When I grew up, as a kid in 1990-2000s in Poland, no one talked about personal budgeting like I see it now in social media and TV. Everyone had a job, better or worse, earned and been payed at the beginning of the month and either spend it all on living, or saved a bit for a rainy day. This was a standard. If there was a need for a new furnitures – people got a loan. New car – loan. House – loan. Exotic holiday abroad – find it really cheap or get a loan.

All of this is very subjective, based on my own observations and experience.

As I grew up, I went to public school. As a standard, children learned about the history of the country, they learn about math, biology, foreign languages, art and religion. Almost all of what they were taught was a theory about the world around us with the intention, I guess, of using this knowledge in future studies or jobs – why otherwise would they need to know the advance math, the structure of the plant cell, or reactions of the atoms when mixing two substances?

I guess I will get to the point now – over all those years at school I have not been taught about things that will have the biggest impact on my personal life and heath: how to build lasting relationships between people, how to make love (and sex) to make it always new and exciting many years to come with the same partner, how to exercise the body to make it strong, durable and elastic (science behind it, not just lifting weights, or playing games), how to choose the right food and how to prepare it for daily consumption without loosing all its nutrients and taste, how to deal with stress, how to defend yourself in a dark street from group of criminals, how to encourage difficult children to listen, how to treat different illnesses, and many other things. Off course, among all of those questions, there is a subject of personal finance – how to manage money and how to invest them for a profit.

I think that people make bad decisions mainly due to lack of knowledge. They choose from a limited options which they know, the best they can, with the intention of achieving their goal as close as possible. In regards to investing it is usually “buy cheap items and sell them with profit” or “buy cheap items, fix them, and sell with profit”. Some individuals make stuff from parts which they bought, and sell complete units with profit, which is also kind of an investment. These are long therm, small profit investments. For bigger money in short time there were drugs, sex, violence, gambling and other things. This was the idea of the investing for profit I was growing up with.

When I became an adult and moved abroad, I was hit with different reality – extreme consumerism. In my country people got the loans for a big purchases, and for small items some creative thinking had to be applied. In my new place of living, everything was taken on a credit card. Shoes, electronics, handbags, holidays, dogs – anything that person wished for, could be bought right now for a credit. And deep debt was a new normal.

This freedom of purchase hit me hard and it was very difficult to get out of mindset: “I buy it on credit, because want it now!”. Again, a subject of strict monthly budgeting was more avoided by people than confessions about adventurous sex life with strangers. How bizarre!

At some point I stumbled upon a subject of “financial independence”, where person can live freely where-ever he chooses to, and not be anchored to his work place until retirement. This inspired me to dig deeper into the subject and I discovered few ways of passive income investing. As none of my friends were knowledgeable in the subject above the average Joe (they knew nothing useful, basically), I had to learn all the basics by myself. Out of all the options I have learned so far, I chose stock investing for dividends as the most suitable for me.

Is this the best option out there – surely not. Is it the fastest “get rich” choice? – nope. Is the safest way of investing – unfortunately not. But it does not require from me a finance degree, mountain of upfront cash or physical labour to turn it into profit. All I need to start is general knowledge of the businesses on the available market, consistent monthly investing and patience. Along side the life long savings, there is also monthly budgeting, which is a prerequisite of any financial stability.

The companies I invest in are multinational businesses which pay increasing amount of dividends for shareholders. This means that as long as I hold their shares and they are doing well in their business category, I will get “free” income, regardless of how I spend my day – on the sunny beach, in bed or working. Off course to receive an amount which will sustain me for a month, there must be a certain sum invested in the businesses, but as I buy the shares each month, the dividends I receive are reinvested to buy more shares, and this increase their number in my hold. The longer I do it this way, the faster I get to financial independence. The less unnecessary things I buy, the more cash I will have. This is where concept of minimalism come into play – another prerequisite of long therm investing.

Why do I wright all this things? To show another option to a reader, who may not have been aware of it before. To start a conversation. To learn from others about their thoughts and experiences. To share my thoughts and experiences.

 

Hope someone find it useful 🙂