Author: Money Maroon

Probability

Dramatically Increase Your Financial Success Now

Money Maroon

Probability and financial success intertwines. In a mathematical sense, life is a probability function. The probability of an outcome increases or decreases base on your actions. As such, when you see someone achieving success, it is important to understand that luck had little to nothing to do with it. It is all a probability function and that individual may have taken requisite action to increase their probability of achieving  that success. There is also a very low chance, but a chance nonetheless, that such an individual did absolutely nothing and achieved this success. 

This reality does not take away from the fact that others may have helped this individual to achieve his goals. Those who aided the individual played a role in increasing the individual’s probability of achieving their goals. In the same vain, the individual achieving the success may have taken action to be around those individuals who aided him in achieving the success achieved. Again, this could be summed up as taking action to increase the chances of success – putting yourself in position to take advantage of opportunities.

The Lottery

Let us look at the example of winning the lottery. We all have a chance of winning the lottery. There is a probability of winning even if we do not actively go out and purchase a lottery ticket. The probability is very low of course. But, you can theoretically win the lottery without buying a lottery ticket. Consider the fact that you may find a lottery ticket on the side of the street that happens to be the lucky numbers. You may also be gifted a winning ticket.

Note, the probability of any of the above two scenarios happening is very low. We must accept the fact that the odds that you will win the lottery without purchasing a lottery ticket is infinitesimally small, however, you still have a chance.

Now, suppose you buy 1 lottery ticket, the probability of you winning the lottery will now increase substantially. Your odds of winning will be 1 in 292,201,338. If you would like to increase these odds further, you can purchase a second ticket to now have an odds of 2 in 292,201,338.

The Financial Game

The financial game is the same. We are all born with a probability of having financial independence. If you born into a wealthy family, you may have a higher probability of this result than someone born in poverty.  However, there is a probability that those born wealthy may end in poverty and those born in poverty may end in wealth. Every action you take increases or decreases your probability of getting a result.

What Can You Do To Increase Your Probability?

To increase your probability of financial independence, I have a secret. Ready, it is the same boring list that you have heard before, live below your means, save, invest, and repeat. 

Your probability of living below your means is increased by having a higher salary, maximizing your time and spending less. How do you increase your probability of having a higher salary? You gain an education, you start a business, you invest. How do you spend less? You cut unnecessary expensive and limit debt.

The same two factors (living below your means and spending less) will also increase your probability of saving and investing. The more you save, the more you will have to invest. It is a feedforward cycle. This is also the reason the rich gets richer.

The second you begin to take action in this regard, your probability of financial independence increases. On the other hand, the opposite is true. Earning less and spending more will undoubtably decrease your odds of living below your means, saving and investing. These actions will undoubtably decrease your odds of financial independence and stability.

Action Plan

If you want to have a financially secured life, there are steps you can take to increase your probability of achieving that result. Live below your means, save, invest, and repeat. Take steps to increase your chance of financial independence. 

Conclusion

Probability and financial success intertwines. In a mathematical sense, life is a probability function. The probability of an outcome increases or decreases base on your actions. As such, when you see someone achieving success, it is important to understand that luck had little to nothing to do with it. It is all a probability function and that individual may have taken requisite action to increase their probability of achieving  that success. Journey to financial independence by taking simple steps that increases your probability of financial success.

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Time of your life

Time Of Your Life: Time Is Your Greatest Asset

Money Maroon

Your time is your greatest asset, so use it wisely. As the old saying goes, nothing can be said to be certain, except death and taxes. So each second that you waste is a second that you will never get back, but also, you are a second closer to not being here. While this is a morbid outlook on life, it can be used to inspire your actions and financial decisions. Life your best life and have the time of your life.

Questions To Answer

Ask yourself:

  • How am I spending my time on this planet?
  • How am I managing my most valuable asset?
  • Am I maximizing my time?

Once you ask yourself these questions, do you feel a need to change:

  • Your actions?
  • How you spend your free time?
  • Your career?
  • How you interact with your family?

Ask yourself these questions now, such that you can make necessary changes, because you will not get back the time lost.

Maximizing Your Time – Have The Time Of Your Life

I was somewhat of a late bloomer when it came to maximizing my time. It took until college for me to realize how much time I had wasted. 

