Latest Share Investments

Would like to share my latest share purchases.

I sold Aviva, Carillion, and BP that I did not think were performing.

I have instead bought Renishaw, Avon Rubber, and the launching Avanti Communications.

Avanti has today launched their first own Satellite for Broadband Connections to rural areas. Share price jumped by almost 10%, and I bet it will continue increasing come next week.

I am trying new ways of investing in shares, and I will keep you posted on how I am doing.

/Fredrik

Alternative Income from Betting.

Hi,

I am sorry that I have not been posting for a while.

I have been evaluating a Fixed Odd betting system on Forex, and I am impressed with it.

From my evaluation it gives a 90% hit rate (i.e. the indication comes true).

If I bet only when it gives me a return of 30% and more, then I will be getting an average return of: 17% (see calculations below). I have on occasions had 86% return on a bet, which was very good indeed.

Calculations:
10 bets at 100 each
9 bets win 30 each = 270
1 bet loses 100
So in 1000 bet, I will gain 170 (after the loss), which is a 17% return per bet (and that is including any losses).

Of course, there is a risk that something weird happens on the Forex, which drops the probability of gains from 90% to something lower.

If the probability drops to 80%, my returns would drop to a mere 4%, which is not enough considering the risk.
10 bets at 100 each
8 bets win 30 each = 240
2 bets lose 100 = 200.

I am not really doing this to get rich, as I only risked £100 on it. So far I have 7 wins, and 1 loss, giving me a gain of £85.34. The nice part with this is that it is tax free.

I will get to you on how I am doing with the system, and maybe share some more info on it.

/Have a nice Bonfire Night!
Fredrik

The real secret to riches

In one word basically, the real secret to becoming rich is “compounding”.
Warren Buffet knows it, and it is one of the basics in his investments. Compounding, along with tremendous returns have made him one of the richest people on earth.

What does it mean then?
It means that as long as you re invest your profit, your money will start growing faster, and faster. Kinda like when you roll a Snowball, and it grows bigger and bigger (sorry, just had to borrow that from the title of the book The Snowball, by Alice Schroeder; which is about the life of Warren Buffett).

I will use an example, which I borrow from the dowtheoryletters. :
It refers to a study, courtesy of Market Logic, of Ft. Lauderdale, FL 33306. It asumes that investor B opens a tax free saving at age 19. For seven consecutive periods he puts $2,000 in his tax free saving at an average growth rate of 10% (7% interest plus growth). After seven years this fellow makes NO MORE contributions — he is finished.
A second investor A makes no contributions until age 26 (this is the age when investor B was finished with his contributions). Then A continues faithfully to contribute $2,000 every year until he is 65 (at the same theoretical 10% rate).
The study shows the incredible results. B, who made his contributions earlier and who made only seven contributions, ends up with MORE money than A, who made 40 contributions but at a LATER TIME. The difference in the two is that B had seven more years of compounding than A. Those seven early years were worth more than all of A’s 33 additional contributions.
(Sorry if picture takes a while to load)
power of compounding
So, the sooner you start, and the longer you keep compounding, the richer you will get.
So, start tomorrow, or even better, today.

Until next time.

/Fredrik Sohlberg

Recommended Reading Rich Dad Poor Dad

First of all, sorry about not writing anything last week. I was still working on finishing off our new home office, and it took a little longer than expected. My son has had a cold for the last two weeks, so we have not been getting very much sleep.

First book I would recommend anyone to read is

Robert T. Kiyosaki’s Rich Dad Poor Dad.

First time I read this book, I recognised my father in both the Rich Dad aspect, and the Poor Dad aspect of the book.

While my dad has Rich Dads aspect to how you spend money, he also had Poor Dads aspect on how to earn the money.

The short of it is basically that the way that most of us are brought up (Poor Dad) is to value education, and to strive for a good education, in order to get a good job, as with a good job normally follows a good income. Promotions are good, as they increase the income. The only problem with Poor Dad is that with the increased income, all the expenses also increase, and as long as the expenses increase at the same rate or faster than the incomes, you will stay poor, or get poorer.

The aim on the Rich Dads side is instead the following:
1. Don’t work for money.
2. Get financialy literate.
3. Mind your own business (i.e. run your own company).
4. Taxes and corporations.
5. Rich people invent money.
6. Work to Learn – Don’t work for money.

So, what can you learn from the book?

First and most important thing you learn is about emotions (fear and greed), and using intelligence when it comes to money, rather than emotions.

