The old setup was Ghost on a virtual machine. Ghost is good software, that part was never the problem. The problem was that I had turned my writing into a server I had to run. There was a database to back up and a Linux box on the internet that was mine to patch (I run a homelab for fun, so I told myself this was fun too, and look, sometimes it was).

Here is the part nobody tells you about self-hosting your blog: the server does not care whether you are writing. Between December 2020 and June 2022 I published nothing. The droplet did not mind, it billed me $12 USD every month either way. Same story for most of 2024. I paid for the machine for about four years, which comes out to roughly $576 USD (about $790 CAD, and yes our dollar is really like that), and for long stretches of it the only thing the server was serving was my own guilt.

I want to be clear that the math was always available to me. I am the guy with the budgeting spreadsheet. I just never put this number in it, because the spreadsheet is for decisions and I had already decided the server was fine.

What changed: I rebuilt everything as two static sites. This one for the stories, and Informal Engineer for the technical procedures. Static means the pages are just files, they get built once and copied to Cloudflare's edge, there is no database and no admin panel, nothing that can go down at 2am. The old URLs from 13 years of impulse projects survive through a redirect map, which took longer to get right than the sites themselves (this is a known thing, nobody believes it until they do it).

The new bill: $0 a month for hosting on Cloudflare Pages' free tier, plus the domain renewals I was paying anyway. Publishing is a git commit. If my homelab burns down, the sites do not notice, and I say that as someone whose homelab is the single most monitored thing in the house.

The old me would probably not listen to any of this. He wanted to run a server, and the tutorial he wrote still holds up if that is the itch you have. But if the goal is writing on the internet, the answer is static files, and it took me $576 USD to be sure.

In today's fast-paced world, where new health trends emerge almost daily, it's easy to overlook fad practices. One such practice, which has recently gained traction, thanks to users like Andrew Huberman and Ali Abdaal, is mouth taping. Yes, you read that right – taping your mouth shut before bed. As bizarre as it might sound, this method, aimed at promoting nasal breathing during sleep, has a surprisingly profound impact on overall well-being.

About 16 months ago, I decided to take a leap into this unconventional practice. Like many, I was initially skeptical. Could a small piece of tape really make a difference in my sleep and health? But as I learned more about the science behind it and heard anecdotal success stories, my curiosity got the better of me. This blog post is a journey through my personal experience with mouth taping, coupled with scientific evidence that supports its various health benefits. From enhancing sleep quality to potentially aiding in respiratory conditions, I've discovered firsthand that mouth taping is more than just a passing fad.

Personal Experience

When I first heard about mouth taping, I was skeptical. The idea of taping my mouth shut every night seemed unusual, to say the least. However, driven by a blend of curiosity, and a desire to reduce my mouth breathing, I decided to give it a try. The initial nights were an adjustment, especially because I have a beard, and boy does it hurt sometimes, but soon, it became a part of my nightly routine.

It may sound like I was the one who decided to make it part of my nightly routine, but in actuality it was my wife. At this point, she reminds me to tape my mouth before bed. Things we do for love.  

The first change I noticed was in the quality of my breath. Mornings, once marked by a dry mouth and stale breath, is significantly better. My tonsils are typically never inflamed anymore and I oddly don't get sick as often anymore either - however this could just be coincidental. This was just the beginning.

Another surprising benefit was the physical change in my facial appearance. The puffiness and bloated look I often woke up with started to decrease, giving way to better-defined jaws. But perhaps the most notable change was reported by my wife – my snoring, which had been a nightly disturbance, ceased entirely.

I noticed a considerable reduction in my tendency to breathe through my mouth during the day. This switch to nasal breathing seemed to offer an improvement to my respiratory health.

The Science behind Mouth Taping

While my personal experience with mouth taping has been overwhelmingly positive, it's important to understand the scientific underpinnings of this practice. Various studies have shed light on the potential health benefits of mouth taping, particularly in areas like asthma control, sleep bruxism, sleep architecture, and mild obstructive sleep apnea. However I wanted to explore if it is necessary for day to day users.

Asthma Control and Mouth Taping: A study by Cooper et al. (2009) focused on the impact of mouth taping on asthma control. Although no significant differences were observed in asthma control compared to usual breathing methods, the high acceptability among participants suggested other benefits. Many, including myself, have experienced a subjective improvement in breathing and a reduction in nocturnal asthma symptoms, likely due to enhanced air filtration and humidification from nasal breathing.

Relief in Sleep Bruxism: Mouth taping might also offer relief for those suffering from sleep bruxism. According to Keskinruzgar et al. (2019), techniques akin to mouth taping, such as Kinesio taping, effectively reduced muscle pain associated with bruxism. This aligns with my experience, where I noticed a decrease in jaw tension and morning discomfort, pointing to its benefits in managing bruxism symptoms.

Enhancing Sleep Architecture: Teschler et al. (1999) found that mouth taping in patients using nasal bilevel ventilation improved sleep quality, indicated by reduced arousal and increased REM sleep. My experience echoes these findings. I've observed a deeper, more restorative sleep and not waking up as often during the night.

Mouth Taping in Mild Obstructive Sleep Apnea: The impact of mouth taping on mild obstructive sleep apnea is particularly notable. Lee et al. (2022) showed a significant reduction in the apnea/hypopnea index and snoring index among patients. This mirrors my wife's observations of reduced snoring.

Mouth Taping Detailed Benefits

Since starting mouth taping, I've noticed several specific improvements:

Better Breath and Improved Sleep Quality: The most noticeable change was in my morning breath, which became significantly fresher. My sleep quality also improved. I started experiencing deeper, more restful sleep, waking up feeling refreshed.

Reduction in Facial Swelling and Improved Jaw Definition: Another unexpected benefit was the physical change in my facial appearance. The usual morning puffiness reduced, and my jaws began to show better definition.

Decrease in Brain Fog and Grogginess: The mental clarity I gained was substantial. The brain fog and grogginess that used to linger in the mornings began to dissipate, improving my productivity and mood throughout the day.

Elimination of Snoring and Drooling: My wife noticed that my snoring had stopped, a change that positively impacted both of our sleep qualities. Additionally, I used to drool quite a bit in my sleep, which has now completely ceased. This reduction in drooling not only makes for a cleaner sleep experience but also suggests an improvement in overall sleep hygiene.

Reduced Tonsil Irritation: Previously, I often woke up with irritated tonsils. Since I started mouth taping, this issue has disappeared. It appears that the switch to nasal breathing has had a positive effect on my throat health, reducing the irritation that used to be a regular part of my mornings.

Reduced Mouth Breathing: During the day, I find myself naturally breathing through my nose more often, leading to a decrease in mouth breathing. This shift has contributed to an overall improvement in my respiratory health and general well-being.

Mouth Taping Misconceptions

When I first mentioned mouth taping to friends and family, their reactions ranged from disbelief to curiosity. It's a reaction I understand well, having had similar reservations initially.

