retirement Archives - Page 122 of 585

Apache is functioning normally

May 29, 2023 by Brett Tams

In January, I accompanied Kim to an appointment with Paul, her investment adviser from Edward Jones. Paul’s brother was my best friend in grade school and junior high, and we have many mutual friends. I sat and listened while Kim and Paul talked about her investments and how she ought to invest for retirement. I didn’t participate much, though, because this is Kim’s money, and I didn’t feel like it was right for me to take an active role.

I did ask some questions about index funds, though. Kim’s money is entirely in individual stocks (like Apple) and expensive load-bearing funds such as VFCAX (Federated Clover Value Fund), which has an expense ratio of 1.19 percent and a sales load of 5.5 percent.

Paul argued against index funds, saying:

Mutual-fund managers earn back the sales load (and high expense ratio) in time so that, long term, actively managed mutual funds outperform index funds. (Note: Studies show that, in general, this is not true.)
Part of the reason people pay him to manage their investment accounts is because he protects them from making foolish emotional decisions about the market and he alerts them to possible opportunities.

Afterward, I asked Kim what she thought of the meeting. She got the gist of things, but found a lot of it confusing. No surprise. I know this stuff and still found some of the presentation confusing.

“What do you think I should do?” she asked.

“Well, I still think you should be in index funds,” I said, but I didn’t push it. Again, we’ve been dating almost two years, but it’s not like we’re married. I didn’t feel comfortable making this decision for her.

Over the next few weeks, I wrote the investment chapter for my ebook. And then I rewrote the chapter. And then I rewrote it again. (This ebook will finally see the light of day at the end of April, by the way.)

As I wrote, I realized that I truly believe index funds are the right way for most people to invest. And it’s not just me. Warren Buffett believes this, as do many other well-known investors. The evidence is overwhelming. The smartest way for the average person to invest is to put all of their money in broad-based, low-cost index funds and never touch it. End of story.

Meet the New Adviser — Same as the Old Adviser

Between January and March, Kim switched jobs. Her new employer also contributes to retirement, but uses a different investment adviser. Last week, we met with the new guy, Evan. This time, I asked Kim how she viewed my role before the meeting. “I want you to speak up,” she said. “I want you to act like you’re my husband.” Well then, OK.

The meeting with Evan started very much like the meeting with Paul. Evan talked about how much Kim needs to save to meet her retirement goals (answer: a lot!). He also talked about where she should put the money. He agreed with me that it’s probably best not to shift around Kim’s existing investments (although I can’t help thinking we’re falling victim to a sunk-cost fallacy by not moving to index funds). He recommended that all of her new money should go into shiny new mutual funds that his company sells — funds that carry loads of 5.75 percent.

Note: These mutual funds are from American Funds, and I’m very familiar with them. When I was married, Kris put a lot of her savings into the American Funds family.)

“How are you compensated?” I asked.

“Great question,” Evan said. “I’m paid out of the sales charge, out of the front-end load of the mutual funds. A part of that goes to me, a part of that goes to my company, and a part of that goes to the mutual fund company itself.”

After a few minutes of discussing these new funds, I decided to speak up.

“Look,” I said. “I write about money. I’m not an investment guru and I don’t have any specific training, but I’ve read and written a lot about investing over the past few years. Everything I’ve read says that the only reliable indicator of future mutual fund performance comes from a fund’s fees. The lower they are, the better the fund is likely to perform in the future.”

“That may be so,” Evan said, “but that’s only part of the story. With proper management, a traditional fund can outperform an index fund. Besides, index funds only work if you’re able to control your emotions. Studies show that most investors earn returns far below those of the market because they make poor choices under the influence of emotion.”

“Sure,” I said. “The Dalbar study shows that every year.” I cite this study over and over again in the articles and books I write. “But investor behavior is only one part of the problem. The other part is costs.”

Evan protested. I didn’t blame him. His livelihood is tied up in this. Besides, I think he truly believes in his funds.

“If Kim were to buy index funds through Vanguard or Fidelity, how would you be compensated?” I asked.

“I’d take 1 percent,” Evan said.

“One percent up front?” I asked. “Or 1 percent per year?”

“One percent per year,” he said. With the roughly 0.25 percent expense ratio for a typical index fund, that would give her a cost of 1.25 percent annually. That beats the expense ratios from the funds Evan was proposing, especially when you factor in the 5.75 percent sales load.

Following My Own Advice

At the end of the meeting, Kim smiled and shook Evan’s hand. “Thanks for your help,” she said. “We’ll go home and figure this out.”

We walked next door to have a glass of wine while gazing out at the stormy Willamette River. “What do you think I should do?” she asked.

“Do you want to know what I would do if this were my money?” I asked.

“Yes,” she said.

“First, I’d contribute as much to retirement as needed to get the match from your boss. I’d have that put into an index fund, and I’d pay Evan his 1 percent per year. I don’t like it, but that’s your best option to get the match from work.”

“For everything else, though, I’d invest on my own. I wouldn’t do it through Evan. I’d open an account at Vanguard or Fidelity and schedule monthly contributions. He says you need to be putting away $920 per month for the next 20 years in order to have the equivalent of $50,000 per year at retirement. Do that. To be honest, I’d rather you didn’t pay me rent or utilities. I don’t need that money. I’d rather see you put it directly into an investment account every month. It’ll still feel like you’re paying me rent, but it’ll be going to your future instead. Does that make sense?”

Kim nodded. “It does,” she said, “but I still don’t like it.” (We’re still hammering out the financial side of our relationship. She wants to pay her half of things — which I appreciate — but I don’t want to take her money. When she pays me for rent or utilities or anything else, I tuck the money into a “secret” savings account at Capital One 360. That makes both of us happy.)

Unconventional Success

After our meeting with Evan, I began to have bouts of self doubt. It’s one thing to make decisions with my own money; it’s another to make them for somebody else.

To boost my confidence, I turned to books. I re-read the rationale behind investing in index funds. In particular, I turned to David Swensen’s Unconventional Success. During our meeting, Evan had pointed to the Yale University endowment as an example of investing success. Swensen is the mastermind behind that endowment. He’s also a passionate supporter of passive investing.

Unconventional Success contains nearly 400 pages laying out the arguments for index funds as “a fundamental approach to personal investment.” It explores asset allocation, market timing, and security selection before ultimately concluding that “overwhelming evidence proves the failure of the for-profit mutual-fund industry.”

Note: You can read a much shorter version of Swensen’s arguments in his 2011 New York Times editorial about the mutual fund merry-go-round.

Refreshing myself about the evidence in favor of index funds allowed me feel much better about our second meeting with Evan. On Monday night, we returned to his office to explain our decision. In short, we wanted to put all of Kim’s future funds into the following asset allocation using Vanguard index funds:

45% into VTSMX, the Vanguard Total Stock Market index fund
25% into VGTSX, the Vanguard Total International Stock index fund
20% into VBMFX, the Vanguard Total Bond Market index fund
10% into VGSIX, the Vanguard REIT index fund (a REIT is like a mutual fund for real estate)

“That’s great,” Evan told us. “We can do that. But there’s just one problem. Our investment platform requires a $25,000 minimum in order to make this happen. Otherwise, it’s not worth our time.”

At first, I thought this was a barrier. Kim doesn’t have $25,000 in new money to invest. But then I hit upon a couple of solutions.

First, we could move our shared “dream fund” from the Capital One 360 savings account where it currently resides. Instead, we could place it in index funds. Sure, this would introduce greater risk, but I’m OK with that. By the time we’re ready to tap this fund, the stock market should be higher than it is today — and it should outperform savings accounts in the meantime.

Second, we could liquidate Kim’s existing mutual funds and move the money to Vanguard funds instead. That’s probably the smartest move anyhow. We had planned to leave her existing accounts at Edwards Jones, but this makes more sense.

In the end, Kim came up with a fun plan. Here’s what we’re going to do:

We’ll move all of her investment accounts from Edward Jones to the new company.
We’ll sell half of her existing funds in order to meet the minimum requirements to begin putting money into a Vanguard retirement account. (And because index funds are the better choice.)
We’ll keep half of her existing funds as they are and allow her new adviser to manage them as he sees fit. Let’s see if he can actually beat a portfolio of index funds.
Meanwhile, she’ll funnel $460 per month into her employer-sponsored retirement account.
Finally, she’ll open a personal Roth IRA account at Vanguard. Into this, she’ll contribute $460 per month. This will give her a chance to see what it’s like to manage an investment account on her own.

This process illustrated some of the problems the typical investor faces. First, she receives self-serving advice from advisers (even when they don’t intend to be self-serving). Second, even when she knows the right thing to do, it can be tough to stick to her guns in the face of trained expertise. Third, there can be barriers to making smart choices, barriers like high minimums and additional fees.

In the end, it’s important to make your own informed investment decisions. Remember: Nobody cares more about your money than you do. If you don’t take the time to educate yourself, you can’t expect anyone else to make the right decisions for you.

Source: getrichslowly.org

Apache is functioning normally

May 28, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

How many times have you thought about how much FI would it take to retire?

It’s a question that can be frustrating, especially since the answer is different for everyone.

What if there was an easy way to calculate your personal FI number and find out what kind of portfolio you need based on your spending habits? That’s where this handy calculator comes in!

Calculating your FI number is not as difficult as it sounds.

This is an important personal finance number to know.

If you desire to do something else or are just looking forward to retirement, you need to know how much money you need!

What is FI number?

