Hi close friends welcome to
yadnya investment academy. Today is friday. So today we will talk regarding
Today'' s subject is Related to retirement preparation A very common question of you all that come Undoubtedly this all recognizes. Retired life is very vital goal. Primarily when I do financial planning So many persons monetary
preparing I have actually done directly After that because comes.Retirement is very
essential goal. In which we require a whole lot of money Nowadays early retired life is occurring. FIRE environment talks are occurring. Financial cost-free retire very early In such things When retired life comes in goal One vital point comes Just how much money do I need? Inform me this much money suffices. I can retire. That is a regular question. For this we have already developed an intriguing calculator yet that was prior to pay wall surface. Now we have actually removed that from pay wall since it is very beneficial calculator. So a retired life calculator we have actually made. In that with so several permutations combinations we can obtain an idea This much retire corpus I require. If I get to below after that I have actually done well.I go to least monetarily totally free. Now I have to retire.
We have to function additionally or otherwise. It is my choice. If above that. Currently I am just sharing my display. Now you will see here You will certainly take place investyadnya website There is a section named tracker and calculator. In this there is a retirement calculator. Open this Now here we need to fill up details. Expect I am placing age of 30. You have to suppose to retire on 60. Life expectations we mostly suggest We need to maintain 90, 95, 100. With a conventional estimate If you maintain 100 then it is very great conservative estimate.If you intend to take hopeful If you took functional after that it should be 90.
Mean I am placing right here 95. 4th details is our Current annual cost When we do retired life computation Obvious we took assumptions. One assumption is this the expense I am doing today Expect when I retire After that likewise my costs need to resemble this. Way my way of life of currently remains maintained neither I boost nor lower. Mean I am spending 50k monthly today. The expenses that are occurring. After retirement I will do the very same costs. After retirement costs can reduce. It can be your residence if you are living currently on rental fee. It can be so much rental expense.That can minimize. Now your children ' s costs are so a lot. They will certainly lower at that time. Occasionally after retirement costs raise.
Like holiday expenditures mostly boosts. In some cases clinical costs increase. Some expenses are enhanced. Mostly as an expert If we took a basic advice then we claim. Maintain the same expenditures as they are currently. Don ' t do much modifications because. Some increases some declines. If we desire to do a straightforward computation Then take into consideration according to present costs Suppose my expenditure is 50,000 The account we are taking has expenses of 50,000 per month. After that it is 6 lakh rupees
per year. You have to put today ' s expenses. You wear ' t have to put of old age. That ' s all it will put. Inflation number Exactly how much inflation number do we need to take? 7 %rising cost of living is mainly recommended of India. If you want to be conventional You can take 8 %If you want to be aggressive then you can take 5-6 %. Inflation you ought to calculate by your very own. Every year just how my costs are raising? If you understand little suggestion about that these things are enhancing according to my expenses.Education costs children ' s charges It enhances almost 8-10% yearly. Services mainly 10%. Landlords mainly raise rent by 10%. My individual rising cost of living is 8, 9-10%. You take according to your. So for computation here I am taking 7% inflation. Return on financial investment. On
the basis of roi. Exactly how much is my roi? Prior to retired life and after retired life. Currently I am retiring at 60. At 30 I am beginning investing. How much should I invest for that? Just how much retired life corpus will I obtain? The corpus I am spending currently. On that exactly how much return should I expect? It depends where you are spending. If you feel I will certainly spend mainly in equity markets. Retirement oriented since it is really long horizon. I am of 30 years and also retiring at 60 years. Perspective is of three decades. All that I am spending I will spend mainly on equity. We can take 11-12%. return on investment All that we will certainly spend currently. Or we maintained in equity we can take that. If you feel This house is my retirement corpus This will certainly boost according to that. On genuine estate the return. on assumptions that remains.Basically it is round inflation of 7-8 %. It depends on you if you have
EPFO. That is a really huge retirement corpus. On EPF we navigate 8%. According to that you have invested below. On the whole that you are spending Or you are preparing This is for retired life.
as well as I am mosting likely to invest.
What are the expected returns on that? Till 60. Pre retire is retirement on financial investment. Mean it is 12%. Whole the cash I will certainly place in equity. After that you took 12% return. Post retired life my corpus that will come to be. Just how much will it expand? Expect I retire and also I get a corpus of 5 crores. 5 crore rupees Where will I invest? Once again really difficult concern If you are of three decades then in 60 years.This is really tough. It is a large presumption. We need to think that primarily at 60 our risk profile reduces. We will certainly not take much equity allotment. Intend now we have 60-70 equity allocation that time it comes to be 20-30% or 40 %. I go a bit on conventional. I state to the majority of individuals Take percentage equivalent to inflation I obtain return like rising cost of living. If I desire to take. 0.5-1% extra. We took here 8%. Means 8% of post retirement. My corpus will certainly grow 8% after that. Rising cost of living will certainly stay at 7%. This is planning according to that. We will certainly talk about these points later. For that reason I am doing all these absolutely no. We placed these things. What we claim? Our retired life age, life span. Our annual expenditure, rising cost of living. These all are our required areas. If I send this now. Sorry some values need to be inserted.Randomly the worth we are inserting. That it can work. If I send this now. I need retired life. corpus of 14.6 crores. If you are of thirty years as well as you have to do expense of 50k each month. At today ' s worth Today ' s 50k off program will not continue to be the very same at the time of retirement. They will boost with inflation.
If you need to preserve today way of life The 50k costs you are doing today Very same you desire to do at 60.
If I have 50 lakh rupees I will certainly spend it.For 30 years they will expand by 12 %. Clearly our wage will raise in years Rising cost of living boosts salary increases. If inflation is of 7 %.
With 7% revenue should boost If we take 7 With 7 %it is raising. We thought about 7% rising cost of living. Income is likewise enhancing by 7%. In worst instance wage is not changing. With 7 %there is rise in salary.Existing investment Do you have any investment currently? That you believe this is my retired life earnings From that additionally it will reduce. Mean if you have EPFO corpus Intend of 5 lakh rupees. 5 lakh rupees I have actually inserted below. This is my EPFO of 5 lakh rupees. I will use it for retirement. On that how much return will I obtain on EPFO? Returns are 8% After that we consider we will certainly get 8%. It is tax free means you will certainly
get 8% Expect I have 5 lakh rupees On that particular I will get 8% more. Currently allow ' s do the computation once more. Currently considering that EPFO arrived. From 48 it came to be 46. Retirement corpus continued to be exact same. Currently we have to do Drink of 46,000. We can do tip up sip of 24,000. We spend 24,000 rupees this month. Annually we enhance that by 7%. From yearly boost in earnings we have to do this annual rise in sip. Today you started sip of 24,300. Next year boosted 7% on that. Again in following year rise 7% on that Intensifying 7%. Boost 7 %each year till the age of 60. Additionally your objective will be accomplished. Then you will have 14.6 crores rupees. Considering these were our prices of returns so it is very really great. You can use a lot of.
