5 Challenges for Entrepreneurs

August 15, 2022

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Bir Grewall

Bir Grewall

Sikh American, India born; Bir is a "Top Recommended" Financial Strategist, Advisor & Author



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August 10, 2022

Four Types of Self-Made Millionaires

Four Types of Self-Made Millionaires

A 5 year study of hundreds of self-millionaires has revealed their paths to achieving wealth. The findings reveal key insights that anyone can adopt and apply.

Starting in 2004, Tom Corley interviewed 225 self-made millionaires. His goal was simple—discover strategies, habits, and qualities that unite the self-made wealthy.

Along the way, he discovered four distinct types of self-made millionaires.

These are more than abstract archetypes—they represent actionable strategies and attainable goals that you can imitate, starting today.

Here are the four types of self-made millionaires…

Saver-Investors

These wealth builders come from all walks of life. What they have in common is that they save, save, and save. Add a dash—or heaping spoonful—of compound interest, and their savings grow over the course of their career into lasting wealth.

Company Climbers

It’s simple—score a job at a large company, and climb the ladder until you reach a lucrative position. Then use your significant income, benefits, and bonuses to create wealth.

Virtuosos

Got a knack for an in-demand skill? Then you may have serious wealth building potential. That’s because businesses will gladly pay top dollar for specific talents. Just remember—the virtuoso path to wealth requires both extreme discipline and extensive training.

Dreamers

From starting a business to becoming a successful artist, these are the people who go all-out on their passions. It’s an extremely high-risk solution—often, it can lead to failure. But those who succeed can reap substantial rewards.

The types may seem intimidating—after all, not everyone is positioned to drop everything and become a successful entrepreneur. But anyone can apply the basic strategies of the self-made wealthy to their finances…

Income is of the essence

The more you earn, the more you can save. Whether it’s by developing your skills or starting a side business, every bit of extra income can make a crucial difference on your ability to build wealth.

Save, no matter what

Unless you’re set on starting a business, you must save. Corely’s research suggested that saving 20% of your income is the benchmark for the self-made wealthy. Do your homework, meet with a financial professional, and start putting away as much as you can each month.

Invest in your skills Your skills dictate what you can earn. Take a note from the virtuosos—get really good at something that businesses need, and reap the benefits.

What type of self-millionaire could you become?

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¹ “I spent 5 years interviewing 225 millionaires. Here are the 4 types of rich people and their top habits,” Tom Corley, CNBC Make It, Aug 1 2022, https://www.cnbc.com/2022/07/31/i-spent-5-years-interviewing-225-millionaires-3-money-habits-that-helped-them-get-rich.html

August 8, 2022

Moves to Make Before Maxing Your 401(k)

Moves to Make Before Maxing Your 401(k)

Maxing out your 401(k) is boilerplate financial advice.

That’s because so few Americans are on track to retire with wealth—as of 2017, workers age 55-64 had saved only $107,000 for retirement.¹

With such bleak numbers, it’s no wonder financial professionals encourage 401(k) maxing. When possible, it’s a simple strategy that can help you reach your retirement goals and avoid a post-career catastrophe.

But consider this—the 401(k) contribution maximum as of 2022 is $20,500. For a single professional making over $100,000, that’s no big deal.

But what if you earn $60,000? Or have a family? Or have medical bills?

Suddenly, $20,500 seems like a much larger pill to swallow!

The simple fact is that saving shouldn’t be your first financial priority.

Before you save, you should create an emergency fund with 3-6 months worth of expenses.

Before you save, you should secure financial protection for your income in the form of life insurance.

Before you save, you should eliminate your debt to maximize your saving power.

Even then, you may not have the financial firepower to max out your 401(k) and make ends meet. It may take a side hustle to supplement your incomes to increase your contribution ability.

A helpful rule of thumb is to at least match your employer’s contribution. It’s a simple way to get the most out of your 401(k) without overextending your finances.

And above all, consult with a financial professional. They can help evaluate your retirement goals, your cash flow, and steps you can take to make the most of your 401(k).

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¹ “Jaw-Dropping Stats About the State of Retirement in America,” Jordan Rosenfeld, GOBankingRates, May 13, 2022, https://www.gobankingrates.com/retirement/planning/jaw-dropping-stats-state-retirement-america/#:~:text=According%20to%20a%20TransAmerica%20Center,saving%20 for%20 retirement%20is%2027.

July 21, 2022

Mental Health And Money

Mental Health And Money

There is a deep yet often unconsidered connection between mental health and money.

The data is clear as day. The Money and Mental Health Institute discovered that…

  • 46% of people__ with debt have a diagnosed mental health condition
  • 86% of people with__ mental health issues and debt say that debt exacerbates their mental health issues
  • People with depression and debt are 4x more likely to still have debt after 18 months compared to their counterparts
  • Those with debt are 3x more likely to contemplate suicide due to that debt¹

What these statistics don’t reveal, however, is what comes first. Do mental health issues spark financial woes? Or do financial woes spark mental health issues?

The answer, of course, is yes.

The connection between mental health and money can’t be reduced to simple causation. Instead, it’s a spiral where both factors can feed off of each other.

