Financial Independence

The Best Job

The Best Job To Have

Money Maroon

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need.

Your Early Career

It is highly unlikely that you will love your job early in your career. The fact is, for many of us, the first job serves a very specific purpose. First, to pay the bills and second, to gain experience. For the most part, you do not want to stay in the same passion for 5, 10 or 15 years. To learn and gain experience, a lot of what you  will be doing is grunt work. For your first few jobs, it is likely that you will be doing the tedious and repetitive tasks that those above you do not want to do.

As you gain experience, you begin to do more of the fun things. This could generically be strategy, interacting with clients, or running deals. But with more experience comes more money and responsibilities.

You Can Have Your Best Job In 10 Years Or Less

If you play your cards right, it will take maybe 10 years to get to your best job. If you work hard, save, live below your means and diligently invest, there is a high likelihood that in 10 to 15 years you can be financially free or at least be a good way there. 

Financial freedom brings the best. While it is great to be fully financially independent,  you do not need to entirely have financial independence to get the best job of your life. Imagine the following scenario. You have expenditures of about $50K per year. Over the first 10-15 years of your working life you happen to amass let’s say $500,000. Based on the 4% rule, if you are able to live on $20K per year, you are financially independent. 

Not many folks can live on $20K. But if you have $50K expenditure per year, and have cover for $20K because of the $500K you have, you really need only a $30K per year salary to make your expenditures. Which then means that if you do not like your job, you can get another one that you truly love so long as it brings home at least $30K per year. This is the benefit of having financial independence.

This calculation works at all levels. The more you save and invest, the less you rely on the job you have. Therefore, you can actually do a job that you truly like and be the absolute best at it. Further, with financial independence you have no need to put up with BS from superiors or colleagues. You are able to true do what you love.

Financial Independence

Generally, financial independence is when you enough money to live the life you want without income from a job. If you do not need to rely on a job and you are working, you will only continue to do that job if you actually love it. This is why one of the side effects of financial independence is that then you are able to have the best job.

Think about it. If you did not need the money from your job, would you continue to do it. If the answer is yes, the reason is typically that you actually love your job. You love the people you are working with and the work that you are doing. Here, it is not about the money.

On the other hand, if your answer is no, once you have financial independence or your are close to it, why continue to do work you hate. Quit and find something that you love to do. Life is short, you owe it to your self to spend the limited lime you have on this rock doing something that impacts the world and that you love to do.

Conclusion

There is a saying that the best job to have is one that you do not need. I did not believe this at first. For the most part, I viewed this saying as just a cliche. Similar to if you love what you do you will never work another day. But guess what, it is true. The truth is, if you do not need a job, it forces you to do something that you love. Therefore, once you do not need a job, what ever you do will be something that you love. To find and do the best job, you must have a job that you do not need. Financial independence allows you to do what you love.

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quiet quitting, quiet hiring quiet firing, person with finger to the mouth

Quiet Quitting, Quiet Firing & Now Quiet Hiring, Please Stop!

Money Maroon

It is amazing how fast someone discovers something that is new to that person, push it as being new to all, coin a new name and then it is pushed by the media. Think about quiet quitting. It is not new. We have all known folks who simply do not give 100% on the job. Once employees realize that they are not being compensated appropriately, this is what employees do. Quiet firing, is old, not new. Employers have always done this. Now we are hearing about quiet hiring. Quiet hiring is not new. Employers have always done this. I am now waiting for quiet studying, quiet retiring, and quiet dating, oh I guest that is already called ghosting. The point is, do not get caught up in the phraseology, focus on your goals.

Quiet Quitting

The term quiet quitting has come to generally refer to when an employee withdraws from their organization. Quiet quitting manifests itself as an unengaged employee and may be a result of having poor work-life balance.  Meaning an overworked and underpaid employee. One of the biggest causes of quiet quitting is an employee believing that they are not compensated appropriately or that their efforts do not matter. Generally, quiet quitters do not actually leave the organization, instead, they show up but do not give their best effort.

While quiet quitting has entered the lexicon of many in recent years, it is not new. We all know individuals who have always done this. Once they realize that they are not being compensated appropriately, they disengage. They work up to what they are compensated, or up to the point where they will not be fired and stop. I can bet you know of co workers who are like this. If the job description is a 9-5, by 5 they are out the door. If the job description calls for specific activities, anything additional, these employees push back. They will not go above and beyond.

