Author Topic: Personal finances as a Business  (Read 5390 times)

Le Barbu

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Personal finances as a Business
« on: December 29, 2014, 10:19:22 AM »
My dad is a savy guy but not trully a Mustachian (no debt, good pension plan, buy very expensive cars, drive a lot, smoke a bit, not great shape). He know for a long time that I outdone him on managing money and the conversation came like this

me: well, I just realise our couple has the lowest income within related (sibblings etc)
dad: don't make me cry about your finances
me: ...what do you mean?
dad: you put asside about 40k$/year
me: maybe, but my goal is to stash 50k$ so, I'm not really there
dad: you run your personal finances like it's a business
me: hum! (not sure if I should take it in a positive way...probably he just tried to insult but failed)
dad: everyone else spend all their earnings, so whats the point they earn more than you
me: I just said we have the lowest familial income
dad: sure, but you don't spend anything! (we are getting nowhere here)
me: you're right, I'm glad I don't need to spend money to be happy.

then he turned on the tv...

at least, someone noticed I try to run my personnal finances like a business, my own business

GGNoob

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Re: Personal finances as a Business
« Reply #1 on: December 29, 2014, 09:39:39 PM »
That's pretty much the only way to manage your finances in my opinion.


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innerscorecard

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Re: Personal finances as a Business
« Reply #2 on: December 29, 2014, 11:04:50 PM »
One thing I'm trying to do is to talk about money less with family.

Le Barbu

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Re: Personal finances as a Business
« Reply #3 on: December 30, 2014, 07:01:28 AM »
One thing I'm trying to do is to talk about money less with family.

I usualy try to keep quiet about money with family and friends. But, don't you get this feeling that normal (spendy-unmustachian) people keep talking about fucking money together all the time and wondering why I don't join the conversation much. The list of their conversation theme at Christmas meeting: the 2015 Crosstrek my brother just bought, the 2015 Acadia BIL is lurking, the "must own" 1,500$ automatic coffee-maker of my aunt, the WDW trip we are all supose to do (and enjoy) next Christmas, the politicians who are all robbing all of us, the teachers who are underpaid (5 teachers in my family earning 45-70k), the taxes are to high, the gas price, etc.

They even joked (cluelessly) about the 10k miles/year we drive (this is for 2 commuters, our 2 sons playing hockey in a league, our vacations trips etc) because they all drive over 30k miles/year/family.

I was so annoyed, I ended-up with my 2 sons playing outside on the ice-rink and enjoyed the starry sky. The next morning, I jumped in the spa to see the sunrise over the St-Lawrence River (did I mention we had to share a McMansion at 1000$/night?) and those are the "bizar" behaviors that bring my dad and me to that conversation about money.

Considering this, I should not only talk less about money with family but spend less time with them.

Sigh...

Monark

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Re: Personal finances as a Business
« Reply #4 on: December 30, 2014, 11:22:43 AM »
On the topic of family and money, I am in a similar situation to you wherein I seem to be the only person in my family that doesn't immediately spend every penny earned.  It's particularly visible over the holiday season.  I am writing this at my parents house while in town visiting them for the week.  Mom just bought a brand new car (Acura RDX) last week.  Dad went out yesterday for an impromptu TV purchase at Best Buy.  Mom and I actually accompanied him on this trip.  It was one of the most painful experiences of my life.  The service at BBY is comically bad--you would think my dad is the first person ever to purchase a TV there and ask them for the full service plan for them to install it on the wall at home.  Took about an hour and a half.  While trying to decided which giant flat-screen to purchase my dad asks me "Which one would you pick?" to which I replied "Neither, you already have two flat screen TVs on the wall at home, why on earth do you need a third?"....He didn't have an answer for that one.  For Christmas I asked my mom to write up her family tree for me.  My mom has many many cousins that I've never met and I just wanted to visualize her side of the family.  I expressly asked her not to buy me any other presents.  This is a request I make every year, and every year she buys me dozens of shirts, sweaters, shoes, pants and other junk items that I neither want nor need.  For some reason I thought maybe this year would be different, especially given that I had asked for something specific, something only she could give me and would cost her nothing.  You can probably guess how the story ends.  I got shirts from Banana Republic, pants and shoes from Nordstrom, coasters and bottle openers from her trip to France, etc, but no family tree.  She said she just had too many other "projects" and didn't have time to write-up the family tree.  I didn't even bother arguing about how much time she must've spent shopping for all the useless junk I don't need.  I used to get frustrated and tell my mom to return all the gifts to the store, but I saw how it made her feel bad, so now I mostly just donate the items to goodwill.  I think what I've learned from all this is that you can't change who people are.  Accept and love your family for who they are even when you don't see eye to eye on many things.  You'll be happier in the end and so will they.

