7.31.2013

Get rich with a breadmaker

The three biggest expenses the average family has are food, transportation, and housing. Savings in one of these three categories will have the biggest effect on your budget, and consequently your ability to get rich.

A loaf of whole wheat bread costs us about $4 at a grocery store, maybe $3.50 at Costco. With two small kids, we go through two loaves a week.  Assuming we shop at Costco (we do), that's $364 per year on bread.

Enter the breadmaker.
We got this Black & Decker breadmaker for $5 at a yard sale down the street a few months ago. Since then, we haven't bought a single loaf of bread from the store.

We modified one of the recipes in the manual to make a nice honey wheat with a 2:1 bread flour to whole wheat flour ratio.  The only ingredients are flour, water, honey, butter, salt, and yeast. It's delicious.

Bread flour is about $8 for a 25 lb bag at Costco. 
Buy a jar of yeast at the grocery store, a 5 lb bag of whole wheat, and the normal honey and butter you have around the house.  Set the timer and you have a fresh baked loaf of bread in the morning at a fraction of the cost.

As an added bonus, it makes super easy pizza dough for family dinner on Sundays, again at a fraction of the cost of ordering pizza.

Saving $300 per year may not seem like much, but little things like this add up.  That's $300 extra to be invested, producing an extra $20-30 in annual income.


7.10.2013

How Much Do You Get Paid for Breathing?

This post from Brave New Life talks about how he has the world's best job.  Essentially, he breaks down what he gets paid for breathing.  He's taken the advice of Mr. Money Mustache, and making his army of dollar bills work for him.

We all know what we make per hour when we're working.  If you're paid hourly, they tell you up front.  If you have an annual salary, drop three zeroes and divide by two to get a reasonable approximation.  For example, if you make $50,000 per year, drop three zeroes to get $50, then divide by two to get $25.  You make about $25/hour while you're working.

The problem with the traditional job is that you only get paid while you're working.  Also, that annual salary conversion trick only works if you work 40 hours a week.  I assure you, I work more than 40 hours a week, mostly because keeping poor people out of prison is hard and doesn't lend itself to 9 to 5 hours.

My father once told me that his goal in life was to become "gainfully unemployed."  That is, to make money without having to work for it.  It's a simple goal, but a profound one.  Getting paid for breathing more than it costs you to live.  This goal is attainable, but it takes effort and discipline.

The nice thing about having your dollars work for you is that they are earning money 24/7/365, not just the 40 hours you're at work every week. 

As a motivation, I thought I'd break down what I currently get paid for breathing, not counting any of my salary as a public defender:
  • Lending Club (peer-to-peer lending) pays $11.45 as of last month in interest.
  • My non-retirement stock accounts paid $62.40 in dividends last year.
  • The house we don't live in, that I rent out, $2,740.17 after expenses in rental income.
  • Interest on various savings and checking accounts was $12.89 for last year.
 Breaking that down, it comes to $2,952.86 annually.  That's $246.07 monthly.  $8.20 per day. $0.34 per hour.

$0.34 per hour is about how much I get paid to breathe. 

It's a horribly low wage, but I get paid it every hour of every day, whether I'm awake or not.  Every dollar I invest pushes that number up a little bit higher. And at some point, some day, I will be gainfully unemployed.