Monthly Archives: June 2016

Hit Your Money Goals

unduhan-21So you save some of your paycheck, contribute enough to get your company’s 401(k) match and wouldn’t dare miss a payment on your student loans.

Nice. You’re on your way. But your journey might be longer—or harder—than it has to be. Because while smart steps like these will help you eventually reach your goals, there’s a good chance it’ll take longer than if you applied a little more strategy.

Want to travel a less painful path toward wealth? Make sure you’re not committing these common (and well-intentioned) mistakes.

You’re nickel-and-diming yourself.

You calculate how much you’re spending on happy hours and Shake Shack, then ban them for the sake of your budget. Your head’s in the right place, but your strategy is misguided if you’re striving to save $15 a week by cutting something you enjoy, but still paying $100 more than you need to for cable or $200 a month on a gym membership you haven’t used since January.

Related: Start saving $100/month on Live TV

“Not only will little budget tweaks not get you very far in terms of your overall savings, but they may bum you out, which will cause you to burn out,” says Dominique Broadway, a financial planner in Washington, D.C., making it tough to stick to your budget.

Instead of looking for small-ticket items to skip, start with the big stuff. Can you renegotiate your gym membership? It can’t hurt to ask. Are you paying too much for your phone plan? You may save hundreds over the long run by downgrading your data plan, asking about specials or switching to a competitor.

You’re putting money in a savings account, but not investing.

It seems like a smart move to transfer money from checking into your savings account each month—and it is. But it’s not enough to ensure a comfortable future.

Banks are paying an average of 0.5 percent interest annually on a savings account now, but the inflation rate is above 1 percent (and, over the long term, it’s averaged more than 3 percent annually). “So by simply putting money in a standard savings account, it’s almost like you’re losingmoney,” says Broadway.

An easier way to grow your money and take advantage of compound interest? Once you have at least three months’ worth of expenses in an emergency savings account, start investing leftover cash, says Mary Beth Storjohann, a San Diego-based Certified Financial Planner and founder of Workable Wealth.

Aside from retirement accounts, you can open a traditional brokerage account or keep it simple with an app like Acorns or another automated investment service.

You’re only contributing enough to get your company’s 401(k) match.

It’s easy to think you’ve got your long-term savings covered if you’re contributing a few percent of your salary each year and taking advantage of your company’s free match.

“But the amount that your employer will match should be the minimum you contribute. It’s important to remember that it’s not tied to how much you’ll actually need to save in order to be comfortable in retirement,” says Certified Financial Planner Cheryl Sherrard, director of financial planning at Clearview Wealth Management in Charlotte, N.C.

How to Get PERFECT on Credit Score

images-34I will teach you the secret to achieving the perfect credit score. This will open many doors for you that are closed to most. I’ll first start with a story to set the stage:

I’m in the military. Some people around the office seek me out for financial advice. They know I’m a “money guy” and word gets around that I like talking investing and real estate.

I always warn people they won’t like my advice. They usually don’t.

This guy didn’t.

Recently a co-worker told me he’s got $20,000 burning a hole in his pocket, and what I think about investing in the British Pound. With the Brexit, it seems like a sure thing!

I told him this kind of speculation in currency isn’t for everyone. Even those who devote their lives to studying this are wrong more often then right. I warned him this would be a fun way to lose money quickly on something he doesn’t understand. It seemed like he took that to heart.

Guy: “Ok, I got a better idea! What about gold!?!?!?”

Me: Shit. (silently in my head)

I told him I have a different approach to investing. With an extra $20k and with no debt (awesome), consider fully funding retirement accounts first.

Guy: “O no, I still have debt!”

Getting Your Money

Being a young adult in 2016 is no picnic. You (mostly) don’t know what you want to do, your love life’s a slow-motion disaster film, and your parents keep asking when you’re going to settle down/get married/go to med school.
Oh, and you’ve got crazy student loan debt, wages have been stagnant for decades, housing prices are through the roof, and climate change just killed a bunch of reindeer in Siberia.
It’s enough to make you feel like this:

It doesn’t have to be this hard. While we can’t tell you how to figure out what you want to do with your life, or get you to stop drunk-texting your ex, or bring those poor reindeer back to life, we can help you get your finances in order.
Here’s how to be an adult—on paper, at least.
1. Pay yourself first

It’s a personal finance cliche, but it’s still the first step on the road to financial stability. Saving money often feels like deprivation—you can’t buy stuff you want. But if you change your mindset, and see saving as an investment in (pretty near) future you’s health and happiness, it makes it a lot easier.
How to pay yourself first? Here are a few ideas:
Do (at least) the bare minimum when it comes to retirement savings

Ideally, you’d be putting away a significant amount of money toward your golden years, but we know you’ve got bills: Those fat monthly payments to Sallie Mae, as well as rent, food, and the (more than) occasional night out.
But one of the few advantages (financially speaking) of being young is that you’ve got decades until you’re going to need your retirement money. Thus, every dollar you put away now will be worth more at retirement than dollars you put down in 10 or 20 years, when you’ll be a little farther along the slow crawl to the grave—and thus more flush.
Why? Compound interest. With time, your money earns interest, and then that interest earns interest, and then the interest on your interest earns more….you see where this going. Time is on your side on this one.
So what’s the bare minimum?
If your employer offers a match, contribute as much as you need to get the maximum match. For most of you, this will be 6 percent, with an additional 3 percent coming from your employer. Free money!