To help pay for my college costs, I did work study. My first work study position was terrible. While simple, it demanded total concentration as it was in the administration office and included filing documents. The major issue here, I had to focus on tasks for a defined period of time, I would thereafter have classes, then I had to study for those classes. There had to be a more efficient way.

My mind was blown after discussing my work study position with a friend who was managing a computer lab. In college, managing a computer lab meant watching over a computer lab and helping students troubleshoot issues that may occur at the computer lab. This was a perfect college position because it allowed for maximization of time. Why?

As a computer lab manager, you were able to watch over the computer lab and perform your own personal studies. As this was college, rarely did any student need help on how to log on or how to use the Microsoft applications that were loaded thereon. If there was a powerpoint presentation, it was only a matter of setting up the equipment, simple!

Now, because students rarely asked questions, with this work study position, you are able to study for classes, review notes and do homework while getting paid. I was quickly able to transfer to this new position with the recommendation of my friend.

I loved the job, and I would work hours that others would not because I understood what I was gaining. By having this position, I was able to get paid to study and do homework. That is what I call maximizing your time.

What About You?

What about you? How can you maximize your time? How about learning a new language or subject matter while at the gym or running. To give some context. While many are listening to music on their headphones while working out, why not try to learn a new language or listen to an ebook? In your down time, why not get into a new hobby to expand your mind or physical abilities? What can you do to maximize your time on this planet?

Note that maximizing your time can bring many financial rewards. By expanding your mind and physical abilities you may become more qualified for position. You may become more well rounded. You may be able to accelerate your career progress and outlook. Such career advancement may lead to (1) a higher salary, (2) you starting a new business, (3) you spending more time with family, and (4) you achieving financial independence. By taking simple steps, you can have the time of your life while developing spiritually and professionally.

No Need To Maximize Everything

While I encourage you to maximize your time, not everything should be rushed. For example, time with your love ones.

Let us look at the F.I.R.E movement. Many have developed working and spending habits such that they can retire early (As I have noted previously, many in the F.I.R.E movement have no intention of retiring). By maximizing your time, you may be able to  advance your career, save more, and invest more. With these actions, you may be able to hit your F.I.R.E number and become financially independent. This may allow you to spend more time with your family and/or do tasks that you prefer. 

Now, with more time with your family (if you like spending time with your family), when asked the below questions, you may think differently:

When asked: 

  • How are you spending your time on this planet? 
  • How are you managing your most valuable asset? 
  • Are you maximizing your time? 

The only change in your actions may be the thought that you should have done this sooner. Here, the journey to financial independence can be a journey to happiness.

Conclusion

Your time is your greatest asset, as such, you should use it wisely. As the old saying goes, nothing can be said to be certain, except death and taxes. So each second that you waste is a second that you will never get back, but also, you are a second closer to not being here. While this is a morbid outlook on life, it can be used to inspire your actions and financial decisions. Journey to financial independence. Life your best life and have the time of your life.

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Losing Job

Learn Lessons From Recessions

Money Maroon

Changes

Learn lessons from recessions. Following the great recession, many Americans made a conscious decision that it was time to prepare for the next financial downturn. Many of these individuals actively or passively joined the Financially Independence Retire Early (“F.I.R.E”) movement. During the pursuit of F.I.R.E, these individuals cut back significantly on spending, saved an increased amount of their salary and invested.  

Those Unprepared For Recessions

While many individuals made a conscious decision to change their life, others did not. Many framed the great recession as a once in a life time event and quickly began spending as they did previously. The prices and sizes of homes increased and the length of car loans approached five to seven years. We were riding the high of a decades long bull market. Each year the prediction of a market downturn came and past with new record highs in the stock market and record lows in unemployment.

However, this all came to a screeching halt. We now have a Covid-19 pandemic. Predictably, those who made financial  changes are in a better position than those who did not.

F.I.R.E in a market downturn

F.I.R.E And Recessions

Over the last decade, as F.I.R.E came to the main stream, many in the media came out asking why? Others have announced that it was a futile fad. Some just did not understand why those in the prime of their careers would want to retire. Many further asserted that it would be dangerous to quit your job early. However, let me tell you a secret. Many in the F.I.R.E movement have no plan to retire in the traditional sense. Many plan to retire from their current jobs and instead focus on a passion. In many instances, these passions provide a sustainable income.