Second thing you learn is about assets and liabilities, and the difference between them. Crucial if you want to ever get Rich.

Financial literacy, and cash flow. This part is very much about why most of us, eventhough our incomes go up don’t get a better life.

I highly recommend this book as a book to start with on your way to financial freedom.

I will try to advice on more books in the near future.

“Fredrik Sohlberg is a participant in the Amazon Europe S.à.r.l. Associates Programme, an affiliate advertising programme designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.co.uk/Javari.co.uk.”

Cars, you can’t live without them, and they cost too much money

So, back from holiday, and back to making up for any spending I did. I did use my tips from the other week btw, so our flights were cheap, the car-rental was acceptable, and housing was free (staying with family and friend does that to accommodation costs).

This weeks topic is cars as you might have guessed from the headline. I am not talking flashy cars here, but rather reasonably priced family cars (in my example I am using Ford Mondeo Hatchback 2.0 TDCi Zetec, and an estimated yearly mileage of 20,000, and the car having to be replaced after 100,000 miles, so at around 5 years of age). Rest value estimated at £2000 after 5 years, at 100,000 miles.

Alternative investments are evaluated at 4.9% APR for 5 years, and 4.3% APR for 3 years.

New Cars, the smell of new car, the feeling of driving it away from the dealer, and parking it on your drive. Realising that it has just dropped up to 30% in value.

All prices etc are compared against just keeping the £16,013, and investing it at 4.9% for the 5 years, which would give us £20,340 at the end, or £4327 more money.

Cash the car can be bought at £16,013, and sold for £2000, which for 5 years is £2802/ year. This means that you are £18,340 worse off for buying cash, compared to just saving the money.

If you chose hire purchase (HP) with an initial deposit of £500, 60 payments of £323, for a total of £19,880, and sold for £2000, which for 5 years is £3576/year (10.5%APR). This means that you are another £3867 out of pocket compared to cash buy, which means £22,207 worse off using HP, compared to just saving the money.

If you instead chose lease purchase (LP) with an initial deposit of £500, 60 payments of £263, and a final payment of £6205 for a total of £22,485, less re-sell value of £2000 or £4097/year (11.9%APR). In this case you are another £6472 out of pocket compared to cash buy, which means £24,812 worse off using LP, compared to just saving the money.

So when buying a new car, I found the following:

  • Cash -> £2802/year  and £18,340 worse off compared to saving the money
  • Hire Purchase -> £3576/year and £22,207 worse off compared to saving the money
  • Lease Purchase -> £4097/ year and £24,812 worse off compared to saving the money

So among new car options, the best one in this case was Cash.

Used Cars, no new car smell there, unless you buy a Wunderbaum with New Car smell :)

Used 10 Reg with 5000 miles at £14,000 as this one has done 5000 miles, we only get 4.75 years out of it, so the calculations are based on that, as we sell it at 100,000 miles. Here we pay cash for it, but we only use £14,000 out of our £16,000, and invest the other £2000 at 4.9%. We end up with a cost of £12,000 after we sold the car, and have now £2523 from the £2000 saved. So cost per year is £2526, and we are only £15,817 worse off compared to saving the money.

Used 59 Reg with 10,000 miles at £13,500 same as above, here we get 4.5 years out of it. We pay cash, and use £13,500, and invest the other £2500 at 4.9%. We end up with a cost of £11,500 after we sold the car, and the investment is worth £3115 from the £2500 saved. So cost per year is £2556, and we are £15,225 worse off compared to saving the money.

I think you by now will have guessed where this is going.

Used 09 Reg with 15,000 miles at £11,500 same as above, here we get 4.25 years out of it. We pay cash, and use £11,500, and invest the other £3500 at 4.9%. We end up with a cost of £9500 after we sold the car, and the investment is worth £4308 from the £3500 saved. So cost per year is £2235, and we are £14,032 worse off compared to saving the money.

Okay, last one I promise.

Used 07 Reg with 35,000 miles at £7700 same as above, here we get 3.25 years out of it. We pay cash, and use £7700, and invest the other £8300 at 4.3%. We end up with a cost of £6700 asuming that we get £1000 back instead of £2000, and the investment is worth £9542. So cost per year is £2061, and we are only £9798 worse off compared to saving the money.

