Two words…dividend investing. I am not sure when I stumbled upon the dividend investing strategy, but stumble upon it I did, which lead me to the Lazy Investor by Derek Foster. It is a really straight forward book about Dividend Reinvestment Plans (aka DRiPs or DRiPing) and Stock Purchase Plans (aka SPP) also also referred to as Optional Cash Purchasing (aka OCP) which when combined together over the long term make for a solid income generation plan.
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A gift from my Mom. She knew we were well into our war on debt and this handy little book got us thinking about more than just paying down debt. It got us thinking about the future and also what legacy we might leave for our descendants.The five wealth secrets are:
You can reduce your monthly communications costs significantly by bundling services with the same provider. We classify communications as:
We got rid of our cable TV years ago but had for a long time our internet service through Shaw and our telephone service through Telus. By switching our phone over to Shaw and bundling it with our internet service we were able to save on average $25/mth which when multiplied over a year is $300.00. Now I’ll admit that we’re a little old fashioned in that we keep a “landline” phone when in all honesty we could get by just fine with Kana’s mobile phone (I also have a phone provided by work but if it wasn’t provided by work I would not have one). However, the point is that there are options when looking to reduce your monthly communications costs. You could get rid of cable and just have NetFlix.
I’ve never really seen the point in a smart phone…or GPS for that matter because I don’t like trusting computers (but that is another story). Let me digress a little….when Kana and I moved to Japan in 2004 we went to get mobile phones (this was before the iPhone which came out in 2007) and the sales person was going on about the camera, the video options, the texting….and I said “Kana could you ask her if it is a phone?”. Kana asked and the sales person who looking a little puzzled said “Yes it is a phone”. I said “Good let’s buy 2!”. I wanted a phone and I wanted the cheapest one…the cheapest one to purchase and the cheapest monthly rate.
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One of the biggest weekly/monthly expenses is groceries. Groceries are not optional without food you will die, but the price you pay for food can be optional depending on your location (e.g.: in cities there are way more choices than in the rural countryside).
Back in 2007 we made the choice to shop for groceries at our local Safeway because they had a member discount program and because we collected AIR MILES. This decision was also compounded by the fact that we bought our gas at Shell which also was an AIR MILES retailer and on the way to Safeway. The AIR MILES really came in handy over the years as we cashed in miles for a new vacuum cleaner, a king sized duvet, a home phone set, a DVD player, a Blu-Ray player and more.
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Once one comes to the sobering conclusion that they are in fact slaves to money and they need to declare “DEBT TOTAL WAR”, the question then becomes: “Where do I/we go from here?”.
The first step in unleashing debt total war is to understand where your money is going. This is best accomplished by creating a Monthly Summary. This is the first weapon in the arsenal of financial freedom.
We began a monthly summary in 2007 shortly after moving back from Japan. We were amazed at how poorly we understood where our money was going until we started capturing it and looking at it through the lense of a holy warrior. Suddenly our enemy’s finger prints could be seen…and of course, the enemy was us! When we looked at the numbers we were actually adding about $65.00/mth onto the credit card debt. Knowledge is power…and applying that knowledge to our monthly finances became very powerful indeed. During the course of debt total war we went from going $65 further into the hole to paying off $1000 of debt each month.
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Welcome to Tomi Dou – the Way of Wealth. A new section in the Mercer Adventures.
Us at Wickaninnish Beach 2014
A while back I was having lunch with a good friend and I was sharing how within a month we would be debt free, having paid off all the student loans, credit card and credit line debt. We had been fighting the battle for the better part of 10 years, were finally seeing the light at the end of the tunnel and it wasn’t a train!
My friend then shared his ongoing struggle with debt and I encouraged him to declare a “debt jihad” a holy war against debt. He said he’d like to but he just wasn’t sure where to start. I shared some of the things that we had done like making sure we never paid for data on Kana’s iPhone, negotiating a lower rent with our landlord and learning how to save hundreds of dollars per year on groceries.
He said “Bro you should blog this! I’d follow along and I am sure others would too.”. I said I’d think about it. That night I awoke about 4:00am and was restless, tossing and turning thinking about my good friend’s ongoing struggle knowing countless others were out there struggling too…I got up, made a bunch of notes in my journal and decided that I would take up the challenge to document our family’s journey…
All of which, in time, will lead to prosperity not only for us but for our kids, our grand kids and beyond.
DISCLAIMER! Kana and I are not good bloggers. We are not money experts, we are not financial advisers and we don’t have all the answers. All we have is our stories, our stories of how we learned to become disciplined in our spending, to bring income and expenses under control so that we could get to the starting line of Tomi Dou….being debt free. Where we go from here we aren’t 100% sure…but it will be an adventure for sure. Won’t you join us?
November 15th, 2014 marks the first day for the Mercer Family of being debt free. The credit line was paid off at midnight. Breathing a sigh of relief, our holy war against debt has been successful and we are no longer slaves to debt. I no longer have to look at the interest payments and curse myself for making poor financial decisions. It feels good folks and we ain’t never going “back to Egypt”!
Now our sights are set on the horizon with the battle to get out of debt won now it is time to think about getting our money working for us and begin the next campaign…SAVING & INVESTING!