RESET your personal finances

RESET is my book of the week

RESET with my book of the week

RESET is a book you have to read. This is if you are interested in personal finance.

Most of the personal finance/self-development books I have read are American. And are written mainly for Americans. RESET, is written for us Brits.

Spend less than you earn and invest the rest. This (I have read) is the foundation of personal finance.

But this might be the hardest part of personal finance. Especially, when you consider the current difficulties imposed by COVID.

What you will learn

The book is broken up into 6 parts:

  • Part I: What matters to you
  • Part II: Going Digital – How to future-proof your career
  • Part III: Declutter your life
  • Part IV: Getting F.U. Money – a Plan
  • Part V: Core Principles to Guide You in Work and Life
  • Part VI: 12 Do’s and 12 Don’t’s

You will learn some skills that will help you in the digital/information age. Information is coming at us thick and fast from our various devices. The more efficient you become with a computer or smartphone the better.

You will be reminded of the dangers of the internet and social media. Smart phones are a brilliant tool that we have come to rely on. But try not to react to every ping. Phones are very addictive, so we need to limit our usage if possible.

You will learn some budgeting skills. This isn’t exciting I know. What is exciting is getting to a point where you can invest.

The author will help you to save 100s of pounds each month. Then he will help you invest it.

He talks about going to Liddle, Aldi and Home Bargains. Or the LAHs as he refers to them – a Liverpool band from the 90s, I think.

Read this book and your financial literacy will massively improve – it’s important!

A case study

There are many ways to save each month. Quite a few are covered in RESET.

We will focus on the LAHs for now. The author claims that by going to the LAHs, his family saved £300 pcm. I don’t doubt it.

There is a new ALDI close to my house. Many of the items are half price compared to TESCO. For example, a decent bottle of red wine is £4 instead of £8 – this will save us a lot!

Let us say the Duffy’s save £300 per month with the LAHs. Let us go back a few years and imagine me and Mrs Duffy are 30.

We are going to put that money into a stocks and shares ISA. Based on research, we can achieve 7% interest per year. This will go up and down, but we are going with a set and forget strategy.

For more information on my set and forget strategy, visit: https://duffmoney.com/2020/03/13/1666/

The Duffy’s want to retire at 60. How much of an impact will that £300 have?

If we invest £300 every month, for 30 years, we will get £368,126.25. This is based on achieving a yearly interest of 7% (average).

We have invested £108,000 over this period. This means that the compound interest would be £260,125.25 – compound interest is worth understanding!

This £368,126.25 will massively help our retirement. It will take serious discipline to invest every month for 30 years. But no one is going to help you in retirement.

We are no longer in the industrial age. Final salary pensions don’t exist. And we need to learn about money.

What RESET has done for me

My financial literacy has improved.

I decided to write a blog because of RESET. This has given me an on-line presence. Writing a blog has made me realise how much I love writing.

My digital skills are improving all the time. This helps me at work to be more efficient. Even with my new digital skills, my head is often up my a**. Without these skills, I would probably need to find a new job.

It added to my index fund knowledge. This helped me choose my set and forget Vanguard index fund.

It made me look at my spending habits differently:

For instance, did you know that the cost of a four-dollar-a-day coffee habit over 20 years is $51,833.79.

This has forced me into stopping my daily Starbucks. I love Starbucks americanos. But I will have to stick to free coffee at work. It will be worth it when I’m in my late 50s.

Overall, RESET had made me realise I can retire early. I might not want to retire but it would be nice to have the choice.

Please get yourself a copy of RESET. We need to learn about money. And we have to look after our own futures.

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