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Saving 50% of Your Income

By on Sep 10, 2016 in Uncategorized | 0 comments

In order to have $1 million invested so that you can safely withdraw $40,000 a year, you’ll need to fast track your savings. To do this you will have to save a high percentage of your income each and every month and invest that in a low cost index fund.  If your company has a 401(k) matching then that’s free money on the table. You don’t want to leave money on the table by not contributing to this matching. This is also a way to increase your savings rate. If you can save an upwards of 50% of your income, it will mean that you can retire earlier.  There are two approaches to this. Increase your income and decrease your expenses. Because it is generally more difficult to increase your income, most people tend to focus on decreasing expenses.  You can increase your income by having a side business in addition to your day job. This can include a plethora of things including selling products or services online, working another job, etc. I generally don’t like the idea of working another job if it takes away from your time with family. Find something that is scalable and not getting paid for exchanging your time for money.  Decrease your expenses by cutting out things in your life that you can go without. Cut the cord for cable and watch things online. Cook at home more often and don’t waste money eating out. Bring your lunch to work instead of buying a meal. Make your coffee at home instead of buying one at Starbucks everyday.  The key to both of these theories is consistency. You cannot just save money once a year and expect to have a heap of cash by the end of 10 years. You’ll have to consistently save money from each paycheck. Consider setting up an automatic investment withdrawal. You also cannot just skip the Starbucks once and expect to have more money available.  Stick to it and be rewarded. What examples do you have for increasing your income or decreasing your...

Financial Independence / Retire Early (FIRE)

By on Sep 10, 2016 in Education, Personal Finance, Savings | 0 comments

Financial independence and retiring early is commonly abbreviated as the acronym FIRE. If you’re an avid reader of this blog, you’re very likely trying to strive for each of these. But how would you define financial independence? How would you define retiring early? At what age is early?  Financial independence could mean a lot of things to different people. For the sake of this article we will define it as the amount needed to live off of a yearly safe withdrawal rate of 4%. For example, if you have $1,000,000 in index funds and withdrawal 4% each year, you’ll have $40,000 to live on and cover your expenses for the year. Depending on your cost of living, you may be able to live off of $40,000 a year, especially if you own your home outright and do not have any debts. That comes to $3,333 a month. With housing and transportation as the most expensive costs, if those two debts are paid off (mortgage and no auto loan), living off of $3,333 a month is plenty for most people. The idea is to adjust this number up or down with your savings amount and how comfortable you are with living off of that amount.  Retiring early is defined in this blog as retiring before the standard age of 65. Those who are looking to retire early have done so in their 50s, 40s, and even 30s. If you have done really well for yourself then it is possible to retire in your 20s as well.  The million dollar (literally) question is, how do you save up $1,000,000 to retire on? It depends on how much you make and how much you...

Credit Cards are Evil

By on Sep 7, 2016 in Education, Expenses | 0 comments

You’ve heard the term that money is the root of all evil. You may also heard that credit cards are evil. While it is true that people can get in quite a mess if they fall into the spiral of credit card debt. And while it may feel impossible to get out of that debt and easy to blame it on the credit card itself, that’s not the root problem.  Credit cards make it easy to spend money. There’s a psychological effect of not using cash and having it feel less “real.” In the same sense that casinos give you chips to gamble with — to make you feel like you’re not gambling with your own money. Credit cards make you feel like you’re not spending your own money.  Don’t fall into that trap.  It’s easy to spend money and not keep track of it. Do not let yourself fall victim to that or blame it on credit cards.  Pay your balance in full. Each and every month.  Don’t buy what you can’t afford. If you don’t have the funds available in your bank account, don’t spent it.  Keep track of everything that you buy.  Create a budget for each spending category.  Stick to the budget! The key is to plan. If you don’t plan then you plan to fail. Figure out how much you spend each month on a particular category like groceries or entertainment. Then give it a good hard look to see where you can cut unnecessary expenses. If you can get rid of discretionary spending that hurts your bottom line then go ahead and do it. You’ll thank yourself later when you have a nice cushion saved up for...

Is It Worth It To Get a Masters or MBA?

