2021 De-Clutter Finances & Life (Post Pandemic Wealth & Health)

Let’s face it, pandemics are no fun! It has been a roller coaster of a ride. It seems that things are slowly returning to normal in the USA. Prayers and hope for the rest of the world as vaccine is distributed and we put this all behind us. As we progress further into 2021, I have an overwhelming urge to de-clutter and simplify life. Maybe it’s the summer feeling after a hard year. Perhaps we are sensing that the end of the Pandemic is close? Perhaps we are all in need of a kind of re-birth and re-awakening? The last year has challenged many of us and society at large. I can feel in the air that folks are ready to close the chapter and move forward. Many already have. With the exception of a few situations where a mask is still required (or preferred) life is starting to feel a new normal. As life presents many times, this summer may be another opportunity for rebirth. I have been de-cluttering my financial, emotional and physical life. Here are some ideas that anyone can harness:

1. Too many platforms and accounts

As a personal finance and investment blogger, Jerry and I are regularly testing out new platforms for building wealth and saving more money. As a result, I realized I have too many accounts with money spread all over the place. It is time to close out some accounts and consolidate assets in fewer “places”.

2. Sell Some Stock

Let’s be real, stocks have had a great ride over the last year. The recovery from the pandemic drop was fast and furious. There are still some opportunities, but many assets appear to be fully valued. I believe most assets can be passively managed in index funds that capture a broad swath of the market. See our “Ride My Bike” Portfolio for a kind of set it and forget approach. Although 10-15% is reserved for active trading, etc. But perhaps a few of your investments have had a great run, perhaps it is time to take some profits. One neat trick is to take your initial investment out and leave the rest for further growth and opportunity. The main point is to assess all your positions and ensure they are right for the moment. The reason is simple, it is extremely hard, if not impossible, to pick all the right stock market winners. Owning a Vanguard mutual fund that has exposure to large and mid sized strong companies is a great way to achieve long term gains, especially if the dividends are reinvested for compounding action. But, like many, I do reserve about 10% of assets for fun money stock picking. The problem with my Robinhood portfolio is that it now has too many stocks. It is unmanageable. Therefore, recently I sold about a dozen of them that had a nice run the last couple of years.

3. Keep it simple

Over complicated investing can be tricky to manage in a successful manner. How many stocks do you own? How many mutual funds? Some wise investors believe a simple approach actually yields the best results over time. Some successful investors swear by simple approaches with perhaps only a 3-5 index funds or EFT’s. One balanced fund I enjoy is the Vanguard Wellington fund. It offers broad exposure to high quality equity and bond markets. One could theoretically just invest in that fund and be pretty set for life. If a person has 20, 30, 40 or more stocks, that just becomes too much to manage, especially if you have other stuff going on in life. So pare down to perhaps a few core funds and perhaps 10 stocks you enjoy, that might be enough.

4. Close out some credit cards & revolving un used memberships

Now is a great time to simplify and get rid of some debt. Clearing out that underutilized credit card that you opened up to get some discount. Get it paid off and closed. Right now you may not be using as memberships like the gym, perhaps it is time to close it.

5. Pay off some lingering debt

Another way to declutter finances is to get debt levels down to a reasonable amount. What is reasonable? That is particular to each individual and their specific situation. In addition, there is such thing as good vs. bad debt. Good debt is generally used to buy things that add value or are assets. A college degree can be good debt if the level is reasonable compared to the potential earnings. Bad debt is typically for consumer junk that decreases in value quickly like clothing, jewelry or luxury cars.

6. Purge some Paper

I am going through paper files and recycling some of the needless forms and documents I have had stored away. It is very cathartic and feels liberating to reduce the paper files down to the essentials.

Less wasted money

People with too much unorganized stuff typically waste money re-purchasing things. For example, lost gift cards, do not lose them, Raise them! There were probably many times when you could not find something and instead went out and repurchased it. Therefore, If things are organized and you have a good sense of what you own, you could save hundreds a year.

Increased flow & efficiency

Not only will you not waste time trying to find something, the flow of your work and actions will be more efficient. How much time may be wasted trying to hunt something down. And we all can feel that in the modern world, quality time is a measure of “True Wealth”.

