Saving

Peppers

Growing Your Own Produce And Financial Independence Pt:2

Money Maroon

Growing your own produce is similar to growing wealth, it takes time and consistency.  Both gardening and building wealth requires that initial thought to take action, and then acting to begin the process. Saving that first dollar is akin to purchasing that first seed. Planting the seed is like depositing that dollar into a bank/an investment account. Watering the seed is similar to adding funds to your accounts. With consistent watering and sunlight over time, a delicious fruit/vegetable/herb will grow for harvesting. Like the fruit/vegetable/herb, with consistent deposits and rebalancing over time, your bank/investment account will grow for your harvesting at the time of retirement.

As I grow my fruit/vegetable/herb garden, I cannot help but to think of the parallels between growing your own produce and building wealth. 

Peppers
Return on investment

The Idea

My family had the idea to begin growing our own vegetable and herbs for some time now.  At the very least, we had the romanticized thought of waking up and picking our own tomatoes and peppers as needed. Further, have you seen the prices for produce in the supermarket lately? We also knew that by growing our own vegetables and herbs, we would  begin to use the greenhouse that we have in our backyard. We would initially grow the fruit/vegetable/herb outside and as they grow, bring them into the greenhouse. Our thought was to prevent the birds and other animals from snacking on our vegetables.

On the journey to financial independence, we all begin with an initial thought of waking up and having our F.I.R.E number in the bank. We next turn to the why. We want to retire early to spend more time with family, travel the world or to be able to spend more time doing what we believe to be important. Freedom!!

And then there is the hard part, the how.

Taking The First Step

Once the thought of financial independence is solidified, how long did/will it take you to act? It is very likely that you did/will not act that day, or that month. While we all know that it is important to save and invest as early  as possible to take advantage of compounding, we tend to delay. We use excuses such as: we do not have the money. This fallacy was discussed in The Journey To Financial Independence Is A Marathon, Not A Sprint. Further, because we know that it will take some time to achieve the end goal, we have difficulty starting on the journey  to financial independence. We have difficulty with delayed gratification.

Like beginning the journey to financial independence, we did not begin gardening immediately, we delayed until we shamed ourselves into beginning.  We got to the point of discussing each week, “we should purchase the seeds and plant them.” The next week “next week we will buy the seeds.” The next month, “we should really get this done.” The final straw, “if we do not plant now, we will miss the growing season.” Our prompt to act was the reality that we may miss the growing season. As such, we ventured out to get our seeds and growing pots and later ordered our greenhouse racks.

Like any great plan, the most difficulty part is beginning. Do not wait for a so call right time to begin, begin on the journey to financial independence now. The fact is, there is no better time than now. If you believe you do not have enough to save, finding a way to save $5, $10, or $100 now. Saving on a tight budget will teach you the discipline required to save $1,000, $10,000, or $100,000 later. Set up your saving account now. Build your emergency fund. Open a brokerage account now. Implement a plan to pay down debt now. Do it!

Growth

In growing your own produce, once we planted the seeds in our pots, to achieve the end goal of mature plants with fruit/vegetable/herb, we needed to consistently water our seedlings and expose them to enough sunlight. Every other day, we would water the seedlings in the morning. Over time, we began to see growth. Then peppers and tomatoes appeared as we continued to water and expose to sunlight.

Tomatos
Return on investment

Like our fruit/vegetable/herb, once we began the process of saving and investing, we had to perform consistent maintenance. We set up automatic contributions to both our saving and investment accounts. We actively paid down our debts and at times paid more than the minimum. Like the peppers and tomatoes, our money began to grow. Over time, our debt began to decrease and our wealth increased. While we are closer to financial independence, we have a long way to go. However, we have noticed a number of benefits.

Tangential Benefits

Gardening provides a number of tangential benefits. Growing your own produce can be a great family event. If you have little kids, this is the perfect way to introduce your kids to how fruits and herbs are grown and how they get to the supermarket. Further, this is one activity where little kids can participate in almost all activities. For example, planting seeds, watering the seeds, transferring the plants, harvesting the produce and eating the produce. It is also a great way to get your kids to eat vegetables. They are eating the vegetables that they themselves grew. Gardening is also a great exercise, it gets you off the couch, out of the house, and doing physical and mentally soothing activities outside.

Like gardening, there are real world benefits to beginning the journey to financial independence. The benefit of starting the journey to financial independence is the knowledge that you have an emergency fund and that the fund and your wealth are growing. Having money in the bank lowers financial stress, allows you to take advantage of opportunities and improves confidence. The confidence to take active steps in life to better yourself and financial position. These benefits will affect all aspects of your life, including your personal relationships and your mental health.

