Yoga Makes You Wealthy

Here’s some news to light up the BuddhaMoney smile: in less than two months of blogging, BuddhaMoney has cracked the top 100 of…

Here’s some news to light up the BuddhaMoney smile: in less than two months of blogging, BuddhaMoney has cracked the top 100 of personal finance sites [http://blog.feedspot.com/top-50-personal-finance-blogs-wor…/], debuting at #88.

Well, we could not be more humbly appreciative of all our enthusiasts who are spreading the good BuddhaMoney word about how to achieve Balance and Wealth. Thank you.

And now, back to our regular feature …


Yoga Rocks!

Yoga is trendy. Yoga is fashionable. Everyone is into yoga! You do practice yoga, don’t you? Oh my goodness! You’ve never stood on your head, pretended to be a tree, or pretzled yourself into Gumby worthy contortions? How is this possible?

Well, you must, you absolutely must try yoga if for no other reason than the clothes. Have I mentioned the clothes? Oh, the outfits you can buy! They’re reason enough to join a yoga studio. The fun part is that you get to spend silly sums of money on insanely over-priced tops, shorts and pants stamped with the corporate brand identifier of your choice. And the brand, naturally, tells us to which group you belong, reveals your status, and informs others what they should think of you. Wearing the right brand in itself is enough to get endorphins flowing and make you feel good. Never mind you’re blowing up your monthly budget and setting back your wealth achievement goals. See what I’m saying? What’s not to like about yoga?!

Breathe In … Breathe Out

Uh oh. Right off the top, I’ve slipped into sarcasm. Was that necessary? Hmm, maybe it’s best if I take a time out here, and defer to my wise friend who will calmly, rationally, tell you a little something about the true meaning of yoga:


unknown

Enter Buddha

Expansion of awareness is the primary goal of yoga. As consciousness expands, so does our ability to deal effectively with the concerns of everyday life.


Right. And one such concern is money, which allows for putting a roof over your head, food on the table, and reasonably priced clothing on your body: the necessities. In a moment or two or three, I’ll talk more on this point, how yoga leads to expansion of awareness that, in turn, leads to increased personal wealth. But first, I’m getting the shoulder tap again:


unknown

Enter Buddha

The yoga tradition acknowledges the realities of material existence. In this regard, yoga encourages us to skillfully cultivate all four components of a fulfilling life: spiritual growth, meaningful work, pleasure, and prosperity.


A Visit to the Nunnery

Some eight years ago, I attended my first yoga class. The type of yoga being taught was Hatha Yoga: a gentle system that includes yoga poses and breathing exercises designed to bring peace to the mind and body.

Class was held in a room located in a wooden building home to a nunnery. A perfect setting, with the quiet spiritual element evident immediately upon entering.

There I was in my no name sweatpants and t-shirt. Feeling out of place, I intently watched the soft-spoken teacher for clues as to what I should do next. She would perform each pose and explain what we should be doing, how we should position our hips this way or move our torso that way.

The different poses we went through made me feel like I was playing a one person version of Twister, marketed in the 1960s (ya, I know, I’m going way back here) as ‘the game that ties you up in knots’.

Struggling to imitate the teacher’s movements, and increasingly confident that I had no idea what I was doing, I welcomed the announcement to lie on our backside for the final pose, Savasana.

We were instructed to place hands away from our body, feet shoulder width apart, and eyes closed. Within maybe 30 seconds, I felt the sensation of my body sinking into the ground. I was so, so, so relaxed.

My body limber, mind quiet, no stories bouncing around my head, no thinking about past events or planning for the future. I was purely focused on the moment without even trying. It was a strange and awesome feeling. This, I imagined, is what inner peace feels like. How nice.

After class ended, I watched others press the palms of their hands together in front of their heart, then approach the teacher with gracious words of appreciation for her instruction. I did the same.

And ever since my first and only yoga inspired nunnery visit, I’ve made practicing yoga a part of my life. Because I thoroughly enjoy the unbelievably peaceful feeling that consumes my mind and body both during and after each class, improved flexibility and posture, muscle strength, deeper sleeps … the benefits go on and on.

Expanding Awareness, Building Wealth 

Okay, fine. Good for me, you may say. But how exactly does yoga make you wealthy? Do yoga teachers freelance as money managers, offering stock market tips after class? Ha ha, hilarious.

Here’s the thing: practicing yoga is all about nurturing positive mental energy. Enhancing clarity. Sharpening focus. Taming disruptive emotions. Cultivating discipline.