Being Prepared

Whether or not you have achieved F.I.R.E, on the path to F.I.R.E, or thinking about F.I.R.E, the Covid-19 pandemic has shown us why you should plan ahead and have a financial buffer. In times like these, those who have embraced the F.I.R.E movement are leaps and bounds ahead of the rest.

Those Who Have Hit Their F.I.R.E Number

Let us look at those who have hit their F.I.R.E number and have retired. With regard to investments, these individuals have investments that have no doubt reduced in value. For some, the drop is higher than that of 20%. However, as understood by many in the F.I.R.E movement, the stock market operates in cycle. Therefore, these individuals are concerned, however, they understand that the market will return. 

A tenant of F.I.R.E is the emergency fund. Those who have hit their F.I.R.E number no doubt have at least six to twelve months of expense saved in liquid accounts. This is their safety net until the market rebounds.

Those On The Path To F.I.R.E

For those on the path to F.I.R.E, these individuals are still working, has been laid-off or furloughed. Like those who have hit their F.I.R.E number, those on the path to F.I.R.E commonly have investments. There is no doubt that their investment portfolio have taken a hit. These individuals also understand that the market operates in cycles. While they are alarmed by the investment portfolio losses, they understand that the stock market will recover. Further, the losses are locked in only if you sell your investments.

Importantly, these individuals have already build up their  emergency fund or on the path to building this fund. Again, the emergency fund provides an advantage over the general public who generally cannot afford a $500 emergency expense.

Lesson

The lesson from the great recession and this current pandemic is simply, plan ahead. This pandemic will have a similar effect as the great recession. Some will begin to implement contingency plans to protect their families. They will live or continue to live below their means, save and invest. On the other hand, many will not learn a lesson, believe this will not happen again and return to living above their means and keeping up with the Jones.

Conclusion

Learn lessons from recessions such as the great recession and the Covid-19 pandemic. See financial downturns as an opportunity to begin the process or continue the process of building wealth and financial security. Journey to financial independence.

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Video Summary

Opportunities

Take Advantage Of Financial Opportunities During Pandemics

Money Maroon

As someone much smarter than I once said, it is wise to be “Fearful when others are greedy and greedy when others are fearful.” Although the coronavirus has shutdown businesses and have caused mass unemployment, it is important to see and seek opportunities in this time of fear. Let us be clear, we are not down playing the coronavirus or future pandemics. However, it is important to remain level headed and keep your eyes on your goals. In this vain, I implore you to seek, find and take advantage of financial opportunities during pandemics.

Unthinkable And Unplanned

Opportunities may present themselves in the form of a new business opportunity, returning to school or investing in property. Whatever the opportunity is, the opportunity will most likely not appear at the most opportune time or planned. As the coronavirus spreads, different opportunities will present themselves, none of which were thinkable just three months ago. As these opportunities come into view, it will be up to you to take advantage of the opportunities.

Is It Time To Enter The Stock Market

In this coronavirus environment, the most obvious opportunity may be that of taking advantage of the stock market. As a reminder, to build wealth, it is important to live below your means, save and invest. Living below your means allow you to save. While saving is important, saving alone will likely not bring wealth. The power of your saved dollar will be eaten away by inflation.

In view of inflation, investing may be necessary to build wealth. Investing can take the form of investing in a property, yourself, a business or the stock market. 

With regard to investing in the stock market, this act is typically one of the last step taken by most. Due to the risk associated, investing happens to be the step that most are most hesitant to take. However, once most individuals begin to invest, the number one regret tends to be not starting earlier.

What We Can All Agree On

I could go into details about the market providing about a 10% return (not taking into account inflation). However, let us look at the numbers. The stock market hit a high of 29,551.42 on February 12, 2020, and have later dipped below 20,000. This is a drop of more than about 33%.

Will the market go lower? I don’t know, no one does. However, what we can all agree on is that it is highly likely that over time the market will rise from its current levels. This is the opportunity. Buy low, sell high.

Taking Advantage Of Opportunities Involves Risks

If you do decide to jump into the stock market, ensure that you understand the risks associated. All investments carry some degree of risk because nothing is 100% certain. 

Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss.  Most importantly, loss of principal is possible. 

While nothing is certain, taking calculated risk can provide substantially return on investment. Further, by doing your due diligence, taking calculated risk can aid on your journey to financial independence. As such, seek, find and take advantage of financial opportunities during pandemics.

Conclusion

In this pandemic like all pandemics, fear is plentiful. As someone much smarter than I once said, it is wise to be “Fearful when others are greedy and greedy when others are fearful.” In this vain, I implore you to seek, find and take advantage of financial opportunities during pandemics. In 2020, the opportunity may just be the obvious, the stock market.

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Covid-19

Financially Survive A Pandemic

Money Maroon

As the Covid-19 pandemic expands, starting in the East and now devastating the West, governments are taking actions to limit and contain both the health and financial fallout. The effects of the Covid-19 pandemic are unimaginable. However, a pandemic should not change how you approach your financial future. These same principles apply during the coronavirus pandemic: live below your means, save and fund your emergency fund. By following these principles, you should be able to financially survive a pandemic.

Social Distancing

As countries and states practice social distancing, they are economically shutting down. As residences are forced to shelter in place, multiple parts of the economy shuts down. For example, the transportation industry (including airlines and taxies), the restaurant industry, and the hotel industry to name a few. As these industries shuts down, revenues are down while employees must be paid. In such a situation, unless there is some intervention, layoffs will follow. 

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Layoff Concerns

In the current environment, the prospects of layoffs should be on every employee’s mind. For these employees, next are the thoughts of providing for their families, servicing mortgages, student loans and other debts. These thoughts breed anxiety and stress. More concerning, anxiety and stress lowers the ability of the immune system to fight diseases. This in turn leaves individuals more susceptible to diseases.

But not everyone is having financial anxiety.

Financial Independence

Over the past ten years, many have tried and have achieved financial independence. Many have exited the daily grind of working for others and have become their own bosses. For many, even with the current fall of the stock market, their financial future is stable no matter the out come of the pandemic and the related financial effects. These individuals are truly financially independent. 

How did these individuals achieve this peace of mind? They followed these basic money principles: live below your means, save and fund your emergency fund.   If you have followed and are following these principles, congratulations, during this economic crisis you will be ok at least in the short term. Simply put, by following these principles, you should be able to financially survive a pandemic.

You Can Achieve Peace Of Mind

Whether you own your own business or you are a salaried employee, there is a possibility of financial hardship in the future. As such, it is prudent that we all plan ahead for a rainy day. Living below your means, saving and funding your emergency fund takes planning. But also, taking these steps means sacrificing and delaying gratification.

By living below your means, you are able to limit debts, for example, lower mortgage payments and lower car payments. By not keeping up with the Jones, you are better able to weather the financial storm when it comes. Living below your means further frees up money for you to save and fund your emergency fund. 

By saving and funding your emergency fund, you are able to have a greater runway to act during a financial crisis. In times of crisis, cash is king. By having a fully funded emergency fund of six to twelve months, any gaps in income can be made up at least temporarily. As such, you are able to maintain your standard of living while having time to search and potentially find a new job.

By planning ahead and putting away money, you are effectively buying time to maintain your family during retirement or a financial crisis. If you are not practicing these basic principles discussed, begin today. Saving $100 a month is $1,200 in a year, and $12,000 in ten years without added interest. If this amount is invested, your total following 10 years will likely be higher.

The Future

As the number of those infected by the coronavirus increases, pay particular attention to the programs available to financially help individuals and businesses. Federal student loan payments are being delayed for 60 days, while foreclosures, evictions and mortgage are being temporarily suspended. As these programs are outlined and implemented, plan ahead and take the steps necessary to keep your family secure and financially healthy.

Conclusion

As the Covid-19 pandemic expands, starting in the East and now devastating the West, governments are taking actions to limit and contain both the health and financial fallout. The effects of the Covid-19 pandemic are unimaginable. However, a pandemic should not change how you approach your financial future. These same principle apply during the coronavirus pandemic: live below your means, save and fund your emergency fund. By following these principles, you should be able to financially survive a pandemic.