Conclusion

Growing your own produce is similar to growing wealth, it takes time and consistency.  Both gardening and building wealth requires that initial thought to take action, and then acting to begin the process. Saving that first dollar is akin to purchasing that first seed. Planting the seed is like depositing that dollar in the bank/an investment account. Watering the seed is similar to adding funds to your accounts. With consistent watering and sunlight over time, a delicious fruit/vegetable/herb will grow for harvesting. Like the fruit/vegetable/herb, with consistent deposits and rebalancing over time, your bank/investment account will grow for your harvesting at the time of retirement.

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Grow Your Own Produce & Financial Independence

Grow Your Own Produce & Financial Independence

Money Maroon

A key component of financial independence is the act of living below your means. Living below your means results from taking stock of your expenditures and cutting back on unnecessary spending. Two of the largest expenditures on a monthly basis is food and mortgage/rent. We often look at lowering our mortgage/rent, but what about what we spend on food? If you are able to reduce your expenditures at the supermarket, would you be closer to a lifestyle that accelerates your journey to financial independence? Consider adapting a farming to F.I.R.E approach, and grow your own produce.

Fresh Produce Is Expensive

Purchasing healthy and fresh foods are typically the most expensive portion of your supermarket expenditure. Typically, a mango will cost at least $1 per mango. What about green peppers ($1.30 each), cucumbers ($1 each), chives ($7 a bottle), orange ($1.50 each), grapes ($5/lb), pineapple ($3 each), water melon, ($6 each) avocados ($2.50 each), apples ($5/lb) and tomatoes ($5)? If you are practicing a healthily lifestyle, by the time you exit the produce section, you have spent over half your budget. Have you thought to grow your own produce or at least a portion?

Grow Your Own Produce

Grow your own produce: Peas, Pepper, Thyme

Based on where you are living, you may not have access to a large backyard, however, anyone can begin growing their own mint, watermelon, basil, chives, peppers or tomatoes inside. Your investment is the purchase of the seeds or small plants and water. If you have the room to do so, investigate growing mangos, avocados or oranges if you live in an area that does not freeze. Or invest in a greenhouse that may keep your plants warm year round.

For those who have fruit trees or have family members who have fruit trees, the cost of these fruits are the cost of walking outside to pick the fruit or the cost of postage (family members posting the fruits). Once mango/avocado/orange/certain peppers/mints are established, they reliably bear new fruits yearly with very little maintenance required. A little investment upfront, yields generational benefits.

The Benefits: Grow Your Own Produce

Imagine the savings if you invest a little time in beginning to grow a portion of your own foods, growing your own produce. While saving $5 here, $2 there and $10 over there on fruits, vegetables, and herbs may not seem like a lot, the small totals do add up. Consider how much you could save each visit to the supermarket. Then, multiply your total by months and years. 

Do not only consider the savings that would be achieved, imagine the satisfaction. Imagine the access to fresh foods if you currently live in a food desert. Imagine the effects on your health.

While we are not encouraging you to quit your day job and become a farmer, we are encouraging you to take a step towards growing a fruit, vegetable or herb. If you like it, grow something else.

Grow your own produce: Basil

Conclusion

A key component of financial independence is the act of living below your means. Living below your means results from taking stock of your expenditures and cutting back on unnecessary spending. Two of the largest expenditures on a monthly basis is food and mortgage/rent. We often look at lowering our mortgage/rent, but what about what we spend on food? If you are able to reduce your expenditures at the supermarket, would you be closer to a lifestyle that accelerates your journey to financial independence? Consider adapting a farming to F.I.R.E approach and grow your own produce. 

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Growth

The Journey To Financial Independence Is A Marathon, Not A Sprint

Money Maroon

It is best to begin saving and investing as early as possible. The earlier you begin to save and invest, the more time you have to take advantage of compounding. It only makes sense, so while we can all appreciate this simple concept, why do we ignore our financial future until retirement? The journey to financial independence is a marathon, not a sprint. Begin the race today.

The reason we do not begin saving early is often because (1) we think we cannot begin saving because of lack of funds, (2) instant gratification or a combination of (1) and (2).

The Belief That You Do Not Have Enough To Save

Let us dispose of point 1. The thought that we cannot all begin to save “now” is often a fallacy. If you are without an income stream point (1) may be valid, however, this is usually not the case. No matter how little you earn, I can guarantee that if you look back over the past month, you have wasted more than $5. Whether it be on an event, food, dinks, or a random purchase that was not necessary. Saving can start small. Start small. Pay yourself first.

Instant Gratification

The issue we all tend to have with regard delaying saving, is one of instant gratification. Saving is boring, it is slow. If you are beginning at $0, growth will be incremental and slow. For example, if you are beginning the process of fully funding your emergency fund, then process can be a slow and painful process. Painful because to contribute to your emergency fund if you have not been doing so previously, you will now need to change your habits, make a sacrifice and deliberately save. If your aim is to save a year of income, let’s say $65,000, beginning to save will be painfully slow. 

