Savings guide for 2016

Thought it could be a good idea to share some savings tips for 2016, which every person that is aiming for financial independence should live by in the coming year.

-Although I need to admit I am not following all of them, but have as a goal to adopt as many as possible during 2016. I will also try to do a follow up within 6 months, to see how much these things saved for me.

Here comes Eighth Wonder Investing savings guide for how you should save as much money as possible during 2016:

1. Always pay your bills in time, and with in time I mean the exact date the when the receiver should have the money. Always store your money until the last day on a saving account with as high yield as possible.

2.Use the car as little as possible, walk, bicycle or ride the bus as much as possible. Preferably do not even own a car, one of the things that are draining a lot of cash.

3.Clear the garage and wardrobes and sell. If you haven't used it in the last 6 months, you probably don't need it or will never use it again. Sell, sell, sell!

4.If you really need a car, get one which is a couple of years old. The depreciation of the price is the largest in the beginning and it could loose as much as half it's value the first 2 years. After following tips number 2, the newer car with more energy efficiency will never make up the cost for the depreciation.

5. If you're buying clothes, always buy clothes with quality and with timeless design. Fashion trends is for people who is weak and never will be able to spend time on their yacht, cigar in their mouth and enjoying financial independence.

                 -Trust me, 95% of the time I am the best dressed man in the room and I am surely not the                               guy who spend the most on clothes.

6. Always buy food on a full stomach and buy in bulk.

7. Be as unfaithful as possible to all companies you have contracts with, electricity, banks, insurance etc. Always check best price and play them out on each other.

8. Going on vacation? Rent out your place on Airbnb.

9.You think you could live smaller? Rent out a room to a person, could gain you a lot of money and a new friend in life.

10. Visit a lot of physical stores, try a lot of clothes and sizes and always check prices online. Before making the purchase never forget to check the second hand market. If you don't like second hand, a lot of products are brand new and with full warranty.

11. Stop with tobacco and alcohol completely, will save you money and health.

12. Start to exercise, will make you more healthier (sick days costs a lot of missed income), same shape (yes, you could use the clothes you bought in your 20s) and you will look better.

13. Switch jobs, could boost your salary and you will meet a lot of new friends.

14. Do not eat pre-made food from the factories, make the food yourself instead. Both healthier and cheaper.

15.Never have anything electric on standby and try to connect as much as possible to power strips which should be switch off during night.

16.Have the right air pressure in the wheels on the car, often you could have a bit more then the recommendations from the car companies. This will lead to less fuel consumption.

17.Stop eating snacks and all the "snacking". Costs you a lot of money and you don't need the nutrition from it. Check below how much your body needs in terms of nutrition, goal weight etc. and balance it:
                               http://www.active.com/fitness/calculators/nutrition

18. Always bring food boxes to work. Will save you time and money.

19. Use a credit card as much as possible, pay in time and use the free interest period. This will give you reward points which you could use on more fun stuff.

20. Take care of your teeth and do practical dental care at home. Reducing the cost for professional dental care.

21. Cancel all the amusement contracts you have, Spotify, Netflix, Pandora etc. spend time with family and friends instead.

22. The last but as important as the first, track all your purchases and look over them after every month, to see where you could save extra money.



This should not be taken as a financial or any kind of advise and all the numbers on this blog could be incorrectly. I am not taking any responsibility for individuals using this information or any damage coming from it.

Thoughts About Settling Down

Today I asked myself that question, what would I really do with more money or if I were financial independent?. The question is really hard to get and very vague.
The definition I have for more money are financial independence.

Let's start with financial independence, which differs a lot between people. When are you really financial independent? For me personally is that question impossible to answer because it depends on so many factors, as everything else in this world..

Wikipedia is stating that financial independence is a state a human has when he or she has sufficient wealth to live, without having to work actively for basic necessities. Often financial independent peoples assets generate more income then their expenses.
Another definition comes from a survey done 2013 by Capital One 360. The survey states that 44% of U.S adults said financial freedom meant not having any debt, 26% said it meant having enough saved for emergencies and 10% defined it as being able to retiring early.

From my point of view neither Wikipedia nor Capital One 360 has right here, just because of the simple reason that it depends so much external factors that its so hard to answer this question, especially for me at an age of 25.

Let's bring up a scenario.
I guess a lot of people like me wants to live in a nice neighborhood, fancy car and friends with the same mindset around you. In other words this neighborhood will be wealthy and to a certain extent contagious. Why? 
People with high incomes consumes a lot, which enriches corporate to small medium business and those companies will start to demand manpower. These things is pushing salaries north and then the snowball is rolling with the society as a winner and me as financial independent as a loser?

