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How Much Money You Need to Retire at 35 and Live on Investment Income Alone Until 90

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With an early retirement craze taking hold in the US, you’d probably be in the minority if you haven’t wondered, How much money do I need to quit my job and never work again? Tanza Loudenback consulted Brian Fry, a certified financial planner and the founder of Safe Landing Financial, and wrote on Business Insider:

  • To retire early at 35 and live on investment income of $100,000 a year, you need to have at least $5.22 million invested on the day you leave work.
  • If you reduce your annual spending target to $65,000, you’ll need a starting balance of about $3.25 million in a taxable investment account.
  • To ensure the account’s growth, Brian Fry, a certified financial planner at Safe Landing Financial, recommends an “aggressive” asset allocation of 80% stocks and 20% bonds.
 

Most People Would Rather Lose Their Job to A Robot Than Another Human

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If you were going to lose your job, would you prefer to be replaced by a robot or another person? If you said robot, you’re in the majority. Most people would prefer a robot to take their job if they had to lose it, but they would prefer to see another human step in if a co-worker was going to lose theirs. NewScientist reports: 

“Being replaced by modern technology versus being replaced by humans has different psychological consequences,” says Armin Granulo at Technical University of Munich in Germany. He and his colleagues set out to examine these differences.

They asked 300 people to judge whether they would prefer an existing member of staff to be replaced by a robot or a human. In that case, 62 per cent of people said they preferred to have a human step in. But when they were asked to shift their perspective and imagine losing their own job, 37 per cent preferred being replaced by a human rather than a robot…

The team found that people rated robots as less threatening to their self-identity than human replacements in a job setting. They asked questions about which type of replacement would make someone feel more devalued, raise more doubts about themselves, or make them question their own abilities.

That may be because people don’t feel they can or must compete with a robot or a piece of software in the same way as they might another person, says Granulo.

Mark Cuban Explains How to Make a 16% Guaranteed Return

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You could be getting a 16% return on your money right now, and it’s not that hard to do. As Mark Cuban, the “Shark Tank” star, billionaire entrepreneur, and NBA franchise owner explains, just pay off your debts. Mitch Tuchman writes on MarketWatch:

Pay that off and you stop losing nearly 16% in compounding negative returns.

“The reason for that is whatever interest you have — it might be a student loan with a 7% interest rate — if you pay off that loan, you’re making 7%,” Cuban said.

“And so that’s your immediate return, which is a lot safer than trying to pick a stock, or trying to pick real estate or whatever it may be.”

Yet the cost of not paying off your high-interest debts is astronomical.

Let’s say you have exactly the typical American household credit balance of $6,929 and carry it for 20 years at 16%. You end up paying $135,038.

Now let’s say you invested that amount instead and earned 8.8% over 20 years. You end up with $37,486.

You should invest, the earlier the better. But, truthfully, the math strongly advises that you pay off any high-interest debt you carry as soon as humanly possible.

Fewer Renters Believe They Are Likely to Ever Own a Home

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More American renters believe homeownership is financially out of reach, according to a new survey that shines fresh light on the growing housing affordability crisis. The Wall Street Journal reports:

Only 24% of renters said it was “extremely likely” that they would ever own a home, 11 percentage points lower than four years ago, according to the survey set to be released Thursday by mortgage finance giant Freddie Mac . Of the renters surveyed, 82% said renting was more affordable than buying, 15 percentage points higher than February of 2018.

Meanwhile, rising rents also are creating hardships. Of the renters who moved in the last two years, 44% said they did so because they could no longer afford their rent, according to the survey…

The biggest obstacle preventing renters from buying was the difficulty in saving for down payments and closing costs, according to the Freddie Mac survey. The crunch is being felt by about 80% of millennials and members of Generation X—people born between 1965 and 1980—and 71% of baby boomers who rent.

Student loan debt is making it especially hard for millennials to afford down payments, the survey found. Of renters 23 to 29 years old, 51% said they made different housing choices than they otherwise would have because of student loans.

Retirement? Four in 10 Americans Don’t See It Ever Happening

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Almost 40% of Americans lack confidence they will ever save enough money to retire. That number climbs even higher among older Americans, age 54 or more. Bloomberg reports: 

That’s despite nearly one in five Americans who said having enough money saved to be able to retire is their most important financial goal, according to a survey of 1,000 adults conducted by LendEDU in May.

More Americans said saving for retirement is more important versus those that indicated paying off credit card debt or building an emergency fund, according to the survey. However, slightly more respondents said buying their own house or apartment was their most important financial goal.