It's natural to worry about taping one’s mouth shut at night. However, the tape used is typically gentle and designed for this specific purpose. It's not like using regular adhesive tape. It allows for easy removal and is safe for use on the skin.

Another common misconception is that mouth taping might lead to suffocation. The reality is that, for most people, nasal breathing is more than sufficient to maintain proper oxygen levels during sleep. However, it’s crucial for individuals with respiratory issues or those who are unsure about their nasal potency to consult a healthcare professional before trying this - I am not a doctor, I am an engineer, so listen to them, not me. I just want to share my experience.

Finally, there's skepticism about the effectiveness of Mouth Taping. While it might seem too straightforward to be impactful, the subtle shift from mouth to nasal breathing can have a notable effect on sleep quality and overall health.

Guidance for Beginners

For those interested in trying mouth taping, here's a bit of advice based on my experience:

1. Start with the right tape. Look for one specifically designed for mouth taping. I prefer the waterproof tapes.
2. Ease into it. Begin with pressing your lips together and taping only in the middle of your lips. Once you become more comfortable you can try to tape the whole mouth, but it may never be necessary.
3. Listen to your body. If it feels uncomfortable or you're struggling to breathe comfortably, remove the tape.
4. Consult a healthcare professional if you have any concerns, especially if you have existing health issues. Remember, that I am just a random person on the internet, and what works for me, won't necessarily work for you.

Tape Recommendation: Look for Waterproof Medical Tape that is at least 1.5" - 2" inches wide. These can be found in most pharmacies. This is the one I use that can be found at Shopper Drug Mart in Canada.

Conclusion

My experience with mouth taping has been surprisingly positive. It's a simple practice that has brought significant improvements to my sleep quality and overall well-being. While the scientific evidence provides a compelling backing, it's important to approach this practice with caution and seek professional advice if necessary. For those curious about trying mouth taping, it could be a worthwhile experiment in the quest for better sleep and health.

The cost of meetings isn't just financial. It also encompasses the loss of time, energy, and creativity. Large organizations may waste up to $100 million per year on unnecessary meetings. Smaller companies, with around 100 employees, could save approximately $2.5 million annually by reducing needless meetings.

The financial aspect is significant, but the broader impact on workplace efficiency is even more critical. Meetings are essential for collaboration and decision-making, but they also have the potential to be inefficient. Recognizing and addressing this inefficiency is key to improving workplace productivity.

I will explore the reasons behind the failure of many meetings, propose strategies for making them more effective, and discuss how improved meeting management can impress leadership and benefit the entire organization.

The True Cost of Meetings

Financial Impact

The financial toll of inefficient meetings is more substantial than it appears at first glance. In large corporations, the annual loss can reach up to $100 million. For smaller companies, particularly those with about 100 employees, cutting down on unnecessary meetings could save around $2.5 million per year. These figures are not just hypothetical but are based on real-world data and studies. They highlight a critical area of potential cost-saving that often goes unnoticed in budget reviews.

Impact Beyond Money

The true cost of meetings extends beyond just financial losses. It includes the loss of time - a resource that, once spent, cannot be recovered. An average employee spends a significant portion of their workweek in meetings, many of which might be unnecessary. This time could be better spent on productive tasks, creative endeavours, or even rest, leading to improved overall well-being and job satisfaction.

Moreover, the energy and creativity drain caused by excessive meetings cannot be understated. Engaging in unproductive meetings can leave employees feeling fatigued and uninspired. This can have a domino effect on their work, dampening innovation and reducing the quality of output.

Case Studies and Examples

To put this into perspective, let's consider a few examples. In some organizations, meetings are convened to discuss topics that could have been effectively communicated via email or a brief memo. In others, routine status updates consume time that could be used for strategic planning or skill development. These scenarios are not uncommon and signify a larger trend of meeting mismanagement in the workplace.

Let this sink in.

The Potential Time Waste of Meetings

Importance of Meetings

Meetings are indispensable for collaboration, decision-making, and communication in the workplace. However, not every meeting is necessary or productive. Identifying and eliminating meetings that don't add value is crucial for efficient time management.

Insights from Adam Grant

Adam Grant, in his TED Talk "WorkLife," discusses the inefficiencies often found in modern meetings. He points out that many meetings are held for matters that have little bearing on work productivity, such as discussing minor technical settings or personal preferences. These types of meetings contribute little to organizational goals and can often be avoided.

Examples of Inefficient Meetings

For instance, meetings convened to discuss trivial topics like Zoom settings or favourite pizza toppings are clear examples of inefficient use of time. While these discussions might be well-intentioned for team bonding, they often do not justify the time spent, especially when they become routine or lengthy.

Perspective of Organizational Psychologists

Organizational psychologists like Steven Rogelberg suggest that meetings often fail to realize human potential and can be counterproductive. Humorist Dave Barry echoes this sentiment, humorously critiquing how meetings can turn into time-wasting exercises.

Real-Life Implications

In practice, this means that a 30-minute reduction in a meeting with 20 people can save a collective 10 hours. This time could be redirected towards more productive activities, directly impacting organizational efficiency and employee satisfaction.

Why Meetings Fail

Root Causes of Meeting Inefficiency

The inefficiency of many meetings can often be traced back to their purpose and execution. According to organizational psychologist Steven Rogelberg, about a third of all meetings are deemed unnecessary. This high percentage indicates a systemic issue within workplace culture where meetings are scheduled as a default, rather than as a strategic tool.

The Impact Beyond Time Loss

Meetings that are poorly planned and executed not only waste time but also have broader implications. They can sap creativity, leaving attendees feeling drained and less capable of contributing effectively to their work. Furthermore, the stress and frustration associated with unproductive meetings can affect employee morale and mental health.

Execution and Purpose

A key factor in meeting failure is a lack of clear purpose. Meetings without a specific goal tend to meander and lose focus, resulting in unproductive time spent. Additionally, poor execution, such as a lack of agenda or ineffective moderation, can derail even the most well-intentioned meetings.

Strategies for Improvement

Understanding why meetings fail is the first step towards improving them. By focusing on clear objectives, precise agendas, and effective facilitation, many of the common pitfalls can be avoided. This requires a shift in how meetings are perceived and approached within the organization.

Strategies to Transform Meetings

Redefining Meeting Necessity

Before scheduling a meeting, it's essential to assess whether it's truly needed. Ask if the meeting's purpose is for decision-making, learning, bonding, or action. If the objective can be achieved through an email or asynchronous communication, choose those options instead. This step helps to filter out meetings that do not add significant value.

Optimizing Meeting Length and Format

Challenge the standard 30-minute or hour-long meeting format. Experiment with shorter meetings, like focused 15-minute sessions or stand-up meetings, to keep discussions concise and on-point. This approach can lead to more efficient use of time and prevent unnecessary prolongation of discussions.

