Category Archives: Investing

Financial Freedom, Financial Independence, Investing, Wealth

Mega Millions win or bust

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Here’s something to think about: How come you never see a headline like ‘Psychic Wins Lottery’? – Jay Leno

Are you feeling lucky? Well, do ya?

If so, well then playing the lotto might just be for you.

But like Katniss, the odds may not be ever in your favor.

It has about two weeks since the largest jackpot in Mega Millions history was won by a single ticket to the tune of $1.537 billion dollars!

All over the country it was Powerball and Mega Millions fever.

Everywhere I went people were talking about the lotto. Some people even tweeted about what they would do if they won.

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.

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.

I have a theory.

If you are unable to manage balancing your check book with $1k, then it is nearly impossible to do it with $1B.

I feel like it is.

But, if you saw  Justin Timberlake in The Social Network, you know he says, “you know what is cool? A billion dollars.”

They say the first million is the hardest. Well, try wrapping your head around a billion!

Even billionaire T. Boone Pickens thinks that it is too!

That’s a whole lot more zeroes you are working with. If you don’t know what PEMDAS stands for (Please Excuse My Dear Aunt Sally), you are in trouble.

You must first learn the rules of money, if you are to win the game. See my posts for more on how to build up your wealth knowledge bank.

Forget casinos, bet on yourself

The six ways to get rich

Money Lessons I learned from Scrooge McDuck

How Millennial Money inspire me to start saving $13,333.06 a year

STAY GROUNDED

“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.

3 Rich Habits of Millionaires

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.

Read my posts for lessons on eating humble pie:

How Dave Grohl turned passion into profits

Money Lessons I learned from Aesop’s The Ants and the Grasshopper

Money and Life Lessons I learned from Mr. T

Life Lessons I learned from The Warriors

The Greatest Assets are people

HOW TO MANAGE ALL THAT MONEY

You have to ask yourself after winning the lottery: How are you planning to manage all that cash?

You need a team to help you manage all that money. A circle of trust, like in Meet the Fockers.

I have a few suggestions.

  • Set up a trust to stay anonymous
  • Get a financial advisor
  • 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.

Your future self will thank you.

 

Financial Freedom, Financial Independence, Investing, Real Estate, Saving, Wealth

How not to be house rich, cash poor

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“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.

If you read my last post, Save $10,000 by Avoiding PMI, then you know I am all about saving that paper.

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!

https://twitter.com/AP_Lifestyles/status/1051911392704499713

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.

Don’t believe me? Read my post Join the top 5% club and find out!

Investing, Saving

Earn Money with High Yield Savings Accounts

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Don’t save what is left after spending; spend what is left after saving. – Warren Buffet

If you take a look at your bank accounts, you will notice that the rates on your savings accounts are minuscule.

On average, savings rates are a paltry 0.01% APY.

That means you are not even earning 1% on the money you have stashed away in most big banks.

This meager 0.01% APY is not doing anything for you.

If I put my hard earned money into a bank, I want something for it. These rates are almost no better than sticking your money under a mattress!

However, don’t do that. If the house ever catches fire, your money also goes up in smoke and is not FDIC insured.

I once heard a real estate mogul say that many years ago there was a time when interest rates were paying 10%. He was able to double his money every 7 years!

Now, that is fantastic.

However, this is not the case anymore.

Although, there are some banks that are willing to pay a fairly decent rate for the opportunity to house your money.

I found a few from doing an online search.

So, here is how you can earn money from placing your money in a high yield savings account.

WHAT IS A HIGH YIELD SAVINGS ACCOUNT

A High Yield Savings Account is a savings account with a variable rate typically higher than retail brick-and-mortar banks.

These banks are usually online and offer no physical bank that you can visit.

However, you can deposit your money online via electronic funds transfer.

Access to you funds may include a combination of wire transfers, checks, or ATM withdrawals. But this is not always the case.

