On The Magic River of Money - Plans for 2016

I’m learning to build online tools to enhance this web site in the future. For example, I’d like to add a newsletter as an alternate way to keep you informed with fresh perspectives on the decisions that matter in personal finance.

Late in the first quarter of 2016, I plan to begin publishing blog posts here on a regular basis. Of course the topic will be innovative approaches to personal finance, approaches that make wealth creation not only automatic but inevitable.

I also expect to publish another book or two on subjects hinted at in The Magic River of Money.

If you haven’t tried the book yet, click on its cover in the right hand column (elsewhere in the scroll if you’re on a mobile device) and read the free sample.

Here’s wishing you good fortune!

Interested in Independent Writing & Publishing?

I will return to The Magic River of Money.... 

Right now though, I'm blogging quite a bit at AuthorBusinessCEO.com on topics related to independent writing and publishing. (I’m the author of Author Business Plans Made Easy.)

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Think of self-publishing as an inexpensive hobby that can turn serious and become a source of supplemental income. Start part-time and work toward a full-time livelihood. Or plan ahead to pursue your writing passion in (or instead of) retirement.

Publishing the traditional way, with a large commercial publishing house, is at once easier and more difficult than self-publishing.

I delve into such matters at AuthorBusinessCEO.com.

Thanks for the Good Wishes

In the wake of Mom passing at age 94, I want to thank those of you who responded with sympathy and prayer.

Mom’s career was on the administrative side of public education and several years of her retirement were spent as a literacy volunteer and public library docent.

She had a good, long life and we were lucky to have her with us these many years.

Though Mom wasn’t a writer, per se, she left 3 volumes of memoirs, the results of her 2 sons working with her on personal and family history projects.

Perhaps more on those, another time.*

:o )

__

*In one of her memoirs, there’s a chapter on “Thrift in the 1950’s,” that might be of interest to Magic River of Money readers. It’s about the financial methods she and Dad used to steer their little family through the rocky shoals of meager times. 

A Death in the Family

Ryan Petty

I will return to active blogging later this month.

Magic River of Money FAQ #3 (Personal Finance)

Ryan Petty

Q: How permanent do you think decluttering and staying organized can be? And how can it be made to be more so?

A: Thomas Jefferson is famously credited with saying: “Eternal vigilance is the price of liberty.” I think the same can be said for the lesser aspirations involved in living a simple life, well-ordered life.

This includes the aspiration to organize your simplified household in such a way that it remains decluttered, essentially forever.

The key to maintaining order, once it is established, is eternal vigilance, which means assigning a place for each of one’s possessions and returning each item to its designated place after each use.

Following this maxim would sustain order indefinitely, if nothing ever changed in your life... if you had no new interests or activities or relationships. But, of course, things do change—many of them and often.

As I described in the case of children and their parents, we change very fast, particularly in the U.S.A.—accelerated by changes in technology and product innovations. Many of the changes we make affect what we decide to own and whether or not we continue to use things we purchased in the past.

Realistically, the only way to maintain order, is to continuously assign places for new possessions to reside and continuously remove possessions as they fall into disuse. I say, “continuously,” but you could do it in occasional 15-minute bursts of decluttering and reorganizing or bigger semi-annual or annual clean-out events... and stand a chance of keeping up.

This is something glossed over in Marie Kondo’s book. She acknowledges that avoiding the need to declutter ever again requires maintenance in the form of assigning a place for each possession and returning each possession to its place. But she speaks of it without anticipating the dynamics of change. At least in America, our relationships to possessions are subject to change, no matter our commitment to the simple life. Our interests, activities, and relationships are in flux across the broad spectrum of our lives—as are the technologies we use to pursue them—and, thus, so are our possessions.

The more conscious and visible you make a short but sweet re-visitation of your efforts to declutter and organize, the better off and more likely you will be to successfully avoid ever needing a major, time-consuming overhaul.

Copyright © 2015 Ryan Lee Petty

Magic River of Money FAQ #2 (Personal Finance)

Ryan Petty

Q2: You make quite a point in Chapter 5 about the impact of children on clutter and the fact that children are not taken into account in The Life-Changing Magic of Tidying Up. I understand what you say about children being “complicating factors,” but is there more you could share about the nature of the complications?

