Monday, September 1, 2008

Climb the RI* Ladder: Step 1

Start a Rich Idiot Savings Account

As you know from previous posts - I’ve been following the Rich Idiot’s guide. I want to give it some time maybe 1-2 years to see if following a guide really works.

There are over 30 ideas in the book - I will pick and write about a few of them. The ideas I present aren’t in any order, rather how fast I can implement them.

So with that comes suggestion #1: Start a RI (“Rich Idiots”) savings account.

There are two main ideas behind starting a special savings account: 1st it’s a place to collect monies earned by bargaining, secondly this account is a place to have what Robert Shemin calls the “cash-on-hand” feeling.

The author recommends starting an account at a brand new bank – in order to in order to start a new business relationship. Well, since I deal over 5 banks, I felt I have enough relationships, and I wanted something convenient.

So I started at an “old”bank. Funny, even though I’m in computers I was amazed how simple it is to open an account online. It only took $2 - from a debit card – and whiz bank I had an account.

The idea is to put money in this account from
Saving a dollar a day
Bonuses and raises
Money saved by asking for – sweating for – discounts
Any other little cash saved along the way.

There are four asset categories I will be tracking in the coming months – according to the book. I will list this asset along with a rating: ~ to 10. With ~ being not recorded yet to 10.

I’m going to rate my Savings Account (i.e. cash asset) a 1/2. Not zero because I started it, but a 9 year old probably has more money saved it a piggy bank then I do at the moment.

Box score –

Four Assets
Cash ½
Stocks ~
Real Estate ~
Business ~


*RI = Rich Idiot

1 comment:

avenuez said...

Not that I do this these days, but I should...

I used to have what I called a "luxury tax" to fuel my special savings account. Any time I purchased an item I didn't need -- clothes, a night at the movies, etc., I was obliged to put at least 10 percent of the price of that luxury item into savings. What the heck -- the money was already spent, right? What was 10 percent more?

I saved quite a bit this way. These days, as a small business owner, I feel a little stretched, so I've done away with that policy. But I still sock away a certain amount by automatic transfer every week. Even if it's just a few bucks, it adds up.