Tag: FIRE
Can You Really Retire in Your 30s?
Jason 0 Comments Career after Retirement Retire Wealthy
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
averages.
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.
How to Retire in 9 Years Starting With ZERO (A 5-Step Guide)
Jason 0 Comments Career after Retirement Retire Wealthy
are you over the age of 50 with no plan in sight for your retirement don't worry there's still hope it's never too late to get started hey guys welcome back to the channel in today's video we're going to teach you some tips on how to plan for your retirement even if you are starting late in life first of all you need to know that retirement is freedom which means that when you retire you should be able to do whatever you want whether to travel to your favorite destinations spend more time with your family or work on your own projects so let me take you through the steps of your journey to financial freedom first step is to cut your expenses write down all your monthly expenses think of your main fundamental expenses as your running cost as if you're running a company things like rent builds groceries internet so you can watch more of our videos and car payment remember that you could always find cheaper alternatives for some of your main expenses for example you could always move to a cheaper house and save on your rent or if you have a rental car you could rent a cheaper car that also matches your needs the key here is not to minimize your quality of life but to minimize the amount you spend on that quality now write down the other expenses that you could survive without this might differ from one person to another it could be your netflix or amazon prime subscription or it could be the designer clothes that you usually buy these are the items that you could totally scratch from your expenses the more you cut the more you save and in the fifth step i'm going to tell you how we are going to use all this extra money to get you even more money always remember that it's not about how much you earn is what you keep you could be earning much more than others but you're also spending much more than they do keep monitoring your expenses you can do this through a simple written list or even through apps such as zoho expense or expense point second step is to set your expectations remember when we said in the beginning of our video that retirement is freedom well you need to think of your freedom figure which is basically the amount of money you expect per year after your retirement now multiply this number by 25 i'm sure you will get a crazy seven figure number this is going to be your goal i bet you're thinking now that it's impossible but please don't close the video yet because in the last two steps i'm going to show you how you can make this possible you need to lower your expectations for the time being in order to get those results in the future it's a match a fight if you will wealth versus cash flow set your own goals for now and for the future not based on what you see around you or on social media it doesn't have to be a 25 million dollar mansion in beverly hills a huge yacht and a supercar but that doesn't mean you shouldn't be enjoying your retirement it's about being realistic and aware of your situation what you can achieve in the future third step is to consider working longer now i know what you must be thinking i'm watching this video to know how to retire early but bear with me you may retire by the age of 60 or even 65.
But if you retire by the age of 70 you are increasing your social security check to nearly double plus there's also more money going into your 401k what's 401k oh you didn't know well i will explain this in the next step if you can't bear the thought of staying at your current job any longer than you need to then you should look into quitting your current job and finding another one something that you will enjoy more you you'll be surprised at the amount of companies that are currently looking for workers with experience be aware of your physical health keep up with your regular medical check-ups eat healthfully do any form of physical exercise could be something as small as taking a relaxing walk every day all this keeps you energetic so that you may continue working at the top of your game fourth step is to open an investment account this account could be funded by the money you save as a result of cutting expenses remember step one or you could open a 401k account if you don't already have one a 401k plan is a company sponsored retirement account where employers can contribute their income and employers usually match contributions up to a certain amount there are two basic types of 401ks traditionally and roth which differ primarily in how they're taxed with a traditional 401k employee contributions are pre-tax meaning they've reduced taxable income ban withdrawals are taxed during retirement employee contributions to rough 401ks are made with after tax income there's no tax deduction in the contribution year but withdrawals are tax-free so if you don't have a 401k yet what are you waiting for start one and make use of all this non-taxable income now it's time to invest your money which takes us to the last step the fifth and last step is to increase your income well you can always ask for a raise in your current job if the thought of asking for more pay sounds daunting then you can try looking for a new job with a better salary which may not be as challenging as you think there are many ways to promote your skills and experience to other companies you can upload your resume to sites such as indeed.com or linkedin.com let the companies come to you but there is an even easier way to increase your income through a side hustle one of the easiest ways to do so is through creating an amazon individual seller account it's free to create but you need to pay a commission of 99 cents for every sale that you make on amazon not intrigued yet hear this according to a recent survey of amazon sellers twenty percent make between one thousand dollars and five thousand dollars per month which i believe is great for a side hustle or even a decent second income you can even sell your own private label products on amazon around 67 percent of all amazon sellers run their business using the private label method private labeling is a process of manufacturing a pre-existing item preferably with product improvements putting your branding and logos on it and selling it to consumers sometimes it is referred to as wide labeling or brand creation the process has been around for years and is common in countless retail stores targets mainstays brand and walmart's great value are two examples of private label brands your site hustle could also be building websites or content writing there are millions of ways to start a site hustle it's all based on the set of tools that you possess be sure to check out my videos covering this topic and i'll post a link in the description below and remember you can always learn a new skill and this skill could be your next source of income so never stop learning another way to increase your income is by creating a passive income stream passive means you don't actually need to actively trade your time for money you are basically making money while you sleep there are three ways to earn passive income stock markets you don't need to call a local broker anymore there are plenty of applications that you can use to trade stocks that's what makes it the easiest way to gain passive income i'll post some links in the description below for some of my favorite exchanges that i use to trade stocks and crypto cryptocurrency is part of the new modern era with many ways for you to earn passively if you are willing to accept its high risk prices of cryptocurrencies including bitcoin have been falling in 2022 amid a worldwide crypto price crash this could also mark a perfect opportunity to buy with prices being so low check out this video i made where i go over the top five cryptos that billionaire kevin o'leary from shark tank is currently investing in but remember be wise when investing in crypto never put in more than you are willing to lose other options include real estate it's harder to get into it as you need to save up enough to pay for a down payment once purchase you can then get a tenant to rent out the house which will cover payments on the mortgage and hopefully a bit more use any cash flow to pay down the principal faster after a few years you will have paid off the house and can now enjoy some free cash flow from your rental property the earlier you start doing this the sooner you can pay off the mortgage debt now that we have been through each of the five steps of your journey to freedom keep this in mind your life is not going to change unless you take the initiative a nine to five job alone is not enough to build wealth have faith in yourself have faith in your abilities you're not alone in this situation and if other people can do it so can you improve your physical and mental health this will keep you more focused and energetic to work on your goals and it saves you from spending a lot of money down the road on treatment and medications this is it for me today i hope this video has given you as much hope as it did to me don't forget to hit the like button and subscribe to our channel watch our previous videos you never know what piece of information could change your life
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5 Easy Tips To 💰Save Money💰…Money Saving Hacks
Jason 0 Comments Tips for Retiree's
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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