When we walk this kind of path, we expand our awareness. And expanding our awareness means we better understand what is coming at us, be it our own thoughts, our emotions, other people or circumstances. Then, we find greater balance. Our judgment improves, we make smart decisions, we are better positioned to deal with everyday life, including investing and money management issues.

Now, I’m not saying that balance cannot be found through other activities. Of course, there are a thousand and one ways to find balance and if you have found one or more, then good for you (please share your stories on Community Forum).

I’m just saying that yoga helps me stay grounded, helps me bring my best game to investing and money management. Meaning, I make calm, rational decisions about my holdings. I do not react impulsively. I do not get caught up in stampedes when markets are whip sawing one way or another. I do not panic when recession strikes, stock market falls off a cliff and my statement shows a whopping decrease in value of my portfolio. I objectively review information, assess the big picture (i.e., macro-economic climate and company specific fundamentals) and make decisions in a patient manner, keeping the long term in mind.

Retroactive Justification

Oh, and, you know that sarcastic diatribe I started this post with? Well, in the spirit of full disclosure, I have to admit that I did buy a pair of $75 yoga branded shorts. That said, I’ve had these same shorts for more than five years, they’ve seen many a yoga class, and they’re still in one piece. So, I’m retroactively justifying this purchase based on the value I’ve received from the shorts ($75 for 5 years = $15 / year). Ahhh, the power of rationalization! Well, while I aspire to be more like Buddha, for now I have to deal with the challenges of my own humanity. Namaste!

Frugality is Over-Rated

First off, let’s get this out of the way: ‘frugal’ and ‘cheap’ are two different animals. A ‘cheap’ person (known by the scientific name, Cheaposaurus) is single-mindedly focused on spending as little as possible without regard to other costs or benefits (i.e., value, quality, time). As for someone who is ‘frugal’ (otherwise known as Homo Frugalis), think of them as an evolved Cheaposaurus.

Darwin’s Theory of Homo Frugality

Similar to Cheaposaurus, Homo Frugalis (HF) also watches spending and likes saving money but – and here’s the leap up the evolutionary ladder – these folks possess an advanced brain capable of processing a big picture, holistic view of money.

Meaning, low price alone does not determine what to buy or whether to buy. Rather, infused across the synapses of each spending decision are thoughts of whether the intended purchase lines up with personal values.


Enter Buddha

Between the extremes of indulgence and denial lays a path known as The Middle Way. This is a path of moderation; one that brings freedom and wisdom. Homo Frugalis consciously lives The Middle Way, striking a prudent balance between spending and saving.


Okay, let’s get more specific here and convert spiritual proclamation into a real world example.

Cutting the Cord and Loving It

Three years ago I cut the cable cord, figuratively speaking. My kids would click through tens of channels, complaining that there was nothing good to watch. When I stepped back and actually listened to their complaints, and considered that I rarely watch television, this allowed the proverbial light bulb to click.

Then I asked myself: why am I paying close to $1,000 annually for cable (do the frightening math – that’s $10,000 over 10 years!) when it’s hardly being used and certainly isn’t needed? The next day I informed the kids that I would follow through on my frequently invoked threat to get rid of the aptly named idiot box.

After allowing the kids to free fall into panic and various states of contortion for several minutes, it was then revealed that I, Maker of Rules of the Home, would allow Netflix to satisfy the all too common craving to sink into a passive vegetative state. The new cost for gluing eyeballs to screen: $9.99 per month or about $120 per year.

In shaving the cost of home entertainment by 90%, was I being cheap? Would I now be slotted into the category of the lesser evolved Cheaposaurus, knuckles scraping ground and all? Well, if I truly enjoyed watching shows on cable television and the only reason I cut the cord was to save money, then I would rightfully be relegated to roaming among my Cheaposaurus brethren.

But if I loved watching one or more shows aired on cable television, or let’s say that my job required me to review a variety of television shows, then a cable subscription would certainly have more value for me, the cost may be justified, and I could make a fine argument for maintaining HF ranking.

That said, cable offered me little value. And total cost (aside from dollars) was excessive because product quality was judged poor (by all supremely qualified judges in our household) and was of marginal importance (read: value).

So now, every year I have $900 more in my pocket that may be put toward savings and investments or spent on items that align with my values, safe in the knowledge that my knuckles comfortably rest a few feet from the ground. And that makes me happy. Knowing that I’m giving thought to how money is being spent, that I’m maximizing savings, not wasting money, and moving forward toward my financial goals.

