I get it. You win the jackpot and your financial freedom. You’re on cloud nine.
However, you have to plan your escape from the rate race whether or not you win the lottery.
If you want to get rich, either by picking winning numbers or otherwise, you better learn quick how to manage a fortune.
Here’s why.
CHANCES OF WINNING
Are pretty slim.
According to Fortune magazine, the odds of winning the lottery are about one in 300 million. Considering that there are over 326 million Americans, that makes your odds quite small.
Chances of winning the lottery today: 1 in ~300 Million
Chances of being born as yourself: 1 in ~400 TRILLION
If you want to close this gap, you will have to increase your scope of numbers to play and play more often.
It’s not enough to do the kids birthdays or your anniversary. Going to have to get creative. You need the locker combination to your high school locker, your kids Xbox password, your great-aunt’s wedding date, and your first love’s old address. You know, something like that.
But all jokes aside, you will have to increase your range of numbers to increase your odds of winning.
In addition, you will have to play more often.
It has been well-documented that people who win the lottery once are likely to win it again.
The problem with this is that you also increase the amount of money you lose while playing the game.
LOTTERY WINNERS GO BROKE
Get rich or die tryin’. – 50 cent
Did you know a high percentage of lottery winners end up broke? According to the National Endowment for Financial Education, 70 percent of lottery winners go broke.
According to @NYTimes, 90% of lottery winners go broke within 5 years of winning. What would be your plan to keep your winnings long term?
“Using money you haven’t earned to buy things you don’t need to impress people you don’t like” – Robert Quillen
I have seen too many lottery winners go bankrupt. You win all that money just to go back to being broke! No, thanks.
Forget your friends and family telling you to spend. Do not inflate your lifestyle and then upgrade it even more after moving to that gated community in Beverly Hills. You do not need to outspend your neighbors.
You can still drive a Honda. The kids can still get jobs. If you think that it is taking away an opportunity for someone else to work for a needed paycheck, then let junior volunteer.
That was the advice Fran gave Mr. Sheffield in The Nanny. He wanted to teach his daughter about responsibility and the value of money. So, in S02E21 Maggie became a candy striper at a hospital. Great advice.
Fun Fact: In the S02E08 of Gilmore Girls, Rory gets in trouble at school. It just so happens that one of her schoolmates in that episode was none other than Mr. Sheffield’s youngest, Grace, played by actress Madeline Zima. You can see her in the blue sweater walking behind Rory in this clip.
My advice to anyone who comes into large sums of money whether by inheritance, large windfall, bonus, or lottery is to stay humble.
Hire an intermediary to answer requests for money on your behalf
Set a daily, monthly, annual spending limit
Hire an attorney
Take the lump sum
Create your own annuity with a spending budget
Hire a CPA
Learn how to manage money
Understand your tax liability
BUY STOCKS INSTEAD OF LOTTERY TICKETS
I would much prefer people spend their money wisely than to bet it on chance.
You could invest your money instead of throwing it down on the roulette table. If you are want to be a part owner of Caesar’s Palace, instead of merely placing bets at one, you can buy REIT’s or mutual funds.
Even better, you can buy index funds that includes hundreds of stocks that track a benchmark such as the S&P 500.
Every dollar you invest can possibly be turned into two or three dollars.
Source: familyfinancefavs.com
Not sure what all this is? No problem. Go down to your local library and ask for books on personal finance. You can also look up any words you are unfamiliar with online.
In addition, you can read blogs, listen to podcasts, join investing clubs, get a job in banking, take a few online finance courses, or ask friends and family for book recommendations.
Many books offer book recommendations in the appendix.
All you have to do is be willing to do some homework.
Trust me, it’s worth it.
When your one-day sitting on a beach in Hawaii, sipping cocktails and able to get up at noon just because.
“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Chinese Proverb
“What you do not wish for yourself, do not do to others.” Confucius
Anyone out there that has been reading my blog, you can probably tell by now that I am a big fan of cartoons. I even named my blog after a scene in one. See my Meet Miriam page for more on how I came up with the name Greenbacks Magnet.
Anyhow, if you grew up in the 80s or 90s, then you may remember a Saturday morning anthology television show that aired on the CBS network called: CBS Storybreak.
It originally aired from 1985 to 1987 and was hosted by none other than Captain Kangaroo, Mr. Bob Keeshan.
Each episode was 30 minutes long and retold a beloved children’s story in animated adaptations.
It was later rebroadcast from 1993 to 1994 and was again returned to air in reruns in 1997 to 1998. This time it was hosted by actor Malcolm Jamal-Warner.
YEH-SHEN
My favorite episode of the series was entitled, “Yeh-Shen: A Cinderella Story From China.”
Yeh-Shen is a Chinese fairy tale that is similar to the European Cinderella story.
The one adapted on the anthology series, Yeh-Shen: A Cinderella Story From China, retold by Ai-Ling Louie and illustrated by Ed Young, is a well-known children’s picture book adaptation of the fairy tale, which was originally published in 1982.
If you are unfamiliar with the story or the animated series, a kind soul uploaded it to YouTube, and I have linked it here for you to see.
Fast Fact: One of the voices in this 1985 animated anthology of Yeh-Shen, was played by actress Emily Kuroda. She played Mrs. Kim on Gilmore Girls.
