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How To Increase Your Savings Rate

wealth Jul 06, 2020

This post may contain affiliate links. If you make a purchase, I will be compensated at no additional cost to you. For my full disclosure, click here.

 

The key to wealth is your overall savings rate. I say this ALL THE TIME. Recommended savings rates vary from 10% (see books like The Richest Man in Babylon), 15-20% (Dave Ramsey), and upwards of 50% (see the entire FI/RE movement). Regardless of if you are saving nothing at all, or just a small amount, increasing your savings rate even slightly will make a HUGE difference in your future.

But how do you increase your overall savings rate when you're already feeling strapped for cash?

Here are a few suggestions:

1. GET ORGANIZED
- If you're not tracking your expenses routinely, it is nearly impossible to know where you can cut expenses to increase your savings rate. A monthly budget is a fundamental requirement. 

2. PAY OFF HIGH INTEREST DEBTS
- Carrying high interest debts is the equivalent of running a race with...

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Your First Million

wealth May 25, 2020

This post may contain affiliate links. If you make a purchase, I will be compensated at no cost to you. For my full disclosure, click here

 

Becoming a millionaire isn't as hard as you would think. For ease of numbers, let's talk about how to become a millionaire using only your retirement accounts. This is an incomplete picture because your home and other accounts contribute to your net worth and would help push you over the millionaire net worth mark, but for simplicity we will use only retirement investing for now.


SO HOW MUCH MONEY DO YOU HAVE TO SAVE MONTHLY TO BECOME A MILLIONAIRE BY 65?


This varies depending on your current age, as one of the major contributors to the end balance is how much time you have left before age 65 for compound interest to work in your favor. Let's look at the numbers by age. We will assume you are starting with an initial investment balance of 0, and that you receive an 10% rate of return.


  • AGE 25 - $171/MONTH
  • AGE 30 - $280/MONTH
  • AGE 35 -...
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What Am I Investing In?

wealth May 18, 2020

This post may contain affiliate links. If you make a purchase, I will be compensated at no additional cost to you. For my full disclosure, click here.

When you go to select your investments within your 401(k), other retirement account, or miscellaneous investments, how do you know what investments you're choosing? Remember, a 401(k) or Roth IRA is simply a tax designation for an investment. The tax treatment matters greatly, but so does what you choose to invest in within it. 

HAVING A BASIC UNDERSTANDING OF YOUR INVESTMENT SELECTIONS WILL EMPOWER YOU TO MAKE BETTER CHOICES.

Let's review a few basic investments types:
1. ACTIVELY MANAGED MUTUAL FUNDS
- When you select a mutual fund to put your money in, you are selecting a group of stocks and/or bonds. What stocks and/or bonds are in each mutual fund have been selected by a professional who is actively managing the fund - or in other words buying and selling assets he or she thinks will maximize your dividends. 
2....

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Multiple Income Streams

wealth May 07, 2020

This post contains affiliate links. If you make a purchase, I will be compensated at no cost to you. For my full disclosure, click here.

I talk a lot about creating financial security through minimizing debt, creating significant savings as a financial buffer, etc. Another layer to the idea of financial security is creating multiple income streams. 

ONE OF THE WORST BLOWS TO YOUR FINANCIAL STATUS COULD COME IN THE FORM OF JOB LOSS.

One way to minimize the magnitude of this type of event is to develop multiple streams of income. This is something that may take several years to put into place. Creating a plan to develop this type of financial picture may be something that you start now, with the realization that it may not come to fruition immediately. 

The higher percentage of your overall income that comes from additional sources, aside from your primary job, the less likely any single event can substantially reduce your income. 


HERE ARE A FEW...

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