Consider the following pattern…

  • A financial crisis ramps up stress levels.
  • Ramped up stress levels activate negative self-talk.
  • Negative self-talk sparks unhealthy coping mechanisms.
  • Unhealthy coping mechanisms wreak havoc on the financial situation. And repeat.

This is an example of a financial crisis sparking mental health issues. But notice that a financial crisis isn’t the only situation that can cause the cycle. For instance…

  • An unhealthy relationship ramps up stress levels.
  • Ramped up stress levels activate negative self-talk.
  • Negative self-talk sparks unhealthy coping mechanisms.
  • Unhealthy coping mechanisms wreak havoc on the financial situation. And repeat.

In short, there’s a two-way relationship between mental health and money. If you’re seeking to start building wealth and changing your life, you must address both. Practically speaking, that means steps like…

  • Reducing financial stress by building an emergency fund
  • Increasing financial flexibility by reducing debt
  • Unlearning toxic self-talk habits that spark anxiety and depression
  • Developing healthy coping skills to alleviate stress

These can be daunting steps if you’re going it alone. That’s why it’s always best to seek the help of both mental health and financial professionals. They’ll have the insights and strategies you need to blaze a different path for your future.

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¹ “Data Shows Strong Link Between Financial Wellness and Mental Health,” Enrich, Mar 24, 2021, https://www.enrich.org/blog/data-shows-strong-link-between-financial-wellness-and-mental-health

July 11, 2022

The Real Reason You Aren't Saving

The Real Reason You Aren't Saving

“I’ll start saving when I turn 30.”

“I’m too old to save.”

“I’m in too much debt to save.”

“Why do I need to save? I don’t have any debt!”

You may have heard your friends and loved ones say things like this before. You may have even said them yourself!

It doesn’t take much sleuthing to recognize these statements for what they are—excuses. And excuses always suck.

But the fact that people feel compelled to make excuses reveals the truth…

People are afraid of saving.

In one sense, it’s easy to see why. Everyone knows saving is critical. But no one knows the “right way” to go about it. And that ignorance makes building wealth seem mysterious, or even dangerous.

An excuse serves as a justification for avoiding that great unknown. It makes not saving feel like the safer option… for now.

But never saving can have disastrous consequences like…

  • Running out of money in retirement
  • Struggling to cover medical emergencies
  • Constant stress about affording the basics

The choice is simple…

Risk a financial disaster.

OR

Face your fears and start saving.

Here’s the good news—you don’t have to face that fear alone.

Having mentors and companions to aid you on your journey can mean the difference between success and financial shipwreck.

In fact, that’s what I’m here for—to offer insight, tips, and support as you start building wealth and financial security for your family.

So if you’re ready to face your fears and to start saving, let’s chat! We can review your situation, and what it would look like to overcome your financial obstacles.

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June 29, 2022

Sinking Funds 101

Sinking Funds 101

You can put down the life jacket—a sinking fund is actually a good thing!

Why? Because a sinking fund can help you avoid high interest debt when making big purchases. Here’s how…

Put simply, a sinking fund is a savings account that’s dedicated to a specific purchase.

For instance, you could create a sinking fund for buying a new car. Every paycheck, you would automate a deposit into the fund until you had enough money to buy your new ride.

And that can make it a powerful tool. Instead of putting big ticket items on a credit card or using financing, you can instead use cash. It can work wonders for your cash flow and your ability to build wealth over the long haul.

Here are a few tips for making the most of your sinking fund…

Plan in advance

Sinking funds work best when they’ve had time to accumulate—you probably can’t save for two weeks and then expect to buy a car!

First, write a list of all major upcoming expenses on the horizon. List how much you expect them to cost, and when you plan to purchase them.

Then, divide the cost by the number of pay periods between now and then. That’s how much you need to save each paycheck to buy the item in cash. Even if you can’t spare the cash flow to save the full amount, you can at least save enough to lower the amount of debt you’ll be taking on.

Prioritize access

What good is saving for a purchase if you can’t access the money? Not much.

That’s why it’s best if your sinking fund is highly liquid. No penalties for withdrawal. No delay between selling assets and accessing cash. Otherwise, you may find yourself unnecessarily twiddling your thumbs instead of actually making the purchase!

Prioritize safety

Remember—this is for a specific purchase on a relatively short timetable, so you might not want to put these funds in a more aggressive account. The last thing anyone wants is for their car savings to get halved by a bear market. There are other accounts specifically designed for building wealth. This doesn’t need to be one.

So before you make your next big purchase, call up your licensed and qualified financial professional. Give them the details about what you plan to buy and when. Then, collaborate to see what saving for the purchase could look like. It could be the alternative to credit card spending and financing that your wallet needs!

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This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies for saving and/or investing that may be available to you. Any examples used in this article are hypothetical. Market performance is based on many factors and cannot be predicted. Before investing or enacting a savings or retirement strategy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.

June 8, 2022

Tax Now or Tax Later?

Tax Now or Tax Later?

If someone asked if you’d rather pay taxes now or later, what would you say?

Paying later is tempting. After all, who likes paying taxes at all? As with most inconveniences, it’s easy to delay, delay, delay.