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Fear of money

Fear Of Money

Money Maroon

Money is a difficult topic to talk about. Not because money is inherently bad, but because money is an instant mark by which we compare ourselves to others. To the few, money is viewed as a tool to get what they desire. To the masses, money is a scarce resource that must be guarded. Most have a fear of money, consciously or unconsciously.

The Have And The Have Nots

When addressing money, there are major differences between the wealthy and those without wealth. The wealthy sees money as a tool that is to be used. The more money they have access to, the more they can bend the world to their desires. 

Consequences Of Having A Fear Of Money

While the wealthy view money as a tool, those without wealth fear money. Yes, they fear money. Many believe in the concept of “more money more problem.” Further, the masses have an unhealthy fear of not having money.  

More Money More Problems

Why is there a belief in “more money more problems.” Have you ever heard the statement: “money is the root of all evil.” Now, think about who you have heard this from. Was the statement made by someone with wealth or from someone without wealth or new to wealth? I can guarantee that you have not heard the above statement from a wealthy individual.

Let’s dig in. Note that 1 Timothy 6:10 actually reads, “For the love of money is the root of all kinds of evil.”  Even without historical context, it is clear that the bible is not saying that money is the root of all evil. Instead, it is saying that a love of money and not money it self, is the root of  all kinds of evil. This one misquoted phrase and other similar phrases have consciously and unconsciously ruined our relationship with money.

With this miss quoted text, many view money as not being good and subconsciously very bad. How can you make and grow your money when you believe that money is the root of all evil? 

Change your relationship with money. Money is a tool that can be used, in some cases for good and in other cases for evil. As such, remove the above and similar phrases from your vocabulary and build wealth.

The Fear Of Not Having Money

While a healthy fear of not having money is a good motivator, an unhealthy fear of not having money is a problem. Why is this a problem? The fear of not having money can lead to a scarcity mindset. The belief that money is a limited resource, it is not. 

Further, acting out of an unhealthy fear of not having money can lead to not allowing yourself to take risk to grow yourself or your business. An unhealthy fear of not having money can lead to lack of confidence and not standing up for yourself personally and/or professionally. 

In this regard, the fear of not having money leads to an employee mindset. A mindset of working for someone else for a secure salary and not rocking the boat. This mindset is a danger to financial independence. 

Let’s dig into the above statement with regard to the security of a salary position. A salary position is not a secure income source. With a salary position, you are giving your boss complete control over your financial life. The classical, putting all your eggs in one basket. Further, most employees are at-will employees and as such your company can fire you for any reason. Does that sound secure to you?

Embrace money and use money as a tool. Instead of  having one salary position, invest in yourself and secure multiple income streams. Stop fearing not having money and take back control of your financial life from your boss.

Conclusion

Money is a difficult topic to talk about. Not because money is inherently bad, but because money is an instant mark by which we compare ourselves to others. To the few, money is viewed as a tool to get what they desire. To the masses, money is a scarce resource that must be guarded. Most have a conscious or unconscious fear of money. Get over the fear of money, have confidence in yourself and take calculated risk and journey to financial independence.

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Family and money

Family Finance: Talking To Your Family About Money

Money Maroon

Money is a difficult subject to discuss. Some would rather discuss their weight instead of talking about money. When you have to share financial information with family members, the money talk is taken to another level of pain. When you are discussing money with your parents, the money talk may be excruciating. While painful, family finance discussions are important. Do not avoid or delay talking to your family about money. Talking to your family about money may alter not only their financial future, but also yours.

History Of Retirement

Retirement, generally, was not made for the masses. German Chancellor Otto von Bismarck invented the idea of retirement in 1889. At the time, retirement was essentially to force older workers out of the work force and make way for younger workers. However, in Chancellor Otto von Bismarck’s 1889 Germany, the retirement age was 70, but most importantly, the average life span was 70 years of age. 

As health care and medicines improved and we began to live longer, retirement and our understanding of retirement has evolved. Now, retirement is not only for those close to death, but for anyone who have achieved financial independence and want to escape the rat race.

The Three Legs

Generally, in the United States, with the advent of social security, previous generations were somewhat secure in retirement. Previous generations had the now acclaimed three legs to their retirement stool: (1) personal savings, (2) social security and (3) a company pension. However, the three legs have been significantly weakened or are completely non existent for many.