Mrs. Kim ran a tight ship, but was hilarious.
And Gilmore Girls happens to be one of my favorite shows. I want this website to be the Gilmore Girls of blogs, as there will be enough pop culture references in here to make your head spin, but that, like Lorelai and Rory, is how my mind works.
Now let’s get to the story.
VIRTUE CAN BE SEEN IN RAGS AS WELL AS SILK
“I believe that virtue shows quite as well in rags and patches as she does in purple and fine linen.” – Charles Dickens
Yeh-Shen always kept a neat and clean appearance. She kept her place in the home tidy. She also told the truth. And always acted with dignity and grace. People noticed, including nobility. And not just any noble, A King. Ursula said it best, starting at 1:02 minutes.
I learned to keep a clean appearance at all times and take very good care of myself. I regularly get exercise, read, brush my teeth, and eat my three square meals a day. And people notice, including my partner. My appearance is one of the things that attracted my boyfriend to me.
FRIENDS ARE IMPORTANT
Yeh-Shen’s only friend is a fish named Gold Eyes. He is a spirit that is there to look out for her, that was sent by her mother, as a way for her to look after her beyond the grave.
Gold Eyes always helped Yeh-Shen. He would assist her with her laundry, give her food and advice, or provide anything else she needed help with.
She would share her meager breakfast with him, even though she had so little for herself. She was a good and kind person and a dear friend. In return, Gold Eyes held her in high regard and was always there for her in return. He tells her she deserves better and one day will have it.
From this, I learned how important friendship is. True friends are there in good times and bad.
It’s like Oprah Winfrey said, “Everyone wants to ride with you in the limo, but what you want is someone who will take the bus with you when the limo breaks down.”
Agreed.
POVERTY IS HARD
However, there is no shame in being poor.
Upon the death of her parents, Ye-Shen is poor. She becomes a lowly servant to her stepmother and her daughter. No matter the amount of work placed upon her, she does her duties, and does them well.
It didn’t matter how hard Yeh-Shen worked or how obedient she was. She was treated badly simply because she was poor.
A man in town even looked her over because he said he was looking for a beautiful wife and not a pretty servant.
From this, I learned two things: (1) A job worth doing is worth doing well, and (2) do all you can to change your station in life. You may be born into poverty, but only you can determine if you remain that way forever.
Might I suggest reading biographies and books about money. And get your education. A good one.
MANNERS MATTER
Every time someone spoke to Ye-Shen, she spoke elegantly and courteously. No disrespect. People remembered and appreciated that about her.
Those manners got her far. She was able to escape trouble, punishment, and land the attention of a handsome noble from minding her manners.
MIND YOUR BUSINESS
Her stepsister did not want Yeh-Shen to go to the festival because that is where people go to find a husband or wife. She said, “she couldn’t handle that type of competition.”
In addition, when she finds out about Yeh-Shen’s fish, she tells her mother, who then gets rid of him. In the end, it turned out to be fortuitous for Yeh-Shen.
Do not focus so much on others. Mind your own business. Run your own race. You could be getting yourself together and becoming your own success, if you focus less on what others are doing.
POSITIVE AFFIRMATIONS
In the show, her stepsister repeats this phrase after her mother tells her she wants to hear positive thinking and not any negative thinking, “I will find a husband, I will be a bride.”
To this day, I practice my affirmations. I actually learned this from Yeh-Shen. I reject negative thinking and focus on being positive. Optimism gets results. Negativity does not.
MISERY LOVES COMPANY
When the stepmother learns of Yeh-Shen’s talking fish she decides to get rid of him. Leaving Yeh-Shen all alone.
Those who are unhappy, don’t want to be alone in their unhappiness. It is your job to get away from them. They will only drag you down.
FATE
Gold Eyes turns into magical bones. He tells Yeh-Shen not to despair, as this was his fate. He is still there with her, even though only in spirit.
Like Doris Day said, “Que será, será, Whatever will be, will be, The future’s not ours to see.”
You cannot control what is meant to be, but you can control your actions and how you respond to others. Stay in control. Have a cool head. Control your emotions, control your life.
KINDNESS
Gold Eyes tells Yeh-Shen that he must repay her kindness. Her stepmother would feed her very little. Therefore, Gold Eyes would provide huge meals for her as a way to compensate for this slight.
Even after all they put her through, she asked Gold Eyes if she should share with her stepmother and sister. He replies by telling her, “Did they share me with you? No. This gift is from me to you.”
He says to her that she can ask for something more, but she says, “this is all I need.”
Being nice has its rewards. I always repay a kindness. However, there is a thing as being too nice. You have to set limits and boundaries with people. In addition, you must also stand up for yourself. You can be nice, but don’t be anybody’s fool. Also, only take what you need. No need to be greedy.
DO NOT BE EASILY PROVOKED
Throughout the entire episode, she is repeatedly reprimanded, punished, neglected, scolded, and insulted. She never responds to this.
Sometimes you have to be man or woman enough to walk away. You must pick your battles. Live to fight another day. Move on.
YOU MUST GIVE TO GET
When Gold Eyes tells her she deserves more and that they should not treat her so bad she says she knows. But she was an orphan and they gave her a home.