But here’s an important question. When do you think taxes will be greater—today, or years from now?

It’s impossible to answer.

Looking to history doesn’t really help—income taxes are actually far lower now than they were in the 1930s, 40s, or 50s.¹ So if you pay now, you may miss out if taxes sink even further.

But no one can predict the future. If you opt to pay later, unforeseen circumstances may create a higher tax environment down the road.

So if you’re comparing tax now vs. tax later, it may feel like you might as well toss a coin to determine your strategy. Not a good place to be!

But fortunately, there’s an alternative. Tax never.

And no, that doesn’t mean buying shady nail salons, opening businesses in the Cayman Islands, or committing a felony. It simply means working with a licensed and qualified financial professional to identify time-proven—and 100% legal—financial vehicles.

These include…

Roth IRAs/Roth 401(k)s Health Savings Accounts Indexed Universal Life (IUL) Insurance 529 College Savings Plans Municipal Bonds

Each vehicle has specific rules, limitations, strengths, and weaknesses. It’s absolutely critical that you consult with a financial professional before you start leveraging these tools. Remember, you don’t need to flip a coin to make financial decisions!

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¹ “History of Federal Income Tax Rates: 1913 – 2021,” Bradford Tax Institute, https://bradfordtaxinstitute.com/Free_Resources/Federal-Income-Tax-Rates.aspx

June 6, 2022

Retiring in a Bear Market

Retiring in a Bear Market

Is a slowing market challenging your peace of mind about retirement?

It’s no wonder why—losing wealth on the cusp of retirement can suddenly lower the quality of your post-career lifestyle.

And worst of all, it can seem unavoidable. If you turn 67 during a bear market, what are your options for avoiding a retirement disaster?

The first, most obvious solution is to keep working. Take the loss on the chin, push through, let the recovery buoy your savings, and retire at the top.

The drawbacks? It could delay your retirement by 3 to 5 years.

Even worse, you’ll then likely face the temptation to retire at the TOP of the next bull market. And if you don’t plan accordingly, your retirement savings and income could get hammered during the almost inevitable bear market that would follow.

The second, far more powerful strategy? Taper your risk as you approach retirement.

Why? Because it can make you far less vulnerable to market fluctuations. Whether you retire at the top or bottom of the market becomes less important for your retirement outcome.

That’s why it’s absolutely essential to meet with a licensed and qualified financial professional ASAP. They can review your goals and situation to determine what level of risk works best for you. They can also help you taper your risk exposure as you get closer to retirement.

And if you’re ready to retire but skittish about the market, they can help you weigh the pros and cons of taking the plunge or waiting it out.

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May 11, 2022

An Introduction to Crowdfunded Real Estate

An Introduction to Crowdfunded Real Estate

Home tours and late night toilet repairs.

That’s what most people think of when they hear the words “real estate.” You’re either an agent or a landlord. You’re either selling homes, or fixing up diamonds in the rough and renting them out.

But you probably don’t think of the word “app.” At least, not yet.

That’s because there’s a new way of owning real estate—crowdfunding.

Here’s how it works…

You’ve probably noticed that real estate is wildly expensive. Even before the housing insanity of 2021, few had the cash to buy land, homes, or commercial lots outright. The traditional method to get around this was to take out a loan. It was a barrier that limited real estate to either financial institutions, the wealthy, or scrappy home flippers.

But what if you could team up with dozens of other people to buy a property? Say you and twenty people pitched in on a home in a promising neighborhood with good schools. You split the rental income, and when the home gets sold, you cash your share of the profits.

Suddenly, real estate is far less intimidating—you can pool your resources with others to buy a stake in a property, without shouldering all the risk or responsibility yourself.

But that’s not all. If enough people pitch in, you could hypothetically start buying apartment complexes, supermarkets, even a skyscraper!

That’s the power of crowdfunding.

And recently, it’s taken off. The past few years have seen a surge in online real estate crowdfunding platforms.

The model is simple. You give the platform money, either as a lump sum or monthly deposit. They use your money to buy promising properties. You get dividends and appreciation. They get a fee for managing your money.

And for many platforms, you can simply download an app and make decisions about how much you want to contribute and see how your properties are performing from your phone.

Let’s be clear—this is NOT a recommendation to start crowdfunding real estate purchases. Far from it. It’s still a new industry which is relatively untested. As with all financial decisions, it’s best to consult with a licensed and qualified financial professional first.

But it’s worth knowing about this new way of owning property. Only time will tell if it becomes a staple of wealth-building strategies, or if it fizzles out.

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April 25, 2022

Lessons From the Super Frugal

Lessons From the Super Frugal

The world of the super frugal can be an overwhelming place.

In a sense, it’s inspiring. The creativity and grit of the super frugal are sure to put a grin on your face. You may even find a few fun money saving projects that are worth your time. Saving money with french toast? Sign me up!

However, there’s a fine line between inspiring and weird, and the super frugal sometimes cross that line. Could reusing a plastic lid as a paint palette save you money? Sure! The same is true for bartering with store clerks. Will you get funny looks? Almost certainly.

