Every year, consumers in rich countries are wasting food almost equal to the entire production of sub-Saharan Africa. Aside from being absolutely horrendous for the environment, wasting food is terrible for our bank balances. After all, food is the third largest expense most of us have (after accommodation and transport).
If only there were some way to minimise how much we are wasting food. Well, as luck would have it, Captain Thrifty presents…
10 quick tips to stop wasting food
1. Beware the special offer. Offers like “Buy One Get One Free” seduce us into buying more than we really need. Particularly for those of us with frugal impulses, bulk buys can be a siren call that’s hard to resist. If it ends up going in the bin, though, the only winners are the supermarket’s shareholders (which could be you, of course).
2. Fill your fridge strategically. Yes, really. Due to the way fridges are build, how you order the contents does make a difference. Want to know more? Food Republic has a useful infographic for what to put where.
3. Don’t put everything in the fridge. Some things, like bread, bananas and potatoes actually keep better at room temperature.
4. Watch out for ethylene. Ethylene is a plant hormone that triggers ripening. Some fruit and veg produces it, some is sensitive to it. For example, if you keep carrots and potatoes together, you risk ending up with rotten carrots before you can use them. Check out this handy list to work out what you should store separately.
5. Work with what you have. It can be tempting to go out and buy food to make an exciting new recipe. That’s cool, but complex recipes often leave you with leftover ingredients. The internet can be a real help here if you’re not a natural cook. Sites like SuperCook will let you input your ingredients and find recipes to match what you already have.
6. Monitor your waste. Much like budgeting and tracking expenditure, what gets measured gets managed. I can almost guarantee that for most ordinary people, just tracking how much you are wasting food will come as a shock.
7. Consider preservation. Can it, pickle it, whatever. Enough said.
8. Use your leftovers. Using your leftovers – perhaps even to take to work for lunch can be a good way to save money and avoid wasting food at the same time.
9. Eat the whole thing. My grandma always told me eating the crusts on my bread would give me curly hair on my chest. Leaving aside the dubious science of that – never mind whether it’s actually desirable – eating your bread crusts and the skins of your apples and potatoes is good for you and your bank balance, and will stop you wasting food. Win, win, win.
10. Don’t throw out good food. This may sound super obvious, but don’t be intimidated into throwing out good food just because it has passed a date on the packaging. Understanding the difference between sell-by and use-by dates is particularly important.
So, there we go. Do you do any of these things? Do you have any of your own tips?
Own the world?! Some mistake, surely? After all, we’re only here to reach Financial Independence! We’ve no business trying to own the world, right? Wrong! Two words for you: index funds. If you don’t know what I’m on about, this post is for you. Bear with me, and I promise all will be clear.
But first, let’s talk about the basics of investing in the stock market. When it comes to investing, a lot of people are scared. At best, stocks are often viewed as a socially acceptable cousin of gambling.
That’s quite understandable. Just like putting it all on black in roulette, shares in a single company can leave you with double or nothing in a short space of time. Just ask anyone who bought Enron shares in the late 1990s. All of this makes the stock market seem a real emotional roller-coaster.
Let’s be honest. Investing is risky, and it will never feel 100% comfortable. But we’re about to learn a strategy to smooth out the roller-coaster. To do so, let’s go back to kindergarten. We were all taught this proverb as kids:
Don’t put all your eggs in one basket.
I’m sure most of us follow that advice without even thinking about it a lot of the time. When we look for work, most of us submit many applications rather than just putting in one and crossing our fingers. It turns out “don’t put all your eggs in one basket” is pretty sound investing advice too.
Whilst individual shares can be exceptionally volatile, big groups of shares across large numbers of companies tend to be less so. Why? Because when one company goes down, another will probably go up, balancing things out.
Here’s where “owning the world” comes in. If we could just own a bit of every company in the world, we’d be insulated from the fortunes of any single company, or even country. Instead, we’d just take a slice of the overall pie of global growth. Obviously there are times when the global economy as a whole takes a dip. On the other hand, if the whole global economy ever goes the way of Enron we’ll be too busy worrying about other stuff in the armageddon to even notice.