On average, monthly benefits for a retired worker from the Social Security Administration are $1,468.39 or only about $17,600 per year.

The Days of Getting a Cheaper Cable Bill by Threatening to Leave May Be Over

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With internet service growing faster and more profitable, subscribers are becoming expendable, meaning pay-TV companies no longer need to entice customers who are threatening to quit with discounts and special offers. Bloomberg reports:

Over the past few years, pay-TV stocks have suffered wicked swings as investors reacted to growing subscriber losses. But they’ve recovered as the companies shift their focus to lucrative broadband services. Comcast, the largest U.S. cable provider, is up 22% this year and Charter is up 36% to a 21-month high, outpacing the 12% gain for the S&P 500. That’s despite accelerating pay-TV subscriber losses at both companies last quarter. 

“It used to be when customers would call and said, “I’m thinking of cutting the cord,’ they’d throw all sort of promotions to keep them from leaving,” said Craig Moffett, an industry analyst at MoffettNathanson LLC. “Now they’re saying, ‘Goodbye, it’s been fun, enjoy the broadband subscription.'” Cable One Inc., a smaller cable company with about 305,000 residential video customers, even helps cord cutters choose between online alternatives like YouTube TV or Hulu’s live TV service, according to Moffett. [C]able executives are now focused on what they call “profitable” or “high-quality” video subscribers and less interested in cutting deals…

As customers drop pay TV, cable companies will actually see their profit margins widen, Moffett said. That’s because much of their pay-TV revenue goes right to channel owners, like Walt Disney Co. and its ESPN network, in the form of subscriber fees. Fueled by expensive sports rights, those fees are even rising faster than cable TV bills, hurting profits for companies like DirecTV and Comcast. Selling high-speed internet is far more profitable.

Half of Americans Are Just One Paycheck Away From Financial Disaster

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A new study from NORC at the University of Chicago, an independent social research institution, found that 51% of working adults in the United States would need to access savings to cover necessities if they missed more than one paycheck. MarketWatch reports:

Certain communities were more prone to economic hardship in the event of missing a paycheck. Roughly two-thirds of households earning less than $30,000 annually and Hispanic households would be unable to cover basic living expenses after missing more than one paycheck, the researchers found.

“Even short disruptions in pay can cause significant hardship, as most Americans appear to be living paycheck-to-paycheck,” Angela Fontes, director of the Behavioral and Economic Analysis and Decision-Making (BEAD) program at NORC at the University of Chicago, said in the report.

Adult Children Are Costing Many Parents Their Retirement Savings

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Financial independence, once a hallmark of adulthood, has gone by the wayside as adult children increasingly depend on their parents to help them cover the cost of rent, student loans, health insurance and more. But parents’ desire to give their children a financial assist could be misguided — and even backfire in the long run. Half of American parents are unable to save as much as they’d like to for retirement, and their grown offspring — whom they still count as dependents — are to blame, according to a new Bankrate.com study.

CBS News reports:

Half of American parents have cut back on their retirement savings to help pay their children’s bills, a Bankrate.com study shows. 

Parents are putting their kids’ car insurance, cell phone bills, credit card debt and health care costs ahead of their own needs to grow their retirement funds.

Kids miss out on learning to be independent. “When you write your first rent check or car loan check it feels so good to be able to face some problem and fix it for yourself,” says one expert.

Getting Rid of Debt Makes Your Brain Work Better

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Getting rid of debt doesn’t just unburden finances, it takes a weight off the mind that clears up cognitive functioning, lessens anxiety and improves impulse control. MarketWatch reports:

The findings come from researchers at the National University of Singapore’s Social Service Research Centre, who studied almost 200 low-income people who unexpectedly had portions of their long-running mortgage, utility and municipal debts paid down by a charity.

The study found:

• Average error rates in the cognitive function tests fell to 4% after the debt was paid down, compared to a 17% error rate beforehand.

• The proportion of participants showing generalized anxiety disorders went from 78% to 53% after the debt relief.

• Numbers of people showing so-called “present bias,” which favors instant gratification, dropped to 33% from 44%, a sign that their impulse control had improved.

Average U.S. Mortgage Size Hits Record-High $354,500

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The average size of mortgages U.S. consumers were looking to obtain to buy a home or to refinance one hit a record high of $354,500 last week, suggesting resilience in the higher end of the housing market, the Mortgage Bankers Association said on Wednesday. Reuters reports:

On the other hand, the rise hints that first-time buyers face a challenge in finding their home of choice heading into spring, which is typically the busiest time of the year for home sales, the Washington-based industry group said…

The average interest rate on 30-year fixed-rate mortgages with conforming loan balances of $484,350 or less decreased to 4.64 percent from 4.67 percent.
Most other fixed mortgage rates that the MBA tracks fell by 0.05 to 0.06 percentage point last week.