He offers to do her chores for her, but she says she does not mind doing manual labor, for now. She hopes to find a husband (her true love) at the festival. He concedes and tells her if that is her destiny so be it.
She is offered the world on a silver platter and turns it down. She wants to make her own future on her terms. It is best to keep your head down and work. You must give to get. That is just how the universe and karma works.
BROKEN PROMISES AND DREAMS
She helps her stepsister get ready for the festival. After, she is done, she says she must get herself ready and asks if it is still alright for her to go, as her stepmother promised.
Her stepmother breaks her promise. She tells Yeh-Shen she can go to the next one, or the ones after, but this this one for this year. Yeh-Shen was looking forward to that festival all year. Hope was thoroughly dashed. Yes, this can happen in life.
A TIME TO BE DISOBEDIENT
When her family leaves to go to the festival, Gold Eyes tells her she should go. She says she has nothing to wear. He then magically turns his bones into golden slippers, which transforms her plain clothes into a gorgeous dress. She disobeys her stepmother and leaves to go to the festival.
In life, there is a time to act. You must decide if you are going to break the rules. And if you are, you better make sure it’s for a good reason.
DEMURE AND CHARMING
At the festival, her family sees the man referred to as The Handsomest One. She then gives a toothy smile and he scowls at her. It was hilarious.
Her mother then says your supposed to charm not scare him. She then goes on to say, “Let’s try the not handsome, but rich crowd.” Come on, really?
Then enter Yeh-Shen all dolled up. Yeh-Shen, who is usually demure, looks confident and sophisticated. A far cry from the reserved creature you are used to seeing in this episode.
Her mother remarks that, “There is the prize winner. She will get the handsomest, richest husband.” She says to her unmarried daughter, “Why can’t you look like that?” Who smartly remarks, “because I was born from you.” Her mother then pinches her.
Oh yea, for a drama it also has quite a bit of comedy. It’s a dramedy for sure.
HATERS GONNA HATE
When Yeh-Shen walks her stepsister says that she had hot nothing to do all day, but take dancing lessons and be pampered. Come on. Hating like that will give you wrinkles unmarried daughter.
It doesn’t matter how nice you are or what you do for people. Some people just are some haters! Ignore them. They hate us, cause they ain’t us. I say don’t hate, congratulate. Figure what they doing so you can see what makes them so successful and find the secret recipe, so you can copy it.
PRICELESS
At the festival, she runs away and loses one of the gold slippers. A man finds it and sells it to the merchant. The merchant then gives it as a gift to the King.
The gold slipper is referred to as priceless. And it is. Rare indeed. When something is priceless, you don’t just give it away to anyone. The merchant gave it to someone he felt was worthy.
A GIFT FIT FOR A KING
The King feels that the slipper must belong to someone of great beauty and wealth. He decides to find the owner. Who just so happens to be Yeh-Shen; who is also looking for a golden slipper.
If something is lost, then you may decide to return it to its owner. However, do not think that it will come with a reward or be some fairy tale, happy ending. All that glitters may not be gold. In this case, the owner was a poor, orphaned, peasant girl. But there is more to her than people can see.
SEEK AND YOU SHALL FIND
Yeh-Shen asks around town to find the other slipper She finds a man who sold it to the merchant. He then tells her he gave it as gift to the King. She says she must acquire it from the King. The merchant tells her to go to palace to go try it on. She says, “Thank you sir, I shall.”
If you want something, go and get it. Sitting on your laurels has never helped anyone.
THE POOR HAVE NO VOICE
Yeh-Shen waits in line all day to try on the slipper, but is denied. She then tries to take it. The palace guards accuse her of trying to steal it. They called her a girl in rags. She tells them the slipper belongs to her friend, a dead fish, as the slipper design is like the scales of a fish. They lock her in the dungeon.
First, if she had been a woman of nobility, she would not have been treated this way. To be poor is not a crime. However, if you want to be heard, you must ask the right way.
Second, you cannot even look as if you are attempting to steal something. There is a saying that, if you’ll lie, you’ll steal and if you’ll steal, you’ll kill. Do not even give people a reason to think that.
MERCY
The King says to have her released in the morning. A guard tells her in a curt tone to get out and stay away. She merely bows.
Like in the Karate Kid (1984), there is a time to show mercy. A tense situation arises between an adult and a teen. And they needed an adult at the wheel. Mr. Miyagi was that adult.
And for those who do not know Mr. Miyagi, this is for you. Please do not be like that kid on that episode of Supernatural.
For those of you who do not know or may not remember, here is the scene of Mr. Miyagi teaching Daniel son another life lesson.
A TRAP SO TINDER
Better than any tinder app could do, the results of this match are written in the stars. Slide left, I mean right. Don’t want to make that mistake.
The King sets a trap to leave the slipper unattended so Yeh-Shen will take it and he will then follow her to see what she does and why it’s so important to her. That’s smart.
And pretty slick, if you ask me. Reminds me of that scene in Hackers (1995).
PATIENCE
They wait. She takes the slipper. They follow.
Anything worth having is worth the wait.
IT DOESN’T BELONG TO YOU
After getting the slipper back, her step family find her out. Her stepmother is happy to have a matching pair of gold slippers. She says their fortune is made and their ticket out of the cave. She will sell to the King.
