Financial Freedom Quick Tip #24: Your Financial Vitruvian Man
First off, let me apologize to all the ladies. I originally did have “or Woman” stuck to the end of the heading for this post, but when post titles threaten to start spanning three lines I figure they’re just too long.
As for the picture – I’ve decided to just call him Stan. Firstly because my tongue gets all twisted up every time I try to go with the Vitru thingy, and secondly because Stan is the man. Get it!? Get it!? 
Anyways, the reason why you have Stan floating around in the middle of your screen, is because he is the image of the perfect man, that Leonardo da Vinci created for himself.
To create an image of the person you would like to be, a type of perfect you, is a very powerful way of motivating yourself to become more like that person.
It is also quite simple to apply this idea to your personal finances. Simply write down a list of things that define the perfect financial you, and stick it up somewhere where you’ll see it everyday.
To help you get started with your list, I’ve created a generic one that you can hack apart, add to, and otherwise abuse, as you see fit, until it’s more in-line with the perfect financial you.
For the purposes of gender equality I’m also abandoning Stan for now, and switching to Joe and Jill.
The perfect financial Joe or Jill, is someone who has:
- one main bank account,
- no credit-cards at all, or at most only one credit-card,
- no store-cards, e.g. clothing accounts, at all,
- no car payments,
- one home-loan, that he/she is working hard to pay off as soon as possible,
- one vehicle insurance policy, if he/she owns a car,
- one life insurance policy, if the Joe or Jill is married, or has dependents,
- some disability cover, in case he/she becomes disabled, and cannot work anymore,
- sufficient medical insurance, e.g. medical aid, or a hospital plan,
- a simple, but well-diversified investment portfolio.
Right, there you have it. Now go ahead and make your own.
I’ve had a picture of Michael Schumacher pasted on my dashboard for a while now and I must admit, he’s done wonders for my driving skills. The downside is no-one wants to drive with me anymore… go figure.
This tip is part of the Financial Freedom Quick Tips series. If you want to receive a notice every time a new quick tip is published, you can subscribe to Liberta.
August 20th, 2008 at 11:45 am
This is a great tip Francois, I’ve been following your site for a week or so realized that I follow most of your tips already. Oh, before I forget, I guess I have to introduce myself
I’m a 25Yo Engineer from Centurion. Anyway….
1. I have no credit cards (the devils own)
2. No Store cards
3. My car is payed off.
4. One bond (my first house I bought this year)
5. Putting money aside for retirement as well.
One thing I would like to add is that It’s a good idea to use your bond as a savings account. You score quite allot on interest.
Hopefully I’m on my way to financial freedom!!
August 20th, 2008 at 12:16 pm
@Johan:
Yup, it really does sound like you’re on your way to financial freedom! Well done, and keep it up!
And thanks for the tip of using your bond as a savings account.
If you have an access bond, where you can deposit and withdraw money from, almost like a savings account, it is better to pay surplus cash into your bond, than a savings account. The reasons are:
1. you’ll save more interest by putting money in your bond than you’ll be able to earn interest from a savings account, or even from investing in the money market, and
2. the money you save is tax-free, because you’re saving on interest, not earning interest.
August 20th, 2008 at 01:12 pm
Uitstekende inskrywing. Dawid is iemand wat geestelik in my lewe inbou. Hy sê: Everything is created 2 times. First in your head and then in the physical
August 20th, 2008 at 01:54 pm
@Riaan:
That’s a very good way to summarize this post:
“Everything is created 2 times. First in your head and then in the physical.”
I agree about David! He is one of the men whom I look up to the most in my life, and strive to imitate.
August 21st, 2008 at 02:33 pm
Wow! I am very surprised. Except for a couple of things, we ARE the list. The exceptions are that I have a car payment (new loan b/c my van died last year, but it was paid off), we have a small amount of medical bills (getting those paid off), and we have two VERY small credit cards. So technically, this tells me that all my debt is surface debt (my term). I think surface debt is fru fru expenses (my term again), like satelite television, cell phones, internet service, etc. Stuff like that. If we didn’t have all that stuff, we would be very comfortable financially – well we are really if you compare us to the rest of the world. Just look at where you live. BUT, that’s a whole other subject you have already covered.
What do you think?
August 21st, 2008 at 05:08 pm
I think… Way to go Robin!!
My recommendation is that you guys carry on like you are!!
Make your goal to get all the little bits of surface debts paid off completely, and then save up a ‘buffer’.
From there on it just gets easier!