For example, American Express® Personal Savings accounts are not meant for everyday spending. Therefore, debit cards, ATM cards, or checks are not provided. Transfers have to be done online. And transferring funds online can take anywhere from 1 to 3 days to complete.

Therefore, you should only deposit money in these types of accounts that do not require you to need access to these funds immediately or for daily spending purposes.

THE RULE OF 72

This rule allows you to estimate how long it will take for an investment to double at any given interest rate with the “Rule of 72”.

Knowing this will allow you to make a more informed decision before placing your money in any investment or savings vehicle.

You must also pay attention to the type of account you put your money into. For instance, a money market account or Certificate of Deposit (CD) will pay you more than a savings account.

Stocks pay you he highest rates of returns and give you the biggest bang for your buck!

The average annualized total return for the S&P 500 index over the past 90 years is 9.8 percent.

With the Rule of 72, If you use the formula, that equates to 72/9.8 = 7.34 years to double your money.

However, many banks are paying 1% or less!

Therefore, if your savings are earning only 1%, this means you money will double in value in 72 years.

That is 10x longer than if you had invested your money in stocks.

BANKS WITH HIGH YIELD SAVINGS

After doing a short search online, I found the following banks with high yield savings:

  1. American Express National Bank – 1.90% APY
  2. Ally Bank – 1.90% APY
  3. Barclays Bank – 1.90% APY
  4. HSBC Direct – 2.01% APY
  5. Synchrony Bank – 1.90% APY

HOW MUCH YOU CAN EARN

This amount can vary based on how much is deposited.

Of course, the higher the deposit amount the higher earned in interest.

You can use this money for anything you want or simply keep it invested and let the interest keep compounding on the amount you earn.

Please be advised that you still have to report this as income on your taxes. The bank will supply you with a form for tax purposes.

Now let’s show you the money.

We will use the 2.01% APY as our rate.

If you deposit $15,000, into an accounting paying 2.01% APY, you will get the following:

If you deposit $25,000, into an accounting paying 2.01% APY, you will get the following:

If you deposit $50,000, into an accounting paying 2.01% APY, you will get the following:

SKY’S THE LIMIT

All yeah! Let’s stack that paper!

Unless banks start putting a cap on the amount you can deposit, you can pretty much do this until you feel you have deposited enough in savings.

The point of using a High Yield Savings is to grow your money while you sleep.

That’s right. You can earn money just for breathing.

Merely allowing it to sit in an account paying less than 1% will not beat inflation; being its customary 2-3% rate per year.

At the very least, your money can keep up with inflation and not fall so far behind.

The goal is to always beat inflation.

Your money will have less purchasing power as inflation does its thing.

Therefore, it is your job to finds ways to keep the money train going by figuring out how to earn more, invest more, save more, and ultimately beat the inflation monster that is coming out every year to a theater near your wallet.

Banking, Credit Cards, Financial Freedom, Investing, Retirement, Saving, Wealth

Avoid paying interest and get rich

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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.

CONSIDER BANKING WITH A CREDIT UNION

If you read my posts, about the Unbanking of America and New Banking Rules: clear a check payment in a day, then you understand where I’m coming from.

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:

  1. Make it automatic
  2. Pay down your debts
  3. Bank with a credit union
  4. 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!”

 

Financial Freedom, Financial Independence, Investing, Retirement, Saving, Self-Made Millionaires, Wealth

How Millennial Money inspired me to start saving $13,333.06 a year

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If you have been reading my blog recently, then you know I attended FinCon in Orlando, Florida this year.

However, what many of you may not know is that I have been listening to podcasts and reading blog posts by Grant Sabatier of Millennial Money.

Grant discussed saving money every day. Something like $5. And when I changed my mindset, I was like I want to do that too.

The escalation of your saving rate. Grant recommended that people try to escalate their saving by 1% every 30 days.

I knew this was a massive undertaking, but I was determined to do something.