You do not own and cannot sell what is not rightfully yours.
NO THIEF HERE
The King stops the squabbling between Yeh-Shen and her stepmother. She tells him she is no thief. She needs to have the slippers together so that her friend can go return to the pond of his forefathers.
Sounds crazy, I know. However, when in doubt, tell the truth.
WHO ARE YOU?
The problem with playing games is that you get hurt too. – Common (actor, rapper, entrepreneur)
She tells the King who she is. No more games or pretending.
He asked. She answered. Tell people who you are.
GET TO THE ROOT OF THE PROBLEM
The King asks her, “What are these slippers to you?” She says they belong to her friend. Explains her story to the king.
That’s right. Tell people your story. Share what you are trying to do. You will be surprised how much people are willing to help you when you are doing the right thing. Also, when you know the truth, then you can deal with it.
DO THE RIGHT THING
The King tells her if that is what she must do with the slippers, then do so. He then says “but first, place them on your feet.”
She obliges and transforms back into the woman seen at the festival that day in the beautiful dress.
The look on her stepmother and stepsister faces are priceless!!!
The King could have decided not to believe her, but he listened. Do the right thing because it is the right thing to do and not for any prize or reward. Doing the right thing is its own reward.
SECRETS REVEALED AND DESTINY
Gold Eyes magically appears as a spirit and thanks Yeh-Shen. All secrets are now revealed. He tells her now he can go. As her dreams are about to come true.
If you are meant to have it, no one can stop you from your destiny.
The truth is out, now you can deal with it.
MARRIAGE MATERIAL
Her stepmother tells her that the clothing that Gold Eyes gave Yeh-Shen belongs to her because she is her guardian.
The King says no as she is a free person. She must then step aside.
The King says, “Your friend, the mystical fish has brought you into my life for a reason.” He then steps up to the plate, wasting no more time and asks for her hand in marriage. She says yes.
The show ends by letting the audience know to visit your local library or book store. Book recommendations are provided by the Library of Congress. If you like this tale, then read Cinderella by The Brothers Grimm.
I, myself, am a huge fan of the fairy tales. I like Hans Christian Anderson and the Grimm Brothers. Particularly, the Grimm Fairy Tale Classics cartoon, but that’s another story.
“It is so liberating to really know what I want, what truly makes me happy, what I will not tolerate. I have learned that it is no one else’s job to take care of me but me.” – Beyoncé
Many of you may have heard of the FIRE movement (financial independence, retire early). However, what some of you may not know is that there are different ways to FIRE.
Let’s explore some of those ways shall we.
WHAT IS FIRE?
According to Camp Fire Finance, the elevator pitch for FIRE is this, “When your investments generate enough money to cover your annual expenses you’re financially independent (FI). At that point work is optional and you can retire early (RE) if you want to.”
Basically, you have more than enough money coming in to stop working. Usually, this requires anywhere from $1 million to $5 million dollars depending on what you want or need to spend to maintain your lifestyle or that of the one you dream of having.
For example, if you decide you want to withdraw at least $80,000 a year, you would need to have a $2-million-dollar portfolio.
HOW DO YOU BUILD A $2 MILLION DOLLAR PORTFOLIO?
“Don’t focus on getting to $1 million; focus on getting to $2 million.” – Arnold Schwarzenegger
I heard that little gem when Mr. Schwarzenegger was doing a radio interview.
So, one word: invest.
Property, stocks, art, and stamps can all help you build your net worth.
“Market crashes are the best times to buy,” he said. “When Walmart has a sale, everybody would run in to buy. But when the stock market has a sale, or the real estate market has a sale, everybody runs away. That’s why there’s a difference between rich and poor today because they don’t know a good thing when they see one.” – Robert Kiyosaki quoted from a MarketWatch interview
Do not focus on your income; focus on your net worth.
Earning a high income means nothing, if you spend it all. If you make $85,000, but spend $86,000 you’re in the red. You can blow through just about any paycheck.
PURSUIT OF LIFE, LIBERTY, HAPPINESS AND FINANCIAL FREEDOM
The pursuit of financial freedom takes work and time. I thought this post from Apathy Ends, hit the nail on the financial head on why people are not rich, yet. See my post on Patience is the key to wealth.
I will never forget that episode of America’s Next Top Model (ANTM) when Ms. J was teaching the girls how to walk down the runway. He was fierce and determined. What he got from the girls was gentle and undetermined or undefined and lazy.
He commented to them, while slapping his hands together, with one palm face up against the other hand palm down for emphasis: “I want you to walk like you’re selling it and the rent is due tomorrow.”
I could think of no better way to tell someone that is how you approach your money and your life’s work. Either be all in or don’t do it at all. Passion is what separates the have’s from the have not’s. And in that case, it was a $100,000 prize and modeling contract.
Get a financial education. Learn all you can about money. Make a plan or a budget for your money, but make it sexy. I know for some people talking about interest rates puts them to sleep, but how about we think of the subject differently and come at it from another angle.
I went to a meetup in DC and heard J. Money of BudgetsareSexy say this, “Do you want to learn how to balance a check book? Boring. Or do you want to learn how to save a million dollars?” WHAT?!!!