The funny thing is that many quiet quitters know that they will not be promoted for their activities or lack thereof. But that is the point. If they are not promoted, they are ok because they did not go above and beyond. If they are promoted, they know how little they will have to do and no more. Again, nothing new, employees having been doing this for decades

Quiet Firing

Quit firing is essentially when managers fail to engage an employee and slowly push them out of the organization. At times, this is intentional, other times it is a result of a manager’s neglect. When it is intentional, managers will not provide coaching, support or guidance to an employee. This then results in the employee performing at a low level. If the employee is paying attention, they will quietly leave the organization as they know that they may be fired. On the other hand, if the employee is not paying attention, for each low performance, the manager will build a case and inform the employee of this low performance. The aim here is to have the employee finally get the point and leave voluntarily or be fired. 

Again, this is not new. Managers have always been inept. Managers have always trim numbers by building a case against an employee. Quiet firing is nothing new.

Quiet Hiring

The latest in the list of new jargons is quiet hiring. Quiet hiring is when an employer acquires new skills without actually hiring new full-time employees. This is essential an employer hiring contractors and not full staff or moving current employees to new roles while not changing title. When quiet hiring is utilize, the full time employee number does not change. if executed perfectly, your current employee will take on a new role and not be paid anything additional. This is how organizations get an employee to take on dual roles while not being adequately compensated. At times, this is done with the promise of a promotion.

Again, nothing new to see here. Employers have been doing this for centuries. Anything to not pay employees the wage that they deserve.

Conclusion

It is amazing how fast someone discovers something that is new to that person, push it as being new to all, coin a new name and then it is pushed by the media. Think about quiet quitting. It is not new. We have all known folks who simply do not give 100% on the job. Once employees realize that they are not being compensated appropriately, this is what employees do. Quiet firing, is old, not new. Employers have always done this. Now we are hearing about quiet hiring. Quiet hiring is not new. Employers have always done this. 

To ensure that you can live the life that you want to live, journey to financial independence. With financial independence, it does not matter if your employer quiet hires or quiet fires. You can live the life that you want and put in the effort that you choose.

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Be Work optional

Be Work Optional And Have The Best Job

Money Maroon

The best job to have is one that you do not need. The reasons are easily apparent if you think about it.  The less reliant you are on your job, the more comfortable you can be in the workplace. When your job is optional, your boss and those above you cannot take advantage of you. If they try, you can simply quit. Essentially, with work optional, you can make ongoing decisions that are in your best interest. If you are an employee, it is important to remember, no matter how much they love you, you are replaceable.

If you do not believe me, consider the rapid layoffs that have occurred in 2022. Think of those twitter employees in 2022. From top to bottom, you are replaceable. Your employment is at the whim of someone else. If your livelihood does not depend on your job, you are free.  Aim to be work optional.

Being An Employee

In the United States, for many, employment is at will. Which means for any reason, the company can fire you. It is that easy. If someone does not like you, you can be replaced. Many companies, to avoid a law suit for discrimination or retaliation, will build a case for removing employees before actually firing them.

When building a case, companies and their agents, yes your manager, will become more vocal against you. All your missteps will be documented. If you are late for a meeting, no matter the reason, it will be noted. Someone does not like your tone, it will be documented. If you disagree with others, the company will view you as not being a team player. You will begin to hear criticisms. The aim here is to let you know that you are not doing a good job such that when you are let go you do not think to sue.

But some companies build cases in a more blatant way. You may have received great reviews previously, and all of a sudden a bad review. That should be a warning signal to prepare yourself. Sometimes, you may have absolutely no contact with your manger or supervisor and they drop a bad review on you. In some of these cases, the managers will actually blame employees for the lack of contact. 

The Elon Musk Situation

You may encounter an Elon Musk situation. You may be in the unfortunate situation where another company buys your employer. Your role may be redundant. In these cases, all your good will and hard work goes out the door. The new owner will view you as a cost center. The point is, if your company wants to get rid of you, they will. 

Protecting Yourself

As life is unpredictable, plan ahead and protect yourself. At least from the financial stand point, the best way to do this is by becoming  work optional. This way, no matter what your boss or your bosses boss decides, you will be ok. 

