Tag Archives: Geico

Budgeting

15 items or less

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Shopping, Spending, Till Slip, Purchase

When I think of 15 items or less it always reminds me of being in line at grocery store. However, it has more meaning to it than that for me. It is not just a line at the grocery store.

That number represents the amount of ingredients I prefer to have in my food or any meals I prepare, the amount of items in my Amazon cart I like to have, and the number of stocks I like to have in my portfolio.

Many financial experts will tell you that you need no more than 20 individual stocks in your retirement and investment accounts to build wealth. Personally, I am an index investor. I put my money in these funds because a single stock can go bust and you could lose every penny.

An index fund can’t go to zero because it is made up of hundreds or thousands of stocks and if one business goes belly up, then it is replaced with another one that is in good standing. Thereby, making sure your investment never goes to zero.

One of the reasons I stick to a budget and adhere to strict investing rules is because I know money is not always so easy to come by. Even though you can earn more money and not time, money is still an important commodity that cannot be overstated.

During COVID-19 lockdown, I got to see up close and personal just how important it is to keep your head down and stay focused on your money goals.

After losing my job during the Great Recession in 2009, I do not take anything for granted. I always try to keep a 3-6 month emergency fund, money in savings and brokerage accounts just in case. At the very least, I try to keep $5,000-$10,000 cash for a rainy day.

Imagine my surprise when the pandemic hit and I was yet again shown numerous cautionary tales of why it is important to have these things in place.

Living on a budget can help save you from going hungry when times are lean. This always gives me perspective. Stay disciplined, save and keep your feet firmly planted in reality and on the ground. Plan for the long term.

Your personal savings account is your own version of having Geico insurance; it is there just in case something bad happens.

These stories reminded me why I save so much. I don’t ever want to be caught out in the rain or a heavy storm without an umbrella.

I’m going to share with you just a few of the things I heard while standing in lines to buy food and other shopping items over the last few months.

The following are some of the things I overheard while millions had lost their jobs and income in 2020:

Cashier: “That will be $8.64.” Customer: Exasperatingly said, “There goes all the money.”

Customer in line on the phone that looked 50ish: “Hopefully, my mother will be able to pay my car payment this month for me.”

Woman shopping for furniture: “I just bought a house at 64. I hope they can finance this for cheap.”

Cashier gives customer total to pay. Grocery store customer to cashier: “I don’t have any money.” The cashier then decides to pay for the customer’s groceries herself out of her own pocket.

A landlord calling a tenant: “Can you pay your rent a little earlier because I need to pay the property taxes on the 31st?”

Why not just have the property taxes wrapped up in the mortgage? Just a thought, but okay, I digress.

A gentlemen speaking with his coworkers: “I’m trying to buy a home. It will cost about $900,000.” His coworkers reply: “But you’re in your 50’s. Why not stay where you are and leave some money to your kids.” His reply to that: “They have to struggle like I did and fend for themselves. This is for me. It’s time to shine.”

Woman talking to her folks : “Private school costs like $1,200 a month. It’s expensive and I have a lot of student loan debt, but I want the best for my kid.”

Workers discussing an overpayment they received from their employer: “If they are going to take back the money they just gave us by accident on our next check, they got to give us a payment plan right?”

A payment plan for a lump sum payment they just got. Why not just set the funds aside that they received by accident? You would only want a payment plan if you already spent the money.

All these stories tell me that these folks are broke and living on the financial edge. I knew I did not want to ever be on the side of a financial cliff ever again. Therefore, I had to get my fiscal act together.

I cut my living expenses to the bare necessities; got my housing costs to under $1,000 a month, paid off my car and got rid of my $450 car payment, and started tracking my net worth.

I felt like Smokey the Bear would always say, “Only you can prevent forest fires.” In my case, it was financial fires that would burn up all my money and leave you broke. I didn’t want that.

I know times are hard, but I hope as I did all those years ago, that people learn some very important lessons from all this tragedy. And that is, the government is not going to save you. No one is coming to save you. We are all on our own out here. You must fend for yourself or be broke.

If you know you would rather be rich, then keep reading the blog posts on this page to stay motivated to leave the rat race sooner rather than later.

You will do it by attracting one dollar at a time and then investing it to turn it into two.

Happy reading and good luck on your road to wealth.

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

Beware Of Financial Vampires

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Nosferatu, Dracula, Moon, Moonlight

Well hello there boys and ghouls.

