The Value of Getting Out of Your Comfort Zone and Cultivating Healthy Money Habits, Chat With Lionel From Cent by Cent

Yasi: Welcome to Fast track podcast Lionel. 

Lionel: Hey, thank you for having me 

Yasi: I am very interested in knowing you and also your personal stories that you moved from Switzerland to London for your career. So I want to know how did they happen? Why did you decide to move away from Switzerland? 

Lionel: Well, yeah, I mean, I’ve been called crazy about it a few times, especially when I say that I’m passionate about personal finance and, uh, the fire movement and people are, so what the heck did you leave Switzerland with that high salary and all those opportunities you had and the thing growing, being born and raised in Switzerland makes you realize that it’s a bit of a golden prison in the sense that.

Once you start earning a Swift salary and you start setting down in Switzerland, you never want to leave. And I’ve seen so many people that, um, graduated university and were telling me, yeah, I want to travel. I want to do also, but now that I earn. 10,000 francs a month. I’m actually pretty good here. Um, so yeah, I didn’t want to that to be my story.

I wanted more of life. Uh, I wanted to discover the world. I know you’ve done it as well. You’ve lived in eight different countries, right. So I had that mindset of, I want to see more. So I didn’t know. I wanted to go to London. I just applied to everywhere around the world. And this is the job that got my attention.

Yasi: Yeah. I totally understand, because I think you, in your. Early twenties or at the beginning of a career, really, you have nothing to lose, just try it out. And then maybe there will be new opportunity came up. That could be better, you know? 

Lionel: Yeah. That’s the idea is that if I had kids or like a dependence, maybe I would’ve felt differently.

I also didn’t have a relationship at the time. So for me, literally, nothing was holding me back apart from the greed of a highest salary. Um, and yeah, I’ve always liked the idea of. Of discomfort and kind of getting out of my comfort zone to, you know, look for something new because that’s how you grow.

And yeah, I wonder if I’d even be doing everything I do now outside of work, if I had stayed in Switzerland, if I’d just be contempt with what I have. 

Yasi: Yeah. Yeah. And also if you see that maybe you get a higher salary right now, if you’re working in Switzerland, but think five, 10 years down the road, now you have experiences abroad.

You grow as a person, you met more people. There are more opportunities. Maybe at the end of the day, it’s still better off. You might not even having like financially, you know, Worse than if you were living in Switzerland. And so that leads to my second question. You mentioned about personal finance, that you have a lot of interest in this topic.

Like since, when did you get interested in this topic and why personal finance?

Lionel: That’s it? It’s a good question, but actually it’s um, so I come from a blue collar family, so my dad’s a butcher. It’s like, I’m the first one actually studying in my, uh, In my family. Um, but one thing, my grandparents, my father, my mum, all out have lived the taught the answer.

You can money as a tool that you can use to set yourself up and that you can use to your advantage. It’s not you, it should never be your target in life. It should never be something you base every decision on, but it’s something that can give you. A step up or can make a difference in the long run if you’re smart about it.

So I’ve always heard about investments about how the finances of the shop were going and how all these things working. And it led to me starting to wonder, well, if they can do it, if they can, like what, I’m curious, how can they play the game? How can I stop taking stocks? How can I start getting. Uh, ahead and how can I start making my life better in not today, but maybe in 20 years.

So, yeah, it’s just got me thinking and it got me really excited about the challenge. Basically. 

I really like how you think about it. Like if they can do it, why not you, right? 

Exactly. Yeah. I don’t like the idea 

of. I mean, of course my goal is to leave something, a legacy for my potential children one day, or for people that come after.

But at the end of the day, I think it’s important to learn the, the value and the chat of the challenge and to learn how to create your own path in life and go that way. Of course, parents are meant to give you a lot of things, but yeah, being able to take what they teach you and apply it to yourself is how you truly learn it.

I believe. 

Yasi: Yeah. And also by, you know, learn to yourself from books, from talking to other people from taking additional courses. Since you have learned a lot about personal finance, have you ever made some big money mistakes you want to share with us?

Lionel: Um, so, uh, well I started like, um, truly I was still students, so it was before I started investing in a lab, but I had this idea I’ve always heard, you know, like never buy a car and you always buy a used car because it will cost you a letter that so like yeah, for sure. I looked for the cheapest car I could found.

So I found the car. I think it was a 1919 Volkswagen that cost me like 1000 Franc. Except I did not realize is with that car came. Higher taxes because it wasn’t the Constable than higher, uh, like higher monthly bills because I have to fix it every two weeks. I think my TCS was going insane. I need, he reached a yearly limits.