FI number is the amount of money needed to retire.

It can be calculated using your salary, interest rate, and the time period in which you need to save for retirement.

The 4% figure is a reasonable place to start. The 4% rule is a conservative estimate, with the expectation that Social Security will play a larger role in retirement income.

Why Choose Financial independence?

Financial Independence, or “FI”, is a term used to describe the state of not needing to work for a living because your passive income from investments or savings can cover your living expenses.

It doesn’t mean you have to stop working altogether, it just means you’re no longer tied down by the need to earn a certain amount of money each month.

FI is an attractive proposition for many people because it allows them the freedom and flexibility to pursue their passions or hobbies without having to worry about financial constraints. And if you have money saved up, you can live comfortably off your savings or investments!

How to calculate your FI number?

There are a few different ways to calculate your FI number. The easiest way is to use an online calculator. This will give you a ballpark estimate of what you need to save in order to achieve financial independence.

Option #1 – Using Yearly Spending

One way to calculate your FI number is by multiplying your annual spending by 25. This will give you the amount you need in savings to have 25 times your annual spending available each year without having to touch the principal.

FI Number = yearly spending * 25

For example, if you spend $50000 a year, your FI number would be $1,250,000.

Option #2 – Using a Safe Withdrawal Rate of 4%

Another way to calculate your FI number is by using the safe withdrawal rate of 4%. In fact, many studies believe that 4% is the too old way of thinking and 3.3% is a better safe withdrawal rate (SWR).

You can calculate either way. If you prefer to pull more money out at retirement, then stick with 4%.

FI Number = yearly spending / Safe Withdrawal Rate

For example, if you spend $50000 a year and choose a 4% Safe withdrawal rate, your FI number would be $1,250,000.

Using a 3% safe withdrawal rate, your FI number would be $1,666,666.

The Financial Independence Formula

Do you know your FI number?

It’s a question people are often too embarrassed to ask, but if you don’t have an idea of what it is or where it comes from, you might be spending too much of your money.

Let’s start with the basics and work our way up to where we are today in terms of financial independence!

Calculate Your Spending

In order to calculate your spending, you need to know how much money you spend in a year. To do this, simply multiply your monthly spending by 12. This will give you an estimate of how much money you spend on an annual basis.

It’s important to have a detailed zero based budget before calculating your Financial Independence Formula. This way, you can be sure that you are including all of your regular expenses (and irregular expenses) in your calculations.

The FI Formula is based on conservative retirement calculations, so it’s important to include all of your regular expenses in the formula. The more accurate your figures are, the better idea you’ll have of how much money you’ll need for retirement.

Find Your FI Number

In order to achieve financial independence, you need to find your FI number.

This is determined by two factors: spending and withdrawal rate. The safe withdrawal rate (SWR) determines how much money you are able to withdraw each year without running out of savings in your lifetime. You divide your current spending by SWR to find out how much wealth you need in order to reach a certain financial target.

FI Number = yearly spending / Safe Withdrawal Rate

Everyone will have different FI numbs.

Determine Years to Financial Independence

The Financial Independence Formula may help estimate how much time it will take to reach financial independence. The formula is only a rough estimate, and you must adjust it as needed for more accurate calculations for your own savings plan.

The Financial Independence Formula factors in how much you need to save each year to become financially independent.

The goal of the Financial Independence Formula is to achieve financial independence before the typical retirement age of 45.

Years to FI = (FI Number – Amount Already Saved) / Yearly Saving

Using the example above, we calculated your FI number to be $1.25 million. You have already saved $450,000 and currently saving $25000 a year.

32 Years to FI = (1250000 – 450000) / 25000

However, if you increase your savings rate to $80000, then

10 Years to FI = (1250000 – 450000) / 80000

As you can tell, the more you are able to save and invest, the quicker you will reach FI.

For the amount already saved, you need to use the amount saved in retirement plans as well as any taxable accounts that will fund your lifestyle.

A commonly asked question is… should I include my house value? Honestly, the answer is no – unless part of your FI plan includes selling your house and moving to a lower cost of living area. Then, you would use the difference of your appreciated house value minus the cost of a cheaper home.

How to FI – Create a Plan

One of the most important aspects of actually achieving financial independence is to create an action plan.

Without action, you will be spinning on the same cycle over and over.

So, take an hour and start making your plan.

Step #1 – Figure out Numbers

The first step is figuring out your FI number and how many years away you can be.

There are many ways to make variations on finding your FI number. So, make sure you take into account how many years it will take for you to reach financial independence at your current savings rate.

This is the most important step!

Step #2 – Pick a Realistic Date

This is when most people get motivated when they pick a realistic date to retire early.

Every single decision you make will take you one step closer to your goal.

You are working backward from your “selected” date.

Step #3 – Take Action to Enjoy Life

The hardest step for actually making the decision to FI is to take action.

There are so many factors going into what you need to do once your know your FI number.

You can’t just sit back and do nothing once you know your FI number. You have to follow the steps below on saving and investing to reach financial independence.

For many people, this is choosing to live a frugal green lifestyle while saving money.

How to FI – Saving to Achieve Financial Independence

The FI Number Calculator is a simple tool that helps you calculate how much it will take to reach financial independence when investing in the stock market and using your savings rate as well.

But there are certain steps you must take to be able to save more money to jumpstart your path to financial independence. While many of our money saving challenges will help you, you need to find ways to save more money.

Step #1: Pay Off Debt

When you’re working to achieve Financial Independence, it’s important to address your debt. Paying off debt will help you achieve financial independence faster.

There are two types of debt that are especially important to pay off:

Credit card debt
Student loan debt

Credit card companies have high interest rates, so it’s important to consolidate your credit card debt by using Tally or an equivalent service. This can help you find a lower monthly payment and reduce the amount of time it takes to pay off your debt.

Before seeking to consolidate your credit card debt, make a plan for how you’ll avoid future use of this type of loan!

Debt is a cash flow drain while pursuing Financial Independence.

Step #2: Reduce Expenses

There are many ways to reduce expenses and achieve financial independence faster.

One potential area for savings is housing, which can be achieved through refinancing, house hacking, or downsizing.

Other options include trading in your new car for a beater car, scaling back on eating out or cutting back on your streaming services.

Typically those who budget consistently have an easier time reducing their expenses. Using a budget binder will help you find ways to reduce your expenses.

Step #3: Boost your income

This is probably the most important step to be able to increase your saving percentage significantly!

There are many ways to boost your income and save more money.

For example:

Find ways to increase your income from your 9-5 job.
Develop skills or get promoted to earn a better job with higher pay.
Side hustling can help you earn a decent income every month.
Find passive income streams as ways to start earning more money without any effort on your part.
Sell your old stuff on websites like eBay or Amazon for some quick cash infusion into your savings account.

Finding ways to make money fast is important during your FI journey.

You must search for additional sources of income, as they can help you save more and invest more in the future.

Step #4: Invest Money

It’s important to invest money in order to grow your wealth. You can do this automatically by investing through most online brokers.

This way, you’ll avoid making any rash decisions based on fear or greed. Investing consistently is a great way to get an average of 8-12% returns on your investments.

The idea is to save as much as possible and invest in assets that provide a high return on investment. This could include buying stocks, real estate, or other investments that offer long-term stability and growth potential.

Learn how to invest $100 to make $1000 a day.

How to FI – Investing to Reach Financial Independence

Now is a good time to start investing for financial independence.

When you’re ready to invest, it’s important to make sure the investment risk matches what you can handle. A portfolio must match your risk tolerance and long-term goals if you want to achieve financial independence.

We will cover various options on how to use investing to help you reach FI sooner.

Step#1: Make Investments Automatic

When you invest your money automatically, you don’t have to think about it and you can take advantage of dollar-cost averaging.

This means that over time, you’ll get a better price for your investments since you’re buying them in small batches instead of all at once.

In layman’s terms, that means investing a certain amount of money each month.

Step #2: Choose an Index Portfolio

Creating a lazy index portfolio is one of the best ways to invest your money.

This type of portfolio is made up of low-cost index funds or ETFs, which means that you don’t have to worry about timing the market or trying to pick stocks that will outperform the rest.

All you need to do is hold on for the long term and let the market do its thing – in good times and bad.

Step #3: Track Your Progress

As you save and invest your money, it’s important to track your progress so that you can see how well you’re doing and whether or not you’re on track to reach Financial Independence.

This can be done easily by creating a budget and tracking your net worth, both of which will give you great insight into where you are with your finances.

Also, track your liquid net worth separately.

Seeing this progress in black and white is often motivating enough to encourage people to keep saving and investing!

Empower is a comprehensive suite of financial tools that offers a FREE way to track your investment and cash accounts. You can connect all of your accounts so you can see an overview of all of your finances in one place, and the best part is that it’s free! Check out my Empower Review.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

FI Number Calculator

The Financial Independence Number Calculator uses a range of variables to calculate the length of time it would take to save for FI. This information can be helpful in developing a savings plan that is tailored specifically to your individual needs.

Here is a simple FI number calculator.

As you can imagine, there are many different scenarios for finding your FI number.

For starters, get a ballpark range and amount you need to save each year to reach your goal. As you get closer to actually, hitting that switch and becoming fully financially independent, then you can refine your FI number.

Remember, while this formula provides a ballpark estimate, more precise results are possible by using a financial independence calculator such as Networthify’s model.

Saving for Retirement or More Savings to Quit work?

