Today’s interviewee is Lean Life Coach from Eliminate the Muda. I can’t seem to get enough of his writing and he’s a consistent commenter on the site. Enjoy his fantastic interview:
What the heck is Muda? Muda is a Japanese word for waste. However as many things in the Japanese culture this seemingly simple word has a very deep and complex meaning in the context with which I teach it. Muda refers to any action, expense or effort that adds no value. The concept was popularized with a well known business management philosophy generically called Lean Management. In essence and properly applied it is a way of business that focuses on the customer first. Delivering the greatest value in products or services at the lowest price possible. In business this means eliminating the unnecessary. If you have ever worked for a company, any company big or small you have seen waste in many forms. Lean empowers and teaches employees how to identify and eliminate them.
In one’s personal life these same principles can be applied. For example, as the resident weekend breakfast maker in our house, I took a 40 minute process cooking pancakes and bacon a few years ago to a 20 minute process today. My wife teased me saying this was a silly example. But think about this, 20 minutes saved two days a week for 52 weeks a year times say 25 years gives me an extra 36 day of life to do what I please. It also manifests itself in money, not only does more time represent more opportunity to earn or save, but these principles guide sound spending habits.
What is the most important personal finance lesson you have learned? You thought I left you hanging on that last question? The most valuable personal finance lesson I learned was the value of money and how to make sound judgments when spending. For many years my wife was not my partner in finance. Until that is I shared with her my most important lesson: The value of savings.
In a nutshell it is this, your savings are worth more than any other money you have. Assume I have a 5% savings rate. This means out of every one hundred dollar I earn, ninety-five is spent on bills and discretionary items. Let’s say this 5% represents $1,000 meaning I earned just $20,000 per year. Furthermore lets say that I made a bad choice and blew $50 on a pair of rockin new shoes that I wanted (but didn’t need). That $50 comes from my savings, right. So if after bringing the shoes home I have remorse and want to recover the wasted money. How much extra do I need to earn?
If 95% of all earnings are already spoken for than only $5 of every hundred can be used to make up my savings shortfall. To recover $100 lost I must earn $2,000 additional dollars. I need a 10% increase of income to cover a stupid $50 purchase! How’s that for a different perspective?
What was first personal finance memory?
My earliest personal finance memory was in the second grade. I had a spare Cox airplane engine and no plane for it to go on. A friend at school learned of it and offered to buy it from my. Hey, what the heck it was doing me not good. So I brought it to school and took $10 in payment. It took about 30 seconds for us both to end up in the principles office and another thirty for my Mother to show up. I was punished for being a capitalist was all I could think of at the time.
Why did you join the Yakezie group?
I’d use golf as an analogy. they say when you play with a group that is better than yourself, you play better. Until just a few weeks ago I paid little attention to any performance metrics for my blog. My only focus has been on sharing my perspective, learning the technology, and working on improving my writing skills. The group is filled with some amazing writers, a tremendous amount of talent, and a wide array of skills. When the challenge was launched I saw it as another path for continuous improvement.
If you could go back and tell your 20 year old self one thing (about personal finance or not), what would it be?
Don’t I wish! I would tell my 20 year old self the same thing I’ve been telling my kids since they were toddlers. “Always save twenty percent!”
Which is your favorite post? Why?
This is a tough choice. There are two that compete. Combat the Closing Techniques – The Puppy Dog Close was the first in a series I am working on to educate my readers on how to deal with salespeople. While I’ve really enjoyed researching and writing this series I am especially proud of this one because it was a Best of Money Carnival editors pick.
As a hobby I am a woodworker building furniture and turning bowls. Another post that means a lot personally is The Value of DIY is Greater Than Just Savings. This one was really enjoyable because I was able to share some amazing work by three fellow bloggers.
What motivates you to keep writing?
Professionally I teach many of the same principles of Lean that I share in my blog for personal use. There is tremendous personal reward every time one of my clients benefits by learning and applying these ideas. Blogging leaves me a little more disconnected than when I am consulting but What motivates me is the thought that I can make a difference in somebody else’s life.
Daily Yakezie Short Carnival:
Coupon Strategies – Establishing a Workable Coupon System @ Not Made of Money