Wednesday, April 21, 2010

Early retirement - part 1

The thought of early retirement

As I explained in the very first post, the reality of life and work in particular, made me find a way to escape this 'rat race', as it is called. I don't want to keep working for someone else, making their dreams come true. I want all my efforts to benefit my own life, in stead. I want to spend my days doing something I love to do.

You could take a different approach and accept the fact that it's just this job you don't like. In that case, finding other and more meaningful work, would be beneficial. But finding work you love is difficult and sometimes even impossible, depending on what you like to do in your free time. Not all hobbies can be turned into jobs.
One of my hobbies, for example, is martial arts. The only way, that I know, that allows you to earn money with martial arts, is by opening a dojo and instructing martial arts. I don't want to teach it, I want to keep learning.

Anyway, to get back to the point: I want to be free to do whatever I want. Another thing I always liked doing, was saving money. I never spent much money, so all the excess money went into 'piggy banks'. I had a lot of them, when I was a kid. So when I thought about those piggy banks, I made me think about money. I wouldn't have to work for someone else, if I had enough money.

So how do I get a lot of money?

I could marry a rich woman and throw her of a cliff at one of our trips to the sea-side. There are 2 problems with this idea: first, the Belgian coast doesn't really have cliffs that are high enough to make sure she's dead and second, it's not exactly legal. Such activities usually come back to bite you in the butt. On to the next idea...

I could marry a rich woman and keep her. But marrying for money? Nah, that's a relation that's doomed to fail. No rich woman for me.

I could win big with the lottery. But I don't play the lottery. Why not? I learnt statistics in school, which made me find out that you only have 0.00002 % to win the jackpot.
To clarify this: it's a form you fill in, where you can pick 6 numbers, going from 1 to 42. To win the jackpot, you need all 6 of them to be correct. This gives you (42 x 41 x 40 x 39 x 38 x 37 ) / ( 6 x 5 x 4 x 3 x 2 x 1) = 5245786 possibilities. That makes our chance (1/5245786)*100 = 0.00002 %. Or rounded that gives: 0%. The lottery? No thanks.

Robbing a bank, another great option. I once made actual plans to rob a bank, so I have really considered this option. I was only 14 at that time, so the plans weren't really that good, but I was playing with the idea. The problem with this, is that bank security has gone way up since then. It becomes more difficult to rob a bank and you would need special material. That material can cost a lot of money. It would also be illegal and like I said before, those activities usually come back to bite you in the butt. And even if you succeed, you could not live in the same country where you robbed the bank. Wait a minute... I could rob a bank in a country where the bank security is still somewhat low? No, it's still not a good idea. With international cooperation, it would not take long before they found you. You'd have to live in fear (of being caught) all the time. No thanks.

Gambling is another option. If you use the proper techniques, like flatbetting for example, you can steadily gain some money. It's all about money management. Spent little amounts, so you can loose a lot on the short term and still be a winner in the long run. That's how poker players can make a living playing poker. But I'm currently trying this with sports betting and I haven't had much success yet. I'm gonna keep trying this every NHL ice hockey season, but more as a hobby on a small scale. It's nothing that will make me enough money to become financially independent.

One of the best ideas to become rich, is by starting your own business. You'd have to work hard, but all the work you put into it, makes you money... makes YOU money. It's an option that I'm still considering, but I wouldn't have a clue as to what I would do for a living. I'm very bad at selling things. At the moment, I'm trying to get rid of clutter, by letting my brother sell it. He gets 50% of all things that get sold. I don't even like selling things. And another problem you get with starting your own business, is the social security you have to pay. It's at least 600 euro every quarter. That would be at least 2400 euro each year. You'd have to be able to make a decent living in order to pay for that and be able to pay the bills.
But it's not impossible, in fact, many people tried and many even succeeded. It's an option I'm leaving open for now.

The stock market provides opportunities to earn money too. I have some long term funds going, because I had money on my bank account that wasn't doing anything. I always wanted to buy real stocks myself, but I was a little affraid to do so. Many people lost money on the stock market and I didn't understand completely how it worked. But then this awesome thing happened: the economic crisis. It's not so awesome that many people lost their jobs because of it, but on the stock market, it means that most stocks go down in value. Waaaay down.

So when everybody started freaking out, I started gathering some information about stocks and the stock market. I sold one of my funds to free money for buying stocks and I bought my first stocks. You can make simulations, trying it out before actually doing it. But it's not the same, different emotions are involved. So I jumped right in and now I'm still doing it. It made me some money and I lost some money, but the most important thing is that I learnt a lot about it. I'm still learning, but this is a good way to make money and I'm going to utilize it to it's fullest potential. I actually love trading stocks. It excites me. So maybe I found something here... a hobby that could turn into a job perhaps?

There's still one more way to make money, that I have not mentioned. But I have a lot to say about it, so I'll leave that for the next post.