Used cars:

  • Used 10 Reg at £2526/year, and £15,817 worse off investment wise
  • Used 59 Reg at £2556/year, and £15,225 worse off investment wise
  • Used 09 Reg at £2235/year, and £14,032 worse off investment wise
  • Used 07 Reg at £2061/year, and £9,798 worse off investment wise

Some people will now argue that if you buy the 3 year old car, you will only have a car for 3.25 years, and you wanted one for 5 years. You can carry on the calculations if you are interrested, and check what ends up the better deal. As long as you can keep enough of your money in investments, and spend less on the car, you are in a better position than the people who buy new cars.

So, this weeks conclusion is:

Don’t buy a new car, while you are trying to get rich. Buy a 3 year old car each time, and invest the other money. That way, you will get rich faster, and still be able to drive a reliable car.

Only buy a new car, when you have passive income that is greater than what you were, or are payed in your job. I will get to passive income when we get to investments.

Next Friday I will be suggesting books for reading.

/Cheers

Fredrik Sohlberg

Holiday, a time to relax!

For most of us, the holiday time is a time to relax, and to re charge the batteries.

For some it is a stressful time, and a time when financial problems get worse, due to the costs.

There are however ways of decreasing the cost of holiday, and maybe making the holiday time a time for relaxation, and spending time with loved ones.

Holiday Packages:

Many people use package holidays for their plans, and it can for the inexperienced traveller be the way to create a holiday for which you give the responsibility for organising activities to the travel representative.

Using a package holiday can be a good way to get the type of accomodation you want, and the type of activities that are suited to your taste and needs.

One benefit is that the travel companies can negotiate good rates with the air-lines, or even have their own flights, but a negative that very often negate the savings on flights and accommodation is that the travel company will need to finance their holiday reps, as well as making a profit.

Even though I have sometimes used package holidays, I prefer to organise things myself, as I have better control of the costs, and can focus my spending on the things I find important in a holiday (i.e. the food and wine).

With holiday packages, the easiest way of saving money is to either book very well in advance, or to book last minute trips (the benefit is the price you get, but you have much less choice in where you end up going, and you might not get all of your needs fulfilled). You can however save more than half of the price, as long as you shop around, and are flexible on where and when you want to go.

Flights:

In the last 10 – 15 years alot of low cost airlines have appeared, and have made it much affordable with flights, and have made some of the normal airlines drop their prices, or create new low cost ticket types, in order to fight back. A lot of people are using Ryanair as a low cost airline, but unfortunately due to their additions on costs (especially when you need to bring a suitcase as you are going on holiday, and when you travel with children) they very often prove more expensive than normal airlines such as British Airways, Scandinavian Airlines, etc.

Ryanairs higher prices, along with the airports on either side normally being located well away (50-70 miles) from where you want to go has made me stop using them. Instead I try to book my flights well in advance (3-4 months) in order to get the cheapest possible prices.

Ryanair also seems to be using a model where they do not release their cheap prices until just 2 months before the flight, which means that if you book before then the price will be higher. This will vary between different destinations, so it is best for you to shop around. Take all parts of your flight into consideration when you compare prices. The full flight fare with Ryanair, which you will only see when you get to the part where you enter your credit card information, as well as all ground transportation to get you to and from the airport on either side. You can use holiday booking sites like expedia.com to check for flight prices. Airlines which are local either to your destination, or your origin airport tend to be cheaper, but by no means always.

Hotel or other accommodation:

For finding hotels suitable for where you want to go, you can use holiday booking sites, local tourist boards (some of them have search capability for you). When it comes to hotels, I try to use the criteria of finding a place in which I can get clean sheets, somewhere to shower, and an edible breakfast. For this I need to rely on testimonial of other customers. I don’t usually care if the hotel have a restaurant which serves lunch or dinner, as long as there are local restaurants available in the local area.

You can also rent a chalet, villa, or cabin. They will usually be cheaper than hotels as soon as you get to at least 3 people. They will sometimes give you more privacy, and also the availability of a kitchen where you can cook your own food, which should make the food part cheaper.

Swapping your house with another family is also an alternative way to reduce the cost of the accommodation, as you pay for the house you borrow by lending your own house out to the family whose house you use. These people tend to take good care of your house, as you are in theirs. I don’t have personal experience of this, but my immediate family does, and they praise it.

A cheaper alternative is also to rent a cabin or a caravan at a caravan park. Many caravan parks have a small number of simple cabins, which can be rented fairly cheap, and are suitable for people who do not fancy living in a caravan, or don’t have a caravan.

Also, if you are fortunate enough to know someone with a summer house, maybe you can borrow it. If you can’t return the favour by lending a house back, maybe you can help with some work that needs doing on the summer house (most summer rentals will need a bit of work at the beginning and towards the end of the season, so there should always be a way for you to compensate the owners).

