Category Archives: Financial Independence

financial freedom

Celebrities and Money, Financial Freedom, Financial Independence, Self-Made Millionaires

3 Rich Habits of Millionaires

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After doing some research on millionaires and billionaires, I have noticed some recurring attributes among them, which include: reading, pursuing a passion, and setting goals.

READ

“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.”

― Dr. Seuss, I Can Read With My Eyes Shut!

Many of the affluent read daily or often. They seem to set aside at least 30 minutes a day for reading. This greatly improves their knowledge of their products, brands, and businesses. When you know what drives the market, then it makes it easier to compete with everyone else. I even read that Marilyn Monroe was also said to be a voracious reader.

I know in my life reading has helped me a great deal. I was able to do better in school, make better informed personal and professional decisions, and increase my investment knowledge.

One of the most successful investors of all time, Warren Buffet, says he reads every day.  Buffet typically spends 80% of his day reading. Here are some quotes from interviews he has done over the years in regards to how to become successful.

THE KEY TO SUCCESS

The CEO of Berkshire Hathaway, when asked once about the key to success, pointed to a stack of books and said, “Read 500 pages like this every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.”

WHAT BUFFET READS?

Warren Buffet starts his days with an assortment of national and local news. The billionaire investor tells CNBC he reads the Wall Street Journal, the Financial Times, the New York Times, USA Today, the Omaha World-Herald, and the American Banker in the mornings.

Even though Buffet reads tremendously, it would mean nothing if he did not retain what he has read. Buffets says that knowledge builds up over time. Here are some tips to remember what you read – take notes, skim the text, read out load – are just a few things you can do to retain what you read.

PURSUE YOUR PASSION OR GIFT

“To give anything less than your best, is to sacrifice the gift.” – Steve Prefontaine

I have always had an affinity for writing. I write pretty much every day. My goals are that my writing helps to plant the seed that inspire people, motivate them, and make them feel good about themselves. Writing about finances is the cherry on top of the sundae for me. And I give it everything I’ve got. No less. When I’m sick. I write. When I’m tired. I write. When I was down to my last $2. Still wrote. I would write down my thoughts, hopes, dreams, and goals. I have crossed off at least 5 items on my 10 year to do list. If it can work for me and countless others, then I know it can for you.

Dreams can come true. You just have to believe and lay down the groundwork. There is no builder of a home that would not first lay down the foundation and then build up. The same goes for life. You do not start in at the top. Otherwise, if you do, you are more likely to have created a house of cards, that can easily come tumbling down.  Like the three little pigs, you want bricks and not sticks or straw. You want something that is concrete. Construct your life blueprint on building or creating something that is solid.

If you can, find a mentor. Mentors help guide and keep people on the right path to succeed. I suggest finding someone who has already done what you want to do successfully and then asking them for advice. You can also read their books or attend their workshops. Either way study their success and see if you can imitate it.

SET GOALS

“Set your goals high, and don’t stop till you get there.” – Bo Jackson

The best advice I have ever read was to write down your goals. I have heard this from numerous celebrities including Beyoncé. She said she would write down her goals; and that she wanted to go platinum and sell a million records. Well, she wanted to be financially secure. Well, she can scratch that off her checklist. Simply heed these words: Write it down.

When you set goals and pursue your passion it is a winning combination for success. Instead of watching the clock, you just keep on working. There are too many hours on the clock when you do something you detest, but no enough hours in the day when you do something you love.

Forget the naysayers. They are not you and you are not them.  Focus your energy on doing what you enjoy putting your effort into. The energy you use to pursue your passion or anything that you do well is never wasted.  When you can focus and limit or ignore distractions, you are well on your way toward success.

Automobiles, Financial Freedom

Outrageous Loan Terms for Porsche that even the Rich can’t Justify

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Want to finance an exotic car? No sweat. It will only cost you $157,944.33.

That amount is based on a Porsche that costs $144,750 with loan terms of 144 months, with a 3.3% interest rate, and $14,475 down payment.