Curating Attendees

Carefully consider who needs to be in the meeting. Invite only those with relevant expertise or decision-making authority. Over-inviting can lead to bloated, ineffective meetings. A policy like Microsoft Japan’s, which limits meetings to five attendees unless specially approved, can be a useful guideline.

Revamping the Agenda

Transform the agenda from a list of topics to a set of questions that need answers. This shift encourages attendees to think critically about the issues at hand and to come prepared with ideas, enhancing engagement and productivity.

Promoting Active Participation

Encourage diverse contributions by framing agendas as questions and rotating meeting leadership among team members. This approach fosters a more inclusive environment where all attendees feel valued and are more likely to contribute actively.

Case Study: Microsoft Japan

Microsoft Japan experimented with a '4-day work week' and found that shorter meetings led to a significant increase in productivity. By limiting meeting times and attendees, they demonstrated that efficient meetings could contribute to a better work-life balance and higher overall productivity.

Impress Your Boss with Meeting Efficiency

Photo by krakenimages / Unsplash

Implementing effective meeting strategies is not only beneficial for productivity but also an opportunity to demonstrate leadership and foresight.

Here's how you can impress your boss and make a positive impact on your team and organization:

Showcasing Leadership

By advocating for more efficient meetings, you position yourself as a proactive leader. This involves not just suggesting improvements but also taking the initiative to implement them. For example, if you're leading a meeting, try applying the strategies discussed earlier, such as a focused agenda and a curated attendee list. Your ability to run efficient meetings can set a standard for others to follow.

Demonstrating Time and Cost Savings

Efficient meetings can lead to significant time and cost savings. Presenting these benefits to your boss can be a powerful way to showcase the impact of your initiatives. For instance, calculate the time saved by reducing the length of meetings and show how this extra time has been reallocated to productive tasks. This tangible demonstration of efficiency can be very persuasive.

Enhancing Team Productivity and Engagement

An immediate benefit of efficient meetings is the improvement in team productivity and engagement. When meetings are concise, focused, and involve the right people, team members are more likely to be engaged and contribute effectively. This can lead to faster decision-making, more innovative ideas, and a more dynamic work environment, which are all likely to be noticed and appreciated by your boss.

Personal Initiative

Taking the initiative to evaluate and improve meetings in your organization shows a commitment to continuous improvement. It reflects your dedication to not just your personal growth but also to the betterment of the team and organization.

Conclusion

In reflecting on my early career experiences with frequent and often lengthy meetings, I've come to appreciate the profound impact that efficient meeting management can have on both personal productivity and organizational success. This journey from realization to action embodies a shift towards a more mindful and purpose-driven approach to workplace collaboration.

The financial and time savings from reducing unnecessary meetings are substantial, but the benefits extend far beyond these tangible measures. By fostering a culture of efficient meetings, we can unleash the full creative and innovative potential of our teams, enhancing job satisfaction and overall workplace morale.

As we've explored, transforming meetings isn't just about cutting down their length or frequency. It's about rethinking their purpose, ensuring active participation, and continually seeking improvements. The strategies discussed are not exhaustive, but they offer a solid foundation for anyone looking to make a meaningful change in their approach to meetings.

I encourage you to start evaluating your meetings with a critical eye. Are they necessary? Are they efficient? Are they engaging? Implement these changes gradually and observe the positive impact on your work life and the impression you make on your peers and leaders.

I am writing this article right after my lunch break where I had leftover steak with earl gray tea because that is all we have in our office. I had several large project deliverables that needed to be closed out today, and I wanted to take the energy from that and put it to use.

This week, I have started to re-read one of my favorite books -Never Split The Difference by Chris Voss. Re-read is a little misleading since I am actually listening to the audio book during my commute to work.

Album of choice this week has been DAMN by Kendrick Lamar.

I have actually stayed away from Podcasts this week, too many are talking about the FTX incident. Which is serious, and I am very lucky that I did not have any capital on the exchange at the time. But I have consumed as much as I needed to on Twitter and did not need more confirmation on the same story.

Building A Daily Writing Habit.

I have recently started implementing golden time blocks to have a few hours each day that is reserved for building skills without distractions.

No Distractions.

No Responsibilities.

Only Focus.

Just me and my work for ideally two hours. If you are cringing at this idea, here is a way I reframed the problem: when you are taking a shower, are you checking your phone? When you have shampoo in your hair are you reachable by an Instagram notification?

If your answer is no, and I truly hope it is. Just begin to pretend that your time blocks is the time you spend in the shower. These blocks should be planned in advance, blocked on your calendar and ruthlessly defended from anyone or anything that attempts to interfere with them. They should be established as an un-cancellable meeting with yourself. EVERY DAY. Consider them to be more important than every single deadline you have stressed over for your career.

Once you begin to emphasize the importance of these hours, the compounded results will begin to shock you.

Set your own constraints, if you fail to do so, the world will set them for you.

How to establish Golden time blocks for writing?

I ask myself a few questions:

What time of day am I most productive and focused?

What time of day can I be least responsive without concern?

Please note, there is no correct or incorrect answer here. Every individual will have different preferences, schedules and responsibilities.

To help you get started with golden time blocking here is a list of the most common golden time blocks:

• [Early Birds] 5:00am - 7:00am
• [Pre-Workers] 7:00am - 8:30am
• [Lunch Maximalists] 11:30am - 1:00pm
• [Mid-Day Workers] 3:00pm-5:00pm
• [Evening Maximalists] 7:00pm - 9:00pm
• [Night Owls] 9:30pm - 11:30pm

I have been writing everyday, while not fully shared on this website. I consider myself to be a Lunch Maximalist because it's a time usually reserved for myself and others tend to also be on their lunch breaks so my distractions are heavily limited.

Look for an optimal intersection, choose a two hour chunk and block it out of your calendar. Just do it!

How to go about changing your golden time block.

Several people asked me if I change my time blocks and if it is okay for them to do the same. The short answer is: Absolutely!

You are the master and designer of your life.

It is alright to experiment, but eventually you are going to want to find a golden time block and stick to it. Consistency will help you stick to your goals and you will need to make less of a conscious decision to write or focus during that time.

This is where your efficiency starts to get compounded, and you will notice your results start to accelerate.

How to get the most out of your Golden Time Blocks.

First and formost, you need to defend and protect these time blocks. Do your best to use this time to get into a deep state of flow and focus.

Here are a few tips to get the most out of your golden time blocks:

• Focus on limiting "reactive" actions like checking emails and texts.
• Figure out and document what you would like to focus on the night before.
• Use tools to block out sounds like noise cancelling headphones.
• Utilize tools like airplane mode and Do not Disturb to block out distractions.
• Use website blockers or just disconnect from the Wi-Fi.
• Ensure your workspace is as clean as possible.

Imagine you are in an airplane. During those few hours, you are 35,000 FT in the air, with no one able to reach you and you can't be reactive to your notifications because you are also in a bubble. Treat your golden time blocks as a bubble.

That's the easy part done, we have found the time but now we need to put in the work.