The baby boomer generation will be the first generation since world war II to enter retirement without all three legs. 

First, many have very little to no personal savings; second, as it currently stands, the social security program is teetering on the edge of insolvency; and  third, for the most part, company pensions are a thing of the past. Taken together, the baby boomer generation have little saved for retirement, no pension plan and are dependent on social security.

Are your family members, prepared? A more direct question, is your mother and father prepared? If they are prepared, lucky you. If they are not, who will be taking care of your parents in retirement? Look into a mirror and the answer will be looking at you.

How will this impact your financial future? With this in mind, have you had the talk? This is the reason family finance discussions are so important.

Family Finance: Talking To Your Family About Money

– The First Talk

I have personally tried to have the talk with my parents, the first attempt did not go very well. However, I understood that family finance discussions were important, so I tried again.

Imagine your child asking you personal details about your financial situation and questions with regard to end of life planing? Imagine your child then critiquing your choices and then showing you that you have not saved enough, imploring you to cut back on spending and put more money away? Your child then warning of the dangers of running out of money in retirement, the high costs of healthcare as you get older, and the importance of being debt free prior to retirement?

Would you be defensive, would you hide information? Of course you would. 

– The Problem

First, this represents a huge roll reversal that not many parents can handle. Your child is now being the parent. If your parents are from the camp where they speak and the child listens, such questions will evoke anger and a feeling of being disrespected.

Second, based on answers or lack thereof to the questions asked, both parent and child now know that in the finance department, the parent is not as all knowing as they may have represented to be over the years. These questions will expose financial mistakes and missteps. Acknowledging these errors of judgement and missteps to a child can be very difficult for some parents to handle.

The above are only two of the many reasons why it is so difficult to talk to your family about money.

– Perseverance Is The Key

Did I stop talking to my parents about their finances when I was rebuffed? No. Did we have yelling matches when points were not getting across, yes.

To ensure that your relationship is not destroyed because of your discussions, spread out your discussions. Continue to ask questions that were not previously answered. Over time, a funny thing will happen. Instead of having to ask questions, your parents will begin providing updates on their financial progress.  I am not saying that you will have a miraculous breakthough and your parents will become the most responsible with their money and make all the right financial choices. Instead, they will become more aware of their financial situation and start thinking more about their financial futures.

We cannot control what another person does, especially our parents. However, if we can make them aware of potential issues that may be on the horizon, maybe they can and will take action to change course. 

The fact is, you as the child may be responsible for your parents during retirement. Begin taking steps to mitigate the impact on your financial future by talking to your family about money. Have the family finance discussions.

Conclusion

Money is a difficult subject to discuss. Some would rather discuss their weight instead of talking about money. When you have to share financial information with family, the money talk can lead to an unbearable amount of pain. When you are discussing money with your parents, the money talk may be excruciating. While painful, family finance discussions are important. Do not avoid or delay talking to your family about money. Talking to your family about money may alter not only their financial future, but also yours.

Talking to your family about money is one of many stops on your journey to financial independence. Have the talk.

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Side Hustle

Get Your Side Hustle Right

Money Maroon

We have all seen stories after stories of people ditching their day jobs for a side hustle. In some cases, multiple side hustles. These major financial and professional moves typically occur upon the realization that the side job provides more income, time with family and all round satisfaction as compared to the main hustle. Whether you want to make your side hustle your main hustle, or you simply want to supplement your main income with income, one important principle rings true. While you may want to jump head first into your first or second side hustles, do not allow your side hustle to interfere with your main hustle.

Reliance On The Main Hustle

Picking up and doing a side job is easy. Being consistent enough to garner a reliable income stream and/or growing the side job to become your main income source is difficult. This is akin to starting your own business. Building a reputation and developing a reliable clientele requires a huge investment of time and potentially financial resources. This investment is almost always reliant on your main hustle’s income. Therefore, it is essential to keep your main job stable as income from your side job grows.

The Problem

Even if your side hustle is performed in the hours outside of your main job, at the very least, your time investment will take away from the time available to focus on your main hustle.  