permutations and combinations on this. I have little more cash than 24,000. I can do upto 35,000. Can I retire early? Can I retire at 58? On 58 it will occur at 29,000. I have 35,000. Can I retire at 55? Currently your intriguing computation will certainly begin No you need 37,000 For retirement at 55. Layoff you can take at 37,000. If I do 37,000 annually. I spend in such investments. that offer me 12% annually. 7 %boost i placed minimum. If you think 7% boost is less.Consider development of salary minimum 8-10%. Why not? Take into consideration 10%. In 28,000 you can retire at 55. Retirement corpus additionally reduced. As early you retire that much less corpus you will certainly desire. Value of money comes less. Back then its value will certainly be extra. At the age of 55 we need 11.6 crores. Just how much lump sum funding do
we require? Exactly how much month-to-month sip. as well as step up sip we require? I considered 10% annual boost.
Similar to this If you can do numerous. permutations and mixes. You can intend yourself. When can I come to be monetarily totally free? I think this is very intriguing calculator If you like as I am a conventional investor I am not taking 12% from whole equity. Expect we take 9%. This we keep 10. The price of return comes to be 9 %from 12%. Clearly both the sip ' s will certainly increase. You can do computation according to that. Which type of investor am I? If you
assume below is additionally 9. It will certainly alter again.These points you can do so several permutations and mixes. based on your account. You will certainly obtain so much support as well as understanding If I invest this much money For this much time After that I can go towards a better retired life. This is just how you should work on these things You can prepare very early retired life'. You desire to invest so much or not. 50,000 will not be enough. I desire to increase my way of life.
Now I am spending 50,000.
At that time I want to invest 75,000. Acc to that by making use of.
permutation and combination What are my cost savings now? I can intend such investments or otherwise. Then in those points you will get. Much help from these calculators. Do check that on our web site. If you have any type of comment If there are issues. after that visit our internet site. Below is our e-mail address and also. whats app number is provided. All things are composed below. You can email us there. if you have any query. Listed below there is remark area.
Should compose in comment section.Hit a like if you suched as the video. If you think some knowledge is added After that struck a like Have a good time in advance friends Jai Hind.
Mean now we have 60-70 equity allotment that time it ends up being 20-30% or 40 %. With 7% revenue should boost If we take 7 With 7 %it is boosting. Returns are 8% After that we consider we will obtain 8%. Once again in following year rise 7% on that Intensifying 7%. If you assume 7% increase is less.Consider growth of salary minimum 8-10%.Read More
retirement is a goal that lots of people strive.
to attain and also some people also desire of retiring at a young age such as 30 yet is.
it truly feasible to retire in your 30s and if so how much money do you need to make that.
a fact in this detailed overview we will certainly discover the idea of layoff and.
review the economic considerations you require to keep in mind to retire at 30. the principle.
of layoff typical retired life is usually connected with getting to the age of 65.
and after that quiting working entirely nevertheless early retired life also understood as Financial Independence.
retire early fire is a different strategy to retired life it entails conserving and spending.
aggressively throughout the early years of your profession to make sure that you can build up sufficient riches.
to cover your living expenses without relying upon a conventional task layoff commonly.
needs a mix of economical living clever investing and technique saving it'' s not around. quiting working completely but rather having the flexibility to choose when and also how you work and also.
pursuing activities that you are passionate regarding even if they do not produce substantial.
income aspects to think about for retiring at 30. retiring at May 30th noise like a desire come.
real but it'' s not without difficulties here are some variables to think about when preparing for early.
retirement primary living expenditures the first action in determining exactly how much money you require to.
retire at 30 is to approximate your living expenses this consists of real estate prices Transportation food.
Healthcare tax obligations as well as other day-to-day expenditures it'' s essential to be reasonable and also think about all.
prospective expenditures that you will need to cover throughout your retired life years number two.
rising cost of living inflation is the increase in the basic level of costs over time and also it can wear down the.
purchasing power of your money when intending for layoff it'' s necessary to variable in the.
impact of as well as rising cost of living on your living expenditures historically the ordinary yearly rising cost of living price.
has actually been around 3 percent but it can vary over time number 3 investment returns.
early retirement counts heavily on investing to gather enough riches to cover your living.
costs the rate of return on your Investments can dramatically influence your retirement cost savings.
normally Investments such as supplies and also real estate have the potential for higher returns but.
it ' s vital to prepare for wellness insurance policy protection if you retire prior to the age of 65 when. you become qualified for Medicare you will need to discover alternate choices for medical insurance this.
might consist of acquiring Personal medical insurance or obtaining insurance coverage with a partner ' s company.
if relevant number six tax obligations tax obligations are an additional essential element to consider when planning for. very early retired life different kinds of retired life accounts such as conventional 401k or individual retirement account have. different tax implications it ' s vital to recognize the tax obligation rules as well as think about the influence. of tax obligations on your retirement cost savings and also income number seven take into consideration several revenue streams. check out opportunities to gen rate several streams of earnings throughout your retired life years. this can consist of part-time work freelancing or starting a side company to supplement your. retired life cost savings as well as cover any kind of potential voids in income number 8 prepare for Healthcare.
research study and also prepare for Healthcare insurance coverage during your retired life years think about the prices of health and wellness.
insurance as well as possible out-of-pocket costs when approximating your retirement
expenses number. nine seek specialist recommendations consider Consulting with an economic consultant or retirement coordinator. to help you develop a comprehensive retirement strategy customized to your distinct economic scenario.
as well as goals number 10 be prepared for potential challenges very early retirement at May 30th featured.
its own collection of obstacles it ' s crucial to be planned for unanticipated events that could impact.
your retirement such as economic downturns changes in market problems or unexpected. health concerns having an emergency situation fund in area can give a safety web throughout unforeseen. conditions on top of that very early retired life might require you to make specific sacrifices and. way of life adjustments you might require to live frugally reduced back on costs and also forego particular. luxuries to make sure that your retired life savings lasts throughout your retired life years it ' s. vital to be emotionally and emotionally gotten ready for these adjustments as well as have a strategy in position to. manage any kind of obstacles that may develop moreover layoff suggests you will certainly require to take care of. your Investments and withdrawals carefully to avoid lacking money as well soon this may. call for continuous surveillance of your Financial investment Portfolio changing your withdrawal rate as required. as well as making educated decisions about when and also exactly how to tap right into your retired life cost savings it ' s also.
important to consider the prospective impact of taxes on your retired life revenue understanding.
the tax obligation implications of different pension and financial investment techniques can help you.
enhance your retirement earnings and lessen tax obligation responsibility abilities very early retirement at'30 can.
be an exciting as well as fulfilling objective to seek yet it needs careful planning technique saving.
as well as prudent investing by establishing clear financial objectives producing a budget plan taking full advantage of retirement. contributions spending intelligently reducing financial debt continuously keeping an eye on progression taking into consideration.