Putting in the work.

Finding the time to work is not where most people struggle, that's left for putting in the work.

When you are sitting in silence and you have a realization that you have free time. You realize that you can't use not having enough time as an excuse, so you decide you have to put one foot in front of the other, which can be terrifying.

My advice? Focus on your future and imagine the library of work you will create.

You should not be using golden time blocks to do shallow work, if you can do your task in front of the TV or while watching an YouTube video, you need to reassess the depth of the work you are doing during your time blocks. This time should be used for creative, high-leverage, deep work that makes progress in your life's goals.

I have been using these time blocks for writing. Not for content, but for clarity and I am finding so many benefits which I will save for my next update.

Have you ever tried time blocking and has it helped?

Thank you for reading.

I am writing this article after going to a fantastic brunch restaurant located in the Leslieville district called Bonjour Brioche. It's a quaint bakery with amazing brunch options. If you're in Toronto, I definitely recommend checking it out.

This week, I have taken a break from reading books and have been opting for music and a podcast as my morning commute indulgence.

Album of choice has been Honestly, Nevermind by Drake.

Podcast I recommend everyone listen to: Huberman Lab - Specifically I listened to the episode titled: Sleep Toolkit: Tools for Optimizing Sleep & Sleep-Wake Timing.

Increasing your Luck.

I have always been graced with good luck. I like to say I am not a superstitious person, but I like to think extraordinary things are possible with enough ground work and time:

UNCOMFORTABLE TRUTH:

The conflation of "luck" and "randomness" is one of the most intellectually lazy things we do in our society.

Time for a thread 👇🏽👇🏽👇🏽

— Pomp 🌪 (@APompliano) October 2, 2020

I believe it is easy to increase our luck. The answer isn't just to increase the amount of work you do, but a few changes in behavior.

Step 1: Dress for Success.

Successful people know that dressing well is the easiest thing you can do to become luckier because others take notice of you, and they may be more inclined to respect what you have going on.

Dressing for success is the easiest thing you can do to become lucky because it will make feel more confident, and people take your work seriously. This starts a powerful positive feedback loop that helps our self-esteem grow with every interaction.

Dress like you are going to meet the love of your life everyday.

Step 2: Show up.

You need to show up for things to happen. It's as simple as that.

After the end of the larger waves of lockdowns, a lot of VDC Coordinators were hesitant to go back to the office, understandably so. I was no different, but instead of requesting full remote, I worked out a middle ground, that gives me a few days at the end of the week to work from home.

This simple action, brought countless opportunities and responsibilities to my lap. I have been given a raise over 20%. I handle several critical aspects on my projects that is outside of my scope. Now I am being handed responsibilities of a Project Manager - which comes with it's own perks. My team never has an issue with communicating with me and constantly elevates me. At the same time, I am able to maximize my time with my family and invest time into personal passion projects as well.

This is all to reiterate the only way these opportunities can show up is by being present in others minds. This works with remote work as well, be the person that pushes for team events, always open to discuss issues or just jumps on short calls to check up on others.

Be present, not just in the room, but in others minds.

Step 3: Learn Skills that are In-Demand.

You don't need to learn everything about a specific topic. The goal is to learn about new skills and know how to efficiently communicate around new subjects. You do not need to be a master in all of them.

For example, I am a Civil Engineering graduate, but I went out of my way to earn my PMP as soon as I could. For my purposes, project management skills are easily transferrable to any industry. I gained the skills so I can openly communication with other industry specialists in Software, Pharmaceuticals, Mechanical, etc.

Become a jack of all trades, and a master of one.

Step 4: Create Opportunities to ask Questions.

Being able to ask good questions will build a lot of good rapport with others.

Asking quality questions shows that you care about the other person and their expertise. Use the other steps to help you find quality open ended questions. This will help you learn new skills, and it is also a form of showing up.

My ability to ask quality questions is what brought me industry mentors who were actively invested in seeing me succeed.

Ask questions to build relationships, doing so will increase the investment capital others have in you.

Step 5: Cast your Net of Influence.

Have you ever been with someone that makes the room light up the moment they walk in?

Everyone stops what they are doing to say hello, and proceeds to have natural conversation that elevates that person. You don't need to be a celebrity to have this impact.

Simple steps to start casting a net of influence:

1. Consistently show up or frequent an establishment.
2. Learn others names, and greet them with their names.
3. Create a zone of comfort and positivity.
4. Uplift others accomplishments.
5. Strive to connect people from different groups.  

Be positive, connect and uplift others and your zone of influence will expand.

Step 6: Consider Yourself Luckier.

There has been many psychological studies done where you can change your luck purely by changing your mindset.

Positive people tend to be significantly luckier.

Negative people tend to be significantly unluckier.

9. So why is it important to separate luck and random chance?

Studies show that you can change your "luck" by simply changing your mindset.

Be positive, you become luckier. Be negative, you become unluckier.

Change your mind, change your luck. pic.twitter.com/AScZyXj0py

— Pomp 🌪 (@APompliano) October 2, 2020

Simple, change your mindset, change your luck.

That's it, there is 6 steps you can take to make yourself luckier.

What else would you add?

Thank you for reading. See you all next week!

Please note, my experiences are based on Amazon FBA (Fulfilled by Amazon) not Amazon FBM (Fulfilled by Merchant). I will cover the differences and their pros and cons in another post. In general, with FBA you send your products to Amazon, and they deal with the logistics of shipping it to the shopper and the customer service in the case of an issue. Amazon holds your products at a fee and there are quite a few other fees involved, however the concept of sending the products in and forgetting about it is much nicer than having to actively manage your shop.

There are 4 Major types of Amazon FBA Businesses:

First what is Arbitrage?

Simply, it is the act of buying from one location and selling it on another at a higher price. Please note, that during my time selling items using Retail Arbitrage on Amazon FBA, at no point did I purchase essential items and sold them at a marked up cost. Retail Arbitrage has gained a pretty negative name due to sellers purchasing products and then selling to at-risk individuals at a much higher price. I tried to stay away from essential products like food, disinfecting wipes, sanitizers and masks to name a few. I focused on purchasing shoes, old books from Value Village, ATV parts, hardware's, journals, mason jars and toys.

I know a lot of people who have made a significant income focusing on products such as Inflatable pools, sewing machines, gym equipment, PS5's, GPU's, printers and patio heaters. For me, while this is very much viable, it was more hassle than it was worth for me since these products come with a large payoff but you are taking much larger risks. You need to take your location into consideration as well.

Living in Canada, there is a smaller market and that is something that is important to consider. More on this in a future post.

Why would anyone use arbitrage?

It essentially has to occur for the current economy to operate. If you work a 9-5 job, you are a key player in someone's arbitrage move. Your boss purchases your time for a price, in hopes that he can sell your value to others for a greater price, you get an income for your skills and take on (hopefully) no risk, but your boss has to ensure that he is finding clients, keeping them happy and hopefully you as well, so you continue to bring him positive growth.