Jack

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Re: Personal finances as a Business
« Reply #5 on: December 30, 2014, 11:31:08 AM »
I heard a radio commercial this morning for some financial services company who said the same thing, that you should run your finances as a business. I was impressed. (I didn't hear the whole commercial... if I find out that it's anything other than a fee-only adviser, I'll be disappointed.)

Dicey

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Re: Personal finances as a Business
« Reply #6 on: December 30, 2014, 11:43:14 AM »
One thing I'm trying to do is to talk about money less with family.
This.

Le Barbu

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Re: Personal finances as a Business
« Reply #7 on: December 30, 2014, 12:35:14 PM »
I think what I've learned from all this is that you can't change who people are.  Accept and love your family for who they are even when you don't see eye to eye on many things.  You'll be happier in the end and so will they.

100% right, but at the same time, it's a real pain to share some precious time with them and listening to all this anoying stuff about stuff. Every 15 minutes, someone ask why I look annoyed and don't say a word (hum and yeah and sure, and I agree and wow do not work all the time). I try my best to set a nice-fake-innocent-angel smile on my face but I'm not an actor and they think I'm dead or something like that. If I give a try to joint the conversation, it usualy goes like this:

BIL: we just purchase a new fridge, electric range and dish-washer last week!
me: how come? (instead of wow! he expected me to answer)
BIL: the fridge broke...
me: what did broke (usualy, a fridge doesn't "break" as a whole, a piece or a component does)
BIL: it was only 6 years old, they don't built things to last anymore!...
me: sure*! (*fake agreement to keep him on my side a bit longer)...but, what component broke?
BIL: the tech guy told me it was rotten, rusted, leaking, blah blah blah...
me: ok, wich P-A-R-T of the fridge was "rotten, rusted, leaking"?
BIL: ah, many if not all of them you knaw!
me: (giving up, I'm not inquiring for a murder after all, just trying to follow the "replacing 3 items (6 years old) for 2,500$ event" after all so , you don't know which part broke. And why did you bought a new electric range and a new dishwasher?
BIL: because wifey want all those 3 "stainless steel" to match and the previous were white...
me: mkay! at least, you'll make someone else happy and cash few hundreds selling this on Craiglist ! (it's a bait dude, please, don't you see it?)
BIL: nahw, I don't bother with this, they just picked it all for free when delivering the new stuff so I dont have the pain to getting rid of it by myself like you do!
me: (trying hard to not facepalm) ho, I see!

few minutes later, he even confessed me he would be willing to share his tips to deal/buy new appliances anytime when needed. I said thanks!

bor-ring XO
« Last Edit: December 30, 2014, 12:38:16 PM by Le Barbu »

mxt0133

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Re: Personal finances as a Business
« Reply #8 on: December 30, 2014, 01:28:12 PM »
I have employed a different strategy with money talk with family.  I am tenacious by nature and can go for a while discussing a topic just to exercise logic.  So when they bring up a purchase or something money related.  I would dig into their reasoning and ask them if they have every tries some cheaper alternative.  Some come back and say well it's not really worth it for me to do it myself because I could just pay someone else to do it, then I ask what their hourly rate is and do the actual math, including taxes taken out, could they really just earn that extra money if they on a salary, ect.  I don't judge I just drag them through the mud, so to speak, and make them realize that there are more optimal solutions.

