Money is a tool, not a goal, end state or life-defining attribute

Money, money, money. It’s the central theme of endless songs, movies, and books. It’s dreamed about and lusted after. For some, it’s a status symbol and sign of “success”. Because society places such a high value on money, we also believe it will bring us happiness.

However, the reality is that money isn’t an end in itself; rather, it’s a means to an end. Money doesn’t buy us happiness, as the acquisition of stuff is ultimately transitory and our wants are never sated. We’ll always want more and so chase the unobtainable. Rather than resulting in a happier life, the focus on money and materialism is the root cause of great misery and dissatisfaction for many people.

Despite knowing this to be true, over the last year I’ve been increasingly caught in the golden net of money, the tractor beam of cash and the siren call of affluence. I’ve been thinking about it more, reading about it more, seeking to gain more, save more and invest more. Admittedly it hasn’t been to chase status or wealth for wealth’s sake but rather in the pursuit of financial independence and freedom. I think, though, that I may have become a bit obsessed with money and the accumulation of assets. Looking at my allocation of time, too much of it has been spent in the pursuit of money or learning how to optimize it better.

Money is after all only a tool and one aspect of life. Money can’t buy happiness, but my actions over the last 12 months suggest I’m a believer in that myth.

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How to manage your finances like a grown-up and avoid money worries

You are an adult now. Stop relying on friends and family to bail you out; stop drawing on the bank of mum and dad; stop blaming others, or circumstances, for your situation in life. Get your finances in order and do the basics right. You’re all grown up now; time to act like it!

Good money habits and successfully managing your finances are a foundational element of being a responsible and smart grown-up.

This means living within your means and budgeting. It means doing the right things regularly and without fail, like paying bills on time. It means making smart decisions like avoiding unnecessary debt. It means also keeping one eye on the future by saving and investing.

Whether you are aiming to get out of debt, saving to buy a house, putting money aside for your retirement or striving for financial independence, you should also plan for, and make provisions for, life’s unfortunate events which are outside of your control. These could otherwise easily derail your family’s financial security and any future ambitions and dreams.

Handling your finances like an adult isn’t necessarily always fun. In the long run though it can be liberating and gives you choice and freedom. Managing money like a grown-up is the only way to alleviate money worries permanently and unlock a bright financial future.

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Stop chasing more and embrace a life of less

More, more, more is the mantra of today’s culture. Accumulate more things, more money, more social media likes, more food, more career success, more responsibilities, more house, more gadgets and more clothes.

Success in life is often judged by external indicators like luxury items, popularity, salary, or status items. Unfortunately these are, in reality, poor guide posts as they aren’t indicative of true wealth, contentment or positive lifestyles. The reality behind the shiny facade is often debt, money worries, stress, poor health and disfunctional relationships.

I’m firmly of the belief that we’d be better off individually, and as a society, by heading in the other direction. We need to reject this acquisition mindset and the boundless consumerism that everyone is caught up in. Instead, we might just experience greater fulfilment and happiness from a more moderate lifestyle and being less concerned by the opinions of others. Getting to this point may require an initial focus on less in order to restore balance as we pull back from our lifestyles of excess.

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“Normal” things to stop doing in order to live a more successful, happier and fulfilled life

Social norms help guide and direct our behaviour. Unfortunately, for many of us, simply looking to the people around us, whether they be family, friends or work colleagues, won’t provide good examples or guidance.

“Normal” often means spending more than you earn, consuming more than you need, relying on debt and living paycheck-to-paycheck. It may be easier to just do what everyone else is doing in the short term, but it isn’t typically the optimal answer in the long run.

In fact, focusing on being normal is likely to set you on the path of mediocrity, the average and ordinary. Mindlessly following the herd is a receipe for drift and a life without direction or purpose.

When you make the decision to avoid “normal” and realize that you don’t have to live up to the expectations of others, or follow the unwritten rules of society, then you can begin living your life on your terms.

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition”

Steve Jobs
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Reflecting on 2019: Ch-ch-ch-Changes

One of my goals when I started this blog in April was to document my journey to design, implement and live a better, simpler and more content life. The idea behind this was to build forward momentum, hold myself accountable and, where possible, help and inspire others.

It’s been a year of discovery, finding the Financial Independence movement and minimalism. It was like waking up and uncovering a new reality. Both topics felt grounded in commonsense and immediately rang true for me. They became my new compass and focus. These areas seemed worth exploring in depth, which has also naturally led to broader interest in personal finance, mindfulness and sustainability.