For example, If you begin by saving $500 per month, in 3 months, it is only $1500 without interest. In your mind, you are so far away from your total that it is inevitable that you will become discouraged. In 5 months you will have only saved $2500 without interest, still over $60,000 to go. At this point you may begin to think, what is the point? You may begin to believe that the sacrifices that you are making is too great. This is the point where many quit saving and revert to their old ways.

If you quit your savings plan, what you and many others fail to realize is that the math is simple and true. If you are saving $500 a month, that is $6,000 a year, that is $60,000 in 10 years, that is $120,000 in 20 years. None of the above includes the added compounding interest or the prospect of you getting a raise as you progress in your career, or investing a portion of your savings.

Because the math is so simple, if we are able to find easy ways to take our minds off the slow process, we will be able to make progress.

Set It And Forget It

To keep our minds off the slow process of accumulating wealth at the initial stages, it may be best to set it and forget it. For example, automatically deposit a portion of your income into a savings account. As this is an automatic process, this means that you will at times forget the process. When you remember this process, you will be surprised by the amount that have accumulated. The gratification of seeing this progress working will  no doubt encourage you to continue the process. A feed forward cycle will emerge. 

Dream big
Keep your eyes on the future and your goals

Further, money begets more money. This may be in the form of investing a portion of your savings or the general power of compounding. Your greatest asset in wealth building is time. Keep your eyes on the future and your goals. Think long term.

Take the first step today and begin saving for your future. Set up an automatic deposit of $5. If you are able to contribute more, do so and increase your contribution over time. 

Conclusion

It is best to begin saving and investing as early as possible. The earlier you begin to save and invest, the more time you have to take advantage of compounding. It only makes sense, so while we can all appreciate this simple concept, why do we ignore our financial future until retirement? The journey to financial independence is a marathon, not a sprint. Begin the race today.

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Video Summary

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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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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Child wealth

How To Make Your Kid A Millionaire

Money Maroon

One of the biggest regrets for most adults is not starting to save for retirement earlier. If this is your biggest regret or a regret that is high on your list of regrets, why not take the steps necessary to prevent this regret from being a generational regret. Have you ever wondered how to make your kid a millionaire? Why not give your children an advantage in the game of financial independence and wealth? Contribute to your child’s future early, often and consistently.

Savings

Many strive to save for their children, but few do. If you are able to put away $10 per month for your child, you are a head of the game. On the journey to financial independence, time is your child’s biggest asset. Imagine saving $10 per month, that is $120 per year. Over 18 years, that is $2160, not including interest. If you are in a better financial situation and is able to put away $100 instead of $10, that is $21,600 over 18 years, not including interest.

While interest earned on your savings account at an average bank is very low, high yield savings accounts can offer more than 20 times the interest rate of your average bank. A high yield savings account can turbo charge your child’s savings account.

How to make your kid a millionaire – contribute to your child’s savings account early and often.

Stock Market

While minor’s cannot invest in the stock market, you can do so for them. You may open a Guardian Account or a Custodial Account for your child.

Guardian Account

  • You are able to retain ownership of the account
  • Gains are taxed at your tax rate

Custodial Account: 

  • The child owns the account although you are in control of the account
  • Gains are taxed at the child’s tax rate
  • Note that once the child reaches 18 or 21, the assets in the account come under the child’s control

Roth IRA

You may also open a Roth IRA for your child. We are proponents of Roth IRAs because of the many advantages. For Roth IRAs for kids, the only barrier is income. Once the child has taxable income, an account can be opened. However, the same contribution limits applies for the account as any other Roth IRA.

How to make your kid a millionaire – invest early and often.

529 Plans

The third rung in your child’s wealth building chest is a 529 plan. Let’s face it, college is expensive and seems to be getting more expensive.

  • Average public university cost per year: $10,116 
    • Public university cost to graduation (average): 4 x $10,116 = $40,464
  • Average private university cost per year: $36,801
    • Average private university cost to graduation: 4 x $36,801 = $147, 204

By contributing to a 529 plan, you are able to offset some or all costs associated with a college education. In many States, two 529 plans are available, an investment plan or a prepaid plan.

  • The investment plan allows you to contribute by buying and selling shares offered by the State or the State’s agent (similar to investing in the stock market).
  • The prepaid plan is based on the cost of attending a college. Here, you are prepaying the cost of attendance.

While 529 plans are not deductible on your federal tax filings, many States allow you to deduct a set portion of your 529 contribution from your State tax filings. As such, contributing to your child’s future and also receiving a State benefit. A win-win of sorts.

How to make your kid a millionaire – Reduce their college cost burden.

Conclusion

On your journey to financial independence, it is only natural to wonder what can be done to give your child an advantage on their journey. Time is your child’s greatest asset. As such, contributing to your child’s future early, often and consistently will greatly increase their chances of financial success. Saving, investing and funding a 529 plan are instrumental financial tools that you can use to jump start your child’s journey to financial independence. Make your kid rich.

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Video Summary