A: Yes, the key is that children grow up in stages and there are many stages, each having its own interests, activities, and clutter. American children are on the journey of a lifetime through an incredibly fast-changing culture, and they tend to take their parents with them… through each and every stage. And most of the stages have associated with them the necessity to purchase certain “gear:” Gadgets, toys, books, games, clothing, furnishings, parental aids, etc.

Parenting itself, from pregnancy on, is so consequential that the habits, interests, and activities of parents hugely add to the flow of clutter.

The first stage hits before the first child is even born. And both child and parents shed many skins in the course of the child’s development into adulthood and beyond.

Just think of the possessions modern American parents regard as essential… whether pragmatic in nature or purchased for social effect… and think how often those possessions change through the various stages of a child’s life and how quickly some of those possessions flow through the busy lives of families.

The affect on clutter is, of course, all the more complicated when additional children are brought into being.

And consider the ways in which technology changes and habits and interests follow during the course of a single generation’s rearing. And all along the way new things need to be purchased and old ones abandoned. The abandoned ones we now call, clutter.  

Copyright © 2015 Ryan Lee Petty

Magic River of Money FAQ #1 (Personal Finance)

Ryan Petty

Q1: How—exactly—does your tidying-up advice for Americans differ from that of Marie Kondo’s? Anything more you can tell us about this? 

A: If your household is as simple as that of an apartment with a small on-premises storage locker (included in your rent), I would follow Marie Kondo’s advice, more or less as written in the English language translation of her book, The Life-Changing Magic of Tidying Up.

If, on the other hand, you live in a house of more than 1500 square feet and you’ve lived there for several years, and a place that once seemed big enough but is now overflowing with your possessions, I’d depart from her advice, not so much to change it as to add to it. I’d do a custom decluttering plan that considers the following:

Decluttering in America vs. Japan

1.    You can add a major garage sale or professionally run estate sale before beginning the formal decluttering process. Capture the cash you generate and hold onto it until properly deployed in a financial plan.

2.   You can do a room-by-room, storage space by storage space decluttering to remove the first 50% of your clutter… before going through the category-by-category analysis advocated by Marie Kondo.  This avoids the time and logistical challenges of pulling categories together in one place and holding individual items in your hands as you look for those that provide you some special spark of joy. Not that the spark of joy idea is a bad one, but it’s inefficient and probably not necessary for getting rid of the first half of your clutter.

3.   Because you are not trying to be comprehensive, you can handle the first round of decluttering fast. Save the harder decisions for the KonMari Method of the second round.

4.   As you go room-by-room, you can identify those categories in which you own many more possessions than Marie Kondo or anyone could have anticipated. Add such categories to the five she identifies (clothing, books, paper, mementos, and miscellany). Dispose of the obvious clutter from your personal categories and save the rest, pending the category-by-category review outlined by Marie Kondo. (You can, if you like, do this for her five categories, as well.)

5.    After you’ve applied the KonMari Method but before you’ve finally disposed of the second half of your clutter, you can quickly do one more room-by-room, storage space by storage space review. You want your rooms to end up looking right, particularly if you will be staying in your current home. You want them to function right, particularly if you will be taking on new functionality [as in using part of your home for an Airbnb guest room(s)].  And you may identify a storage shed (no longer needed and free-standing, not tied to your property) that can be listed for sale on CraigsList.

6.   Before the final disposal of the remnants of your clutter, you can consider whether you want to hold another garage sale or contract an estate sale professional. Decluttering a major household can take six months. Consider holding such event as you start and again, six months later, as you finish the process. In each case, the unsold items can then be donated, recycled, or, as necessary, disposed of as trash.

What do you think? 

Additional questions?

Why Living Within Your Means Is Not Enough (Personal Finance)

Ryan Petty

People with financial goals often suffer from setting them too low.

Few of us manage to live within our means. Instead, we aspire to do so - and sometimes fail - and burden others with our failures or go into debt - and burden ourselves.

We budget and scrimp and live from paycheck to paycheck (those of us with jobs), trying to live within our means in ways that leave us obviously vulnerable, even if we are successful.

And most of us are burdened by a load of debt from mistakes and life’s unfairness and the sudden, obsessive urge to buy things that leave behind a trail of clutter.

