Tax Haven Residency

Most people decide to consider tax haven residency as they begin to build a strong business, after they have amassed a significant investment portfolio, or as they consider their standard of living in future retirement years. By gaining residency in a tax haven or otherwise beneficial, individuals can legally minimise or eliminate their personal taxation.

Don’t be fooled though, making the move to a tax haven is not a simple task. While trying to obtain residency in one of these countries, there can be significant costs, a load of hassles and depending on where you choose, a significant cultural barrier. Let’s start with the basics.

Are You Willing to Leave Your Home Country?

This is the most important question of the topic, because if you’re not willing to physically spend a significant amount of time outside of the country where you are currently a tax resident, it’s pointless going any further. Depending on where you are from, your home country will offer some tax residency tests to determine if you are a resident for tax purposes. The most basic of these tests start with the number of days in which you have spent in that country. As a general rule, if you won’t or can’t leave your home country for the majority of the year, they will consider you a tax resident. Here are some over-simplified examples:

Australia: 183 days
Canada: 183 days
Italy: 183 days
New Zealand: 183 days
Singapore: 183 days
Spain: 183 days
Sweden: 183 days
United Kingdom: 90 days

If you are wondering why the United States isn’t in that list, it’s complicated. We’ll discuss this when we delve deeper into how to become a non-resident for tax purposes. As you can see, if you’re not spending less than half the year away from “home”, it’s not necessarily impossible to claim tax residency elsewhere, but it’s going to take some work.

The real solution here is gain tax haven residency by establishing a home in a new country. If you can genuinely find a happy life in a new country that offers no or low taxation, your holidays to home will be exactly that – holidays, rather than some debatable time that you spend back in your country of prior tax residence.

So What Are Your Options?

It’s time to break out your analysis skills. When considering tax haven residency it’s important to remember that no country is perfect. What works for one person won’t work for another. Start to ask yourself the following questions:

  • What is the climate?
  • Is there a major airport nearby? Is it cheap to fly to home or your favourite destinations?
  • Will I feel safe?
  • How much of the year am I willing to spend in this country?
  • What is the cost of living?
  • Am I willing to pay some tax for the right country?
  • What language is spoken?
  • How welcoming are the people?
  • What religion is practised there? Can I accept that value system?
  • Do I need a work permit in the country, or can I only work for myself?
  • How much (if anything) do I need to invest to gain residency?

This is before you consider subtleties such as whether or not there is a surf beach or golf course nearby, whether or not you can get your favourite snacks in that country or how reliable the internet is. Here are a handful of options you might find worth considering:

Andorra

  • Maximum income tax rate: 10%
  • Residency requirements start with a €400,000 investment with €50,000 bond and only a 90 day requirement, down to the cost of a company formation but the requirement to spend the majority of your year in the country.
  • Said to be one of the safest countries in the world.
  • Cost of living is very reasonable, though real estate is more expensive.
  • The official language is Catalan, though Spanish, French and Portuguese is widely spoken.
  • Andorran citizens only make up around 30% of the population, meaning you’re not going to feel like the odd one out.
  • There is no airport inside Andorra. The nearest practical international airport is Barcelona, around 3 hours drive by car.
  • Andorra could be considered one of the most beautiful tax havens around.
  • Living in Andorra can be cold in Winters as it is high in the mountains.
  • Located between Spain and France, many desirable holiday locations are located nearby.

Panama

  • Panama has a territorial tax system, meaning that both corporate and personal income from outside of the country is tax exempt.
  • Maximum income tax rate: 27%
  • The “Friendly Nations visa” is possibly the cheapest and easiest residency program around, assuming your country is on the list. Setup costs are likely under US$10,000.
  • Panama is claims to be one of the safer countries in Central America. Only you can decide if this is safe enough for you.
  • The climate is warm year round. The wet season can bring torrential rain.
  • Depending on your standard of living and what you like to consume, cost of living can range from very cheap to very expensive. If you want to live in a Casco Viejo townhouse with high quality finishes and eat the same cereal you did at home, it’s going to be an expensive exercise.
  • The official language is Spanish. English is rare outside of the major tourist areas.
  • Panama City airport is well serviced to North America, but less so to the rest of the world. Expect connecting flights.
  • The country has Catholic values, which may suit many expats.
  • Panama is a developing country. There is beauty (and opportunity!) behind the trash, but only you can tell if you are able to look past the imperfections and find a country that you can spend time in.
  • It doesn’t feel much more cosmopolitan than sitting at a rooftop bar in Casco Viejo, the city’s old slums, now reborn.

