Monday, March 26, 2007

Learning From Other's Experiences

Earlier, I had written The Secret to Career Success - Get A Jungle Guide. The principle is to find an experienced person who as done it before to guide one to success. The principle can also be applied to personal finance. Here are some examples by Silicon Valley Blogger at The Digerati Life, and Golbguru at Money Matter and More Musings, that I put in the Jungle Guide category.

My Foolish Money Mistakes: Moves That Cost Me More Than $1000 Each presents 13 experiences by Silicon Valley Blogger. Here are the headlines of a few of the "moves" that I have tucked away in the "don't do that" part of my brain.

  • Acting as one's own general contractor. I periodically contemplate doing this for a future home. After all, I am an engineer:-) However, I know I would not enjoy being a communication link between the architect and the builder. Hence, based on SVB's experience, I will pay a general contractor and avoid a mess.


  • Buying expensive items that nobody uses. As my income increases, so does my interest in expensive things that I wouldn't fully utilize - e.g. vacation property, boats, club memberships. So far I have resisted temptation as I try to buy only what I need.


  • Not backing up my computer. I never backed up our home computer until three people I knew had hard drive crashes in the same week earlier this year. Their experience convinced me a backup was worth the cost and effort. I bought a 120 GB WD Passport Portable HD from Best Buy at a sale price of $99.00 plus tax. Now I back up our computer at least once a month.

How I Killed My Debt and What I Learned From It discusses how Golbguru eliminated his debt in about three years. While hundreds of thousands of bloggers post about how they are going to get out of debt, here's a blogger that has actually done it. This is his summary on lessons learned:

"Recognize your debt early and face it fast. Start making payments aggressively; it hurts initially, but if you don’t do this …credit card interest rate will hurt…thats even worse. It takes time for debt to vanish, so be strong and keep attacking it. Only when you kill your debt will you see the benefits of your savings/investments. It doesn’t make sense to have a bunch of money in your savings account while your are loosing tons of it on credit card interest. Once your are free from debt, its important to keep it away; spend on credit cards only as much as you can pay up by the end of the billing cycle. It took me almost three tough years, but it might take you more (or less) so prepare your mind for that."

While I have never had credit card debt, each of Golbguru's lessons were true for me when I eliminated other debt, such as my student and car loans.

Both of these posts have excellent strategies, tips and guidance from people who successfully navigated through their own personal finance challenges. If I haven't had the experience myself, I hope to learn from others who have already done it so that I can avoid mistakes and achieve my goal faster:-)

For more on Strategies and Plans , check back every Monday for a new segment.

Photo Credit: morgueFile.com, Clara Natoli

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

3 comments:

Golbguru said...

Wow...you still remember that post. It's long gone and vanished in heaps of archives.

Thanks for shining some light on it.

There is another thing that might motivate your readers...I got rid of the debt in my student days itself...there is no need to wait till you get a good job and such. :) Seriously, with the kind of stipend I get, it won't be an exaggeration to say - If I could do it...everyone else could do it.

The Digerati Life said...

Hi Super Saver,
I'm glad you could avoid the messes I've encountered. I'll tell you now that between the general contractor mistake and the backup negligence, I lost around $3,000! I should've just refused to act as the gen. contractor and made either the architect or the builder do a dual role.... I wish you the best on your home projects! I look forward to hearing about them when you get into it.

I enjoyed reading about Golb's advice on your post as well! :)

Super Saver said...

Golbguru and SVB,

Thanks for your comments. Both of your posts shared excellent insights about your experiences. I learned quite a bit from them.

There are no house building plans in the near future. However, I will defintely remember SVB's point about a general contractor should I ever get involved in house construction.