By on Mar 7, 2016 in Education | 0 comments

With the high rising costs of tuition and the parallel high cost of living, many people ask the question if it’s worth it to get a masters degree or MBA. To keep up with the cost of living, people may go back to school in hopes of a higher salary upon graduating. Tuition costs are not going down, so this is a big gamble to take. Of course it is going to depend on your location and industry that you work in, but the truth is that nobody has a crystal ball and can give you a definite yes or no on going to graduate school. You must weigh out the pros/cons and do a cost/benefit analysis. 1. What do other’s make in your field and do they have a Masters or MBA? The first question to ask yourself is where are you now and what do you want to do? Find out how much your boss, director, or high level employees in your company make by using sites like GlassDoor.com and Salary.com. Find out their bio on LinkedIn.com and see what kind of education they have listed in their profile. If you’re seeing a high percentage of them with post graduate degrees and that is that job you eventually want, chances are that you’ll also need a graduate degree. What kind of bachelor degree do you have and does it compare to the person in the position you want to be in? The degrees that pay the most are in the STEM family. STEM stands for Science, Technology, Engineering, Mathematics. 2. Cost/Benefit Analysis Don’t just merely look at the cost of tuition. You also have to weigh out what you could be doing with that money if you were not going to grad school. If it costs $30k to go to grad school, how many years would it take for you to pay it off? How much interest would you also have to pay for the life of that student loan? If you had $30k to spend on something else, would it net you a greater return than this diploma? The time you will be spending studying for entrance exams, classes, tests, and writing papers — are you prepared to sacrifice that time? Will you be able to handle the added stress of working full-time while attending classes 3 times a week plus homework, studying, writing, and meeting with classmates for group projects. Some people work for companies who will pay for a fraction of all of the tuition costs. Usually it comes with a stipulation where you have to keep working at that company for a year after you graduate or will have to pay back the money. Also you likely will have to graduate with a high GPA or your company may not help pay for it. 3. Are you good enough? Are your grades good enough in your bachelor academic career to propel you into a good grad school? Did you get high scores on your GRE or GMAT? If you cannot get into a good grad school, is it even worth going? Some say that you should not waste your money on low tier graduate schools because it is not worth the cost and time spent. This is up to your own judgement though. What will happen after your graduate? Will your current employer promote you? The answer is most likely not. You will need to find a new job that will value your education more. How much experience do you have? Will your experience take you farther or will you need a graduate degree to help...

Save money: What are the smart ways to lower your credit card bills?

By on Oct 8, 2013 in Credit Card Debt, Personal Finance | 0 comments

The following is a featured post from Christina Jones at oglv.com. Feel free to contact us if you would like an article featured on our blog. Save money: What are the smart ways to lower your credit card bills? Usually, credit cards aren’t considered as a money-saving tool. However, if you’re a savvy credit card user, then you can actually employ them for your best of interest. How to save money from credit cards Here are some credit card tips to help you to lower your bills and drive up your savings: Opt for balance transfer offers – At any given moment, you may get bombarded with several 0 annual percentage rate (APR) card offers to transfer the balances from your existing credit cards to the new one.Right now, it is considered as one of the most suitable time to get the balances transferred from a high interest credit card to a zero or low one. This will save you quite a lot of money while paying them off during the promotional period. Make good use of credit cards – This is one of the basic rules of using any kind of credit and the same goes in case of credit cards as well, i.e., to use them responsibly. You won’t even save a dime, if you pay too much of interest on your credit card bills. Moreover, you must always make it a point to make full payments and never miss any monthly deadline.This is because missing payments or paying minimum on your bills will cost you a lot more in the long run by way of late fines and higher rate of interest. So, always try to use cards with least interest rate and if possible, then use that during the teaser rate period. Benefit from credit card rewards – Though rewards on debit cards have become quite an extinct thing now, yet you’ll get plenty of them on credit cards. So, if your credit is good, then you may opt for various rewards like cash back offers, airline miles, vacation packages and so on.However, find out the kind of reward card that fits you the best and go for that only. Moreover, by paying off all your cards’ balances in full, it’ll help you to earn rewards that’ll save you a good amount of money in return. Study your credit card statements – Whenever you receive credit card statements, make sure to go through them carefully. A lot of people like you pay off their balances without reviewing each transaction that they’ve made in a given month.Behaviors like these will make you vulnerable to fraudulent transactions or identity theft that may even result in some huge unwarranted purchases. There is a deadline to report any of these issues and if you don’t review your financial statements regularly, then it is very likely for you to miss them. Last but not the least, if you’ve run up on huge outstanding credit card balances, then you can get that settled. This will help you to repay your credit card debt for pennies on the dollar and save a handsome amount of money out of it. In order to settle your overwhelming credit card balances, you need to have excellent social skills, sturdy emotional stamina and an easy access to a pile of reserve cash to offer your creditors on the spot. Not every creditor will accept your offer and settling debts is surely a long-term process, so never give up mid-way through...