  • For example: 
    • Main hustle: 9am-5pm
    • Side job: 7pm-10pm

Those extra 3 hours of working a side job per day or week will result in a tired employee. An employee who no matter how good you are, will become prone to mistakes. Further, such an employee will likely not be providing full attention to the main hustle as they will be thinking about the side hustle….potentially having one foot out the door. How would you react as an employer if you got wind of such developments. Now, as an employer, imagine if your employee’s side job is or could become a direct competitor.

Does Your Employer Have Your Best Interest

We would all like to think that our employer want the best for us as employees, and while this may be true for some, these employers are in the minority. Your employer wants what is best for you so long as what is best for you is best for them. Where what is best for you diverges from your employer, you will have trouble. This is often the case once you begin a side job.

Employer Becomes Aware Of Your Side Hustle

If your employer have the slightest belief that your side job could potentially compete or take business away from him, he will ensure that you do not survive, at least at your current position. Expect to be fired, however, before the axe falls, the warning signs will show themselves as complaints with regard to: your ability to focus on the task at hand,  you not spending enough time in the office, you not making yourself available, or you are unable to handle new responsibilities and your inability to grow.

I have seen this play out, even in fields where a side job is completely unrelated to the main hustle. In one case, a jealous co-work informed the employer of a fellow co-worker’s side job, caused a big stir and eventually got him fired. In this case, the side hustle and the main hustle were completely unrelated. However, jealousy is ever-present as we are all human beings.

Once an employer learns of your side job, it is not uncommon for you to be accused of using company’s resources for your new endeavor. This can have far reaching implications depending on your employment agreement. For example, if your side job is one that is a new idea. Note that many employment agreements have an assignment clause wherein inventions developed with the use of employer’s equipment (for example computer) and on employer’s time belongs to the Employer. 

If your side hustle and your main hustle are in the same field,  you may even face legal action with regard to mailing lists or stealing clients among other grievances. 

As such, it is imperative that you keep your side job and your main hustle separate. We would suggest not even answering an email related to your side hustle on your current employer’s computer.

Conclusion

Side hustles may provide more income, time with family and all round satisfaction as compared to your current main hustle. However, if your journey to financial independence includes a side hustle, do not allow your side hustle to interfere with your main hustle until you are ready to have your side hustle become the main hustle.

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Emergency fund

Benefits Of Having An Emergency Fund

Money Maroon

“Emergency” and “fund” are the new buzz words of any financial advice. You have heard it and have been told many times to have an emergency fund. How much you should save is typically dependent on who you ask. Some say have at least 3 months, others say have at least 6 months while others have recommended up to a year of your monthly cost of living saved. Whatever the amount you have settled on trying to save, start saving now. On the journey to financial independence, there are many benefits of having an emergency fund.

Financial Stress

Financial stress is not only one of the leading causes of divorce, but also stress and all related pathologies. This comes as no surprise in view of recent reports. Survey after survey notes that we are not saving enough for retirement. There are monthly reports noting that most cannot afford a $500 emergency without going into debt. Additionally, the average American has over $38,000 in debt. With regard to student loans, in the US, student loans are now over $1.6 trillion.

Less Financial Stress

What would having a months cost of living in a bank account do for you emotionally and psychologically? Would this mean not living pay check to pay check? What about being able to afford that unexpected car repair, and being able to cover that often raised $500 for an unforeseen expense. The stress relief and feeling of well being, yes, these are the benefits of having an emergency fund.

Now, multiply the amount saved by 2, 3, 6, 12, or 24. The more you save, the better the feeling. The more saved in an emergency fund, the less financial stress.

An Emergency Fund Provides Confidence

With less financial stress, comes confidence. The confidence to take active steps in life to better yourself and financial position. If you are not worried about living pay check to pay check, you can focus more on your career, education and/or family. All of which builds confidence. The more you save, the less on a tight rope you live. The more you save, the less reliant you are on your job to pay for the next 1, 2, 3, 6, 12 or 24 months of expenses.

Confidence is the ability to push back when your boss mistreats you or put you in a compromising situation. Having an emergency fund puts you in a position to fight back because financially, you may not be completely reliant on that job. An emergency fund gives confidence and options.

An Emergency Fund Creates Opportunity

Having an emergency fund allows you to take advantage of opportunities. Opportunities do not come along on a predicted timecourse. Opportunities present themselves on a random untimed basis. 

