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saving money

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Imagine you’ve been falsely imprisoned.  Having exhausted every conceivable avenue to prove your innocence, you are forced to contemplate the very real possibility of spending the next several decades in jail.

Years of fighting the system have taken their toll.  You begin to think that it might be easier to just accept your fate.  It’s what anyone else in your position would do, you tell yourself.  Besides, they provide all the necessities; food, shelter and clothing.  The prison warden even rewards well behaved inmates with short yard breaks on the weekends.

Fortunately, you snap yourself out of it.  Who are you kidding?  You weren’t meant to live life as a captive.  You were born to be free!

So you start plotting your escape.  Every day you start chipping away at the walls that imprison you.  Every chunk you break out brings you one step closer to your eventual liberation.

Now suppose someone you trust comes along and offers to help.  More hands working together means you can reach your goal faster, so of course you gratefully accept.

The next day, while you’re busting your ass trying to make as much progress as you can, you start to wonder where this “helper” is.  At the end of the month, he finally wanders in with a toothpick and chips a few grains of sand out of your escape tunnel before disappearing for another month.

At first you’re speechless.  WTF?  But it doesn’t take long for you to finally tell this dude, “You know what?  Thanks but, nevermind.”

So in this simple parable of your quest for freedom, who does this ineffectual helper represent?

Your bank or credit union.

At my credit union, savings accounts pay a paltry 0.2% annually and a money market account isn’t much better at 0.3%.

So you’ve scrimped and saved your way to an impressive $50,000 and all your “helper” does is chip in a measly $12.50 in interest your first month.  Ugh.  Nevermind.

libertopia (800x450)

how I went from spender to saver

I spent every penny I made.  Knowing that I would usually receive an annual bonus, I would buy something from Best Buy or somewhere else a year in advance on credit, with no payments and no interest for a year.  When my bonus came, I would pay off whatever I bought in the prior year and then buy something else.  I would literally spend my bonus a year before I received it!  I did this year after year.

Since I had no savings, I sold stock options I’d received from my employer so that my family could attend my sister’s wedding in Hawaii.  We planned to visit my brother-in-law’s family in California in the following year.  However, when it came time for the trip in the fall of 2008, the market was tanking and my stock options were worthless.  I had to cancel the trip.  It was humiliating.

I’ve mentioned before that the market crash of 2008 is what marked the beginning of my interest in stocks.  But the last post got me thinking; specifically, what was it that caused me to make the switch from spender to saver?

The Journey

Thinking back, the shift actually began at around the same time.  It’s amazing how seeing your 401k chopped in half can focus the mind.  Prior to this, I was just kind of floating through life with no concrete long-term plans.  The 2008 crisis shook me up and inspired me to start looking for ways to mitigate economic risks that I’d never even noticed before.  Saving money and buying precious metals was part of it.  Increasing personal resilience by planting fruit trees and starting a garden was another step we took.  Unfortunately, I also thought that “spreading the word” and political action were solutions as well.

This is where I can point to a second pivotal event in my journey.  In 2011, I was spending a lot of time (and money) making music with my band, Rothbard.  We were invited to participate in an event called Libertopia in San Diego.  We played our set and the rest of the time I listened to many of the speakers.  The overarching theme and philosophy I took away from that conference literally changed the trajectory of my life.

I realized that it’s futile to try to “mobilize a majority”.  There’s no need to try to conjure up a “consensus”.  For the first time in my life, I ascertained the true essence of government; coercion.  The majority forcing it’s will on the minority is immoral and I want no part of it, even if my ideas happen to be in the majority.  Secondly, the elusive if not impossible goal of trying to change the minds of enough people can become convenient excuses that ultimately keep me spinning my wheels but going nowhere.

The reality is I can live a rich life of freedom NOW without these things.

Prior to this, I had been fixated on a lot of the doom and gloom out there.  Out of control government spending and debt, stifling regulations, corrupt politicians, etc., etc.  Of course, there are plenty of negatives I can and did focus on, but wasting my limited time and energy fretting about things out of my control left me feeling frustrated and unhappy.

Governments will do what governments do.  Politicians will continue to do what politicians do.  I can’t control them.  I can, however, improve society by leading by example; by presenting it with “one improved unit“, as Albert Jay Nock has said.

The truth is, the people and institutions I thought were holding me back, can actually do little to stop me from living a life of freedom.  All I had to do was define what being free meant to me and then find creative ways to get there.  As I started confronting the obstacles in my path, I found that many of them existed only in my mind.

Let me give you some idea of how Libertopia elevated my vision.  Prior to this event, I was arguing with my HOA about my right to put a Ron Paul sign in my front yard.  I was also spending a lot of my free time going through boxes of coins looking for copper and silver.