Another example?

Alright, imagine you are a grocery store. You have large refrigerated trucks that you take over to the farmers, and perhaps you buy 100 apples for 30c each, and then you bring it back to your grocery to sell it for a dollar each. Now you can decide you want to drive 30km just to pick up a handful of apples for 30c, but I am going to make he assumptions, most of you rather just go over to your local grocery store and would be willing to pay a dollar for it instead.

While it is easy to see that there are implications where a profit does not need to be made. It is equally important to have this source of imbalance because it causes growth. Amazon's, massive success is all thanks to this imbalance and they were able to capitalize on it by making everything just a lot more convenient.

So that's it, in terms of retail arbitrage, you are creating an opportunity for the buyer to get the product with your value added. You should also utilize the practice of ethics, and by that I mean, don't be the person that sits on a mountain of essential items to drive up the price and then dump it on people who have no option but to buy it at ridiculous prices.

Types of Arbitrage

Retail Arbitrage

Simply, it is when you buy products from big box stores like Walmart, Marshalls, Home Depot, Costco, Best buy, Lowes, Rona, Kohls, Target, etc. Then turning around and selling them on Amazon for a profit. Price discrepancies are very common especially in stores like Canadian Tire and Walmart where sales and discounts are very common. In other places like Kohl, you may end up using coupons or discounts offered by the stores, stack the discounts to find amazing deals that you end up selling on Amazon for a strong profit.

Other times retail arbitrage can also be when the customer decides the convenience of having a package show up at their front door is worth it. With retail arbitrage, you are jumping on existing listings that are already selling, you do not have to put in the additional work of taking pictures, listing and advertising the product. A major advantage of retail arbitrage is the competition. When it comes to it, all you are competing with are local resellers of the products and you are turning it around and selling it to the entire country.

Online Arbitrage

This is essentially the same thing as Retail Arbitrage. However, Online Arbitrage is the act of finding price discrepancies online and then selling on Amazon FBA. In this situation, you are competing online potentially against people around the World. This model offers a lot to people who enjoy the  convenience of sourcing inventory and running your entire business from your computer. It is important to mention again that Online Arbitrage is a significantly more competitive than Retail Arbitrage.

Private Label

Source products on Alibaba or other manufacturer and create your own brand and but a label on it. It will be your own listings that you have to make, specific to your products. That includes taking your own professional photographs and doing your own marketing. This type of Amazon FBA business model requires you to have a greater risk appetite and a diverse skillset. You will be buying larger quantities of products most likely from overseas, investing in marketing and finding ways to drive up reviews and hold a customer base.

Wholesale

Buying bulk amount of an already established product at a significant discount. For instance, this is exactly what your favorite retailers do. They buy products by companies that are considered household names such as Lotions by Aveeno, they purchase them at a significant discount, and then allocate a dollar amount to them so they can make a profit after paying for management fees, storage fees and any other fees a larger or smaller retailer might incur.

So what should I know before I get started?

Well the first thing I will tell you is, do not listen to YouTube guru's that are trying to sell you on the fact that they are making millions of dollars per month. Note, it is really easy to bump up the numbers you see on most Amazon FBA Seller Central accounts.

How do guru's bump their numbers?

Easy, if you find products and sell them constantly without worrying too much about your profit margin and fees, it's really easy to show off impressive numbers on your amazon seller account and walk away with next to no profit.

What do you mean fees?

Amazon FBA charges you close to 40% on all product sales, and I suppose you can call it value added service such as storing your items in their warehouse and giving you a market place full of buyers.

Note the 40% listed above is a rough amount. But the figure below is before I started getting charged for shipments to the facilities.

So, How much did I earn with Amazon FBA?

In general the total gross revenue I was able to generate was approximately $4187 CAD. Not too bad! In total I had invested approximately $2500 - $3000. So I was able to walk away with a profit of approximately $1187 CAD at the low end. Please note, there is a total of 27 products currently listed in my store with various quantities. So while I have to pay a few dollars a month for the storage of those products it's not too bad at all. You may have noticed the months I actively found and listed products on my store.

Most of the products were listed between mid-October to mid-December. Due to the Christmas rush I think I was able to receive a lot more sales. One thing not shown here, is returns, while I was lucky enough to not have received too many returns, the few that I did receive were on big ticket items. There are ways to offload those losses, either to your taxes or get the product sent back from Amazon, but those are all very involved and at the time I just let them slide.

How to make even more money with Amazon FBA

Learn the rules, this is so dang important especially when you first start out. Know exactly what you can and can't sell on Amazon. For example, I had found an amazing price for compressed air, only to find out that you are not allowed to ship it using Amazon FBA. When you first start out, there will be a lot of products you will be gated against. The term gated essentially means you are not able to sell that product, without getting more reputation, sales or documentation that you purchased those products from a reputable wholesaler.

Do not let this deter you, if anything this is great news for everyone that is looking to make a profit in this industry. The barriers that Amazon places for new sellers actually ends up promoting the sellers that are serious and are in it for the long game.

When I first started, I was gated from essentially everything that I could purchase at an amazing price. Over time, I started getting un-gated from a lot of companies, including Nickelodeon and Pokémon. I want to make another writeup covering how to work with gates and how to get products un-gated over time. If you have any specific questions you can reach me here.

In Summary

I must add, with the right skillset and drive it is quite easy to make a pretty sizeable income from Amazon FBA. After lots of discussions with veteran members, it is also possible to transition this to a mostly passive income. For instance, it is possible to source your products during dry times such as January, and then sell the products during high times such as November and December. There are several different ways you can automate a pretty big chunk of this process, especially if you find a formula and products that have been tested to work for you.

So what's my verdict? I think this Amazon FBA is a great business to diversify into. I am planning on getting geared to sell more once stores start re-opening in Ontario. The only down side to selling on Amazon in my experience is that it was very labor intensive and you are at the will of retailers. However, once you build out your business, I was getting a consistent $500CAD every month even after Ontario went into full lockdown with minimal intervention.

Amazon FBA is a great platform to learn and have in your back pocket, while I know it is very easy to make this a full time career, I am using it to supplement my income and fulfill my need for shopping.

I had to lock up quite a bit of capital at first and my house was a mess of boxes that were getting packed full of inventory to ship out. Starting again, I would be more organized, utilizing a business bank account to ensure I knew exactly how much I am spending. I would get a Virtual Assistant involved early on so I could step away from the logistics of dealing with returns.

If you want to learn more join my email list, I am currently working on a E-Book that covers everything from getting started to automating your Amazon FBA business. This E-Book will be sent for free for all of my email subscribers.

Learn more about Amazon FBA here.

It seems more often than anything that paying that debt is an impossible task, there are gurus who suggest you need to live like a hermit for a few years to get back on track. That works for some, not so much for others. I mean try living in Toronto, while being a student. The money won't matter if you sacrifice your physical and mental well being to attain it.