I hope we can agree that owning the world is a solid theory. But in practice it sounds like a lot of hard work, doesn’t it? Can you imagine how long it would take to buy shares across the whole world? Here’s the lucky bit: someone already did it for us. We can invest in a whole bunch of shares – getting the benefit of global diversification – through vehicles known as global index funds.
We’ve got options on specifics. The biggest game in town for index funds is Vanguard. Even Warren Buffett – the most famous stock investor in history – wants his wife to put their wealth in Vanguard funds when he dies. I’m not here to sell any particular option. If it’s good enough for Warren Buffett, though, it’s certainly good enough for me!
What are your main concerns about investing? Have you already started? Would you consider global index funds?
It’s a fact: even as many millenials resign themselves to a life of renting, most of us are still obsessed with dreams of bricks and mortar. In many parts of the world, millenials have grown up with house prices that only ever seem to go in one direction: up. This feeds into a general idea that home ownership is a golden goose, and many of us feel a pressure to hurry – bordering on panic – in order to get on the “property ladder” before it’s too late.
In our enthusiasm, though, we forget that buying a house is a massive financial decision. For most of us, it’s the biggest purchase we’ll ever make. So it’s surprising that the question of whether or not it’s even a good idea to buy a house is often considered less than where to go on holiday next year.
The best way to approach such a big decision is to go in armed with the facts. Understanding the possible pitfalls will help you approach home ownership with maturity, wisdom and good sense. You will be able to look back in 20 years and look back on the decisions you made without regret. Here are some thoughts to get you started:
1. Affordability. A mortgage is a type of “secured” loan. This means that if you stop paying, the bank has a claim on your house. It doesn’t take a long memory to know that this threat has teeth. Psychologically, you should consider a mortgaged property as being owned by the bank.
2. Interest rates. At the time of writing, interest rates are really low. The Bank of England base rate, for example, is close to zero. In the 1980s, though, it was more like 10-15%. Over in the States, the fed funds rate similarly reached a high of 20 points in 1979 and 1980. Could you afford your mortgage repayments doubling or trebling?
3. Opportunity cost. My dad always told me that rent is money down the drain. That’s only half true. To illustrate the point, we’re going to imagine being already pretty well off. You might rent a $200,000 property for $10,000 per year which you could have bought outright. If you buy it, you save $10,000. If you don’t, you might put that money into an investment which yields 7% – $14,000. You just won $4000 per year by skipping home ownership. Of course, we’re not factoring in leverage (see below) or the tax implications and stability of that return.
4. Leverage. Property can be a powerful investment due to leverage – you can put in e.g. 20% and borrow the rest. The ordinary citizen is gonna find it hard to get a similar financing arrangement on their stock portfolio. If the value of the property goes up, you keep 100% of that additional value. Just don’t forget that this cuts both ways. Property can go down in value too, eroding all of your equity and more, and you still have to pay the mortgage.
5. Stamp duty. Some countries – like the UK – have a government tax on transferring land or property. This can go up to a hefty 12% for the most expensive properties, so can be a significant added cost of home ownership.
6. Conveyancing. Most UK buyers will use a solicitor or conveyancer to conduct searches on a property they want to buy (e.g. to check ownership or flood risk), and then to exchange contracts and complete on the property. This doesn’t scale with the cost of the property, so could easily add 1% to the cost of buying a cheaper property.
7. Survey. A full structural survey can cost hundreds. Whilst cheaper options are available, bear in mind that buying a house is a huge financial decision for most people. Weigh up other factors like the age of the house, and whether you’re in a position to cope with a large unexpected maintenance bill, to decide what the most appropriate option is here.
9. Mortgage early repayment costs. This one is important for us Financial Independence types. We might be in a position to pay back our mortgages faster than most. However, typically the charges range from 1–5% of the value of the early repayment. Consider looking for a mortgage with no early repayment charge if this is a path you’re looking to take.