Homo Frugalis Splurge

  • Clip coupons? Good for you. Take in $10 worth of coupons to the grocery store once a week for 52 weeks and you’re looking at an additional $520 to your name.
  • Bringing lunch to work? Then you now exactly what you’re eating and are likely eating healthier (feeding your brain leafy greens has been known to increase investing prowess, according to my unscientific study). Oh, and saving money. Right. Lots of money. If an inexpensive lunch on the town costs $10 and you’re dropping that money 5x/week, thats $50/week. Stretch out the work year to 48 weeks (hey, you have to take breaks, vacations, they’re good for the soul) and we’re talking $2400/yr. Sure, you’ll spend money on groceries that are used for lunch but not nearly as much as you will spend eating out.
  • Make coffee/tea at home and not buy $5 coffee concoctions at the local café? Let’s see … 30 days per month, one cup of coffee/day @ $5 works out to $150/month or $1800/year. Hmmm.
  • Bottled water. Even if saving the environment isn’t your thing, think about the savings to be generated for funding your financial freedom by buying your own water bottle and filling up at home. Give or take $20 for a good stainless steel water bottle that should last many years versus $2.50 for store bought bottled water times say 10 bottles/month = $25/month or $300/year.
  • How about growing your own food in a garden? I assure you, the taste and nutritional benefits of garden grown food is so, so, soooooo superior to store bought fruit and vegetables. And, of course, with the California drought five years in the making and counting, fruit and veg costs are only going up.
  • Maybe you prefer to dry clothes on a laundry rack or outside on a line instead of a drying machine. Good for you. Cut down on your power bill. More money for you. Kudos!

All of the above activities, and this is just a teeny, tiny, sampling of ways in which to reduce your spending, build your inner wealth (because your activities align with your personal values) as well as your material wealth (through more savings).

And the bonus is not only more money for you to invest, build your wealth, and get closer to your goal of financial freedom, but more options for splurging once in a while.

Splurge?

Can I do that?

What about staying true to frugality, true to the HF tribe?

Ach! The BuddhaMoney way is about balance, moderation, the Middle Way. Yes, frugal is good. Yes, fewer expenses is good. And yes, you can splurge once in a while. It’s not a crime and you will not be ex-communicated from the HF tribe.

In fact, you will be celebrated! Because HF folks live a conscious, balanced life, they align their actions with their values and their budget, which leads to a general sense of well-being and gosh-darn-blow-your-horn-the-sun-is-shining-life-is-good-happiness.

So if you want to buy that fancy shmancy pricey new camera, gemstone earrings, or front row seats to a show by your favorite performer, go ahead, do it! And feel good about your spending because you’ve earned it by making little changes in your lifestyle, by cutting out the fat in your budget, and by deepening your pockets and your spirit at the same time.

Millennials: Beat Debt, Get Wealthy

It took me several hours to write this post. Once the final draft was complete, I was reviewing for edits when,…

Bear with me here … I’m going to share a short story with you before getting to the feature article.


It took me several hours to write this post. Once the final draft was complete, I was reviewing for edits when, before my eyes, the characters instantly morphed into gibberish. My first thought: what the *@%?

Initially calm, I checked other files for infection. Thankfully, all was fine. So I ruled out a virus as the cause and focused on fixing the one corrupt file. An hour later, the file remained corrupt.

As calm dissipated and frustration grew at the thought of losing my work, I took a break, heading to yoga class with the intent to regain my balance. Driving to the studio, I obsessed, my head looping the same story over and over: How could this happen? Hours worth of work gone. And it was a damn good piece! Now what I am going to do? I’ll take my laptop in for repair; maybe someone else can figure out how to recover the file. But what if they can’t? What then? … blah, blah, blah, whine, whine, whine, me, me, me.

Arriving at the yoga studio, totally self-absorbed in my earth shattering problem, I was anything but balanced. After checking in with reception and removing my socks and shoes, I looked at the wall in front of me and saw an 8×10 photo with a caption written underneath. In the photo was a woman with her two young children. I recognized the woman, she teaches yoga at the studio. One of her children, a nine-year old girl, was recently diagnosed with brain cancer and is undergoing intensive chemotherapy. By way of the photo, the yoga teacher was asking her fellow yogis to share positive energy and, if so inclined, supportive donations.

Smacking myself in the forehead, my eyes finally opened. I realized the absurd insignificance of my concern. Here I am complaining about losing a teeny, tiny creation in the form of a written article, and here’s this gentle woman justifiably anxious, to say the least, about losing her daughter. Her beautiful daughter.

Whoa. I check in with my inner Buddha as I’m about to enter class. I remember that we are most out of balance when too focused on our self. Only when we practice gratefulness, when we shine light on all our good fortune, and extend compassion to those who are truly suffering, do we regain balance, and tap into our sense of generosity toward others, and our self.