If you have some money saved already, the time to reach FI will be shorter than if you are starting from zero. Saving at a high rate is important to reach FI in the shortest time possible; saving at a lower rate or not saving anything makes reaching FI impossible.

Financial Independence is reached by saving a certain amount each year.

This number can vary depending on your unique circumstances, such as income and expenses.

There are a variety of reasons people are pursuing FI – more than likely it is because I hate my job or you want to spend your time doing something else.

The FI Number formula is just a starting point: remember that there are many other variables that could impact your individual savings plans, such as debt load, income, and monthly spending habits.

While using this formula can provide helpful insight into when you might achieve financial independence, it’s important to remember that there is no one-size-fits-all answer.

Every person’s situation is different, so it’s important to tailor your savings plan to your own needs and goals.

Source: moneybliss.org

Apache is functioning normally

May 28, 2023 by Brett Tams

A short while ago I wrote reviews of two services that recently launched, both of which intrigued me. One is a free online savings account called Digit, and the other is a free automated investing adviser called Axos Invest.

Both companies are different from anything else out there.

Digit’s claim to fame is that they will automatically save money for you after analyzing your spending and account balance trends. Once Digit figures out how much it can save without you noticing, or overdrawing your account, it just does it. It saves small amounts to your Digit savings account throughout the month. At the end of the month, you’ve got a nice lump sum saved in your account. (Digit review here)

Axos Invest is gaining traction because of its unique business model as well. They’re a robo-adviser, an automated investment advisory along the lines of Betterment or Wealthfront, but they’re different in that they don’t charge any management fees as most other companies do. They invest your money in ETF index funds with no trading fees and no management fees whatsoever. They plan to make their money off of premium add-on products like tax-loss harvesting in the future. (Axos Invest review here)

I liked the ideas behind these services and signed up for both of them to give them a trial run. While I was at it I decided to turn this into a bit of an experiment. I plan to see just how much money I can automatically save and then invest with them through the end of the year. I thought it would be interesting to show just how much you can automatically save and invest (at no cost), without even thinking about it. Saving and investing doesn’t have to be hard, or expensive!

Digit Savings Account

According to Ethan Bloch, the founder of Digit, the company was started to help people, “maximize their money, while at the same time driving the amount of time and effort it takes to do so as close to 0 minutes per year as possible”

So how does Digit work? You sign up for an account, and link your checking account. Digit will then analyze your income and expenses, find patterns and then find small amounts that it can set aside for you – without any pain for you.

So once you sign up and turn on auto-savings, every 2 or 3 days Digit will transfer some money from your checking to your savings, usually somewhere between $5-$50. Digit won’t overdraft your account, and they have a “no overdraft guarantee that states they’ll pay any overdraft fees if they accidentally overdraft your account.

Open Your Digit Savings Account

Axos Invest Investing Account

Axos Invest launched with the goal of being the world’s first completely free financial advisor. Their founders had a mission “to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge fees.”

Axos Invest’s founders understood that one of the drags on the typical person’s portfolios is the fees that they’re paying to invest, as well as the friction point of having to invest thousands of dollars to start. They changed that with no minimums to invest, and no fees charged for investing. Axos Invest will be releasing some premium add-on products for their users, which they will charge for, but a basic investing account will not cost anything beyond the mutual fund expense ratios associated with your investments.

What do you invest in with Axos Invest? Axos Invest will invest your funds based on Modern Portfolio Theory (MPT). Your investments will be diversified, low cost, and recognize the value of long term passive investing by investing in ETF index funds.

Open Your Axos Invest Investing Account

The Digit + Axos Invest Experiment (D+AI Experiment)

For the experiment I plan on using the two accounts I have just opened with Digit and Axos Invest in order to show just how easy it is to invest.

From now until the end of the year I plan on allowing Digit to automatically save money from my checking account and put it into my Digit savings.

When the amount in the account gets to around $75 or more, I’ll transfer it back to the checking and transfer the same amount over to my Axos Invest Roth IRA to invest in their automated investing service. I figure by doing it this way, I’ll engage in a bit of dollar-cost averaging, instead of waiting until the balance is higher and investing once or twice. Since Axos Invest has no minimums and you can buy fractional shares, why not?

When the end of the year rolls around I’ll do a review and look at how much money I’ve been able to save and invest using these two sites.

The Experiment In Progress

Once I had setup my Digit and Axos Invest accounts I started putting the experiment into action in early February. I turned on the automated saving feature of the Digit savings account, and waited for the small savings amounts to start showing up. After about 3-4 days, my first few deposits into Digit appeared. There were deposits for $5, $6.50, $8.45, $2.35 all within the first 7 days. I have also referred friends to Digit, and $5 referral bonuses started showing up as well.

Day after day the referrals and savings deposits started piling up and before I knew it, I had $186 in the account. At this point I decided to withdraw and make my first investment over at Axos Invest.

Amounts Withdrawn And Invested So Far

I’m only about a month into my little experiment, and so far I’ve withdrawn my Digit savings balance and invested it in my Axos Invest Roth IRA twice. The amounts were:

$186.00
$74.72

Here’s a screenshot from my Digit account showing my latest withdrawal for the purpose of investing.

After withdrawing the money I then transfer it from my checking account over to Axos Invest. Here’s a screenshot of my latest deposit with Axos Invest.

Once this deposit goes through I’ll have a little less than $260.72 invested at Axos Invest since the market has gone down slightly since I started. You can see the $184.84 total invested for my first $186 deposit below.

Here’s the portfolio’s asset allocation in my Axos Invest account currently. Probably a tad more aggressive than in my other retirement accounts, but that’s OK.

The funds that Axos Invest uses and their expenses are shown below (and are subject to change)

Vanguard Total Stock Market ETF (VTI): 0.05%
Vanguard FTSE Developed Markets ETF (VEA): 0.09%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.12%
Vanguard Short-Term Government Bond Index ETF (VGSH): 0.12%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.20%
Vanguard REIT Index Fund (VNQ): 0.10%

Depending on how the market does, we’ll see what kind of returns my account sees. No matter how it goes, I’m already ahead of the game as I don’t have to pay any account management or trading fees. Can’t beat that.

Join In The Digit & Axos Invest Experiment

If you’re intrigued by Digit and Axos Invest like I was, and want to join in the “D+WB Experiment”, I invite you to join in.

Open an account with both services (both accounts are free), set Digit to start automatically saving and get started. Let’s see how much we can save and invest this year – without lifting a finger!

Source: biblemoneymatters.com

Apache is functioning normally

May 28, 2023 by Brett Tams

A wash sale occurs when an investor sells a security at a loss, and buys a very similar security within a 30-day window of the sale (30 days before or after). The wash-sale rule is an Internal Revenue Service (IRS) regulation that states an investor can’t receive tax deduction benefits if they sell an investment for a loss, then purchase the same or a “substantially identical” asset within 30 days before or after the sale.

While investors may find themselves in a position in which it may be beneficial to sell securities to harvest losses, it’s important to know the wash-sale rule in and out to avoid triggering penalties.

Which Investments are Subject to the Wash-Sale Rule?

The wash-sale rule applies to most common investments, including:

• Stocks

• Bonds

• Mutual funds

• Options

• Exchange-traded funds (ETFs)

• Stock futures contracts

Transactions in an individual retirement account (IRA) can also fall under the wash-sale rule. The wash-sale rule does not apply to commodity futures or foreign currency trades. The rule also applies if an investor sells a security that has increased in value and within 30 days buys an identical security. They will need to pay capital gains taxes on the proceeds.

What Happens When You Trigger a Wash Sale?

Investors commonly choose to sell assets at a loss as part of their tax or day trading strategy, or they may regret selling an asset while the market was down, and decide to buy back in.

The intent of the wash-sale rule is to prevent investors from abusing the tax benefits of selling at a loss, and claiming artificial losses.

In the event that an investor does trigger a wash sale, they will not be allowed to write off the loss when they do their tax reporting to the IRS. This means the investor won’t receive any tax benefit for selling at a loss. The rule still applies if an investor sells an investment in a taxable account and buys it back in a tax-advantaged account, or if one spouse sells an asset and then the other spouse purchases it that also counts as a wash sale.

It’s important for investors to understand the wash-sale rule so that they account for it in their investment and tax strategy. If investors have specific questions, they might want to ask their tax advisor for help.

Recommended: Investing 101 for Beginners

Avoiding a Wash Sale

Unfortunately, the guidelines regarding what a “substantially identical” security is are not very specific. The easiest way to avoid wash sales is to create a long-term investing strategy involving few asset sales and not trying to time the market. Creating a diversified portfolio is generally a good strategy for investors.

Another important thing to keep in mind is the wash-sale rule applies across an investor’s accounts. As such, investors need to keep track of their sales and purchases across their entire portfolio to try and make sure that the wash-sale rule doesn’t affect any investment choices.

What to Do After Selling an Asset at a Loss

The safest option is to wait more than 30 days to purchase an asset after selling a similar one at a loss. An investor can also invest funds into a different asset–a different enough asset, that is–for 30 days or more and then move the funds back into the original security after the wash sale window has passed.

There are benefits to selling an asset at either a profit or a loss. If an investor sells at a profit, they make money. If they sell at a loss, they can declare it on their taxes to help offset their capital gains or income. If an investor has significant capital gains to report, they may decide to sell an asset that has decreased in value to help lower their tax bill. However, if they hoped to reinvest in an asset later, a wash sale can ruin those plans.