Like every, basically what I saved on the cost of the car. Cost me. I think that the first year cost me like 6,000 francs, but I had to only paid a thousand for it. So I never saved them. Basically. One thing to go to cheap was one of the biggest mistakes I made because it just put me into home for a lot of money after two years of owning that car.

So yeah, that I think is by far the biggest mistake. 

Yasi: Yeah. It looks cheap. At the beginning, but you didn’t know it’s uh, yeah. It’s putting money 

out of a pocket. Yeah. 

Lionel: It was a trap. I believe the salesman and yeah, it taught me that I need to do a bit more research, especially when I’m spinning I’m I’m a student and for now it wouldn’t be that much of a hit.

But back in the day, 1000 Franks was already like everything.

And that was the first year. 

Yasi: What happened to the car? 

Lionel: Let’s say it took me another year to realize it was, uh, it was time to get rid of it. And by the time I realized it was dead, so I couldn’t even make any money selling it. So I just had to, I had to pay money to get rid of it. So for someone to get it.

So, yeah, I think in total that car cost me 10,000 francs or 11000 Franc’s when I could have just. Spend 5,000 to buy a car and, uh, and then much less often. 

Yasi: Yeah, that’s the thing was the car. Usually when people buy a car, they think about how much they can afford, but they never think about the associated costs come along with it.

 And now how did you evaluate, how much you want to spend on certain things? 

Lionel: Um, so now I do much more research on what I buy first. Now I have a mindset of I’m not frugal by any means because I still spend some money. I mean, uh, I think my saving rates about 40% right now.

Uh, but I still, I still spend a fair bit of money every month, but the way I look at it is if it’s something like a pair of. Walking shoes or a jacket or something. I’ll spend a bit more upfront because I know it’ll last me for longer. So I’m a minimalist when it comes to things. Basically I own very little things because in my mindset, I’d rather spend.

A hundred more on something and be sure that it will last me for five, 10, 20 years, then get a pair of sneakers every year for 30 francs because it’s cheap. But at the end I spent more money in the long run. So do I look at it now is I do a calculation around life expectancy and cost. So I do a cost per year.

Of what I’m going to purchase. So if I made to purchase a pair of shoes, that’s cost me 200 times. If it lasts me 10 years, it’s worth it. If it lasts me a week, uh, it’s not worth it. So that’s how I look at spending now.

Yasi: I think now I also start to look at things this way. In the past. I never paid attention to it’s, uh, you know, this concept of cost per usage. Yeah. 

Lionel: Yeah. But yeah, I don’t know. It’s, it’s something that. That’s uh, it’s easy to fall in the trap. I mean, like for example, people have to go to primark or things like that because it’s cheap.

Right. But at the end of the day, even something like that, even a t-shirt’s will, if it lasts you a week instead of a year, what’s, what’s the point behind it. And I’ve also started thinking in more of an eco conscious way in the sense that what, not only what impact does it have on my life. And how long it costs me, but how much does it cost DRF and how much does it cost people around me?

And do I really want to wear shoes that were sewn in a factory by a child? Probably not even if it’s cheaper. So it kind of made me think a bit differently about that. 

Yasi: What is your money philosophy now in terms of spending, investing? 

So my money 

Lionel: philosophy. So I’ll start with spending as we were on that, and then I’ll get you investing. So in my mind, uh, when it comes to spending is what impact is going to have on my life. Is it going to be a good experience? I’m really trying to focus more on experiences and.

Um, like just enjoying things that are going to bring value to my life. So I have no issue buying, uh, a good a book, or even if it’s a bit more expensive than another one, I’d have no issue going on a holiday or going to I’d rather go to a nice restaurant once, then take away every week, for example. So my mindset is, is more than that side is that I spend for good experiences within the budget.

I’ve given myself. So I don’t know if you’ve read your money or your life. The work of Vicki Robbins. Uh, I actually, uh, that’s amazing. It’s great. It changed from my way of spending as all that. I’m, uh, I apply her way of spending with I track every spend I make. And then I asked myself what value it brings to my life and all these things.

And that’s really helped me like cut down on, on silly things like, uh, I’m not going to buy that random pack of cookie. I will, every time walking out, I’ll buy it once in a while and it feels nicer. So that that’s, that book is. Uh, it was really a life changer for me because it really helped me to kind of get into and into where I spend my money into where I live.

So I’ve done that. And then you asked about investing as well. So the way investing goes is I think the biggest mistake most people make is they’re not humble about the investing. They think they know it all and that they can know it all and beat the market and all that. So a fun fact I love is there’s.