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Niece One and Niece Two

My lovely sister blessed planet Earth with two daughters, my nieces, otherwise known as Niece One and Niece Two. Both are twenty-something Millennials (i.e., born between 1982-2000, or thereabouts). Both are university graduates. Both are industrious. Both want a meaningful life. Both want to make use of their unique talents and contribute to society. And both are concerned that the deck is stacked against them and their fellow Millennials.

Niece One lives in Toronto (Canada’s claim to a ‘world class’ city for those who like to compare and rate and judge … oops, I just judged the judgers). Following graduation, she spent more than six months searching for work in her field of expertise. Eventually, she landed a job with a non-profit organization. She was thrilled. The position allowed Niece One to put her skills to use and learn alongside an eclectic, stimulating mix of co-workers. The downside was salary. Niece One was paid enough to rent a small apartment with a roommate, buy groceries, slowly pay down her student loan, and go out on the town once a week.

A few years younger, Niece Two opted to stay in her home town of Ottawa, Canada’s capital city, after graduating. She would love to live with big sister in Toronto but, more practical minded, the thinking was that Toronto is too expensive.

Niece Two endured about eighteen months of hunting for a permanent job. During this time, she worked a variety of odd jobs, including part-time waitressing, a position that, to my knowledge, does not require a university degree. And, until recently, she lived at home with Mom and Dad (members of the baby boom generation, through no fault of their own), because she couldn’t afford to move out. Today, at age 25, she and a roommate rent an apartment.

That Was Then

She didn’t move out of Parent’s Home until age 25? Well, Niece Two is far from unusual in this regard. Get this: in the U.S., about one-third of all Millennials live with their parents. It’s the first time that living with Mom and Dad has outpaced living with a spouse for this age group since The People Who Are Charged With Recording These Statistics began keeping score in 1880.

Okay, it’s time to inject more perspective here. Just for fun, let’s time travel to a not too distant past. A time when our society looked different, and was different from many perspectives, including economically.

My father started his career in the early 1950s. Having graduated from university in his early twenties, he was courted by several employers because, hey, this was the Golden Age. This was a decade in which annual economic growth registered above 7% four times, and above 5% twice. If you wanted to work, be it white collar, blue collar or any other category, opportunities were there for the taking.

So he gets his first job and moves out on his own almost immediately after graduating. Within two years, he finds another job that pays better and offers more responsibility, becomes engaged to marry, buys a house, and is nine months away from pushing baby in a stroller. Oh … and no debt after graduation. What’s that, you say, no debt?! How is this possible?

Two reasons. First, government assumed responsibility for the bulk of education financing, rightly rationalizing that an educated workforce was beneficial on many fronts for society. The result being that tuition fees were a token amount, i.e., a few hundred dollars. Second, students were able to finance education costs with summer jobs, which were plentiful.

That Was After Then

Close to forty years later, the cost of education had changed but not a whole lot when you factor in inflation. When I graduated from a public university law school in 1990, my final year tuition fee was $1,750. And I marvel at the fact that I was able to live the entire academic year, from September through April, on less than $10,000; this included tuition, rent, food, clothing, bus pass, beer, pizza, you know, the usual university expenses. Sure, I borrowed some money to pay for school and that money was repaid after graduation. But most of my expenses were paid for with wages earned from summer employment. Lucky me.

This Is Now

Today, in 2017, I have three family friendly words for you about the cost of education: Oh … My … Goodness!

The same law school I attended, offering the same degree within the same time frame, now charges tuition of close to $22,000 per year. That’s just tuition! Add on the usual living expenses and you’ll see a final annual tally of between 30-40k. What about undergraduate tuition costs, you ask? In the mid-1980s, I paid $880 annual tuition to attend a well regarded public university. Today, the same school charges more than $5,000.

How, in the name of BuddhaMoney, could anyone who does not have a parent bank rolling their education complete their course of studies without racking up serious debt in the form of student loans?

As for getting a job to help pay for school costs, of course this is an option. But even if you could find work during the school year and/or summer break, the going rate is likely minimum wage which, while helpful, would not relieve you of the need to borrow big against your future. That said, finding work may be easier said than done as the economy simply doesn’t grow anywhere near as fast as it once did. And jobs, especially well paying jobs, are fewer and farther between.