In some cases, simply selling a stock from one corporation and purchasing one from another, different corporation is fine. Even selling a stock and buying a bond from the same company may not trigger a wash sale.

Investing in ETFs or Mutual Funds Instead

If an investor wants to reinvest funds in a similar industry while avoiding a wash sale, one option would be to switch to an ETF or mutual fund. There are ETFs and mutual funds made up of investments in particular industries, but they are often diversified enough that they wouldn’t be considered to be too similar to an individual stock or bond. It’s possible that an investor could sell an individual stock and reinvest the money into a mutual fund or ETF within a similar market segment without violating the wash-sale rule.

However, if an investor wants to sell an ETF and buy another ETF, or switch to a mutual fund, this can be more challenging. It may be difficult to figure out which ETF or mutual fund swaps will count as wash sales, and which won’t.

Wash-Sale Penalties and Benefits

If the IRS decides that a transaction counts as a wash sale, the investor can’t use the loss to reduce their taxable income or offset capital gains on their taxes for that year.

However, there can be an upside to wash sales. Investors can end up with a higher cost basis for their new investment, because the loss from the sale is added to the cost basis of the new purchase. In addition, the holding period of the sold investment is added to the holding period of the new investment.

The benefit of having a higher cost basis is that an investor can choose to sell the new investment at a loss and have a greater loss for tax reporting than they would have. Conversely, if the investment increases in value and the investor sells, they will have a smaller capital gain to report. Having a longer holding period means an investor may be able to pay long-term capital gains taxes on a sale rather than short-term gains, which have a higher rate.

The Takeaway

The wash-sale rule is triggered when an investor sells a security at a loss, but then turns around and buys a similar security within 30 days–either before, or after. It’s a bit of an opaque rule, but there can be consequences for triggering wash sales. That’s why understanding regulations like the wash-sale rule is an important part of being an informed investor.

Part of making solid investing decisions is planning for taxes and understanding what the benefits and downsides may be for any particular transaction. This is just one aspect of tax-efficient investing that investors might want to consider.

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Source: sofi.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Is love enough for a healthy and happy relationship, especially when it comes to financial troubles? What if your partner was hiding a secret account or was lying about their spending? Are those issues you could work past?

Unfortunately, negative issues with money and relationships are incredibly common. I actually receive lots and lots of emails from readers who are struggling with some of these exact issues. Hardly a day goes by when I don’t get a question or comment from a reader who has concerns about the bad spending or savings habits of their partner.

Here are a few of the situations I’ve been asked about:

My partner earns $50,000 a year and wants to buy a $900,000 house, and we have NO savings. How do I explain why this won’t work?
My partner has the mistaken idea that if he has a coupon for Best Buy, Bed Bath and Beyond, etc. that he must absolutely buy something because he’s “losing money if I don’t use the coupon.” He is a hoarder and spends all of his money on stuff that he will never use. How do I help him work past his issues before it’s too late for us?
My partner spends over $1,000 a month on entertainment but we have a lot of debt. How should I approach them about it?
My partner is hiding her spending from me and I know it’s happening. How do we work through this?
My partner isn’t trying to find a job but we desperately need the money. What should we do?

If these situations sound familiar, you’re not alone. In fact, 35% of Americans named money as the number one thing causing friction in their marriage. CNBC reported on a money and relationships study done by SunTrust Bank, and here are a few more findings:

In 2 out of every 5 couples, someone lies about money.
31% said that they have a secret credit card or bank account.
75% said that financial deception has hurt their marriage.

It’s no surprise that money issues are one of the leading causes of divorce.

And, according to a recent story on NPR, even couples who managed their money well together in the beginning can still struggle with financial infidelity. This is especially true if one partner earns significantly more than the other, if one spouse is laid off, etc.

Related content to money and relationships:

Now, if you’re in a relationship with someone whose financial beliefs and practices oppose your own, does that mean you’re doomed and should end it all?

Not necessarily.

There are ways you can work towards resolving your financial differences and improving the behaviors that affect your money and relationships. Before calling it quits due to financial stress, you should:

Be honest and stop keeping money secrets from your partner.
Stop ignoring the problem.
Make a budget and start following it.
Make money conversations a priority, even if they have been difficult in the past.

Me and my husband have been together for over 12 years, and we are always trying to work at our financial situation as a team. We’ve had a lot of major changes in the past few years, like selling our house and moving onto an RV and now sailboat, and because each of these changes had a lot to do with money, we’ve had to share a lot of our feelings with one another.

And, every couple is going to handle money and relationships a little differently. We all have different spending habits, and in a marriage it’s important to come together to see how your behaviors affect your shared life.

Working together is key for a happy relationship, especially when you want to meet your financial goals.

If your relationship is struggling because of financial differences, here are some steps that you may want to take.

Here is my advice for handling money and relationships

Have regular money check ins.

A relationship that has regular money talks and budget meetings is more likely to be financially successful and happier than a relationship that doesn’t. That’s because regularly communicating about money is an important step for healthy relationships.

Being open about your money situation can help prevent any surprises, it will ensure that both people in the relationship are aware of what’s going on, and so on.

Here are some of the ways for these check ins to help you with your marriage and finances:

You can work together and succeed. If you are both putting effort towards your financial goals, you can tackle them as a team and are much more likely to have a positive outcome. You can motivate one another, troubleshoot together, and brainstorm for ways to work towards your goals.
Knowing your financial situation will help you keep a budget. Understanding your financial situation means you can create and keep a budget that works for the both of you. You will know more about the amount of money you are spending, whether you are living paycheck to paycheck, and more.
Being aware may prevent everything from falling on one person. Both you and your partner should be aware of your financial situation. It’s not fair for one person to manage it all, and you would be in for a rude awakening if something were to happen to that person. You both should know how much money you make, how much debt you have, when bills need to be paid, etc.
Being involved can help you with your family’s goals. It would be quite difficult for a person to work towards their family’s financial goals if they weren’t aware of their financial situation. Being involved will keep everyone motivated and working in the same direction.
Regular money talks can lead to less fighting. When you are open about money in your relationship, you are less likely to have financial surprises and money fights. This is because conducting regular money talks and budget meetings means you will both be aware of what’s going on.

Recommended reading: Family Budget Meetings – Yes, You Need To Have Them

Be open about money.

Talking about money is seen as taboo, even among married couples. But, according to money and relationship studies reported by Policy Genius, nearly 30% of couples don’t know each other’s salaries.

I have personally met spouses who had no idea what their monthly mortgage payment was, how much student loan debt they had, and so on and so on. For some reason, it is the “norm” for one spouse to be completely clueless about their financial situation, while the other spouse handles the finances. However, this is definitely something that should change.

To become better with this money and relationships issues, you and your partner should sit down on a regular basis, like once and week or once a month, and be honest about where you are currently at. You could even use this time to pay your bills together, discuss future purchases, and more.

But, to make the most out of these money meetings you will have to go in with an open mind and be willing to share where you are at. You money meetings should include:

Your financial goals, money values, and more.
How the two of you are doing financially.
What changes may need to be made.
Any financial problems, and so on.

The key here is that both of you are up-to-date on what is going on with your marriage and finances so that everyone can work together on your family’s financial goals.

Always be honest about money in relationships.

In a money and relationships article on CNBC, it was reported that only 52% of people in relationships believe their partner is being completely honest about money. And, only 61% of people say that they are totally honest with their partner about money.

What I see there is that in many, many relationships, there are some serious trust issues when it comes to talking about money.

The problem with financial infidelity is that it can lead to even bigger financial problems (like debt piling up beyond what’s imaginable), stress, unhappiness, it may start impacting other areas of a your life (such as work), and it may even lead to divorce.

Unfortunately, it’s possible that you may already be a victim of financial infidelity without even knowing it. Here’s how to recognize the signs of financial infidelity:

You haven’t noticed any bills in the mail. This could be a sign that someone is hiding the bills.
You are getting calls from debt collectors. These may actually be legitimate calls!
Your credit cards are being declined. This could be a sign that someone is overspending without your knowledge.
Your partner no longer wants to talk about money. This could be a sign that your partner is too afraid to talk about money with you because they fear that you will uncover the truth.

Lying about money and relationships is very serious, but it’s important to realize that it’s an issue that both partners should work towards improving. While being honest with your partner is important, you should also make sure that your partner feels comfortable telling you when they are struggling.

Set spending limits for each other.

Spending limits shouldn’t be looked as limitations or rules – think about them as guidelines that help you work towards larger goals. That’s because spending limits are really just there to help you stay on track with your budget.

You can set limits however you would like, and some couples tell each other about every single purchase they make, whether they buy something for $1 or if they buy something for $1,000.

Others only tell their spouse if they reach a certain amount, such as $100.

Whatever you decide, it’s a good idea to sit down with your spouse and determine what kind of limits you should set for your specific situation.

Doing this can help keep the communication lines open with your marriage and finances so there are fewer arguments about money.

Learn how to improve your financial situation.

For anyone needing help with money and relationships, one of the best things you can do is learn how to improve your financial situation. It can be an empowering thing for you to work towards with your partner and it can bring you both closer together.