I wish you found the. details in this video clip beneficial and also inspiring if you ' re interested in finding out more
concerning exactly how to. retire early and also attain your financial goals be certain to sign up for my channel for more practical. web content bear in mind careful preparation discipline saving and also smart investing are essential to getting to.
I hope you located the.
When the Social Security Act was passed in
1935, retirement officially began at 65. And the life expectancy at the time was 58. So from the very outset, “retirement”
wasn’t exactly considered a universal experience. But over the last century as life expectancies
have climbed, the concept of retirement has become synonymous with the final chapter in
a person’s life. Then, the book “Your Money or Your Life”
came out in the 90’s and introduced a radical concept The author, Vicki Robin, proposed that by
living with extreme frugality for a few years, younger people could essentially become “retired”
long before old age. She claimed to have achieved financial independence…
in her 20’s! Today, the phenomenon of financial independence
at a young age goes by the acronym “FIRE”. It stands for “Financial Independence; Retire
Early”. And it’s no fringe movement – FIRE has been
covered by the New York Times, Market Watch, and Forbes.
And it’s got more and more millenials wondering
“could I quit my day-job too?” This isn’t about dropping out of society
or living in a cave… necessarily. FIRE practitioners work extremely hard while
living far below their means for years to amass enough savings to leave the workforce. And it doesn’t mean you’ll spend your
newfound freedom just hanging out in bowling alleys like Jeff Lebowski. Many people who manage to retire early continue
to work–but only on projects they’re passionate about. But the question remains… is it possible
to achieve through savings alone? Peter Adeney, aka “Mr. Money Mustache”,
might be considered the modern FIRE movement’s founding father. Adeney was working as a software engineer
while living dramatically below his means during his 20’s. He took his savings and paid off debt and
invested it it in stock-index funds. By 2005 and in his early-30’s, Adeney and
his wife had amassed around $600,000 and a paid-for home. He calculated he had enough to leave the work-force-permanently.
Adeney suggests that Early-Retirement is possible
through three fundamental concepts: Frugality, Investing, and the “4% Rule” of withdrawals. Let’s face it – unless you luck into a large
windfall of cash, you’ll have to save up a serious nest egg to retire. And the simplest way to do that is to slash
your lifestyle. Normally, financial advisors suggest a 10-15%
savings rate to retire at a normal age of 65 or so. Want to retire ahead of schedule? Then you’ll have to level that up. Most early-retirees adopt a 50% to 75% savings
rate… or more! It’s not uncommon for them to cut restaurants
& bars, buy cheap cars, bike to work, make do with a smaller house, and avoid luxuries
like gyms, fancy vacations, and expensive hobbies. Simply stashing cash into a bank account is
a good start. But the FIRE proponents rely on the power
of the markets to boost their savings rates. Assuming you saved your money into a general
stock-market index fund, you might expect 7-10% rate of return, based on historical
Any experienced investor will tell you that
year-to-year returns will swing wildly, maybe even crash! So that’s where the third rule comes in… A 1998 study by Trinity University concluded
that a 4% annual withdrawal rate of your money in retirement should allow you to never out-live
your money – even in a bad economy. This means that even with the dramatic ups
and downs of the stock and bond market, as long as your yearly expenses stay below 4%
of your total savings, you should be able to live off them for… well, theoretically,
forever. Put another way: you take your annual spending
needs, then multiply it by 25. That’s the amount you need to become financially
independent. By now I imagine you’re wondering what it
would take if YOU wanted to to retire early. I think it’s time to… RUN THE NUMBERS! Let’s imagine you have a household income
of $85,000, but you live way below your means and only need $35,000/yr to be happy.
According to our rule of 4%, you’ll need
$875,000 in the bank in order to be financially independent. Through extreme thrift and aggressive cost-cutting,
you’re able to save $50,000/yr, which comes to 59% of your annual income. At that rate of savings, and assuming your
stock-index funds got an average return of 7%, you’ll have hit your goal in… 12 years. A good income, frugal living, and compound
interest are a powerful wealth-building combination. You might be wondering “What if I don’t
make a ton of money? Is this realistic?” A common critique of the Early Retirement
movement is that Adeney and other leaders of the movement had high-paying jobs in medicine
or engineering. Making big bucks can certainly speed up the
process. But it’s not a requirement. Take Jillian Johnsrud. She began working towards financial independence
at age 19. Her husband served in the armed forces and
she worked in customer service and sales. Over the next 13 years they made an average
household income of $60,000, with no year over six-figures. And by 32 Jillian had saved enough to be completely
financially independent. All while raising adopted & biological children
and climbing out of $52,000 of debt. She uses her freed-up time to travel the country,
write, and raise her children.
Today she does some work as a writer and coach,
but it’s on her terms. If you think that “early retirement” is
all about lounging around and avoiding work, you’ve missed the point. Instead, it’s about taking an active step
to replace a job you hate with work you love… and often finances are the biggest hurdle. As Adeney says about the FIRE phenomenon:
“Early retirement means quitting any job you wouldn’t do for free – but then
continuing right ahead with work in something that works for you, even when you don’t
need the money.” And if you’ve already got a fulfilling job
you love– congratulations, you already have the benefits of early retirement without having
to save up for it! So whether or not you want to sprint toward
early retirement, the mindset of reducing your lifestyle, living simpler, and building
a more rewarding work-life is something we should all be aiming for. And that’s our Two Cents! If you were to retire today, what would you do with your newfound freedom? Tell us about it in the comments.
