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I'm just going to assume the guy in this photo made more money than I can fathom.
While the majority of the focus of Part Time Picker will be on making extra income through picking junk locally and then reselling on the internet marketplace, I'll also be checking in with some personal finance strategies and anecdotes. The extra money I made through Part Time Picking was a major component of getting my financial life life in order, but it wasn't the only thing. It was a long process of education, introspection, and discipline.
As you no doubt read in the "My Story" page, six years ago I was in trouble. I was nearly buried alive by all my collected "treasure", I had no savings or investments, and the credit card debt was stacking up. I was recently married and knew that I had to change sooner than later, I just didn't know where to start.
So I started to read. Before I finished my first personal finance book (Personal Finance for Dummies), it was clear that many of the concepts of creating and maintaining wealth were not very complicated. Each successive book drove these same points home. I'm a very good procrastinator, so I know how easy it is to put off actually doing something while I "do more research". It was from the simplicity of these basic concepts of money management that I was able to take action.
So here are some of these basic concepts that have provided me with the foundation to get myself back on my feet.
Earn more than you spend. It's that simple. It seems so self-evident, yet I spent most of my life without really understanding, and acting upon, this concept. Money comes in and money goes out. If more is coming in than going out, you are accumulating wealth, also known as saving. If more is going out in expenses than coming in, you aren't saving. In fact, you're probably borrowing money and going into debt to cover the gap between earnings and expenditures.
Now, there are two ways to earn more than you spend. You can earn more or you can spend less. Or, even better, both. There are hundreds of books and blogs and magazine articles with lots of fantastic (and lousy) ideas for how to earn more or spend less. Spending less is not a fun as earning more, but it is often the more readily actionable of the two ideas.
Once I had the spending less concept down (it took a while), I was at least able to stop digging myself further into debt. Then things really turned around for me when I figured out how to earn more. That's where Part Time Picking comes in.
Pay off your debt! That money I borrowed in the form of credit cards was expensive. Especially when I chose to ignore the idea of paying off current loans before taking on new ones. While some types of debt are necessary and can even up your earning abilities (i.e. student loans or a decent home mortgage), I'm talking about consumer debt here.... Buying shit I don't need with money I don't have.
The interest rates on my credit cards were much higher than any interest I would be getting from investments, so I focused on paying those off first. Until I started to educate myself on personal finance, I just simply didn't understand how much credit cards were messing up my life. Or maybe I did understand and I just wouldn't face up to it.
Invest what you save. Outside of a liquid (meaning very accessible) savings account for emergencies, you should invest your saved money so that it can grow while it your just chilling. Now, the concepts and procedures for investing are varied and complex. You don't want to invest stupidly and lose all that money you've saved. You should have an understanding of any investments you choose to own. You need to know the risks, the expected returns, how those returns stand up to inflation, the tax implications, and what exactly it is you are giving your money to.
You definitely need to understand the concept of diversification. Read a book. Then read another book. If this stuff doesn't interest you, hire a financial advisor, or at the very least, learn about Index Funds. Don't just let you money sit there losing value (from inflation). Put your money to work for you by investing it.
The complexity of investing, much of which I think is intentionally confusing, always made me feel stupid and inferior. I felt like the world of investing was strictly for millionaires and corporations. However, once my debts were paid off, I cautiously opened a brokerage account and started to learn about mutual funds and bonds. Once I got my first statement of reinvested dividends, I was hooked.
Which brings me to my final point: Change your attitude about money. The biggest shift in my financial outlook came not from education and execution, but more so a change in my relationship with money. I had long believed such sayings as "Money is the root of all evil" and "Money can't buy happiness". It's no wonder I was always broke.
I honestly used to think that having more money would be a problem and make me unhappy! I don't really know where these beliefs came from, and I wasn't even very aware of them until I did serious introspection. It was not long after I consciously decided that having money was not incongruous with having happiness that I discovered Part Time Picking. I honestly believe that my new attitude towards wealth opened my mind to opportunity.
So there is my quick and simple roadmap towards riches. Obviously, each of these concepts can be (and has been) greatly expanded upon. In two weeks we'll start talking about my favorite of all these ideas... earning more money. See you then.