Showing posts with label personal finance. Show all posts
Showing posts with label personal finance. Show all posts

Don't Be Lazy; Go Do It Right Now

Monday, April 27, 2009

I am a lazy person. Seriously. I am pretty lazy.

The problem is that I am also a high achiever. I am very driven and have become even more driven in the last few years of college. The way I see it, the value of self-awareness is to:
  1. Figure out my goals – what I value in life, both professionally and personally.
  2. Become aware of my character flaws that stand in the way of reaching my goals.
  3. Come up with tricks and fixes to counteract those character flaws.
I got away with laziness all throughout high school and college. In high school, my only extracurricular activity was being a news co-editor of the high school newspaper during senior year (what Stanford saw in me in 2004, I have no idea). In college, I spent the first few years in laziness and fear of committing my time. Only by the end of junior and beginning of senior years did I realize that I should have done anything and everything that interested me.

So I went lightning speed and in my last quarter at Stanford, I took a full graduate unit load, TA-ed a microeconomics course and wrote an undergraduate thesis. Good times.

In January 2009, I suddenly found myself on my first job, sitting in an office for 8 hours a day and performing magic tricks with Excel. I went from being busy with 100% control of my time to being busy with only 30% control of my time. How do you get any of your personal goals or life errands accomplished when you are working nine to done? Here was an opportunity to let my laziness take over.

But I did not let it. And I do not let it every day. I have been putting in operational life rules by which I live so that my laziness does not take over. So what are they?

1. Lunch breaks are not only for eating lunch, but running errands. Whether it is a quick trip to the shoe cobbler, Walgreens, Safeway or a quick call to the bank, doctor's, etc, I make it a rule to run at least one errand or take care of at least one thing during the weekday lunch hour. It does not matter how small it is. It is all about baby steps. Chipping away at my to-do list one errand per lunch makes a huge difference at the end of the week.

2. Why put something off for tomorrow if you can finish it in the next 15 minutes? This one I borrowed from my advisor who quoted my former office mate. If you can write up a quick note, quickly call the bank to take care of an issue, open a Roth IRA, etc. in the next 15 minutes, just do it. Seriously, stop reading and go do it right now (and then come back to finish the post). This rule works well for both work and personal projects.

3. If you are not feeling efficient and feel like you are wasting time, immediately take care of two tasks on your to-do list. Just like inspiration breeds more inspiration, productivity breeds more productivity. The more you accomplish and cross off your to-do list, the more inspiration you will feel to keep going. The 10th task will feel like a breeze and you will not be able to stop yourself from crossing off more and more tasks. Each task will become easier and easier.

4. When you get home at night, clean the room and the kitchen before your brain figures out what you're doing. I usually fly into the apartment, throw my jacket and purse on my bed, run into the kitchen and start furiously doing the dishes. Before I know it, the dishes are done. I'm still pumped up, so I clean up my room, put all my clothes in the closet and take out the trash. The routine takes 20 minutes, but by the time I realize how much cleaning sucks, everything is done! Simple as that.

5. Accomplish at least one thing a day that is just for your own personal development. I call these "personal projects." A personal project can be the smallest thing, such as writing an email that you have been putting off (like the one I wrote to Ramit Sethi last week...it was so funny, but he still blew me off...whatever). It can be a blog post. It can be sewing up a torn piece of clothing (yes, I do sew up my opaque tights...those suckers tear after like one wear and it would be too annoying to throw them away).
The importance of this one project per day is to feel that you are not only your work and that you are taking proactive steps to grow personally outside of it. The most important investment you will make is investing in yourself.

The common thread in all the rules? Be spontaneous, do before you have time to think of all the obstacles and just keep going.

By following these rules for the past three months, I have managed to set up a dynamic spreadsheet tracking all my spending, write some blog posts, connect in person with a few awesome bloggers like Penelope Trunk and Jenny Blake and become a personal finance mini-expert.

Many more projects are in store, but I have forgotten what it is like to be lazy. Because when I get home at night, I cannot wait to work on my personal project of the day.

Everyone Run and Open a Roth IRA Right Now

Friday, March 20, 2009

Being a huge nerd, I have been reading many personal finance blogs lately. I cruised through college with my parents paying for my credit cards, so being on my own financially is both terrifyingly confusing and extremely exciting. It also does not hurt that my job is all about making crazy dynamic Excel spreadsheets of money moving around, so I feel very empowered to take charge of my finances. I can understand and track where everything is going.

My favorite personal finance blogs are Get Rich Slowly, I Will Teach You to Be Rich, Tough Money Love (this one is superbly feisty) and, most recently, No Debt Plan.

In fact, learning about personal finance is one of my new obsessions, which is kind of ironic, given how my iPhone was just stolen 2 days ago and now I have to pay $541.42 to replace it at the early upgrade price. But that is a whole different (and tear-inducing...in myself) story where I hate on AT&T and Apple and low life thiefs. Back to personal finance.

I started following No Debt Plan a few weeks ago and today stumbled upon a post on how to retire easily on $1,000,000. Now, given my inability to trust calculations unless I do them myself and my mastery of Excel spreadsheets, I decided to test Kevin's conclusions, as well as play around with some sensitivity analyses by altering assumptions about the annual return, compounding, etc.

Kevin basically says that if you start contributing $5,000 annually to a Roth IRA account at 24, STICK WITH IT, retire at 66 and assume a "conservative" annual return of 7%, you will have amassed $1.2 million of untaxable (!) income by the time you retire.

Astounding, but true. I seriously have to open a Roth IRA account:

Omg I Need to Open a Roth IRA Omg I Need to Open a Roth IRA irina.issakova6516

Get this. If I start at 23 and retired at 64 and stick to this plan, I would contribute a total of $205,000 and earn a total of $1,018,036 (!!!) in interest. OMG! You never believe it until you make your own dynamic spreadsheet.

I am now keeping this spreadsheet as a shameful reminder of the fact that I currently do not have a Roth IRA. But all of you out there. Run. Open one tomorrow. I know I will be (well, at least by the end of 2009).

Next step: figure out asset allocation based on my retirement profile. I'm guessing somewhat aggressive during these crazy stock market times.