So, I started where I was at and worked my way up. I just shifted upwards.

This is the first time I have ever opened up about what triggered me to start saving larger sums of money.

I am nervous just writing this post. However, I wanted to share some of the things that I have done in hopes that it may help someone else in the same way that Grant helped me.

SHIFT YOUR MONEY MINDSET

It was around 2013, that I started to do some Million-Dollar Math. I used an online calculator to determine how much I would have to save to get to millionaire status.

I focused on 2 numbers: $100,000 and $300,000.

The reason for this was because at an 8% return $100,000 will net you $1,000,000 in 30 years. At a 9% return, $300,000 will net you $1,000,000 in 12 years.

Even that, seemed like it would take tremendous effort.  Then I realized I had to think big, but start small. Start where I was at.

The answer was staring me right in the face. I was like Homer Simpson, Doh! Come on, Miriam. Use your Noggin.

I needed to take the small steps first in order to get to the bigger ones.

A number like $1,000,000 is too daunting. So, I broke it up into bite sizes like Oreo mini’s.

First, I focused on my retirement savings and then my regular savings. It went something like this.

Retirement Savings Escalation Example

Year Savings % Annual Increase Change
Savings Escalation    
2013 13% 2% +2
2014

2015

 15%

20%

 2%

5%

 +4

+9
2016* 25% 5% +14

*** I stopped at 2016 because I shifted my focus from mostly all savings going to my 401(k) to focusing more on liquid savings for the time being. Don’t worry. I still invest in my 401(k). I have to get that match after all. Can’t leave free money on the table.

In 2017, I made some changes to my savings approach. I needed to have some liquid cash too and not just have all my funds locked up in my 401(k). I had to have cash reserves. Especially, for any unforeseen emergencies that just pop up.

I decided to pay myself first. Instead of saving what was left over after paying my bills and spending money on things, I saved first. I set up an automatic deposit to my savings, then paid my bills and then spent what was left.

My savings rate was so high that there was not but so much left over to spend. I did this on purpose.

It meant I must not only spend less (a lot less), but I must also earn more if I want to spend more.

I started saving more liquid cash in my savings and money market accounts.

In order to get my savings rate higher, I had to cut subscriptions, payoff debt, and eat out less.

And there is a secret to my success. Shhh! But, I’ll tell you guys. The secret is this: I automate it.

Savings Year Monthly Savings Amount End of Year Total Savings
2013 $50 $600
2014 $100 $1200
2015 $150 $1800
2016 $250 $3000
2017 $333 $3996
2018 $1,111.04 $13,333.06
2019* $1,211.09 $14,533.06

I try to increase my savings rate by a minimum of between 1%-5% a year and even double or triple it, if I can. I just cut out everything. I spend as little on clothes as possible. I haven’t bought a car in almost 16 years. I don’t care. I’d rather save and be financially independent.

You can see from the numbers above that once I was introduced to Grant, my savings rate went through the roof and increased quite dramatically!

At the rate I’m going, I estimate I will have somewhere between $80,000 – $90,000+ after factoring in for life (cause things just come up).

And that is only if I continue on this path for at least the next several years and increase my savings by about 11% per year or around $1200 annually, which is a $100 increase in savings per month. I could decide to save even more over time.

I would then have enough savings in the bank to pay for 3-5 years of my expenses.

I estimated my FIRE number (25 x my expenses): $750,000.

Once I hit that or a certain number in liquid savings, I will then re-evaluate my situation.

WHEN I GOT INSPIRED BY MILLENNIAL MONEY

It happened around 2017. I like to read money articles, magazines and books. I like to study the self-made. Then maybe I can emulate their success.

I saw an article about Grant on CNBC in early 2017. I was intrigued to learn how someone could do this in just 5 years what most are unable to do in a 30 or 40-year career or even in a lifetime.

Once I read his story I was inspired to act. I was determined to get my act together too. I devoured personal finance (PF) books. I must have read at least 40-60 in the last 15 months alone.