there are a lot of complex strategies out there when it comes to withdrawing your money in retirement we've already gone over some of them such as the Guyton clinger rule but not all strategies have to be that complicated to work well sometimes the simplest strategy is the most brilliant of all and today that's what we're gonna talk about we're gonna be talking about two of the simplest retirement spending strategies out there we're gonna discuss their pros and cons as well as who should be using them let's get started but before we get going be sure to LIKE this video if you haven't already as it really does help out the channel a lot and subscribe with notifications on for more money related videos like this one every single week so the strategies that we're gonna be covering today are very similar to one another in that they are both known as fixed withdrawal strategies they are the fixed dollar withdrawal strategy and the fixed percentage withdrawal strategy let's start with the simpler of the two the fixed dollar withdrawal strategy the fixed dollar withdrawal strategy is exactly what it sounds like you begin by withdrawing a certain dollar amount from your nest egg every single month and keep that amount constant throughout your entire retirement it literally doesn't get any simpler than that say if John were living on this strategy in retirement he has a 1 million dollar nest egg and wants to be able to live on $40,000 a year he withdraws $40,000 in that first year of retirement does the same thing in the second and so on and so forth in other words there are no adjustments for inflation using this method to analyze this strategy let's look at the four factors of retirement which for those who are new to this channel our income risk stability and buying power income measures how much money is coming in the door each month as well as when that money is coming in its measured this way because not all retirement spending strategies are systematic and linear with their income growth and none of us know how long we're gonna be in retirement so we tend to put more of a priority in having abnormally high income years in the earliest portion of our retirements since we don't know if we'll ever get to the later portions risk is the likelihood of outliving your money stability is graded by how often you experienced anything that would be considered an undesirable change in your income from one year to another this could come in the form of a freeze on the growth of your income or just a decline in your income from near to the next and buying power is defined like it always is it's a measure of how much your money can actually get you at any given time and is largely tied to inflation the fixed dollar strategy is generally considered to be a little stronger on income and risk in comparison to other popular strategies like the 4% rule but it does suffer in terms of stability and buying power the reason for this is simple as long as your initial withdrawals aren't too high you're relatively unlikely to outlive your money using this strategy and you may actually be able to live at a higher standard of living at least initially than you would have in other similar strategies like the 4% rule in fact going all the way back to 1950 if John had had that one million dollar nest egg invested in something like the S&P 500 he would not actually outlive his money during any 20 30 40 or 50 year retirement as long as he would true no more than fifty four thousand dollars a year or forty five hundred a month so even things like the housing crisis in dot-com crash didn't cause him to run out of money so this does grant John a higher standard of living initially than the 4% rule would have because of course with a 1 million dollar nest egg the 4% rule would only allow him to draw $40,000 a year to live on though eventually like I said the inflation effect would catch up with him using the fixed dollar approach and that's where this strategy does tend to fall short it's not meant for longer retirements because while John may be able to handle living on $54,000 a year particularly if he's retiring debt free with a paid off home it becomes increasingly difficult to do that as the years go on due to the inflation effect historically speaking inflation has averaged somewhere between 2 and 3% per year in the United States if we assume that our personal average inflation rate in retirement is nearer the top of that scale well at 3 percent per year then John's $54,000 a year income will get him the equivalent of what $40,000 would buy him today in just 10 years time in 20 years his money would only be able to buy him about what twenty nine thousand nine hundred dollars would buy him today and his money would be worth the equivalent of twenty two thousand two hundred and fifty dollars sixteen thousand five hundred and fifty dollars and twelve thousand three dollars a year in 30 40 and 50 years respectively just because of the effect of inflation so just for a minute let's imagine that John had decided to follow the financially independent retire early movement but instead of using the 4% rule which helps to protect your buying power over longer term retirements like those in the fire community are aiming for John decides to use the fixed dollar withdrawal method assuming everything else stayed the same John would retire at the age of 30 with a $54,000 a year income and a 1 million dollar nest egg again at the age of 30 that would be perfectly fine for him however the average life expectancy for people living in the u.s.
Is about 79 years old as of 2019 and it's possible that that number will continue to grow as technology and medicine continues to advance so assuming he doesn't die young it isn't out of the question that he would have a near 50-year retirement and be living on the equivalent of about $1,000 a month when he's aging and his medical costs are at their highest as you can imagine that wouldn't be an ideal situation for John and that's why this strategy generally isn't the best idea for longer term retirements but for the right person in terms of the four factors of retirement the fixed dollar strategy is above average and income and risk but below average instability and buying power in comparison to the 4% rule the fixed percentage method works very similarly to the fixed dollar method except that you're withdrawing a certain percentage of your nest egg every year as opposed to a certain dollar value this strategy also doesn't adjust for inflation but it does at least adjust with the value of your portfolio and depending on what you're invested in and what initial percentages you choose this method may work out all right say John just wanted to withdraw a 4% of his investments each year in retirement since the value of his investments were $1,000,000 when he retired he would withdraw $40,000 in his first year that would leave him with nine hundred and sixty thousand dollars left over if his investments went up by 10 percent that year the value of his portfolio would be somewhere in the neighborhood of a million and fifty six thousand dollars at the start of his second year of retirement since he's withdrawing four percent of that he would live on forty two thousand two hundred and forty dollars in that second year assuming inflation was three percent during that first year of his retirement his buying power would have actually gone up if he had merely adjusted his withdrawals for inflation like he would have if he were using the actual 4% rule he would have withdrawn 40 1200 dollars in his second year or about a thousand and $40 less than he did using the fixed percentage withdrawal method in this scenario the downside that I'm sure a lot of you already see is that the reverse can also happen say that the following year john's investments fell by 20% bringing the value of his nest egg down to about eight hundred and eleven thousand dollars and forcing him to withdraw thirty two thousand four hundred and forty dollars in the third year of his retirement that would be significantly less than the forty two thousand four hundred dollars that John would have withdrew in that third year using the actual four percent rule so as you can see depending on the situation stability is something that this strategy could have a very low score in given that the value of a nest egg especially if it's invested in something like stocks can grow or shrink by 20 30 or even 40 percent from one year to the next the bright side of course is that you have a very low risk of running out of money theoretically it's actually zero if you're able to follow this strategy to a tee and I specifically say theoretically because like many things it's only gonna be true up to a certain point if we take it to a logical extreme we can break this down say if John had $10,000 in his nest egg and he wanted to live on fifty percent of that nest egg for the next five years in theory he'd be fine and he'd never run out of money because he'd always be withdrawing fifty percent of whatever that nest egg is but how many of us are gonna be able to live on five thousand dollars a year that would be what he'd be withdrawing that first year and of course it would be even less the second year if his investments stayed flat his second years withdrawals would be half of five thousand dollars or twenty five hundred dollars and I don't know many people that are living on two hundred dollars a month but the point is if you're willing to take the hit to the stability of your income in retirement you can usually safely squeeze out a little more than four percent of your nest egg each year in a typical retirement using this strategy you just have to be prepared to see the average raw dollar income that you receive shrink as you go further into your retirement to illustrate this let's say that John withdrew 10% of his nest egg each year assuming he had that one million-dollar nest egg he would start out with a six-figure income however if he ended up