However, interest rates on 30-year “jumbo” mortgages with loan balances greater than $484,350 averaged 4.45 percent, up from 4.41 percent the week before.

What’s the Recommended Temperature for Vacant Home in Winter?

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Whenever you will be away from home for an extended period of time, you should adjust the temperature to save money. During the winter months you want to minimize the heating cost while at the same time preventing water pipes from bursting and avoiding any damage to household appliances. Don’t worry! I will go over what you should do before you leave the house and what temperature you should set the house at while you are away.

 1. What’s the Recommended Temperature for Vacant Home in Winter?

Each house is different and the optimal thermostat setting depends on the level of insulation in the house, pipe layout, exterior temperature, and location. You should set the temperature around 50 to 60 degrees Fahrenheit (℉).

Most of the time, dropping the thermostat to 50 °F to save some heating bill is fine. You don’t need to set your thermostat too high if your plumbing runs within the interior walls. You should have no issues by leaving the thermostat at 50 °F.

If you have pipes in exterior walls you want to set the thermostat higher, such as 55 ℉ or 60 ℉, to warm the house enough that the pipes in the wall are above freezing. Also, if you live in a humid climate, setting the thermostat at a higher temperature to avoid getting musty as the furnace heats the air and lowers the relative humidity. Also, If you live in expose area then set it on the high side around 55 ℉ or higher to keep pipes from freezing.

2. What’s the Lowest Temperature to Set the Thermostat in Winter?

You should not set it lower than 40 ℉ when you leave a vacant house. The temperatures for the whole house are not homogenous as some parts of the house will be even colder than the lowest temperature setting on the thermostat. The money saved on lowering the thermostat further would be minimal compared to the damage if something happens.

Even though the recommended temperature setting is around 50 ℉ to 60 ℉, you can go lower to 45 ℉ and everything should be fine if your property is winterized properly. The goal is to minimize the heating bills but at the same time you don’t want any burst pipes or a flooded house when you arrive home. Please keep in mind that at a lower temperature setting, you have a higher risk of pipe freezing and material shrinkage. There’s a big difference between homes that are left at 55 ℉ and those left at 45 ℉ after years of leaving the house vacant.

3. What Temperature Should You Set the Thermostat in Summer?

Working in reverse for hot weather, you should set your thermostat higher while you are on summer vacation to save money on electricity bill. According to the Department of Energy, for every degree you raise the set temperature of your central air, you’ll save about three percent on your utility bill.

The optimum setting for your air conditioner is 4 ℉ or 5 ℉ higher than what you normally set at. So, if you normally set your house at 72 ℉, crank it up to 77 ℉ or 78 ℉ before you leave the house. Also, don’t forget to check your air conditioner filter and close the blinds before leaving your house.

Setting the thermostat too high might not save you any extra money as the air conditioner works harder to cool the house’s temperature back down. Beware of leaving your house too warm if you decide to shut off the air conditioner completely. You could damage wall structure and household items if the inside is too hot and humid. Set your thermostat higher by 4 ℉ or 5 ℉ is better than full shutdown. For through-the-wall air conditioner, you can safely shut it down when you are away.

4. What To Do Before You Leave The House?

First, if you are leaving a house for a couple months in the winter you should turn off the water. Then open the faucets to drain every plumbing you can. Depending on how long you will be away, turning off the main water supply line where it comes into the house is highly recommended.

Pipes with water in them have a high risk of busting during a long cold spell. By draining all the water lines and turning off the water, if the pipes freeze while the furnace dies it’s not the end of the world. Any sections of pipe that happened to be drained won’t be damaged, and you won’t have to tear the walls containing them apart to fix the damage. Nobody wants to come home after a vacation to a foot of water in the basement as well as numerous ruptures in pipes within the walls.

If you are away for a short period of time and don’t want to shut off the main water, then set the faucet for water to slightly drip out, especially with pipes on an exterior wall exposed to cold weather. Running water through the pipe – even at a trickle – helps prevent pipes from freezing.

In addition, keep the cabinet doors under the sinks open to prevent cold pockets from forming. Air circulates from the outside room temperature will keep the pipes below the sinks from freezing while you are away.