Yes, you read that right. Financing for 144 months is the equivalent of 12 years! Just ridiculous.

Especially, considering that a car depreciates in value the minute you take it off the lot.

For example, a $100k BMW 6 Series after five years will likely only be worth $40,000 in resale value. Therefore, over that time period you have paid over $70k. You would still owe approximately the same amount as the current resale value and it would be worth even less in a few more years.

What made me look into this was listening to talk on a radio show I heard about being able to finance a $100k Porsche over 8 years. I was like that can’t be real. Oh, but it is. The people on the radio said that people were doing it and taking out these loans. I was like that’s insane. You can buy houses in different countries all over the world or in certain parts of the United States for that.

If you are so set on having an exotic vehicle, then I think the best course of action is paying cash in the form of a cashier’s check. If you have to finance a $100k car, then that sounds like a red flag that you can’t afford it. Instead of spending $100k on a car, why not invest it? Over a period of 12 years with a 7% ROI you could have $272,641 in your 401(k). Even without investing another dime, you could be a millionaire in about 20 years. Is that car worth a million dollars? I don’t think so.

Who are these people that want to finance a $100k car? The only one I have ever seen was on a Canadian television show called Til Debt Do Us Part hosted by finance writer Gail Vaz-Oxlade. In one episode, a married couple had accumulated a significant amount of debt, but what made this episode stand out was the fact that the wife wanted a very fancy car and was thinking of financing over $100k to get it. Mind you, the couple had kids and debt, so where was this money coming from?

Here is a sample of how the show went on to explain to viewers how people are spending and where the money comes from: credit. If you want to order Gail Vaz-Oxlade or other financial books, then look to the side or go to the top of my blog page and click the Amazon banner link.

Who are these companies that are likely to finance these amounts? BMW Financial, Audi Financial, Porsche Financial, and the like. See the screen shot.

And not only do these companies allow you to finance, but expect a down payment on cars with six-figure price tags.

I have had my car for more than a decade. Actually, it has been 15 years. My car has been very reliable. Once I paid it off I decided I did not want another car note.  That was almost 10 years ago. Here is a snapshot below of my last payment. It may become my screensaver.

I have been able to do so much without having that payment hanging over my head. I decided to start paying off my credit card debt, invest more, get Lasik, join a gym, and get another degree. Basically, I invested in myself. I do not regret not purchasing a new car for one second.

Here is my take on it. Why stretch yourself financially, for a car you desire? Ask yourself if you would still be willing to do that, if the most popular car in the world among the money elite was a Honda? Financially savvy folks know that a fancy set of wheels is pricey in more ways than one.

I was told that a rapper was discussing online about owning a Bugatti or some other luxury vehicle that has three radiators. If one goes down, it costs $90k to replace. Gulp! That’s a hard pill or repair bill to swallow.

I heard an NBA player say that he knew people that would buy Bentley’s, but then would stop driving them because they were not meant for everyday driving. The wear and tear was ridiculous.  Owners were shelling out tens of thousands of dollars on maintenance. Don’t believe me. I read an article by Forbes about unreliable luxury cars.  Apparently, I am not the only one who has noticed that every luxury car that glitters isn’t gold, but merely sold to those willing to fork over their hard earned cash.

That means you basically are driving a house on wheels for the amount you paid. Then after all that, still have to worry about thousands of dollars in repairs. And since this isn’t your run of the mill car, you have to go to specific repair shops. Usually, this means repeated trips to the dealership. Who has time for that?

Luxury cars seem not only to come with a high price tag, but also lots of headaches. I say this: if you can afford the monthly payments, maintenance, and can hire a mechanic or chauffeur to repair or take your car in for service at a moment’s notice, then you can get the car. If not, you’re better off sticking to something you can take to Jiffy Lube.

Celebrities and Money, Financial Freedom, Financial Independence, Self-Made Millionaires, Wealth

The six ways to get rich

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“What’s keeping you from being rich? In most cases, it’s simply a lack of belief. In order to become rich, you must believe you can do it, and you must take the actions necessary to achieve your goal.” —Suze Orman

Sure, there are lots of ways to get rich, but they all fall into one of these six categories as there are only six ways to actually get rich.