living longer than he planned on he could eventually find himself living on what would only be generously described as a shoestring budget for example in the simulations I ran covering the various retirement lengths starting from 1950 onward assuming John had invested in the S&P 500 he would have had a median monthly income of about $6,500 a month in 20 and 30 year retirements which when adjusting for inflation would be about $3,600 a month in 20 years scenarios and twenty seven hundred dollars a month in thirty-year scenarios but that number did shrink a lot as the retirements got longer for example in 50 year retirements his average median monthly income was about forty four hundred dollars which again doesn't sound bad but when we look at the final few years worth of his monthly withdrawals we find that it's actually about $2,300 a month on average which is considerably less than the six-figure income he started with and of course that $2,300 a month was what he was actually withdrawing almost 50 years from now once we adjust for inflation over that time it may not even buy John what $1,000 a month would buy him today so similar to the fixed dollar withdrawals your buying power could be taking a significant hit if the initial percentages you set in this strategy are too high in summation the fixed percentage method scores reasonably well though not elite when it comes to income particularly when used in early retirements it does great in terms of risk again assuming you're not too aggressive with your initial percentages but is questionable with stability and below average in terms of buying power so in the end who should use these strategies now I'll admit I am personally biased here I believe there's very few people who should realistically be using these strategies as their primary method it's mainly limited to those with very short expected retirements so that their buying power doesn't become too damaged over time and even then ideally only by those who are also approaching that same retirement with little to no debt because especially with the fixed percentage method you'll often need to be pretty flexible with your spending from your year but for those who aren't retiring early and will have no more than nine or ten years that they expect to be retired they have little debt to speak of and want something very simple to follow when figuring out how much of their money they should withdraw each year one of these strategies could work out well it gives you some advantages in terms of income without significant increases in risk but what are your thoughts do you agree with my assessment of the strategy or do you think that I'm missing something do you think another strategy would work better for people in that situation let me know in the comments section below but that'll do it for me today once again if you haven't already be sure to LIKE the video as it really helps the channel a lot and if you want to learn more about various retirement planning strategies be sure to check the links on the screen for my videos on how to safely spend money in retirement as well as protect your nest egg and as always thanks for watchingRead More
Hey guys retired at 40 I’m going on a little road trip today just me and Murph and last week I reached a milestone on my channel and I hit a million views total and 10,000 subscribers in the same week since I’ve been getting requests for quite a long time about how I retired at 40 and I’m on a long road trip right now I figured what better time to share the story so without further ado here’s the retired at 40 story so before I get started I want to say that this is not in any way a brag story in fact I’m definitely not a showy type guy I enjoy very simple things in life and money to me is more of just a vehicle to be able to retire young and have my family live a comfortable and an easy life and to be able to enjoy lots of life experiences and be comfortable in life before I’m old and gray so really the journey began in about 2002 graduated from Iowa State University with a degree in marketing and business and by that point I have met my wife Kelly she had already graduated from school and she was kind of waiting for me and we wanted to move west out of the Midwest to move west see some new territory and get closer to the outdoors so I grabbed my degree ran out the door packed up my 1987 Ranger fully equipped with eight foot hay racks full of all of my personal belongings and we drove to Littleton Colorado and at this point in my life I had $200 in my pocket and Kelly had about the same so being completely naive and basically completely broke but with a degree I was on the search for the best suit and tie job that I could possibly find so I bounced around for a couple months just working some kind of halfway jobs and I quickly realized that I did not want to wear a suit and tie and I wanted nothing to do with the man and working a nine-to-five job well Kelly had found a job in a real estate office working the front desk and she had become friends with a couple of the big-time Realtors there one of which you caught wind that I had some handyman type skills but he made me a deal that if he paid cash for a house and I fixed it up that he would split the profit with us 50/50 and at this point in my life all I saw was dollar signs if I was completely blown away that there was someone that could pay cash for a house this is coming from a guy who had less than $200 in his pocket at this point it was pretty much scraping by I tried to hold back my excitement to him but naturally I said yes please let’s do that I was working the graveyard shift at Target stocking shelves I’d worked for 10 hours I would go home grab a little bit of breakfast and I’d head over to the property and work on it for another five or six hours I try and catch a few hours of sleep and then I would rinse and repeat it was at this point in my life that I learned a few different things one you really have to dig deep to reach your goals in life because I was not getting paid by the hour and at this point I didn’t know how much money I was gonna make I didn’t know if I would make $500 when this was all done or if I was going to make $5,000 when this is all done so I learned that a lot of things that can benefit you financially you have to put in the work upfront without knowing what your final outcome is going to be after about three months which seemed like an eternity of working seven days a week for sometimes 15 sometimes 20 hours a day on this house the house was ready to go on the market and it was all finished it looked great and then before you knew it it’s sold and then the house closed and at this point I still didn’t know what we were gonna make off it but for me it didn’t matter the hard part was done I didn’t have any of my own money into it I just had my time basically so the guy we were doing the investment with hands me an envelope and I opened it up and at $8,000 being twenty-two years old and having $8,000 I might as well have hit the lottery and that brings me to my second valuable lesson that I learned and that is being responsible with money so when you have $8,000 and you’re 22 years old a lot of people would go buy a new car they’d go buy some flashy things some pretty things but to me I had realized that if I can make $8,000 once I can make $8,000 again and again and again and again so I can either go p*&% the $8,000 away that I had worked my a#* off for or I can take that $8,000 and do exactly what he did but do it myself and potentially make twice or three times as much money so my wife being in a real estate office we became acquainted with quite a few smart people financially smart people we learned a lot about real estate very quickly because we were willing to learn which is my next valuable life lesson is that you never stop learning so we took our $8,000 we put a small down payment on a condo in Littleton because we realized that giving someone else our money was you might as well be throwing it away we wanted to be working towards something and it own something on our own so we took our other four or five thousand dollars and we started our search for a real estate investment that we could do all of our all on her own and get a hundred percent of the profits so after some searching we did find a place we found a small town home it was not in as nice of area as we were living it was smaller it needed lots of work but that takes us to our next light life lesson that we learned and that is to sacrifice for a greater payoff in the future so we had only lived in our condo for a very short time but we realized that if we moved into the real estate investment that we could rent out the place that we are living at and move into the place that we were fixing up that we’d have to be paying a mortgage on anyway we had our first real estate investment and we had our first rental so being 22 years old and owning two properties and carrying two mortgages and at this point I’m still working at Target was a pretty scary proposition in life but all I could see was that $8,000 check they had started to change our lives I also want to point out and kind of give a shout-out to my parents and to my wife’s parents because neither one of our parents ever handed us anything in life they always made us work for what we achieved in fact when we move we tried to convince my parents to co-sign on our mortgage for the condo that we bought and they said no way at the time I was very very mad at them and I thought I would never forgive them in hindsight it was one of the best things they’ve ever done for me because it just made me have that fire in my belly and really just want to work to get what I wanted so back to having two mortgages that was a completely scary thing in my life I was making something like 10 dollars an hour at Target I think Kelly was making $13 an hour at the real estate office she was working at we could barely afford the condo we had but now he had two.