After the event, my wife and I looked at investment property in the Dominican Republic and then purchased a rental house in San Antonio.   I also started getting serious about learning how to make money with stocks.

Key Concepts

Given that background information, I’ve isolated two key concepts that were instrumental in my transformation from spender to saver.

  1. A clear vision – once you get a clear picture of where you want to go, it makes all of your other decisions so much easier, including your spending decisions.
  2. Viewing money as capital – Basically, this is the realization that you can use money to make even more money.  This hit me as I started to make money with stocks.  I even got a taste of this when I saw the value of the gold and silver coins I had purchased rise in value.

Of course, no two people take the exact same path, but I hope this little walk down memory lane is helpful to you on your journey towards a life of freedom.

write your own script

write your own script

This is not a blog about saving money.  There are several excellent ones that go deep into that.  Mr. Money Mustache is one of my favorites.

Rather, this is a blog about growing your savings.  However, if you don’t have a meaningful amount of savings set aside, you have nothing to grow.  So let me take a post or two to try to inspire those that need a little nudge.

Why save money?  I mean, life is short, why bother with budgets and delaying instant gratification?

For those of us who do save, the answers are as varied as our personalities.  Some common reasons are vacations, cars, property, children, and the big one, retiring from your job, early or otherwise.

If you don’t save, maybe you just need to dream bigger.  I know that was the case for me.

Don’t uncritically accept the expectations placed on you since childhood.  This is your life!  Carefully and deeply think about what excites you and design your life accordingly.  If you don’t take control of your life and decide where it leads, who will?  And will you like what they come up with?

Don’t settle for a two-bit role in a script society has written for you.  Write your own script!

If you take the time to do this, to expand what you believe is possible and really dream big, it will have a profound effect on your priorities.  You will to start to play the long game and see the value in setting aside as much money as you can now so you can achieve the future you envision.

“You either learn your way towards writing your own script in life, or you unwittingly become an actor in someone else’s script.”
 - John Taylor Gatto
take that first step today

the first step

The first step towards financial freedom is actually pretty obvious, yet it is completely missed by most people, including myself for years:

produce more than you consume and save the difference

In other words, what’s important is not how big your paycheck is, but how much money is left over AFTER your bills are paid.  Maximize this number.


Expenses are like holes at the bottom of your savings account bucket.  You need to plug up or at least reduce the size of as many of these financial fissures as you can.  Credit card debt, car loans and any unproductive debt besides your mortgage should be your first priority.  Unproductive debt is debt that does not produce income.  A mortgage on a rental property or a margin loan in your brokerage account are examples of productive debt.  Borrowing money to go on an extravagant vacation or buy a new flat screen TV is unproductive debt and should be where you focus your initial efforts.

Then eliminate as many recurring subscription services as you can.  Do you really need a 100+ channels, a land line and the morning newspaper?  Go line by line through your subscriptions to see where your money goes and then determine if it’s justified.

Most likely, your biggest expenses are your home and taxes.  Depending on your situation, it may make sense for you to consider downsizing.  I went from a 3,000 sq ft house to a 1250 sq. ft. condo which cut my monthly mortgage and utility bills substantially.

I am not a tax expert, but there are a several good strategies you can research that will allow you to reduce your tax burden.  Starting a business can open up a multitude of deduction opportunities as well as provide another income stream.  Of course you can maximize your contributions to tax deferred savings accounts like 401k’s and IRA’s.  If you are willing and able to move out of the country there is the foreign earned income exclusion which allows you to make up to $100,800 (for 2015) tax free.  Finally, you can potentially move to Puerto Rico, as I have, to cut your taxes on capital gains to zero by obtaining an Act 22 tax grant.


Obviously you’re not going to be able to increase your wealth through cost cutting alone; you are going to need sufficient inflow.  If you want to make good, honest money, it’s not about who you know or how long you’ve been around.  You generally get paid according to how much value you add.  For example, Steve Jobs improved the lives of millions with the now ubiquitous iPhone and he was richly rewarded financially as a result.  This demonstrates the inherent morality of true capitalism where serving others is in your self interest.

Be a value adder, not a value extractor.  How this looks in practice will vary according to your interests, aptitudes and circumstances.  It may mean that you see a need around you so you quit your job and start a business to meet that need.  Or, you might keep your job and adopt an “entre-ployee” mindset, where you proactively look for creative solutions rather than wait for someone to tell you what to do.

Only you can figure it out for yourself but put in the time on this because it’s vitally important.  If you get it right, not only will you be financially rewarded, but you will receive the deep satisfaction that comes from providing real value to your customers who will benefit tremendously from the solutions you provide.  A voluntary, free-market transaction is always a win/win for everyone involved.

In summary, don’t chase money directly.  Instead, relentlessly look to solve problems and provide value.  Be generous with ideas and solutions and the money will come.