Malaysia

  • Territorial tax system – offshore tax is exempt
  • Maximum income tax rate: 25%
  • The “Malaysia My Second Home” (MM2H) visa is even easier to get than Panama’s Friendly Nations visa, it does cost more however. Applicants under the age of 50 will need a RM300,000 deposit in a Malaysian bank account to be eligible.
  • There is no time requirement to be in the country to retain your residency status.
  • Flying out of Kuala Lumpur airport is about as well connected as it gets. Worst case scenario, a cheap flight to Singapore will see you on your way.
  • Cost of living is increasing, but if you would be eating our anyway, Malaysia is very affordable. Penang, a popular location for expats is significantly cheaper than Panama City.
  • Though not as regulated as other countries in South East-Asia, the Malaysian real estate market is probably not as free as you are used to.
  • The official language is spoken, however English is widely spoken in much of the country – more so than Panama.
  • Sunny, warm and often humid, you either love or hate the climate in Malaysia.
  • Malaysia is a country with mostly Islamic values.
  • Do yourself a favour and make it to the East coast of Malaysia before it is completely developed. Divers will love to island hop through this area.

New Zealand

  • A short term incentive, New Zealand offers a four year tax exemption on foreign income for new migrants and returning citizens.
  • Maximum income tax rate: 33%
  • Unless you are Australian, like most developed countries, you’ll need to jump through hoops to get a visa.
  • For those that enjoy their space, New Zealand is about as good as it gets. There’s lots of space on the South Island.
  • Cost of living is moderate – to be expected from such a developed country.
  • New Zealand is a very safe, very clean country.
  • Auckland is a very well connected airport.
  • So long as you keep a property for more than two years, there is no capital gains tax.
  • Used to film the Lord of the Rings trilogy, New Zealand is a spectacular country that is well worth the visit.

There Are Plenty of Options for Tax Haven Residency

This is nowhere near an exhaustive list. Tax havens are not necessarily countries that have a 0% tax rate, it all depends on how the individual uses the laws in that country. If you are using flag theory for example, territorial taxation can work very well for you.

Some other options worth considering include:

  • Anguilla
  • The Bahamas
  • British Virgin Islands
  • Brunei
  • Cayman Islands
  • Costa Rica
  • Georgia
  • Gibraltar
  • Guatemala
  • Hong Kong
  • Macau
  • Malta
  • Monaco
  • Nicaragua
  • Norfolk Island
  • Paraguay
  • Philippines
  • Seychelles
  • Singapore
  • Switzerland
  • Turks and Caicos Islands
  • Uruguay
  • United Arab Emirates
  • Vanuatu

 

Make a short list and see these countries for yourself. What works for one person will not work for another and a country on paper is very different to seeing it and living it in person. It’s part of the fun!

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Individual vs Collective Responsibility

Known as the “Group Trap”, the belief is that that you can accomplish, acquire and see greater reward by collective responsibility, than by individual responsibility.

The more responsible an individual is for individual achievements, the greater incentive there is to increase one’s individual effort through the outcome of greater rewards.

The Group Trap

The Group Trap is the assumption that greater strength can be achieved by sharing. Unfortunately however, the opposite happens: Individual achievements are watered down, time and effort are less effective in arranging compromises and individual incentive is reduced.

The individual becomes much less flexible and mobile, because he must deal with others before getting on with the task at hand. As Thoreau said, “The man who goes alone can start today; but he who travels with another must wait till that other is ready.”

Collective Responsibility Means Sharing the Rewards of Hard Work

If an individual is required to share what he produces but can also have a share of what others produce, his obvious incentive will be to produce as little as possible and live off the rewards produced by others. Consequently, total production will be reduced and there will be less to split up. An extreme example is Communism vs Libertarianism.

Direct Alternatives

You’re sure to accomplish more for yourself in a situation where you can increase your reward through your own effort. A direct alternative is one that requires only direct action by yourself to get a desired result. An indirect alternative requires that you act to make someone else do what is necessary to achieve your objective.