The six ways to get rich are:

  • Capitalize on a unique skill or talent.
  • Marry rich.
  • Inherit money.
  • Own a business.
  • Take calculated risks and get lucky.
  • Spend less than you earn and invest wisely.

Let’s explore each category.

CAPITALIZE ON TALENT

Don’t make money your goal. Instead, pursue the things you love doing and then do them so well that people can’t take their eyes off of you.” ― Maya Angelou.

Become an expert in one area or niche and exploit it. Dominate that field. And never stop growing.

If you read my post on Beyoncé, you will notice that she started young, developed her craft, and expanded her expertise. She not only sings, but dances, endorses products, started businesses, and writes songs. She owns what she does. Everything from trademarks – Blue Ivy and Ivy Park – to owning a music streaming service. Put it simply, she dominates in her field.

If you want to be the next J.K. Rowling or Stephen King, then you just have to start writing. J.K. Rowling famously said she was rejected at least 12 times before anyone would publish Harry Potter. Persistence and determination are vitally important if you want to succeed. And just FYI, it took her 7 years to write Harry Potter.

MARRY RICH

“Don’t you know that a man being rich is like a girl being pretty? You wouldn’t marry a girl just because she’s pretty, but my goodness, doesn’t it help?”

―Marilyn Monroe as Lorelei Lee in Gentlemen Prefer Blondes (1953)

Dating is all about introductions and proximity. It doesn’t matter if you swipe right on Tinder or meet at your family’s country club, you just have to get some face time. You can’t date who you can’t see or touch.

In my experience, men date and marry women who are in their vicinity or social circle. Therefore, if you are looking for a rich man, then you have to be where they are i.e., charity events, sports games, auction houses, doctoral seminars, or the like.

In addition, if you know where wealthy men tend to reside, then hey you can pack up and find a job there and frequent their haunts. Location, location, location baby.

People also tend to look for partners that are successful in their own right. You don’t necessarily have to be rich, but having some sort of talent or career outside of just being a wealthy mate’s plus one bodes well for you and your prospects of landing and keeping a partner. So, invest in yourself – get educated, cultured, learn opera, play piano, paint or learn another language – either way you have a skill.

Above all else, respect yourself. Have your own life, career, friends, family, and money. No one wants a loner that can barely make rent, they want someone who is open to people, new experiences, and can pick up the check.

Don’t agree. Well, how’s this for food for thought; Chrissy Teigen once responded to a mean tweet by telling someone she does not just spend someone else’s money, but in two words replied: “my money.” She also went on to note her Forbes ranking and that she is a best-selling cookbook author. She basically told people to chew on that – no pun intended. A very nice retort on her part and her equivalent of put that in your pipe and smoke it.

Ah, gotta love that Chrissy.

You have to admit it sure sounds better when you can list your own accomplishments.  Respect for self is attractive and shows confidence. And confidence is key.

INHERIT MONEY

I would rather make my name than inherit it. – William Makepeace Thackeray

Studies into the wealth of households have shown that most wealth today is now earned than inherited. In my experience, people truly appreciate and cherish that which they work and sweat for.

For example, when I was given gifts of money or other items I am usually losing or unable to tell you whom gave me the gift. The car in my driveway that I worked so hard for is still there 15 years later.

There are those that inherit their fortunes, but the saying goes that a fool and his money are soon parted. I suggest you get a career, get educated, and learn a craft to earn your own living. If you do inherit, then you can manage your money instead of squandering it.

OWN A BUSINESS

Only I can change my life. No one can do it for me. – Carol Burnett

Starting a business is what two-thirds of millionaires do. This lets you know that if you are successful and become rich, then most likely you will or do own a business at some point in your life.

I suggest determining what you are good at and then turning that into a business. Passion is great, but just because you are passionate about golf and want to be a pro golfer does not mean that is what you are good at or meant to do.