More relaxation

We are absolutely effected by our environments. Therefore, if there is disorganization and toxicity, we tend to feel that inside and it manifests itself in our emotional or health status. On the other hand, people that organize and manage their things report less feelings of anxiety and depression.

Better for the world

If we send old stuff we no longer want out into the world, then someone was able to use something at a discount and be less wasteful. Consequently, if you donate gently used quality items, others may treasure them as new and we keep them out of a landfill.

Financial Decluttering

I came to realize not only the awesome power of decluttering and organizing our stuff, but also applying these principals to our financial affairs. Which can also become cluttered and stuck!
Why does organizing matter to building wealth? And how can it help a person become more productive and creative, which are wealth building practices? How can we apply the Japanese “Konmari” method of organizing for greater energy, happiness, connectedness and success?

The Advantages Of Organization And Good “Stuff” Management

First let us point out some of the clear advantages to having an organized house, office and ultimately mind: a. Less wasted money People with too much unorganized stuff typically waste money re-purchasing things. For example, lost gift cards, do not lose them, Raise them! There were probably many times when you could not find something and instead went out and repurchased it. Therefore, If things are organized and you have a good sense of what you own, you could save hundreds a year. b. Increased flow & efficiency Not only will you not waste time trying to find something, the flow of your work and actions will be more efficient. How much time may be wasted trying to hunt something down. And we all can feel that in the modern world, quality time is a measure of “True Wealth”. c. More relaxation We are absolutely effected by our environments. Therefore, if there is disorganization and toxicity, we tend to feel that inside and it manifests itself in our emotional or health status. On the other hand, people that organize and manage their things report less feelings of anxiety and depression. d. Better for the world If we send old stuff we no longer want out into the world, then someone was able to use something at a discount and be less wasteful. Consequently, if you donate gently used quality items, others may treasure them as new and we keep them out of a landfill.

Using The Konmari Method Puts Things In 4 Categories:

A. Clothes

First a person organizes their clothes. In fact the method requires a person to pile all their clothes in a huge pile and go one by one. You are supposed to hold each item and ask if it “sparks joy”. If it does not, then you are to thank the item and let it go either through sale or donation. Financial application: First of all I noticed that the people with all the clothes are doing a lot of retail therapy. I understand sometimes a little retail therapy is needed, but make sure it is not destroying your financial position. Are you a victim of zombie consumerism and not seeing through the illusion of wealth?

B. Books

Konmari actually emphasizes having few books. As a lover of books this is at first hard to understand. But the more I think about it from a financial perspective, we should be utilizing the free public library for wealth building information and free entertainment purposes.

C. Papers

The Konmari also shuns lots of papers everywhere and advocates for discarding as many as possible. This is another hard one for me being a “man of letters” and I use that term loosely 🙂 I also tend to really think old ephemera type materials are neat to visit and “spark joy.” So in my case, Mrs. Kondo might allow me my papers, if I have them well organized. Financial application: We all know that personal finance management can involve a lot of paper. In the modern world we should be trying to reduce this paperwork as much as possible. There are so many great options to track financial transactions and investments online, so turn off those paper copies already! Some important papers from a financial perspective include the following:
  • Tax folder: One should keep all tax receipts, notes and records in a special folder throughout the year. It is too chaotic to try and find all that stuff in April!
  • Home and property folders: I keep folders on my properties. I keep insurance records, home maintenance projects and warranties, mortgage docs, deeds, etc.
Lists: I am a big list guy! Add it to my many nerd traits. I use lists all the time. In fact, I would love to make a book of pictures of lists! Lists are what makes the world progress and turn. Oh, my love affair with lists.Mail system: One needs a good mail system. I have a 3 pronged approach. First, discard junk mail immediately! Then

D. Misc Items

I came to realize not only the awesome power of decluttering and organizing our stuff, but also applying these principals to our financial affairs. Which can also become cluttered and stuck! What are some other ways you are de-cluttering from the pandemic? Perhaps its time to clear out the garage and have a sale or donate to your favorite charity? Any steps in this realm are sure to make one feel better and prepare for some exciting new opportunities. And hopefully healthy times with friends and family as we emerge from global challenges.

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