You control only yourself. That doesn’t mean that it’s impossible to convince someone else to act in a way you’d like him to act. But the process of having to hope for a favourable reaction from someone else makes an indirect alternative less certain than a direct alternative.

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Unselfishness Trap and Personal Freedom

Any time you make negative choices that are designed to avoid being called “selfish”, you’re in the Unselfishness Trap. The notion of being unselfish is not putting yourself first but being willing to sacrifice your time, money, effort or happiness for others.

Believing you must put others’ happiness ahead of your own puts you in the Unselfishness Trap

It isn’t that others’ aren’t important. You may have a self-interest in someone’s well-being and giving a gift can be a gratifying expression of the affection you feel for him. But you are in the trap if you do these things in order to appear unselfish.

You may know a great deal about the desires of your close friends, but the random giving of gifts and doing favours for others is usually a waste of resources. Even worse, sometimes it can upset the well-laid plans of those receiving the gesture.

Spend time on yourself

If your purpose is to make someone happy, you’re most likely to succeed if you make yourself that person. You’ll never know someone else more than a fraction as well as you can know yourself. Do you want to make someone happy? Go and do it – use your talents, insight and generosity to give masses of happiness upon the one person you understand well enough to do it efficiently – yourself. I guarantee that you will see a more genuine appreciation from yourself than from anyone other person.

Efficient Selfishness

An efficiently selfish person is sensitive to the needs and desires of others, where they stand apart is that they do not consider those desires to be demands upon themselves. Rather, an efficiently selfish person see the needs as opportunities; potential exchanges that might be beneficial to their self. By identifying desires in others, they are able to decide if exchanges with them will help achieve their desired outcomes.

The Unselfishness Trap forces you to sacrifice your needs for others’

An efficiently selfish person doesn’t sacrifice themselves for others, nor do they expect others to be sacrificed for him. This person takes a third alternative by finding relationships that are mutually beneficial so that no sacrifice is required.

Do not be concerned about being labelled “selfish” – everyone is selfish. Everyone is doing what he or she believes will make themselves happier. The recognition of that can take most of the sting out of accusations that you’re being “selfish.” Why should you feel guilty for seeking your own happiness when that’s what everyone else is doing, too?
To find constant, profound happiness requires that you be free to seek the gratification of your own desires. It means making positive choices. Escaping the Unselfishness Trap is one of those choices.

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What are morals? Do they limit my freedom?

How do you define morals? What are morals?

Morals are a person’s standards of behaviour and beliefs as to what is and is not acceptable for them to do. Put simply, it is your individual view of what is right and wrong. While it may seem as though we all live by the same code, when we drill down to each individual’s morals, it is not the case. Different genders, generations, countries, religions, cultures, social classes and quite simply, different upbringings and experiences throughout our lives have left everyone with their own morals that while often similar to others are the same as none.

The Morality Trap

In Harry Browne’s “How I Found Freedom in an Unfree World“, he defines the Morality Trap as “the belief that you must obey a moral code created by someone else”. If you’re acting in ways you hope will satisfy someone else’s concept of what is moral, chances are you’re using a code of conduct that won’t lead you to what you want and may trap you in commitments and complications that can only cause you unhappiness. In terms of this trap, what you do isn’t as significant as why you do it.

When looking at your own personal morals you need to consider the consequences of your actions; they are the point of everything that you do. Acknowledge that each and every act will cause many consequences, ranging from good to bad and everywhere in between.

What is the honest question that we are asking ourselves when making a decision?

“How can I get something I want without hurting my chances for other things that are more important to me?”

The whole purpose of personal morals are to keep you aimed in the direction you most want to go. A personal morality is the attempt to consider all the relevant consequences of your actions.

Can someone give me a a list of morals and values?

Sure, but will you be able to live by a list of morals and values that someone else has defined for you? Does the moral code in which I live by define who you are as an individual?

No matter how you approach the subject, you will always wind up at the same place: others cannot decide for you what is and isn’t moral. No matter what it is, you are living by a personal morality. The question is whether or not you’re acting deliberately to make it the morality that will bring you the kind of life you want for yourself.