Consider This: The year 2000 was the last year the U.S.economy achieved +4% growth (compare this to the 1950s growth rate, previously mentioned, or even the 1990s where 4% growth was achieved four times). Wait, it gets more troubling. In the aughts, the economy surpassed 3% growth only twice, in 2004 and 2005, before the so-called Great Recession. Since then, we’ve been mired in a slow growth, low interest rate, low inflation world where economic growth in our part of the world has not exceeded 2.5%. This isn’t good for jobs, for wage growth, or for future generations.

Albatross

In the The Rime of the Ancient Mariner, a poem by Samuel Taylor Coleridge, a sailor shoots a friendly albatross. As punishment, the sailor is forced to wear its carcass around his neck.

Well, I’m guessing there’s not too many students sporting a bird’s carcass around their neck but, today, the albatross that students wear is a lengthy debt sentence. And while past generations of college/university graduates didn’t have to contend with debt, or at least the kind of debt that slows the spring in your step, Millennials have no choice.

Because tuition costs are not getting any lower. In fact, they keep going higher. And governments have no plans to resume financial responsibility for higher education, graciously preferring to allow private citizens to shoulder more and more financial burdens.

So, what’s the consequence of loading down students, future taxpayers I might add, with excessive debt? Coupled with an economy that doesn’t generate enough well paying jobs?

A generation that rightfully believes the deck is stacked against them. A generation (we’re talking 83 million Americans and close to 10 million Canadians; a larger group than the Boomers) that puts off, maybe permanently, starting a family or buying a home because the overriding concern is paying their bills at month end. When that’s your predicament, guess what else gets kicked down the road? Building savings and investments, putting away enough for a rainy day, and contributing to retirement accounts.

Even if you, a Millennial, do pull down a good size salary, you’re still likely to start down the path of wealth building at a comparative disadvantage. Because if you’re carrying a burdensome debt load straight out of school, income must be diverted to debt payments. The result being that savings contributions are delayed until a later date or are less than what they would have been if the debt load was lighter.

Add to this a low interest rate environment that leaves banks paying next to nothing on savings accounts and high rated bonds dribbling out meager interest payments and, unlike past generations, building wealth is a more complicated process. It now involves learning about stock market investing if you want to generate any sort of meaningful return on your money.

Get Smart

Oh … I’ve painted a grim picture haven’t I? Okay, first, let me say that when it comes to getting a handle on your financial situation, its best to know your starting point. Fact is, Millennials have it tougher than the past few generations. No question.

Still, while this generation faces a tougher slog than their parents and grandparents, this doesn’t mean financial success is out of reach. Not at all! When I said something along these lines to Niece One, she shot me a bewildered look.

“Then … what do we do? I mean, I know there’s no turning back the clock and complaining is a useless exercise. But how do we make the system work for us? I hardly know anything about money management. As for investing, forget it. I wouldn’t know where to start so I just keep my money in a bank savings account.”

Bingo! (uh oh, showing my age … do people under 30 even know what bingo is?) Um, look, this is huge. I mean, money issues are with you your entire adult life. If money smarts aren’t taught at home and, unfortunately, they’re certainly not taught to any depth, or at all, in primary and secondary school, then how do you learn? Well, once the school bell has rung for the final time, you’re on your own. If you want financial knowledge, you have to go looking for information.

If you’re hungry to learn fast, then there are soooo many resources out there, from personal finance websites to books to meet up groups. For beginners, here’s a few good financial knowledge primers to snuggle up with on a Saturday night:

  1. Cary Siegel’s, Why Didn’t They Teach Me This in School?: 99 Personal Money Management Principles to Live By.
  1. Ruth Soukup’s, Living Well Spending Less: 12 Secrets of the Good Life.

If you want to go a bit slower, you know, mellow out in BuddhaMoney time, then that’s what we’re here for: to empower you about money issues and help you become wealthy in every sense of the word. And we do recommend that you visit often, not only because we love visitors but also because you get to discuss money issues with your BuddhaMoney enthusiasts at our community Forum.

Now that we’re done promoting our self in our own low key way, have a read through the following section, and learn what you can do right now to improve your financial situation.

Why You’re Reading This Post … To Learn How to Become Wealthy

  • The Basic Rule. Here’s what hasn’t changed since your grandparents day: spend more than you earn, and you’ll suffer from debt. Save more than you earn, and you’ll build a solid foundation toward financial freedom.
  • Freedom Plan. You gotta have a plan. A savings plan, spending plan, investment plan, debt plan, buying a home plan, retirement plan … whatever your goals, you have to draw a roadmap detailing how you’re going to get to where you want to go.

Why? Plans lay the ground work for direction. Plans set boundaries for saving, spending and investing. If you don’t plan your finances, money is so much more likely to go wayward and just … disappear. Or it will seem that way. In this regard, here’s a wise quote to chew on:

“Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no one could have dreamt would have come their way.”

