So, it is Dec 4th today for me here in Tokyo. And soon, I will be 25 years old.
I thought I write an article about myself and how I have managed to save my money since my graduation from my university.
This article has 3 parts.
Part 1 - My obsession with money and financial independence.
My parents have always been savers rather than spenders. They've managed to pay off their entire mortgage in less than 6 years for their house. My mother always tracked her spendings, though, she lacked well-planned investments and a sound budget.
To my mother, saving every penny was important, but investing and planning weren't. Hence, she didn't really have any goals....or dreams..of what to do with life. Nor did she have any dreams of building up a stream of passive income so that she no longer had to work for a living.
So, at the age of 19 when I first entered university, I became a spender. I spend and spend what little money I had on things I didn't really need.
Why on earth would I do that?
Well, my actions were a result of my psychological need to be as different as I could from my mother. You see, back then, I simply hated my mom. She was homophobic, narrow-minded, selfish, and unreasonable. I wanted to enjoy life, and be free from her constrains. So what better way to live than to do everything she despises.
However, I was fortunate to have my wake-up call at the age of 21. My younger brother was 19 at the time. He and I suffered in the same negative household that my mother reigned. He too, wanted to get away and have a place of his own. But, how? We were so young and we had no jobs. He had became interested in personal finance and investment. He showed me that by using term deposit accounts with higher interest rates, I could get free money.
And I love the idea of getting free money! I mean, who wouldn't?
So we started to hit the libraries together on weekends and we picked up some personal finance books. From then on, we opened separate investment accounts with our banks, and by the end of that year, I had my very first investment portfolio.
My investment of 10k grew at an annual rate of 10% over the course of 2 years. I had managed to come up with that money by working at various part-time jobs and saving my scholarships and awards.
Hey, scholoarships and awards again, are like free money!!
After, I graduated from university and found a full-time job rather quickly.
From then on, I became extremely frugal. Money was all I thought about as I hated the real world. I mean, I have to spend 8 hours a day just to earn a living. To me, that was inefficient and stupid. I wanted to be free!! I want to work whenever I wanted to work and do things I loved with my time. Life is short!!!
So my obession started and I place my financial plan into action. What plan would that be? Well, read part 2.
How I did it! Saving 30k before the age of 25
December 4th, 2006 at 01:38 am
December 4th, 2006 at 02:17 am 1165198624
Also, I'm shocked that banks can give back 10% investments. I have to use a mutual fund to get that right now.
My mother is also a very frugal saver. Well, more like penny pincher, like yours I guess.
December 4th, 2006 at 02:41 am 1165200082
I think people should stash all their cash into banks rather than under their mattresses of piggy banks. There are great banks out there that pay very high interest rate! ING and PC Financial give rates around 4% (Canadian rates, btw). Then, look into buying the stock for your particular bank. Banks can be boring stocks, but they do give some nice dividend yields.
Saving money is fun. Passes on it.
December 4th, 2006 at 02:44 am 1165200276
Yeah, 30k in USD, which is about more than 3 Million yen in Japan. I guess I am already a millionaire in tokyo hahahah.
As for the investments, they are a combination of mutual funds, stocks, bank interests, index funds, and the alike. I believe the actual portfolio bares little value here since I am not a certified Financial Planner, and thus, cannot give advice about what funds to buy.
December 4th, 2006 at 03:36 am 1165203413
December 4th, 2006 at 01:18 pm 1165238333
Well, I dont' know if you know this or not, but US banks don't have stocks, index, or mutual funds. They only have CDs. For everything else, you have to turn to a brokerage.
But you're doing good!
December 4th, 2006 at 02:21 pm 1165242060
Yeah, it is a little different in Canada. Basically, you can open an account with your bank as an investment account that allows you to buy Canadian stocks and funds (as well as foreign funds) online at the same cost, if not less, as a regular brokerage house.
Perhaps different regulations.