Hobofinance

Below is the path to financial independence used by the rich, adapted here for the penniless hobo. The main difference in approach of these two classes lies in stages two and three detailed below. Generally speaking the rich need not minimize, they can comfortably sustain their lifestyles without the immediate concerns of food, shelter or golf. In stage three, the rich need not look for debt (though many do), they already have capital to invest or they roll in social circles that will readily provide it. The hobo on the other hand has no social circles worth talking about and his hobo bag is empty, save for a Frisbee and an old rusty harmonica he found on the train. For a hobo wishing to sustain his hobo lifestyle indefinitely without the ominous threat of getting a job, there are 5 steps on the path toward sustainable unemployment:

1. Research
2. Minimize
3. Borrow
4. Invest
5. Live

1. Research an Asset Class
An asset is anything that if owned, puts money in your pocket. The asset classes you can learn about on this website include a money producing blog or website, investing in or trading stocks and commodities futures, investment or rental real estate and owning a business. Knowledge and preparation is essential before investing time and money acquiring assets. Making money is not an esoteric science or necessarily the result of countless hours of hard work. It is the outcome of smart work, which is defined by an accurate understanding of those things that are of value to other people, e.g. gasoline, pirated dvd’s and beanie babies.

2. Minimize: Reduce your Liabilities
If an asset is something that puts money in your pocket, then a liability is anything that takes money out of it, i.e. high interest credit card debt, car loans, a gold digging spouse etc. These are things that require a constant flow of money, and as such, keep you working for money rather than looking for easier sources of income. The most liberating and financially prudent step one can take is to remove things from his/her life that require time and money to sustain. Steps one and two are best dealt with in combination, in my opinion, by living abroad. Choosing a good location will result in a higher quality of life at a reduced cost of living, with enough free time to find your next money making opportunity.

3. Acquire a Low Interest Loan or Borrow OPM
Once you’ve acquired knowledge of an asset class and have removed things from your life that require immediate or constant financial attention, it’s time to secure investment funds. The two most common forms of funding are OPM (other peoples’ money, including family, friends, business partners) and low interest loans from banks or credit cards. OPM is a little tough for most hoboes to secure because if you rolled in those circles, you probably wouldn’t be considered a hobo. If, however, you do roll in those circles and can borrow from family or friends or find investors who trust you, then you’re in an ideal position. If not, you’ll do it the way I have, use low interest credit card loans for personal investments or bank mortgage loans for real estate.

4. Invest
Combine steps one and three. Buy something that, given some time, will increase in value, e.g. the stock of a strong company, a commodity or rental property, or cash flow producing business. With your knowledge of an under priced asset or a product or service in demand, it is time to put your capital to work for a higher rate of return. This is a simple concept but it doesn’t hurt to repeat it. One must, when borrowing money, make sure that they are receiving a higher rate of interest than that which they are paying for their investment capital. This is easier said than done, so always work with worst case scenarios, fall back plans, and conservative estimates for potential returns. At this stage it is also essential that you don’t need your investment capital to live on for the projected time period of investment. You’ll need to secure enough to live on at the same time, which is why moving to a cheaper country where your expenses can be cut anywhere from 4 to 10 times is recommended.

5. Live
No explanation is needed.