Um, There’s this every year they do a test where they have monkeys pick investments, and then they have hedge fund managers, pick investments as well. And consistently since 1970, the monkeys have beats the hedge fund managers by picking, just picking whatever stock they wanted randomly. So that’s my way of looking at is that if even guys who it’s their job and their profession to invest, make mistakes.

I’m not going to take too many risks. So I still want growth. Of course. So I look more at equities and things like that, but I must invest with index funds with Vanguard, for example. Um, so I invest 80% every month with Vanguard. Uh, so I buy into hm.All cap accumulation funds. So that basically equity around the world, uh, S and P 500.

So the VUSA, as it pays a little dividend as well, and then they have something in the the UK that’s called life strategy funds. Um, so they have different persons chairs and they invest in the 80 20 one. So 80% equity, 20% bonds. And then 20% of my investments I do through trading two, one to where I mostly invent, uh, invest on, uh, Dividends stocks in the UK.

Um, so for example, BP or, um, things like that, just to, because it’s a small percentage of what I invest and I don’t take too much risk with that. 

Yasi: And how did you learn how to construct your own investment portfolio? 

Lionel: That’s a, that’s a tough question. So I’m a big fan of like, um, like as I’m a bit of a nerd, so I like running numbers and it’s my job, right?

I’m a, I’m a revenue manager or they think you mentioned in the intro. And my job is then to, to really, to, uh, to basically look at numbers and build strategies to optimize everything coming in. So. I’ll be honest. It took me about a year to pull the trigger before I started investing, because I wanted to be sure of the way I approached it.

Um, and YouTube videos and blogs like Mr. Money, mustache, or, uh, YouTube videos like, uh, Gram Stephan, for example, really helped me a lot because they have. They had a good, easy mindset to listen to. And they taught a lot of the basics very well. And with those basics, I was able to start making my own models and creating my own idea and trying to build them a bit more so I can share them for free on my website, but I’m not quite there yet.

Uh, so yeah, I learnt it through that. And then it’s a trial and error. Um, and yeah, that’s a, that’s just trial and error. I’ve made some mistakes. I’ve lost a bit of money, but. Index funds for me a bit safer. So I try and never put in more than I could afford to lose, uh, just because I don’t want to lose everything.

So yeah. Emergency fund is key for me for that. 

Yasi: Yeah. I think what you talk about is absolutely correct that you really can learn from all this resources online. And then to many people, investing sounds very scary at the beginning, but you’ve, you’ve spent time studying it do some research. Then you will feel more comfortable having your own portfolio, then you stick to it long-term.

Lionel: Yeah, for sure. I think it’s something. Banks. So I’ve always felt safe for everyone because it’s bigger institutions. And I mean, I have my emergency funds in the bank. Right. It would be insane to have it and stocks, because you never know if tomorrow it’ll go down 2% or not. So you always have to keep, but in the long run, I mean, history has proved that it’s always going to grow.

So I’ve been kind of preaching it to a lot of my friends. I was one of my proudest moments of, well, I think it’s yeah, 2021 was to get, uh, my best friend to start investing. So download trading two on two and start putting every month, a bit of money and just. Tiptoe. I said, don’t go heads in. Don’t go massive at first.

Go maybe a bit smaller at first, just so you get used to it because the first day you lose 5% of your portfolio. It hits hard. You’re scared. And you’re like, what’s happening? Am I losing all my money? So my advice for him and for people starting is step-by-step small amounts get used to what you’re spending and get used to seeing it go red, go green, and it’ll get you into it slowly but surely.

Yasi: You mentioned about the expenses, but I want to touch on that a little bit more. How do you manage your expenses? How do you decide how much to spend on what items or, you know, and how the way you manage your expenses changed? 

Lionel: Yeah, of course. Um, so the way I looked it was, I, I downloaded an app. First of all, that tracks my spending. Uh, and all my accounts, just so that it gave me kind of an idea of where it was going. Um, and what I started doing is I basically built a basic Excel spreadsheet where I put categories. So, um, groceries, restaurants, et cetera, et cetera.

Um, in which I am to every expense I do with a little label of what, where the expense comes from. And so I said, I’m not getting, when I started off, I said, I’m not going to start budgeting. Now. I want to know how much I spend when I’m not thinking about it. So basically I knew I was breaking even, or saving a bit of money, but I wanted to know where my money went to.

Exactly, because it, for me, it was crazy to do a budget. Without knowing what I was actually spending anywhere, because it was easy to say, uh, 80 fragments on the, on shopping, a Uber and whatever. So I, I started by for one month. I think it was the month of January, 2019. I tracked everything I spent, looked into detail, puts it in my spreadsheet, start the February.

