Looking at Frugality as an Investment Posted: 18 Jun 2013 01:00 PM PDT As we’ve discussed before, an average American family with two children – a seven year old and a ten year old – spends $1,252 a month on food according to the USDA’s liberal food plan. If that family adopted just a few frugal practices and were able to switch their food spending to the USDA’s low-cost plan, the family is now spending just $826.60 per month on food. That simple shift results in a savings of $425.40 on food each month. I certainly don’t have to tell most of you about the power of frugality, of course. Most of you know the mountains of savings a person can incur if they’re careful with their spending. The challenge is that many people believe that a focus on investing means that you don’t have to worry much about frugality. After all, in the eyes of quite a few people out there, you simply can’t earn huge returns with frugality. So, we’re going to stick just with this $425.40 per month that you can save just via food and not even deal with the money you can save on your energy bill, entertainment expenses, household supplies, automotive expenses, and other categories each month. This is just to show how important that $425.40 is per month. For calculation’s sake, let’s remind ourselves that $425.40 per month is worth $5,104.80 over the course of a year. Now, let’s say you actually have some money to invest. You took that money and did the obvious thing with it and stuck it into a very broad based index fund – the Vanguard Total Stock Market Index. Since 1992, this fund has returned 9.02% annually, which is a very nice return. That’s the easy route – anyone could do this. Now, let’s say hypothetically you could spend ten hours a week focusing on investing strategy and find a way to earn 10.02% annually. If you were actually able to consistently beat the total stock market index by 1% year in and year out, you would be a total financial genius and ought to be working on Wall Street, but I’m trying to give investments the benefit of the doubt. How much money would you have to have in investments to make those ten hours a week spent on investment management worth more than the ten hours a week spent on frugality? Your target additional earning here is $5,104.80 – except, it’s actually more than that. If you’re investing these sums of money, you’re almost assuredly in the 33% tax bracket, so the amount we’re actually looking at is $7,657. Remember, money saved via frugality isn’t money you have to pay income taxes on. So, how much money would you have to have invested in order to earn a $7,657 annual return by beating the Total Stock Market Index by 1% instead of just investing in it? The answer is $765,700. If you have three quarters of a million dollars in your investments and you have the ability to find a way to consistently beat the market by 1% a year, only then can you earn as much via investing as you can via simple frugality. Given that 72% of American households live paycheck to paycheck, I think it’s pretty safe to say that the vast majority of American households don’t have three quarters of a million dollars laying around to invest. I’m not saying that investment is a worthless thing to think about. What I’m saying is that for most American families in their current situation, a focus on frugality is going to earn them much greater returns than investments will, and that statement will hold true for many years. If a family is very responsible with the money they save from frugality and use it to pay off debts and invest instead of finding other methods to inflate their lifestyle, then they will reach a point where investments matter more. The truth is that it’s only a tiny minority of Americans have enough liquid wealth on hand to make their time spent managing investments worth more than their time spent being frugal once they have an initial automatic investment plan set in place. After that, almost all of us are far better off reading the grocery store flyer and making sure our tires are inflated than reading the latest mutual fund data. The post Looking at Frugality as an Investment appeared first on The Simple Dollar.