It’s not that funny looks are bad. There’s wisdom to defying the crowd and marching to the beat of your own drum. But sometimes there’s a good reason to raise an eyebrow at super frugality…

That’s because it can miss the point.

Your financial top priority must always be providing for those you love. In this day and age, that means building wealth.

Some people may need extreme measures to do that. Let’s say you have deep credit card debt or a spending problem. Coupon clipping, saving on utilities, and thrifting may help you knock that debt out faster and free up the cash flow you need to start building wealth.

But don’t mistake the means for the end. Obsessing over coupons, stressing over recycling, and cutting too many corners can reach unhealthy and even pathological extremes. That doesn’t create wealth and prosperity—it can just cause more suffering.

So take lessons from the super frugal. Find a few money savings projects that you enjoy. Maybe do a spending cleanse. But keep your eye on the ultimate prize—building wealth for you and your family.

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April 20, 2022

Are You Ready?

Are You Ready?

It’s not a question if buying is better than renting. It’s a question of when you’ll be ready to buy.

That’s because rent money is lost to your landlord forever.

A homeowner, though, has the chance for the value of their house to increase. It may not be an earth-shattering return, but there’s a far higher chance that you’ll at least break even from owning than renting.

Even with its advantages, owning a home isn’t for everyone… at least, not yet. Here are a few criteria to consider before becoming a homeowner.

You’re ready to put down roots. If you’re not yet prepared to live in one place for at least five years, home ownership may not be for you.

Why? Because buying and selling a home comes with costs. As a rule of thumb, waiting five years can allow your home to appreciate enough value to offset those expenses.

So before you buy a home, be sure that you’ve done your homework. Will your job require you to change locations in the next five years? Will local schools stay up to par as your family grows? If you’re confident that you’ll stay put for the next five years or more, go ahead and start planning.

You can cover the upfront costs of home ownership. The upfront costs of buying a home, as mentioned above, are no laughing matter. They may prove a barrier to entry if you haven’t been saving up.

The greatest upfront costs you’ll face are the down payment and closing costs. A down payment is usually a percentage of the total purchase price of your home—for instance, a home priced at $200,000 might require a 20% down payment, or $40,000.

Closing costs vary from state to state, with averages ranging from $1,909 in Indianna to $25,800 in the District of Columbia.¹ These include fees to the lender and property transfer taxes.

The takeaway? Start saving to cover the upfront costs of purchasing a home well in advance. Your bank account will thank you!

You can handle the maintenance costs of home ownership. Say what you will about landlords, but at least they don’t charge you for home repairs and maintenance!

That all changes when you become a homeowner. Every little ding, scratch, and flooded basement are your responsibility to cover. It all adds up to over $2,000 per year, though that figure will vary depending on the size and age of your home.² If you haven’t factored in those expenses, your cash flow—as well as your airflow—might be in for trouble!

Do you have residual debt to deal with? The great danger of debt is that it destabilizes your finances. It dries up precious cash flow needed to cover emergency expenses and build wealth.

That’s why throwing a mortgage on top of a high student loan or credit card debt burden can be a blunder. You might be able to cover costs on paper, but you risk stretching your cash flow to take care of any unplanned emergencies.

In conclusion, owning a home is an admirable goal. But it may not be for you and your family yet! Take a long look at your finances and life-stage before making a purchase that could become a source of stress instead of stability.

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¹ “Average Closing Costs in 2020: What Will You Pay?” Amy Fontinelle, The Ascent, Sept 28, 2020, https://www.fool.com/the-ascent/research/average-closing-costs/

² “How Much Should You Budget for Home Maintenance?” American Family Insurance, https://www.amfam.com/resources/articles/at-home/average-home-maintenance-costs

April 13, 2022

Can You Create a Will Without An Attorney?

Can You Create a Will Without An Attorney?

The short answer is YES. You can create a will without an attorney.

There are dozens of templates you can download and use to draw up your estate plan. It’s fast, easy, and convenient.

But the real question isn’t IF you can create your own will. It’s if you SHOULD.

Your will is fundamental to your financial legacy. It’s a legal document that must meet specific qualifications and standards because it’s going to control how your loved ones will receive the wealth and assets you’ve worked so hard to amass.

Any oversight with your will could result in the mishandling of your estate. Your assets could end up in the hands of the wrong people. At the very least, it could cause a legal headache for your family.

If your estate is simple, you might be able to navigate those challenges alone.

But you’ll most likely need an attorney if you…

  • Own a family-run business you want to pass to your children.
  • Plan to pass your wealth to a step-child or step-children.
  • Want to disinherit someone in your existing will.

In other words, you should hire a lawyer if your will is anything more than boilerplate. Otherwise, the risk and consequences of errors become too high.

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April 11, 2022

Discover Your Retirement Number

Discover Your Retirement Number

How much money will you need to retire?

It’s a question that has no single answer. Everyone has different financial needs that arise from their specific situation.

But there are methods and tools you can use to discover your personal retirement number. In this article we show three ways to estimate how much you need to save for a comfortable retirement.