William Hutchison Murray

  • Rainy Day Fund. Life is uncertain. Things happen. We can’t plan for everything. Common refrains, yes? And true. So as a form of self-insurance, do your self a favor and open a separate account that holds enough funds to cover 3-6 months of living expenses. If you can’t afford to do this right away, not a problem. What’s important is that you open the account and start contributing whatever you can afford today. Set a goal, say 5% of your monthly income. And keep contributing until you’ve built enough of a cushion to cover 3-6 months of living expenses.
  • Slay Evil Debt. Set aside a percentage of money from each pay check that goes towards paying down debt. If you owe money to more than one creditor, be sure to prioritize debt payments. The creditor charging the highest interest rate should be paid first. And if you don’t have debt, then the general rule is not to volunteer to take on debt. I say ‘general rule’ because you’ll likely take on debt to finance big ticket purchases such as a home. That’s all fine and good as long as you’ve worked out a budget detailing how you will afford to make mortgage payments and pay home related expenses.
  • Credit Cards. One credit card is all you need. A no-fee, boring, void of bells and whistles, status-less Visa or Mastercard with a reasonable credit limit. And don’t even think about using the card unless you have funds to pay off the full balance by the due date. If you can’t pay the balance in full, then you’ll be charged interest bordering on criminal … and you’ll be throwing money away. By the way, throwing money away is not part of any good plan.
  • Savings. If you sign up for the Freedom Plan, you absolutely have to save. If being disciplined is a challenge, set some ground rules for yourself, such as taking 10% of every pay check and depositing it into an investment account. And cut spending. Absolutely cut spending. Especially  the non-essentials. Like the daily $5 coffee or tea concoction you buy at a trendy cafe (do the math: at $5/day, that’s $35/week or $1,825/year!); pack your lunch; buy clothes on sale, buy anything you can on sale. The more spending you cut, the more you save, the closer you travel toward your goals, your freedom to do as you please, in a money wise sense.
  • Put Money to Work. When you invest money, your money is going to work, not you. This is what you want. Sure, it takes money to earn money. Still, even if funds are tight, if you’re earning a pay check, put some of that money to work for you so one day you don’t have to work for money. The more you can afford to invest the better. And, similar to being disciplined about contributing to savings, be disciplined about building your investments. Set aside a certain amount each month that makes its way directly to the investment account.
  • How To Invest. Niece Two said to me, “I’m making a good salary for the first time ever and I have extra money each month. I want to invest it but … help?”

Right. So, step 1 is getting the money to invest. Niece Two has done that.

Step 2 is setting up an investment account. You could do this with your bank, and they would then put your money to work in mutual funds owned by the same bank. Generally speaking, not being a fan of mutual funds because of their high fees, I wouldn’t pursue this option. That said, close to 70% of investors do choose this option. Why? Not even Buddha knows. But the wise guess is that they trust the bank and they don’t know any better.

Best option: if you’re a beginning investor, set up an investment account with a financial institution that offers a Robo-Advisor.

Um, what?

Having seen its popularity grow in the last five years, the Robo-Advisor simply refers to a way to automate how your investments are chosen. Just like a flesh and blood financial advisor, the Robo-Advisor plugs in your relevant information (i.e., risk tolerance, goals, time horizon for investing) then chooses investments that best suit you. Typically, your money is placed in low fee Index Funds. And unlike a human financial advisor, you’ll pay a whole lot less in management fees.

To point you in the right direction, Canadians should check out the Robo-Advisor service at Bank of Montreal: https://www.bmo.com/smartfolio/?icid=bd-FEAT752IL4-AJBMO16.

For American residents, take a look at Charles Schwab: https://intelligent.schwab.com.

In an upcoming post, I’ll be talking til’ the cows come home about the benefits of investing with Robo Advisors. Until then, give a good pondering to this information and if you have questions, well, post on the BuddhaMoney Forum and bat around ideas with other BuddhaMoney enthusiasts, or send me a message and I’ll do my best to answer.


Enter Buddha

The second Noble Truth teaches that trishna (thirst or craving) is the cause of stress of suffering. Wanting to own a home, wanting to be financially secure is perfectly fine and good. The challenge is to avoid clinging to these wants such that wants become obsessive cravings and we forget what’s important: to be grateful for our life, for who is in our life, and for what we have.