This is a tough love, personal finance perspective:

Even if we achieve our aspiration and live within our means and even if we do that debt free, the sad, hard truth is, it’s still not enough.

It’s not enough because we set the bar too low.

We asked ourselves the wrong questions.

We left out some of our own foreseeable needs.

We set aside no margin to see us through emergencies.

We’re caught in the fable of the Ant and the Grasshopper.

Living within our means sounds good, but it means we’re still like the Grasshopper,  enjoying the summer while setting aside no provisions for surviving the tough winter months.

Unlike the Ant, we put nothing back for the expenses of the future.

Nothing back for a rainy day.

Nothing back for the catastrophe of ill health, accident, or layoff.

Nothing back for higher education, continuing education, or self-education.

Nothing back to help your children transition to adulthood as productively and humanely as possible.

Nothing back for retirement and the good life of ease.

We’re living within our means but not well within our means.

We’re living like amateurs when the rewards all flow to professionals:

To those who make bigger and longer-term commitments.

To those who think life through to its feathered edges.

To those who remain practical and alert for all the wonder and glory of spectacular summer days.

To those who build capacity in themselves and their families.

To those who set money aside for foreseeable expenses including, of course, “the unforeseen.”

That is why living within your means is not enough. 

Life-Changing Magic River of Money - Part 2 Book Sample (Post #3 of 3)

Ryan Petty

Chapter 15 of The Life-Changing Magic River of Money that Flows from Tidying Up

Save Money by Avoiding or Terminating Self-Storage Contract(s)

Few expenses endured by Americans are more foolish than those for the rental of self-storage units.

They cost more per square foot than some apartments.

If you are not familiar with self-storage units, they are individually controlled storerooms, typically accessed by sliding overhead garage doors and protected by special locks and keys, security fencing, lighting, and cameras.

Self-storage is also referred to as mini-storage and temporary storage.

The problem is not so much that we never have the need for temporary self-storage. The problem is that we tend to use it on a non-temporary basis. Surplus possessions, once out of sight, become out of mind. But the rent goes on.

Which is why the worse thing you can do is put self-storage rent on your credit card as an automatic charge….

Better you should write a check each month specifically for it, and have at least those reminders of your foolish nature.

If you are renting a self-storage unit, its entire contents should be among the first items you review for clutter to be gotten rid of.

Units are of various sizes and geographic location affects monthly rental rates, so it is hard to pin down a dollar amount. We once paid $250/month for two years, $3,000 per year, for a 10 X 10 X 8 unit with a sliding metal door and a lock and a key.

As a result, for roughly $6,000 we stored a few family heirlooms and a host of typical household goods that might as easily have been donated to charity. Our stored possessions were worth approximately $3,000 if sold as used goods in the marketplace.

We bled, in other words, but, compared to others, we soon stopped the hemorrhaging. It’s not unusual for a customer to store a thousand dollars worth of household clutter … and still be paying self-storage rent ten years later. Meanwhile, the items stored grow less valuable with each passing year

There are better uses for your money: 

You can buy an inexpensive new or nearly new car for $250 per month.

You can lease a moderately expensive new car for $250 per month.

You can keep yourself in groceries for $250 per month.

You can pay off a student loan for $250 per month.

Purchased early enough, you can buy long-term care insurance for $250 per month.

Or by making some common sense decisions about what to own and what to get rid of, and taking the lot out of self-storage, you can simply pocket $250 per month.

Maybe you don’t know it, but self-storage is primarily an American industry.

Of roughly 60,000 self-storage facility locations worldwide (with facilities often offering hundreds of individual self-storage units), 50,000 of them are in the United States. Together they provide more than 2.5 billion square feet of rentable self-storage space for Americans.

The industry is so big, it has spawned its own reality-TV show, Storage Wars, about the auctions of storage unit contents by landlords for failure of their tenants to pay rent.  The show began its 6^th season in November 2014.

What’s at Stake?

The money you pay and/or the money you can avoid paying for leasing self-storage.

In other words, an ongoing stream of cash on which the income taxes have already been paid—that you could invest or use for other, better purposes.

If you lease a $250 per month unit for three years, you will spend $9,000.

You have the opportunity, by decluttering and organizing, to stop this monthly expense on a dime.

This is easy money and much more certain than the stock market.

Copyright © 2015 Ryan Lee Petty