Use an online retirement calculator. The beauty of retirement calculators is that they’re simple. Input some data about your savings, and you’ll get an estimate of how much you’ll have in retirement. They’ll let you know if you’re on target for your retirement goals.

Always take retirement calculators with a grain of salt. They’re each built on different algorithms and assumptions, so expect a range of results.

They also don’t know you personally, or your situation. You may have specific needs and plans that they can’t take into account.

Here are a few retirement calculators you can try…

The 4% Rule. This is the tried and true strategy for discovering your retirement number. It takes a little math, so grab your calculator!

First, let’s assume your income is $60,000 per year.

Next, let’s say that your annual retirement income must be 80% of your current annual income. So that’s $48,000.

Now, divide that by 4%…

$48,000 ÷ 0.04 = $1,200,000

Using the 4% Rule, you would need to have saved $1,200,000 to retire on 80% of your current income ($1,200,000 ÷ $48,000 = 25 years).

The Income Scale. This strategy, recommended by Fidelity, is more of a rule of thumb.¹

It aims for you to save 10x your annual income by age 67. It provides benchmarks along the way…

-1x by 30 -3x by 40 -6x by 50 -8x by 60

The only issue with this strategy is that 10x your income may not be enough for a comfortable retirement. For instance, a family earning $60,000 per year would only have $600,000 saved!

Each of these tools will help you estimate your retirement number. But the best way to discover your true number is to meet with a licensed and qualified financial professional. They can help you consider all the variables that may impact your retirement, and how to prepare.

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April 6, 2022

Understanding the Inverted Yield Curve

Understanding the Inverted Yield Curve

Inverted Yield Curve. It’s a phrase you may have heard before. More financial gibberish, right?

Wrong.

Paying attention to the yield curve is critical because it may indicate there’s a recession on the horizon. And as of March 29, 2022, it inverted for the first time since 2019.¹

What Is the Yield Curve?

The yield curve is simply a graph that shows the interest rates of different types of bonds. With a normal yield curve, bonds with lower lifespans (i.e., maturity) have lower interest rates. That’s because they’ll face less inflation and need less growth to keep up. By that logic, bonds with longer maturities have higher interest rates.

Put simply, if the yield curve is normal, a bond with a two year maturity will have a lower interest rate than a bond with a thirty year maturity.

So what happens when that gets inverted? Bonds with short maturities have higher interest rates, and bonds with long maturities have lower interest rates.

Why is that a big deal? Because it’s consistently correlated with economic recession. There have been 28 inverted yield curves since 1900, and 22 have correlated with recessions.²

And the average lead time from when the yield curve inverted to when the recession began was around 22 months.

This is not to say that you should start buying land in West Virginia or emergency rations. These are unprecedented times, and there may be other factors at play. But it’s at least a check engine light for your finances. Are you prepared for job instability? Is your emergency fund fully stocked? The time to start preparing for these possibilities is now. Meet with your financial pro today to make sure you’re prepared for whatever the future holds.

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¹⁺² “Explainer: U.S. yield curve inversion - What is it telling us?” David Randall, Davide Barbuscia and Saqib Iqbal Ahmed, Reuters, Mar 29, 2022, https://www.reuters.com/business/finance/us-yield-curve-inversion-what-is-it-telling-us-2022-03-29/

March 24, 2022

The Complete Guide to Buying Happiness

The Complete Guide to Buying Happiness

You’ve probably heard that money can’t buy happiness. But what if it could?

What if you were able to find a way of spending your money that made you happy, and the more you spent on it, the happier you became? Doesn’t sound possible, does it? But it IS entirely possible.

At least, that’s the premise of a paper written by scholars from Harvard, the University of British Columbia, and the University of Virginia. The title? “If Money Doesn’t Make You Happy Then You Probably Aren’t Spending It Right.”

The thesis? If you spend money right, it makes you happy. If you spend money wrong, it makes you feel… well, meh.

Here’s what they found…

Buy experiences, not things. The researchers found that people tend to be happier when they spend money on experiences rather than things. That’s because experiences provide us with opportunities to create memories, which can be recalled and enjoyed long after the experience is over. And as you get older, those memories become constant sources of joy, satisfaction, and happiness.

So if you’re looking to spend your money in a way that will make you happy, focus on things like travel, getaways, skydiving, sunsets, long walks, and conversations. Those will remain with you for the rest of your life.

Help others first. It’s a fact—social relations are critical for happiness. The better your relationships, the greater your happiness.

So it follows that one of the best ways to spend your money in a way that will make you happy is to help others. This could mean donating money to charity, or simply spending time with friends and family.

Focus on little pleasures. Another way to spend your money in a way that will make you happy is to focus on little pleasures. This one seems counterintuitive—shouldn’t you save a whole bunch of money and spend it on something fancy?

However, the paper cites research that frequency is more powerful than intensity. Is eating a 12oz cookie better than eating a 6oz cookie? Absolutely. But is it two times better? Probably not. It’s a concept called diminishing marginal utility—the more you indulge in something, the less enjoyable it becomes.

What does that mean? Frequent day trips beat rare but epic vacations. Fun, quiet date nights once per week beat going all out twice a year.