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5 Life-Giving Truths From 5 Years of Living with Less Posted: 27 May 2013 09:34 AM PDT “The process of living seems to consist in coming to realize truths so ancient and simple that, if stated, they sound like barren platitudes.” –C.S. Lewis Memorial Day weekend, five years ago, I got my life back. I’ve relived the scene a thousand times. I woke up with a simple job to do: clean out the garage. It was not a project out of the ordinary. In fact, I did it every spring. But on this particular Saturday, for the first time, I’d be introduced to the truth that I didn’t have to. Our lives were typical: work hard, make money, spend it on mortgage payments, fashionable clothes, nicer cars, cooler technology, and more toys for the kids. But when everything from my garage was piled high in the driveway while my son sat alone in the backyard, it was a conversation with my 80-year old neighbor that opened my mind to a new way of thinking. She said it like this, “Maybe you don’t need to own all this stuff?” And a minimalist was born. In that moment, I made a life-changing realization: Everything I owned had not brought meaning, purpose, fulfillment, or lasting joy into my life. In fact, not only were my possessions not bringing me joy, they were actually distracting me from it. We immediately began pursuing a more minimalist lifestyle by removing the unnecessary possessions from our home and lives. This journey towards minimalism has been far more life-changing and life-giving than I expected. The possessions in our lives define who we are on a far deeper level than we realize. And as a result, the process of removing them teaches us valuable truths about ourselves and the lives we live. As I consider the past five years and all that I have learned, the following life-giving truths reveal themselves as the most significant: 1. Desiring less is even more valuable than owning less. Owning less brings some amazingly-practical benefits into our lives. It costs less. It requires less time and energy to maintain. It brings freedom, rest, peace, and calm into a hectic world. And it provides greater opportunity to pursue our truest passions. But I have found, over the years, the desire to own less is even more valuable than owning less. Over time, I have been able to remove myself from the incessant desire for more–even in a society that idolizes consumerism at every turn. And when our life’s desire shifts away from pursuing physical possessions, we are finally free to pursue lasting worth with all our heart. 2. Allow the journey towards less inward. Dropping off a handful of clothing at Goodwill is not hard. Dropping off a full van load of unused possessions is not even that difficult. But pulling up to the Goodwill drop-off for the fourth time with a van load of completely unnecessary possessions initiates a lot of soul-searching. The journey toward minimalism runs through the heart and soul. Correctly pursued, it forces us to ask some hard questions in deep places about our most intimate motivations in life. Why did I buy all these clothes? Why did I buy a house with rooms we never use? Why do I still flip through the ads every Sunday even though I own so much already? Why am I still envious of my neighbor’s stuff? These are hard questions to ask with no easy answers. But the darkest truth is that unfortunately, far too many people, will never even ask them. 3. The potential of minimalism lies in the addition, not the subtraction. Minimalism is not the goal. Minimalism is, after all, less about the things you remove and more about the things you add. The potential of minimalism lies in what you choose to pursue with your life in place of material possessions. Choose contentment. Pursue gratitude and generosity. Invest in relationships, grow spiritually, discover truth, and find purpose. Your life is far too valuable to waste chasing possessions. And you’ll discover this life-giving truth as soon as you stop. 4. Minimalism will always vary. I live with 33 articles of clothing. But Leo Babauta lives without a toaster, microwave, or paper towels. Sarah Wilson does the same. And Daniel Suelo lives without money. I am very thankful for Leo, Sarah, Daniel, and Mukund because I am inspired by those who own less. They cause me to reevaluate my presumptions and strive towards even greater intentionality. But I have long since removed the comparisons. I am called to live a different life than them. I have different values, different passions, and different pursuits. As a result, my minimalism is always going to look different. Minimalism is the intentional promotion of the things we most value and the removal of anything that distracts us from it. And by definition, this means minimalism will always look different. 5. We can change lives. We can change the world. Thank you for an amazing five years. I sat behind a computer screen five years ago and started this blog with just a few keystrokes. It was to be nothing more than an on-line journal of my journey towards minimalism. But along the way, something unexpected happened. People started reading. And found new life because of it. The inspiration continues to grow… both through this blog and in my life. This is a far better way to live than most people realize. It is available to anyone who hears the message of living with less and chooses to accept it with their whole lives. May the invitation to minimalism continue to change lives. And ultimately, the world. This is my hope. Thank you so much for reading and supporting Becoming Minimalist. There are still exciting days ahead. Image: Moyan_Brenn