However, I haven’t bought a book in about 3 years. Too expensive. I rent them all from the library.

I do have some books I own from the years I was buying personal finance books. I have a small mini-library in my home (just a medium-sized book shelf) full of all my PF books.

I feel that if you want to be wealthy, then you have to read. You have to pursue wealth. Your house should look like a Barnes and Noble, if you want to be rich.

And ditch the plastic, unless you can pay it off every month. Once you stop making those installments, all your money is yours and a lot of your money woes disappear.

However, for the first time in years I am allowing myself to buy a book and it will be Grant’s new book that is coming out in February 2019.

How do I know he has a book coming out at that time you ask?

Thanks for asking. I’ll tell you all about it.

MEETING MILLENNIAL MONEY

I went to Fincon, a financial conference where money and media meet, and Grant happened to be speaking at one of the workshop sessions.

I stepped in to see what he had to say.

He was awesome. I felt his passion for what he did. It was palpable.

He said blogging is a long game. Your blog and appearance should be clean and shiny.

Be unique, be yourself and tell your story.  Stand out from the crowd because the media will try to lump you in with all the other bloggers. Don’t let them.

Sell your feel goods. Feelings are what connect people to you and your blog.

Do you care about your reader? If so, be clear and transparent. Have a mission.

When I shared my story about having only $2.26 in my bank account it just one day exploded. I have done over 400 media interviews because of it.

90 days ago a firm offered me $4 million dollars for my site. I turned it down. I can’t sell my site. It’s my baby. There is more to life than money. It’s not the money. It’s the work.

If you want to be a blogger, make your posts memorable. Have personality. Be vulnerable. Be more giving. Show people that you are human.  Tell your struggles and challenges. Reveal things to your readers over time. Humanize your site. Be more open.

Screen shot your story. Make it unique so people can remember. Always start with a story.

Write lots of stories. Do your reps. Put in your time. Putting in the extra time to write 3 times more content means you connected the reader. Readers are looking for an emotional connection. And Storytelling.

I’ve written 1 million words about money. And I’m not done. Be distinctive.

This is the age of vulnerability and that is why digital podcasts are so popular.

At this point, I got the message. He was so passionate when he spoke I did not want to leave the session because he was so engaging.

I made a point to walk up to him later in the day and introduce myself and tell him how much I enjoyed his workshop.

He said thank you so much. I really appreciate that because it’s scary up there. Your like an island up there.

I also told him I did not think he should sell his website. I mean where I would get my feel goods.

I then gave him my card and he gave me his flyer. He was super grateful and humble when I told him I liked his speech. I felt and thought that he had a good personality and thoughtful disposition that was positive and hardworking.

And I was right. At the closing party, Grant displayed , yet again, his big-hearted and kind nature.

The DJ was packing it up for the night, but people still wanted to dance. He offered to pay the DJ (out of his own pocket to keep the party going). That was really nice.

That’s the type of people I need and want around me. Those with good character and that care about others. I want to be a good neighbor. And want to be around good neighbors as well.

After all, you never know when you may need to borrow a cup of sugar or need someone’s help.

Case in point, I had a close friend that needed some money fast in order to close on her house. I wrote her a check the very next day, with no other questions asked and she paid me back within 2 months.

My sister also many years ago was in a bind and needed to pay a debt. She said she needed $500 dollars. I wired her the money the same day. She said she would pay me back and I told her to forget it. After all she had done for me. I didn’t forget when there were times she helped me out. I had a chance to repay the favor, so I did.

I know some people out there may say it was just a DJ, but no. It was more than that. It was the fact that he was willing to dig in his pockets and spend money on hundreds of virtual strangers.