At that point they know better to try an rationalize a frivolous expense to me because they know better.  But this is with family that I have a good relationship with or friends that I know have a thick skin.  I genuinely want to help them make better decisions so I have changed my approach as I learned how to communicate more effectively over the years.  But it still surprises me how very few people have the patience to do the basic math when making financial decisions.  I find most people still do it on emotion and perceived wants.

Le Barbu

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Re: Personal finances as a Business
« Reply #9 on: December 30, 2014, 01:46:36 PM »
I have employed a different strategy with money talk with family.  I am tenacious by nature and can go for a while discussing a topic just to exercise logic.  So when they bring up a purchase or something money related.  I would dig into their reasoning and ask them if they have every tries some cheaper alternative.  Some come back and say well it's not really worth it for me to do it myself because I could just pay someone else to do it, then I ask what their hourly rate is and do the actual math, including taxes taken out, could they really just earn that extra money if they on a salary, ect.  I don't judge I just drag them through the mud, so to speak, and make them realize that there are more optimal solutions.

At that point they know better to try an rationalize a frivolous expense to me because they know better.  But this is with family that I have a good relationship with or friends that I know have a thick skin.  I genuinely want to help them make better decisions so I have changed my approach as I learned how to communicate more effectively over the years.  But it still surprises me how very few people have the patience to do the basic math when making financial decisions.  I find most people still do it on emotion and perceived wants.

few people just take few SECONDS to THINK before purchase ANYTHING (most of the time, no maths required)

a friend of mine bought a wood stove last month, 3,900$+tx=4,500$ (their house is electric heated). I just asked how come? they said the old one was...hum, old and they dont want the 1,300$ option because the 3,900$ one is...hum, better!!! They live in my hood, same kind of house, we NEVER get electrical shutdown longer than 1-2 hours, I got no stove and do not intend to install one. It would crank my insurances by about 500$/year + purchase + instalation + wood + mess + chimney maintenance. They just cannot tell any reason why they have to own a wood stove and it is a +10k$ decision!

innerscorecard

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Re: Personal finances as a Business
« Reply #10 on: December 30, 2014, 07:14:22 PM »
I have employed a different strategy with money talk with family.  I am tenacious by nature and can go for a while discussing a topic just to exercise logic.  So when they bring up a purchase or something money related.  I would dig into their reasoning and ask them if they have every tries some cheaper alternative.  Some come back and say well it's not really worth it for me to do it myself because I could just pay someone else to do it, then I ask what their hourly rate is and do the actual math, including taxes taken out, could they really just earn that extra money if they on a salary, ect.  I don't judge I just drag them through the mud, so to speak, and make them realize that there are more optimal solutions.

At that point they know better to try an rationalize a frivolous expense to me because they know better.  But this is with family that I have a good relationship with or friends that I know have a thick skin.  I genuinely want to help them make better decisions so I have changed my approach as I learned how to communicate more effectively over the years.  But it still surprises me how very few people have the patience to do the basic math when making financial decisions.  I find most people still do it on emotion and perceived wants.

But the thing is logic almost never convinces anyone of anything. It's basic fact of human nature. It's only change from within people that can cause them to change. The best you can do is lead by example and be there when your loved ones want to change themselves. Sadly, that often takes a personal disaster.

I'm saying this not as some wise person who has seen it all, but as a person who has myself made many life mistakes even when I was warned against it, and seen others do the same thing as well.

thedayisbrave

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Re: Personal finances as a Business
« Reply #11 on: December 31, 2014, 11:17:16 AM »
The tagline under my username is "CFO @ My Life" - and that is absolutely what I consider myself.  It reminds me that I am only in control of my finanes, and nobody else's... I must make the best decisions I can for myself, taking calculated risks to boost returns, and hopefully build my empire in the process. 