AT&T Is Selling Your Information – How To Opt Out

By on Aug 16, 2013 in Privacy | 0 comments

In late June, AT&T updated their privacy policy to include a notice that it plans to anonymously sell your location data to marketers. Carriers like Verizon, AT&T and the like are making big bucks on selling your information to marketers. If you are worried about privacy, you should opt out. How? Opt out by calling 866-344-9850. If you have an online account, you can opt-out here:  click here

A Life Lesson in a Short Story

By on Apr 21, 2013 in Inspiration | 0 comments

  “A boat docked in a tiny Mexican village. An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them. “Not very long,” answered the Mexican. “Well, then, why didn’t you stay out longer and catch more?” asked the American. The Mexican explained that his small catch was sufficient to meet his needs and those of his family. The American asked, “But what do you do with the rest of your time?” “I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs…I have a full life.” The American interrupted, “I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your fish to a middle man, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City! From there you can direct your huge enterprise.” “How long would that take?” asked the Mexican. “Twenty, perhaps twenty-five years,” replied the American. “And after that?” “Afterwards? That’s when it gets really interesting,” answered the American, laughing. “When your business gets really big, you can start selling stocks and make millions!” “Millions? Really? And after that?” “After that you’ll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take siestas with your wife, and spend your evenings drinking and enjoying your friends.” ————————————————- This is a famous story re-told in many different ways but with the same point. The Mexican villager is already living the life he wants, in a good location with his family. He gets to leisurely wake up whenever he wants and has plenty of time to spend with his children and wife. He has good friends and spends many evenings enjoying their company, drinking, and having a good time. The American in this story looks for ways that the Mexican can exploit his job to his fullest potential by scaling it up — catching more fish and selling the extra, building an empire,  hiring people to run his business. But in the end of the story, the Mexican ends up exactly where he was before he started this business. This story begs the question, what is really important to you in life? Even with all the money in the world, the only real things that matter are your family, friends, and how you spend your time. It gives a great perspective on life and makes you ask yourself, is this culture of money-hungry, greed-driven, paper-chasing, materialistic mentality, etc. – is this what life is about? No, of course not. What do you think about this...

Emergency Savings = 6 Months of Living Expenses

By on Sep 26, 2010 in Savings | 0 comments

I want my emergency savings to last me at least 6 months of living expenses if I lose my job or am unable to work. I calculated it by adding my rent, eating. and living expenses. Of course if I do lose my job, I will cut down on living expenses, but I wanted to have some sort of buffer to give me more room to breathe. My Emergency Savings or I sometimes like to call it my Rainy Day Fund. I calculated it this way: I took my recurring expenses which I calculated earlier and multiplied it by 6 months. This gave me a total of $8,078.58. Then I gave it a bit of a buffer in case of unexpected expenses and just rounded it up to $10,000. That should give me more than enough buffer. Who knows what can happen. Getting new tires, for example, can run more than $500 and that is a possibility so I figured that around $2k of room to breathe will make me feel better. My current emergency savings is at: $6,500. I am $3,500 short of hitting my goal. I plan to hit $10,000 by the end of this year: Dec. 31, 2010. That gives me 3 months to save about $1,166 a month. Updates will be up soon. How much are you saving for your Emergency Savings (aka Rainy Day...