Pay now, consume later. Again, this seems counterintuitive. But it makes sense when you think about it.

Consider the all-too-common alternative—buy now, pay later. First off, this model encourages rampant spending. Without facing immediate consequences, it’s just too tempting to rack up debt and buy stuff you don’t need.

But more than that, it entirely removes antici…

.. pation from the equation. And that’s half the fun!

So instead of whipping out the credit card, save up. Pay cash. Delay gratification. You’ll enjoy your purchase more, and you’ll be happier overall.

So there you have it! The complete guide to spending your money in a way that will make you happy. Just remember—experiences over things, helping others first, little pleasures, and pay now, consume later. Follow these tips, and you may find that your money’s doing its actual job—making you happy.

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March 14, 2022

Financial Essentials for Retiring Baby Boomers

Financial Essentials for Retiring Baby Boomers

Are Baby Boomers out of time for retirement planning?

At first glance, it might seem like they are. They’re currently aged 57-75, meaning a good portion have already retired!¹

And those who are still working have only a few precious years to create their retirement nest eggs and get their finances in order.

Perhaps you’re in that boat—or at least know someone who is. If so, this article is for you. It’s about some essential strategies retiring Baby Boomers can leverage to help create the futures they desire.

Eliminate your debt. The first step is getting rid of your debt. After all, it’s not optional in retirement—you’ll need every penny to fund the lifestyle you want.

That means two things…

  1. Don’t take on any new debt. No new houses, boats, cars, or credit card funded toys.
  2. Use a debt snowball (or avalanche) to eliminate existing debts.

That means focusing all of your financial resources on a single debt at a time, knocking out either the smallest balance or highest interest debt.

Eliminating, or at least reducing, your debt can help create financial headroom for you in retirement. It frees up more cash flow for you to spend on your lifestyle and on preparing for potential emergencies.

Maximize social security benefits. Delay Social Security as long as possible (or until age 70). Delaying Social Security increases your monthly payments, so it’s a simple way to maximize your benefit.

For example, if you started collecting Social Security at age 66, you would be entitled to 100% of your social security benefit. At 67, it increases to 108%, and by 70 it increases 132%. That can make a huge difference towards living your dream retirement lifestyle.

Check out the Social Security Administration’s website to learn more.

Protect your wealth and health with long-term care (LTC) coverage. The next step is to protect your assets from the burden of LTC. It’s a challenge 7 out of 10 retirees will have to overcome, and it can be costly—without insurance, it can cost anywhere between $20,000 and $100,000. That’s a significant chunk of your retirement wealth!²

The standard strategy for covering the cost of LTC is LTC insurance. It pays for expenses like nursing homes, caretakers, and adult daycares.

But it can be pricey, especially as you grow older—a couple, age 55, can expect to pay $2,080 annually combined, while a 65 year old couple will pay closer to $3,750.³

The takeaway? If you don’t have LTC coverage, get it ASAP. The longer you wait, the more cost—and risk—you potentially expose yourself to.

Pro-tip: If you have a permanent life insurance policy, you may be able to add a LTC rider to your coverage. Meet with a licensed and qualified financial professional to see if this option is available for you!

Review your income potential with a financial professional. The final step on your path to retirement is reviewing your income options. You want to strike a balance between maximizing your sources of cash flow and keeping control over your retirement plan.

Many retirees lean heavily on two primary income opportunities: Social security and withdrawals from their retirement savings accounts.

And that’s where a financial professional can help.

They can help you review your current retirement lifestyle goals, savings, and potential income. If there’s a gap, they can help come up with strategies to close it.

You’ve worked hard and made sacrifices—now it’s time to reap the rewards of all that elbow grease. Which of the essentials in this article do you need to tackle first?

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¹ “Boomers, Gen X, Gen Y, Gen Z, and Gen A Explained,” Kasasa, Jul 6, 2021, https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z

²”Long-term care insurance cost: Everything you need to know,” MarketWatch, Feb 19, 2021, https://www.marketwatch.com/story/long-term-care-insurance-cost-everything-you-need-to-know-01613767329

³ “Long-Term Care Insurance Facts - Data - Statistics - 2021 Reports,” American Association for Long-Term Care Insurance, https://www.aaltci.org/long-term-care-insurance/learning-center/ltcfacts-2021.php

March 14, 2022

3 Saving Strategies For College

3 Saving Strategies For College

In this day and age, it seems like college tuition is skyrocketing.

Students and parents are increasingly reliant on loans to cover the cost of higher education, often with devastating long-term results.¹

In this article we’ll cover three saving strategies to help you cover the cost of college without resorting to burdensome debt.

Strategy #1: Use “High-Yield” savings accounts. This strategy is simple—stash a portion of your income each month into a savings account. Then, when the time comes, use what you’ve saved to cover the costs of tuition.

Unfortunately, this strategy is riddled with shortcomings. The interest rates on “high yield” savings accounts are astonishingly low—you’d be hard pressed to find one at 1%.²

Even if you did, it wouldn’t be nearly enough. For example, if you had $3,000 saved for college in a savings account earning 1% interest per year, it would only grow to about $3,100 after four years—not enough to cover a whole semester’s tuition!