Right vs Wrong

So how do you determine right and wrong? It’s probably simpler than you think:

  • Right is what will bring you happiness
  • Wrong is what will cause you to be unhappy

The same definitions apply to the words good and bad.

Questioning your Morals

When examine each of the rules you are living by, ask yourself:

  • Is this rule something that others have created on behalf of “society” to limit others individuals? Or have I created it in order to make my life better for myself?
  • Am I acting by an old moral rule that no longer makes sense but is “accepted”? Or have I personally determined it’s morality from the knowledge of who I am and what I want?
  • Are the rewards and punishments attached to each rule vague and abstract? Or do the rules point to specific happiness I can achieve or unhappiness I can avoid?
  • Have I accepted this morality “someone undoubtedly knows the reason for it”? Or is it one I’ve created because I know and understand the reason for it?
  • Is it fashionable morality that is accepted by everyone around me? Or is it specifically tailored to my style?
  • Is it a morality that’s aimed at who I really am and against my self-interest? Or is it a morality that is for me and comes from who I really am?

Questioning those that think they have “high morals”

When you decide to take matters into your own hands, others may not like this act of independence. “Who do you think you are? Who are you to decide for yourself in the face of society and centuries of moral teachings?”

Easy! You are you, the person who will live with the consequences of your actions. No one else can be responsible, because no one else will experience the consequences of your actions as you will.

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Intellectual and Emotional Traps

Freedom won’t just come to you, it will take effort and planning. To become free requires a well-conceived plan of action. Last minute decisions without prior thought and “gut feel” actions won’t help you. To be free, you need to know what you’re doing and why, else minor hindrances can cause you to discard your plans and give up.

The Intellectual and Emotional traps are all about the what and why of your actions. In the Emotional Trap, you don’t have a meaningful long-term view of what you’re doing. In the Intellectual Trap, you don’t know why you are doing it.

Intellectual Trap

If you try to censor your emotions in order to comply with an intellectually determined standard, no matter how plausible the standard may be, you’re in an Intellectual Trap. If you deny your feelings, all the intelligent thinking and planning in the world won’t lead to happiness.

When you try to deny positive feelings – such as attraction for someone who your parents wouldn’t approve of, or enjoyment of something that others may frown upon, you are in the Intellectual Trap. You’re also in this trap when you believe you should be happy purely because you are doing what you have been told will make you happy.

A $500,000 a year income, freehold mansion, wife and kids doesn’t matter if you are terribly unhappy. Intellectually, it may seem as though you have ticked off many “life goals”, but if your emotions aren’t satisfied it’s best to pay attention to them. You’re in the Intellectual Trap if you let your intellect tell you what you should feel.

Emotional Trap

The Emotional Trap can be summed up by the assumption that one’s momentary feelings will be permanent. This inspires actions that produce consequences that have to be attended to after the feelings have passed. You are in the Emotional Trap if you let your emotions make significant decisions for you.

Resigning from your job while angry at your boss or colleagues or proposing to someone because of a sudden infatuation are perfect examples of the Emotional Trap.

Emotions are involuntary; you can’t command yourself to feel a certain way. Listen to them – they are valuable, but keep important decisions until after the moment when your emotions are in control.

Freedom through logical, yet emotionally honest decisions

Both your intellect and emotions are essential, real parts of you. Each has a purpose and neither can be ignored in order to get what you want in life. Both traps lead to trouble and to deny either of them is to fall into a trap. If you want genuine, durable happiness, you have to recognize your emotional nature and use your intelligence to think ahead to create situations that will trigger happy emotions from your unique nature.

When your plans have produced your desired outcomes, you can disregard your intellect, relax and embrace your feelings. You are now free to act spontaneously within that situation because you have removed the possibility of negative consequences. You can allow yourself to be engulfed in a flow of genuine positive emotions, something that absolutely makes life worth living.

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Identity Traps Limit Personal Freedom

Identity Traps are the belief that you should live in a way that is determined by others such as your friends, colleagues and family, and the assumption that these people will react to things as you would.

To find true happiness, you must understand how your unique emotional nature responds to things. You must take the time to observe and seriously consider your own emotional reactions. If you attempt to fit your emotions to a standard that is defined by others, you lose touch with your true self and blind yourself to the most important part of you-the things that would make you happy.