Did you also know reducing your 401(k) investment fee by 1% can provide you with 10 years of income? Shocking? Yes, I know. I can teach you how to save $1 million and keep $100,000!
Now, those things sound sexy and exciting. Yes, please tell me more.
Once you have a question. Start looking for answers.
THE RULE OF 25
“I can never be safe; I always try and go against the grain. As soon as I accomplish one thing, I just set a higher goal. That’s how I’ve gotten to where I am.” – Beyoncé
If your annual expenses are $55,000 a year, then you need $1.375 million to retire (55,000 x 25) and then this should last you for the next 25 years.
The formula used to calculate your 25 years of expenses is this (expenses x 25 years).
Estimate your FIRE number.
You want more money to retire on? Like Beyoncé says, set a higher goal.
For $100,000 in income, you would need a $2.5-million-dollar portfolio to generate that kind of cash.
“Keep your feet on the ground and keep reaching for the stars.” – Casey Kasem
The 3% rule refers to your withdrawal rate: the annual percentage amount you can safely withdraw from your investment portfolio when you retire.
This allows you to touch your interest earned at a slower pace. Since, you are withdrawing 3% instead of 4%. Meaning your draw down the principal more slowly, if ever. The more you have squirreled away and the less you take, you may not even touch the principal at all.
I know that is really shooting for the stars, but that really is the goal. You never want to touch principal. That way, you live only off the interest forever!
I got this chart from doing another online search and the best I came across was from the blog Financially Alert.
“‘Enough’ is what it takes to not worry about the bills.”
“‘A lot’ is enough that you never have to worry about working again.”
“‘F you’ money means you can rent a jet to go wherever you want, whenever you want, and no party is out of reach.”
“‘F everyone’ money means you can have your favorite band in your backyard, not care how much it costs, and lend them your jet to get there.”
We’re not talking about rich; talking about wealthy. Chris Rock once said, “Shaquille O’Neal is rich. The guy who pays his salary is wealthy.” He also said comfort is the poison. Too much of it can slow down your progress on the road to wealth. All I mean is to stay hungry. I’m just saying there are different levels of wealth.
FIRE IT UP
“Focus on all four of your net worth factors: increasing your income, increasing your savings, increasing your investment returns, and decreasing your cost of living by simplifying your lifestyle.” – T. Harv Eker
Simple math can help you retire rich.
Unfortunately, many people think of math as a foreign language and say it’s too hard to learn.
In my experience, to build wealth you need to know addition, subtraction, division, and multiplication. And that’s about it.
Why FIRE AT ALL?
More control and satisfaction over how you spend your time and money. Finding something you love to do and are passionate about is life changing and fulfilling. What you want is…FREEDOM. Waste less money and work with what you’ve got. Do more with what you have.
What do you want out of life? Write it down. Go seek answers. They say seek and you shall find.
According to Mr. Money Mustache, you should focus more on you than your bank account. Get wiser and healthier so you can increase your probability to get wealthier. My favorite quote of his is this: “Salads and barbells every day.” Become your best self with hard work, dedication, and consistency. Be the Boss.
READY, AIM…FIRE!!!
According to an article by Physician on Fire (POF), called What is fatFIRE?, a Facebook group defined FIRE as the following:
FIRE = Financial Independence. Retire Early.
leanFIRE = FIRE on a shoestring budget.
fatFIRE = FIRE on a generous budget.
Most aspiring to fatFIRE have a target of $2.5 Million or more or the equivalent annual budget of $100,000 or more based on a 4% withdrawal rate.
I found a breakdown of the terms financially speaking on Miniafi on the difference between lean and fat FIRE under the title So Many Terms!
I break it down like this:
LEAN FIRE = $1 million dollar or less portfolio
FIRE = $1.25 to 2-million-dollar portfolio
FAT FIRE = $2.5 million dollar or more portfolio
FIRE is about having enough passive income flows to never work again or to decrease the amount of time you spend doing work you don’t want to do and increasing it on the work you do want to do.
It’s almost Halloween! So, I will start this post like the Crypt-Keeper would on the show Tales from the Crypt on the heels of this upcoming All Hallows Eve.
Hello Boils and Ghouls! Tonight’s tale is one of money, sophistication, and women.
Topic du jour: Women who talk money. Who are the ladies behind the riches?
Before I get into the interview, I just want to start by saying this:
Thanks for coming out tonight. You could’ve been anywhere in the world. But you’re here with me, I appreciate that. – Jay Z
So, like Nas says, “Yo sit back, relax, sip your cog-ni-ac” and I hope you enjoy this blog post!
INTRODUCTIONS ARE IN ORDER
Much like Chaucer did, in A Knight’s Tale, I want to make an introduction.
Welcome Ladies and Gents!
And everybody else here NOT sitting on a financial cushion:
Today, you find yourself equals.
For you will all equally receive the same knowledge.
I have privilege, nay pleasure, of introducing you to bloggers, like no others,
Bloggers that can trace their lineage back to 2015.
I first met them at a dinner table near Orlando, Florida,
Waiting for our drinks,
Hoping that our meals would be arriving soon,
As the chips and salsa, were not enough to satisfy our hunger.