How Does Frugality Translate Into Wealth? Posted: 19 May 2013 07:00 AM PDT Success in personal finance is really a matter of the mind. It’s about having the awareness to see all of the choices you’re making and having the fortitude to consistently make good choices in terms of your money. One of the big challenges, particularly for people first starting out, is to see the connection between frugality and wealth. Frugality as a sustained and natural habit leads directly to wealth, but that path is sometimes hard to see. So, let’s walk through this, step by step. Let’s look at three pretty typical frugal changes a person might make. First, you make the choice to eat one more meal at home per week. You replace a $10 meal eaten at a restaurant with a $2 meal prepared at home and you stick with that forever – let’s say, fifty weeks a year. This is a pretty big change. Second, you replace all of the light bulbs in your home with energy efficient ones over the next month or so. You have 30 light sockets in your home, the average socket is on for four hours a day, and you’ve switched from 75 watt bulbs to 15 watt bulbs, saving you 60 watts. This is also a reasonably big change. Third, you join a free ultimate Frisbee league in your town that’s sponsored by the parks and recreation association, which eats up two weeknights with free activities. On those nights, you would have been staying at home with 10 light bulbs on and watching television for two hours, but instead you walk to the park after turning all of that stuff off. This is a pretty small change, but we want one of those for comparison’s sake. The first step is to calculate what you actually save per month and per year by these changes. With the choice to eat a meal at home each week, you’re saving $8 per week over 50 weeks, which adds up to $400 per year. Per month, you simply divide that by twelve, giving you $33.33 per month. With the choice to replace your light bulbs in a typical usage situation, we know that energy companies charge $0.12 per kilowatt hour on average. You’re saving sixty watts times thirty sockets times four hours, giving you 7,200 watt-hours per day in energy savings, or 7.2 kilowatt hours. At $0.12 per kilowatt hour, that’s a daily savings of $0.864, which adds up to $26.28 per month and $315.36 per year. With the free ultimate Frisbee league, you’re turning off your lights, your television, and your cable box for two additional hours per day. Let’s say your television uses 80 watts, your cable box uses 45 watts, and your light bulbs are using fifteen watts each, as described above. That’s 140 watts, times two hours, times twice a week, times 50 weeks a year, giving you 28,000 watts per year. At a rate of $0.12 per kilowatt hour, that adds up to $3.36 per year, or $0.28 per month. So, with just these three changes, we save $59.89 per month – or $718.68 annually. If you’re astute enough, you can put that $718.68 into an investment account each year so that it will earn a 7% return each year. You start doing this at age 25. At age 65, you have $81,100.66. Yes, switching light bulbs, eating one meal at home a week, and finding a free outside activity to do a couple nights a week – if you take the savings from these things and invest it – will eventually save you over $80,000. There are two big tricks to really making this work. First, find frugal tactics that are actually sustainable in your life. For me, these are either one-off things such as changing light bulbs or things that I try out and find that they integrate smoothly into my life. If something is a hassle or produces results I don’t like, I abandon that idea and shrug it off as something I tried that just didn’t work out. Second, figure out what they’re saving you over your previous choices and save that difference. If you find you made a shift that saves you $5 a month but it’s completely sustainable, then have your bank automatically move $5 each month from your checking to your savings account. One good way to do this is to just have one weekly transfer that’s about a quarter of what you think you’re saving each month thanks to your frugal choices. Keep track of all of the changes on a list somewhere along with how much they’re saving you. Remember, even the little ones really add up over time. Then, once a year or so, move that saved money into some form of investment. What you choose to do with that is up to you, but you should figure out what your goal is in relation to that money and invest acordingly.

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How to Be Happy In a Unhappy World

Everybody wants to be happy, but many people don’t realize that happiness has to start with “you.” If you’re not content with your life and at peace with yourself… no amount of money… no number of possessions… will ever make you truly happy. True happiness comes from learning to enjoy the life you are living right now and learning to appreciate all the wonderful things you have at this moment. Living for a future time and yearning for the things you don’t have will never make you happy.
So what can we do to promote a cheerful attitude and feel happier?

