is on putting in those things which we would go to the store for.
Elaine likes cherry tomatoes and I like the Beefy-Boy – so we will put in a few more than absolutely necessary. Thing is, it all freezes and turns into Marinara sauce, so no waste. We always lose a plant (or four) to bugs, too. Tomato bugs here are larger than your thumb.
Thing is, I’m trying to look at gardening this year the same way I look at insulation around the house, power bills, and so forth. Done by asking the question “What am I getting for my money and my time?”
When you get to where it can’t be further optimized, the idea’s to hold there for as long as possible.
For most people, this means looking at the budget and chipping at the biggest line items first.
That means paying off the house early – surprisingly easy if you know how to use a Mortgage Accelerator program. Adding not too many dollars a month as additional principal makes a huge difference on the back-end.
Next biggest line item is probably cars and insurance. Could we go write a check for a brand new Lexus? Sure. Do we? Hell no. A 2005 that is still in the dealer maintenance program nearly gets the same MPG as a $45,000 update. That math isn’t hard.
After that? Insurance. Shop until it drops.
Once you get in the habit of having money and paying cash, life isn’t so bad: We paid no interest except on our “credit maintaining” tiny real estate note (that we can cover with a check any time) in the past five years. When you figure out what that costs the banks, it’s a reason to smile.
Then, we keep one credit card and us it to pay for everything including groceries. Reason? There are many. If anything happens to us (mugging are unlikely, but statistics are startistic…) there is virtually no liability for a lost card. If you carry cash? Good luck with that. Cash today really means “cash and carry” – as in concealed.
Word will get around you “live on plastic” – which isn’t a bad thing in today’s world, even it far from the truth.
We pay off the card with a wire transfer (same day) so never any interest. Last year, we racked up about $500 in “rewards” which was like “found money.” Never got a 1099 on it, either, lol.
All of which may seem a little far afield from “monetizing your time” but it’s not, really. Everyone has 24-hours in a day and most people worry themselves sick about how to shovel more money into the “revenue column.” But trust me when I tell you this: The effect on the bottom line is the same whether it comes from an increase in income or whether you opt for the decrease in expenses.
Once your main home is paid off (ours has been since 2004) it is laughable how much fun and self-satisfaction you can afford.
Do I keep a fancy dress suit around? No. An off the rack blazer works for most occasions. “Brand name sneakers?” When the Amazon old-man shoes get updated every six months and are comfortable as hell? For $37-bucks?
This is why (if I feel like it) I can pop for a plasma cutter and if Elaine sees something she wants… well, that’s the real definition of wealth.
If you didn’t know it, write it down somewhere: The quality of your life isn’t defined by your top line. It’s defined by how the bottom line – the disposable personal income line – looks.
If someone has a top line income of $200K yet worries about whether they can afford a dry-aged steak? They are not as well off as the $60K type who has no bills, and who have plenty of discretionary.
Pappy used to say: Rich is having $20-bucks left on payday. Inflation-adjusting counts: That wisdom $20-buck wisdom was dispensed to me in 1965. Today Rich is having $158.74 left over at Payday.
Bang this into your children. They won’t get it in school. Those teach debt-yoking, these days.
This is the gift that keeps on giving..
Life With Elaine
Ever watch the TV show Burns & Allen? Gracie and George.
That’s what it’s like with Elaine sometimes. Take Wednesday, for example.
“When is your brother having his eye surgery?”
“I’m pretty sure it was going to be tomorrow yesterday,” she replied.
Don’t worry about me taking up cigars, but there are times rum helps as I diagram sentences…
Write when you get rich,