God bless the banks lending money to anyone at that point on the very plus side of that we learned that someone else can pay our mortgage and we’re basically getting that money for free and then later we figured out that there are many many many tax benefits and huge benefits of owning a rental property so we quickly learned that trying to pay for materials and the things needed to fix up an investment property on just barely over minimum wage is not easy to do the thing that happened next couldn’t have come at a more perfect time so all of a sudden I had money to spend to fix up this house and it would just get me to that next big paycheck that much quicker so that’s what we did we fixed up the house we doubled our money we rolled it into the next one so we kept bouncing from house to house quite a few times and that sacrifice of from going from a nice house to live in to going to a crappy house to live in to fix up to making it nice again to going to another crappy house to fix up it became pretty stressful but we always had our eyes on the prize “are you still with me Murph?” after doing this two or three times I remember getting a check for the last one and the check was forty one thousand dollars so at that point it didn’t make sense to work at Target anymore so I just started doing it full-time but we never took the big proceeds from the real estate and put it into our actual living we always rolled it into the next property and that kind of gave us the baseline of even how we live today we always live well below our means we take the money that we make and we put it into things that will make us an income not into something that will lose us money but you do have to treat yourself every once in a while otherwise there’s no reason to make the money in the first place Kelly saw many of the high producing Realtors making large amounts of money so she decided to get a real estate license and she created her own real estate business so now we really felt like we had the world by the balls because we were getting paid a commission to buy the property and then we were saving half of the Commission when we sold the property and I was fixing him up so we just get rolling our profits in rolling our profits in rolling our profits in until family we were able to buy a house and now that we could get a house we were playing with the big boys the profits were much larger but so was the risk and we really didn’t want to lose all the way it worked for for the last couple of years so we did a few houses and we made some great money but instead of selling them and pulling out our profits we kept them as rentals and it was at this point that we really started building up our rental inventory at this point it was about 2006 or 2007 and real estate was starting to slow down a little bit but we have purchased a large house I’m a courage that was really a big risk for us it was a large house to fix up it was our biggest project for sure it took us the most money to fix it up and we had the most money into it so we lived in this house for about 8 months while we were fixing it up and we kind of decided after doing about 12 properties that the moving all the time was starting to get kind of old and we were kind of getting older ourselves and we decided that we wanted to have kids and kind of settle down a little bit Murph are you with me? sometimes I feel like I’m just talking to myself so after the eight months was up we finished the house we sold it and shortly after the real estate market completely crashed the bubble had burst and Colorado was one of the hardest hit States we got out of the house just in the nick of time and not only did the real-estate market bubble burst we found out that we couldn’t have kids and it seemed like a real low point in our lives but around 2007 when all this happened we realized our next lesson with every negative there is a big positive that can be gained from it and you can just use it as fuel for your fire so the recession was tough we thought our great life had come to an end we thought we were gonna have to get regular jobs you know people were losing their jobs left and right people were losing their houses Colorado was hit very very hard one of the worst states during the recession and we learned that what goes up must come down and in this case it came down hard in many cases not just real estate when things are bad that’s the time to invest and if you’re smart with your money and you’ve been saving while everyone else spending that’s the time to benefit though from about 2008 to 2012 we were buying rentals so we were able to adapt I started doing contracting because that’s pretty much what I was doing before but now I had to be doing work for someone else and Kelly’s always been a mover and a shaker and even a bad real estate market she was able to keep her business moving we were buying things for pennies on a dollar and even though we were not making great money and in some cases losing a little bit of money on rentals we were able to stick it out and after lots of lots of years of lots of lots of heartache and lots of lots of doctors we were able to have two boys so about 2014/2015 real estate started creeping back up again prices kept going through the roof and just when he thought it was the peak they just kept going up stuff was flying off the shelves you could list a house and it would have multiple offers within 24 hours so we had about age 35 we were completely debt-free we had several rentals that we were cash flowing we didn’t owe any money on the rentals so all that money was just rolling into a bank account when you have no bills and you have an income coming in your net worth starts to grow very quickly so we rode out the storm Kelly’s business was doing great my contracting business was doing great we have liquidated a lot of our real estate in Colorado we had capital to play with we had two beautiful young boys and then I fell to my knees crying like a little baby I had herniated a disc in my back and I was on a walker for about a month contracting for me was out of the question I didn’t even want to think about picking something up so I took some time off and I raised our kids which at first I thought would just be for a few months and then a year passed and then another year passed and I decided that I kind of liked it we had rental income coming in Kelley’s business was doing better than it had ever been in fact she had started her own she had several people working for her and just as a little side income I got to do what I love to do which is antiques I was just buying and selling antiques so we were trying to be very strategic at this point because we owned a fair amount of property in Colorado but we knew that our ultimate goal was to retire at 40 and at the rate things were going up we didn’t want to sell too early because we didn’t want to miss out on that upside but we didn’t want to sell too late because we didn’t want to risk the chance of taking a step back so as some regret we sold the majority of our properties in around 2017 but this was a game-changer because we were able to make cash for every rental that we purchased so we loaded up on rentals in Iowa we actually purchased our property that we’re going to move into which is actually where I’m headed now and that kind of brings us up to speed to current date I take care of our 10 rentals which keep which keeps me pretty busy just in itself i buy and sell antiques i get to see my kids all the time we have a good rental income coming in now we do youtube oh yeah we also do a couple fix and flips every year Kelly has her real estate team with about 10 employees and in June of 2020 we’re going to retire at 40 so all in all life is great I have a wonderful family I have enough assets and passive income to live a comfortable life
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Hey, what’s up? John Sonmez here from simpleprogrammer.com. Tired of pushy recruiters sending you LinkedIn requests for jobs you have no interest in? Tired of blasting out resumes into the dark? If so, you should check out Hired.com. Hired.com flips job searching on its head by having top employers like Facebook come to you after you fill out one simple application. You also get your own job coach to help you on your next job search. If you haven’t checked it out, I highly recommend you at least fill out the application. Just go to Hired.com/simpleprogrammer. When you get hired with Hired, you’ll get double the normal sign-on bonus for using that link. Today we’re going to be talking about real estate.
Yes. I have done some videos on real estate. Some of you are like, “What the heck? Why is this guy talking about real estate?” Well, I’ve done fairly well in the real estate realm. If you’re interested, you can always check out my playlist on real estate investment and investment in general. I’m not going to go into all the details here, but occasionally I like to answer a few real estate questions on this channel. I got one here from Jonathan and he says, “I’m 21 and set a goal that I want to retire by 40 to 45.” Cool. “With 20K of passive rental property income.” Man, that’s awesome. I like that. I love that goal. That’s a good goal. “Currently saving money to buy my first property and hopefully, when I get a web development job I can speed up the process. My question is how do I plan for this goal?” This is good.
