I have a confession to make. I’m a recovering money control freak. My wife laughed at me for years as I tracked ever little penny of expenses. The reality was it was a good thing to know about my spending, but now with the kid I just don’t have the time to bother with the same level of detail.
So how do you get over being a money control freak? Start automatic bill payments and fund transfers for your savings, then comes the hard part. Don’t track them as every tranfer leaves the account each month (Alright, you can make sure they leave on the first month). Just limit yourself to doing the end of month summary check to see if you have any extra money in your chequing account that can go over the high interest savings account.
I’ve now go it all set up so I have to pay just two bills in online banking and do one account transfer of money. Every other bill and account transfer is now automatic.
It’s been several months now and it is working. I’m spending less time checking my bank balances and more time reading and playing with the kid. So if you are a fellow money control freak, don’t worry there is hope. All you have to do is give up just a bit of control and get a life beyond your money. After all isn’t all this saving for early retirement about having time to do the things you love. Why wait until your retired to start?
Well in my search for retirement data I have done many Google searches and read many books. Below is a sampling of information I found useful.
Canadian Early Retirement Books
Stop Working – Start Living by Dianne Nahirny: A good book on control spending and about being creative on how to save money and make a little more cash.
Stop Working by Derek Foster: Derek’s a bit new to this entire early retirement thing, but his book does offer some ideas for investing for a very long time frame.
Free Parking & Advance to Go by Alan Dickson: Two books by Alan that provide a good reality shift for most people. It challenges your belief on how you define wealth and an excellent basic description of index investing and why it works can be found in Advance to Go.
US Early Retirement Book
Work Less Live More by Bob Clyatt: This is an excellent resource on some of the finer points of cost prediction for retirement and dealing with the lifestyle of being semi-early retired. Well worth the read for any Canadian or US retirement planner.
General Personal Finance Book
The Wealthy Barber by David Chilton: A classic read for anyone who is just starting out. It covers the basics of insurance and saving, but you might want to take some of his advice with a grain or two of salt.
The Intelligent Investor by Benjamin Graham: A classic read on investing. I personally enjoyed the edition with commentary by Jason Zweig on each chapter. He points of many little facts that provide some reference to investing today versus investing in Graham’s time.
The Retire Early Homepage – A great site with many useful articles. It is written mainly for the US, but it has lots of useful information including a great article on the 4% rule.
Dory’s Early Retirement Forum – With over 3000 members of early retirees or people planning early retirement this page is a gold mine of advice from people who are living the dream of early retirement. On last count there were around 11,000 topics and almost 200,000 posts. The board is mostly US based, but there are a few regular Canadian posters as well. If you can’t find what you need in the search function, join up and put in a post. The same topics tend to come up and those with good memories will often post links to previous topics.
Enjoy reading everyone. I’ll post more links as I get some more time to dig in my bookmarks.
On my personal library shelf I have built up a small collection of some of my favorite retirement planning books. Out of all of these the one I like the best so far has been Stop Working – Start Living by Dianne Nahirny.
Dianne retired at age 36 and during her working life never made much of a salary (around $20,000/year), but she did make good money off a few house deals. She left the working world with a net worth of just $225,000. So the obvious question is with such a low net worth how is she financially independent? That is the lesson of the book: control your costs or they will control you.
Her book has two parts, the first part focuses on attitudes around money and how she came to her freedom day. More than anything what I was left with was the idea was to control your day to day spending and stop wasting money on things that don’t mean anything to you (ie: your power bill). That way you feel fine spending money on those luxury items you really want. In Dianne’s case, it was things like a antique gold locket, fur coat and a trip to Europe on the Concorde.
The second half of the book gets down to how to control your money. Some her examples are a bit extreme for my taste, but it proves the point. If your creative there is little no end in sight on ways to avoid costs and save money. The added bonus to her methods is you will be a kinder to the earth as you waste fewer resources. Which is exactly how I view it. I’m not saving the planet with low wattage light bulbs, I’m saving a few bucks and now have a $40/month power bill, so I’m taking that savings and building up to buy a new LCD TV.