Learn to hold on to things that make you happy, and cut anything that brings you anything but joy. (Thanks Marie Kondo!)

"Smart people will never be in debt" that is something I have heard over and over again. Let me tell you one thing. Being in debt does not make you a lesser person. This concept reinforced me.

If you need some comedic relief watch some Brooklyn Nine-Nine and maybe you can laugh and relate with Jake Peralta's crippling debt. Something I love about that is the way they portray him, an excellent detective who pretty much has the respect of everyone that works with him. While his poor money handling skills is a quirk of his personality, it does not define him.

Build your confidence back up. Tell yourself everyday you can do it, if you slip up forgive yourself and move on. You can't teach anyone to walk if you kick them down each time they trip.

Here are a few things I used to get myself out of debt:

Get Your Ego In Order : Ego is a Catalyst to Debt.

Understand the difference between spending out of necessity and out of pure ego. I had a terrible habit of doing just that. We went to a pub, ordered some food and drinks, and I ended up doing the same without checking my accounts. (More on this later.) The meal with drinks could easily be around $30-$45 which was completely unnecessary and throws you deeper in debt.

Learn to enjoy similar things while cutting down on the things you absolutely don't need to do. If you are going out with your friends, have some snacks before you head out. You can quit drinking and order some water or a $2 dollar soda instead of a $12 dollar alcoholic beverage. Perhaps invest in a small flask if you absolutely need to drink.

The consumerist society preys on individuals like this to pit them against each other. Do you need the newest Acura ILX or is that because you think you friends will think lesser of you because you drive a Honda Accord. Don't ever purchase something that will put you deeper in debt for the sake of looking flashy.

Warren Buffet has a net worth of 89 Billion Dollars (That's 9 zeros!) and he drives a car worth $45,000 dollars. Let's do the math, that's: (45000 / 89 billion) x 100 = ( 0.00005 % of his net worth is his car).

I am not telling you to buy a Lego car. Do not let your purchases exceed your net worth. If its higher than your net worth, you are buying purely out of ego. Whether I drive a 2010 Honda Civic or a Porche 911, its still going to take 2 hours to commute from Hamilton to Toronto.

I had difficulty doing this. I felt like preserving my image of being the frivolous spender. Just remember this, looking rich while burying yourself in debt will do no good for anyone, except for the "pals" you just bought drinks for.

Stop Neglecting Money : Face Your Debt Without Fear

Its absolutely astounding how much effort I put into never checking my accounts. Take charge of your finances. It's only up to you,  Uncle Sam isn't going to help you when you spiral.

Come up with a payment plan to pay off your debt. Make it a unemotional part of your morning by checking it everyday before you head out for the day. Turning a blind eye to debt has never helped anyone and it is especially not going to help you become successful one day.

As a soon to be engineer, we are thought that decisions should be taken based on math and science. Emotions and feelings can be the reason to why you care about what you do but it should not determine the results. Look at your money the same way, let the way you feel be the catalyst to you doing something about your debt. But do not let the fear cloud you from what needs to be done.

When you sit in a plane and entrust yourself to the pilot, even through turbulence you hope they continue to actively monitor and fly the plane. Would you want your pilot to say "This is a lot of turbulence, I'm scared, hopefully the autopilot figures it out". The difference is your finances does not have an autopilot so stop neglecting your finances and sort it out.

Don't be Ashamed to Request Assistance

Talk to your banks and request lower interest rates. It is not difficult to request lower interest rates. Request assistance from your friends and family, not to pay off debt, but just as a support system. Use your support system to build a habit of maintaining your finances.

Similar to cleaning your room or brushing your teeth,  your finances should be a part of your daily life. Learning to tell people makes it a constant reminder and it also pushes people to organize events that require less money spent.

Stop Taking Risks When You Are Ahead

A major portion of my income comes from trading. I have taken risky trades outside of my set rules thinking its a sure fire way. It works the first time, and then I do it again and my good habits come to an end. I end up just harming myself by breaking the rules I set for myself over and over again until it blows up my whole account.

Imagine a hill, you roll a ball up half way and then you let it go in attempt to punt it, sure there is a chance you will kick it and it will end up at the top. More often than not, it either rolls back down or you kick it and it goes straight up and falls backwards.

Don't gamble when you are in debt, don't take risky investments or trades thinking you will hit it big and will be able to pay off the whole debt. It doesn't work and you are risking all of your hard work you put in up to that point.

Think of your debt as a ladder, take small calculated steps. Don't leap, no matter how easy it looks, it's not worth the risk. It's better to pay off your debts $5 dollars a day ($150 dollars a month) rather than risking $50 dollars to make a $100 dollar payment once a month.

Conclusion

Debt is a difficult conversation to have. It seems like an embarrassing and private thing everyone tries to hide from each other though everyone is suffering the same. Like mentioned earlier, it is okay to make mistakes and slip up here and there.

What matters is that you continue to work towards a future you desire, no matter how large the debt. Some of the points listed above may help get your mindset in order. Make it an habit to face your fears. The only way to solve a difficult problem is to face it over and over again. Soon your debt will feel like a distant past that you can solve with ease. Perhaps you can then lend a helping hand to someone else in need.

Cheers and good luck on your journey to be debt free!

A note before anything else: this is education, not advice. I'm an engineer on the internet, not your financial advisor, and past me made trades that current me would like a word about.

Options are by far the BEST way to increase returns on the assets you choose to trade, but also the very BEST way to protect & hedge yourself against market crashes and corrections. There is also spot and leveraged futures trading which I dive into as well, if you are a beginner I recommend you get started with the basics of reading candlestick charts first.

Let's go over the fundamentals in a little more detail and we will call this our option primer. It goes without saying, if you plan on trading option contracts, do so with extreme caution. There are 100 horror stories for every success. Trading is a skill that requires tremendous amounts of discipline and greed has no place here.

Calls & Puts

When looking at options there are two kinds of options you can choose to trade: Calls and Puts.

In the standard stock market, buying one call option contract gives the buyer of the contract the right, but not the obligation to buy 100 shares of the stock at the strike price the buyer selected, anytime up until the option's expiration date. This is advantageous because you need to pay a fraction of the cost vs. buying at spot price (full price per stock) while participating in the same profit profile. If the trade goes well for the call buyer, meaning the asset goes way above the selected strike price, the buyer gets to buy the asset at the lower strike price value he has chosen, even though the asset is then currently worth more than the strike price.

In crypto there are two major differences however:

1. Each call contract can equal 1 BTC, however you can also trade mini contracts that are less than 1 BTC. Again, for stocks 1 call contract = 100 shares always. So, knowing how contracts are sized in different markets is important.

2. Most crypto exchanges will be cash settled. So, you will never be forced to actually buy the BTC/asset shares at expiration (like you are in the stock market). Rather, the exchange will settle the differences and net you out the profit (or loss) on the trade.

