Ways of “forced saving” for spendthrifts

I don’t deny it. I haven’t been that great with money. There have been attempts, like the time over a decade ago when I first found the financial independence classic, Your Money Or Your Life. Wow!! Can this really be??
I got so excited about it. As a chronically ill visual artist who has also been called lazy, I dreamed of being FI. But when I looked at the interest rates offered by banks at that time, my enthusiasm sunk. I did keep a large sum of money on a 12-month high(er) rate account until we bought our first apartment (and consequently the only one we ever owned, but that’s another story) and got a few hundred of interest. Regular savings account interests were getting lower and lower and I had this idea that stocks, let alone bonds and more complicated financial instruments were out of reach for a regular citizen, and that only professionals or the super rich actually had access to them. Silly me, I could have just googled a little! Or like, asked around. Duh!
At that time I did the exercises in the YMOYL and I saw that despite my profession and long-term illness I’d still managed to receive and squander a significant amount of money. And as my artist career was looking promising, I did have some earning power, and in the form of my paintings I actually had created wealth too.

Yes, that oft mentioned hindsight.. Sigh.
As I deduced that while YMOYL was interesting and theoretically worked in a high-interest environment, it was not valid anymore. So I gave up. I quit writing down my expenses (it may have happened after some big purchases that I didn’t want to see written down) and generally forgot about the whole FI thing.

I received a small inheritance when my mom passed. I didn’t instantly spend it and I shared with my husband (soon to be ex-husband) but I didn’t invest it. So my current wealth has nothing to do with inherited money.

Now, I’m a pretty smart person, but with money I have certainly been stupid. It’s like I don’t know simple math. A five bucks here and a twenty there, so on and so on, ADDS UP to a large sum spent. Likewise, a five bucks saved or earned ADDS UP to a large sum saved, and even larger if it is invested and has time to compound. I still struggle with this.

I also struggle with “all or nothing” attitude. I’m either super diligent and frugal, or I get careless and spendy. The middle-of-the-road is very hard for me.
So the goal now is to keep myself in check, be smart and careful with money in general, and really think about each purchase or expenditure, and when I need to buy something, do research and buy the highest quality I can afford, so that I don’t have to replace the thing hopefully for a very long time, nor do I get the urge to upgrade because I originally went with the cheap option instead of the more expensive quality item I really wanted. If I end up buying that anyway a little later, I’ve wasted money and resources.

But what have been the ways I have been actually able to hold on to money?

There are two main ways that have worked for me. The first one is my own business. Investing in it has honestly felt more like “spending” insofar that it has not felt like a drag at all, and I haven’t really realized it, but the growing value of my company is money. The inventory we keep is easily liquidated by just selling it. The company has intellectual property as well which raises it’s value were I ever to sell it. But even if that would never happen, there is a lot of money tied to the inventory that I could turn into cash. Which is what we do anyway, but then I’d just do it faster and not invest any more back.

So owning a company and growing it’s value builds up equity that is safe from spending it.

The second way is that when I had actually made a larger sum of money, I bought a tiny studio apartment that I keep rented. My husband did put some cash into it as well. Now I’m again putting a chunk of money to another apartment, this time I’m getting a loan from the bank though and not paying with cash only. When my money is tied up in apartments, I can’t spend it. With the second apartment, the person renting it is paying down the mortgage and creating equity for me. (I do live in a rented apartment myself. I may buy a place to live in at some point, but for now it was not smart ar I live in an expensive area with my daughter and the studio apartment is way too small for the two of us.)
Both apartments have been good finds. The real estate market has been getting really tough for investors here for the past years, meaning such high prices that it’s difficult to find anything that will give returns. But by following the market it’s possible to make good finds. The prices can come down some before these apartments would become less valuable than what I paid. If I keep them rented to create cash flow, it doesn’t really even matter that much. I may sell them for profit though at some point and find new underpriced apartments to buy.

Because real estate is not sold with one click of a mouse, it’s a way to hold on to your savings, as well as create income.

Published by Miss Guided

Chumped, dumped, ground to the ground, picked myself up and got up with my head held high, fierce and independent woman, I am finally free.

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