Also study up and get a mentor or work with people in the field you want to be in. Read books, attend seminars and save money. All businesses need capitol. If you can find a business to start with a low barrier to entry such as a food truck or blogging, then the better.

BIG RISKS FOR BIG REWARDS

“If you want big rewards, you gotta take big risks.” Jessica Biel as Tenley Parrish in Summer Catch (2001)

If you read my post, wealth comes from doing not luck, then you understand that from preparedness comes opportunity and hard work creates luck and success.

It is okay to take risks, but I prefer calculated ones. The ones where you do your research, study your results, learn from you’re mistakes or the ones of others and keep moving forward. Make that pro con list, watch videos, attend conferences or better yet, speak to those that have done or are doing what you long to do. If you’re going to risk it all, then best to know all the facts first.

SPEND LESS, SAVE AND INVEST OVER TIME

The formula for getting rich is this: spend < money earned

Simply put, spend less than you earn.

If you can do that, you have got a shot at getting rich.

For example, you can be a millionaire over time if you do the following:

  • Save $6,000 a month for 10 years getting a 6% return
  • Save $2,200 a month for 20 years getting a 6% return
  • Save $800 a month for 25 years getting an 8% return
  • Save $600 a month for 30 years getting an 8% return
  • Save $500 a month for 40 years getting a 6% return

The combinations can vary based on the amount of savings invested and the return on investment of compound interest. However, the bottom line is saving can earn you a fortune.

For those concerned with inflation, here is an inflation-adjusted. 25-year wealth accumulation chart.

Source: www.businessinsider.com

THE BOTTOM LINE

Ultimately, no matter what path you take if you partake in spending less than you earn and investing, over time you will become rich eventually.

Financial Freedom, Financial Independence

Money Lessons I Learned from Aesop’s The Ants & the Grasshopper

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Illustration is by Milo Winter 

Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time. –Johann Wolfgang von Goethe

I remember watching an old cartoon about a grasshopper and an ant when I was a kid. I thought it was very entertaining and learned a very valuable lesson about money and hard work. That the two go hand-in-hand and not to let anyone tell you any different.

Little did I know that the story was originated from an Aesop fable. Aesop was an ancient storyteller from Greece that is responsible for many children’s stories. One of his most famous works is the Tortoise and the Hare.

The story is a classic tale of what can happen if you do not work for a living. Here I share with you my takeaways from the tale.

THERE IS A TIME SET ASIDE CHILDISH THINGS

There’s a time for work and a time for play.

In the story, the grasshopper is very happy in the beginning. It is springtime and the flowers are in bloom. The sun is shining. He wants to sing, dance, play, and be merry.

However, the ants know that, much as they like to always inform us on Game of Thrones, winter is coming.

The ants know that they must shore up their resources before the cold comes or they will be unable to provide food, clothing, and warmth for themselves.

Same rules apply when it comes to life and money. You work to provide your family, a roof over their heads, warm beds to sleep in at night, food on the table, and pay your bills.

When you are a child you spend part of your day at play. A much higher portion of your time is spent in recess and leisure while you learn and grow. However, the older you become, as maturity sets in, then the more you are to put playthings aside. You have responsibilities.

My father always told me growing up: responsibilities first, fun later. I still think of those words even today. Before I even start writing one word for this blog, I clean, pay bills, retrieve messages, return phone calls, open the mail, etc.

I need a clean desk and an open mind free of daily tasks and chores to be able to focus. When I was younger everything was cluttered; my desk, mind, and room. As an adult, I have learned to keep everything neat and tidy. Less hassle that way.

When I am organized I can also pay attention to what I am spending. Make a plan and budget for what I need and want. From this I learned, the more I save, then the more freedom I have as I have the means to provide for myself. Automating savings was the key.

THE MORE YOU SAVE

In one book I read, the father of the author was a hippy that did not care about money in his youth, now that he’s older that’s all he’s worried about.  As you get older, life becomes more expensive. Partly due to health care and others due to inflation. Therefore, you must squirrel away your money chips while you can and fill up the money pot. You do this by working when you are young and able.

