Daily Archives: October 11, 2021

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We live in such a remarkable time. Its never been easier in history to make enough money to live a life you love.

People even 20 years ago would be so jealous of the opportunities we have today to live the life we want. We can work anywhere. Travel the world for less. This is at the core of the FIRE (financial independence retire early) movement.

And there are so many incredible blueprints for living a non-traditional life where youre stuck in a cubicle all day doing work you hate.

Theres a growing movement of people choosing to live life on their own terms. And Im part of it. Were the FIRE movement.

It truly can change your life. FIRE definitely changed mine. But when I started my own financial independence journey in 2010, there wasnt a movement yet.

We were a relatively small group of people all over the world using money as a tool to create more freedom in our lives. We figured out that the higher your savings rate the faster you can retire early.

Between 2010 and 2015 I launched a bunch of side hustles, saved upwards of 82% of my income and invested my money so it could grow.

This helped me reach financial independence and retire at the age of 30. I wrote an entire book about my journey and a step-by-step blueprint that anyone can follow titled Financial Freedom: A Proven Path to All The Money You Will Ever Need(Penguin Random House).

FI stands for financial independence.

While there are many definitions of financial independence, a simple way to sum it up, is you have reached financial independence when you are free from the worry of money.

For some people, this happens when theyd gotten out of debt and for others its the moment when you no longer have to work for money.

RE stands for retire early.

As surprising as it may seem, there are also many definitions of early retirement.

For some, it means the moment when you check out and never work again for the rest of your life (aka old school retirement).

But for others retiring early simply means theyve gotten to the point where they no longer have to work, but they might keep working, or switch to a job that they are more passionate about.

When you put FI and RE together you get FIRE.

But FIRE is more than just about money or personal finance optimization, its more about life optimization. The central question is What makes you happy? and aligning your spending and saving, and financial life around maximizing your happiness.

With that goal in mind, the FIRE movement also integrates psychology and philosophical concepts from other movements like Stoicism and even Buddhism.

Financial Independence Retire Early (FIRE) is ultimately a personal journey.

There are also many facets of FIRE that have spring up over the years:

New pockets of the FIRE movement seem to be popping up every day.

As you can see what FIRE means is ultimately up to you. Thats the beauty of it you truly can create your own path.

While the origins of the movement are hotly debated and evidently the term FIRE was first coined in an old Motley Fool forum sometime in the early 90s, the FIRE movement largely began in 1992 with the publication of one of my all-time favorite books, Your Money or Your Lifeby Joe Dominguez and Vicki Robin.

In the book, they outline a simple yet transcendent idea: that whenever youre working your actually trading your life energy for money. So whenever you buy something you should think about it in terms of hours of your life since you can always go out and make more money, but you can never get back your time.

To explore the 9 Steps in Your Money or Your Life check out the Free 5 Day Your Money or Your Life Email Course.

When I read Your Money or Your Life in August 2010 it completely changed my life. Over the past few years, Ive had the opportunity to become close friends with the co-author Vicki Robin and she graciously wrote the foreword to my book.

I feel so grateful to be able to work closely with Vicki to help make financial independence available to everyone.

But back 8 years ago when I started my own financial independence and early retirement journey, there were very few people on the FIRE path. In fact, I only knew of a handful of what are now known as FIRE bloggers.

Today there are thousands of bloggers documenting their financial independence journeys, an incredibly active financial independence subreddit, hundreds of podcasts, and even a documentary about the FIRE movement that Im in called Playing with FIRE that will be released soon and includes others members of the financial independence retire early community.

Im so stoked about it. Check out a preview of the documentary below.

Also, any good movement needs a folk song and there wasnt one about the FIRE movement so I wrote one. Heres me playing my FIRE movement folk song.

For anyone interested in the FIRE Movement, heres how it works.

Its simple in theory (which is why I could sum it up in a 90-second song) but is a little more challenging in execution.

To make it as simple as possible, here are the 9 steps to reach FIRE (financial independence retire early).

The biggest problem with mainstream personal finance and money advice is its all about the money!

But whats more important than money is life. You can always go out and make more money, but you can never get back your time. So before you even start thinking about the money, first think about what kind of life you want to live. Seriously, write it down.

What does the perfect day look like? Why is it perfect? What are the 10 things that make you happiest?

When I did this exercise I quickly realized that most of the things I enjoy most in life are actually pretty inexpensive or even free. It doesnt cost any money to walk my dog in a park on a Saturday, play guitar with my friends, or board games with my wife.

Once I started thinking in terms of the life I wanted to live and what I enjoyed most, it became easier to prioritize where to spend my money and where to save.