I have seen people not willing to give up a dollar, a penny even, not one red cent to help family members. Let alone a stranger. And this guy did it, no questions asked and without waiting for or expecting a thank you.

https://twitter.com/ptmoney/status/1046239732580188161

HOW I STARTED SAVING MORE AND SPENDING LESS

Well, there you have it. My story of how I started to save more.

You now know more about me than some of my close friends and family members do.

I’m not going to lie. I was scared to write this post, but if Grant can screen shot his bank account showing $2.26 in it, then I am willing to share as well.

I too lived at home longer that I wanted or planned to. I went shopping and spent recklessly to numb the pain. I felt I was failing at adulting.

I had to find a way to kick the habit because it was putting me in the poor house.

I started shopping with lists. I would make painstakingly long lists of clothes I wanted to buy. I would make myself wait 30 days before making a purchase. By then, I didn’t even want the clothes anymore.

To satisfy my cravings, I would at times (every few days or weeks) allow myself to go online to Nordstrom and put every item of clothing I wanted in the shopping cart. I once raked up a bill for $18,000 dollars!

However, I thought about my money or my life. How much in sweat would I have to toil to pay off that sweater that no one is going to see me in because I am too broke to go out?

By the time I would be able to pay off the debt (plastic fantastic), those clothes would be long gone and the interest would have made them way more expensive than the $18,000 I racked up just to buy them.

I did not buy one single item.

I proceeded to do this for about 6 months and sometimes I did it every day, in order to get it out of my system.

I have been cured of my shopping addition and clean and clothes sober for the last 5 years. Thank you very much.

I have never told anyone any of these things except my partner. He said do whatever you have to do not to spend.

I’m embarrassed to tell people that I used to do that, but whatever it’s my truth and I’m living in it.

I wasted so much money on clothes. You would not believe. For every event, I would go shopping. I needed a new dress or jacket or boots. I spent with reckless abandon to impress people that I didn’t even know, like or who didn’t even care.

Now, I never go on Macy’s website for longer than 10 minutes, I get what I need, and get out. I have bought very little and way less clothing than in the past. I rarely go to malls and no longer go to any clothing sites online.

I had about 600 items in my Amazon cart. Those items have been just sitting there probably for like the last 5 years. I was like forget it. I don’t need any more stuff.

I also notice when I don’t shop, I feel better. I get just as much joy in saving as I o spending. Almost. Let’s not go crazy now. I’m only human.

I started donating clothes and items all around the house. It feels good to purge all that stuff. It’s so freeing. It was cluttering up my mind and house. I don’t need a bunch of gadgets and new clothes and shoes. I would repair instead of replace.

I rarely go to the movies and almost never go on vacation. And if I do, it’s usually once a year.

I keep myself busy. I don’t like ideal hands. I find something productive to do. Even if, it’s just reading or cleaning the house.

Sometimes, I still get the itch to shop and spend, but I have learned not to scratch it. If the goal, is to be financially secure then sacrifices will have to be made. Hard work is required of anything good and important and it takes time. And hard work builds character.

And I am okay with not getting rich quick or overnight because I know anything truly worth having is worth the wait. The only way to really feel good about something is to earn it first.

I had to train myself on how to deal with large influxes of money and to keep my paws off of it. And much like the narrator said at the end of the Neverending Story, but  that’s  another story…

Entrepreneurship, Financial Freedom, Financial Independence, Investing, Self-Made Millionaires, Wealth

How Benjamin Franklin used 13 virtues to get rich

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“Tell me and I forget. Teach me and I remember. Involve me and I learn.” – Benjamin Franklin 

Benjamin Franklin is not only one of America’s founding fathers (known as one of the signatories the Declaration of Independence), but also its first millionaire.

He did this by investing in what he knew. That is how he built his fortune.

You can do the same to build yours.

I listen to what people have to say, but I always make my own decisions.

I research any industry I want to know and then focus on investing in what I know. I try to put my money where my values are.

I prefer consumer staples such as food, beverage, toothpaste, cleaning supplies, tissue, and other household items.