Work when you’re young so you don’t have to when your old. Work as hard as you can. This elevates the stress of not knowing later, if you will have enough in abundance, so that working will be at will and by choice instead of because of no other options.

Check out this chart below to see how much you save can change your life.

 

 

 

 

 

 

 

 

 

 

Source: www.mrmoneymustache.com

Mathematically, regardless of income, you save more, then you become financially independent faster and that’s true no matter how much you earn.

EARN YOUR WAY TO FINANCIAL FREEDOM

Did you know, by saving 10 – 20% of your income annually, it would take approximately 30-40 years of working to accumulate enough money to retire? Maybe.

The fact of the matter is that life throws many curve balls at you. Sometimes you see it coming and sometimes you don’t.

The longer it takes to save your money; the more inflation decreases your purchasing power. That’s why you want to save more money faster. This gives your money, more time to earn compound interest and beat inflation.

Did you know, by saving 50% of your income annually, you would earn enough money for one year of retirement? That’s right. That means working for 10 years would equal 10 years’ worth of retirement. The formula is this:  1 x X = years of retirement or 1 (years of work) x X (years saving 50%) = years of retirement

See the chart below and see how much time it will take to save up just one year of retirement.

Source: www.flannelguyroi.com

Basically, if you aim to save, you are buying your freedom. The more you save, the quicker freedom comes.

WHAT YOU CAN DO WHEN YOUR FINANCIALLY INDEPENDENT

Getting back to the ant and the grasshopper story, you learn that once winter does finally come, the ants are safe, warm, and dry, buy the grasshopper is cold and hungry.

The ants worked hard every day. Every ant helped. They all had to work. And they saved up more resources than they actually needed. And when they day came, they were protected.

The grasshopper is left out in the cold with no food or place to stay and freezes outside because he chose to play instead of work.

The ants have mercy on the grasshopper and allow him to come in out of the cold. They decide to be kind and neighborly as it is very important to be a good neighbor. They tell the grasshopper they want him to live, even though he made fun of them while they worked. They feed and warm him by the fire. They tell him he must prepare for winter. They also tell him you must work to live.

The next summer came and this time the grasshopper heeded the ant’s advice and not only did he play, but he also worked.

Therefore, you must learn to work before you play. I learned that if you are unprepared then you are likely to fail. In addition, that being a good neighbor can make all the difference in someone’s life.

Lastly, the biggest takeaway I get from the story is this: money offers protection. So make sure you save a portion of every dollar you earn. I suggest saving $0.45 of every dollar you earn. And since it’s no secret that woman earn less, I suggest $0.50 of every dollar a woman earns should be saved. This would mean you become financially independent within 20 years! Possibly less.

That means, if you start working and saving 50% of your income at age 24, you can walk away from your full-time job at 44.

Sky is the limit from there. You can start doing all the things listed on your bucket list. You can become an artist, photographer, writer, blogger, or tightrope walker. The point is you can do what you want. You can lie on the beach all day if that’s what you want. The thing is, now you get to choose.

Budgeting, Celebrities and Money, Financial Independence

Wealth comes from doing not luck

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“Luck Is What Happens When Preparation Meets Opportunity” – Seneca

“I’m a great believer in luck, and I find the harder I work the more I have of it.” –Thomas Jefferson

I do not believe in coincidences.

I believe that whatever happens was meant to. A series of actions and events put two people or things together for a reason. You attract people and things to you.

“The truth attracts money to you and lies repel it.” – Suze Orman

Therefore, if you want to attract wealth, good health and abundance then tell the truth.

THE TRUTH WILL SET YOU DEBT-FREE

Tell people your financial truth. Tell your friends and family that you can’t go on that trip with them, or out to dinner at an expensive restaurant, or that you do not have the funds to buy Christmas gifts.

Yeah, I said it. Cancel Christmas if you have to.

There’s no rule that says you have to go into debt to buy gifts for Christmas.