 

The Value of Indulging

In 2003, I owned a Dell computer that ran on the Microsoft Windows operating system. Checking my inbox one day, I noticed an email from a good friend. The email had an attachment. My friend being a trusted source, I didn’t hesitate to open the attachment. But what I didn’t consider was that my friend’s computer had been hijacked; and that some anonymous, insidious, multi-tentacled digital bug was forwarding diabolical emails to all addresses listed under his Contacts.

Not so pleasantly infected, my hard drive crashed. And I went into full on panic mode, thinking I lost a mountain of vital information and my very survival was at risk (such is the mindset of a workaholic, stressed out, caffeinated, unbalanced, ego driven male species … that was me, back then).

Once panic subsided, slightly, I hurried to find someone who knew way more about computers than me, hoping that my prized data could be retrieved and rehabilitated. The computer repair guy recovered some but not all of the data, and I recovered some but not all of my mental balance. On his way out, computer repair guy made an off hand comment: ‘have you considered buying an Apple computer?’

At the time, Apple was teeny, tiny potatoes on the desktop / laptop scene, claiming less than 3% global market share. Apple products weren’t trendy, didn’t have mass appeal, and the iPhone wasn’t even a twinkle in Steve Jobs eye. However, the benefit to me, a consumer, of Apple’s minimal market share was that the vast majority (we’re talking 95-99% depending on your source) of viruses targeted Windows based operating systems, not Macs.

The following weekend, I went out and bought a Mac desktop. And in the ensuing 13 years, I’ve gone through a few more Mac computers, not once having fallen prey to a predatory virus. Of course, I also don’t open email attachments unless I absolutely, positively know the source.

Price is What You Pay … Value is What You Get

My current MacBook Pro laptop cost about $1,800, including extended warranty. Not small change, I know. But I don’t judge whether to buy a product based solely on price. No question, price matters, price is a hugely important factor. But its not the only factor that goes into my decision-making.

Value also matters big time. And from my perspective, the MacBook gives excellent value measured by security, reliability, durability, functionality, apps such as iBook, iPhoto, iTunes, and stunning design. So all these factors go into my decision to pay the hefty up front cost. That said, keep in mind that ‘value’ is personal, i.e., you decide what matters to you aside from price.

I’m now into my sixth year with this laptop. And I plan on keeping it until the last drop of juice runs out. Why not? The way I see it, the longer I own this laptop, the more value I squeeze for my money. I don’t need or want the bells and whistles on a ‘new and improved’ version when the current model works just fine.

Blinded By The Light

Aside from rationalizing purchases (and lack of purchases) on economic grounds, I have to admit (because it’s true) that, on an emotional level, I enjoy Apple products. The simplicity of design and ease of use fits with me. So, sure, I could choose to spend way less dough on a competitor’s brand that would satisfy my practical needs.

But you know what? As long as I’m not creating financial hardship for myself or going into debt, and as long as I’m making thoughtful purchase decisions and not losing bodily control and drooling over shiny stuff, I figure it’s okay to open up my wallet from time to time and indulge, treat myself to a luxury.

I mean, it’s not like I’m a consumer programmed Apple groupie, traveling to their shareholder meetings or marketing events introducing new products. And I don’t venture on an annual pilgrimage to worship at Apple’s flagship New York City store on Fifth Avenue, the one that’s open 24/7/365 (http://www.apple.com/retail/fifthavenue/).

Think about that: the store is always open. Who is shopping for electronic goods at 3:00 am? And why, according to knowledgeable employees whom I happened to chat with, is the store just as busy at 3:00 in the morning as it is at 3:00 in the afternoon? I don’t know, maybe you wake from a bad dream and instead of soothing yourself in the wee hours with a blanket, you seek solace among shiny aluminum machines within the confines of a brightly lit, busy retail store?


Enter Buddha

One may prefer to snuggle up under a cozy blanket while another chooses to brush up against a metallic machine. Both are fine. We do not judge.


Right, right, I know, I’m still learning to accept that we are creatures of social programming, too often grasping at whatever we think will soothe our existential angst. Okay, look, judgment aside (because judgment does nothing but fill the mind with negativity), the fact is that Apple astutely saw an opening in the marketplace and people responded.

Though I don’t have a teenage crush on Apple products, consumers whose eyes bug out at the thought of being inside an Apple store, among like-minded devotees, smelling, touching, listening to these precious products, these consumers LOVE their Apple.

Consumption, What’s Your Function?

And Apple loves them back. Because they are the ones who upgrade every new product cycle. They are the ones that make Apple one of the most profitable companies on this planet, earning so much money the company doesn’t know what to do with it (at last count, Apple was sitting on a cash pile of about $240 Billion!). These are the consumers that feel less satisfied with their iPhone 6 because the iPhone 7 was just released. Never mind that the iPhone 6 is as amazing today as it was a year or so ago. The thing is, the 6 is now out of date, out of fashion, yesterday’s news and, well, you gotta keep up, you gotta stay current, you gotta have the latest gadget because … because???