Companies like Proctor & Gamble, Colgate-Palmolive, Kimberly-Clark. Clorox, and PepsiCo.

You can find many of these companies included in many mutual funds such as any 500 index fund like the Standard & Poor’s 500 Index (S&P 500 index), the Vanguard 500 Index Fund Investor Shares (VFINX), the Fidelity Spartan 500 Index Investor Shares (FUSEX), the Schwab S&P 500 Index Fund (SWPPX) or the   T. Rowe Price Equity Index 500 Fund (PREIX).

I figured a good way to start my wealth journey was to learn about those that became wealthy.

Benjamin Franklin also created a list of 13 virtues to develop his character. This lets me know that your character is your destiny.

Here I provide you with his checklist. See which ones you can try to emulate to help you on your road to wealth accumulation.

THE 13 VIRTUES OF BENJAMIN FRANKLIN

In 1758, Benjamin Franklin published his essay The Way to Wealth.

Although, it was written 260 years ago, the advice still is holds up, even to this day.

Below is a copy of his checklist.

SPOTLIGHT ON FRUGALITY

My personal favorite is frugality because it includes all the other virtues.

Frugality is basically the will to spend money on what is important and avoiding spending on what is not.

Frugal is not being merely cheap or miserly like Ebenezer Scrooge.  See my post on Money Lessons I Learned from Scrooge McDuck. It is about saving money on things you do not really need.

Saving money allows you to put that money to work for you.

Imagine every dollar is a little soldier. What do soldiers do? They fight.

You have to fight for your money because everyone is trying to part it from you. Don’t let them.

Invest that money and each dollar (soldier) fights for you everyday 365/24/7. Even while you sleep.

FOCUS ON FRUGALITY

In this world, you’re on your own. Benjamin Franklin knew that. So, he set out to start a business in a field he knew. He was a printing apprentice and started a printing shop. He became an expert at that one thing and did it so well that people paid him for it.

He then reinvested the profits back into his business.

That is how he grew rich.

He knew to become wealthy, he had to ignore the charlatans or hype. He had to focus on himself and his spending habits.

And that is what you must do. Ignore the hype. Forget what everyone else says or thinks. Trust your gut.

FORGET THE FANCY SET OF WHEELS

You do not need a fancy car to make you happy. Ride a bike and get some exercise. Better yet, buy an inexpensive, older Chevy where the bumper looks like it will fall off any second.

Then people will be less likely to ask you for money, if they see you riding around in a clunker because they will think your broke, but it couldn’t be further from the truth.

It’s not that you do not like nice cars or can’t necessarily afford one. It’s that you choose not to spend your money on it. Sounds pretty good right?

And watch out for the hangers on. They tend to come around when your last name is followed by an M.D. or Esquire.

FORGET THE BIG HOUSE

You do not need a mansion to live in. You know what that does? It just causes you to spend more money to heat, cool, maintain, and furnish it.

You fill the home up with stuff. No one likes an empty corner. Every inch is piled high with stuff.

How is that stuff paid for? Usually with credit.

What happens if you need that money? For instance, homes need maintenance.

Do you know what the repair bill is for a roof on a mansion? Well, you don’t want to know. One thing we do know for sure is that it costs more than what you would spend on a smaller house.

What about PMI? Private mortgage insurance is what you must pay if you put down less than a 20% down payment. And folks, that money is on top of the insurance and a monthly mortgage payment. We aren’t talking chicken feed here. It can be hundreds of dollars per month!

What about property taxes? It can add hundreds or thousands to a monthly mortgage payment. That’s money that’s not working for you in the bank.

You want to be investment rich, not house poor.

Every dollar that goes toward the house, can’t be working for you in an investment account.

I know they say the value of the home will go up and your equity will increase as you are making the house payments. However, let’s not forget the 2008 housing bubble.

When that bubble burst, so did most folks equity. Foreclosure notices were going out in the mail all over the country. Many lost homes. And many have still not recovered.