Next, Kitty amazed me still further
With her sign language skills and by telling jokes for an hour
Helping us forget we were ravenous
And to not walk across the street to the Shake Shack.
Three hours later, both ladies entertained us with stories
So, that we did not spend dinner in uncomfortable silence.
And so, without further gilding the lily,
And with no more ado,
I give you the Seekers of Financial Independence,
The Protectors of ending uncomfortable silence,
The Enforcers of Getting Rich,
The Ones —
The Only –
Bitches Get Riches!!!
MEET THE BI*CHES
GBM Miriam: It was an absolute pleasure meeting you ladies at FINCON 18 this year! Congrats, on winning the PLUTUS Award for funniest financial blog for Bitches Get Riches. Thank you for stopping by Greenbacks Magnet.
This blog is to help folks learn all things money.
I asked Kitty and Piggy to share their knowledge by answering a few questions and they so kindly said yes.
And thankfully so, I need all the help I can get because I don’t want to have to live in the forest, eat off the land, and use roots as medicine due to lack of money and financial literacy.
After the Dow dropped 800 points, I was strongly considering it, but then, like my sister, I thought if only I didn’t need tampons and to watch Supernatural…
So, here they are dropping gems right here for all to see. In the illustrious words of Sailor Moon, “And that means you!”
Fast Fact: The hand signs that Sailor Moon makes while she says her famous line, “In the name of the moon, I will punish you” means “I love you” in sign language.
Let’s get right into the interview.
BI*CHES START A BLOG
What prompted you ladies to start a blog about money?
BGR Kitty:We were the first among our group of friends to hit the classic major life milestones–marriage, buying a home, selling our souls in big girl corporate jobs. Our parents and grandparents, bless them, they meant well, but their advice was from another century. So we were always texting each other for advice. We needed help from a peer who’d been there recently. Eventually we realized there was a wealth of valuable information just sitting in our text convos, and we thought, “Hey, why not publish it?”
BGR Piggy:What Kitty said.
What are your favorite finance books? How come?
BGR Kitty: Piggy is The Good Child and will give you real answers. But I’ll tell you that I get more out of reading advice that I don’t agree with. Bad advice fires me up. For that reason I have to say The Four Hour Workweek is my current favorite. I haaaaaaaate that book. Myopic, exploitative, and smug. Just thinking about it gets me excited!
What are you reading right now? What’s on your night stand?
BGR Kitty: I’m currently rereading Y the Last Man. It’s one of my absolute favorite graphic novels. It’s the story of what happens to the world when everyone with a Y chromosome dies suddenly, with the exception of one guy and his pet monkey. A fantastic piece of sci-fi that’s I mean, I love any story with roving bands of crazed misandrists. I also just started White Trash: The 400-Year Untold History of Class in America.
BGR Piggy: I just finished reading “Dietland” by Sarai Walker. It’s a total mindfuck of a book, all about body positivity, subversive feminism, rape culture, and a literal feminist terrorist cell that assassinates rapists and blackmails corporations into eliminating sexist products. If your reaction to that description was “… wut?” then hey, me too!
One thing people may not know about each of you?
BGR Kitty: I don’t get hangovers. (I try not to rub it in the morning after a long night of drinking, but it definitely came up at FinCon.) I also have a genetic mutation that makes my body not process cannabinoids. Finally, I can open ANY jar. Seriously, ANY jar. Given this body of evidence, it’s entirely possible that I am Bruce Willis’s character from Unbreakable.
BGR Piggy:I hate chocolate. Refuse to eat it. When I was a kid my brother and I would divide the Halloween candy between us: he’d get all the chocolate, I’d get all the non-chocolate. He also got all the cavities which I’m sure is unrelated. I also love playing blues covers of pop songs at open mics! Just learned Ariana Grande’s “Dangerous Woman.”
What’s in your wallet? How did you start getting your riches?
BGR Kitty: I have a net worth of a quarter million. I find that beyond amazing, considering I’m a working artist. Every single lucky break I’ve had in my career has been because someone believed in me and advocated for me. If I were trying to make it in the big city with just my brains and my work ethic, I’d be straight fucked. I’ve had help, lots and lots of help. That’s why I like helping other people! It both feels good and is the only karmically sensible reaction.
BGR Piggy: I love this question, but I feel like Kitty’s question is perfect. Also, the Capital One Venture card is LITERALLY in my wallet. My husband and I paid for a vacation to Portugal for our fifth anniversary using the travel points for that card. It took us about two years of earning the points, which isn’t bad for a free vacation.
BONUS ROUND
Bonus Questions (pick any of the questions from the top or below that you want to answer)
Any life or money lessons from a favorite movie or TV show you would like to share?
BGR Piggy:According to my favorite movie, The Princess Bride, you should never get involved in a land war in Asia, nor should you go in against a Sicilian when death is on the line.
If you could have dinner with anyone in history, who would it be? Why?
BGR Kitty: Malcolm X, especially towards the very end of his life. He’s a personal hero, and an incredibly complex figure. I’d be so interested to hear his thoughts on the state of America right now. Also, he doesn’t eat pork, and neither do I, so it would be super easy meal planning.
GBM Miriam: On your About Page it states: Who are Kitty and Piggy?
