Wednesday, April 8, 2009

How to improve your liquidity

Ensuring that we are always liquid is critical. A company could go bust overnight due to liquidity problem. What is liquidity? Liquidity simply means to be able to pay when we have to pay. Likewise as an individual, managing our liquidity is critical as well. We need to basically set up an emergency fund of our monthly expenses between 3 to 6 months to enable us to sustain should we encounter financial crisis like this. To ensure that we are always liquid, we need to monitor our cashflow. If we have been tracking our monthly or better still daily expenses then we could easily indentify the expenses that we could cut down.

We have been conditioned all this while to drive even to the nearest destination. Nowadays, bicycle has been my first choice mode of transport, followed by motorbike, then car and public transport. Not to forget we could even walk, okay!

Bike commuting is one of the ways to improve our cashflow. I am using this drinking container to put aside all the direct or indirect expenses that I could save whenever I am cycling my bike instead of using car/motorbike..

What are the direct and direct expenses that you could save?

Cost per kilometre (km)
How much does it cost you for every km travel if you are using your car or motorbike? I prefer this method since it also encourage me to track the distance that I have travelled so far. For instance if my cost per km is 15sen, then if I cycled for 50km to work (to and fro), then I would save RM7.50 (RM0.15 x 50km) that particular day. This is only applicable to activities that
instead of using car/motorbike, you cycled. Sports activities are not counted.

How much would I have to pay for parking? Let say RM2.50 per entry. Then that RM2.50 will be put into the container.

Do I have to pay toll for my journey? For instance, if I am using the NPE highway, I would have to incur RM4.80 (to and fro).

Maybe as a result of this bike commuting, you would quit smoking. Let say RM10 per day. Read the story of Riezal who has finally quit smoking

Gymnasium fees
Since you have been cycling regularly, you might stop going to the gym as well. Let say another RM50 per month saved.

I know that it's a bit tedious, but unless we know where our money goes to, we could never be able to improve our cashflow. Well, it's all about habit forming.

Commuting bike doesn't need to be expenseive. I acquired these 2 used bikes for about RM1,000. So far no problem and it has travelled for more than 2,000 km.

Fixie (Single Speed Fixed Gear)

Giant Chromoly 21 Speed

The most common operating expenditures would be:

Flat tires
Replacing tubes would be very expensive. A tube would cost between RM10 to RM16 depending on the bike shop. A cheapest solution would be to patch the tube. I bought a box of patch for RM10 only. It has 48 patches incusive of a glue. So per patch it only cost you about 21sen (RM10/48).

Replacing tires
You don't need to buy high performance tires for commuting purposes. My tires only cost me RM25 each. Honestly I didn't know how often do I need to replace it yet. Let say for 3 months (60 working days), then the cost would be RM0.83 per day (RM50/60 days)

Parts wear and tear
I don't upgrade. Only replaced it when required. Honestly, I don't have any problem commuting with my fixed gear bike. So the 21speed chromoly MTB is far more than adequate. So far for the past 2 years, the only parts that I replaced was my MTB's crank arm.

The whole idea is to minimised your operating expenses. It's like setting up your bicycling account. At the end of the day, you would be amazed that how much you could have saved. So cycle more in life (CMILe)

Read Dino's article on Spend wisely


akmalhizam said...

Good one, bro.
Gotta have those tube patches!
I've never estimated my savings for RTW, actually. Hence, never set aside the savings. Would be a good booster to start one.
At least I saved a few liters of water for having shower at the office instead of at home :)
Now, I wonder how much does a Saga costs per km.

Man CIOCC said...

It's not about what bike you ride, it's about what a rider you are.

zackgrafik said...

Kat mana nk beli patcher tu?

azizan abd aziz said...


I still remembered you asked for my commuting bike photos:-) Roughly you could just fill up full tank for your car before you start travelling. Then record your odometer. After your trip, note down your odometer and refill your car petrol full tank. Divide the petrol that you refill by the distance. So you will get the cost per km. You can add a few sen for your car maintenance cost.




Aku boleh tolong belikan kalau kau nak.