LifeScore Chronicles #11: Show me the money 💸 💸
Hi there guys! Welcome you to the #11 edition of the LifeScore Chronicles (I am supposed to add here a little joke or something witty, but hey, it’s getting complicated!).
Anyway. This space aims to be your weekly guide to personal growth, with health and life hacks, productivity and consistency tips, plus clever insights to improve your overall well-being. Just 10 mins a week where you’ll bring home one or two things (hopefully).
So, let's get started!
Today’s summary:
🧮 Compound interest: 2, 3, 5, 8, 13, 21, 32…
🤑 I will teach you to be rich: Sure you will!
💸 Have your spending under control? Easy peasy!
🐖 Want to get some hacks to save money?
🧮 On compound interest
All benefits in life come from compound interest, whether in money, relationships, love, health, activities, or habits - Naval Ravikant
First off, a fact: I am pretty useless when it comes to economic education. Only in the last year I started learning a bit about it and come to understand how to use money on my behalf. You know the classic mantra, "Make your money work for you"? Turns out it's actually true.
Let’s start with the basics though. Compound interest is not just about earning interest on your initial investment; it's about earning interest on the interest you've already earned. As time passes, your original investment, along with the interest, grows exponentially. And if you leave the money there, working on its own, it will continue to accumulate interest based on the larger total.
It's the snowball effect that makes your money grow faster.
(For all those economic-savys out there: bare with me please, we’re getting there).
Now, imagine this in other areas, like learning. With compound learning, each piece of knowledge becomes a building block for more. The more you learn, the easier it becomes to understand and grasp new concepts in the future.
Or, moving into fitness and health. Every workout is an investment. Starting with small activities, even easy walks, you compound interest in your health. Each workout makes you healthier over the long run. It would be impossible to start by running a marathon, but you wouldn’t be able to run a marathon if you don’t compound interest in your activity level!
Anyway, to wrap it up because this is getting rather long:
Save a bit monthly, whatever works for you (automated funds, fixed interest accounts, equity investments, stocks, crypto, you name it). Put it to work, let it grow over time. It is incredible what compound interest can do for you.
Have an open mind and try to learn new things every day. Stay curious, assume you know nothing.
Never skip an active day. You don’t need to be an athlete, you just need to move. Walk everywhere, run, go to the gym, cycle, do zumba classes… even 10 mins a day will help (and we all have 10 mins a day, and if not, try to avoid using the phone just for one day and you’ll realize how much free time you do have!).
And that's it! No magic needed, just a bit of consistency and a method...
🤑 I will teach you to be rich
And of course, in this economic-themed newsletter, the content recommendation would be around money, right?
I am bringing you today some books and a Netflix series.
The first book is The Compound Effect, by Darren Hardy. This one is not strictly only money-related. The Compound Effect shows you how consistent, positive habits can create remarkable results. It's a book that goes about how daily choices compound into long-term success. "The Compound Effect" by Darren Hardy and "Atomic Habits" by James Clear share some similarities but they approach the concept from different angles, having TCE a broader focus, covering various aspects of life. Note: Nothing beats Atomic Habits, though.
The second book is “I Will Teach You to Be Rich” by Ramit Sethi (please don’t judge the book by its cover title). The book aims to be a go-to manual for mastering personal finance, with a blend of practical advice and a touch of humor (a bit annoying and forced sometimes though), but it goes through saving, investing, and making money work for you. Also, there’s a Netflix series, kind of a reality focused on how to handle money topics. Pretty interesting!
💸 Spendee: Your financial tracking companion
Alright, let's dig deep into the money topic a bit more with the weekly product recommendation. There are tons of apps out there doing the same, but I stick with Spendee because it's simple and well-designed, and the free version covers all my needs.
What is it for, you’re asking? As a finance tracker, it helps you log your expenses and income, tagging them with categories. At the end of the month, the app generates a report showing how much you've spent and earned, breaking it down by categories and giving you a monthly balance.
Once tracking becomes second nature, it's quite easy, and it helps to put things in perspective. For example, I thought I was burning money on coffee (I love having coffee after working out or after lunch), but as it turns out, not so much. On the other hand, eating out takes a substantial bite (pun intended), so we try to reduce the frequency.
Also, it is a nice way to detect stupid expenses that could be avoided or reduced. In the long run, it gives you a nice view of where your money is going.
Lastly, it also taught me a valuable lesson—rather than focusing on cutting expenses, increasing income is a more effective strategy. Going frugal like a monk might not bring happiness, but increasing your income through extra work, selling items online, or exploring other ways makes more sense (and brings better results as there is no limit there).
Give Spendee a shot if you want to keep an eye on your money and make smart moves!
🐖 Savings on Autopilot
If you combine a closer look at your expenses with some hacks to minimize your expenses and simplify the way you handle money, the cocktail is quite powerful.
But, how to do that? Well, there is no magic recipe, but let me list some (probably stupid) ways to optimize your relationship with money:
Automate savings: Set up an automatic monthly transfer to your savings or investments account. This way, you're consistently building your savings without even thinking about it. Again, even 50 bucks will do.
Unsubscribe from temptations: Unsubscribe from retail mailing lists. Less temptation in your inbox means fewer impulse purchases. And cleaning your inbox brings a lot of satisfaction. At least if you’re like me.
Wait 48 hours on material purchases: Once you put something in your shopping cart, leave it there for, at least, 24-48 hours. If you still want it, buy it.
Save your coins: At the end of each day, empty your wallet and put all your coins into a piggy bank. Once a year, empty it and put the money into your savings account (or use it for something you’ve been willing to buy for a while).
Cashback apps and credit cards: Use cashback apps or credit cards when shopping. Many apps offer cashback or rewards for purchases you were already planning to make. It is not a lot of money, but hey, it’s free money up for grabs! Nice cards to use: N26 and Revolut. Apps: LetyShops, Swagbugs, Sweatcoin.
Review Subscriptions: Review your subscriptions, ideally twice a year. Cancel any you're not using frequently.
Of course, there are tons of ways to save money, but I don’t want to make this eternal. Something I repeat myself is a couple of sentences that help me focus:
Financial health is Self-Care: Just as you invest time in your physical and mental well-being, investing in financial health contributes to a better life.
Money is a tool, not a goal: Shift your perspective on money. Understand that money is a tool to achieve your goals, not the goal itself. Invest in education, skills, and experiences.
Enough about money, I hear? OK, time for the data dive!
📊 Data Dive
You know how this works already. Every week, a little look at the LSC performance:
116 Subscribers → Alright, goal for the quarter: Hitting 500 subscribers!
2 Unsubscribed → And minimise this number as much as possible, otherwise we won’t make it to 500!
65.72% Open rate → The goal here is to stay in the 60-70% range
Just one more thing before leaving. As much as we have been talking about money, remember just one thing: Money can’t buy you love.
And that’s a wrap! Until next week, take care and recommend LifeScore Chronicles to your friends, work colleagues, relatives, lovers, husbands or wives, gym friends, pets... the more the merrier!
Stay safe and healthy!