If you want to improve your financial situation, here are some of the things you may want to do:

Read financial blogs. Reading financial blogs can help you see what other people like yourself may be doing to improve their financial habits. While it may not always be perfect and/or applicable, it can be helpful to see real life examples.
Listen to financial podcasts. You can learn a lot about money and relationships by listening to others talk about their own situations and topics relevant to your life. And, there are so many amazing financial podcasts out there ‒ take your pick!
Read financial books. 17 Personal Finance Books That Will Change Your Life is a great read if you are looking for financial books to help you with money and relationships. That list shows books that will help you to pay off debt, find side hustles, manage your money better, figure out retirement, and more.
Attend money workshops. There are in-person workshops on the topic of personal finance, huge conferences, money meet-ups, and more.
Join money-related Facebook groups. I have a free Facebook community that you can find here, and another favorite of mine is ChooseFI.

The key here with this and any other money and relationships advice is to do it together. I think learning more about money can usually help get a person more motivated about improving their financial situation, so if your spouse is having a hard time managing money, this can be a good way to get them more involved.

Reevaluate your situation.

Should money break a relationship?

Some will say no, and others will say yes.

For me, I do believe that money can break a relationship. However, that doesn’t mean that divorce or separation should be the first place you go when you are struggling with financial infidelity or other issues affecting money and relationships. You will need to work on your issues together before deciding that it’s time to call it quits.

Being on the same page is so very important, and if your partner is the complete opposite of you, you may be fighting constantly, you may both be unhappy, and more. If that’s where you are at, then reevaluating your relationship may be an important next step.

Only you can determine what goes on in this step, as it’s a very personal decision and no one knows the exact issues you’ve been through and how they’ve affected your relationship.

What money and relationships advice do you have to share? What would you do with a partner who was bad with money?

Apache is functioning normally

May 28, 2023 by Brett Tams

You may have shook your head when you first read this title. However, hear me out and continue reading to learn more about the habits of millionaires! The rich are rich for a reason- most of them know how to manage their money correctly.

Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy.

But, surprisingly, the average millionaire is frugal, and they know how to manage their money well.

Related posts:

Here are some examples of millionaires and billionaires who are frugal:

Warren Buffett lives in a house that he bought in 1958 for around $30,000.
Mark Zuckerberg drives an Acura.
John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.

I have personally met several retirees who have millions and live in an RV. RVing is a ton of fun, but a lot of people just assume that RVers have no money. If only they actually knew! We made one friend while RVing who actually has a nice house and millions in the bank, but he lives in an RV that is worth less than $20,000. You never would have guessed!

If you want to learn how to become rich (whatever amount of money or lifestyle that means to you), continue reading in order to learn more about the money management habits of millionaires.

They wear the same outfits.

President Barack Obama once said, “You’ll see I wear only gray or blue suits. I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.”

Many other successful people feel the same way, including Mark Zuckerberg, the late Steve Jobs, Albert Einstein, and many others.

The average family spends $1,700 a year on clothing, which is a lot of money. Plus, the average person wastes anywhere from 10 to 30 minutes a day when deciding what to wear!

Having multiple outfits can lead to wasting time deciding what to wear, as well as wasting money.

They have more than one source of income.

A lot of millionaires have many sources of income, and this is one of the many great habits of millionaires.

They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.

They also do this because millionaires know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.

Read about some of the many ways to make money at 75+ Ways To Make Extra Money.

They have long-term goals.

Successful people and millionaires are known to set goals, especially long-term ones. They are extremely determined and without goals it would be hard to be successful.

Setting goals is important because without a goal, how do you know where you’re heading? Goals can help keep you motivated and striving for your best.

Please keep this quote from Statistic Brain in mind:

People who explicitly make resolutions are 10 times more likely to attain their goals than people who don’t explicitly make resolutions.

And, it’s true!

They have a budget.

Yes, even millionaires have budgets! Not all of them have a traditional budget, but trust me, they know where their money is going and they are watching their cash flow closely.

Tracking your money and knowing where it is going can help you see where you’re wasting money and what spending habits need to be changed.

They educate themselves on financial matters.

When millionaires are unsure of a financial decision or implication, they either seek out financial advice from an expert and/or they seek out the knowledge they need to know by educating themselves.

Millionaires are always learning.

They read numerous books, attend classes, read the newspaper, and more.

They know the value of experts.

Continuing from the previous habit, the rich are interested in educating themselves, but they also know when to hire help.

Knowing when to get help from accountants, lawyers, experts, and more can help them take advantage of confusing laws, areas where they aren’t experts, etc. This can prevent wasteful spending, bad investments, and unnecessary legal issues.

This helps them save time as well as money!

They don’t fall for lifestyle inflation.

Millionaires tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so.

Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t trying to keep up with the Joneses.

This is drastically different from those who aren’t millionaires.

Here are some money statistics that may scare you:

68% of people live paycheck to paycheck.
26% have no emergency savings.
The average household has $7,283 in credit card debt.
The average monthly new car payment is around $480.

Many people try to keep up with others and fall for lifestyle inflation, which can prevent you from being good with money.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

They pay themselves first.

Millionaires pay themselves first.

Sure, they have more money to work with, but they always make sure to save money before spending it.

Paying yourself first is when you put money into savings as soon as you receive your paycheck. Doing this may allow you to save more money and cut back on unneeded spending, and it can help you prepare for the future.

They invest.

Millionaires make their money work for them, and that is how they stay rich.

Investing is important because it means you are making your money work for you. If you aren’t investing, your money is just sitting there.

This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.

For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.

Learn more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!

They still use coupons and haggle.

Yes, one of the many habits of millionaires is that they tend to still use coupons and even negotiate in order to get the best pricing!

What other habits of millionaires am I missing? Share in the comments below!

Apache is functioning normally

May 28, 2023 by Brett Tams

Early retirement is the dream of many.

The idea of paying your dues, saving up, investing smart and retiring at some point before the “traditional” retirement age of 65 has a strong pull.

For many, early retirement is something that might even happen in their 40s.

If you are considering how you can retire early, here are 3 ideas that can help you reach an early retirement goal:

1. Disciplined Saving and Investing

One way you can build up a sizable nest egg is to practice disciplined investing. Consider how much you will need in your investment portfolio to create an income stream that you can live off of.

You will have to consider your age, how long you are likely to live, and the asset allocation you will need to provide reasonable growth, but not leave you over-exposed to the vagaries of the market. A long-term approach can help you.

If you are 30, and plan to retire by age 50 or 55, you might be able to amass $522,063.08 if you start with $10,000 and invest $1,000 a month for 20 years, assuming a 6.5% return — compounded quarterly — on your portfolio. (Note, though, that returns will vary according to market conditions, and there is always the risk of loss.) You can end up with more than $1 million if you double that to $2,000.

When you start living off your retirement portfolio, though, you will need to make sure you are not withdrawing so much that your nest egg can’t support you. You can maximize your efforts by investing in tax advantaged accounts and making use of your employer’s company match program. But you need a plan, and you need to be disciplined enough to stick with it if you go this route.

2. Cultivate Multiple Income Streams

Another idea for early retirement planning is to begin cultivating multiple income streams, rather than relying solely on your ability to build up a massive nest egg to get you to retirement. Instead, make a plan to pay down your debt (including your mortgage) by your early retirement target date.

Try to rid yourself of as many obligations as possible, so that you will have fewer expenses during retirement. Make a plan to pay down this debt while preparing for the future. Figure out how much money you will need each month to support your retirement lifestyle and then begin cultivating different income streams to create that income.

While there are rules that allow you to begin withdrawing from an IRA early, you likely won’t have access to Social Security benefits during an early retirement. You can consider your early withdrawal from an IRA if you must, but consider other sources of revenue. You can establish a web site that helps you earn residual income, write a book that results in royalties, start a business that can provide an income stream, or even engage in income investing.

It is, of course, possible to cultivate a number of income streams at once, diversifying your income sources. Start now to develop these streams so that they are established and mostly automatic by the time you are ready for early retirement.

3. Take Mini-Retirements

Tim Ferriss, author of The 4-Hour Workweek, made the idea of a mini-retirement somewhat popular. If you want to enjoy life now, and aren’t concerned about having a huge chunk of time to try and kill when you are older, you can plan to take mini-retirements, living in a different place for one to six months. You do have to be willing to quit a job — and try to find a new one — in some cases.

An alternative that appeals to me is having a job you can do from anywhere. I work from home as a freelance writer and I could actually whittle my workload down to a couple hours a day for a few months, and take my job on the road. I’d be living in a state of almost retirement, and it would work as long as I had access to the Internet. Consultants and other freelancers, as well as online entrepreneurs, could make this work. After all, if you can manage to work on reduced hours, and have time to do what you want, you won’t need the same size of large nest egg.

Bottom line: There are even more paths to early retirement, and it might be that you combine different efforts to come up with a method that works well for you. The important thing is to decide what you want to do, and then make a realistic plan to accomplish it.

Source: goodfinancialcents.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Paying off debt is hard work. If it weren’t so hard, then it would be no problem for people to do. But, that isn’t the case at all.

Once you decide to pay off your debt, there will challenges along the way. There will be times that you feel tired and even defeated. Paying off debt takes making sacrifices, it takes time, and you may feeling like you are the only one working towards being debt free.

There are many things that may weigh you down as you pay off your debt, and the ones I bring up are all going to feel very negative. But, I want to talk about them because they are all things that I have felt while paying off my nearly $40,000 of student loan debt. By knowing that these feelings are common, my hope is that today’s post can help you overcome difficulties that you may experience along the way.

Instead of letting these feelings or challenges completely stop you from moving forward as you pay off your debt, you should know that many of the obstacles you come across are things that you can push past and move on from.