I sat down and looked back, okay, this is what I’m spending. This is where my money’s going. Okay, that makes sense. So do I need to spend a hundred Franks at the pub every month? Probably not our budget. I’ll put a budget at 40, so I can still go and have drinks with my colleagues, but. Maybe I say, no, what?

I’m getting close to full teeth. Well, I spread it out. Uh, do I need to do, do I need to take Uber when I come home? No, I can walk from wherever I was. I don’t need to take Uber. So all these little things basically was a trial and error process. So that second month I went for everything. I put the budget targets and I did the same thing.

So I entered every expense. I did trying to follow the budget month after I checked again. And basically I’ve been fine tuning it. It’s still not perfect. Two years later, but every month I review what I’m spending and I’ve seen my expenses get flats and the flats and flats and flats. And my income went up because I got a promotion, but otherwise my savings have been going up.

Investments have been going up basically. Yeah. 

Yasi: So eventually you will arrive this crossover point and then there let’s do the next question. Then. What is your future plan? Do you plan to retire early and to be financially independent or else? 

Lionel: Hmm, I think I’ll go with Ellis now. Um, uh, financially independence.

Uh, yeah, I’d love to have the idea that I don’t need to look over my shoulder of where my money. Of how it’s going. Um, I’ve always dreamed to be an entrepreneur, uh, and to, I want to make a difference and to help people around me. So I don’t think retiring well, I will retire one day, hopefully, but I don’t think retiring earliest for me just because.

I don’t want to end up at, I don’t know, 45 looking at another 50 years and not knowing, you know, not bringing value. Uh, for me it’s important to bring value, but what I’m looking towards and what I would like is to be able to bring value in my own way. And on my own terms, my dream is really to bring. For me, a big crusade is education.

And because education for all, everybody needs education and bring most importantly, show everyone that if I can do it, if anyone my age, or you guys can do it, if, and I’m sure that’s also what a lot of us online content creators are bringing is that we can all not achieve financial independence, but at least financial literacy and learn how to manage your finances.

Be safe, not have 10,000 in debts. I want to help people get safe and get on the positive side. I don’t want to retire. I want to make a difference. 

Yasi: Is that why you started, uh, cent by cent your blog? 

Lionel: Well, I mean, I’m, don’t think I’m making a difference yet with it. I think it’s still small and I’m building up a bit by bit, but my goal is sent by sends is, uh, whatever article I wrote or whatever piece of content I put out.

It makes sense a difference for just one person. I don’t, I don’t need a thousand views. I don’t need millions of visitors every month. My only goal is to genuinely make a difference in someone’s life and to try and not even in their lives, just make them think and make them try and do something else. So I want to make her platform that’s easy, accessible, where people can learn how to, to, to grow their relationship to money.

Not be scared of it. It’s your, it’s a tool it’s not. Your God, it will help you get where you want to get. So, yeah, that’s the big idea behind it. You don’t know wehere it will go, where it will leave me, but this is why I’m starting now is just trying to make a small difference. 

Yasi: I also like your recent articles about, you know, renting a place and work from there.

Try remote working and also have. To create a lifestyle like work from your countertop, or I love your articles. 

Lionel: I really appreciate that things. No. Yeah. I think that flex cations that I was the one that did my guest posts on, uh, on the financial Imagineer. And, uh, I really enjoyed writing that article because it’s something I try and put my money where my mouth is.

Uh, it’s something I’ve done a few times. We tend to always think vacations, always have money and that we lose time. But I, my goal is to show that if you. Combined different things together as well. You can get the most productivity out of even fun stuff. Like, okay, you want to rent a chalet in the mountains.

Rents are shallow in the mountains, maybe work two days remotely from there and ski on the weekend and have a good time. And instead of being in your same environment, same office, you get to see the world and you get to have a really good time somewhere else. And that means that, yeah, you’re not moving abroad, but maybe it’s a first step towards that.

Maybe you want to get and discover the well that it allows you. Just to test out your, your life. 

Yasi: Love it. And so this, all my questions, I hope the audience gained a lot of insight and learned a lot from your personal journey. And then you’ve, some of them want to get in touch with you or read more of your blog articles, where can they find you?

Lionel: So, uh, I’m easily accessible on a cent by cent.co.uk, uh, which is my blog. Um, and if you want to get in touch, you can also reach out to me on Twitter, uh, at cend by cent. I’m I answering any message, just come on, have a chat. I’d be more than happy to, and yeah. Otherwise feel free to follow my newsletter as well.

That’s accessible on the website. 

Yasi: Great. I will leave all the links in the show notes. So thank you very much for coming here today. Lionel.

Lionel: Thank you for having me.