10. Moving costs. Are you moving far? Don’t forget that you need to get your stuff from A to B. If you don’t plan this right you could be hit with significant costs, especially if you’re moving long distance.
11. Property taxes. This is really specific to where you live. An average American household spends a couple of thousand on property taxes on their home. Council tax in the UK goes to local councils to pay for services like bin collection, but households end up paying a similar amount.
12. Maintenance. Upkeeping your home can be a significant expense – one that you don’t need to pay in most countries if you’re renting. 1% of the home’s value per year is a common rule of thumb, though you will want to consider other factors like age, climate/weather and who’s living there.
13. Leasehold/Ground rent. In some parts of the UK and US, home ownership is not always quite as simple as owning outright. Especially some parts of England and Wales, and on apartments, “leasehold” is common. This means that instead of buying a property, you are buying a long-term lease on it. You do have all sorts of rights, and a level of security not usually associated with being a tenant. In the case of leasehold houses you should also be able to buy the “freehold” (~complete ownership). That process can be expensive, though. You also have an ongoing cost – ground rent – to use the land the property is built on. Be doubly cautious when buying a relatively newly built house. The leashold agreement can leave you with spiralling costs, and a house that is difficult to resell.
15. Anchoring effect. Some of us like roots, some of us like wings, some of us a bit of both. Our 20s and 30s can be a great time to indulge our wanderlust or explore living in new places before deciding where to put down roots. Whilst it’s never too late or too hard to make a change, the costs of home ownership we just covered will make you think twice about packing your bags overnight and moving somewhere new.
What do you think? Is home ownership worth it? Does it increase or decrease your freedom? Is it necessary for Financial Independence?
A penny saved is worth two pennies earned . . . after taxes. – Randy Thurman
Focus on keeping ’em
This is a blog about both saving and earning. But don’t assume these are both equally strong tools in our journey towards Financial Independence. In the same way as you can’t out-exercise a bad diet, you can’t (usually) out-earn profligacy. Here’s why:
Hedonic adaptation. Hedonic what? Hedonic adaptation is a psychological tendency we all have, to return to a relatively stable level of happiness following life changes – such as salary bumps. If you’re spending every penny of your current salary, chances are you’d need to do the same with your new higher salary to keep up.
Tax. A dollar earnt is worth less than a dollar saved. Why? Because if you want to save an extra $1 through earning, you need to earn, say, an extra $1.20 before tax. The more you earn, generally, the bigger this effect is. If you want to save an extra $1 by not spending it…well, just don’t spend it
The secret superpower of savings. To achieve Financial Independence, we need to build a pot big enough to provide passive income to support a given level of outgoings. Earning more helps build that pot, sure. Saving also helps build the pot but it also decreases the size of the pot needed since it now only needs to support a lower level of outgoings. This means reducing spending is doubly effective!
So, there we go. Each one of those deserves an article to itself, but in a nutshell that’s why the Captain will take reducing expenses over increasing earnings any day of the week.
What have you found? Is it easier to save by earning more or spending less?
As a middle class millenial, conversation about identity and “privilege” is something that has been swirling around me constantly for a good few years. Still, the feminist cause is very much at the forefront of the wider public consciousness in the West too at the moment. There’s the #metoo movement of course. And in the UK, 2018 marks 100 years since Parliament passed a law which allowed the first women to vote.
At work, there is also a real push to promote women further and faster. I do have some misgivings about who that really benefits (mostly privileged, middle class women from what I’ve seen – intersectionality, anyone?). Still, I’m quite happy to call myself a feminist. After all, who can really argue with equality? So far so good. The thing is, though, there’s only so far that mere advocacy can go:
You change existing systems with disruption not protest. Existing power structures always resist change. If you think taxis are a bad gig, you don’t lobby for cheaper taxis; you start Uber. Taylor Pearson
Not all strong, independent women are to be found in a boardroom
The “underdog” narrative which underpins much of the debate can inadvertently cast women into a passive protest role. Not exactly the feminist spirit if you ask me. So why not disrupt the system instead?
