Save, and Live Below Your Means???

I was clearing my desktop the other day in the office. My eye balls stopped at a photo and my brain was carried away immediately. The photo was taken on 02.05.15 in Lake Pukaki. I was on holiday for 1 week over the area. I left early in the morning to take some sunrise photos over the Lake and was planning to stay the whole day over there.

I love the holiday, not only because it’s a great place and I had a great time; more importantly because I was able to pay for the trip without a cut in my salary or any of my other income sources. How did I do it? The answer is the power of financial literacy.

I’ve been trading FX since 2004 the year I graduated from the University and then FX CFD since 2011. The profits (and thus cash in-flow) from the trades has became more predictable after 2014 as a new tactics has been employed. Following this I’m able to give a fairly accurate forecast how much I could have earned to meet any expenses in any given time.

Back in Mar-15 I had this holiday plan in South Island for 3 weeks, plus a new iphone totaled NZD 5,000 would be required. Apart from profits from previous trades in Feb-15 (approximated NZD 2,000) I’ll still need at least NZD 3,000 to make that trip happen. You may say hey no big deal, you can top up the gap from your salary or anything else. I know, BUT I don’t want to do that because 1) my salary had already been allocated to something else; and 2) this is an expense, and if I want it badly, fine, go ahead but I have to earn it first, and 3) I want to test myself.

Certainly the trade results were great and I made more than expected. I kept on making profit even though I was having lunch at the water front, or hiking in the Tasman Valley, or taking photos at the Hooker Glacier Lakes.

So what’s my point? My point is – Investing and trading along with your base salary is the way to go. And the goals shall be 1) building up your wealth; and 2) living beyond and expanding your means. I don’t like the ideas:  1) to save the ever depreciating “currency”, 2) to live below your means, 3) Cling on job security and wait on pay rise.

Back to my holiday example, if I elected to “save” instead of “trade”, I wouldn’t know how long it takes to save the NZD3,000 under; if I chose to “live below my means”, perhaps the holiday trip could be a dream at best.

Having said all these, I’ll suggest before investing or trading, first invest your time and energy on financial education. Going to classes, studying financial materials and starting small to get experience may be a good start for many of you. Only when you have had enough life experience (by taking action and learning from mistakes) then you can over-weigh your stake and eventually get ahead financially.

I’ll talk more about these topics and reference to my life examples in the forthcoming articles.


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7 thoughts on “Save, and Live Below Your Means???

    • Hi Luann,

      thanks for your inquiry and interest. It’s very easy to subscribe; just check on the right side of the blog, you may see a little box named “Follow me”. Just click into there and all you need is just place your valid email address into there that’s it.

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