{"id":1055,"date":"2019-07-18T01:16:59","date_gmt":"2019-07-18T01:16:59","guid":{"rendered":"https:\/\/joshfrom.nz\/?p=1055"},"modified":"2019-08-03T09:44:49","modified_gmt":"2019-08-03T09:44:49","slug":"how-are-you-funding-this-mini-retirement","status":"publish","type":"post","link":"https:\/\/joshfrom.nz\/index.php\/2019\/07\/18\/how-are-you-funding-this-mini-retirement\/","title":{"rendered":"How are you funding this mini retirement? \ufeff"},"content":{"rendered":"\n
When I said I was taking a mini-retirement in good old Upper Hutt<\/a> there were a number of questions, such as \u201cHow did you get to this point?\u201d and “How are you But the most common was \u201cDoes Katie work\u201d? The answer is yes! W As well as her unpaid, but super important Mum job, she works 2 hours a week at the gym. Not so much for the money (although that helps), she works because it\u2019s something she is passionate about, interested in and genuinely enjoys. She has also been involved in all the business ventures I have been a part of.<\/p>\n\n\n\n Side Note: She has actually helped me in business way more than she gives herself credit for. I am so thankful to have such a smart, supportive and loving wife! <\/p>\n\n\n\n As Tim Ferries comments in the ‘4-Hour Workweek’, It doesn\u2019t take a million bucks in the bank to live like one ( Before I talk about how we got to this point, first let me be clear on one thing. I am not a financial advisor, and these are my opinions. Obviously, this is not the only way to do things, but a way that has worked for us.<\/p>\n\n\n\n In Failure: The Ups and Downs of Business and their Challenges<\/a> I wrote: \u201c….I was in about $25,000 debt when I was 19 years old. This culminated in the court taking my car from me to pay for all my driving fines. They turned up to Maccas one lunch rush, asked for the keys, and towed the car away. I was left with a personal loan for the car, lots of driving of fines, and no car to drive. In the end, it was a massive turning point, but at the time it felt like my world was crashing down around me At the time, almost 100% of my income was dedicated to paying off this debt. After my basic living costs, and then paying off debts, there was about $10 a week leftover. It was like that for about 2 years until I paid off the final debt and vowed never again to borrow money to live outside my means\u2026\u201d Since then Katie and have lived out this rule. The engagement ring I got Katie, when I was 20, was worth $250. We saved and paid for our wedding and honeymoon with cash. This meant our wedding was super basic, but it also meant we weren\u2019t starting off our marriage in debt and on the back foot already. (I did manage to upgrade Katies rings for our 10 year anniversary, again using savings.) Early on we knew we wanted to travel so we opened a savings account and started putting in anything we could spare. At By no means are we However we have always You could easily be earning a six figure salary, but if you\u2019re spending every cent of your earnings, and then some, you will always be back at square one, or worse slowly digging yourself a hole. In Books to Follow up \u201cRich Dad Poor Dad\u201d<\/a> I talk about the book \u2018The Richest Man in Babylon by George S. Clason<\/a>\u2019 \u201c… This book is very easy reading and aims to pass on timeless principles in a story-based format. While the language is very \u201cold school,\u201d the lessons it teaches are a good starting point and able to be put into action immediately.<\/p>\n\n\n\n The key principle that I took away was this: \u201cA portion of all I earn is mine to keep.\u201d<\/p><\/blockquote>\n\n\n\n I pictured a portion of our weekly income going to Pak N Save, Caltex, Insurance, Westpac, and all the other things we spend our hard-earned dollars on. I pictured giving all these corporations all our money and having nothing left for ourselves. I started to think about what I could do to have something left over for us to save and invest.<\/p>\n\n\n\n If I was going to sum this book up in 1 sentence, I would say this \u2013 It\u2019s not how much you earn; it\u2019s how much you keep that matters\u2026\u201d<\/p><\/blockquote>\n\n\n\n It\u2019s pretty simple maths, you need to spend less than you earn. For every $100 you earn, you need to spend less than $100, there needs to be money left over. It starts with making sure there is at least $1 in $100 leftover. Almost everyone can do that. <\/p>\n\n\n\n The sooner you can get into this habit the better. Then aim for $5 in $100, This is the same for managing a business, as well as your personal finance. When we took over the restaurant, it was making over 600k in sales, but it was spending 101%, so no matter how much it earned, there was always nothing left! For many Many people have told themselves something along the lines of “I’m not good with numbers” effectively setting themselves up to fail before they have even tried. <\/p>\n\n\n\n Again if you can do basic maths, we\u2019re talking addition and subtraction up to 100, you can do a budget.<\/p>\n\n\n\n Instead of thinking budget, change the word to PLAN<\/strong>. A budget is simply a plan<\/strong> of how much you think you will earn, and how you intend to spend it.<\/p>\n\n\n\n There are 4 parts to a good plan<\/p>\n\n\n\n Take a couple of minutes to work out your money plan: <\/strong> As with all successful plans you need to have room for the unknown, the surprises. If your money plan is so rigid there is no room to move you will struggle at the first curveball and not be successful.<\/p>\n\n\n\n
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<\/p>\n\n\n\nMy Stance on Debt
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<\/p>\n\n\n\nLiving Within Your Means
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<\/p>\n\n\n\nChange the Word Budget to Plan <\/h2>\n\n\n\n
– How much is coming in?
– How much is going out?
– How much is leftover (or how much are you over spending by?)
– What can you change to increase the leftover amount (ie can you decrease spending or increase earnings, or both ideally!)<\/p>\n\n\n\n