If you lose your job today, how would your life change? If you have a family, this is a question that you should be thinking about often. Do you have enough in an emergency fund? How far are you away from financial independence? Instead of rushing back into a job that you may not like, can you take your time and find something that you like to do? Another question is, was your job optional.

Work Optional

Work optional is another way of noting that you are financially independent. By being financially independent, you can work if you choose to, or not. You are work optional. If you have a job, the job is optional. If you happen to be fired, you can pick up your things and graciously exit your job and sit at home if you need to. Strive to be work optional.

Conclusion

The best job to have is one that you do not need. The reasons are easily apparent if you think about it.  The less reliant you are on your job, the more comfortable you can be in the workplace. When your job is optional, your boss and those above you cannot take advantage of you. If they try, you can simply quit. Essentially, with work optional, you can make ongoing decisions that are in your best interest. If you are an employee, it is important to remember, no matter how much they love you, you are replaceable.

If you do not believe me, consider the rapid layoffs that have occurred in 2022. Think of those twitter employees in 2022. From top to bottom, you are replaceable. Your employment is at the whim of someone else. If your livelihood does not depend on your job, you are free.  Aim to be work optional.

Follow me on Twitter @JoToFI_com

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Internet Financial Guru

Where Are All The Internet Financial Gurus?

Money Maroon

It is interesting, and most likely you have also noticed. During boom periods, there tends to be a lot more noise from internet financial gurus. It could be a matter of folks being willing to share their experiences as the market booms. More specifically, there is typically a weekly or almost daily update about individual net worth. But what happens when the stock market begins to go south? Most, will stop sharing. A lot of internet financial gurus become very quiet. No one likes to share that they are losing money and if they are following their own advice, they are. But that is the big question, are internet financial gurus following their own advice?

Financial Gurus

During boom times, it is very easy to say keep buying, or buy the dip. But when the market is heading into recession territory, this becomes very difficult. Right or wrong, the more you buy the more you are losing in the short term as the stock market goes into the red. Also, the dip keeps getting dippier. So this is a very difficult message. As such, many internet financial gurus will stay quiet during these times, even if they are following their own advice.

Look At Your Statements

As the stock market goes south, are you looking at your account statements? It is interesting that as soon as we get wind of the stock market going down, we begin to develop this ability to not check our accounts. Do check your accounts. This is not to provide a reason to sell, but it is important to know what is going on in your accounts. Do not be afraid to look at your loses on paper. The stock market goes up and it will go down, and it will go up again. 

The same messages that financial gurus disclose during boom times are also applicable during a recession. If the information was true/false then, it is true/false during a recession as well.

Do Not Buy Individual Stocks, Buy Index Funds

As we have discussed before, a monkey can be a better stock picker than a human. So it is advisable, unless you are Warren Buffet, buy index funds. But when the stock market is going down, it can be difficult to stick to this strategy. But a clever man once said to be fearful when others are greedy, and greedy when others are fearful.

Stick to your strategy but use the market conditions, information, and your own situation to adjust your strategy. A stock market down turn does not mean that you should abandon your current strategy. In effect, if you truly believe in what you are doing, continue to do it and modify as information changes. This is also a matter of doing your research before you implement any strategy such that you are able to plan ahead and handle different situations. 

Recessions Are Filled With Opportunity 

As the past has shown, recessions are filled with opportunities. If you are in a stable financial position, you have no doubt pay down debt and has bulked up your assets. These are two basic steps that will prepare you  for a recession. Especially if you are in a high interest rate environment. More specifically, because banks will quickly raise interest rates on credit instruments, do not maintain balances if at all possible. If you have low to no debt, this is not something that you will have to worry about. Again, many of the statements made by financial gurus during boom time may be applicable as a recession approaches. Save, pay down debt, invest. This works no matter how good or bad the stock market is doing.

Cash Is King

If there is a recession and people are losing their jobs, having cash on hand is one way to ensure that you will be able to navigate such a situation for a year or two. Another advantage of having funds in the bank during a recession is the increased interest rates of online banks as the stock market falls.  During such a time, interest rates are typically increased.

There are many lesson to learn from recessions. If you are fortunate enough to still have your job during a recession, where you are consistently bringing in money, continue to save and invest. Avoid trying to time the market, because guess what, you likely cannot. Many have tired and have failed. Instead, consider dollar cost averaging and ride out the recession. No matter the economic condition, continue your journey to financial independence.