I hate seeing people stop their debt payoff journey because they feel too overwhelmed, and it’s important to remember that you aren’t the only one trying to pay off your debt. Just like anything else you are working towards, keep trying because you won’t get any closer to your goal if you stop now!

Plus, paying off debt is all worth it.

Remember this as you go, choosing to face your finances and pay off your debt is one of the best things you can do for yourself. And, even though it’s hard, you will be so proud of yourself once you realize what all of those struggles and hard work were for.

It may take a long time, but try to remember why you are doing it.

To help you deal with how difficult it may feel to pay off your debt, here are some of the struggles and feelings you may face and what you can do to change your mindset.

You may feel tired.

Learning to pay off your debt means you may need to find another job, cut your spending, and even downsize your house. All of those things are stressful and stress can leave you feeling exhausted.

But, you need to remember that you won’t always feel this way. This feeling is a temporary thing and what’s at the end, being debt free, will let you live a better life.

You will eventually be able to cut back on working so much and you will be able to sleep better knowing that you won’t have debt hanging over your life.

I remember how much extra work it took to pay off my debt. I worked so much and was so tired, but I wouldn’t change a thing because paying off my debt has led to living an amazing life.

You may have to make sacrifices.

Paying off your debt is all about making sacrifices, and we all know how hard that can be. You may have to change your spending behaviors, avoid places like the mall, cut your expenses, and more.

While it may seem tough to adjust to a new lifestyle, especially in the beginning, it will get easier over time. If bad spending habits were what led you into debt, then these sacrifices may feel even harder due to the fact that you may be used to spending more than you have.

But, you can break those bad habits and create new ones that will help you pay off your debt and then stay debt free. Habits like budgeting, family money meetings, and not overspending are all things that will help you for years to come.

If you are struggling with making sacrifices, I recommend bookmarking your favorite debt blogs and podcasts,

going on a no spend challenge, redoing your budget, looking for ways to extra money, and more.

Related:

You may be bored.

When you are trying to pay off your debt, you may have to start saying no to some of the activities and things you were spending money on. This could mean saying no to vacations, happy hours, dinner with friends, going to the movies, and more.

While you may feel bored in the beginning, it’s probably just because you haven’t realized that there are so many ways to have fun while you pay off your debt. When you actually start looking for frugal options to having fun, you will probably be surprised that there are so many possibilities.

You can take part in free events and festivals around your area, go to your local library, use coupons, and more. Plus, the outdoors are always a great place to have fun for cheap. You can go for a walk, ride your bike, hike, jog, or just explore. Find more ideas at How To Have Frugal Fun.

There really is no reason to be bored while paying off your debt. You’ve probably heard the saying that only boring people are bored – so don’t be boring!

Related posts:

You may feel like you should be keeping up with the Joneses.

One thing that many people find hard about paying off debt is that it feels like everyone else around them is still spending a lot of money. There are social media posts about amazing vacations, your friends might be talking about the new car they just bought, and friends who are wearing trendy new clothes and shoes, etc.

But, none of those things are needs. That negative feeling you might be experiencing when thinking about those things is just the feeling that you need to keep up with others. This is often something we try to do in order to feel better about what’s going on in our own life.

Unfortunately, it can be very tempting to stop your debt payoff journey to try to keep up with others around you, this is because you may feel jealous and wonder why others can spend money when you cannot.

But, looks can be deceiving. You don’t know what kind of financial situation that the other person is in. They may have more debt than you do! They may be maxing out their credit cards to go on vacations and buy expensive new clothes. They may have taken a second mortgage out on their home, and more!

There is no need to spend just to spend. You should only make purchases that you actually want to make and ones you need to make.

The next time you feel like you should spend money on things you don’t really need, you should stop and think about what’s actually bugging you and if you truly believe that spending money will cure whatever problem you are dealing with.

So, if you are wanting to do some emotional spending to deal with your feelings of debt pay off or to keep up with others, try to think about how amazing you will feel if you just keep working on your debt.

Paying off debt is all worth it.

While all the things listed above were negative feelings, there is one thing to keep in mind:

Paying off your debt can have so many positives.

I paid off my student loan debt quickly, and while it was extremely tiring, I wouldn’t change it for the world. There were many sleepless nights, 100 hour work weeks, and more, but I always reminded myself that this wouldn’t last forever. I knew that I wanted a different life and knew that paying off my debt would be 100% worth it in the end.

And, while you may feel like it’s awful right now, here are some positives that will come along the way:

Happiness. No longer having debt means that you’ll have more money in your pocket. You can save for retirement, finally take a vacation, and those things can lead to happiness and security.
No longer living paycheck to paycheck. By eliminating your debt, you will hopefully have learned better money management skills which will then allow you to start saving for other things in life, such as retirement.
Feeling in control. Debt can make a person feel like they have completely lost control of their life. By getting rid of your debt, you will feel much more in control of your life and your financial situation.

How does, or did, paying off your debt make you feel? What do you do to remain positive? What do you think debt free life will be like?

Apache is functioning normally

May 28, 2023 by Brett Tams

Hello! Today, I have a great article from JT. JT has a great story about how he was down to his last dollars living in a hostel, to hitting his retirement number just a little over a decade later. If you’re looking for another great retirement article, I also recommend How This 28 Year Old Retired With $2.25 Million. Below is his article on how to retire in your 30s. Enjoy!

Have you ever seen a grown man ugly cry? Our faces scrunch up like a squeezed sponge, wringing the water from our eyes. Our shoulders shake uncontrollably. We gurgle out a noise that’s a cross between a laughing hyena and a grunt. We’re not pretty.

It was 2000. I was ugly crying on the bed of the Spanish Harlem hostel where I was living, down to my last dollars. Months earlier, I graduated college, sold my car, and drove from Los Angeles to New York City with sunny West Coast optimism. Then after months of getting rejected from job after job after job, reality blew in like an East Coast blizzard.

They say, “New York City: If you can make it here, you can make it anywhere.” For those of us who have tried, it can feel more like, “Since I can’t make it here, I can’t make it anywhere.”

I wasn’t crying because I failed. I was ugly crying because I thought I was a failure.

And yet, a little over a decade later, I hit my retirement number. So what happened between the tears of sadness and the tears of joy? I’ll tell you exactly what I did to hit my retirement number in my 30s.

Related articles on how to retire in your 30s:

What is Your “Retirement Number?”

First, let me define what I mean by retirement number. It’s not just sitting under an umbrella on a faraway beach sipping fruity cocktails (although that would be nice!). It’s simply the point where if you were to quit working, you could still cover your basic needs. Basically? It’s when going to work is a choice.

You might find out, like I did, that you actually want to keep working. The best part of reaching your retirement number isn’t money, it’s agency. It’s the ability to spend your time the way you choose — unless you have little ones like I do waking you up at 6:00am every morning!

Sound pretty good? Here are my 6 steps to find out your retirement number and how to reach it. I’ll spend more time on the first 2 because they are the foundation for the remaining 4 steps. The math might seem a little intimidating at first, but if you write it down on paper, you’ll find that it’s not too bad. As you’ll see, you don’t have to be a math or money genius to retire early!

The 6 Steps to Retire in Your 30s:

Budget to a Balance Sheet:

When many of us think about our finances, we focus on what’s called the “income statement.” As a result, the budgets you see are most often just an income statement, like this:

Understanding your savings amount is a good starting point, but it’s where most people stop. Instead, use it as a starting point. The savings amount from your income statement is there to help make your “balance sheet,” which is just a fancy way of understanding what you have and what you owe. It will take some time go gather up your statements, but it’s not harder to make than your income statement.

Your balance sheet is basically:

Your savings amount flows into your “What You Have” bucket since that savings is now what’s called an “asset.” Think of it like when you eat cashews and have several left in your bowl. You’d go and put the remaining cashews back into the bulk container. Those cashews just went from leftovers to future snack.

Next, add your investment account balances to your “What You Have” bucket. Don’t include your car, house, jewelry, or any other physical things unless you actually plan to sell them within a year. You’re trying to figure out all your “What You Haves” that can be used to fund your living expenses, and last I checked, biting into your steering wheel wasn’t all that filling.

“What You Owe” is your credit cards, student loans, mortgage, and that loan you took out from your uncle. The technical term for these is “liabilities.” So, once you organize your information, you basically have your balance sheet. You’ll see in the next steps why having a good grasp of both your income statement and your balance sheet is so important.

Know Your Retirement Math:

A study by financial planner William Bengen found that if you withdraw 4% a year, your money would last you at least 30 years if you had a 50/50 portfolio of stocks and bonds. Others have found that most of the time (although on a 60/40 stock/bond portfolio), you would actually end up with more than when you started.

Bengen got to this 4% rate by back testing the withdrawal rate that would have worked even through the Great Depression, basically taking the worst case scenario in history.

The 4% withdrawal rate is a helpful guide for knowing how much to withdraw, but not very helpful to let you know how much you should have to withdraw from. To find that, you’ll need to convert it into a goal. We’ll start with the 4% withdrawal equation:

But that’s not a goal. It’s basically where you are today if you were to try to retire early. To convert it into a goal, you’ll need to do some mathematical jujitsu with the equation above (not to worry, I did it for you!). It’s the same equation, but I’ve mixed it in a blender to make it more helpful:

If you look carefully, I just reversed the “retirement withdrawal” equation. I changed the “retirement withdrawal” to “living expenses” and inverted the 4% to make it 25. By doing this, you can get to your “Retirement Number” goal.