FORGET THE DESIGNER CLOTHES

You know those people who say dress to impress. Well, that’s fine and dandy, if you can afford it. However, if you can’t swing it, then walk by the $400 clothing rack and head to the sales rack in the back. Forget sartorial superiority. Who wants to be the best-dressed poor person?

I now see more people walking around with designer purses today than I have seen at any other time I can remember. Who’s paying for it? Mr. credit card, that’s who.

I see people opening up store cards all the time.

They have so many different color credit cards in their wallet it looks like a skittles bag exploded.

Places are handing out applications for credit cards every, single day.

You must resist. Resist the urge to spend. Credit is seductive. The temptation is too great.

So you must decide, what is more important. Buying a designer’s clothing and paying for their summer home or funding your own future.

FORGET THE EXPENSIVE WATCHES AND JEWELRY

I read about an NBA player who had bought dozens of watches. And not just any watches, but Rolexes!

Just because. Well, hey, you know bosses got to be on time.

Do you know what those things retail for? Well, last time I checked, it could be anywhere from $2500 to $40,000 and up.

The guy could have started a college fund. He could have funded an entire small city of kids $1k college scholarships.

Who needs 30 watches? Someone who wants to know the exact moment they went bankrupt I guess.

FORGET THE EXOTIC VACATIONS

So you want to travel. That’s great. But unless you can afford it or do it on someone else’s dime (like for work).

You may just have to watch the latest episodes of House Hunter or any show on the travel channel.

I once read it is a great thing to go travel and see the world as it is a great education, it will only cost you: $25,000.

I think I’ll just read a good book on world travels instead and invest that money until it earns enough interest that I can pay for the trip with cash.

Here are some of my suggestions on traveling when your travel budget is on life support.

You want to see the northern lights in Iceland? See it on a YouTube video.

You want to go skiing in Switzerland, Aspen, France or Vail? Watch a travel show until you can afford it.

You want shopping sprees in Milan, Paris, Rome, New York’s Fifth Ave, or Rodeo Drive?  Focus on buying things that will appreciate in value. Clothes, once purchased, is money that’s burnt.

I know you watch the television shows and see all the families going to Disneyland or Hawaii. However, what they don’t tell you is how much it costs to go to these places. Lots of times the studio or the network is picking up the tab.

They do it for ratings. Because who wants to watch a show about people sitting on couches all day. They want to see the lifestyles of the rich not the broke and unknown. I say just stop watching those shows.

Focus your attention on earning and working. If your head is down working, you never can look up and notice what everyone else around you are doing.

FORGET FOMO (fear of missing out). It’s a myth.

I know plenty of people that go out, spend money, buy nice cars, big homes, fly to the islands, and go to lots of parties.

However, they are not the boss. They work a 9-to-5 just like everybody else. One missed check could cause havoc on their already precarious finances.

Many people are one paycheck away from being on the sidewalk.

Don’t be like them.

Practice the 13 virtues. Be frugal. Then you can live like no one else because you will actually be rich instead of acting like you are.

FORGET PRETENDING TO HAVE MONEY

Forget pretending to be rich. The only time bluffing works when it comes to money is at the poker table.

And you know what happens when the hand is over, the bluffing stops there.

So leave the bluffing at the table and check it at the door.

Remember that scene in the comedy movie Back to School with Rodney Dangerfield. He was a wealthy guy named Thornton Melon, but always said to his son: A man without an education is nothing.

There was one scene in the film where he was talking in class about being in business and all the things a businessman is doing to make it in the real-world.

The teacher disagrees with his assessment, even though he was coming from a place of information.

When the professor asks where to build the business after scolding Melon he replies, “How about fantasyland.”

When it comes to your money you cannot afford to live in a fantasy. You have to keep your feet planted firmly on the ground and your actions based in reality.

Earn money, save it, invest it, and get rich slow.