You don’t have to live a life that isn’t yours

Your negative emotions can act as signals, letting you know that there’s a part of your life that is uncomfortable and needs attention. Don’t suppress these emotions but rather acknowledge them honestly and without judgement.

On the other end of the spectrum, it’s just as damaging to deny your positive emotions. Certain things that please you may be frowned upon by friends and colleagues. So what?! Your happiness is the object of your actions. Does it really make a difference if others claim they know what is “correct”?

Your personal positive emotions are the seeds of a happier and true life. Every day they are trying to tell you how you can be happy. Ignore them, suppress them, or deny them and you lose the vital guideposts that could lead you toward happiness.

Acknowledge these four basic principles to help to avoid the Identity Trap:

  1. You are a unique individual that is different from all other human beings. No one else has the exact same nature as you; no one else reacts to things or sees the world exactly as you do. No one can dictate what your identity should be; you are the best qualified person to discover it.
  2. Each individual acts from his or her own knowledge in ways that they believes will bring them happiness; acting to produce the consequences that they think will make them feel better.
  3. Treat things and people according to their own identities in order to get what you want from them. Just as water isn’t a sandwich, it’s just as unrealistic to expect one person to act as someone else does. You have no control over the identities of people, but you can control the way in which you deal with them.
  4. You view the world like no one else as a result of your own experience, interpretation and limits of perception. You need not know the absolute truth about everything in the world.
    Instead of searching for absolute truths, ask yourself: does it work? Does your identification of things lead to the consequences you expect? If it does, what you’ve perceived was true enough for that situation. Acknowledge the context of the situation and be skeptical when generalizing from that test to draw broader conclusions.

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Personal Freedom

Personal freedom is hugely important to who we are. After all, every individual is different. Each has their own identity with it’s own knowledge, understanding, perception and attitudes. While many individuals may look, act or think in a similar fashion every one is indistinguishable in some way.

Your Personal Freedom

You are you and only you. You live in a world of your own, composed of your own experience. You can’t be someone other than who you are. You can try, but you will always be stronger than the mask you are trying to wear.

Freedom of Others

No matter how hard you may try, you cannot control the natures of other people, but you can control how you’ll deal with them. You can also control the extent and manner in which you’ll be involved with them.

The paradox is that you have near absolute control over your life, but you give up that control when you try to control others. The only way you can control others is to recognize their natures and do what is necessary to encourage your desired reactions from those natures. As a result, your actions are dictated by the requirements involved when you attempt to control someone else.

Consequence of Decisions

The barriers that we perceive are typically only consequences. Everything you do will produce an effect or consequence of some kind. The consequences you will depend upon the identities of things and people and how you deal with them. To be able to predict those consequences depends upon your ability to perceive the true identities of things and people.

A positive decision is one in which you choose among alternatives to maximize your happiness. For example: deciding whether you’ll be happier going to a movie or the opera.

A negative decision is one in which you choose among alternatives to minimize your unhappiness. For example: deciding whether to let your roof leak or to deplete your savings account to get it fixed. Neither choice will increase your happiness; you’re trying to decide which choice would be the least unpleasant.

Someone with personal freedom spends most of their time making positive decisions—choosing among attractive alternatives.

Instead of taking for granted assumptions about what you “should” be, start from the inside – from inside of you. Start by finding out who you really are – your unique collection of feelings, desires, perceptions and understanding. When you find it, respect what you see in yourself.

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Communication Skills Training

When I was offered some communication skills training recently, I was skeptical to say the least. It was ran by a life coach, came highly recommended and I wasn’t paying for it. Sure, why not!

I can confidently say that it was well worth my time. I have a clearer vision of my future both on an employment level and throughout the rest of my life. One thing that became an obvious “want” of mine, is to learn how to communicate effectively with others.

I believe I am a good communicator – my outgoing communication is good and I have no reservations with telling people my feelings or what I think. My challenge is when I’m trying to talk to someone who doesn’t communicate well. When I began the coaching I was under the impression that if I was talking to someone that was unable to articulate their feelings, it was a situation where “they can’t communicate, so they need to change”. Things aren’t always as they seem.