Don’t forget the water heater. You probably don’t want to drain the water heater, but it’s a good idea to turn it off if it’s electric or to shut off the gas supply. If a pipe bursts or water leaks out, an electric water heater could overheat and short out the heating elements, and a gas heater could do even worse. If you don’t want to turn off the water heater, make sure to turn it to low or vacation mode.

Phone Scammer Gets 6 Years in Prison After He Made the Mistake of Calling William Webster, Ex-FBI and CIA Director

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The Washington Post reports about phone scammer Keniel A. Thomas, who made the mistake of calling William H. Webster. Thomas told 90-year-old Webster that he had won $72 million and a new Mercedes Benz in the Mega Millions lottery, but that he needed to send $50,000 in taxes and fees to get his money. Instead of sending $50,000 to the random caller, Webster performed reverse phone sting for FBI.

Thomas also told Webster he’d done his research on the top winner. “You’re a great man,” the scammer cajoled. “You was a judge, you was an attorney, you was a basketball player, you were in the U.S. Navy, homeland security. I know everything about you. I even seen your photograph, and I seen your precious wife.”

Thomas’s research didn’t turn up everything. He didn’t learn that the man he was calling was the former director of the FBI and the CIA, the only person ever to hold both jobs. And he didn’t know that Webster would call him back the next day with the FBI listening in.Thomas was arrested in late 2017, after he landed in New York on a flight from Jamaica. He pleaded guilty in October and faced a prison term of 33 to 41 months under federal sentencing guidelines. But with Webster and his wife in the courtroom, Chief U.S. District Judge Beryl Howell on Friday added another 2 years to Thomas’s sentence, giving him nearly six years to serve. Howell said that the scam qualified as “organized criminal activity” and that Thomas posed “a threat to a family member of the victim.”

Most Americans Just One Serious Illness Away From Bankruptcy

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A study of bankruptcy filings in the United States showed that medical expenses contribute to two-thirds of bankruptcy filings in U.S. For many Americans, putting one’s health first can mean putting one’s financial status at risk. Study Finds described:

The study, led by Dr. David Himmelstein, Distinguished Professor at the City University of New York’s (CUNY) Hunter College and Lecturer at Harvard Medical School, indicates that about 530,000 families each year are financially ruined by medical bills and sicknesses. It’s the first research of its kind to link medical expenses and bankruptcy since the passage of the Affordable Care Act (ACA) in 2010.

“Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” Himmelstein says in a release by the Physicians for a National Health Program. “For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, copayments and deductibles that illness can put you in the poorhouse.”

World’s 26 Richest Own As Much As Poorest Half of Humanity

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In an annual wealth check released to mark the start of the World Economic Forum in Davos, the development charity Oxfam said 2018 had been a year in which the rich had grown richer and the poor poorer. As a result, the report concluded, the number of billionaires owning as much wealth as half the world’s population fell from 43 in 2017 to 26 last year. The Guardian reports:

Oxfam said the wealth of more than 2,200 billionaires across the globe had increased by $900bn in 2018 – or $2.5bn a day. The 12% increase in the wealth of the very richest contrasted with a fall of 11% in the wealth of the poorest half of the world’s population …

Among the findings of the report were:

* In the 10 years since the financial crisis, the number of billionaires has nearly doubled.

* Between 2017 and 2018 a new billionaire was created every two days.
The world’s richest man, Jeff Bezos, the owner of Amazon, saw his fortune increase to $112bn. Just 1% of his fortune is equivalent to the whole health budget for Ethiopia, a country of 105 million people.

The Truth About Becoming an American Millionaire

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The American dream is alive and well, and Americans who aspire to build wealth and become rich may be surprised to know they don’t need a flashy job. or come from an affluent family to build a fortune. The truth is, eight out of 10 millionaires reach that milestone through their company’s 401(k) plan, according to the National Study of Millionaires by Ramsey Solutions. Additionally they are hitting it years before the traditional retirement age. Julia Limitone writes on Fox Business:

“Typically they are hitting it around 25 to 28 years, so right before age 50,” said Chris Hogan of Ramsay Solutions to FOX Business’ Maria Bartiromo. on Tuesday. “So that shows using the 401(k) and 403(b) and IRAs puts people on the path to build wealth over time.”

What’s more, it’s not the glamorous jobs like being a professional athlete or entertainer that are raking in the dough. Rounding out the top five professions were engineers, accountants, teachers, managers and attorneys, Hogan said.

Hogan also offered tips for the pursuit of millionaire status. In his opinion, one of the biggest mistakes made is not understanding the threat associated with debt.

“Any time you have debt in your life, you’re paying interest and so that’s preventing you from growing your money,” he said.