Personal finance blog Frugal Vagabond shows that financial independence can mean more than just the financial freedom to buy what we need. Financial independence also grants us the freedom of changing your mind, too. “If we’re not happy, we’ll change our minds. We’ll move. We’ll come home. We’ll settle someplace new that we can’t imagine leaving. We’ll take on part or full time jobs just to pass the time, assuming we enjoy them completely. That’s part of complete financial freedom too.” Indeed, financial independence is the luxury of changing your mind.
In order to become wealthy, you have to embrace money. Rather than bashing the rich, there are some insights to learn from the experiences of the very wealthy. Here is the list about 7 Life Lessons From the Very Wealthy.
1. Having money is better than not having money
2. Don’t become “cash rich” and “time poor”
3. Memories are better than material objects
4. Watch your “lifestyle leverage,” especially early in your career
5. Having goals is incredibly important
6. You must live in the here and now
7. It helps to be incredibly lucky
We should all study from the very wealth who have achieved success. It is very important to learn from their experiences that got to where they are and learn from the success. Wealth creation is a good thing so that you can be financially secure in life. (washingtonpost.com)
More and more employers are opening up companywide salary information to all employees. For instance, This company, Buffer, posts all employees’ salaries on its website. “The idea of open pay is to get pay and performance problems out on the table for discussion, eliminate salary inequities and spark better performance. But open pay also is sparking some awkward conversations between co-workers comparing their paychecks, and puncturing egos among those whose salaries don’t sync with their self-image.”
According to Dice’s new survey data, average technology salaries in the U.S. saw the biggest year-over-year leap ever, up 7.7 percent to $96,370 annually. Bonuses and contract rates also rose from 2014, and tech salaries in seven metro areas reached six-figures for the first time since the survey began more than a decade ago. Contract workers saw a rise (5%) in hourly compensation, with contractors earning $70.26 per hour. With the big salary increase, technology professionals are also more satisfied with their pay and confident in job prospects of their field. (dice.com)
University of Chicago professor Harold Pollack stated that the best personal finance advice “can fit on a 3-by-5 index card, and is available for free in the library — so if you’re paying someone for advice, almost by definition, you’re probably getting the wrong advice, because the correct advice is so straightforward.” His advice about the best financial tips that fit on an index card can be round on NPR. The ideas on the index card are to pay off your credit cards, invest in low-fee index funds, save 10 to 20 percent of your income, max out your 401(k), and not buy or sell individual stocks. (npr.org)
Bloomberg Business reports that 32 of the 35 districts in which inequality is greatest are represented by Democrats. Clearly, extreme inequality correlates strongly with Democratic political representation. Bloomberg Rankings, drawing on U.S. Census data, have measured the level of inequality—the Gini coefficient—in each of the 435 U.S. congressional districts. It’s a fascinating list (and a map) that reveals all sorts of interesting things. Of the 100 districts with the highest levels of inequality, not one held by a Republican is considered to be in play this November. (bloomberg.com)
If you have a spending problem, can you earn your way out of a spending problem? A post at lifehacker shows that chances are you can’t dig yourself out of a spending problem by earning more. There’re certain situations where your income is really, then earn more is essential to digging out of that hole. However, once spending problem becomes a lifestyle problem, there won’t be enough money to fix the bad spending habits. Increasing your income is desirable. Unless you also take care of your spending side of the equation, you can’t dig yourself out of a spending problem by earning more.
If you found yourselves spending on needless stuff or regretting after big ticket items, Everything Finance has an article to show how to align your spending with your values. First, make a list on what’s important to you. From that list, pick out some of your absolute favorites so you can easily forgo unnecessary and trivial things. You can then share those goals with your loved one in order to work as a team and to keep each other accountable. Next, make those goals visible and monitor your spending to see if your goal of spending on your values is on track. The biggest thing is to learn to say no to yourself. By aligning your spending with your values, you will have higher success rate to save enough money for your favorite trip oversea, home down payment, or even retirement.
According to the National Association of Home Builders, the average size of a new single-family American residence in 1950 was 983 square feet. MarketWatch reports that nowadays Americans are buying bigger and more expensive homes as the average size has ballooned to 2720 square feet. That decision would delay many people the chance to reach financial independence early in life. There is no doubt that Americans’ families love bigger space as about half the new homes last year have four or more bedrooms and a quarter of them has three ore more garages. The average price of new homes also climbed to $351,000 in 2015, up $100,000 from 2009.
Did you make any New Year’s financial resolutions? According to Bankrate.com, the top financial resolutions are to stay current on living expenses,to pay down debt and to save money. By first month, 30 percent of us have given up on these resolutions. Don’t worry. Elisabeth Leamy, from ABC News, shares 50 excellent strategies to keep your money resolutions. Instead of focusing on small stuff such as packing for lunch or skipping Starbucks coffee, she encourages people to save big–at least $1000–by control the top five costs: Housing, Cars, Credit, Groceries and Health Care. By applying some of the 50 strategies to save at least $1,000 on these top five costs, you are in much better shape to keep your money resolutions for the year.
Based on the Internal Revenue Service’s database, Financial Samurai write an excellent article about how much the top income earners make. To be the 1% one needs to make $380,354, and to be in top 5%, it is $159,619. To be above 50%, one only needs to earn around $33,000 per year. While it’s the trend to complain about the top 1% of tax payers, but they pay nearly 38% of all the income taxes. If you earn less than $33,000, you can join the above-average income earners by moving to high-tech locations where the average salary is way above average. You can also try to work more than 40 hours a week and to upgrade your skills constantly in order to get ahead. After all, there are still many six-figure jobs available in the market.
Base on a whitepaper report from American Student Assistance, US News & World Report discussed about the profound impact of student loan debt on the daily lives and spending habits of young Americans. The student debts affect the majority of borrowers’ decisions to make large purchase such as car and home. Borrowers believe education is worth it, but they are making financial sacrifices elsewhere. These young Americans have problem saving for their emergency fund and for their retirement. Education is a great investment but it also make the new generations more indebted.
An article on Brownsville Herald recommend saving more money as a resolution to keep. According to a report from the Pew Charitable Trusts, over half of American households have less than one month of income available in case of an emergency. Personal finance bloggers often advise to keep at least three to six months of income as a part of emergency fund. However, saving can be difficult for those with household incomes of less than $35,000. The ability to save mostly depends on age and household income. So, does saving more money rank near the top of your resolution list?
According to Oxfam report, just 62 people own about the poorest half of the entire world population – or 3.6 billion people. Back in 2010 it took 388 rich people. But as the global inequality has reached levels not seen in over a century, the richest 1 percent own more than the other 99 percent put together. To put that into perspective, the wealth of the poorest half of the world’s population – that’s 3.6 billion people – has fallen by a trillion dollars since 2010 while the wealth of the richest 62 has increased by more than half a trillion dollars.
Some of the basic concepts of personal finance needs to repeat as often as possible. One of them is to live below your means as written by Jonathan Chevreau of Financial Post. Live below your means is considered as an eternal truth of personal finance. “This is the granddaddy Truth of personal finance. Without it, there’s little point talking about the rest. The only way to become financially independent is to be consistent about spending less than you earn, year in and year out, decade in and decade out.” The formula for happiness, attributed to Charles Dickens, is based on living below your means. If translated into today’s world, in David Copperfield the character Micawber would say: “Annual income $50,000, annual expenses $40,000, result happiness. Annual income $50,000, annual expenses $60,000, result misery.”