Month: May 2013

Lower Expectations

Last night was an eye-opening first-hand experience on the latest in technology. A friend in her high-end luxury car with a prestigious brand name reported that her car computer was telling her to shut down her engine because of “lack of coolant”. Opening the hood itself was not as intuitive as cars were before electronics dominated the engine compartment. Upon finally finding the latch to open it in a darkened parking space, our next target is to find where the coolant goes. In the old days, on any car (except the air-cooled engines) it is usually sitting right under the hood on top of the radiator within easy reach of the driver. It is almost embarrassing to use the car manual to find out where is the opening where the coolant goes. Then there is the warning that in this type of car, you have to know that not all “additives” or coolant are compatible with the engine. In the old days, any coolant is good enough for any car. Pure water is good enough also for several miles.

This is frustration getting on top of frustration. Since it is quite an expensive car, we expect it to perform almost flawlessly compared to vehicles at half its price. And there where the disappointment lays. We put high expectations on things just because they have very high cost.

The tow truck driver confirmed my suspicions further regarding this type of cars (luxury cars in general). He said that this brand is notorious for breaking down even when relatively brand new. He suggested that certain brands of cars made in a certain Asian country don’t even see the towing truck until they hit 250,000 miles. But this brand is usually his best customer. What a big letdown!

In our relationships, sometimes we expect too much from other people. I’ve seen parents push their children to go take some specializations in college because they think it’s a quick moneymaker, or their friend’s kid is going through the same college course and therefore her child should go the same route. The child actually hates going to this course but to honor the parents, they forced themselves to do it. More often than not, they don’t finish the course – resulting in needless expenses in a fruitless endeavor.

How do we deal with this? We have to look at materials things as things that deteriorate right after purchase. By lowering our expectations, when the breakdown comes, we feel we have foreseen it; therefore it’s not as frustrating. We can also do deep research into things to see which ones has more reliability according to buyers. From that research, we may have to buy a “lesser” car in terms of image – but a much dependable vehicle when it comes to mechanical reliability.

In our relationships, it is best to always apply our best efforts to it all the time. Then we should lower our expectations a little bit. Just because we think a certain way doesn’t necessitate that other people should be thinking the same way too. We have been given wisdom over the years, but other people may take additional years to receive that wisdom. It pays to be patient and nurturing – instead of impatience and judging. This is easier said than done, of course. But to be effective, it has to be practiced as opportunities present themselves. Then, after several tries – it will become a habit.

Take it easy!

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More Thoughts on Saving vs. Spending

This is a part of the “Get rich slowly but surely” series because I got really inspired writing a lot about money lately. I feel that if I got a hold of all these wealth increasing information decades ago, I would have been in a better financial situation today. At the same time, I am happy as a clam that I was still able to learn even at a later age because not doing so would mean a very poor future financial outlook.

In the various finance blogs, there are two trains of thoughts – saving a lot of money or making a lot of money.

Let’s call the first group (the high earners) Group A and the other (high savers) Group B

As we all know, earning loads of money is doable – but can be extremely hard and taxing. It requires a lot of effort for Group B folks usually to earn lots of money – earned within moral standards of course. Two ways to earn it: by being employed and getting paid much or having a highly profitable business. To get to that point of high income, it requires a lot of education (not necessarily schooling), research and practical application. Lots of people achieve it and they earn a lot but if they lose their job, they only have a few months of savings and very little liquid assets to help them get by while preparing for the next income source. If you are one of these wealth accumulators, imagine a bathtub with the hot and cold faucets turned to its maximum output (that is your income). However, if the drain is wide open (that is your expense) on the bottom of the tub, the water flows out freely no matter how much flows in. By closing the drain slowly (your expenses), water (wealth) now begins to fill the tub (your wallet :)).

Group B are the people who earn below average income, spend frugally, and still save a lot of money. Their choice on spending are rather “radical” to a society brainwashed by Wall Street in get rich quick mentality. They are either renting or bought their house cash (then proceeded to improve the house). They have no car or they have used vehicles with no loans. They seldom go out to dinner but rather prepare healthy inexpensive meals at home. Some buy clothes only at thrift shops while some rely on high quality clothes which are not cheap so they last a long time. Comparing this to the metaphor of the bathtub in the previous paragraph, the water flows in slowly, but because the drain is almost shut, the water still tends to increase, albeit very slowly.

So where are we going with this thinking? If you are one of those Group A fellows – you still have to be frugal but you have to consider the relationship between your time and money. Time is the real measurement of wealth. Having said so, then it is OK to hire someone to do some of your work if the work is so mundane (cleaning your home), or you lack expertise (electrician to rewire the lights in your home), or would take you a long time to complete (fixing a leaking kitchen drain). Remember, because you earn a lot, your time is very valuable. By delegating your work you free yourself to do more thinking and creativity to produce more, paving the way to increase your income some more. By hiring someone, you get to share your blessings with others. And the more you share – the more wealth goes back to you.

If you are in Group B – it pays if you can improve your skills in a few areas. For example, to save a lot of home repairs, you should study a little bit of plumbing, electrical and carpentry skills. You may also specialize in a skill that you have a passion for. Make sure that that skill is one of those skills which can make you a generous amount of income. Handyman skills will cut down expenses and your new skills will earn you a better income.

If you can’t decide which type of person are you, then practice frugality anyway. It’s always nice when you know you have some extra dough. It makes you feel less stressed. I know because I’ve been broke more than a few times in the past.

Ideally, combining both earning more and saving more is the best way to go. Maximize your earning potential – while at the same time – saving a lot of your income. There are quite a few of them that are doing this practice – and since the Great Recession there is an increasing trend of voluntary frugality even among those earning lots of dough. I personally hope this doesn’t remain a trend but rather a habit for everyone. If we do this, our own personal economies will not suffer from the ups and downs of the global economy.

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