Thursday 12 April 2012

Better One Handful With Tranquillity...

Today's lesson is taken from Ecclesiastes 4:6:

Better one handful with tranquillity than two handfuls with toil and chasing after the wind.

Now, the great thing about these proverbs is that you can often interpret them any way you like. So my interpretation is: live more modestly, making it easier to achieve financial independence and retire from the rat-race.

Here's the thing (as they say in the US): more is not always better. In fact, in many cases less can be better. If you doubt that, have a look at the Zen Habits blog.

For a DIY Income Investor, developing a self-sustaining financial structure for yourself and your family is based on two main principles:
  • reduce expenditure, with a continual striving for more cost-effective living
  • increase passive income, by saving and investing sensibly

I don't talk about it much here, I put as much effort into reducing expenditure (and keeping it low) as I do to increasing income. Think of it as the two blades of a pair of scissors (like supply and demand for economists).

Eventually your Money Snowball will achieve 'escape velocity', when your passive income will exceed your expenditure and working will become optional.

For more on this, find out about your Wealth Potential.

I am not a financial advisor and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

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