Happy Greenbacksween.

Hey if Geoico can have Geicoween, then surely so can we.

On today’s spooktacular blog post, we are talking about why you should avoid the black cat of investing: fees.

They come in all shapes and sizes. From front-load, back-load and even fees you pay to trade stocks.

However, one of the most overlooked of all fees come from commission based salesmen disguised as your friendly neighborhood financial advisors.

They wear the greatest costumes 365/24/7: a suit.

And we are not just talking any suits my friends, but the kind you drop a month’s wages on; think more John Wick and less death of a salesman, as to portray a sense of wealth that make you feel like you be anyone or can do anything and believing you want to run up and kick that football that Lucy is holding.

You are unstoppable.

Then it happens.

You get that investor statement in the mail. You are so excited that you rip the envelope open to see how well you are doing. The market is firing off dividends and capital gains the likes of which you have never seen before. You just know you are making a killing in Mr. Market, right?

Then you see that 2% of your portfolio goes to the fund managers and realize that you just got punked!

You look to your left, you look to your right, but Ashton is nowhere to be found.

Why you must be your own financial advisor

I hate to be the bearer of bad news, but I must confess that being a DYI investor is best.

While reading a plethora of books on the subject of personal finance, I have learned the following:

  • Don’t invest in anything you don’t understand. It is not enough to buy the product. You must research the company behind the brand.
  • Know if a company has a competitive edge. For example, once digital cameras came on the market Kodak fell off the face of the earth. The last time I had a Kodak moment was right before Apple unveiled the iphone.
  • Don’t time the market. If you have money to invest, then do it!
  • Don’t invest in anything you can’t draw with a crayon.
  • Invest in index funds instead of individual stocks.
  • Only invest in funds with an expense ratio of less than 1%.
  • You can do exchanges between index funds you already own without paying any fees. This is pretty sweet!
  • Most millionaires are worth between $1 million and $5 million dollars.
  • 90% of millionaires over the last 200 years achieved wealth by investing in real estate.
  • Forget buying the product and own the stock. Millionaires collect assets – stocks, bonds, real estate, and intellectual property – like monopoly pieces. The poor collect consumer liabilities like big houses, boats, and cars. An asset pays you. Collect assets.

No one cares about your money more than you do

Although self-explanatory let us dig deeper children.

Would you hand over all the passwords to your bank, credit card, and investment accounts over to strangers?

Of course not.

However, in an essence that is what we do when people hand over the financial reins to business partners, financial advisors, and handlers.

Instead of working through the struggles of figuring out how money works, many just give up the responsibility to someone else. Nothing screams “just take some” more than giving people free range access to your money. Nothing attracts grifters more.

Just pick up a few free library books on investing and get started right there.

Heck you can even search online for podcasts or website that talk about money! That is how I got started.

Why you want to have $100,000 in investments

It is simple. If Mr. Market does what he has over the last 90 years, then you can turn $100k into $1M in 30 years. Not bad for a kid that gets picked last to play dodge ball.

Once you hit this number, then the money starts finding you.

Depending on your rate of return you could double your money to $200k in less than 8 years. It took me about 2 to 3 additional years to get that next $50k after the first $100k.

Do you want chocolate Halloween candy or a rock?

If any of you out there have seen The Great Pumpkin Charlie Brown, then you know what I’m taking about.

The reason many of us invest is the same reason kids trick-or-treat because we want the treat, that is something that gives us great pleasure.

You go from house to house looking for a reward for putting together that perfect costume.

Investors buy investment after investment looking for the same thing.

Nobody wants a rock!

I remember a time in school that I sold so much for a fundraiser that I got a chance to go in the money machine (where you stuff money into your pockets for like 60 seconds). I wanted that reward!

But guess what? The night before the big event I stayed up late and overslept the next morning! I missed the whole thing. That could have been my seed money to start this blog! That could have helped me start a Roth IRA at 17! The funny thing about rewards is that you may earn them, but you still have to go and pick them up.

Now I write down everything in a journal so that I do not miss a thing!

I wanted to one day be able to have ‘F everyone’ money like Mark Cuban said: “‘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.” You should invest for your future self to have that option.

If you take nothing else from this post, at least remember this: we like the kind of money that jingles, but we invest so that we can have the kind that folds.

Coins are wonderful but paper folds so nicely.