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Raman Minhas
Raman Minhas
Articles (7)  | Author's Website |

Your Top Five Most Valuable Possessions

December 09, 2014

What are the top five most valuable possessions in your world? Thinking about this question can reveal some fascinating insights about how soon and simply you could move towards financial freedom.

Specifically, what things do you spend money on today that are the most valued things you have. I’m not talking about staples or basic needs, e.g. food or housing. Also, exclude things that might be considered luxuries – e.g., holidays abroad, eating at smart restaurants, fancy houses or cars. Focus instead on the stuff in the middle which has a meaningful impact on your day-to-day life.

Every dollar counts

Think about discretionary spending where you gain the most return, or in economic speak, utility, for every dollar you spend. Start out listing everything that you think is important, then try to whittle it down to just five things.

As you strip your list down, really think about why something is useful to you. If this is still too hard, pick off any two things from the list and compare with each other, eliminating one. Then repeat until you have just five left.

Next to each, write the dollar cost, why it’s useful to you, then total on an annualized basis.

Top five most valuable possessions

For me, the top 5 (not in any particular order) are:

  • Smartphone – $30 per month. Ultimate communication, productivity and life-enhancing tool.
  • Laptop – $400. Compliment to smartphone – for research, reading, work, communication, creativity, media, etc
  • Tai Chi DVD – $12. Exercise. Relaxation and meditation tool – I spend 25 minutes per day following the routines by a grandmaster.
  • Good shoes – $150. I love to walk. Plus they keep your feet, and you, relaxed all day.
  • Investment website membership (I use Gurufocus) – $300 per year. 10 year data, interactive tools and screens, guru buys, good articles to learn from.

Assuming an average life for the laptop of three years, and shoes for two years, this leads to an annualized cost of $875.

That’s amazing. Just $875 per year on the five most value enhancing things bought. Or $73 per month.

For me, there’s a strong disposition towards access to timely information and basic health enhancing tools. Interestingly, I wasn’t as aware of how highly I value these things until completing the short exercise.

Basic needs

Of course, everyone still has basic needs. These include food, a place to live and transportation of some kind.

Everyone has a different definition of what these look like. I would be the first to say having a comfortable place to live along with nutritious and tasty food is high on the list. Mostly this is because of how it enhances the opportunity for building relationships – both with your immediate family and with extended family and friends.

But it doesn’t have to mean big or fancy. As many others have, I’ve spent a little time visiting emerging economy countries (India and Malaysia). While these countries have metropolitan centers to match the world’s best and a globally competitive workforce, I’ve also gone off the beaten track a little and witnessed the warmth and welcome from people with much less than is usual in the developed world.

Framing basic needs in the context of your Top 5 most valued possessions can help in deciding what are really necessities, what’s nice to have and what are way up the scale as luxuries.

Luxuries

These are more interesting. Not because of the sheer breadth and range available. But because of needs we might usually consider as “basic” that could actually be moved into the “luxury” category.

Once you’ve defined your top five most valued and used this to frame your basic needs, virtually everything else is a luxury. That might sound like a bold statement.

I’m not suggesting luxury is a negative thing.

But there is a very wide range which starts much closer to the “basic” end of the spectrum than we usually associate. For example, maybe you have a modest house by the standards of “Cribs” or “Lifestyles of the Rich and Famous.” But chances are, you still live in splendor and luxury compared to over 5 billion of the world’s population.

Or perhaps you don’t drive a Ferrari or Rolls Royce, but you probably still drive in luxury just like a famous investing billionaire.

Completing this exercise could help you do three things:

  1. Focus in on what you value – for me this is information and health (with a view to creating and enjoying more time)
  2. Redefine basic vs. luxury – and see that you have far more flexibility and choice on the luxury scale than you ever imagined.
  3. Bring financial freedom closer – by using this life-hack in your financial freedom toolkit.

What are your top five most valuable possessions?

Raman Minhas writes about using value investing, saving and psychology to help you reach financial freedom. If you enjoyed this article, join his free newsletter.

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