• Slow down and notice the little things. This might be as simple as enjoying the scent of the soap in your morning shower, or the way the air feels after a rain. Feeling happy about a lot of little things throughout the day adds up and contributes to an overall feeling of contentment and happiness.
• I think that the spiritual part of your life is very important and that everyone needs to believe in something bigger than they are. As a Christian, I know that God is greater than any problem I am ever going to have, and for me this is a great source of peace.
• Build a close relationship with the people in your family and remember that they are the most important people in your world. Quality time comes out of quantity time, and often at the most unexpected moments. Treat your family with respect. Be thoughtful and kind and remember that words (even carelessly said) can hurt.
• Avoid jealousy and try to be forgiving. Harboring bad feelings or grudges can do you a lot of emotional harm. It may help to remember that you are who you are because of EVERYTHING that has happened to you… good and bad… and that even the most hurtful things you have experienced have made you a stronger, more resilient person.
• Be honest with yourself and others. Don’t be manipulative in your relationships, and don’t lie or be deceptive. Dishonesty is a drain on your soul. Know what your values are and try to live up to them in everything you do.
• Keep your mind and body active. Try to stretch yourself mentally, even if it is just with a crossword puzzle or a game of Sudoku. Take a walk or do something physically challenging on a regular basis. Physical activity and mental stimulation are good for your health and your state of mind and will help you maintain a positive outlook on life.
• Set long term goals and work towards them. These goals don’t have to be on a grand scale, but planning ahead to the future brings optimism and a sense of purpose to your life.
• Give yourself and your family a special treat once in a while. Do something a little bit out of the ordinary. It takes little effort to turn ordinary days into memorable days.
• Stay close to nature as much as you can. There is a satisfaction in working with growing and living things that you will never get from anything else.
• Most of all, dwell on what is good about your life NOW. Appreciate the day-to-day positives in your life NOW. Don’t be so busy looking for happiness in the future that you miss out on the happiness you could be having today.

Written by Shirley | Filed Under Personal Development, Voluntary Simplicity

Things I don't Have That Many Others Do

things I do have instead Posted: 02 May 2013 07:18 PM PDT After I wrote my last post, things I don’t have that many do, someone asked, “What do you have that most people don’t?” It was a good question. I cut out a lot of what I found to be unnecessary (for me) to make room for what I find to be more important. So what do I have instead? Honestly, what I have isn’t that uncommon, but here goes: leisure time space in my home time to read, meditate, exercise time to write every day time for my beautiful family time for close friends time to walk places (instead of drive) freedom from car maintenance, car breakdowns, traffic time to cook simple, healthy meals the luxury of not worrying what time it is most of the time disconnectedness when I’m away from home fewer distractions even when I’m connected my health less worry a very light packing list worry-free finances a business I’m proud of wonderful readers

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Why You Need to Simplify Your Life

Why You Need to Simplify Your Life

Tuesday, April 02, 2013  simple living  9 comments

More and more people around the world strive to become sustainable in their lifestyle, mindset and emotions but feel entangled in deeply rooted old habits or get confused by too many contradicting advices.

If you have decided to simplify your life but you don't know how to start, this post is for you! If you have already set on the simplifying path - jump right on in, we love company!

Photo: kanelstrand

What is simple living?

Simple living is an attitude to life that will help you live more sustainably, more deliberately and more happily. Among other things, simple living includes:

• Identifying what is most important for you and eliminating everything else.
• Doing what inspires you and being with the people you love.
• De-cluttering (be it your mind, your everyday life or your virtual life).
• Single-tasking and learning to diminish stress.
• Striving to live frugally by wanting less and buying only what is necessary. 
• Slowing down and being actively present in the moment.
• Living a healthy life.
• Striving to be green and sustainable as much as your surroundings allow.
• Enjoying the simple pleasures of life.
• Simplifying your goals, tasks and expectations.

Photo: kanelstrand

How to know when you need to simplify your life

• You are way to deep in debt.
• The clutter around you is overwhelming you and is keeping you away from taking the right decisions.
• You have grown apart from your loved ones and even yourself.
• You are stressed out.
• You rarely do something for the fun of it.
• The time you spend on the Internet is way too much and way too disorganized.
• You are multitasking any time, anywhere.

I know all this may seem overwhelming but I assure you, there is nothing complicated in living a simple life. You don't need to withdraw from the world and seek a retreat to be able to achieve simplification. On the contrary, simple living is about engaging more fully in the world, but with a changed list of priorities. Simple living makes place for the really important things in your life and helps you appreciate more fully what you have and who you are.

The Simple Living Pledge

To help you re-evaluate your priorities in life, I invite you to take The Simple Living Pledge and participate in the discussions on Kanelstrand. Together we can grow much faster! I am looking forward to your insights, advice or your general thoughts on simplifying.

strawbale gardening for anyone,any place.

Friday, March 29, 2013

http://www.nextworldtv.com/videos/growing-food/grow-food-anywhere-straw-bale-gardening.html