Per their definition, put options give the buyer the right, but not the obligation, to sell an asset at a strike price that the buyer selected, anytime up until the option's expiration date. This is advantageous because the buyer of the put option can potentially profit on as a short trade that moves almost 1:1 (dollar for dollar) as the asset falls (making you profit). Think of it like car insurance.

Buying vs Selling Options

You can either buy or sell, both calls or put options. Buying calls is a long strategy on an asset. Buying puts is a short strategy on an asset. When you trade these the opposite direction (buying vs selling), they simply change to the opposite directional bias. Example: if you are “selling” calls you are now making a bearish bet. And when you are “selling” puts you are making a bullish bet.

• Buying a Call = DEBIT to your account. Taking a bet, the asset will go above your strike price in exchange for PAYING the premium asked – BULLISH

• Selling a Call = CREDIT to your account. Taking a bet, the asset will go below your strike price in exchange you RECEIVE the premium instead – BEARISH

• Buying a Put = DEBIT to your account. Taking a bet, the asset will go below your strike price, in exchange you PAY the premium asked – BEARISH

• Selling a Put = CREDIT to your account. Taking a bet, the asset will go above your strike price, in exchange you RECEIVE the premium instead – BULLISH

This might seem confusing at first, but it becomes easier with repetition and practice. There must be a buyer or seller on the opposite end of all option trade. If you are buying and they are selling the same option type that each would have the exact opposite outlook and directional bias. I will occasionally update my content with images and videos in the future to drive this concept in more.

Creating a Basic Options Trade Plan.

Things you need to have in mind BEFORE you execute an options trade:

1. What is the ‘underlying’ asset you are trading? (BTC, SPX, SPY, etc.)

2. Will you be using calls or puts?

3. What is the strike price are you plan to select?

4. What is the expiration date for your option you are planning to go with?

5. How much is the option contracts Premium? Are you paying or receiving the premium? (i.e. will you be buying or selling the options?)

6. Is the exchange American style or European style? (Most crypto options are European, while US stocks are American)

7. Is the trade physically settled or cash settled? (Most crypto exchanges will be cash settled, and most stocks you trade will be physically settled. Some are not, for example SPX trades are cash settled because you cannot own 'shares' of an index)

Every time you decide to make an options trade you should go over these 7 details in your trade plan.

If you are trading crypto options, the most essential thing before putting on your trade is making sure you understand the difference between cash settled and physically settled (point #6) and the difference between American style and European style (point #7). There will be additional posts in the future covering this in greater detail.

Basic Options Definitions.

Let’s go over a few of the main definitions now:

Strike Price

The strike price is the price of the asset in which the trader has chosen before entering the trade. The trader is either hoping the assets price climbs either above or below their selected “strike price” before expiration for them to make a profit. The strike price is a fixed price at which the asset of the option can be purchased or sold on expiration or before. Again, in cash settled exchanges you don’t take possession of the asset at expiration, they just net you out either a profit (win) to keep or a debit (loss) to pay.

Expiration Date

The expiration date is the date that the bet (trade) ends. It is a chosen and carefully selected date by the trader, that he makes before entering the trade. This expiration date is the last day in which the option can be exercised or closed. After an option expires, the trade is over, and the trader simply moves on and starts evaluating their next trade.

As per the definition, European style options cannot be exercised before the expiration date. However, exchanges like FTX do offer alternatives to closing the trade other than just through the exercising of the option on expiration day. You can close the trade and FTX will simple pay you the netted profits just as if you had to take possession (assignment) of the asset at the discounted price (your strike price) and then sell it at the current higher value. They just pay you the profits instead or deduct your losses. Getting back into crypto trading after a year this was the one thing that even caught me off guard for a couple days, especially since I was trading on Interactive Brokers. So, make sure to take note of what style your exchange trades in and how they settle (cash or physical). Not all crypto exchanges are the same.

Premium

The premium (current price of the option) is what the trader either pays or receives for making the trade. It is either a credit or a debit to the trader. When I buy my calls on BTC, I am “paying” the premium price asked, for the right to enter the trade (aka bet). When I sell my SPX options on the income trades, the premium is what I RECEIVE for taking the option trade and SELLING them.

Know that as the options get closer to expiration their time value starts to lessen and decay. Meaning the premium is reducing in price overtime. This is a good for the option seller as they become more profitable as the time value erodes. They also earn money if price action is not moving fast enough. It is bad for the option buyer as the more the premium erodes, meaning he can only get less and less for the option if he decides to close the trade.

So essentially the ‘option buyer’ is hoping that price climbs faster than the time value of the option erodes. And the ‘option seller’ is hoping that the time value erodes faster than price moves.

Intrinsic Value (or Time Value)

The other main factor that effects an options price is its intrinsic value. Which is the value the option has according to how far below or above the strike price that the asset has moved. A long call buyer for example is betting that an options intrinsic value (movement of the asset) climbs faster than its time value is eroding. If this happens you can be profitable WITHOUT the asset ever going over your strike price!! And it can happen way before expiration as well. This is normally when I close our early before expiration at take profits.

Now if this intrinsic value (or time value) has you confused, know that we have an entire channel dedicated to going over these two subjects (posted soon, reference channel when posted). Also know that it does not change the fact ever that if the assets price moved is in the direction of your bias and ends up above or below your strike price you chose at expiration, you will always be profitable. Then time value doesn’t matter at that point.

Implied Volatility & ‘The Greeks’

Another factor that influences an options price both before you trade it and while in the trade is VOLATILITY. Implied volatility to be specific (not historical).The change of the premium price of an option in comparison to the change in the price of the asset is called its "Delta". Delta is a part of what we call the “Greeks”, which is generally the hardest concept to understand when it comes to options for beginners. I will be working on additional posts that will cover the greeks in more detail.

Summary

When you are a "Buyer of options, your maximum profit potential is unlimited, and your max risk is the amount of premium you paid for the option (be it call or put). When you are a “Seller” of options, the maximum profit on a short option (be it call or put) is limited to the premium received for shorting the asset, no matter what the assets price action may do. The risk can be unlimited without any trade management. This is how I know how much profit I can potentially make each day before I place my SPX income trades as a “seller” of options.

Options provide ways to leverage, manage, and protect trades in ways that no other trading instruments can accomplish. The benefits to taking the time to truly understand this way of trading could dramatically impact your results for your entire trading career. Options are not going anywhere. It is simply the next level once you realize extreme leverage trading on exchanges like Bitmex are structured HEAVILY against you. It solves every single type of trade situation you can imagine or get yourself into.

Options are contracts between two people with opposite bias. It brings them together to creates and accomplish a “bet” between the two parties. They can be used to leverage long or short positions or simply to hedge existing asset positions. In their most mature form, they can create consistent income for the trader that chooses to master them.

For additional resources, check out Investopedia's resources on options trading.

Trading this way has put food on my table for the last 6 years. Take it from me, this is what you want to spend your time learning if you want to get serious and your goal is to become the best trader you can possibly be. There is simply no trading instrument more powerful than options.