So, 21, Jonathan is 21 and he’s thinking this way and he’s got this plan by 40 to 45 to make 20K of passive income from rental properties. I love this. This is great. “Thanks for everything you do and have a beautiful day.” I am having a beautiful day. Thank you, Jonathan. “P.S. I was thinking of buying a duplex and live in one and I rent out the other one so basically the tenant pays my mortgage.” So, okay, there’s a lot of ways to approach this. I think Jonathan has got his head screwed on right. Well, I’ll start with the last, the P.S. of renting out a duplex and living in one side. I think that’s a great idea. This is a fantastic thing. More people should do this. A lot of you young people out there that are thinking about renting or buying a house, consider buying a duplex and renting out one side and if you find the right deal which—it’s out there, you could actually have the renters pay your rent.
You see what I’m saying? You could actually live for totally free by having a duplex and renting out one side. I’m not going to say it’s going to be super easy. I’m not going to say that those deals are everywhere. It depends on where you’re at. You’re not going to find that deal in California or New York, San Francisco, not going to happen, but if you’re in the Midwest you might be able to find that deal. I’ve seen it before. I think that’s a great idea, but let’s talk about the plan. 21, you want to retire by 40 to 45. You want to get 20K of passive real estate income. It’s not going to be easy, but it’s certainly doable. What you need to do is you need to calculate backwards where you need to be and have a real solid plan for this.
I can give you a general outline, but I haven’t run the numbers so I can’t tell you exactly. There are going to be some factors in here, but you actually need to take a spreadsheet and actually need to calculate this and figure this out. It’s going to be fairly complex, but you don’t have to be super detailed. You can kind of ballpark this, but you do need a spreadsheet. You can get some rough answers here, but calculate this out, 20K of passive income from real estate. Let’s say 45. What does your gross need to be? You’re going to have expenses, you’re going to have rents, I mean you’re going to have property management, you’re going to have a bunch of things here. That can give you an idea of what kind of wrench you need to be pulling in. It’s not going to be a 20K wrench, you’re not just getting 20K. It might be like 30 or 40K a month of rents. In order to get 40K a month of rent how many properties do you need and how much will those properties cost? How can you divide that over time and put inflation into the equation a little bit here over that period of time? Work backwards and make a spreadsheet and run some scenarios.
This is going to take time and some planning. Like I said, you can rough ballpark it. If I were just going to give you what I think would probably work for you, it also depends on how big your budget is. How much money are you investing every year? How much money do you have to invest every year. If you can put 10K down onto a rental property every year that’s different than, “Hey, I’ve got 50K to invest in real estate every year.” That’s different. Or 100K. Those are all different scenarios. What you’re planning based on your current scenario might—there may not be—there might be this gap and you might be like, “Well, how do I get there?” It might not be apparent.
You might have to do some other things. You might need to make more money in your job or start a side business in order to fuel that. I had to do that to reach some of my real estate goals. Think about that and calculate that out. I’ll give you kind of a rough timeline, a rough plan that I would have if I were you which would be something like—and this was the plan I initially developed when I was doing this which would be to buy one property every year, regardless. The nice thing I like about this plan is that it’s scalable.
The size of the property depends—is dependent upon how much money that you have in that year. When I first started in real estate investment when I was close to your age, I think I bought my first house at 19, but I really started doing investments around 21 and started this plan of buying one house per year. I think the first house that I bought I was able to put $10,000 down. It was like a $100,000 house or $120,000 house. The next year it was probably about the same and then probably like the third or fourth year I had more money. I was able to put $20,000 or $30,000 down. I got to the point where I was buying properties and I was putting about $20, $30, $40,000 down every year on a property when I buy it. Some of that was because of the real estate that I was already making me money. Some of it was because I was making more money in my job and I had businesses and side things going on which helped me to do that. That’s the kind of plan that I would—it’s not going to happen magically. I think that’s the key thing. You actually have to have a solid plan for this and you can run these numbers and calculate this out.
There’s actually a really good book that I recommend called The Millionaire Real Estate Investor. I think that’s by Garry Keller, the founder of Keller Williams if I recall correctly. I don’t recommend very many real estate books, simply because a lot of them are crap. The reason why I’m really going to recommend that book to you is because it has these charts that show you—it gives you a realistic expectation over 20 years what the value of a property is likely to be, how much money you’re likely to make from it, cashflow and all that. Again, it’s as complex equation. You’re not going to be able to nail this down perfectly, but at least if you run the numbers and you do the best job that you can, you can have a ballpark idea and you can always adjust the plan. You’ve got to have—you’ve got to know where you are and where you need to go in order to reach these goals. I’ll also recommend for you—I have a course that I created called Simple Real Estate Investing for Software Developers.
You can check that out here. If you buy that course, obviously it has a money back guarantee on it, but that’s going to help you to give you the basics of everything I know about investing. Just to give you a background, I have about 26 rental properties. They are all paid off. I started investing when I was 19. I kind of know what I’m talking about here. I don’t give a lot of bull shit advice about this. I give you exactly—practical advice on how to get started and how to do this.
The reason why I created the course, even though it might not seem like it goes along with a lot of my other content, it was just simply because I was tired of so many people giving BS real estate advice and doing all these kind of scamming, no money down, speculative moves that just doesn’t make sense. You need some kind of practical advice so that’s what I put together there. Go check that out. This is good. I think you’ve got a good plan here. You just need to develop the plan further and it’s going to be very dependent on your individual factors and—I think you have information though to say, “Okay, can you do this in 45—by the time you’re 45?” absolutely! I believe that you can. It’s not going to be easy, it’s going to be hard to do. 20K is a pretty big number but it’s certainly possible, but you’re going to have to start moving now, which it seems like you’re going to do, and you have to have a plan and it’s going to take a lot of work and a lot of effort and you got to find good deals in order to be able to do this in that time frame.
All right, I hope that is helpful to you. If you have a question for me, you can email me at [email protected]. Don’t forget to click the subscribe button if you haven’t already. Click that Subscribe. Click the bell to make sure you don’t miss any videos especially if you like the real estate stuff because, hey, those videos might not show up and then you’d miss it and then you wouldn’t find out the secret to life and how to make millions of dollars. All right, I’ll talk to you next time. Take care .