Consider the previous financial downturn of 2008. To many, the recession was a devastating event for all the known reasons. However, to others who had money saved and were able to buy into the stock market at a significant discount or purchase homes at discounted prices, the recession was a massive opportunity. The financial downturn of 2008 was a realized opportunity to many who had the financial reserves to take advantage. 

While the financial downturn of 2008 is an outlier with regard to the size of the opportunity, the same principles apply for the small opportunities that present themselves daily. Those who have the financial capital and confidence to do so, will take advantage of these opportunities. Having an emergency fund will place you in a better position to take advantage of small and large opportunities alike.

Conclusion

An emergency fund is a specific group of assets, typically cash, that are readily available to help one navigate unexpected financial difficulties. These financial difficulties include but are not limited to loss of a job, illness, and/or repairs. Whatever the amount you have settled on trying to save in an emergency fund, start saving now. On your journey to financial independence, there are many benefits of having an emergency fund.

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Stay motivated

How To Stay Motivated

Money Maroon

With anything in life worth having, there tends to be some pain associated, physical or physiological. The journey to financial independence is no different. While many hope to be financially independent, few take the steps necessary to be financially independent and fewer still are able to achieve financial independence. If you are serious about achieving financial independence and have taken steps to begin the journey, stay on the path. But how to stay motivated?

The Wish

We all would like to max out our retirement accounts, save and pay off debts. However, are you willing to make the required scarifies? For many, the answer is no. Just as many have started diets and have not attain weight lost, many have started to save, pay off debts and save for retirement but never attain their goals. 

Many will save for a week, a month or a few months, but few are able to consistently save the same or more for a period of years. To find the motivation to deprive yourself of certain activities or joy is difficult. Delayed gratification is not fun for most and downright painful for others. When we begin the process of attaining a long term goal (financial independence), we are naturally working against ourselves. We are built for instant gratification. 

Turning The Wish Into A Goal, How To Stay Motivated

To achieve your goals, you must engineer an environment where you are more likely to succeed. The below represents only a few steps that can be taken to build this environment.

A goal without a plan is a wish

Short Term, Intermediate And Long Term Goals

We are more likely to succeed on our journey to financial independence if we have a long term goal (financial independence), intermediate goals, but also short term goals.

The short term, intermediate and long term goals allow for short term, intermediate and long term rewards. This offsets and/or lessens the pain of delayed gratification. Thus increasing the chances of you staying on course and attaining your goals.

Visualize Each Goal In Detail

Visualize each short term, intermediate and long term goal. Have a plan with details. By visualizing your goals you are able to focus. Further, attaining each detail or checking off a detail in the plan is a mini reward. This mini reward offsets and/or lessens the pain of delayed gratification. As someone previously stated, “A goal without a plan is a wish.” We have a lot of dreamers/wishers out there, don’t be one. 

Be Flexible

“There is more than one way to skin a cat.” Meaning, there are many ways to achieve a goal. Even with detailed plans, life happens, things change. Bend with the winds of life while keeping your goals in focus. 

Continuously Check Your Progress

Hold yourself accountable by continuously checking your progress. Consider creating a spreadsheet or an equivalent to track your progress.

Surround Yourself With Like-Minded People

The fact is, the people you surround yourself with has a direct influence on how you behave. “Show me your friends and I’ll show you your future.” Be around those who will encourage you to achieve your goals. If your goals are viewed negatively by those around you, it is highly unlikely that you will achieve your goals. This also ties in nicely with not being the smartest person in the room. Surround yourself with those you can learn from.

Reward Yourself

It is only human nature to avoid pain and move toward instant gratification. As such, it is important to consciously realize our default actions and change our mindset and actions. Small rewards will enhance your chances of attaining your goals. Let’s face it, every now and then, we need a moment to enjoy the fruits of our labor, no matter how small. Understand who you are and take the necessary steps to work with your innate impulses to attain your goals.

Make It Fun

Enjoy the journey and the destination if you can.

Conclusion

While many hope to be financially independent, few take the steps necessary to be financially independent and fewer still are able to achieve financial independence. If you are serious about achieving financial independence and have taken steps to begin the journey, stay on the path. But how to stay motivated? Engineer an environment where you are more likely to succeed. 

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