I dont know but its a good thing to think about, should you choose to settle down in a more "expensive" neighborhood or in a cheaper region like Asia for example.
I will definitely put that up on my to-do-list, what is actually financial independence for me.

Besides the philosophical thinking I am working on a general analysis of the fast food industry, which will probably be done and posted in the upcoming weeks.


Best regards,

Eighth Wonder Investing

Bi-weekly Roundup and Forecast December Sales Vardia

Its time to start with Bi-weekly roundups to keep track on my last two weeks and see that I am on the right track to make my goals for 2015. This post will also include some thought for the sales figures that Vardia Insurance is announcing tomorrow.

Lets start with the financials for the first 11 days of this year.

The salary for December was really good due to a bonus, ended up at a salary income at 3215 euros. It has been some bad consumption during these days, would like to highlight some of them.

• Bought designer plates and forks for 750 SEK (approx. 78 euros).
• 113 Euros are spent on alcoholic beverages.
• 48 Euros spent on taxi trips.

As you see always room for improvment, on the other hand if you deduct these expenses the month has been really good I must say, at the moment 2169 Euros are left when all invoices are paid. The forecast is to have 2000 euros left when the new salary are dropping in on the account the 28th January.

The portfolio is up 2.08% for 2015 which is great but I would have preferred to see falling share prices instead. Just by the simple reason that I know I will be a net buyer of stocks in at least 7-8 years from now on. The portfolio still consists of the same companies, allocation in brackets. 

• Hennes & Mauritz (28.1%)
• Protector Forsikring (29.3 %)
• Vardia Insurance (24.5%)
• Tesco (18.01%)

The company which will get my next purchase is Vardia Insurance. Vardia is the stock with the best intrinsic value. Target price is 1.0 x GWP (Gross written premiums) are now at the moment around 35 NOK, and forecast for 2015 are 50-55 NOK in GWP. Will continue to buy the stocks until we have a valuation on 1.0 x GWP and if nothing happens in terms of falling sales for example.

Forcast December Sales Vardia

I assume 16 full working days in December (normal month consists of 21 days). Which is 23% less working days from a normal month. I apply a growth on 1% and then deduct the loss in working days, after the calculus we assume that the sales will be around 80.295 million NOK in December, will be really interesting to see were we end up tomorrow.

Over and out,

EWI 

  

The Goals for 2015

Since I just started this blog and haven't had any real goals for 2014, except some saving goals. I am now thinking that it could be a good strategy to set up goals for 2015.

Although I had problems with how to define the goals and make them relevant and attainable I luckily found this magnificent and interesting blog post from Dividend Mantra: "The Importance of Being Smart With your Goals". Which made me understand how I will set up and define my goals for 2015.

The S-M-A-R-T goals methodology was first published in a paper from November 1981 Theres a smart way to write managements goals and objectives. written by George T. Doran. There are a few different versions of the S-M-A-R-T criteria but I will apply the ones that George T. Doran came up with the year 1981.

Specific - There should be a goal that is specific and narrowed down. Not a general goal that are vague and could be hard to measure in the end.

Measureable, In other words the goal should easily be measured in some way. It should be quantifable.

Achievable. The goal should be reachable, in other words physical possible to reach.

Relevant. It should be relevant to your journey, if its not your end goal will say.

Timeline. The goal should have a specific deadline when it should be accomplished.


So now over to how my goals will be for year 2015.

• Save 100 000 SEK from my salary (Approx. 10 000 EUR).
• Start to follow a monthly budget. I have done this 2014 but not as strictly as I want.
• Reach 300 000 SEK in savings (Approx. 30 000 EUR).
• Pay off 12 000 SEK on my student loan (Approx. 1200 EUR). 

Due to make it as simple and specific as possible will I only have four goals for 2015. I will follow up my goals on a monthly basis to keep track of them and to see that I am on the right journey to financial independence. Why so often, comes from that I realized from 2014 that I need to be much more strict with my goals to not loose focus.
As you could see have I not chosen any goals linked to the valuation of my stocks, this comes from the reason that I believe I cannot predict and affect the share price over one year, all my investments are at least based on a time horizon on 3 years. I could even say that it will be hard to predict a share price after only 3 years, but I know for fact that in some future the real value of my company will be shown in the share price. In other words a goal linked to the share price wouldn't have followed all the S-M-A-R-T criterias.

Over and out,

EWI