Even worse, inflation might increase the cost of tuition at a pace your savings couldn’t keep up with. Your money would actually lose value instead of gain it!

Fortunately, high-yield interest accounts are far from your only option…

Strategy #2: Consider traditional wealth building vehicles. That means mutual funds, Roth IRAs, savings bonds, indexed universal life insurance, and more.

The growth rates on these products are typically significantly higher than what you’d find in a high-yield savings account. You might even find products which allow for tax-free growth (the Roth IRA and IUL, for example).

But, typically, these vehicles have two critical weaknesses…

  1. They’re often designed for retirement. That means you’ll face fees and taxes if you tap into them before a certain age.

  2. They’re often subject to losses. A market upheaval could seriously impact your college savings.

Note that none of these vehicles are identical. They all have strengths and weaknesses. Consult with a licensed and qualified financial professional before you begin saving for college with any of these tools.

Strategy #3: Use education-specific saving vehicles. The classic example of these is the 529 plan.

The 529 is specifically designed for the purpose of saving and paying for education. That’s why it offers…

  • Tax advantages
  • Potential for compounding growth
  • Unlimited contributions

It’s a powerful tool for growing the wealth needed to help cover the rising costs of college.

The caveat with the 529 is that it’s subject to losses. It’s also very narrow in its usefulness—if your child decides not to pursue higher education, you’ll face a penalty to use the funds for something non-education related.

So which strategy should you choose? That’s something you and your financial professional will need to discuss. They can help you evaluate your current situation, your goals, and which strategy will help you close the gap between the two!

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Market performance is based on many factors and cannot be predicted. This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies for saving and/or investing that may be available to you. Any examples used in this article are hypothetical. Before investing or enacting a savings or retirement strategy, seek the advice of a licensed and qualified financial professional, accountant, and/or tax expert to discuss your options.


¹ “Student Loan Debt: 2020 Statistics and Outlook,” Daniel Kurt, Investopedia, Jul 27, 2021, https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007

² “Best high-yield savings accounts in August 2021,” Matthew Goldberg, Bankrate, Aug 25, 2021, https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/

March 2, 2022

Playing With F.I.R.E.

Playing With F.I.R.E.

Financial Independence. Retire Early. Sounds too good to be true, right?

But for many, it’s the dream. And for some, it’s even become a reality.

What is the Financial Independence Retire Early, or “F.I.R.E.” movement? It might be obvious, but it’s a movement of people who are striving to achieve financial independence so that they can retire early. How early? That’s up to each individual, but typically people in the F.I.R.E. movement are looking to retire between their 30s and 50s.

How are they doing it? By saving as much money as possible and living a frugal lifestyle. That might mean driving a used car, living in a modest house, and cooking at home instead of eating out. They scrimp and save wherever they can to save.

So why is the F.I.R.E. movement gaining in popularity? There are a few reasons…

Some people want freedom. They want the freedom to travel, to spend time with their family, and to do whatever they want without having to worry about money.

Others are tired of the rat race. They’re tired of working jobs they don’t love just so they can make money to pay for things they don’t really want. They’d rather be doing something they enjoy and have more control over their own lives.

And finally, people want security. They want the wealth they need to live comfortably and fear-free, and they want it now. They don’t want to wait until they’re 65 or 70 to start enjoying their retirement.

It’s a challenging path. Achieving financial independence and retiring early takes hard work, sacrifice, and planning. You’ll have to face financial challenges like covering health insurance, for one.

So if you’re thinking about joining the F.I.R.E. movement, what are some of the first steps?

1. Assess your finances. Figure out how much money you need to live on each month and how much you need to save to achieve financial independence.

2. Set financial goals. Determine where you want to be financially and create a plan to get there.

3. Make a budget and stick to it. Track your spending and make adjustments as needed so you can save more money.

4. Invest in yourself. Education is key, so invest in books, courses, and other resources that will help you build your wealth.

5. Stay motivated. Follow other F.I.R.E. enthusiasts online, read blogs and articles, and attend meetups to keep yourself inspired on your journey to financial independence.

So are you ready to play with F.I.R.E.?

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February 21, 2022

Debt is a Big Deal. Here's How to Use It Wisely

Debt is a Big Deal. Here's How to Use It Wisely

Debt must be respected. If you don’t take it seriously, it could derail your finances for good.

But while debt is no joke, it’s not necessarily bad. If handled wisely, debt can help you reach financial milestones and provide for your family.

It all starts with understanding the difference between good debt and bad debt.

Good debt is debt that you can afford and that can help you build wealth.

Think of it like this—often, you need to spend money to make money. But what if you don’t have mountains of cash to throw at every opportunity that comes your way?

That’s where good debt can help. It can give you the cash you need to seize opportunities like…

- Starting a business

- Buying a home

- Getting an education

Those can help you boost your income, purchase an appreciating asset, or increase your earning potential. And as long as you’ve done your homework and can afford your payments, good debt can help you leverage those opportunities with no regrets.

Bad debt is the exact opposite—it’s borrowing money to buy assets that lose value. That includes…

- Cars

- Video games

- Clothes

Debt can simply make these items more expensive than they already are. And what do you get in return? Nothing. Just more bills.