At the end of the day money only matters if you live a life you love. Ive always believed that money is not the goal, time is. But you need to think about what kind of life you want to live what is important to you?

Its always easier in life to chase that next thing whether its the next job promotion, raise, or save 1 million dollars.

Whats harder to do is take the time to figure out what actually makes you happy and what kind of life you want to live. But once you look within instead of just outside, the easier it will be to plan for financial freedom.

The next step is to figure out how much money you need to live that life awesome life! I remember being in college and dreaming about driving a Maserati and living in a big lake house, but now when I see a Maserati driving down the road I dont see $200,000, I see $1,200,000 in 30 years!

In 2010 when I started my financial independence journey, I didnt set a goal for how long it would take. All I knew was that when I did the math I was never going to be able to retire if I was only able to save 5-10% of a $40,000 $50,000 income.

The math I did was pretty simple. If I was able to save $5,000 per year maximum, even with an expected compounding rate of 6%, I would have about $433,000 in 30 years. While that might seem like a lot of money today,its not going to be that much in 30 years, because of two expected variablestaxes and inflation.

You will need to pay tax on that money when you take it out, assuming a 30% tax rate that cuts the after-tax value to $308,000, which when adjusted for 2% annual conservative inflation amount (it could be higher than this even!), then the future value of that money after taxes and inflation is approximately $170,000.

While $170,000 is still a lot of money, its not going to be in 30 years. It definitely wont be enough to live on for 20+ years.

Typical wisdom is that you need 25x your annual expenses to retire early. When I did this calculation, I anticipated my annual expenses would be at least $50,000 in the future (who knows if I will actually be able to live off $50,000 in the futureI sure hope so!).

But it was the best starting point I had, so by simply multiplying 25x by $50,000, I determined that I would need to save $1,250,000. Thats a big number, but it was my target.

You can sit down with a piece of paper and see how much money you need to retire early by checking this calculator I built.

Saving is an opportunity to live a life you love. Its not a sacrifice. As long as you view it as a sacrifice youre always going be in a scarcity mindset.

The only way that youll be able to reach financial freedom and FIRE is by saving as much money as you can and investing it to grow.

Remember what I said about living differently? A 50% saving/investing rate is more common than you would think amongst the FIRE (financial independence early retirement) crowd. I know a lot of people that save this much each month because they get it.

Saving 50%+ of your income is definitely going against the status quo, but thats how you fast track wealth. If you want to go deeper, here are two posts onhow much money you should be saving and my investing strategy.

The easiest way to monitor how much money youre saving is by tracking whats known as your savings rate. Your savings rate is simply the percentage of your income(s) that you are saving.

To calculate your savings rate, you want to add up all of the dollars that you save, both in pretax accounts (for example, 401(k)s and IRAs) and after-tax accounts (brokerage) and divide it by your income.

Here is an example of how it looks if you have a $100,000 income and are saving 40 percent.

Its pretty simple. The more money you can save the faster, and bigger, it can grow. The average savings rate in the United States is currently around 3.2%, which based on simple math means that a majority of Americans will never be able to retire.

But if you can get that savings rate to 20%, 30%, or even 50% youll be able to cut years and even decades off of your retirement.

Keeping a budget is really hard and its what stops most people from really fast tracking their financial independence.

Im not going to tell you to create a budget or cut back on all of your expenses. What you need is to balance how much you spend. Ive always viewed saving as an opportunity, not a sacrifice.

But you do need to find a way to reduce how much you are spending so you can increase how much you save.

The easiest way to do it is by cutting back on your housing, transportation, and food costs. The average American spends 70% of their money on housing, transportation, and food, so if you can spend less on them (say 25% or so, then you can bank the difference). If you move to a smaller apartment, walk to work, and cook at home, you could realistically increase your savings rate to 25%+ or even higher.

By reducing what I spent on my housing, transportation, and food costs, I increased my savings rate to 40% and sometimes as high as 80% while I was fast tracking my financial independence. The only way I was able to fast track was by cutting way back on my living expenses and investing the difference.

Focus on where you spend the most money to save the most money. Cut back your housing expense as much as you can through a strategy known as house hacking where you rent or buy a 3 or 4 bedroom apartment or house and rent out the other room. Youre going to save a lot more money doing that than by cutting out things like your $5 latte.

Im not here to tell you what to buy or not to buy, but its important to recognize that whenever you buy anything youre actually trading your future freedom for it.

At the end of the day it comes down to a personal choice, but I was happy moving to a smaller apartment, moving closer to my office, and eating out less, to bank the difference. And I definitely was able to bank the differencesaving at least an additional $13,000 per year by cutting back.