My point is not to trash Apple devotees. If you want to stay current in the product game, well, that’s your call. There is no scorecard, no better or worse, for buying stuff. You do what you decide is best for you. That said, what I’m trying to do is get you to think about what is best for you, and the value you are getting, if any, from staying at the forefront of the electronics product game. In a broader sense, think about what ‘value’ means to you, and whether each purchase you make (computers, clothes, gym membership, travel, whatever it may be – since the use of Apple is only for illustrative purposes) is fulfilling your idea of ‘value’.


Chewy Bit

I bought an iPhone 5c three years ago. And for two of those years, I resisted hounding from my consumption happy teenage son to upgrade, to start living in the year 2016 as he would say. But a few weeks ago I caved, upgrading to an iPhone 6. Not because the 5c didn’t serve my purposes. In fact, it was just fine. The reason I upgraded was because the 6 cost me nothing in exchange for agreeing to lock into a two-year plan. The added bonus? My new plan is less expensive then the previous plan.

How did I pay less for a so-called ‘premium’ (‘premium’ phone is marketing jargon for, we will charge you more for the newest model phone because we can) phone on a new plan? Bargaining. You can negotiate with all the phone companies. They are fiercely competitive with each other, they want your business, and are generally willing to toss in incentives to get and keep your business. If one phone company doesn’t offer you a satisfactory deal, tell them you will walk down the road to their competitor. And be willing to do so. The downside: time and effort researching and contacting different telecom companies. The upside: lower phone bills, more money in your pocket.


Mindful Consumption

A consumer oriented economy encourages us to consume (nothing like stating the obvious). Like most of us, when making a purchase, the endorphins fire and I experience a sense of pleasure and control whether I’m buying a new car, a shiny toaster, even a meditation cushion. This feeling, however, is nothing more than a temporary adrenaline kick and it does pass.

Okay, so the squishy feelings pass. That’s all good. There’s nothing wrong with buying stuff that’s useful, and why not enjoy the adrenaline while it flows. What matters here is the perspective that you bring to your buying decisions, i.e., knowing that while the act of consumption may be a pleasure filled activity, it does not, it cannot, bring any sort of genuine or lasting satisfaction.

Once you’re aware of the limited benefit of consumption, and have knowledge of the social pressure to consume and adorn yourself and your home with status elevating STUFF, you set the stage for a little look-see inside yourself. Meaning, you’re able to bring a whole lot of wisdom to the consumer aisles. Before buying stuff, you’re asking yourself questions that matter, examining your personal values, and considering the costs and benefits of each purchase.

When this happens, when you reflect on yourself like this, your values inform your buying decisions. And the beauty of walking through this process is that peace of mind and clarity follow simply because you have considered who you are, thought about your needs and wants, and thoughtfully determined whether the stuff you want to buy is a good fit for you.


Return of the Buddha 

The Middle Way avoids the extreme of overindulgence or reliance upon pleasure for perfect happiness. In a consumer society, stuff may claim to offer permanent happiness. We may think, if we can only get enough of it we will be happy. The marketing pitch, whether through advertisement, movies or other misleading portrayals, can be intoxicating.

If we fall for the delusion that sensual pleasure, i.e., seeing, hearing, tasting, touching, thinking, whatever it may be, is going to provide lasting happiness, then we are lost because lasting happiness is an inside job. Healthy, happy people find a Middle Way, their own Middle Way, that speaks to Balance, and are grateful for what they have.


 

Enter the Buddha

Here’s what I’m thinking: continue with yesterday’s stream because there’s a whole lot more to say on this issue of money and happiness.

So, I left off posing the question, is happiness a pipe dream? I’m going to hedge here and say ‘maybe’. Really, it depends on you. It depends on whether or not you understand that money is a tool meant to serve you, not an object to which you become a servant. Continue reading “Enter the Buddha”

The Money Journey

This blog is about money. Investing money, saving money, spending money. And happiness. – Happiness?

This blog is about money. Investing money, saving money, spending money. And happiness.

Happiness?

I like to think of happiness as the pleasant payoff that comes about from experiencing emotional, psychological, and spiritual contentment. I’ll talk more about this shortly.

For now, it’s worth your while to toss around the idea that, more than net worth, it is our thoughts, perspective, and emotional connection to money that tie into our balance of mind, and set the stage for happiness. Continue reading “The Money Journey”