(Enter Financial Independence, stage left.)
The Financially Independent feminist doesn’t need to complain about the cards they’ve been dealt. FI means you get to pick your own cards. Hell, it means you get to play a whole different game if you want to:
Money is power. Whether we like it or not, money is a tool to make things happen i.e. a source of power. If feminism is about challenging an imbalance of power, then there are worse places to start than with finances.
Negotiate with strength in the workplace.The common wisdom is that women are less willing to negotiate pay rises. I’ve no idea if there’s any scientific truth to that, but hey – knowing you can walk away is crucial to any meaningful negotiation. Financial Independence gives you that.
The cold, hard maths of Financial Independence. Compound interest doesn’t care about your genitals. Enough said.
Financial Independence is a long term project. The maths looks great on paper, but in reality many fail. Why? Human psychology. The classic pattern is to start off super-enthusiastic, but to lose focus over time. After all, our hunter-gatherer brains are wired for short-term goals and rewards.
To make it all worse, we tend to perceive progress in relative terms. It’s easy to double your wealth when you have $10 in the bank. 100% progress – great! Doubling when you have $200,000 or $2m? Not so easy.
So how can we keep the momentum long enough to hit our target?
Change our values. Work on your Inner Game. Live congruously with your values. This way we can keep moving forward, even when we’re not focussing actively on it.
Enjoy partial progress. Financial Independence isn’t an all-or-nothing game. Look back at what you’ve already achieved. Take pleasure in having enough to relax about emergency costs, enough to go travel the world for a few years, or simply enough to cover your monthly Netflix subscription in perpetuity.
The first rule of FI club (shh!). Just telling others about our plans can give us a premature sense of achievement. This actually hinders our accomplishment of them. Keep your eye on actions, not words.
Gamify. Making a game out of long term goals can make them feel more fun during the stale moments. Why not treat Financial Independence as an RPG, as in one of my favourite posts from the Finance Zombie?
Accept the lulls. Just recognising that we’re all human can help us cope with the boredom of working towards Financial Independence. There are guaranteed to be times when we don’t feel inspired. Understanding that this is a natural part of progress can immunise us against getting too demoralised.
Is Financial Independence your longest term goal? What else have you achieved that took years? What did you learn?
The secret to happiness is freedom, and the secret to freedom is courage – Thucydides
Hi there. If we haven’t met yet, I’m the Captain. For as long as I can remember, I’ve always been a bit of a misfit. Not a rebel. Not someone who railed against social norms. Just someone a little quirky who didn’t always see the logic in everything “normal” people did.
One of the things I wondered from childhood is why high earners didn’t just save and retire early. It took me till I was 21 to find out I wasn’t the only one to wonder this. One sunny day in 2012, an idle internet search led me to Early Retirement Extreme, which opened my eyes to the possibility of saving hard for 5 years to generate enough passive income to retire.
I spent the next year or two saving hard and sailing the seven seas (the inspiration for the nautical theme to the blog). Although ERE inspired me to some pretty hardcore saving by most people’s standards, I realised I had fallen into a trap of chasing the destination with no real thought to the journey. I was still slave to a materialist dream*.
Fast forward a few years. Despite easing on the saving, I found myself aged 26 – a land-lubber once more – with a paid-off house and a modest investment pot. I also found I no longer had any burning desire to retire. I looked back and realised I’d sleepwalked into living the dream. The magic ingredient? Freedom.
I’m not saying this to brag. You may well be cleverer, wealthier and better-looking than me. Actually scratch the last one – nobody’s better-looking than the Captain. And if you’re already happily retired, or plan to work till you die, or love nothing more than buying flash cars, this blog probably isn’t for you. But if you want to hear more about what I’ve learnt so far and – hopefully – share what we’re learning too, step aboard. Financial freedom isn’t easy, but hey – few of the best things in life are.
What’s your experience? Where are you in your financial journey?
*This is totally not the message of ERE – it’s a great blog – just the way that I ended up taking it