You might be thinking 25 times your expenses is a big, scary number. It can seem unreachable. But, I’m excited to show you how it can work in your favor. To do that, turn the “25 times” into the ratio:

When you look at it as a ratio, you can see the power of reducing your expenses. For every $1 you shave off of annual expenses, you’ll need $25 less in your “What You Have” bucket to hit your retirement number. To illustrate how powerful this is, let’s look at an example: Say you spend $35,000 a year but shaved off $4,000 in expenses. Take a look at what happens:

If you put your money into the stock market, you might get the historical 7% annual returns. Your account might get bigger. But it also might get smaller. But if you cut expenses, you’re guaranteed to get a 2,500% return! ($4,000 savings x 2,500% = $100,000 effect on your retirement number)

Isn’t math fun?

You’ll notice I’ve only focused on “What You Have,” so why did I want you to know your entire balance sheet? It’s a little circular, but I think you’ll get it one you think about how the income statement and balance sheet talk to each other:

Reducing your expensive “What You Owe” (like credit cards) items on your balance sheet leads to…

Lower expenses on your income statement, which leads to…

Higher savings on your income statement, which leads to…

Increasing your “What You Have” on your balance sheet, which leads to…

Hitting your retirement number sooner!

So don’t ignore your “What You Owe” number. The sooner you get rid of your high interest rate ones like credit cards, the sooner you can hit your goal.

Alright, so how are we going to apply this to our actual lives?

(Do you wish you knew how to do this when you were younger? Would you like to teach it to your child? I’ll show you how teaching your children about money can be fun, fast, and easy starting here. Download the FREE Guide to Helping Your Child Start Their First Business and you’ll also get access to a FREE course on how to get your finances in shape for early retirement!)

Make As Much As You Can:

I know — you’re shocked!

Even though it’s basic, let’s take a moment and think through the implications of what this means. It means that if you’re serious about retiring early, you don’t work for passion. You work for money. If Goldman Sachs is offering you a job but you’d really rather be glassblowing, take the Goldman job, hang in for as long as you can, then retire early and spend the rest of your life glassblowing. Till the ground now so that you can enjoy the fruit of your harvest later.

As for me, I persisted and eventually found myself at a hedge fund that allowed me to stay in New York City. But most of us don’t have the opportunity to immediately get a six figure job. What then?

Side hustle.

Michelle has 65 Ways to Earn Extra Money. There should be at least one that tickles your fancy. Remember, you are trying to increase your income so you can increase your savings so you can increase your “What You Have.”

So that I could extend my runway until I could get a full-time job, I worked as a sales associate at Banana Republic. When I finally did land a full-time job, much to my friends’ puzzlement, I kept my sales associate job and turned it into a side hustle. (Imagine how mortified my boss at the financial firm where I worked felt when she ran into me at Banana Republic!). My balance sheet thanked me, as it helped me quickly pay off my “What You Owe” items, including student debt.

Change Your Spending Mindset:

Change your default question from “What can I afford?” to “What can I withstand?” Often times, when we get an upgrade in pay, we too often automatically think we need an upgrade in lifestyle. Why default to this assumption?

Let’s say you just got a promotion that is paying you $5,000 more a year. You’re tired of asking your roommate clean up her dishes. Your car is fine, but basic. You think about how hard you’ve been working and how you deserve your own place and a new car.

We’ve all felt this tug to spend more. But as we’ve seen in step 2, the ability to minimize your spending is the most powerful thing you can do to reach your retirement number.

Even though I was making six figures, I lived with roommates in non-prime areas of Manhattan until I got married. I never had a doorman. I hardly took cabs. I stayed in and cooked most nights. Within a few years, I paid off $15,000 of school debt and started building up my net worth.

Invest (Almost) Everything:

Saving is not the same as investing. Saving is the act of putting money away for a rainy day. Investing is putting money to work. In fact, if you simply save without investing, you actually lose money due to inflation.

After you’ve saved enough for 3 to 6 months of living expenses, invest the rest. The S&P 500 has historically returned 7% a year, after inflation. Meanwhile, the average annual salary raise has been around 3%. This difference is huge! It means that at a certain point, your investments will actually start making more than what you’re saving per year. Then, with enough time, it will actually start making more than your entire annual salary!

Basically, you’re trying to shift your finances from the picture on the left to the picture on the right.

Now, the last step can be tricky, but greases the path to your goal.

Move to a Lower Cost Area:

This is the trickiest part but also has the most potential to get you to your early retirement goal. An easier way to do this is finding an employer that also has a location where you want to be. For the East Coast, that’s either moving from Manhattan to a borough like Queens or transferring to another city like Philadelphia or Stamford. On the West Coast, it’s like moving from San Francisco to Portland. (Or, for the ultimate move, live in an RV and see the entire country like Michelle!)

A few years ago, I moved to Philadelphia while keeping my New York City salary. In so doing, I significantly reduced my housing expense by thousands of dollars…every month. With that one move, because I reduced my biggest expense, my wife was able to stay at home with our 3 children. In other words, it allowed my wife to retire (although her work as a SAHM is much more challenging than mine!). At the same time, I was still able to accelerate our retirement timeline by decades!

So, if reducing your expenses is the most powerful thing you can do to reach your retirement number, cutting your housing expense is the most powerful thing you can do to reach your expense reduction goal.

But Can You Really Hit Your Retirement Number Before 40?

Let’s put all six steps together.

You’ll see that it can be done without making six figures. Let’s say you make $50,000 out of college and have a side hustle that makes you an extra $12,000 a year (I based this on the 20-25 hours a week I worked at Banana Republic while keeping my full-time job). Also, you live with a roommate and pack lunches most days a week and only occasionally eat out for dinner.

Your salary and expenses each increase 3% a year, which is in line with historical inflation.
Your investments earn 7%, which is the historical S&P 500 return above inflation.
At ages 28 and 34 you get a promotion, getting a $5,000 bump in salary each time.
Your first promotion at 28 gave you more responsibilities, so you decided to quit your side hustle.

At age 34, you move to a lower cost part of town, reducing your living expenses by 15% over the prior year (yes, it’s possible – I saved more than this moving from Manhattan to Philadelphia).

As you can see, by the time you’re 39, you could withdraw almost $43,000 a year. So, if you were this person and quit your job at 39, you’d have enough to cover living expenses and taxes until social security kicks in.

As you can see, it’s possible even if you don’t have a big salary. So the real question is not “can you?” but “do you?” Do you have the desire to transfer the math into your actual lifestyle? Do you put in the effort to create the habits to sustain this level of investing for almost 2 decades even when life throws you curve balls (which will happen)? Do you set aside time and energy to start a side hustle even when your friends are going out and having fun without you? Do you say “no” to the tug to spend more and that desire to show the world how successful you are by the clothes you wear or car you drive?

If you do, then the only thing between you and achieving that goal is…you.

A Different Cry:

Several years ago, I had a different moment while sitting down. This time, I was looking at my balance sheet and realized that I had surpassed my retirement number. There was no blubbering this time, just a calm lightness. I felt liberated. From then on, every day I walked into work was because it was my choice.

The funny thing? I realized I wanted to keep working because I was still having fun. For now. My 67 year old boss just retired. Instead of the joy and excitement you would’ve expected, he had a lot of fear about how he was going to fill the rest of his days. Do you want this fate? You work so hard for so long that when you do have financial freedom, you’re either too old or too set in your routine to experience all the things you used to want to do.

For someone working toward a single purpose for so long, it’s actually challenging to not have a big goal anymore. And the time to figure out what else to do is while you’re still employed. This is why I started Just Making Cents so that I could still have purpose and projects of my own choosing, and to have greater impact on people’s lives.

And that’s when life gets really fun.

Author bio: JT is passionate about viewing money differently, having spent over 15 years on Wall Street. He writes about money from the perspective of faith and as a father of 3 spunky kids.

Are you interested in learning how to retire early? Why or why not?

Apache is functioning normally

May 28, 2023 by Brett Tams

When it comes to different types of retirement plans there are far more options out there than you might be aware of: 401k’s, 403b’s, Keogh Plans, DB(k)’s. Is your head spinning yet?

One lesser know retirement plan is the 457 Plan, which is often referred to as a Deferred Compensation plan or Deferred Comp. It’s a lesser known retirement plan because it is only offered to certain types of employees.

What is a 457 Plan?

A 457 plan is a type of tax-advantaged retirement savings plan offered by governmental employers in the United States. It is named after Section 457 of the U.S. Internal Revenue Code and allows employees to set aside a portion of their salary into an account that is exempt from federal income taxes until it is withdrawn at retirement.

The accounts are regulated by the IRS, and employers can choose to offer them as part of their benefits package.

State and local public employees and sometimes nonprofit organization employees are often offered the 457 retirement plan. Only employers who are exempt from paying federal income taxes and non-church organizations can offer 457 plans, including:

State and local governments
Hospitals
Educational Organizations
Charitable Organizations or Foundations
Trade Associations

The 457 is similar to the more widely known 401(k) plan, where you can choose to contribute to the 457 plan through automatic deductions from your paycheck before the taxes are taken out. Also, like the 401(k), money grows tax-deferred in a 457 retirement account until the time you withdraw the money.

Contribution limits and early withdrawals are treated differently for 457 plan holders, however. which we’ll take a look at here.

457 Contribution Limits

If your employer offers only a 457 plan as your retirement account option, you can contribute a maximum of $22,500 in 2023 if you’re under the age of 50, and up to $30,000 if you’re over the age of 50.