Conclusion

During boom periods, there tends to be a lot more noise from internet financial gurus. It could be a matter of folks being willing to share their experiences as the market booms. More specifically, there is typically a weekly or almost daily update about individual net worth. But what happens when the stock market begins to go south? Most, will stop sharing. A lot of internet financial gurus become very quiet. No one likes to share that they are losing money. But no matter the economic condition, continue on your path to financial independence no matter the rate of chatter.

Buying Time

Start Buying Time Now

Money Maroon

Quickly calculate your net worth. After calculating your net worth, divide your net worth by your average spend per year. The resulting number of years is what you have bought back. If you decide to quit your job today, this is how long you could potentially go without working if all else stays constant. Now knowing this, how many years have you bought back? Buying time is akin to financial independence. At a certain point, you will have bought back so much time that you will no longer need to work. This is the aim.

Know Your Net Worth

On a basic level, your net worth is equal to your assets minus your liabilities. Unsurprisingly, the younger you are, the more likely that your net worth will be zero or below. But this does not mean that you should keep the full picture of your financial situation in the background. Knowledge is power! 

By knowing your net worth, you are able to gauge where you are as an individual. By knowing your net worth, you can individually gauge your progress towards your financial goals. Having a home or a specific car may be a goal, but your ultimate financial goals are inextricably link to your net worth, not a salary, home or a car. It is important to know your net worth because with this information, you can knowledgeably plot your financial path forward. If you do not know what your current financial situation is, how can you plan your financial future? How can you determine how and where to allocate funds? The fact is, you cannot plan your financial future without knowing your net worth. Know your net worth, use money as the tool it is  and buy time.

Money Is A Tool

Money is truly nothing but a tool. As such, you should aim to use your money to accomplish tasks. This should be done the same way that you use other tools. For example, if you have a hammer, it does not just sit around and do nothing. The hammer is always kept in working condition ready to bang in nails. In the same manner, money does no good just sitting around. Money should be in working condition and ready to be applied to accomplish tasks. For you who are financial minded, the game of money is about buying time. Each dollar you spending is time you are losing and each dollar you earn is time you are gaining. The time you gain is related to time that you need not work.

View Your Money As Buying Time

Each dollar you spend, consider how long you will need to work to get that money back. I guarantee that you will not buy certain items if this analysis is done before each purchase you make. If you are making $10 an hour, that $200 shoe is equal to 20 hours of your time. With taxes and other deductions from your paycheck, it is actually a bit more of your time. Now, when looked at in these terms, is that $200 shoe really worth it? Is it really worth more than 20 hours of your time? This same calculation work if you are making $50 an hour or $100 an hour. Is that item worth your time? Buy an item or buy time? The answer is simple, buy time.

Buying Time Gives You Freedom

Knowing that you have bought back 2, 3, 4 years gives you confidence. If there is a recession, you have time to do what is necessary with no need to panic. Because you have bought time, you will not lose your home or other possessions. Buying time provides a security blanket, you are able to pay your bills and if needed, you have enough for any emergency that arises. You have the money, you have the time. This is the difference between those who live pay check to pay check and those with money in the bank. One group is critically worried about keeping their jobs, while the other group have their head up and looking for better opportunities. It is much more difficult to seek opportunities and take advantage of them when they arise if you are in a place of financial survival. 

The more time you have bought back, the easier it is to pursue your dreams and take advantage of opportunities as they arise.

Conclusion

Calculate your net worth. After calculating your net worth, divide your net worth by your average spend per year. The resulting number of years is what you have bought back. If you decide to quit your job today, this is how long you could potentially go without working if all else stays constant. Now knowing this, how many years have you bought back? Buying time is akin to financial independence. At a certain point, you will have bought back so much time that you will no longer need to work. This is the aim. Journey to financial independence.

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Jealous friends and your wealth

Jealous Friends And Your Wealth

Money Maroon

While you are focus on your financial objectives, you may lose sight of one very important aspect, your friends. Based on the people around you, can you or will you be able to truly enjoy your wealth? Would your friends be happy and congratulatory of you achieving your financial objectives? Put simply, do you have jealous friends. 

Here, the assumption is that you are not purposely flaunting your wealth to belittle your friends. If you are doing this, then you are the bad friend, and your friends should be distancing themselves from you.

