Did I Tell You I’m Afraid of Heights?

Isn’t there a song that goes: “you picked a fine time to tell us, Lee ….“?

But, it’s never too late, especially not for Lee … and, I’m sure that there are some great ideas out there … so, let’s get them ‘out there’ and help Lee!

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Now is a heck of a time to share this revelation but I’m afraid of heights, so much so that if there was a social network for ladders you would find me at the bottom.  This journey Making Money 101 so far has been a great learning and relearning experience causing me to admit some great failures in my past.  But I have learned that like in the Bible not all failures are “unto death” they just feel like it. So my learning has been that in order for me to make my number of $4,000,000 by 20019 I need to do some house cleaning, house building and house hunting.  My biggest failure and yes my greatest need at this point is to establish some savings so I will have something to work with when I launch out into Making Money 201.

Debt retirement is not really a problem for I have no debt except my home ,vehicles and student loans. The vehicles will be paid off in less than a year.  Sensible Savings for me would be any savings which is better than I have had in the past.  I have established an ING account and am having some automatic withdrawals placed in it, so that’s a start.

Cleaning up my spending style has been a real challenge and 10-1-1-1 exercise and recording my spending opened my eyes pretty quick.  So guess what I have a little bit more money now because I’ve adjusted my spending but I’m still a long way from where I want to be.

I calculated my required Annual Compound Growth Rate and it came up 131.88%. Oh great now I really concerned.  It’s kinda like being sized for a space suit only to find out you have to have oxygen also.

As I stand on the launch pad I am keenly aware that I need some active income, I would like to do some investing and am trying to figure out how to begin. Sensible Investment keeps coming to mind.

Small Business perhaps online type is where I would really like to go and something that my son and I could join together is my preference.  The issue is a product.

Bottom line,  what is holding me back? Two things (1). Lack of funds to invest in any effort and (2). Fear of heights.

On a personal note: Please forgive my tardiness with this post, that’s what happens when you stand at the bottom of a really tall ladder and refuse to look up.

When I actually begin to climb I just hope I don’t have to look down.

Automated Budget?

Photo credit: urbanraven

Another great graphic! Thanks, Mark …

Unlike those whose MM101 issues are at the fore, Mark has a good income and low cost base so the ‘pressure’ to budget, etc. seems less … but, how important do you really think it is? Any advice for Mark on his spending / saving habits?

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I must admit I’m not a big fan of budgeting. I did attempt to follow the No Budget Budget, but I failed miserably, hence the broken pie chart above. I’m too used to letting Quicken download my financial data and perform monthly analysis on my spending. I usually have a 12-month average that I use as a benchmark. This is how I compare against my average spending. My average spending is actually here.

How do I compare with the average in April? It was a huge difference! I just moved in to a new home and I’ve spent about $5,800 fixing up the old townhouse for rental. That amount paid for a new heating and cooling system, painting, cleaning and fixes. I haven’t started paying the mortgage for the new home yet and I’m still paying for the old townhouse.  By comparing with the average, I can quickly identify anomalies:

A quick glance shows that I’m $5,472.01 out of my norm. This is mostly from Rental Expenses that incur in April. Another anomaly is Entertainment; I just bought 8 tickets to a U2 concert and I’m going to sell some of them. I might actually make a small profit later – I’ve done this before .  How do we record such activities in a budget?  I’ve also increased my charitable contributions and bought some ceiling fans and tools for my new house. The moving sale and a drop in gifts did offset some extra moving expenses.

I keep questioning about having the need to budget. I know I do spend less than what I’ve earned and my savings are automatic. Should I spend more time budgeting or spend more time earning more income?

I actually believe that savings from budgeting may not have a huge impact that I’m looking for.  Savings on big ticket items like a house, car or education should have a larger impact. Nevertheless, having good MM101 habits is very important.  We will see how I will do in May when we apply the 10-1-1-1-1 rule. Will it stop me from spending?