Mr. Money Mustache preaches about minimizing one’s car-related expenses to the bare bone. “When it comes to the Automobile, you really have a choice between two possible relationships. You can be the Master, and thoughtfully use cars as a tool as needed to reach your goals. Or you can be a Slave to the auto – worshiping it, allowing it to steal your money, your physical fitness, and your sense of control over your life.” In his situation, by spending only $1500 per year on vehicles’ expenses comparing to $9000 for the average two-care family’s spending, he’ll come out ahead by $104,751 over 10-year period. However, his friend Ben has a totally different saving route regarding to car-related expenses. Ben shows how he makes profit after he has owned and driven over 50 cars. Basically he gets his cars for free by buying, fixing, driving and selling cars for profit. Ben’s recommendations are to buy low, to look for neglected cars, to research and do as much work as you can on your own. Then sell quickly at a modest price. That way you still save money and have fun at the same time. (mrmoneymustache.com)
Ways to Save Money When You’re Young, Dumb and Broke
Younger generations are flooded in debts. In fact, the average millennials starts off in life after graduation with $25,000 in the hole. But it’s hard to save money when you’re deep in student loans and credit card debts.
According to Dr. April Benson, a psychologist, “young people can’t think of a time when they’ll be too old to work, or not want to work, or will need money for buying a house. The pace of their lives is so fast, and savings are slow.” But there are ways to save money when you’re young, dumb and broke as shown in an article by Vice. First you’ve to confront your fears and start monitoring your personal finance. Then you have to figure out what expenses you need to cut.
There’s a relationship between money and life satisfaction according to Ryan Howell, a professor at San Francisco State University. “Basically, what we find is that the more credit card debt you have, the less you enjoy your discretionary spending. So to be really happy, you need to make sure you feel financially secure—and get your credit card debt under control—and then you should use your discretionary resources to bring you closer to your friends and family. That is the simplest path from money to happiness.”
To key to save money when you are broke is to make a realistic budget that works in your daily life and to cut back all unnecessary spendings. The good news is that time will be on your side since you are young.
Top 10 Personal Finance Blogs You Should Read
As the number of print personal finance magazines shrink, more and more personal finance blogs publish their work over the internet. If you only invest an hour each day reading over personal finance news, it only makes your life better. Here are the top 10 personal finance blogs you should read by Kiplinger:
- Block Talk
- Christian Personal Finance
- Credit.com Blog
- Credit Donkey
- Good Financial Cents
- Money Under 30
- PT Money
- ReadyForZero Blog
How to Fix 5 Retirement Planning Mistakes
According to an interview for PBS television’s Frontline, over 900 people in any given 1,000 person retirement plan will retire in poverty or run out of money before death. The average 65-year-old retiree can expect to have two more decades ahead in retirement. Daily Finance show you 5 retirement planning mistakes and how to fix them.
- Mistake: Focusing solely on your rate of return. Solution: Create a diversified portfolio.
- Mistake: Forgetting about taxes. Solution: Have a tax plan for investments and assets.
- Mistake: Thinking the start of retirement marks the end of planning. Solution: Review finances and goals every year.
- Mistake: Saving too little. Solution: Start now and automatically increase contributions with every raise and bonus.
- Mistake: Saving too late. Solution: Stay in the workforce or look for guaranteed income streams.
Retirement planning is one of the most important financial goals you’ll undertake. Don’t make the mistake of not taking retirement planning seriously enough. (dailyfinance.com)
Here’s 5 Ways to Catch Up on Your Retirement Savings
A survey from Bankrate.com found out that over one-third of American’s don’t have a penny saved for retirement, including more than a quarter of those ages 50 to 64. As you already know the best way to stay on track for a comfortable retirement is to start saving early. But If you’re late on the retirement saving, fear not. USA Today has an article to help you back on track. Here’s 5 simple ways to catch up on your retirement savings:
- Focus on debt
- Max out tax-deferred accounts
- Reduce advisory fees
- Work longer
- Don’t fall for shortcuts.
Fees for Mutual funds and ETFs Fall Toward Zero
An article on The Wall Street Journey reports that the cost of investing is falling toward zero for mutual funs and ETFs. This is an excellent news for common investors everywhere. However, “some money managers that get much of their revenue from actively managed funds are fighting back, partly by getting more vocal about the potential risks of index investing. They say the strategy forces investors into risky bonds or pricey stocks just because they are part of a benchmark.” Despite their talks, indexed funds consistently out perform actively managed funds. That’s not good news for fund managers. They still don’t accept their fate yet in order to get some revenue by being a market-leader in indexed mutual offerings and by profiting more so due to high volume. The tough time is ahead for actively money manager as fee cutting pressure remains relentless while Vanguard automatically lowers fees as its funds grow. (wsj.com)
Financial Independence as the Freedom of Changing Your Mind
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.
7 life lessons from the very wealthy
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)
How Would You Feel If Your Co-workers Could See Your Paycheck?
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.”
Tech Salaries Had Biggest Year-Over-Year Increase in 2015
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)
The Best Financial Tips Can Fit On An Index Card
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)
Income Inequality Is Higher In Democratic Districts Than Republican
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)
You Can’t Dig Yourself Out of a Spending Problem
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.
Here’s How to Align Your Spending With Your Values
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.
Americans Shop For Bigger and Pricier Homes
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.