In my personal situation, people close to me often tell facts about their day to day life, but nothing of emotion, deep meaning and true value. I can hear about what happened at work for an hour (being busy, what new policies there are and so on), but not how tired they are from being busy, or how the new policies affect them (disappointment, frustration, etc). I acknowledge that facts have their place, their place isn’t here. When talking to someone you care about, you want to know how they feel and how life is going for them, not dry, unemotional facts of their life.

Communication Skills Training helps you to help others’ take part in meaningful conversation

With effective communication skills, you can encourage the most introverted person to open up and tell you meaningful information about their life.

Some useful steps to effective verbal communication:

  1. Remove Distractions – The easiest way to start a quality conversation. Television, radio, a computer, newspaper, etc. They will all distract you from your conversation. If the person you are talking to thinks you aren’t listening, they aren’t going to open up to you. This is easily fixed – turn the TV off, put the paper down, switch off your smartphone.
  2. Be Curious – Ask questions about the content of their conversation. If you are genuinely curious, the person you are talking to will begin to open up to you.
  3. Clarify – By clarifying what the person is saying, they often respond with more meaning in their speech.
    • Paraphrase – Say what they told you, but in your own words.
    • Mirror – In their words, repeat what they said.
    • Clarify – By clarifying what they are saying in your own words, you will make sure that you know what they are telling you. They will most likely further clarify what they are saying too.
  4. Ask Questions – Although point 1 is asking questions, this point is directly in relation to how it has affected them. It’s a direct question for meaning. “How did you feel about that?” “What was the impact on the rest of your day because of that?”

Drill Down for Meaningful Conversation

Your main objective is to drill down for meaning. Drill through the facts and the information to find out how they are coping with life. Find out what makes them happy or sad.

Not convinced after my first training session, I went straight to my desk and mirrored a colleague when he told me something about his home life. He proceeded talked for about 5 minutes about how life was affecting him at the time. I couldn’t believe it – it worked! And I was able to put a smile on his face after it all too – a good vent was all that he needed.

Coaching has taught me that much more is in my control than I first thought. If I can use these communication skills to help others, my life will be happier too. We all win!

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High Impact Low Effort Changes

High impact low effort changes, it’s the stuff dreams are made of. In the workplace, high impact low effort ratios make perfect sense – most businesses will find that a small portion of their customers account for most of their balance sheet. Small tweaks to their website or their marketing strategy can often mean great reward.

Most people are living the high effort, low impact lifestyle

What about your personal life though? How much do you need to earn to sustain your lifestyle? My friends pull figures out of thin air. On the weekend one said that if he could earn $100,000 he’d be happy. “I will do anything to earn that sort of money, even work 80 hour weeks!”

Why is it that when we all started our careers we never had enough money, yet now that we are grown up earning much more, we still “don’t have enough money”? It’s not our fault that we always want more “stuff”, Western children were raised on television and junk mail all asking us to consume. It’s just that it really locks us into a working life.

I have no intentions of working for my whole life. In fact I recently quit my 9-5 job in favour of becoming a consultant. I enjoy my work but I like to work when it suits me (when I’m creative, motivated and productive) rather than when someone tells me I have to work (when I’m unmotivated). I may be the odd one out, but there’s something about getting paid to sit around and do nothing that just doesn’t sit well with me. In order to do this, I have chosen to base my business around a 20 hour week (low effort). During these 20 hours I am highly effective (high impact) and can therefore afford to charge more per hour than I could if I was working on a 40 hour week, as I’d be much less effective during that time.

The leap of faith also took some financial planning but for the most part, it’s been made easy by committing to less recurring costs!

Recurring costs erode your finances and therefore your options

Mobile phone contracts, Internet contracts, cable TV contracts, petrol, car registration and insurance, club membership, Netflix, I could go on. Most people are more committed than they may know. Obviously some things you can’t live without and most people need to spend money to make themselves happy sometimes. For instance, I enjoy using the Internet and I spend more money than most people I know do on Internet, but I get my money’s worth!. I don’t have cable TV, because I don’t really watch much TV. I feel as though I can justify that expense.

