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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...

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...

Savings Plan for the Next 5 Years

By on Jun 1, 2010 in Personal Finance, Savings | 0 comments

Prioritizing is important when involving your finances. Your next paycheck and either go towards that new $600 watch you want or to pay off some credit card debt. The logical thing to do is to put that money towards the debt and don’t incur any more debt. The main problem is some people choose to ignore their issues or act on impulsive emotions. Here is some simple math to help you get from sinking underwater: Expenses < Income In other words, keep your expenses less than the money you take home. Spend less than you make. Live below your means. Only spend what you have. Whatever you want to call it, it’s simple math. Now if you do this properly, it should give you a good amount of money to save each month. The question is what do you save for and why do you need to save. Depending on where you are in your life and what you want to achieve, it can be different for many people. But here are some examples: Saving up for a down payment on a house Saving for a rainy day — unexpected medical expenses, emergencies, loss of job, etc Saving for retirement Saving for children’s education Saving for a big purchase — car, boat, ring, etc. Saving for a wedding Those are some of the more common reasons to save. Now some of these things in the list don’t apply to me — I don’t have children and not looking to marry soon. I do have a plan for the next 5 years and buckets on where my money should go. This list is prioritized and once the first bucket is full, I’ll move on and fill up the next bucket. I may decide to fill up each bucket at the same time, but it’s important to get that first bucket full before continuing on. Here are my 5 buckets: $10,000 saved in a high-interest yielding liquid account to act as my “6-month emergency fund” Max of $4,000 each year in my Roth IRA $200,000 down payment for a house Max of $16,500 put into my 401(k) every year Put $10,000 a year towards long term investments – stocks/bonds/mutual funds If you add that up, I’m aiming to save $362,500 in 5 years. I need to be making a million dollars a year to save that much, right? Well yeah something like that. But since I already have some money in each of these buckets, I can still get by with what I’m making. Usually, maxing out your 401(k) would go after maxing out your Roth IRA, but I’m looking to buy a house in the next 5 years so I have shifted that up the priority ladder. Also note that I am in California so a typical 20% down payment on a million dollar house would be $200,000. For my first home, I may only need half that down payment for a smaller house, but I like to aim high. Your list might be different. Sit down and prioritize what you want in life and stick to the plan. Save a little bit each month make that amount consistent. What you will see is the total amount compounding as you keep working towards your...

High APY Liquid Accounts

By on May 26, 2010 in Personal Finance | 0 comments

I had my ‘6 Month Living Expenses – Emergency Fund’ account in my TD Ameritrade account, but I wanted to find something that yielded more than 0.25% APY. With such a low APY, I would probably be losing money if inflation rates were higher than that. With the inflation rate at 2.2% in April 2010, I certainly would be losing money having it sit there and do nothing. So I did some research to find some High APY Liquid bank accounts in the nation. The current top 3 High APY Liquid Accounts: At 2.00% APY up to $35,000 (remainder at 1.00%): evantagebank.com Also at 2.00% APY up to $35,000 (remainder at 1.00%): americanetbank.com Sounds cheesy, but claims to be 2.00% APY up to $35,000 (remainder at 1.00%): redneckbank.com There are also Reward Checking Accounts available that give an even higher APY, but there is a catch. You must follow certain requirements that they have such as exceeding the number debit card transactions, using bill payments each month, having direct deposit, and also having a minimum amount. If this interests you, check out: danversbank.com at 4.01% APY and firstnewengland.org at 4.10 APY Be sure to clearly go through and read the terms and conditions before you apply. I opted to go with the ING Direct account just because I had an account open with them and they’re easy to use. Also at 1.10% APY with no minimums, it’s not too...

My Total Net Worth

By on May 23, 2010 in Personal Finance | 0 comments

Brokerage Account #1: $15,000 Brokerage Account #2 $40,000 ($21,000 in Roth IRA) 401(k): $20,000 Brokerage Account $3: $2,500 ‘6 Months Living Expenses’ account: $1,400 Credit Card Debt at 0% Interest: -$3,300 ————– Total Net Worth= $75,600 $924,400 away from my goal.