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I’m going to do a video on 5 simple things you can do to help your financial situation and I realized that I need to do a follow-up to the retired at 40 story video because there’s a huge need for financial education in this country and really everywhere it pertains to every single person doesn’t matter what your financial status is you can always use help and there’s always little tip tips and tricks that and things that you can do to better your status it always amazes me how scared people are to talk about their finances to put something on paper to basically take a look at where their money is going what’s getting saved and how everything is getting spent and I’ve met people time and time again that are highly educated very smart people but they know nothing about finances and they are terrible with money management so before we get into the 5 tips I want to strongly urge you to make a financial statement for yourself figure out where your money is going currently and figure out how much you’re saving and basically figure out where you can trim the fat for so many people a financial statement or just finances in general is like a bad word they’re just terrified of it but the only way that you’re gonna be able to improve your finances is to face the music alright so now that you’ve had a chance to go through your financial statement you definitely know where your money is going but how can we save more and what you really need to aim for is about 6 months of reserves especially if you’re getting ready to invest money into something or if you’re doing some kind of career change or some life-changing thing and all of these five tips will more than likely be a line-item on your financial statement so let’s go to financial tip number one hey I’m going to have to call you back I’m shooting a video right now so this first thing is something that we’ve all become very very accustomed to in the last 10 to 15 years and that is a cell phone and people tend to spend absurd amounts on their cell phones whether it’s the bill or the cell phone itself mainly the cell phone itself so that’s my first financial tip is shop on eBay or Amazon for a cell phone that’s refurbished or used or one this may be just a couple years old I actually just purchased a cell phone on ebay because I’m having trouble with my current one and I got on to my cell phone providers website and the most expensive phone that’s like mine now is $1,200 that’s insane to me so I got on eBay I found one that’s similar to the one I have right now it’s new but it’s a couple years old and I got it for less than $200 another thing that you can do is ask for some kind of loyalty benefit from your cell phone provider cell phone providers are constantly trying to earn your business and if you’ve been with them for a long time and you can convince them to keep you around by offering you some kind of benefit they’ll jump on the chance just by going into my provider recently I have a cell phone bill that was about a hundred and ten dollars a month I told them that I’ve been with them for close to 15 years they knocked it down to sixty-seven dollars and I have unlimited everything now tip number two is what I call going to youtube University or getting a YouTube education we live in the most amazing time ever right now there is information everywhere and it’s so easily accessible don’t ever stop educating yourself it’s so easy to find out how to do things these days you’re doing yourself a huge disservice if you don’t take advantage of that so how does that pertain to saving money well you can save money by doing tons and tons of things yourself instead of paying someone else to do it just look at the platform that you’re watching right now for instance you’re watching a video on how to do something so that how-to can be anything from changing brake pads on your car to changing the oil on your car to fixing a leaky faucet or the toilet flapper not working on your toilet all the way to how to the meal which brings me to my next point number three so food is a necessity in life but is it a necessity to go out to eat or go to Starbucks once or twice or every day the amount of money that people spend on food and going out to eat fast food Starbucks McDonald’s it really adds up quick and I don’t think that people realize how much money they’re actually spending on it because it’s just five or six or seven dollars here and there but if you add that up over the course of a month or a year or five years or ten years I think the result would be pretty staggering cook your meals at home pack your lunch for work make that fancy coffee at home it’s not that tough to do there’s so many great ideas and resources on YouTube and Pinterest and vlogs and blogs this channel included if you need a place to start scroll through my channel I have lots of cooking videos if you want to take that a step farther you can start growing your own food and if you don’t have a big green house like this you can grow a lot of food just in five gallon buckets even on a little deck if you don’t know where to get started see tip two number four is something that really hits home for me because me and my wife are both self-employed and we have been for 15 plus years so number four is insurance and although I don’t like insurance companies because I think they’re a giant scam it’s a necessary evil and you can also use that to your advantage you can put them against each other insurance companies much like cell phone companies are begging for your business and they’re constantly trying to outdo each other with with certain benefits or promotions so make them put their money where their mouth is and put them up against each other constantly and not just insurance companies you can do this with all kinds of different companies you should always be price checking these companies the ball is in your court make them earn your business all right I’d saved the best for last tip number five is taking advantage of bank account and credit card bonuses and this tip is begging for a separate video all on its own because I could go on about this for a long time but if you’re not taking advantage of credit card bonuses for sign ups or credit card cash back or travel miles or if you sign up for a bank account a lot of them will give you a large sum just for putting your money with them now I want to be clear I’m not promoting just going out and spending a bunch of money on a credit card but more putting the things that you already spend money on into the credit card it’s money that you’re spending anyways put your mortgage on a credit card if you can insurance is a good one it’s not super expensive but at least we’ll get you a couple hundred bucks on your credit card unless of course it’s health insurance and then you’re talking in my case thousand to twelve hundred dollars a month here’s another good one groceries it’s something that you always have to have and depending on how much you go to the grocery store it could add up to three or four hundred bucks a month sometimes six hundred maybe even more no-brainer here put your gas on a credit card you can always put your utilities on your credit card too if your utility company will allow it next from tip one your cell phone bill now depending on how much some of these are and if you are allowed to actually put them on your credit card you’re talking some pretty major money that you can get a bonus from if you’re getting two percent cashback that really adds up not only that but you’re increasing your credit score while you’re doing that so as long as you’re financially responsible and you pay this every month you’re reaping a large benefit a lot of credit cards will give you a 2% cashback they’ll give you a $500 signup bonus that’s free money in my opinion the free bank bonuses or even better than the credit card in my opinion because the bank account is something that you have to have anyway a lot of them will give you $500 for a small deposit as long as you put your direct deposit with them all the way up to I’ve seen $1,000 before and if you have a little bit more money to play with some of the online money market accounts like Capital One will pay you up to 2% or some even up to 2.5% just for keeping your money with them so some of these things may not seem like it’s saving you a ton of money but when you take up those extra fives and tens and occasional hundreds and you put them to work for you as opposed to something that you’re normally spending you’re not only saving the money because you’re not spending it but you’re putting it to work and doing something else with it and you’ll find that your your finances will start to collect very quickly so if you found the video helpful and you enjoyed the content take a second to give me a thumbs up it really helps out the channel and it helps the YouTube algorithm get this video out to people who actually need to see it also don’t forget to subscribe we do some gardening some frugal living some food preservation and cooking some gardening and you get to join me and my family on our retirement at the age of 40 after you’ve clicked subscribe click the bell notification also and it will notify you every time a new video comes out and it’ll keep you in the loop of the community all right I appreciate you sticking with me through this whole video so I’m gonna give you an extra bonus tip with an extra 100 or 200 or 300 or more dollars per month that you’re saving with just cutting back on a few things you take that extra money and you pay down debt with it the faster you get out of debt the closer you’re going to become to financial freedom and whenever you’re paying off debt always choose the smallest balance first because it gives you that extra little boost and if you can pay it off faster it gives you that extra bit of confidence to rock into the next one so once you’ve paid down your smallest debt move on to your next smallest debt take that money that you’re saving from the smallest debt that you’re not having to pay any more and add it to the money you’re saving from the 5 tips that I’m giving you and apply it to the next smallest debt and when that one’s paid off you roll it into the next one you roll that one into the next one and so on and so on in the meantime this is retired at 40 check out these other helpful videos if you have a minute remember to live a life simple and we’ll catch you next week oh hey I’m gonna have to call you back and shooting a video right now this is right my god get out of debt
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