Riding the Technology Curve

The future is here, it’s just not evenly distributed yet.” – William Gibson

Many people are excited by gadgets, myself included.  Whether it’s Apple’s iPod or Google Glass, these futuristic tech toys are fun and exciting.  When a new model comes out, people queue up, sometimes for days, in front of the store to be one of the first to own it.  The early adopters pay the most for it.  After some time, there is usually a price drop, then another, until eventually sometimes people simply discard the item in favor of the cutting-edge replacement.

Obviously gadget collecting is an expensive hobby, and the farther you lag behind the technology curve, the cheaper everything is.  As exciting as these things are, I try to practice restraint and avoid being an early adopter of anything.  As cool as they are, I’ve actually never owned an Apple product.  I’m not sharing this with you to make a statement about this one particular company; their products are incredible, like something out of an old science fiction magazine.  Rather, I want to point out that over my lifetime I’ve spent a total of $0 on Apple products.  I’ve never really felt that I NEEDED any of them.

Earlier this month, I discovered Project64.  This program emulates the Nintendo-64 video game console, and is available for FREE!  Pretty much any N64 game has a “ROM” available on the internet somewhere.  This means that anybody with a laptop can play and appreciate the entire library of N64 games today for free.  I never had an N64 as a kid, and I’m glad I never bought one for the original retail price of over $150, or any of the games for $50 or more.  Because now, I can enjoy them all for free!

Project64 isn’t even that new, it’s just that I only just discovered it.  There are plenty of other emulation programs for other systems out there too.  By just waiting a couple of years, you can eliminate nearly 100% of your video gaming costs!  And this same concept applies equally to other non-necessities like carrying your music around with you as well.  It’s totally cool, but do you really want it right now, at that price?  Try waiting, and saving that money instead.

We live in an age where the rapid advancement of technology makes these waits trifling.  Don’t want to pay hundreds of dollars for a flat-screen TV?  I bet somebody, somewhere is trying to give away a perfectly good tube TV.  Let the early adopters have their fun, and let their business ensure that companies like Apple will continue to create and innovate, with the pleasant knowledge that you will have access to all of the same things without needing to pay for the privilege.

EOM June 2013

My savings rate for June = 61%.

I spent $0 on gaming this month!

I spent exactly my regular monthly average of $70 on alcohol this month.  Same for my monthly $10 cell phone bill, $35 heat/electric bill, and rent.  No surprises there.

I spent more than usual on gasoline and on groceries (about double) due to a wonderful visit from my parents.  I wanted to keep them well fed and also show them around.  Although this lowered my savings rate a bit this month, it was well worth it!  These are the kinds of things it is important to spend on.  And I can easily afford it because of how good I am at saving up!

In the same vein, I shelled out $100 to rent my apartment complex’s guest apartment for the night that my childhood friends rolled through with their band, Swear & Shake.  They regularly tour the eastern half of the United States and this was their first show in Madison, WI!  So naturally I wanted to see them, make them comfortable, and show them a good time.  Again, well worth it.

Some other reasons my savings rate was lower than usual this month:

  • I made my semiannual auto insurance payment for $400.  I’ve been meaning to shop around for cheaper insurance.  Upcoming post maybe?
  • I spent about $100 on new summer clothes.  Since I’ve been keeping track, I’ve been spending about $165 on new clothes annually.  You can tell I’m not much of a shopper, although I do take advantage of the low prices at Kohls (I shop there almost exclusively).
  • I also made a cash withdrawal of $175 to refill my wallet.  They only take cash at the local farmer’s market I go to, and I also wanted cash on hand for my recent business trip.

It was a fun month, including a visit from my parents, from old friends, and a camping trip.  Even with all of this going on, I still managed to save 61% of my after-tax earnings!  I am still confident that by the end of this year, my overall savings rate for 2013 will be greater than my overall savings rate for 2012 (67%).  Onward and upward!

And remember, the best things in life are free… like this view!

IMG_20130627_120855

Rules and Risks

There is an old board game called LIFE where players move along a track from start (getting a job) to finish (retirement), and are subjected to random events along the way.  Win $5,000 in a karaoke contest!  Pay $100,000 for plastic surgery!  You also have the option to purchase auto insurance and home insurance to mitigate risk later on.  Flood!  Fire!  Good thing you picked those certificates up, right?  Of course, in real life not every event can be insured against.  And there will never be any shortage of life events, random or not.  Every action has its risks, and (real) life has its rules.  Break them at your peril.

life-car-pegs

One of life’s little rules are speed limits.  Breaking them is a common risk that many people take.  The benefit of speeding is reaching your destination sooner.  The risk is of getting caught, being issued a citation, and needing to pay hundreds of dollars to the state.  I was speeding recently, and a police officer was waiting for me on the other side of a hill.  He issued me a ticket for about $300.  On top of that, I was driving a car that belonged to my passenger, and her registration was not up-to-date, so she got a citation too.  That was a risk that she took to save the $75 registration fee.  I think in both cases the risks did not outweigh the benefits.

This and other recent events have definitely influenced me towards being much more risk-adverse.  Stop speeding; slow down.  Think critically about risks and potential gains.  Always ensure you are insured.  Be prepared for the worst case scenario.  This attitude will save you money (and peace of mind) in the long run.

Here is a list of actionable items that may help you practice this attitude:

  1. Do not speed.  Speeding tickets are expensive, and you may not be shaving off as much time from your trip as you think.
  2. Keep licenses, registrations, and insurance policies up to date.  You will avoid fines by renewing the former and mitigate risk by owning the latter.
  3. Keep an emergency fund.  You will have more options for when you encounter negative life events.
  4. Follow the rules, and pay attention to authority.  Be reasonable, but keep your head down.

Most of this is common sense, but it never hurts to refine ideas by giving voice to them.  You may only be between jobs for a month without health insurance, but if you couldn’t pay a hospital fee in case of an accident (worst case scenario) you should get an individual insurance plan, even if it is just for one month.  When all is said and done, avoiding the risk will almost always be the smarter choice.

In the case of my speeding ticket, the only thing I did right was number 3 on my list: having an emergency fund to cover it.  Here is to getting the rest right also, and not letting little speed-bumps (so to speak) prevent me from reaching financial independence by 35!  Because life, unlike LIFE, does not end when you retire.