Money Changes Friendships

It is understandable that as time progresses the dynamics of our relationships change. Some friends will grow with you while others will grow away from you. But for those that you aspire to be apart of your life for the near and foreseeable future, how will they react to your wealth or you achieving financial independence? 

You will likely believe or have heard the refrain that true friends will not care. But the fact is, this is wishful thinking. Money changes the dynamics of all relationships. Just do a general search on the internet and you will see what I am talking about. As you transition in life, few of your old life will be with you in your new life.

While I know this, I do hope for you and me, that we are able to navigate achieving our goals and continue to have current friends around us that cheers us on. 

Cheap

If your aim is to achieve financial independence and you have tried to balance your expenses by trying to limit your spending, you will be called cheap. You will hear it multiple times from certain friends who may not completely understand what you are doing. You will be mocked for wearing the same pants or shirts that you have had for years. You will have to endure others around you having newer things, but if you are really about attaining your goal, you will not care. 

But a funny thing happens as you get closer to your goals. All the mocking and jeering will fade away to real questions. How close are you to retiring? What do you think about this financial move, what do you think about that? Your friends will have real interest in what you are doing. They will want to get to where you are, but there is an issue. You have been sacrificing and working on this path for years while they are seeing the end results and wanting that result.

This is where issues may develop.

Real Friends

As your dreams begin to come true, your real friends will continue to cheer you on. 

What I am saying here is that if you are low key, you will continue to be low key. If you believe in stealth wealth, you will likely continue to do the same things with slight changes. If you have achieved financial independence, well, you may change jobs or begin to pursue other things. It is unlikely that you will tell your friends your net worth. However, your real friends will know that you have enough based on your actions.

But your other friends may not see it that way. They will say that you have changed. If you decide to upgrade after being frugal comments will be made. You may also be accused of thinking that you are better than others. Overtime, some friendships will become strained.

Resentment may come from comparison, sometimes it may be linked to your friends own self-esteem and the way they view themselves. Especially if you and that friend started at the same financial point or you were from a lower economic position but have now surpassed them.

Real friends or jealous friends - friends jumping in the sun
Really friends or jealous friends

Why You May Have Jealous Friends

Some friends will be jealous friends because they do not want to see others, not even a friend, do better than they are doing. Some jealous friends are jealous because they love to cause chaos. Misery loves company. But if you have friends who have been with you for a long time and they become that jealous friend, it could be a matter of envy because you had the confidence to take the risks and make the sacrifices to achieve your goals.

How To Solve Or Preempt Jealous Friends

To prevent jealous friends, be aware and have the tough conversations. As you embark on your journey to financial independence and early retirement, note that not everyone is on the same journey. Be conscious of this. While you may be ostracized at first, note that the lifestyle that you will build for your family will likely be the envy of others. 

Once you have achieved your goals, you will likely have amply free time and the financial resources to do as you choose. You will be able to travel, do a job that you want, and spend time with family. You will be able to more so do the things that will make you and your family happy. Who doesn’t want that? This is all while your friends are toiling at a job that they hate and potentially have a life that they do not want. Be conscientious of this. Be understanding.

When friends ask about what you are doing, try to be patient and explain, do not judge their lifestyles. Do not fall into the “I told you so” mantra. 

Above all, live your life as they live there’s and if a friendship needs to end, it needs to end. Do not put yourself or your family in a terrible situation to maintain a hostile friendship.

Conclusion

While you are focus on your financial objectives, you may lose sight of one very important aspect, your friends. Based on the people around you, can you or will you be able to truly enjoy your wealth? Would your friends be happy and congratulatory of you achieving your financial objectives? Put simply, do you have jealous friends. 

Whatever the situation, do what is best for you and your family.

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Video Summary

Friends

Friends Influence Your Success And Wealth

Money Maroon

Show me your five closest friends and I can provide a very accurate description of you. The fact of the matter is that the friends we have not only tells us who we are generally. Our friends influence who we are and who we will become. Yes, those closest to you will impact who you will become. Peer pressure  in proximity is strong, so is the influence of mentors and leaders. Choose your friends wisely because they will influence not only your career success but also the wealth you will attain in the future.