The issue is that most people don’t really think before they commit to things (eg, $99 a month on their phone). Before long they are so used to having it, they “need” it. Add up all of those weekly, monthly and yearly financial commitments and combine them with the daily habit of buying things (eg, DVD’s, clothes, expensive food) and sure enough, you’re broke.

The habit of spending less is a high impact, low effort choice that significantly helps your finances in the long term

I explained to my friend that while earning $100,000 a year by working an 80 hour week, he wouldn’t have the time to service his car or paint his house. All of a sudden he would have more costs than he did while earning less money and working less hours. Presumably his quality of life would be greater too!

The best thing about high impact low effort changes is exactly as it sounds. By making small changes in life, you can experience far greater rewards. Slashing your spending is one of many high impact low effort decisions that you can make to give yourself many more options in life. You will likely find that it will open a lot more doors for you too!

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University and College is a Waste of Money

Tertiary education has an important place in many career paths, but for the vast majority university and college is a waste of money. In just 50 years, Australians have gone from a population of early school leavers, to pushing a large number of year 12 graduates into tertiary education. Most Western countries are the same – college has been given an increasing importance in every individual’s life.

For many, College is a Waste of Money

With rapidly rising tuition costs, university and college has tipped the scales from giving graduates a head start to beginning their adult lives with an enormous amount of debt. One needs to do the sums to find out how long it will take to pay off that college degree with the extra money that they may earn. Not only is the cost of college a contributing factor, you also need to remember the cost of not working for the 3+ years you spend studying.

Postured for Tertiary Education

I studied at a great private school, where for years before finishing I was asked “What University degree will you do?” Not one person asked me whether I wanted to finish schooling or IF I wanted to continue studying after finishing school. It was all about the Uni. After being encouraged by teachers, parents and friends to go to uni, I applied and gained entry into a Software Engineering degree. A few months in to the degree, I realised that it wasn’t for me. I’ve never been one to learn by having someone tell me something to my face, I need to do it myself in practice to understand how it works.

More importantly the course content was not for me. It was always my dream to work in the IT industry but my real passion was in Network Administration. As a University degree did not exist for this yet, I was advised to study software engineering instead. I saw out that semester – nothing changed, so I quit and started working full-time.

I was always told that in order to work in the IT industry that I’d need a degree, but it couldn’t have been more from the truth. In fact, a degree would have wasted 3 years of my life and over $20,000. Out in the real world I realise how many people who work in my industry don’t have a degree. Many of them have certifications from companies like Microsoft, Cisco, Novell and so on, but many skipped college – and most that do have a degree have one in Business Management.

College is a Waste of Money
Warm and fuzzy? Me too. It’s a shame that college is a waste of money.

College can be useful

While there is clearly a place for these organisations, I think it is unfair to be encouraging those who aren’t academics to continue studying after they finish school.

Now I’m not disputing that degrees are important. There are many jobs that require a large amount of study to do it well and rightly so. My friend is a dentist, my wife is teacher and some of my friends are lawyers. It just annoys me when I see teenagers convinced that they should go to uni so they can finish an obscure degree that won’t help them at all.

Why encourage your child to start their adult life with even more study after spending the last 13 years in the books? Why encourage them to take on a huge student debt before they truly know what they want to do with their life? If they have 100% direction and know that they want to be a doctor, great. But if they “think” they want to be a personal trainer, there’s no point pushing them into a Science degree only for them to quit after doing it for two and a half years. 2.5 years and no certification at College is a waste of money!

Learning can be done anywhere!

Whatever happened to learning the job that you need to do, on the job? Are employers too cheap to train people nowadays? One can learn from books, other people, the internet and so on. Don’t limit yourself to studying the exact same content that 300 other students learned at the same time. It’s no wonder you will struggle to find employment after finishing your course!

Maybe Tertiary Education isn’t about you?

It’s obvious that universities want (and probably need) more and more money, so they offer more and more courses and degrees to do this. Because of the wider range of degrees, more people are going to uni to study and because more people are considering study, more of the image driven parents are encouraging (and often forcing) their kids to study “with their best interest at heart”. The more people that study these obscure courses perpetuates the fact that college is a waste of money.

Everybody has their own direction and everybody learns differently. If you don’t know what you want to do for the rest of your life don’t stress – get out in the workforce, get some experience and discover what you want to do. Be true to yourself and follow your own path.

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