Like it or not we are either born as savers or spenders. It is just a part of our DNA, and it can dramatically affect our lives when it comes to dealing with finances. The way to hack your inner self is to realize which one you are, and learn how to change the code within your DNA.
No we are not literally changing our DNAs, but we can use financially intricate systems to help us become something we are not and transform our behaviors. The best secret to impart change is to decipher the errors, take notes, begin to implement, and make the positive changes consistent. The definition of consistent means sticking to things for the long haul aka years and decades.
Get an Emergency Fund and carry big Money Bags like this Guy.
I released a gem of a post a few months back and it was all based on the good old emergency fund topic we all love. Now I will impart unto you a second rendition of the reasons you need an emergency fund.
This is a great topic that everyone can relate too, and I created with a semi-comedic twist to make all of you crack up literally while reading. Talking about money can be funny if you just try a different approach.
I wonder if everyone had an Emergency fund how much easier and simpler life can be. One of the basic foundations of money management is having a savings fund. If this is too hard for you, and you are employed in today’s world then something is seriously wrong. Now let’s get back to having a blast with this topic as I would like to keep things light.
Hey imagine you received a windfall of lifetime earnings at once? Would you treat this windfall differently? Do you know how much income, side hustle, illegal activity you’ve made in your lifetime? If you already have 5 years of working history under your belt after college, and made on average at least 50K-55K annually how much is that amount. For those of you who are not too good at math it is 250-275K thousand dollars. Now back to the first question asked, imagine you received all of that money at once?
If you Can’t see your Budget, how do you know its Effective?
Do you know that in order to handle money correctly, we all need to know the exact percentages we can spend on every category? Once you understand why percentages matter and that it’s all about handling money within percentages, then money management will be a breeze. This is a simple finance strategy many never implement, but when they do, people will soon realize how much extra cash flow can be had. I will provide below a standard guideline for specific categories and I hope your budget is in line with what I am about to share below. Granted nothing is set in stone around here, but this will get you to understand if you need to fix a money category, that is out of whack.
If you can stay within the percentages for expense categories, this will eventually free up money for you to go over and above in the savings / investing percentage categories. By going over in the savings / investing categories you will be bounds ahead in retirement nest egg funds in no time. People will most likely shoot down an idea like strategizing income based off percentages, before even trying it out. How can one negate a financial strategy before implementing it, all because it is something completely new and different.
This is not a new investment opportunity as it has been around for a long time now. The problem is if you are not into investing and do not read investing books, you probably never heard of this type of investment opportunity. What is a real estate investment trust? Exactly what you might think it is when you read the title. They are companies that invest in real estate holdings, offer shares to investors so that they can own a piece of the pie. This in turn provides the company with the influx of cash to invest into more properties. Now the secret sauce to this deal is that by law these REITS must pay out about 90% of all the income they make back to shareholders. If they make 1 million dollars a year they have to pay out 900K to all the owners. Usually all the dividends are paid out on a monthly time schedule. Now what company you know gives almost all of its profits back to the owners? (None I’ve seen)
I am a big proponent in holding some REITS long-term, as it can provide a substantial amount of income and the ability to diversify nest egg money away from the usual U.S. large cap equities. The REIT market on average provides yields of about 5% and this is not including any capital appreciation on the price of the stock when you decide to sell. For a few examples of REITS in the market today see below:
This Guy is Retired and still is the Richest Man in the World.
Did you know that the richest man in the world according to Forbes is Bill Gates? If you by happen chance do not know who he is, Bill Gates is the founder of Microsoft Inc. He basically has about 78 billion dollars as of July 2014. Half of that money is in Microsoft shares, and the kicker is he has been retired from Microsoft since 2008. (Since then he has been on the board) Now why in the heck is somebody who is retired still the reigning champ of wealth? Maybe it is the 6% in ownership of the total Microsoft Stock or maybe he has millions coming in from the books he authored. I decided to write this because I am confused as to how someone who doesn’t make a salary is still worth more than Buffett or Carlos Slim, which both are still employed in their respective companies? If you can solve this puzzle then you maybe can succeed to grow wealth and never lose it in retirement.
Do you know that many municipalities in the US are filing for bankruptcy due to retirement pension default? A recent report released by Bridgewater states that 85% of them will fail in a specific time frame. How confident are you that your pension will last you the rest of your living years? This is why pension concerns are alarming for millions of people in the US. It is a frantic time for anybody who is dependent on that pension succeeding because most are hanging on a short financial string. A sharp scissor is ready to cut funding and politicians could care less. The problem in my opinion is that the people who manage the funds, are not doing enough to grow it, or are misusing the money for the municipality’s other budget shortfalls.
Private pensions are on the same boat as the public pensions. The corporation who was set up to help failing pensions is 34 billion in deficit. The numbers do not lie as it beckons anyone who believes pensions will be around to support them. As quoted in Forbes, “Over the past forty years the Pension Benefit Guaranty Corporation has assumed responsibility for thousands of failed plans. Traditional defined benefit pension plans offered by private employers are rapidly facing extinction and with the PBGC’s deficit recently hitting a record $34 billion, the future of private pensions looks grim.”
Now let’s focus on what can we do to avoid getting a heart attack due to worries that your pension might go under very soon. It all boils down to realizing you have to save more while in your working years. See the pension as gravy if you get it when you retire. Never be dependent on that income from day one and you will see things differently.
Having an Emergency Fund is a given to succeed with Personal Finance.
Hello my friends today we will entertain you with a fun light hearted post. Let’s discuss how you can revel in the security behind having an emergency fund account. This has been done many times over and I truly don’t understand why individuals can’t grasp this, as the benefits behind having an EF are overwhelmingly simple to comprehend. Now you can argue that there are 5 reasons to not have an emergency fund, and I’ll say to you stop hating.
I know life has its drama and at times situations prevent you from saving. Move forward and make the best of the present. Just take any of the 5 reasons mentioned and smile because you probably had the same thought once in your life and couldn’t implement the emergency fund then. See below for the 5 reasons why you need an emergency fund.