Friends

We may deny it, but those around us have the power to influence us. We are constantly picking up on cues from those around us. These cues subconsciously inform and shape our behavior. These behaviors over time become habits, and our habits determine who we become. The influences of our friends are not only behavioral. Who we have around us affect our world view, the way we think and the way we feel about ourselves. As such, our success and in a sense our wealth in life will come down to the people we choose to spend our time with.

Think for a second about the company kept by your financial heroes. Now, contrast this with the financially illiterate and those living on the edge. The friends kept by these two groups are diametrically oppose.

At this moment, consider who are your closest friends. Think of their attributes and how these friends have affected your life. What habits do these friends have that you want? Also identify attributes that you do not wish to adapt? Mostly, do you need new friends? 

Success

To be successful, be around successful people. If you want to be in shape, hang out with those who are healthy. If you want to be happy, surround yourself with happy people. We become those who are around us.

If you want to build wealth and become financially independent, do not have a circle of people around you who are struggling and lack financial discipline. Instead, associate yourself with positive, focused people. Be friends with those who are committed to constant improvement and the pursuit of the best in life. Have friends who will facilitate your journey to wealth and financial independence.

Choose Your Friends Wisely

Remember, while you may not be able to choose your family, you do choose your friends. To be friends with another person, you must agree to have this individual in your life. And while the decision to cut people out of your life may be difficult, tough decisions must be made for you to achieve your goals. 

Be the CEO of your life and demote or fire your friends as needed to achieve your goals. If not, do not be surprise when your ambitions, goals and position in life are at the same level as those around you.

Choose your friends wisely

Conclusion

Show me your five closest friends and I can provide a very accurate description of you. The fact of the matter is that the friends we have not only tells us who we are generally. Our friends influence who we are and who we will become. Yes, those closest to you will impact who you will become. Peer pressure  in proximity is strong, so is the influence of mentors and leaders. Choose your friends wisely because they will influence not only your career success but also the wealth you will attain in the future.

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Wealth takes time

Wealth, It Just Takes Time

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We all would like to be rich and wealthy today, now, at this second, but this is not typically how it works. There is a reason why the average retirement age is in the 60s. Building wealth is one of those things, it just takes time. Building wealth does not typically occur overnight. It takes small steps over time, typically a long period of time. I will be blunt here, it typically takes decades.

It Just Takes Time – No Short Cuts

Wealth takes time. This is the truth. There is really no get rich quick schemes. Some get lucky by taking elevated risks, and the rest build wealth over time. Of course, the more risk, the higher the rewards. But with more risks come bankruptcy and depending on the activity, jail. It is a fact, and you may not want to hear this but generally, it just takes time to build wealth. Short cuts may only get you short term gratification, but not a sustainable award that will last in the long run. This has been shown over and over again.

Wealth Calculator

The time it will take to build sustainable wealth can be generalize using a wealth calculator. Select your favorite wealth calculator and see for yourself. Even with a 10  to 15 percent year over year increase in the stock market, which is highly unlikely for a long period of time, if you are starting with nothing and contribute a small portion monthly, it will take you multiple decades to achieve 1 million dollars. This is the simple reality. It is hard to hear, but it is the truth.

We Fail Because It Just Takes Time

The length of time that it takes to build wealth is the reason we all do not achieve our dream. This is the reason so few of us actually achieve the goal of financial independence and true wealth. It just takes time. Many of us are simply not patient enough to diligently save, invest, and live below our means consistently for an extended period of time. If we were able to do this, the rewards at the finish line are truly worth it. Your financial freedom is worth it.

Mortgage As An Example

Another example of our financial reality is a mortgage. Most typical mortgages are 15 or 30 year mortgages. Why is this? The reason is a simple one. To accumulate and pay off the large sums that is typically a mortgage, for example for a home mortgage, takes time. Unless you are coming in with money, it is highly unlikely that you will pay off your mortgage in 5 years. Think about it, in today’s world, it will typically take the average American  5-7 years to pay off a car loan, which costs significantly less than a home.

Do Not Keep Up With The Jones

It is normal to look at what others are doing. It is also ok to wonder if you are being too conservative with your finances, especially when others are purchasing bigger homes or nicer cars. But you do not know how leveraged or over leveraged these individuals are. Further, your situation is different from others. It is important to stay in your lane and maximize your situation. Work on you. 