If your employer also offers either a 401(k) or a 403(b), you have the option of contributing to both the 457 plan and one of the other available retirement accounts. I have several clients who are employed by the local university and they have the option of contributing to both the 457 plan and a 403(b). You can invest up to the maximum limit for each account!

This means you could contribute $22,500 in the year 2023 to your 457 plan, and another $22,500 into the 401(k) or 403(b) plan if you’re under the age of 50. This probably goes without saying it, but you do have to have enough income to be able to contribute this amount.

This is a great option for people who are starting their retirement savings later than planned, or who just want to take advantage of tax breaks or employee matching as much as possible.

For 2023 and future years, the maximum contribution for these plans will increase by $500 increments, and indexed for inflation.

Catch Up Contribution Limits for 457 Plans

If you’re over the age of 50 before the end of the calendar year, you’re eligible for a “catch-up contribution” in 2023. You can contribute an additional $7,500 if you have a governmental 457 plan.

Year	403(b) Maximum	Catch-Up Contribution	Maximum Allocation
2023	$22,500	$7,500	$66,000
2022	$20,500	$6,500	$61,000
2021	$19,500	$6,500	$58,000

Early Withdrawals from a 457 Plan

Money saved in a 457 plan is designed for retirement, but unlike 401(k) and 403(b) plans, you can take a withdrawal from the 457 without penalty before you are 59 and a half years old. This is a very important rule that often times goes overlooked with the 457 plan.

I had one encounter with an individual that had retired early and had rolled their 457 plan into an IRA based on a recommendation from their former advisor. (Notice I said “former”). By rolling into the IRA, you lose the ability to cash out early to avoid the penalty in case you need access to your funds.

There is no penalty for an early withdrawal, but be prepared to pay income tax on any money you withdraw from a 457 plan (at any age).

Just like other retirement plans, you do need to start taking distributions from your 457 plan by the age of 70 and a half years old.

How to Invest in a 457(b) Plan

If you’re looking for investment options, you can’t go wrong with a 457 plan. A 457 plan offers an array of different investments, including stocks, bonds, mutual funds and even annuities. By diversifying your portfolio within the 457 plan, you can make the most of your money by balancing both short-term and long-term gains.

And if that sounds too tricky, some plans even offer the option to use a professional financial advisor to manage your portfolio – so let them navigate the turbulent investing waters while you kick back and relax.

Can You Roll a 457 Plan Into an IRA?

As I mentioned above, you do have that option if you are a government employee. The process is very similar to rolling over a 401k into an IRA. As a reminder, you just need to be cautious if you retire early for the reasons noted above.

If you don’t need the money immediately it’s in your best interest to leave the money in the account to compound until you are ready for retirement, but it’s nice to know that you won’t pay a 10% penalty on early withdrawals should there be no other option.

If you do decide to roll your 457 plan into an IRA, I recommend a platform like M1 Finance.

Can You Roll Your 457 Plan Into a 403b or 401k?

Yes, you can roll your 457 plan into a 403b or 401k. However, it is important to note that the rules for doing so vary depending on the plan and provider.

If you are considering rolling over your 457 plan into a 403b or 401k, you should contact your plan administrator for more information about whether this option is available to you and how it works.

The Bottom Line – 457 Retirement Account Rules

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The bottom line of the 457 Retirement Account Rules is that it offers a variety of tax benefits for those who take advantage of them. Contributions to a 457 plan are not subject to Social Security or Medicare taxes, making them a great way to save for retirement.

Withdrawals from the account are federally income tax-free after age 59 1/2 as long as certain criteria have been met. Employers may offer matching contributions, adding even more to your retirement savings.

Participants should be aware that if they withdraw money before age 59 1/2, they will likely incur an early withdrawal penalty and any earnings on that amount will be subject to federal income tax as well as state penalties.

457 Plan	Description
Type of plan	A type of retirement plan available to employees of state and local governments, as well as certain tax-exempt organizations.
Contributions	Employees can contribute up to the IRS annual limit ($22,500 in 2023) through pre-tax or after-tax (Roth) contributions.
Catch-up contributions	Employees age 50 or older can make additional catch-up contributions up to $7,500 in 2023.
Withdrawals	Withdrawals can begin at age 59 1/2 without penalty, and must begin by age 72 (or retirement, if later). Withdrawals are subject to income tax.
Loans	Some 457 plans allow for loans, with repayment typically required within five years.
Rollovers	Funds can be rolled over from another 457 plan or a qualified retirement plan, such as a 401(k) or 403(b).
Employer contributions	Some employers may offer matching contributions or non-elective contributions to employee accounts.
Advantages	Offers tax-deferred growth potential, flexibility in contributions and withdrawals, and may offer lower fees and expenses compared to other retirement plans.
Disadvantages	Limited to employees of state and local governments and certain tax-exempt organizations, may have limited investment options, and may be subject to certain withdrawal restrictions.

FAQs on 457 Retirement Account Rules

Who is eligible for a 457 plan?

Eligibility for a 457 plan depends on the employer’s plan and the type of employer. Government employers, tax-exempt organizations, and some non-profit organizations may offer 457 plans.

How does a 457 plan differ from other retirement plans

457 plans are similar to 401(k) plans in terms of tax benefits and investment options, but there are some differences such as eligibility, contribution limits, and early withdrawal rules.

Are there any penalties for early withdrawal from a 457 plan?

Distributions from a 457 plan before age 59 1/2 may incur a 10% early withdrawal penalty in addition to regular income tax.

What investment options are available in a 457 plan?

Investment options in a 457 plan vary, but they usually include mutual funds, exchange-traded funds (ETFs), and individual stocks. The options available depend on the specific plan.

Can you roll a 457 plan into a Roth IRA?

Yes, you can roll a 457 plan into a Roth IRA. This means that you will withdraw money from the 457 account and then contribute it to a Roth IRA. However, keep in mind that there may be tax implications when rolling over a 457 plan into a Roth IRA. The tax implications are very similar to rolling a 401k into a Roth IRA.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Source: goodfinancialcents.com

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retirement

Apache is functioning normally

Meet the New Adviser — Same as the Old Adviser

Following My Own Advice

Unconventional Success

Apache is functioning normally

Digit Savings Account

Axos Invest Investing Account

The Digit + Axos Invest Experiment (D+AI Experiment)

The Experiment In Progress

Join In The Digit & Axos Invest Experiment

Apache is functioning normally

Here is my advice for handling money and relationships

Have regular money check ins.

Be open about money.

Always be honest about money in relationships.

Set spending limits for each other.

Learn how to improve your financial situation.

Reevaluate your situation.

Related Posts

Apache is functioning normally

They wear the same outfits.

They have more than one source of income.

They have long-term goals.

They have a budget.

They educate themselves on financial matters.

They know the value of experts.

They don’t fall for lifestyle inflation.

They pay themselves first.

They invest.

They still use coupons and haggle.

Related Posts

Meet the New Adviser — Same as the Old Adviser

Following My Own Advice

Unconventional Success

What is FI number?

Why Choose Financial independence?

How to calculate your FI number?

Option #1 – Using Yearly Spending

Option #2 – Using a Safe Withdrawal Rate of 4%

The Financial Independence Formula

Calculate Your Spending

Find Your FI Number

Determine Years to Financial Independence

How to FI – Create a Plan

Step #1 – Figure out Numbers

Step #2 – Pick a Realistic Date

Step #3 – Take Action to Enjoy Life

How to FI – Saving to Achieve Financial Independence

Step #1: Pay Off Debt

Step #2: Reduce Expenses

Step #3: Boost your income

Step #4: Invest Money

How to FI – Investing to Reach Financial Independence

Step#1: Make Investments Automatic

Step #2: Choose an Index Portfolio

Step #3: Track Your Progress

FI Number Calculator

Saving for Retirement or More Savings to Quit work?

Digit Savings Account

Axos Invest Investing Account

The Digit + Axos Invest Experiment (D+AI Experiment)

The Experiment In Progress

Join In The Digit & Axos Invest Experiment

Related Posts

Which Investments are Subject to the Wash-Sale Rule?

What Happens When You Trigger a Wash Sale?

Avoiding a Wash Sale

What to Do After Selling an Asset at a Loss

Investing in ETFs or Mutual Funds Instead

Wash-Sale Penalties and Benefits

The Takeaway

Here is my advice for handling money and relationships

Have regular money check ins.

Be open about money.

Always be honest about money in relationships.

Set spending limits for each other.

Learn how to improve your financial situation.

Reevaluate your situation.

Related Posts

They wear the same outfits.

They have more than one source of income.

They have long-term goals.

They have a budget.

They educate themselves on financial matters.

They know the value of experts.

They don’t fall for lifestyle inflation.

They pay themselves first.

They invest.

They still use coupons and haggle.

Related Posts

1. Disciplined Saving and Investing

2. Cultivate Multiple Income Streams

3. Take Mini-Retirements

You may feel tired.

You may have to make sacrifices.

You may be bored.

You may feel like you should be keeping up with the Joneses.

Paying off debt is all worth it.

Related Posts

What is Your “Retirement Number?”

The 6 Steps to Retire in Your 30s:

Know Your Retirement Math:

Make As Much As You Can:

Change Your Spending Mindset:

Invest (Almost) Everything:

Move to a Lower Cost Area:

But Can You Really Hit Your Retirement Number Before 40?

A Different Cry:

Related Posts

What is a 457 Plan?

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