It is not always easy to cut down your costs and save money when you have routines that you have had for years, perhaps since you were a child. However, these small routines are sometimes where you will find the easiest ways to cut down on your spending and save money. This month I have done 5 things that has cut down my costs significantly.
3 things I have done to cut down my costs and save money over 200 dollar this month!
- I have biked everywhere. I normally bike every now and then but this month I have made a point of bringing the bike with me all the time. Great exercise!!!
- Mr Viking and I have dutifully implemented the One Simle Purchase Rule
- White month! As the Viking I am, I tend to drink alcohol every now and then, and Mr Viking and I very much enjoy a glass of red after a long day of work. Cut off alcohol completely this month and noticed two things: a) I am saving more money than I thought! A good bottle of wine pays up to ca 20 USD so lets say we have saved at least 40 bucks on this. b) My skin looks great! I want to continue with this.
These are things that has made me save in total more than 200 USD.
In one year this is adding up to 2400 dollars. Insane. Tips: Write down right now what you would do if you were given 2400 dollars out of the blue right now. Keep this as a motivational note.
It is not on par with MrMoneyMustache but everyone has to start somewhere and these are definitely three tips that anyone can follow. If you try it one single month, you will still save a lot of money.
My Strategy to financial independence
If you read my last post you know how much I was able to save from my last salary. The next implied question then naturally becomes; what do I do with that money in order for it to grow me some financial independence? This post will talk about what i do with the money that I invest into the Leprechaun , i.e. my investment strategy to Financial Independence.
Four easy steps —
Get an income stream, and preferably more than one. You can never save money if you don’t get any money, so this is the most crucial step, even if the actual salary is not that important. I get my salary each month.
I have a set saving goal each month, lets call it X . This sum I need to invest. The biggest mistake you can make is leaving that money passively deprecating itself due to inflation and potential taxes. Long term investments can be put into high-risk funds and stocks without it being that much historical risk associated to it. The market has historically always gone up, even if it regularly will take a stroll downwards into a recession. Note here that I talk about the whole market and not individual stocks and funds. Stocks tank all the time, which is why it will generally be a higher risk for you to invest your money in one individual stock, than in a larger index.
I invest 80% of X in different index funds. Of these 80%, around 40% are branch-specific, quite risky and narrow indexes while the remaining 60% are large global index funds.
I am looking to leave my riskier branch-specific investments where they are but from now on start putting the whole 80%-chunk into global index funds. Mainly because I am still convinced he recessions is near and not sure which market it will hit first. The remaining 20% I place in stocks of different kinds, mostly larger companies with a good track record of raising their dividends shares each year. I will probably continue to buys socks for a few more months but then slowly shift this chunk over more and more to the global index funds as well. I will explain this more in step 3.
Have a set percentage to play with. This is where my 20% that I buy stocks for each month comes into play. I really like investing in stocks, and reweighing, shifting and shorting my way around the markets. This is not a very good thing if you are looking for a solid investment plan. This is why I have capped my allowance of my savings I can play with to 20%. I will decrease this percentage in the next few months. This as I don’t have enough time to become the next Gordon Gekko and index funds has historically almost always beat individual strategies in the long term anyway.
When the time has come for me to have enough capital for the Leprechaun to become immortal (i.e. enough for me to live off its returns indefinitely) I will sell off the funds and buy high-dividend stocks for these so that I am set up for a monthly income.
Thanks for all the positive feedback from my last post as well!