Know that there are no short cuts. To achieve financial independence, it just takes time. Save, invest, and live below your means.

Amazon prime day
Think before you spend

Conclusion

We all would like to be rich and wealthy today, now, at this second, but this is not typically how it works. There is a reason why the average retirement age is in the 60s. Building wealth is one of those things, it just takes time. Building wealth does not typically occur overnight. It takes small steps over time, typically a long period of time. I will be blunt here, it typically takes decades.

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Summer time

Summer Time Is Money Time

Money Maroon

It is summer time again. While this time of the year is not packed with costly holidays where you risk over spending to impress another with presents, be careful. Summer can easily become a time of the year where you overspend. Summer is the time for grilling, summer vacations and out door activities. In a year of pent up demand for leaving home, the costs of this year’s summer time activities can add up very fast. Stay focus and keep your financial goals in view.

Vaccines And Summer

With covid19, the summer of 2020 was unlike any other. For the most part, we all stayed in and only mingled with those in our household. Not a lot of traveling, and not a lot of vacations. Lots of unintentional savings were made in 2020 as we spent significant time with our immediate families. For some, financial plans were derailed because of loss jobs. However, this year is a bit different when compared to last year. With the roll out of covid19 vaccines, we are moving closer and closer to normal. Mask mandates are relaxed and traveling is picking up.

As we return to normal, so will our spending. Our overspending will also likely return to  normal or accelerate. With more to spend and the deviation from the norm that was 2020, it is only natural for us to want to get back out there and enjoy this summer. But this can get very costly.

Sumer, put your feet up
Summer Time – Money Time

Cost Of Summer

If you are planning to travel, I would encourage you to take a look at airline fares and plan ahead. Travel related prices have increased significantly. While the airline industry lost  billions last year, you better believe that they are looking to profit this year. Further, with increased demand, it is likely that your travel costs will be significantly more expensive than years prior.

Hotels, are operating similarly to airlines. This year, there will be increase demand compare to 2020. Many families will try to hit the road and get out and away from home.  Overall, supply may be lower because of those business who have gone out of business due to covid19, but demand will significantly increase over last year. As supplies decrease and demand increase, prices will also increase. Further, take into account that hotels will try to make up for last year’s short fall and you will be paying a heavy price.

Now, if you are not traveling and want to stay home, the cost of meats for grilling has increased, the price of gas has increased. Again, because a number of business went out of business because of covid19, the supply chain has been disrupted. Again, the law of supply and demand means as we go back to normal, prices will rise as demand rises.

Save This Summer

You have survived covid19 and for the lucky ones, you have saved if you were able to keep employment. As we return to normal, do not forget your financial goals. While your financial goals may have been derailed or accelerated in view of the covid 19 pandemic, do not lose focus. Your actions today will be amplified tomorrow. The financial decisions you make today will affect your finical life in the future. Take steps today to rein in your spending and continue on a journey to financial independence.

If you were able to save during 2020, save during 2021. Do not stop. Maintain or increase your saving/investing rate. Know that  you are in control and if you were able to do it in 2020, you can do it in 2021. You are in control.

Conclusion

It is summer time again. While this time of the year is not packed with costly holidays where you risk over spending to impress another with presents, be careful. Summer can easily become a time of the year where you overspend. Summer is the time for grilling, summer vacations and out door activities. In a year of pent up demand for leaving home, the costs of this year’s summer time activities can add up very fast. Stay focus and keep your financial goals in view.

Life is what you make it. If you were able to take the steps to survive covid19, this summer, take the steps to secure your financial future and achieve financial independence.

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Debt Free

Need A Total Money Makeover?

Money Maroon

Today, debt has become one of the tallest life hurdles to overcome. Now more than ever, for many, debt accumulation begins during the college years or earlier. The culprit is often student loans, and depending on one’s circumstances, it is a matter of when and not if credit cards will become a part of the total debt. How can this trend be stopped? First, we must understand the issue: more often than not, debt starts to accumulate in view of lack of financial education. A possible solution is education and a total money makeover.

We Act Only When Necessary

Like most issues in life, it is best to understand debt before it becomes a problem – preventative care. However as humans, we typically wait until we have a full blown problem before we attempt to remedy a situation. With regard to debt and our financial health, we approach preventive care for finances in the same manner. Unfortunately, many delay the pursuit of financial education until they already have financial issues. 

