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How to Set Up a Budget

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It’s important to have a good budget that will help keep your finances in check. The right budget doesn’t just help you know where your money is going, it helps you identify flaws in your spending habits and ultimately allows you to be more efficient with money, while possibly having fun.

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It isn’t easy to create a good budget, but in this article, we’ll be covering the basics and a few tips that will get you on the right track. Keep in mind, everyone has their own style, and what looks great for some people can be extremely impractical for others. Moreover, there are various types of budgets, so we’re just looking at a few general guidelines.

Before setting up a budget

Before we start, it is important to understand your financial behavior first, in order to set up short and long-term goals. These goals will allow you to determine what subcategories will be included in your budget. For example, if you want to reduce your yearly expenses in the office, an “office” category won’t cut it, it will need to be divided into various subcategories.

People use various budgeting systems and it is up to you to determine which one fits your style:

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  • Pen and paper – This is certainly the most straightforward way of setting up a budget, but it is somewhat risky, as misplacing a notebook, for example, can be disastrous. On the other hand, this is a great way to backup a budget you created somewhere else.
  • Spreadsheets – Spreadsheets are, to my knowledge, the most common way of setting up a budget, as they can not only do a lot of math for you, they are also fairly safe, especially if you make backup of your files regularly. The most common spreadsheet software is Microsoft’s Excel, but Google Docs and Open Office are great free alternatives.
  • Desktop Software – Desktop software is a somewhat recent alternative to spreadsheets. These programs don’t just do the math for you; they create charts and, in some cases, even give you recommendations that will help you notice small details. Most are paid programs that will need you to link your bank and investment accounts in order to give you proper recommendations. Mint is an excellent example.
  • Smartphone Apps – There are smartphone apps for most desktop software programs, but there are also free apps that can do what the paid ones do, and a lot more. A great advantage apps have is allowing you to keep track of income and expenses on the go. Again, you might have to provide more information than what you are comfortable with. Money Lover, Wally+, and Toshi Finance are worth mentioning.

Creating categories & subcategories

As said above, it’s important to have short and long-term goals. According to some experts, a budget should be divided into three main categories: income, fixed expenses (housing, gas, healthcare, etc.), and variable expenses (gifts, car maintenance, etc.)

Each one of these will have its own subcategories. These are usually very basic and should be adapted according to your goals. Following the “office” example given above, I could add the following subcategories: office supplies, hardware, software, decorations, and so on.

This type of division can be done with any budget, and will certainly help you see where you can save. Personally, I believe it is always better to make money than to save money, as there is only so much you can save, and there are virtually no limits to what you can make, so try to split your income into subcategories as well.

If you use desktop or smartphone programs, you might find out that these already have a few subcategories to help you out. Always adapt these and use descriptions that are as specific as possible. Here’s a small example of what a spreadsheet budget would look like for an individual. [“*” is used to mark specific subcategories].

https://drive.google.com/open?id=0B1t1_MeGycaQQ05Sakx6dUxqQUE

In the example, the individual has $80 to spare at the end of the month. However, it is clear he can reduce entertainment expenses.

Budgeting tips

Finally, here are a few tips that can help you be more efficient and make the best out of your budget:

1. Keep track of every cent

Always keep track of everything. You will always remember how much you earn, but it’s hard to remember small expenses that, at the end of the month, may represent a decent chunk of your money. Smartphone apps make it easy to register every expense, so we’d advise you to at least use a program that will allow you to take notes on the go. Google Keep and Evernote are pretty reliable.

2. Build a safety net

You probably noticed the example above treats savings as a fixed expense. That is because they should be treated as such, in order to help build a safety net in case anything happens. According to experts, your safety net should be the equivalent of 6 months’ living expenses and should be built with whatever you can. Even $10 a month help.

3. Keep working on your budget

A good budget is going to have to be updated on a daily basis, and should be analyzed at the end of every month. Using a small amount of time looking at the data is going to help you know where you should cut expenses, and allow you to know how you can improve your budget so it fits your goals and needs.