Car-rentals:

Short term (day rentals), is probably cheapest to do when you are at the holiday place. Especially if you are in a holiday hot spot, and the weather is very nice (less people will need to leave the beach then, so should open up the possibility of deals). Always try to negotiate.

Weekly rentals. Cheapest is to pick it up away from the airports, as most rental companies charge extra for pickup and drop at airports, due to their higher costs in those places. There might also be local hire companies that are cheaper than the big ones like Avis, Hertz etc. Shop around, book early, and pre-pay for the rental with your credit card.

Monthly rentals. On these you can get even better deals, as they get very close to being a lease deal. Maybe a local car dealer can lease you a car for a month? Sometimes the big rental firms will have special deals during the summer. Look around, and shop around.

Food:

In touristy areas, try to walk a couple blocks away from where the restaurants with all the flashy signs are, and try to find a calmer place, and you should get better food, and cheaper than in the middle of the tourist trap. You will also most often find more authentic local food, instead of some of the tourist trap food which will be adapted for the tourists, rather than to the locals. Ask locals where they would go to eat, and you will probably find more exciting food, and better prices.

You can also cook yourself. I try to get inspiration from the place I am visiting, and cook food which is more like the way the locals cook, while still doing lots of BBQ’s. Visit the local butcher, fish monger, cheese shop, bread shop and green grocer, and you are likely to find the best goods, and be able to have a feast every evening without having to break the bank. I also try to drink local beverages, be they beer, wine, rum, or tequila.

Some people prefer the less worrying aspect of food by going for a fully inclusive holiday, but I think that it limits the choice. Especially the choice of beverages, as I am a bit picky over what wines I want to drink, and all inclusive wines tend to be basically undrinkable.

Travel Insurance:

Shop around for travel insurance online, and make sure it covers any special activities you might want to do, like skiing or scuba diving.

Do not ever get the travel insurance from the travel company, as they tend to charge you through the nose for it.

Holiday activities:

A very difficult topic to write about, as most people have very different taste on what kind of activities they like. As I am interested in history, and culture, I enjoy visiting old buildings. Especially castles, and forts. This is fortunately something that my children enjoy as well, so we can do these together. As long as we do enough ice cream, and visit enough play grounds, they will be more than happy to visit some old castle with me.

One castle that really stands out for me is Kreuzenstein Castle just north west of Vienna. It was blown up by the Swedes during the 30-year war in the 17th century when Hungarian forces were advancing. It was later bought, and in the 19th century it was re built with parts from different old buildings of different architectural style from all over Europe. It has been used in film recordings like The Prisoner of Zenda, and Peter the Great. It sports 2 working draw bridges, one large for horses and carriages, and one smaller for walking people.

Please all enjoy your holiday, and I will be back in 2 weeks this time.

/Fredrik Sohlberg

Saving Money and Improving your Food

Some quick ideas on how to save money on simple food.

  • Plan what you are going to eat, and when buying fresh produce only buy what you need for your receipts.
  • Skip that take-away, and learn to cook that meal yourself. It will end up healthier, and probably taste better as well.
  • Skip the ready meals, and cook your own. You will end up with something that taste better, and is cheaper for the same thing, but my guess is that you will want to improve the quality rather than cut the price.
  • Buy produce that are in season. The price of fruit and veg can vary greatly between when they are in season, and when they are out of season.
  • Learn what alternative ingredients to use, which are cheaper, or help make your meal more filling.
  • Beer & Wine, leave that for the weekend, and drink water during the weeks.

Best savers:

  • Take away Pizza, will very often set you back around £20 for a family of 4, but if you make that pizza yourself, it will cost you less than £5, give you more ingredients on it, and most likely taste better. With regards to the quality, I am comparing with places like Pizza Hut, Dominos etc, rather than you authentic Italian pizzeria (which in Sweden at least will very often give you a better pizza than most people can do at home). So, lets say that you today have Take away Pizza on average twice a month, and you are a family of 4, that should save you £30 per month, or £360 per year, just for spending a little bit of time making it yourself.
  • Chips (or French Fries for non Brits), the markup on them is phenomenal, same on the soft drinks. Your normal burger bar, don’t actually make their money on the burgers. The money is in the soft drinks, and the chips, and for the greedy places that charge you for condiments, in those as well. So if you have to go to the burger bar, only buy the burger there, skip the drink and the chips. You will be healthier, and you will save money. Check out the film “Super-size Me” on the big burger chain.
  • Meat, buy buying cheaper cuts of meat, and changing the way you cook slightly, you can eat well, and still have money left over at the end of the month. Instead of buying Chicken Breast and cutting them up for whatever dish you are making, try Chicken Thighs, which often is at around a quarter of the price or less, and just about as good. Yes it requires a little bit of work, but once you get the hang of it, it works fine. Also in these summer days, when you want to have a BBQ, go for Rib-Eye rather than Sirloin (much better for BBQ, as it has some fat in it), and for Shoulder Chops, rather than Pork Chops, or Tender Loin  if you are after Pork. With Lamb I would go for Chum Chops, rather than Neck Fillets (though I am very biased towards Neck Fillets when it comes to making a Souvlaki). With some of that, you should be able to cut your meat costs in half.
  • Fish, a bit trickier saving there, as most people are getting more and more conscious of the origin of the fish, and the sustainability. You can however chose cheaper fish versions, which taste almost as good (I use almost, as it is very hard to beat the real thing when it comes to fish).

The more you cook yourself, the more you will discover what you can save on.

I have been making our Jams and Apple Sauce, partly to reduce the sugar content for the children, but realising that it actually saves us quite alot of money. Previously we went through a jar of Bonne Maman conserve in under a week (at £1.50 to 2.50 depending on variety, that is quite a bit of money in a year). Now I will buy a batch of fruit (frozen), or apples and make our own. I make it around once a month, and we normally spend less than £4 for that. It saves us somewhere between £30, and £80 a year, just from Jam and Apple Sauce.

You can save money on most foodstuff, but the hardest thing to save money on is actually bread. In alot of countries the bread is the loss leader, the way to get the customer into the stores, which means that the margins on normal bread are basically non existing. However specialty breads like paninis, focaccia etc, come at a premium, so there is still money to be saved there.

Alot of people might say, “we don’t have time to cook food”. Consider how much TV you watch every day, and then if you don’t have 20 minutes, or 30 minutes to spend on making your average meal, I guess you will have to find other ways of saving :)

So, that is my take on saving on food.

Next week I will look at holidays, and ways of doing it on a budget.

/Fredrik Sohlberg

What you should do with the money you spend on lotteries

Are you a gambler, do you want the thrill of the chance of winning that BIG price? Then you might want to try this as an alternative:

I used to play the Lottery, Euromillions in fact, as the winnings seemed to be higher there. Unfortunately while the winnings were higher, the chance of winning was still slim.
I wasn’t a big gambler 4 lines at £1.50 each or £6 per week is the same as £312 per year.
I did win once in a while, but ended up spending the winnings rather quickly. On average though my £312 would have turned into around £131.

I have since stopped playing the lottery. My lottery is instead premium bonds. I put in £50 every month = £600 per year. I should currently be getting around 1.2% back in winnings, and currently with one win of £25 I stand at 2.5% return. Not an awful lot, but I get to gamble and still keep my money (what I lose is the inflation of the money).

I still have that elusive chance of bringing home the monthly £1,000,000 win, which is highly unlikely that I will ever do, but the chance is there.

So, if you are that gambling person (don’t ever do this with more money than you can afford to lose), you can put the money in premium bonds, and at the end of it you are still left with the money, kinda like putting it in your mattress.

Here are the average returns you will make on £50/month comparing Lotto, Euromillion, and Premium Bonds:

  • Lotto: Your £600 would have turned into around £270, or a 55% loss. (Jackpot estimated at £2,000,000). (www.national-lottery.co.uk)
  • Euromillion: Your £600 would have turned into around £352 based on having the same Jackpot as this week (£34,000,000) every week, or otherwise around £252, or a 58% loss (Jackpot estimated at £15,000,000).
  • Premium Bonds: Your £600 would have turned into around £604.50, or a 0.75% gain. (It is not 1.5% as advertised, as the cost is spread over the 12 months, thus giving an average of £300 “gambled” for the year). It beats the lottery hands down. You could probably get better interest from a basic bank account (though you might have to pay tax on it), but with the Premium Bonds you have the chance of that £1,000,000 price each month. (www.nsandi.com)

Even if you do happen to get the Jackpot on the lottery, there is always the risk that someone, or a few people have got the same numbers which means you will need to share it. With Premium Bonds, if you win the £1,000,000 then you don’t have to share it with anyone.