And with that, you’ll be close to halfway to the 20-percent savings rate that most financial advisors (and Money Under 30) recommend.
If you start right out of school, it might even be enough for you to have a year’s salary saved up in your 401(k) by age 30.
And because that 6 percent comes out pre-tax, you won’t feel as much of a pinch in your (slightly) reduced paycheck.
If you employer doesn’t offer a match?
Then you should open up a Roth IRA and aim to max out your yearly contribution. Since you’re young, and probably not making a ton yet, you’ll be paying less in taxes than you will later on. Contributions to a Roth IRA are done with post-tax money; withdrawals you take in retirement are tax-free.
Regardless, you’ll want to put your money in low-cost index funds, as fees can really eat up your returns.

Getting Out of Debt

I’m a math nerd, I like depriving myself of stuff, and I really like to live simply…and getting out of debt still sucked.

BUT – it was one of the best things I’ve ever done.

In case you don’t really know my story, here’s the sequence of events:

  • Graduated from college, had $18,000 of student loan debt
  • Got married (yay!)
  • Together, we paid off the $18,000 and built up an actual net worth
  • Got divorced (booo…), kept the house, and therefore was thrown back into debt because I owed my ex $22,000 of our equity
  • Paid off the $22,000 in 6 months (whew!)
  • Paid off the remaining $54,500 on the home mortgage in just 12 months!

In other words, I’ve been in debt, got out of debt, was thrown back into it, and then came out of it faster and stronger than ever. I quickly became a get-out-of-debt machine.

How did this happen? It certainly wasn’t by accident. Through the unfortunate life events listed above, I discovered the absolute best tool for getting out of debt.

Getting Out of Debt – Discovering the Tool

No, I’m not trying to sell you something. The purpose of this post is not to jack up your spirits and then tell you that it’ll cost you $49.99 to experience euphoric bliss. First of all, I’m not that cruel. Second of all, this tool for getting out of debt shouldn’t really cost you anything. Just a few moments of your own time and thoughts.

So what the heck am I talking about? What is this tool for getting out of debt?

Discovering My Tool: The 1st Time

When my ex and I were first married, I distinctly remember the day that my general nervousness turned to panic.

Our student loans came due, and that fateful bill came into the mail. The bill that we couldn’t afford.

It was in that moment that I put my foot down and shouted, “NO MORE!!”

No longer was I going to lie back and relax while my bank account was obviously plummeting toward the negative! It was either we fight this evil giant called “Debt” or we were going to let it rule us for the rest of our lives.

From that date when we said, “No more!”, we paid off $18,000 and cash flowed a $6,000 car in just 14 months.

Discovering My Tool: The 2nd Time

“I don’t love you anymore,” She said matter of factly. “I want a divorce.”

I crumpled to the floor and looked up in disbelief. I didn’t understood non-physical pain until that moment. But once I felt it, all I wanted in life was for it to go away. The only chance I had was to cut all the strings – to pay off my debt to my ex.

From that moment, it only took me just 6 months to pay her the $22,000 she “deserved”.

All ties were cut and I could breathe again. Finally, I could get on with my life.

Discovering My Tool: The 3rd Time

My ex was paid off, but something still didn’t feel quite right. I still felt owned. Something was still holding me back in life. This time, it was the bank.

I owned a house, sure. But was it really mine? If I lost my job tomorrow and could no longer afford the mortgage payments, what would happen? The bank would send me a letter, let me know that they were taking possession of “my” house, and then strong arm me out. As long as there was a mortgage on that house, it most certainly was not mine.

I was single, I had a decent income and had no other debt – it was time for me to truly own my house…completely.

After that decision day, it took me less than one year to pay off my entire mortgage.

Getting Out of Debt: With Motivation

In all of my situations above, there was one common theme that propelled me out of debt. No, I didn’t find the secret to have my student loans forgiven, I didn’t invest in some magical stock that took care of all my debts, and I also didn’t get rich by blindly allowing a piece of software to save money for me (Achhhmmmm, Digit…I’m still not a fan).

My debt vanished because of one simple tool: motivation.

On every occasion, when I was pissed off about my debt, I simply figured out a way to get rid of it.

When people today say that they just can’t seem to get out of debt, it just frustrates the heck out of me.

  • Don’t you have a wife that works her butt off at corporate, but really wants to be at home raising your children?
  • Don’t you love your kids and want to provide them with the best education possible? Isn’t that more important than that shiny Land Rover you’re driving?
  • Have you ever thought about your retirement years? If you have nothing saved, don’t you realize that you’ll be trying to live on cheap pasta and tuna every day? Does that sound like fun to you?