(Original post by Erich Hartmann)
Some friendly advise from your favourite Uncle Scrooge
I am just somewhat value conscious which unfortunately often comes off as being stingy and selfish... I blame it on genes
Anyway have always been somewhat of a good saver.... my family often tell me even when I was 5 I knew how to squeeze money for better deals LOL... I don't particularly remember that era........but I'll take their word for it.
I went to uni a few months after turning 17, that was in 1995
and I had already saved up US$4000 of my own money to go, remember now it won't seem like a lot of money but that was a lot of money back then... how I earned it? I used to build databases.... was rather good at it back then... first customer was my mum and I think she purposely overpaid me LOL.
Anyway, an important thing to always remember about finance........ evaluate and plan... failure to plan is planning to fail... very simple.
My finances are quite simple in reality, for every £1000 I earn after all deductions and taxes I do the following :-
i) 10% I remove it and give it to church, though now I only do 7% as in Switzerland you have to pay 3% church tax
ii) 10% I save it in something fairly liquid, usually short term saving accounts that you could withdraw money at any time. I never let this build up to more than 2 months salary of my main job.
iii) 5% I take it out for short term investments, usually buy stocks, commodities or stuff such as oil or gold. Any profits are reinvested the same way.
iv) 15% I take it out and dump it into a long term tax-free savings account, the one that can give the best ever returns. Then each year in November I will evaluate what I will do with the money..... usually end up buying real estate to let out for a profit, investing it into a business or buying stocks to keep for long term. Returns or any profits from this I also do the same thing.
Now am left with £600 of the original £1000..... I just go on the basis that I've made £600 and not £1000, so as most experts believe your rent shouldn't be more than 20% of your monthly income, so I just look for a place that is £120 rather than £200
even if it means living in an area not befitting someone who does my kind of work
Bonuses are different of course.... 10% still goes to church, 30% I keep for fun stuff, 50% into iv and the rest into iii.
Haven't done too badly I think, at my height I owned 8 properties, 7 of them rented out for profit of 18% average. Also invested in the following businesses an organic farm, 2 country-inns, a bakery and I am the owner of a small company that does property development, usually by means of refurbishing old buildings into very nice ones. Earlier this year sold off everything that had debts on it.. as I wanted to move away from real estate.
Money gained from the sale, some of it went into buying up that alpine lodge in Switzerland, the owner wanted to retire and I was keen on expanding my hospitality businesses. The other part of the money I bought one very derelict mansion from the Canton for CHF100 on the promise that I would convert that mansion into 6 townhouses without significantly affecting the exterior of the house and after it was completed the Canton gets the rights to 2 units of the townhouses. Thankfully I also received a green-home grant to retro-fit various energy generation and saving devices into the building.... am trying to win an award for this project. Was originally going to sell off the 4 units, but only sold 2, 1 I kept for my own stay and another I rent it out to one policewoman.
Last 3 months also begun selling off everything I owned, cars (I'm a classic car collector), antiques, the bakery, all remaining real estate in Britain and anything that had value to it needed to go.... went were the 2 country-inns. Even our old family home sold together with the organic farm... needed to raise funds for a new business venture... found a distressed company and one that had some rather valuable patents and tooling in Switzerland. Was originally going to bring all the tooling and locate it somewhere in Wales, but that proved to be quite a disastrous plan... I asked the Welsh Government for a place and a small grant... they gave some ludicrous conditions for the award of a grant which was only 3% of the final amount required....which would have been fine as I could have found a way to raise more money, except I asked for a place in either north or south Wales, they came up with the idea of why not have one site in North Wales to manufacture all the components and truck everything to a site in South Wales to assemble it. I told them they can keep their grant and was about to give up... in the end I told the company I was going to pull out from the sale as I didn't have enough money to save it, had 50% of it in cash, 43% in loans and needed the last 7% for it... the head of that company asked me to ask the Canton in which the tooling were located in and also to speak to someone at the Federal government, a few calls, emails and meetings and it turned out I had enough money after all... 3 grants, 2 tax-holidays, 1 year free rent at one industrial park and turns out I don't even need 43% in loans, in the end the shortfall I had to make up in loans was only 8% saved a good part of it on the relocation cost and another good part of it was saved from the need to pay out redundancies and goodwill. On top of that, I also got offered 4 big contracts and 3 smaller ones from the 3 governments that took faith in this whole project... which essentially gives me lots of breathing space...... moral of the story : After the final contract was signed by the representatives of the governments involved, I told them if they had come earlier it would have spared me and all the staff that were about to lose their jobs much of the agony... the person who was representing the Canton where the main plant will be located at simply looked at me with her steely blue eyes and said "But you never asked either." (Imagine that being said in very sterile and formal German) LOL.
Which brings me to the next point when it comes to saving money or doing anything else....... always do it with both eyes and ears open. Just because something appears to be cheap does not mean it is value... think long term. Also your bank isn't in the business of helping you save money