7 Steps to creating a budget that will guarantee freedom

Before worrying about your spending, let's focus on how you make money. List income sources with tax included. In other words, list your after-tax income. This is quite easy if you have a regular paycheque.

Remember to deduct taxes and business expenses! We want the amount of pie remaining after Aunty Maple and Uncle Sam have taken a piece out of it.

How to build your budget.

It took me a very long time to understand and utilize a budget myself. It required a lot of work and commitments to the changes I was prescribing myself. Discipline is key, find and develop your own system, and learn to follow it. It's unlikely that you will wake up one day and suddenly become a budgeting guru.

I realized for myself I needed it to be automated. I absolutely hate to have to track more things than necessary. So track something while I have the opportunity, once the situation is understood, I do everything necessary to automate the process.

Photo by Sincerely Media / Unsplash

Understand your situation

We all have different needs. It is important to make sure you know what you want out of a budget. Do you want more guilty free spending money? Maybe you are preparing for a wedding? Every situation will require you to have a different level of detail in your budget. Ultimately, each budget is very personal. What we are providing is the guideline feel free to tweak that to your desired settings.

Track your spendings.

There are some amazing free options to see where your money flows. A lot of times, people don't know where their biggest expenses lie. Utilize services like Mint to track your most recent expenses and where you spend the most amount of your income. Tracking your money and being aware of your spending will help you establish an amazing system to budget your money.

Find every single financial statement that you can get your hands on and pile it on to your table. Bank statements, investment statements, utility statements, credit card statements, you get the point. First, deal with all of your physical statements, and then download any electronic statements you may have. You should find anything that may have a source of income or expense.

When I made my first budget, I looked at all of my statements for the past 6 months. I suggest you start by looking over the last three months. This needs to be a detailed scan of each and every payment that is leaving or being added onto your account over that time frame. This is as hard as it gets, looking over all of your statements can be one of the most painful yet eye-opening things you can do. This activity forces you to realize where your money is going.

Break your budget down into three categories.

Income; use this category to list all the avenues of payments you may have.

Monthly Responsibility; this category should include your rent, health insurance, car payments, student loans, car insurance, credit card payments, utilities, etc. These are payments that get processed out of your accounts automatically. These expenses are also consistent, as in they should be generally the same month to month.

Other Payments; this category should include things you spend money regularly but the amounts are not consistent. Groceries, personal items, household products, transportation, entertainment, dining out, etc.

Establish your income.

Figure out your monthly income. If you get paid the exact same amount every month then your life is a lot easier than many. For those of you who work freelance, this can be a bit more tricky. The way I did this was, I looked at my average monthly income over the last 12 months. If you want to be safe use the month with the lowest earned income. This way your budget would be based around the safest amount and you would be able to pay your bills.

How much money do you have?

If you have a long term savings account, retirement account, and other mediums of quick access cash which come with penalties, make a note of all of that. This section includes funds that you have direct access to and the penalties associated with it. For instance, if you have a tax free savings account, with funds tied to index funds or stocks on a brokerage account, you can write down the amount and the costs associated with withdrawing the funds. This section should also include your checking accounts and other investment accounts.

The primary reason to do this activity is to visualize the impact your longer-term savings funds can have on your budget. In case you ever need to dip into it. It's not a matter of never using the money you save, it's about understanding when and where to use it.

Create a personal net worth chart. Not just for your current situation, but also make notes on where you want to be. Visualizing where you are in terms of money and assets and checking where the money can be distributed to bring you closer to your financial goals is an important metric to follow. It helps to print out these charts and keep them handy just to assess changes over time. Similar to going to the gym, it is a good idea to monitor and track the changes to your financial health. Because it will help keep you motivated and not stray from your goals.

What do you owe?

While there is a lot of reasons to budget your money. It is especially important if you are currently stuck in high-interest consumer debt. Find out exactly how much recurring debt payments you are required to make every month. This is fairly simple especially if you have stopped incurring additional debt in the short term.

Overall, debt can be utilized as a positive entity, only if you know-how. However, that does not include high-interest debt. It's too easy to over-leverage yourself and get stuck in a rut of interest for the rest of your life. Understanding what you owe and where your payments need to be diverted is a crucial aspect when you need to budget your money.

Three values are needed in this section; Total amount owed, Interest percentage and minimum monthly payments.

Photo by Tezos / Unsplash

What is your average monthly expense?

Many people suggest it is important to track every single penny that you spend. Unfortunately, that is not possible for the majority of people. Here is a simpler way to track the metric. Print out your statements for the last 6 months and look for reoccurring monthly payments, this includes hydro, water and utilities, phone bill, etc. Things that come in monthly and has been certain over the last 6 months. Once you have that, feel free to use an app such as Mint to generate a report of an average of miscellaneous expenses over the last 6 months assume everything else can be lumped into that amount.

The reason why this helps is it gives you a general guideline to how much you are spending on average. With that, you can set up something engineers call a factor of safety (FOS). Which is just a multiplier of the amount you are spending a month with a small cushion.  For instance, when designing loads, we will find the minimum capacity of the beam and multiply it by 1.5 to make sure there is space for mistakes.

Similarly, you should find an amount that works for you and the aggressiveness of your spending. If you are impulsive or feel as if you are prone to more emergencies (Not maintaining your car, not having health insurance, etc.) Then perhaps set a higher factor of safety in your budget for the funds that go into your checking account which should be automatically diverted after you get paid.

Create and adjust your budget according to reality.

Create a section for all your expenses, and divide them by your total income to check how much each aspect of your expenses is eating into your earnings. We love using percentages, they are easy to monitor and also adjust. This way you can allocate higher percentages to paying off your debts forcing yourself to be more frugal earlier and then let off the gas as you reclaim more percentages from the debt payments and utilize them in other aspects of your life. This is the magic of budgeting your money.

In a later post, we want to show you exactly how to automate your budget allocations so there are fewer human interactions. You want to find the golden ratio when it comes to the percentages in your budget allocation and just let the computer do the rest. You should only have to check in every few months to monitor and establish changes.

Here is a sample budget I created in my first year of university. It was simple. 

If you live in a community where the price for oil and food is rising, I would not suggest you budget your money once and stick to it for the rest of your life. Depending on how difficult it is to stick to your budget, you should be continuously changing your allocations over time.

Therefore should you budget your money?

It's not difficult to budget your money. The difficult part is the discipline required to actually use it. It's difficult looking at a bunch of numbers on a page and willing to believe in it 100%. By following the few steps noted above you will be on a path to efficiently budget your money and achieve financial freedom.

That's why we are working on a simple budget builder and we hope to share it with the community for free. So if you are interested please register your email and keep an eye out!

We hope this helps you figure out another approach to your personal budget by taking out the stress. Do you have a budget? What do you use and what has not worked for you in the past? Please share how you budget your money in the comments below.