How about the family finds a more economical way to give gifts? Like a lottery or drawing or Secret Santa. This could be drawing names out of a hat and buying just for that one person.

Who cares if you ruffle some feathers? It is far better to be debt-free. That is the gift that keeps on giving.

Not having to pay interest to service debt is the best gift of all you can give to yourself.

“Rather go to bed without dinner than to rise in debt.” – Benjamin Franklin

Couldn’t have said it better myself.

If I hear one more person talk about going on vacation to Jamaica, I’m going to start an exotic vacation jar. It works similar to a swear jar. However, the end result will be I put my own money into the jar, say $5, and then deposit it in my savings to invest it into a Certificate of Deposit (CD) or stocks at the beginning of each year.

I know some people may not agree with me, but I really do feel that you get as much pleasure and excitement out of saving as you do spending.

I have watched and heard many friends, family, and acquaintances talk about plans for vacation, but I rarely hear them talk about plans for saving for the future.

Everything revolves around spending.

Well, I’m here to let you know it’s okay to say no to things.

It is okay to say no that you cannot afford to go shopping, out to dinner with friends or to birthday parties.

Heck, even weddings if the ticket and tux will put you in the red.

If you feel obligated to go to a wedding, I completely understand, but plan for it.

For instance, you could save $100 bucks a month in a weddings account. This is for all things wedding related. Flights, hotel rooms, wedding attire, and gifts. Set aside a certain amount. Let’s say $1,000 and that is your budget. Then you never have to worry when you get that call, “I’m engaged.”

If you feel that it makes you uncomfortable to tell people you can’t afford it, try this one line on for size: “I choose not to spend my money on insert item here.”

Fill in the blank with anything. It sounds good no matter how you say it.

Cause after all, it is your money.

Lastly, tell your doctor the truth. You can’t have wealth without health.

Do not ever feel embarrassed to tell a health professional what is going on with you.

They are there to help not to judge.

LUCK MAY NOT EQUAL MORE BUCKS

“If you just keep your head down, work, and put it on the bottom line, sooner or later that takes care of everything else.” – Wayne Huizenga

I feel that people make their own luck. The harder you work, the more you give of your time, energy and efforts to work, help and care for others is all the luck you need. Hard work is like a magnet because it attracts things. Like money. It’s a Greenbacks Magnet. Get it. Wink, wink.

Even, Star Wars Master Jedi Obi-Wan agrees with me.

“There is no such thing as luck. Only opportunity and being prepared.” – Terry Crews as Julius on Everybody Hates Chris (2005-2009)

So if luck is tied to work, then what do you think happens when people are lazy. So in essence, you are not ever really unlucky, but you can be lazy.

I know life is a journey that is full of twists and turns. It is not a straight path – as the crow flies – from obscurity to abundance.

I also know that life is full of tough times, obstacles, and at times unfair. We may not all have the same opportunities, but we all have to play the hand we were dealt because our turn at bat will come. Every action may not be a royal flush or a home run. Sometimes you just have to roll with the dice. However, you can do your best with what you’ve got. Either way, life happens. So batter up.

I agree with this quote: “You don’t get to choose if you get hurt in this world…but you do have some say in who hurts you.” – John Green (author of The Fault in Our Stars and Paper Towns)

You may not earn what you want when you want, but you can start building lasting impressions and relationships that can put you on the path to wealth.

It’s been said the harder you work  the luckier you get.  Tejano singer Selena once said, “When you get hard work you get success.” That was 25 years ago. But you don’t have to believe me. Here is it straight from the singer herself. She may be gone, but her music and words of wisdom are not forgotten.

Let’s say you get to the cherry on top of the sundae and earn gobs of money and it piles up. Well, don’t let money make you complacent. No resting on your laurels. Hard work is about more than prosperity. Jennifer Lopez says she learned the following from her parents:

They showed me that you put your head down and work—you work for a living and then, when you’re making a living, you still don’t stop… We don’t stop working because we have money in the bank—we do what we do and we keep on doing it.

Remember this: “We make a living by what we get, but we make a life by what we give.” – Winston Churchill