Even with £1,000,000 in the Bank, most people could live rather well just on the interest, lets say 5% = £50,000 less tax gives around £35,000 or £2900/month. I would be happy if I had that kind of money coming in each month :)

I don’t know if there will be any more gambling advice, as I am pretty lousy at gambling, and try to play things where the odds are more in my favour.

Next week I will look at food costs, trying to compare prices of ready made things, with easy home made things.

Until then

/Fredrik Sohlberg

Cutting costs, or how to have £50 more per month from spending 5 minutes.

This week my focus is on cutting my costs in a specific area. It is the area of magazine subscriptions, and club memberships.

Today I have reduced my costs of £171 per year by removing a magazine while basically just contains gossip, and TV programs (we have the TV guide on the Sky Box, so do we really need a magazine that doesn’t contain a majority of the channels we have anyway?). I also removed a membership, which is included in those savings.

Are you the kind of person who gets gym membership, and then don’t end up using it? Cancel your gym membership, and go outside running instead (easy to say in the summer like now, wait for the autumn).

Are you the kind of person who subscribes to a magazine, or newspaper, but never have enough time to sit down and actually read it? Cancel it! You can always buy single issues when you do have the time.

I have another £396 per year to save from a short 5 minute phone call tomorrow to cancel something I am subscribing on, but that I am not really using.

I guess I will need to lobby harder for my wife to give up the Gym at £480 per year.

That would bring it to a saving of £1047 per year, or £87 per month.

Well, looking on the good side my ISA increased by 1.27% today, but unfortunately my non taxfree investments in shares dropped by 1.58%. Fortunately enough the upside was more than the downside.

Also, the Bordeaux 2009 sales are now finished. Had my last order confirmed today. Now all I have to do is wait 10 years and hope that they have some better value then :)

Until next Friday, when I will talk a little bit about gambling (yes, I used to gamble, and now all I can possibly lose is the interest).

/Fredrik Sohlberg

Balance your books (or Earnings & Spending)

First of all, before you can become financially independent, you need to learn some very simple things about economy (most people find it rather boring anyway).

  • Add up all your income (salary, interest, etc). This is your plus.
  • Add up all your costs (rent, or mortgage, car, food, insurance, credit cards, etc). This is your minus.

So, in order for you to become rich, all you need is that your plus, is more than your minus. For all the money you don’t spend, you can generate additional income (interest, increase in value etc).

What if your minuses are larger than your plusses (a very possible scenario in todays recession)?

  • All your activities with regards to money need to be done in order to reduce the spending, and to increase the income.
  • First of all you would want to reduce your debts (credit cards, personal loans, mortage). Pay of the ones with highest interest rates first.
  • Second of all you would want to reduce the regular spendings (e.g. You pay for cable TV every month, or you subscribe to your favourite magazine, or you are member of the local gym). All these things cost money, and because you will be working on sorting out more income in your spare time, you will not have enough time to enjoy them (not at this moment at least, so get rid of as many as you possibly can; ohh that reminds me to cancel our subscription to Heat Magazine).
  • Third, by reducing the number of times you eat out, or eat take away food each month.
  • Fourth, by buying less ready made food, and checking out alternative places to do your food shopping, you might save a bundle. Some of the low-cost places can be okay, as they normally keep the prices down by selling a limited number of brands, thus improving their barganing power with those suppliers.  You can also grow your own veg if you are that inclined, but in general the savings are not that great compared to the amount of work you need to put in. (I do it for the pleasure of eating what I myself have grown).
  • Fifth, getting a cheaper and more economical car, or getting rid of your car altogether (very difficult for most people, and I am no shining light here as we have 2 cars). We do however drive fairly echonomical cars.
  • Sixth, sell all your old stuff that you don’t need on your favourite auction site (e-bay), or at your local car-boot sale. You will be surprised as to what people are willing to buy.
  • Seven, if you still have problems getting that extra money to balance your books, and to keep you in the black each month.  Get another job, maybe for the weekend, or every other weekend.
  • Eight, seriously re-consider your holiday plans.

The more you manage to reduce your spending, the faster you will be able to accumulate wealth. If living like a church mouse is not your idea of fun, reward yourself once in a while for saving well, but don’t over do it. Find as many free things you can do as rewards to you and your family, and use a free weekends to enojoy them.

Once your money starts growing (unfortunately it will take around 7-8 years at good returns before you start seeing the big effect of compounding), having the money grow even faster will be exciting.

I will be back with more ideas on how to balance your books. Until then.

/Fredrik