4. Investing as a fixed expense

You can also add a subcategory called “Investing” as a fixed expense where you put 1% to 10% of your monthly salary in an index fund. Index funds are always the safest bet when starting to invest your money. Call it an expense and let the money grow by itself. Only withdraw when you really need the money.

Do you have a budget or will you create one? Leave a comment below.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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2 Comments

2 Comments

  1. alexandretrindade

    August 2, 2017 at 8:37 pm

    Thanks!

  2. NoHomeJerome

    August 15, 2017 at 11:56 am

    Do you think some of these point can vary depending on the unique situation of the person?

    For example, if for one reason or another, someone feels relatively safe financially overall, could they disregard building a safety net?

    Thanks.

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How I Made It: Multimillion Dollar Cash Flow

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Please excuse the image. It’s not a picture of me nor my car. I own a BMW 318 2009 model with a car seat in the back for our seven months old daughter. It’s been some time since I last published a post on Hacked.com. I want to let you know that I’m going to be more active in the coming months. I’ve just had too many things on my plate, from my Digital Trainee job at Wilhelmsen to Hacked.com, CryptoCoinsNews, MoneyMakers, and family. I want to explain how I’ve managed to create a company with a multimillion-dollar cashflow. Remember, I’ve spent more than nine years on reaching my current level. I’ve had multiple failures, I’ve lost hundreds of thousands of dollars, but I’ve also made a lot of money and recognition.

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When I was 16 years old, I started my first company which I registered on my mom. I called it for “Limitless Juggernaut, ” and it was a clothing line that I started to sell in Tønsberg (a small city in Norway). I managed to get my clothes in one shop in Tønsberg, but it did not catch on. I think I sold five to ten pieces and ended up with a loss of $5000. I worked as a phone seller to make the money I spent on my micro startup. In 2008, when I was 18, I started a phone import business where I imported phones from China and sold it on Norway’s “ebay.” I managed to make $3500 in profit each month while attending high school. There was a guy in Oslo, the capital of Norway, that wanted to get into the phone businesses with me. I was young and naive; I put too much trust in a stranger that ended up hustling me. He gained control of my stock, and I transferred some money to him, then I never heard back. I decided to shut the business down.

In 2009 I started studying Entrepreneurship and Business at a college in Oslo. That’s when I founded MyGoodAct which was one of the first crowdfunding platforms for social causes. During four years the platform raised more than 1.5 million USD to different social causes. I managed to sign up the most significant NGOs in Norway, but the main issue was to establish a positive cash flow for the startup. Even though we won awards, was funded by some larger companies and organizations, we never really got the traction we needed. I decided to shut MyGoodAct down in 2015.

In 2013, when I was working part-time for an NGO, I discovered Bitcoin (Cyprus chaos was blowing up the Bitcoin price and made it to the news). I fell in love with the digital currency, mostly due to its deflationary functions. I was sick of the fundamentals of our economy, with fraction banking and the private FED. At that time, there were few news sites for Bitcoin, so I started CryptoCoinsNews. I started writing two to three articles per day, posted stories on bitcointalk.org and Reddit. After a couple of months, the site had 100 to 300 visitors per day, and I managed to secure one advertiser that paid one bitcoin per month for the top banner. After that, I had some funds to pay other writers with, so I started to recruit writers. The site grew, I got more advertisers that paid a fixed fee per banner on a monthly basis. Today, CCN is one of the largest bitcoin news sources in the world. Last month, I bought CCN.COM for 150 000 USD, and we are doing a complete redesign of the site and hiring more full-time writers. I want to make CCN the world leader in cryptocurrency news, just like Marketwatch.com is for stocks.

