[ad_1] Another summer evening skate-n-scoot outing with Mini Me It’s Back to School time here in Colorado, which means both my son and I will be hanging up the swim shorts and kayak paddles and getting back to more serious business for a while. It has been a slow and endlessly sunny and leisurely summer, and a nice break for both of us, which has been very relaxing and a great time for bonding. But relaxation has its limits. At some point all that Chilling Out fades its way into Complacency, and our natural Human nature starts to work against us, telling us to conserve energy and not really do much of anything. And laziness begets more laziness, and life actually becomes less fun. You can see this effect in our activities. I’ve only completed two blog posts over the entire summer holidays, and together we have put out only two YouTube videos. Spending more time at home and less at the MMM Headquarters squat rack has caused me to lose at least five pounds of leg muscle that I had wanted to keep. Little MM has spent a lot less time practicing on the upright bass and putting out songs, and a lot more time playing video games and getting sucked into the “dank memes” and “Trove” channels on Reddit. It has been a fun break, but as the freshly polished school buses awaken with the sunrise, it will be even more fun to get our own lives cranking into a higher gear as well. And if you’re reading this, it means I am off to a great start! Complacency Is Expensive This laziness was affecting my financial life, and your financial life too. I had let thousands of dollars of uninvested cash build up in my checking account, where it was sitting around earning nothing. My credit card bills had come in, been automatically paid, and filed themselves away without me even reviewing them for fraudulent transactions or wussypants spending on my part. And I had a growing mini-mountain of things I need to do regarding insurance, accounting, and legal stuff in both my personal and business domains. And yet once I got my act together last week, I cleaned up the whole mess and set things straight in less than an hour. It’s not Just Me, it’s You When I talk to friends and family, I notice a common theme: they tend to set up certain “hassle” things once, and then ignore them as long as possible unless some absolute crisis comes along and forces them to make a change. “Oh, I just do all my insurance stuff with Jim Schmidt’s Insurance office downtown, because my parents referred me to him when I first moved out for college. Even better, his wife Jane runs a loan brokerage, so she handles all our family’s mortgage needs!” On this surface, this sounds fun and folksy and like a nice way to do business. And that is exactly the way I like to live: keeping my business relationships as casual and fun as I can. But when it comes to money, complacency can come at a price, so at the bare minimum we should find out exactly what price we are paying. For example, just recently a coworking member came to me and asked for some financial help. And as always, I suggested we start by looking at big recurring expenses. So we dug into the details of her insurance and other major bills streaming in from ol’ Jim and Jane, and found an interesting breakdown: Required liability coverage on a 2010 Subaru Forester: $580 per year Optional collision and comprehensive coverage ($500 deductible): $360 per year Home insurance on a 2000 square foot house ($500 deductible): $1450 per year Mortgage interest on a $300,000 loan at 4.85%: $14,550 per year Student Loan interest on an old $35,000 student loan at 5.5%: $1925 per year Total: $18,865 per year. It’s no wonder my friend was having financial stress – she had interest and insurance costs that were soaking up half of a reasonable annual budget before she could even buy her first bit of groceries or clothing. So, right there we did a quick round of phone calls and online quotes, and streamlined a bit of the insurance coverage by increasing the deductibles. Within 90 minutes (she did most of the work while I had a beer and swept the floors of the HQ), we had the following new set of options: Subaru liability coverage: $380 per year ($200 savings) through Geico Removal of collision and comprehensive (in the unlikely event of a crash, they could afford to replace the car with less than two months of income) ($360 savings) Home insurance on a 2000 square foot house ($5000 deductible): $650 per year ($800 savings) through Safeco Refinanced mortgage to 3.375% through Credible.com*: $10,125 per year ($4,425 savings) Refinanced Student Loan (also Credible) to 3.85%: $1347 per year ($578 savings) New total expenses: $12,502 ($6363 per year in savings!!) It is hard to even express the importance of what just happened here. My friend just did two hours of work in total while drinking a glass of wine, and dropped her annual expenses by over $500 per month, or six thousand dollars per year. And she will of course invest these savings, which will then compound to about to about $86,000 every ten years. Even if she has to do this annual round of phone calls and websites once per year to maintain the best rates on everything, she will be earning about $3150 per hour for this work. Hence the bold title of this article, which you can now see is very conservative. The Optimization Council The first Optimization Council meeting at MMM HQ So you’re convinced. $3150 is enough to get you to pick up the phone, but how do know who to call? Who is going to be your coach if you don’t live near Longmont and thus can’t just join the