Some people wonder which of us is the Bebop, and which one’s the Rocksteady. But that question is an illusion. We are both Krangs.
So, here is my question.
Why not Bebop and Rocksteady? Why 2 Krangs? Inquiring minds want to know! You said I could ask you anything. Please, no judgment.
BGR Kitty: If we’re going by the 1987 animated series, Bebop and Rocksteady–though lovable–are bunglers of the highest order. We’re strictly bunglers of the second-highest order. Like Krang, we are very goal-oriented. We too have platform dependencies (us, Patreon; him, Shredder). And most of all, we share Krang’s personality: sarcastic and demanding, with an almost admirable abiding pettiness.
If you found a lottery ticket that ends up winning $1 million. What would you do?
BGR Kitty: I would drive my van to Empire City and stay at Le Hotel with my son in the hopes that I could convince my dead wife’s possessive lesbian ex-servant to chill the fuck out. Hashtag reference! All the kids got it!
The End.
This is where the screen fades to black and the curtain closes. Please ladies take a bow!
Well, we have now come to the end of this interview. That was not only interesting, but also entertaining to say the least. I feel like I just walked out of an amateur comedy night, open-mic contest!
BGR:Thanks Miriam!!!
GBM Miriam: Thank you Kitty and Piggy for coming aboard!! The next time we see each other the Patreon is on me!
Want more financial and life gems, from the comedy stylings of the dynamo duo of Bitches Get Riches?
“If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.” —Edmund Burke
I remember watching an episode of Property Brothers and they were telling this couple that you do not want to spend too much or overspend on a home and end up being house rich and cash poor.
They instead wanted the couple to buy a fixer-upper, do some sweat equity, renovate the home, and put that money into their pockets.
Basically, when you buy a turn-key home, the work has already been done and you are paying the homeowners for the money they put into the home on renovations.
However, then you buy the house at a markup.
This is due to the fact that they may pay $20,000 for renovations and then the property may increase in value by $40,000 or double what they paid. Thus, allowing them to increase the purchase price of the property, ergo you pay them to renovate.
That’s pretty steep for move-in-ready.
If you do the work yourself, you get to keep the value that the home increases by.
This means buying a fixer-upper for $300,000 and putting in $20,000 for renovations will push the home value to $340,000 and let you keep the $20k in equity for yourself instead of putting it in someone else’s pocket.
So, let me show you how not to be cash poor, but house rich.
WHAT DOES HOUSE RICH, CASH POOR MEAN?
According to Investopedia, “house poor is a situation that describes a person who spends a large proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance and utilities.”
Basically, you are paying more for your home than you can afford or simply buying too much home.
If you have to pay more than 40% of your income for your dwelling, then you will become cash poor.
Matter of fact, if the value of your home decreases, you can be both house and cash poor.
When you are house rich that means all your money or wealth is tied up in your home. The home equity may be something like $150,000, but you only have $1,500 in the bank. That is not even enough to cover one month’s mortgage payment!
In order to shift this, you would want $40,000 in the bank, and to owe less than $150k on your home. That $40k would be enough to pay one year’s worth of expenses including mortgage payments ($1,600 x 12 = $19,200).
You would need a fixed rate mortgage to help you do this.
STAY AWAY FROM VARIABLE RATE LOANS
The ARM, or “adjustable rate mortgage” loan is too dangerous. Any loan product that can change at the drop of a hat and without a moment’s notice is too risky.
Let’s think about this for a second. Why is anything at a drop of a hat so bad? Well, did you ever see the movie Tombstone?
The idiom is likely to have come from the Old West, when duels would begin with a signal consisting of a man grabbing his hat and thrusting it toward the ground, before weapons are drawn.
Is this any way you want any part of your life to be lived?! Absolutely, not.
Entertaining in the movies sure, but not for real life.
This type of trickery should be left out of the equation.
First, lenders approve you for wayyy too much. Second, they tell you it’s okay to only pay the interest when it’s really not. As you cannot get out of debt, without paying off the principal of a loan.
And going for the trifecta of trickery, the third thing lenders do, and this is the hat trick, your mortgage payments jump so high Bryce Harper couldn’t catch it!
Your mortgage payments spikes upward too sharply for most folks to keep up.
A reasonable $1,600 mortgage payment could reset and go up to $2,400 in a single month!
That’s no joke.
I had a conversation with someone this actually happened to. Shocks like this are hard for most people to fathom and continue to live comfortably.
A fixed rate loan allows you to plan the monthly budget in advance.
When you how much you monthly nut has to cover, you are just better off.
HOW TO BE CASH RICH
Buying a home for less than you can afford is a start.
If you are approved for $400,000, then slash this amount by 25%. This equals $400k x 0.25 = $100,000!
You heard me. Then bank says $400k, and then you say: I’ll go $300k.
In one fell swoop, you both cut the amount of home you buy and monthly payment by 25%
You then take that $100,000 and over the course of the 15, 20, or 30 years you are paying your mortgage, you put this same amount into mutual funds.
You could do the S&P 500 index. Do whatever you want.
The goals are to simultaneously invest that money and pay down your mortgage.
For instance, that $100k over 30 years translates to investing $277 per month for 360 months. That would allow you to save anywhere from $500,000 to over $1 million depending on your rate of return through compound interest.