So if you find yourself borrowing money to buy things, stop and ask yourself: Am I making an investment? Do I think the value of this purchase will increase? Or am I simply spending because it feels good?

Here’s the takeaway—debt is a powerful tool that can be good or bad. Handle it wisely, and it can help you build businesses, buy homes, and increase your earning potential. Handle it carelessly, and you can cause serious harm to your financial stability. So do your homework, evaluate your opportunities, and meet with a licensed and qualified financial professional to see what good debt would look like for you.

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February 16, 2022

Manage Your Finances Like a Pro

Manage Your Finances Like a Pro

Do you ever feel like your money is going out the door as fast as it’s coming in?

Maybe you’ve tried budgeting, only to slip back into a pattern of unconscious spending.

Or maybe you’ve tried saving, but found that you simply don’t have enough cash at the end of each month.

If you’ve tried to get your finances in order but still struggle to stay afloat, this may be the article for you. Here are three dead simple things you can do right now to help you manage your money like a pro.

1. Download a budgeting app.

If you’re not a spreadsheet whiz, don’t worry. There are many free budgeting apps available that can help you keep your finances in order without breaking a sweat. Most of these apps make it easy to add transactions and set goals based on your income and expenses.

Best of all, some even sync with your bank account, so you don’t have to tally up your spending each month—the app does it for you!

Here are a few budgeting apps to consider…

Mint—Good overall budgeting app that syncs with your bank accounts

YNAB (You Need a Budget)—In-depth budgeting tool that’s more hands-on than other options

Mvelopes—Cash envelope budgeting system that syncs with your bank accounts

EveryDollar—Simple budget that requires manual input of expenses

Honeydue—Budgeting app designed specifically for couples

Each of these apps is free to use, but offer additional features for a monthly or annual fee.

2. Dial back subscriptions.

Do you have a gym membership, magazine subscriptions, or streaming services?

Better question—are you using your gym membership, magazine subscriptions, or streaming services?

If you’re like many, you’re shelling out money each month for subscriptions you don’t even use. You may have even forgotten that you’re still signed up for some of them!

But little by little, those subscriptions add up, depleting your cash flow each month.

So take some time to look at your transaction history to discover recurring charges. Then, cancel the ones you’re not using.

Pro-tip: You can also use apps like Truebill and Hiatus to help identify and cancel unwanted subscriptions.

3. Automate your savings.

Do you struggle to save money because of your spending habits? If so, it may be difficult to set aside cash while still having immediate access to it.

The good news is that you can set up an automatic transfer from your checking account to a savings account each month.

In fact, with this method, you don’t even have to think about it! It’s like paying a monthly subscription to a future of potential wealth and financial independence.

And it’s not difficult. Simply log in to your savings or retirement account and look for a transactions or transfers tab. Then, schedule a recurring deposit right after you get each paycheck. Just like that, you’ll automate a wealth building process that requires zero effort on your part.

If you want to manage your money like a pro, simply follow these three easy steps. With these simple moves in place, you’ll be watching your savings grow possibly faster than ever before!

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February 7, 2022

Why Debt Is A Big Deal

Why Debt Is A Big Deal

Debt is a word that strikes fear in the hearts of many. It ruins fortunes, causes untold stress, and topples governments.

Just ask a millennial about their financial struggles—student loan debt will certainly top their list.

But why? Why is debt so bad, anyway? After all, isn’t credit just money you can use now then pay back later? What’s the big deal?

Well, actually debt is a very big deal. In fact, it can make or break your personal finances.

This article isn’t for hardened debt fighters. You already know the damage debt can do.

But if you’re just starting your financial journey, take note before it’s too late. At best, debt is a tool. It certainly isn’t your friend. Here’s why…

It begins by lowering your cash flow. All those monthly payments bite into your paycheck, effectively lowering your income.

And that has consequences.

It can make it a struggle to afford a home. You simply lack the cash flow to afford mortgage payments.

It makes it a struggle to build wealth. Every spare penny goes towards making ends meet.

It makes it a struggle to maintain your lifestyle. You may find yourself choosing between the pleasures—and even the basics—of life and appeasing your creditors.

And that brings the risk of bankruptcy. It’s a last-ditch effort to erase an unpayable debt. It comes with a heavy price—creditors can take your home and possessions to make up for what you owe. And even if bankruptcy erases the debt, it will have a lasting impact on your credit score and financial future.¹

It can change your life forever, throwing your life into chaos.

Think about it—when was the last time someone smiled and fondly recalled that time they went bankrupt? Never. It’s a traumatic experience. This is something you want to avoid at all costs.

This isn’t to scare you into a debt free life or guilt you for using a credit card. Rather, it’s to educate you on the stakes. Debt isn’t something to be taken on lightly. It can have lasting consequences on your life, family, finances, and even mental health. Act accordingly.

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¹ “Bankruptcy: How it Works, Types & Consequences,” Experian, accessed Jan 7, 2022, https://www.experian.com/blogs/ask-experian/credit-education/bankruptcy-how-it-works-types-and-consequences/

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