Thursday, October 21, 2010

Perspective on life as a business

Been doing a lot of personal accounting for the past few years, mainly due to my car which I wanted to calculate the fuel consumption and amount spent on it.

Over the years, I've been increasingly adding to the number of accounts that i have been keeping. So right now there's one for my car, one for my portfolios, one for my monthly cash-flow and one for my poker winnings/losses.

I find that the more I think about this endeavor, the more intricate and detailed my accounts were and I find myself doing it more religiously than before. Especially for my cash-flow and portfolios.

It would seem that as technology improves, from keeping them on a little booklet for my car, I went to my pda, then my smartphone and now I find myself tallying everything up and keeping an eternal record of my accounts by cloud computing like on google docs.

Its also really easy to access them nowadays due to the convenience of Internet connections through your iphones, andriods and your now windows mobile 7.

Keeping a detailed record of my income and expenditure is really like keeping an account book for a business.

So in a way the perspective would be, why not run your life like a business?

If you can sort out what and where the gains and the losses of your life are, then you can really begin to save up a lot just by avoiding or minimizing the losses and increasing the gains.

It ends up giving yourself a very different look and understanding of what and how you've been doing and where you actually spend your time. Then you can review and see in which areas you can improve or should improve, like spending less money on the daily indulgence of a $7 cup of starbucks to maybe once or twice a week? Just the little act of cutting back on a cup of coffee can save you over $100 a year.

And mind you I am not trying to tell you not to live your life but to enjoy yourself better with the resources that you have now.

Bet you could find something better to do with that $100 than just improving your coffee experience every morning now can you? And that's just from cutting down from a cup of $7 coffee to maybe a $5 cup. Will the experience of that cup of coffee really be that different? Now with that $100 saved, you could instead at the end of the year, buy your partner something nice or take him/her to a nice dinner. All that for basically nothing but changing your habits a little.

The more detailed an account you keep, the more information you'll be able to gleam for yourself every month or every other month when you can take a step back and basically tally up your life.

This form of sorting of detailed info is probably the basis for what is now known as Forensic Accounting.

So if you want to, maybe for a laugh, in the next month or so just keep a detailed record of what and where you're doing. Then at the end of the month just look through them and be amazed at how exactly you've spent your time.

Who knows where this insight into yourself might take you?

Have fun and Wish me Luck

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