That means over a 30 year time period you have paid off a worth an estimated $300,000 or possibly more as home value may increase during this time and have an additional $800,000 in investments.
You would have a net worth of $1.1 million and would put you in the top 10% of wealthy households in America. See my post; Join the top 10% club for more on this.
WORDS OF WISDOM
A few words of wisdom to follow:
Buy less home than you can afford
Spend no more than 25% of your income on the housing payment
Invest the difference of the savings you received from not paying the full amount approved for
Stick to a housing budget
Have a god size emergency fund of 8 months or more
It sounds so simple, but most folks are actually living beyond their means and buying my house than they can afford. I have actually seen people in their 50s signing up for 30 year mortgages! Holy crap! The odds of paying off this home are slim at that age.
If you can follow the advice I give above, you could find yourself at the top of the economic pyramid.
If you use a credit card, you don’t want to be rich. – Mark Cuban star of “Shark Tank”
According to CNBC, Americans have an average credit card balance of $6,375 and owe a record breaking $1 trillion in credit card debt, which is the most ever recorded in history.
Investing that money instead could net you anywhere from $50,000 to $200,000, depending on how long you invest it and getting a return on investment of around 9%.
And that does not include an employer match or if you invest more. You could save and invest your way to a small fortune thanks to compound interest.
Here are some ways to avoid paying interest.
MAKE IT AUTOMATIC
I’m sure to many of your out there this is not new advice. However, how many people are actually doing this is another story.
Setting your bills up on automatic payments is a great way to avoid missing payments.
Credit card companies can levy a hefty fee for missed payments. The most recent I read was $38! Forget that. I rather use that money for gas or some other function. Anything is better than paying fees.
In addition, credit card companies can ratchet up your interest rate to 29.99% for missing a single payment!
That means almost near perfect timing of paying all bills.
The closest you can get to doing this is to make all your payments automatic.
Set up everything you can on autopay.
You can put the gym membership, cell phone, utilities and insurance payments on a credit card. Then set up automatic payments with your bank to pay that credit card off at the end of every month and you’re done.
PAY DOWN YOUR DEBTS
Paying off high interest debt is a must on the road to wealth.
Every dollar you spend towards interest cannot work for you compounding interest instead.
Think about it. If you pay $700 per month servicing debt and pay 50% of that in interest, that money is gone. Dust in the wind my friend.
If you can do the polar opposite, investing the entire $700 and earning interest instead, you have a clear path to building wealth over time.
That is the equivalent of $8,400 a year you are investing as opposed to using that amount to pay debt in which $4,200 goes to principal and the other $4,200 in interest and that money you never see again.
Many may not know this, but credit unions are not allowed to charge more than 18% on loans or credit cards (unless you default).
The savings gain alone from not having to pay some credit companies 22-27% interest is huge!
You could save anywhere from $50-150 bucks or more per month with a lower interest rate. That’s another $600-1,800 per year!
Just something to consider.
REFINANCE YOUR MORTGAGE
If you can lower the interest rate on your mortgage, you can save $100’s or $1,000’s of dollars a year.
In addition, if you can change your repayment period from 30 years to 20, 15, or 10, then you can save a ton of money. Maybe not tons of money monthly or right away, but over the life of the loan.
For example, a $250,000 mortgage at a 3.92% rate over 30 years will cost $425,533. You reduce that to 15 years and total output is $331,058. That is a difference of upwards of $100,000!
If you take that $100,000 and put that into index funds, you could have anywhere from $600,000 to $1 million dollars over 30 years with a minimum 6% return on investment.
Many folks will buy at least 2-3 homes in their lifetimes. If every new purchase resets your debt-free mortgage clock by 30 years, then you are likely to spend most of your working years in debt.
I hate to be the bearer of bad news, but this is actually the norm for most people.
You do not want to be normal. You want to be different and extraordinary because that gets results.
If more folks put down 10-20% and got 15 year mortgages, you would be better off in the long run.
Paying on one item for 30 years is a long time.
A lot can happen in 30 years. Heck, a lot can happen even in 10 years!
Retire that debt ASAP or as fast as you can.
You can build an in-law suite, swimming pool, and remodel the kitchen after the debt is gone and the home is paid off.
People used to have mortgage burning parties, after paying off their home. Let’s try to bring that back shall we.
I have recently read in the news personal finance experts expressing their concerns over mortgage payments that Americans are making.
Most wanted the debt paid just before you retire. Others said get rid of it in your 40’s. Like around age 45. Why you ask? Since, this is the point where you are halfway through your career, it is best to spend the second half of it working toward building capital to fund your nest egg.
That is excellent advice.
Basically, you spend the first 20 years paying off all you owe, and the last 20 years building up your retirement accounts you will need in your golden years.
SUMMING IT UP
All you have to do is follow these four steps and you can avoid paying interest or at least a whole lot less of it.
Remember these 4 steps:
Make it automatic
Pay down your debts
Bank with a credit union
Get a 15 year mortgage
Sounds pretty simple right?
Well, you would be surprised by how many people are not doing any of the things stated above.
Therefore, if you can start doing even one of these things now, you are well on your way to building up your bank account.
And in the illustrious words of Porky the Pig, “That’s All Folks!”