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I bought Hacked.com in 2014 for $50 000. I saw the domain on Flippa.com, and I had profits from my previous bitcoin investments. I had no plan for the domain; I just thought it was the coolest domain I’ve ever seen available. I was up 24 hours bidding on the frigging domain while watching The 100 on Netflix. The other bidder I was bidding against only increased the price with 50 to 100 USD at the end of each auction period, which made the auction extend with another hour. I became so tired and angry at that tactic, so I contacted the seller and told him that I’d exit the auction if we do not end this soon. I was ready to bump it up with $5 000 or even $10 000 just to be done with it. The seller added a buy now price at $50 000, and I was able to purchase it before the other bidder.

We started Hacked.com as a technology news site, at one point, we had a trending story on Reddit that made it to the front page of Reddit.com. It generated almost a million visitors during one day; our servers could not handle the traffic. However, even with one million visitors, we only made $2000 in ad revenue from Adsense. And, you need to keep pumping out extraordinary articles to keep such a momentum. The prices for such articles could be anywhere from $50 to $500. I did not have the funds to keep funding writers and attract better talent, as the site always operated with a loss. After one year, I decided to put Hacked.com on pause.

In 2015 I started Tailored Message that was a news app for youth in Norway, with gamification and a shop. The idea was to make a clone of “Instagram/Reddit” for news and blogs and let the users earn points based on ads in the app that they could spend on products in our in-app store. We launched the app in April 2016, and we got more than 20 000 downloads, just in Norway, and made it to the top 3 most downloaded apps. I spent almost 100 000 USD on the startup, and in the summer of 2016, we secured 200 000 USD in funding including a marketing deal with one of Norway’s largest media companies worth 300 000 USD. I moved into the media company and hired a salesperson. Unfortunately, the marketing deal that was signed by their director was never followed through. I spent almost six months implement the marketing deal that we already had agreed on. The media company always had excuses for why they could not implement it, and we changed the marketing deal two times without any success. The investors I had became worried, and in the winter of 2016, I decided to shut it down, pay the investors back with what was left, and try to focus on something else. I went to a lawyer in Oslo, and he told me that we could sue the media company for our losses, but that it would cost $30 000 and could take a year or two. I was upset, but I did not want to have a lawsuit to define my next year. I backed out.

What I learned from this experience, which was a very tough period in my life (as I hate to disappoint people that put their trust in me), is that you should never depend on a single deal you make with any company. Especially large companies. In large companies, you have so many different opinions, so many shitheads, so many useless persons that only think about themselves and their KPIs. If you are working with large companies, you need backup solutions. I think the best way to run a startup is to be independent, and just gun for it on your own. Fuck the large companies; they are too slow for a startup.

Well, that’s funny. But I was hired in January 2017 by Wilhelmsen, one of the largest shipping companies in the world, as a Digital Trainee. I had lost most of my cash holdings due to Tailored Message, and I needed something more stable to focus on. My wife was pregnant, and we expected our child in April 2017. I’ve never worked fulltime in a large corporation before, and I thought it would be a great experience to learn how it works. Right now I’m working on a 3D print project where Wilhelmsen wants to 3D print ship parts to the maritime industry, which has been and is an amazing project. I have a leading role there, and I’m learning many new things.

I’m a person that need multiple projects to be satisfied. So after working hours at Wilhelmsen, I pivoted Hacked.com into becoming the service you see today, based on subscriptions. I hired a couple of people, and we started small. After a couple of months, we had a positive cash flow, and I could hire more people to take over some of the time-consuming tasks. And now, Hacked.com is probably the largest paid cryptocurrency community in the world. My initial idea with Hacked.com was to educate people in how they can become more independent of the 9-5 job reality most are living in. This is something that I want to focus more on in the coming years. I also want to host conferences and meetups in 2018. I think we can make something great out of Hacked.com and be supportive of each other.

Right now, both CCN and Hacked.com is generating more money than I would ever dream of. It’s now a multimillion-dollar cash flow business. And I think it’s safe to say that I’ve already reached my long-term goal. Of course, we have large expenses, but the profit is still positive and enables me to invest more in the ventures and improve them.