Debt, The College Years

If we look specifically at those in college, due to the lack of financial knowledge, debts are usually ignored until graduation. Upon graduation, most students are happy to reflect on what they have achieved. Years of study and hard work is rewarded with a degree, friends, memories and a mountain of student loans. The hope is that aside from the degree, new graduates have chosen a career path that allows them to financially support the life they seek. We know that this is hardly the case. For those who seek employment, getting the first job is exciting, but the salary may not be as exciting.  The average salary for an individual holding a bachelor’s degree is about $45,000-$50,000 depending on the degree and area of study. 

You’ve Got Mail

Whether or not gainful employment is obtained, within 6 months of graduation the grace period for student loans will end. The debts accumulated during college, in short, can no longer be ignored. The bills will literally be in your mailbox. Do not worry, even if you do not provide an updated address, the student loan servicers are typically very good at tracking you down to collect. 

Six months following graduation when the bills begin to hit college graduates’  mailboxes, it is a terrible time to begin learning about money, and money management. For those who could not obtain gainful employment, you could not select a worst time. Yet, when the first bill to student loan borrowers turns up in the mailbox, this is the time when many millennials usually decide to learn about money management. Not by choice, but by necessity. 

The Total Money Makeover

Graduation removes  the luxury of student loan ignorance and the steady supply of play money. Graduation brings financial reality. This reality is beginning to force many millennials to address their financial situation head on. The financial reality is so stark that many millennials are not only aiming to address their student loans, but many are taking steps to be debt-free. For many, Dave Ramsey’s total money makeover has been a go to guide. The total money makeover is a complete mind makeover and a great start to making lifelong financial changes. 

Total Money Makeover Principles

The total money makeover works by forcing you to be  aware of your finances. This includes listing your debts from smallest to largest regardless of interest rate. Below is a short summary of the method:

  • Step 1. Save $1000 for a starter emergency fund.
  • Step 2. List your debts from the smallest to the largest regardless of interest rate. Make the minimum payments on all your debts except on the smallest debt. On the smallest debt, pay as much as you can. This is the debt snowball method.
  • Step 3. Save 3-6 months of living expenses. 2020 has shown us how important it is to have at least 6 months of living expenses saved. 
  • Step 4. Invest at least 15% in a retirement account.
  • Step 5. Save for children and college. 
  • Step 6. Pay off your home 
  • Step 7. Build wealth and be generous. 

Your Situation Is Unique

As we can see with these steps, using the total money makeover, the majority of individuals after graduation will be stuck at step 2 – getting out of debt using the debt snowball method. This is completely okay because the goal is to be debt-free. Also, because you are paying off debt does not mean that you should not contribute to a 401K. This is true especially if your employer is providing a match. The total money makeover is a guide and it is best to apply it based on your situation.

The Goal To Be Debt Free

Be Debt Free - Total money makeover

Ultimately, the goal is to become debt free and pursue financial independence. Focusing on paying off debt is important, as interest payments are a detriment to wealth accumulation. How liberating would it be if you were not tied to student loans and/or credit card balances? What would you do if money was not driving all your life choices? What if you could make decisions based on your happiness and not the financials? Your freedom can be achieved by applying a method that you will adhere to over time. Try to apply the debt snowball method to your debts. Find an extra income source and put all extra income towards paying down debt. Build your emergency fund and march toward financial independence. 

Being debt free and achieving financial independence requires sacrifices. While you implement the total money makeover, for a while, you may experience no vacation, no eating out, skipping the coffee run, decrease subscription services, and may even have to cancel plans with friends. But this is a start to building the foundation for wealth accumulation. This is a journey that requires consistency. The end goal is to be financially free and financially resilient. Will you allow a night out with friends or your coffee habit get in the way of your financial progress? I think not.

Conclusion

Today, debt has become one of the tallest life hurdles to overcome. Now more than ever, for many, debt accumulation begins during the college years or earlier. The culprit is often student loans, and depending on one’s circumstances, it is a matter of when and not if credit cards will become a part of the total debt. How can this trend be stopped? First we must understand the issue: more often than not, debt starts to accumulate in view of lack of financial education. A possible solution is education and a total money makeover. Journey to financial independence with a method that works for you and your ever evolving financial situation.

Co-Authored by Paigemera A.

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