I'm lucky that my family are all quite Mustachian.. if anything, I'm the least Mustachian of us all.  But friends, on the other hand, are another story.  People who choose to go to expensive schools and incur tons of student loan debt, borrow money for a car, buy a house 40 miles away from the city in which they choose to work thereby escalating their commute/car costs, having all sorts of electronic devices with data plans on ALL of them (seriously... who needs a data plan on a tablet unless it's part of your job?), goes out to eat every single day etc... These are all examples of one person I know, by the way.  Who then complains loudly that all he does is pay bills... well, no shit! I just smile and nod and continue on my merry way.

The only thing you can control is you.  So stop worrying about what other people think/say/do. 

Le Barbu

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Re: Personal finances as a Business
« Reply #12 on: December 31, 2014, 12:59:12 PM »
thedayisbrave, this is exactly my way of thinking. Sometime I just get borred to shut up and smile for hours when I HAVE to spend time with this kind of people (family or friends). It's like they just keep talking about their spending and complaining about how broke they are.

I mean, give me a break please!

Joan-eh?

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Re: Personal finances as a Business
« Reply #13 on: December 31, 2014, 08:20:20 PM »
I have a friend whose job it is to run the family estate/wealth. He goes into the office 5 mornings a week. I admire the discipline. He is rewarded by autonomy, fulfillment and relationships and by focusing on the wealth bundling, continues to grow the family wealth. (Real estate, land, active business, funds, reading, and the family's hobby).

Lebarbu, When you used the phrase "personal finances as a business" I immediately thought of how successful he is growing the wealth because it is his daily priority.

Le Barbu

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Re: Personal finances as a Business
« Reply #14 on: December 31, 2014, 09:03:20 PM »
And discipline is just remembering what is your priority

Joan-eh?

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Re: Personal finances as a Business
« Reply #15 on: January 01, 2015, 09:08:31 AM »
Le Barbu, I just saw your tag line! I love it ! I've lived frugally my entire life, but it was initially through concerns about sustainable balance /"the environment"/ Mother Earth.  I'm with you on this! Keep spreading the word!

forummm

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Re: Personal finances as a Business
« Reply #16 on: January 01, 2015, 11:54:36 AM »
DW likes to tell me the stories about her family blowing money everywhere. It's hard for me to understand how they do it. They hired an electrician to replace burned out light bulbs. They bought all new appliances so they would match (just like the previous poster's BIL). They spend our monthly budget just on restaurants. They buy the most expensive of everything (and didn't need whatever it was in the first place).

I'm almost 40 years younger but will likely retire before FIL.

Le Barbu

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Re: Personal finances as a Business
« Reply #17 on: January 01, 2015, 12:45:26 PM »
DW likes to tell me the stories about her family blowing money everywhere. It's hard for me to understand how they do it. They hired an electrician to replace burned out light bulbs. They bought all new appliances so they would match (just like the previous poster's BIL). They spend our monthly budget just on restaurants. They buy the most expensive of everything (and didn't need whatever it was in the first place).

I'm almost 40 years younger but will likely retire before FIL.

And if they worked for a business that is managed like this, they would say "-this place in ran by fools!"

Monark

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Re: Personal finances as a Business
« Reply #18 on: January 01, 2015, 02:38:15 PM »
Just have to add one more thing...visiting at my parent's house for the holidays, and I just noticed a perfectly good scale in the trash pile next to the door waiting to be thrown out.  I asked my mom, "Why is the scale in the trash?  She responds, "Oh, your father just got a new scale for Christmas from his sister.  It's a really nice one."  Me: "Is the old scale broken?"  Mom: "No, but your father says it's 'inconsistent'."  At that point I stopped, pulled the scale out of the trash pile, and weighed myself.  It worked just fine. 

Sad. 

Indexer

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Re: Personal finances as a Business
« Reply #19 on: January 01, 2015, 04:05:17 PM »
I think this is the breakdown between mustachians and non.  If you run your personal finances like a business and you have any business sense then going the way of a mustachian is logical. 

Its all about being efficient.