I’m still working as a Digital Trainee at Wilhelmsen, and please understand that I’ve been working nonstop now for the past two years, I’ve never had one full day off. Sometimes I’ve had to work nights because of DDoS attacks, server problems or similar. I’ve employed more people to take some of the daily tasks I’ve had. I’m also focusing on spending more time with my wife and daughter, as I’ve been absent for an extended period. Money, cash flow, and business is not everything, family, friends, and experiences are what you will remember when you are 80 years old. Remember to enjoy your life.

However, I’m still not satisfied. That’s the way I am as a person. Damaged. Entrepreneurial. I continuously want to improve, want to launch better services, give more people the services that they appreciate. Help people reach their full potential. I think there are some good opportunities in the shipping industry, and I may be able to do something fascinating with Wilhelmsen in the coming years.

Focus on what you love to do, and never look back. Don’t let a shitty job bring you down.

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Buying and Storing Physical Gold in Hong Kong

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Hong Kong gold

If you are one of the many people who feel uncertain about the direction of the global economy and stock market, you should be looking for other options to preserve and grow your wealth. Cryptocurrency is obviously one option, but with the high volatility that comes with it, some people may prefer more traditional stores of value. In this article, we will guide you through exactly how you can buy and store physical gold in Hong Kong, widely regarded as one of the best places in the world to buy gold.

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Bars, coins, or jewelry?

If you are buying gold as a pure investment, it is always a good idea to buy your gold as close to the gold spot price as you can get. For gold jewelry, there is always a big premium added on top of the gold spot rate to pay for the design, brand, marketing, etc. Traditional gold coins also carry a premium for their fancy design of up to 7% over the spot market value of the gold.

The best way to buy gold for investment purposes is gold bars, big or small, depending on your budget. Generally, the larger gold bar you buy, the lower the premium over the spot price will be.

Where can I buy gold bars in Hong Kong?

I personally consider Hong Kong to be the best location for buying physical gold. It is first of all a nice city to visit if you haven’t been there, prices are low, and the staff you deal with generally speak English.

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As you walk down the streets in Hong Kong, you will see gold and jewelry shops on almost every corner. Competition is fierce, and the buy/sell spread on the physical metal is therefore among the smallest you can find anywhere in the world.

In addition to very tight spreads, Hong Kong has no sales tax on gold (or anything else for that matter), keeping the prices you pay as close to the read market rate as possible. And let’s not forget that it is also an excellent place to store your gold once you have purchased it.

While gold smiths and jewelry shops in Hong Kong generally offer much better spreads than in other countries, it is still important that you make sure you don’t pay more than you need to. It is generally recommended to stick to the well-known and reputable shops. Some of the more reputable jewelry shops in Hong Kong are:

While these jewelry shops are the easiest and best known places to buy gold in Hong Kong, the most cost effective way is actually to go straight to the bank. In Hong Kong, several banks actually let you buy gold bars and coins directly over the counter, at least at their main branch in the city. The ones that are most often recommended are:

For a full list of the banks that offer this services, as well as their prices, take a look here.

How should I store my gold?

When it comes to gold storage, there are again many options available. For smaller quantities, you may choose to store your gold in your home. If you happen to have a high quality safe, it may even be totally fine to store larger quantities of gold in your home.

For most of us, however, it is preferred to store gold and other precious metals in a safe location other than your house or apartment. You could choose to bring it back to your home country to keep in in a safety deposit box in your bank, but keep in mind that you may be liable to pay import duties on gold purchased overseas when you bring it across international borders. Each country has different rules pertaining to gold specifically, so make sure to check this first if you want to bring it home with you.

My preferred option however, is to store the gold safely offshore at designated gold storage facilities. Note that this should in most cases not be the same place as you bought the gold, due to risks of default, segregation of your gold from the shop’s own gold, etc. An exception to this would obviously be if you buy your gold in a bank and store it in a safety deposit box in the same bank. In that case you know that your gold is safe and kept separate from other people or the bank’s own gold.