Insight and new knowledge isn’t really helpful unless you take action. So let’s see what I got up to in 2019, and what lifestyle changes I implemented.

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Goodbye money worries – Financial Independence, the impossible to lose bet

Do you constantly worry about credit card debt, that you aren’t putting away enough money for retirement, that you won’t be able to pay the bills, that you could lose your job, that the car might need repairs or that you won’t be able to afford health insurance? Financial stress is common and endemic.

“Success is having to worry about every damn thing in the world, except money”

Johnny Cash

What if I told you there was a solution? That there was a way to address money worries, throw off the shackles of debt and eliminate the routine and pressure of a job you don’t like. A way to not only eliminate financial stress, but also have the time and freedom to pursue your passions and ambitions.

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ESG funds – green sustainable investing or a marketing gimic?

In recent months I have been looking at all aspects of my life to assess where I can lighten my ecological footprint and, within my personal sphere of influence, positively encourage global warming mitigation action.

Naturally for someone interested in personal finance, the question arises whether there are ways to invest in companies that have more progressive stances on the environment and, likewise, avoid certain firms or industries which don’t.

One approach that is becoming increasingly popular is ESG investing. ESG refers to Environmental, Social and Governance, three key factors in measuring the sustainability and ethical impact of an investment in a particular company. The concept picks up environmental concerns (eg. climate change and sustainability), social concerns (eg. diversity, human rights, consumer protection and animal welfare) and corporate governance (eg. executive pay, employee relations and compensation). All good things in my mind, and aligned with my values.

Like anything though, it is important to look beyond the surface and unfortunately ESG doesn’t necessarily mean as green, sustainable or ethical as I assumed. Digging a little deeper has me questioning whether ESG funds are materially different from other investment options, especially within an index fund. At a more fundamental level, I’m also questioning whether attempting to invest in sustainable companies makes sense or if there better ways to allocate my money and time.

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The paradox of thrift – what if everyone became more frugal?

Having recently watched the Playing with FIRE documentary and contemplating the increased media attention around the Financial Independence movement, I started asking myself – What if this idea really took off? What if a lot of people embraced a more frugal lifestyle? What if everyone started saving more and Financial Independence became mainstream? What if a large percentage of the working age population didn’t need to work?

This is probably nothing more than a fun thought experiment, given the unfortunately high level of financial illiteracy, societal pressure to keep up with Joneses and the rampant consumerism now embedded deeply in our social conscious.

But what if…..

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FI Around The World: Considerations for those pursuing Financial Independence outside the US

The Financial Independence (FI) movement can appear to be very US centric, having the largest community and most prominent bloggers and podcasters. The terminology used, retirement vehicles highlighted and strategies suggested are, not surprisingly, typically those available in America.

As an expat living in the US, but likely to be moving on next year, I’ve been conscious and interested in the broader international approach to Financial Independence.

What works in one country may not necessarily work in another one. Where you live can have a big impact on the approach you take and strategies you employ to save effectively, minimize tax, invest and build assets.

So what are the universal themes applicable wherever you live? What are some of the key differences to think about and consider when developing your plan of attack to reach Financial Independence?

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Lifestyle inflation – the silent assassin!

I’ve written previously about the millions of people living paycheck-to-paycheck. It doesn’t matter how much you earn but rather how much you spend. According to a recent Nielson survey, 25% of American families earning more than $150,000 per year still live paycheck-to-paycheck, so even the wealthy aren’t immune. Apart from poor financial habits, a key reason for this ongoing money stress, for many people, is lifestyle inflation.

It is a gradual, subtle and common problem that’s killing our collective finances. The harmful effects occur over time and in a way that often goes unnoticed.

Like the fable of the boiling frog, who didn’t perceive the danger of the increasingly hot water and was slowly cooked to death, many of us have been unwittingly turning up the financial heat in our own lives by trying to keep up with the Joneses or “upgrading” our lifestyles when we get a payrise.

Most of us have been victims to the silent assassin of lifestyle inflation. Our spending inches up year-on-year, and what was once something you considered a luxury item is now a must have “need”.

Lifestyle inflation, a silent assassin

Those moments when you convinced yourself that you deserved it because you work hard, or that a “one-off” treat won’t hurt, have added up over time. The aggregate impact of decisions to get a nicer couch, second car or bigger house increase our monthly spend commitments and raise the bar of what we need to earn.

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