Designated gold storage facilities in Hong Kong will usually charge you about US$75 per year to rent a safety deposit box. Another common way to price it is as a share of your asset value, for example 0.72% of asset value per year.

Final thoughts

There is no doubt that Hong Kong, perhaps together with Singapore and Dubai, is one of the best places in the world both to buy and store gold. If this is something you have been thinking about, I recommend taking a trip to check it out for yourself. After all, Hong Kong is a great city that is worth a trip regardless of whether you choose to buy gold there or not. And as we’ve written about previously, why not open a company and bank account while you are there?

Featured image from Valcambi.com

 

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Total Mindfuck or Nirvana: Our Imaginary Phenomenon

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I love to read good books that can increase my level of understanding. I’m now reading Sapiens by Yuval Noah Harari. A truly mind-altering book that confirms many of my own beliefs (unfortunately?) and that just gave me more respect for Steve Job (see video below)

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Steve Jobs and Yuval Noah Harari are my “gods”. Everything that you see around yourself is made by man. It’s either political systems, values, human rights, the monetary system, religion or even news. As Harari explains, humans can only work in a group that is no larger than 150 people. We do not have the capacity to live in a larger group before things start to unravel. That’s why we all lived in small groups for the most of our history. Homo Sapiens evolved from other ape-like species 150 000 years ago. For 70 000 years ago we entered into a cognitive revolution that made us able to communicate and be creative, to create tools that helped us conquer the world (and kill off the Neanderthals). It’s only 12 000 years ago since we moved from foreaging to farming, where we gradually gathered together in larger groups and started to create imaginary systems to control the population. Our predecessors also had imaginary beliefs, like religion, but not the extensive systems we now see today. Religion was one of the core systems that made us able to find a common goal and live together in larger groups.

The code of Hammurabi is one of the oldest “code of conduct” that is known, dating back to 1754 years BC:

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It is one of the oldest deciphered writings of significant length in the world. The sixth Babylonian king, Hammurabi, enacted the code, and partial copies exist on a seven and a half foot stone stele and consists of 282 laws, with scaled punishments, adjusting “an eye for an eye, a tooth for a tooth” (lex talionis)[1] as graded depending on social status, of slave versus free man or woman.[2]

The code of Hammurabi was created to establish a prosperous community, Mesopotamia. Just like the founding fathers of the USA created Decleration of Independence stating:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

All laws, all religions, all politics have been created to manipulate and control our inherent DNA. We would not be able to “thrive” the way we do now in larger groups without it. One could argue that we were happier before we started to gather in larger groups (cities). But mankind would not have evolved without it.

We are all tied up to what Harari explains as “Prison Walls”. The objective phenomenon exists independent of human’s consciousness and beliefs. Radioactivity is harmful for people. That’s a fact. A subjective phenomenon is something that exists depending of a single mind’s belief and consciousness. It can disappear or change over time. E.g. I believe that a pink elephant will come and save us all within ten years. This might change if I start to believe in something else or die. The intersubjective phenomenon is something that exists in our network of communication which connects individual subjective consciousness. If one individual die, the intersubjective phenomenon (Christianity or Islam) will not disappear. However, if everyone within the network changed their mind or died, the intersubjective phenomenon would change or disappear.

Why am I writing this post? I think it’s important that you know that everything we do is created by people, for people (or the elite). The monetary system is no different. It was created to control the economic growth and position of a few people, companies or nations. Everything can be changed if enough people start to believe in something else. Cryptocurrencies could be such a shift that might change our monetary system.

Remember, you are free. Do whatever you want, don’t be restrained to people that lived on this planet for hundreds or thousands of years ago. They didn’t know what you do now.

Maybe our true goal as human kind is to reach singularity and relieve ourselves from human restraints.

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