While I dont have the exact figures, I estimate that cutting back for 2 years, before buying my first home, I was able to save about $25,000 that I invested in 2011 and 2012, and that cutting back is now worth more than $100,000 in my investment accounts. Im going to continue to let it grow and hopefully making that decision 2 years ago will compound in 20 years into a lot more money. It was totally worth cutting back on my three biggest expenses. Try it out.

When I was on my own financial independence journey I calculated that for every $100 I saved I was buying a week of freedom in the future.

Not all debt is created equal. There is good debt vs bad debt. Some debt you lose money on and some debt you can make money with.

Good debt is debt like mortgage debt you use for investing in real estate or building a real estate empire or in some cases student loan debt if it helps you get a better job or make more money over your career.

Bad debt is credit card debt since the interest rate on it is probably over 20%. Pay down any credit card debt you have immediately since you are losing money with it.

While there are a bunch of different debt payoff strategies, the best strategy is simply to pay down your debt with the highest interest rate first, which in most cases is going to be credit card debt, then any personal loans, followed by student loans, and then mortgages.

The simple rationale is that compounding works both ways, meaning that just like your investments can grow and compound over time, so can your debt.

So whenever youre paying off a debt you want to pay down your highest interest rate debt because its like getting that percentage return on your money.

If you pay off your 20% interest rate credit card its like you made 20% because your debt is no longer growing, as opposed to paying down your student loan balance with a 5% interest rate where youd only be getting 5% on your money.

Since your full-time job is where youre likely currently making the most money, its important to try and get paid as much as possible.

The simple fact is that most people deserve a raise, but theyre too afraid to ask for one. The impact of a single raise of a few thousands of dollars can actually add up to tons of additional money over time.

Just getting 1 percent bigger raises each year can make you literally hundreds of thousands of dollars richer over the next twenty to thirty years by investing and compounding that small raise difference.

A simple study that looked at an annual 3 percent versus a 4 percent raise each year showed that after thirty years the 4 percent raise was worth $578,549 more when that small 1 percent difference was invested in the stock market.

This is because your future earning potential is impacted by your base salary today. Most people are underpaid in their roles, but many dont do anything about it.

Eighty-nine percent of Americans believe they deserve a raise, but only 54 percent plan to ask for one in the next year.

We typically spend more time planning for a vacation than working to improve and optimize our careers, which is a missed opportunity.

In reality, most of the jobs that will exist in 20 years havent even been created yet, so while traditional advice is that you should become an expert in one thing, its actually more valuable to have a broad range of complementary skill sets.

For example, if you know how to use Google Analytics, you should also learn about branding and how to start a blog.

A side hustle is anything you do to make money outside of your full-time job.

While you can make money doing literally anything, the best side hustles are the ones where you can make money doing something you actually enjoy and where you can control what youre getting paid and when you work.

Far too many people drive for Lyft or Uber and are limited by the hours in a day they have to drive and what they get paid because the rates are set by the company, not the drivers.

While there is an infinite number of side hustles that you can launch, I like the side hustles that you can do online because they give you the ultimate flexibility to make money from anywhere in the world and on your own time.

Some of the best current side hustles are learning how to become a virtual assistant, start a blog using Bluehost (check out how to make money blogging), and running Facebook ads.

Its essential to switch from a saving to an investing mindset. Its not possible to fast track financial independence by keeping your money in a savings accountinvesting is an essential ingredient.

I have made more money through investing than anything else and most of it in my sleep! Just recently, I was looking at my investing returns over a 90 day period and realized that I had made over $15,000 in gains from one of my investments, which is more money than I made in 6 months working at my first job after college. If you really want to make money, then you need to be investing as much money as you can.

Investing your money is what really accelerates your ability to reach financial freedom faster because your money starts making money and then the growth accelerates.

While you can invest in literally anything, the most dependable investments are stocks, bonds, and real estate. You need a short term investing strategy (money youre going to need in the next 5 years) and long term investing strategy (for the money youre going to need in 10+ years).

Note: Its always worth keeping at least 6 months of expenses saved in high-interest online savings account for any unexpected emergencies in whats known as an emergency fund.

Your short term investments should be kept in a high interest online savings account and your long term investments for retirement should be largely kept in low cost highly diversified index funds like the Vanguard Total Stock Market Index Fund (VTSAX) or something similar that holds most of the stocks in the U.S. stock market.

You can invest in a total stock market or S&P 500 index fund in most employee retirement plans like a 401(k), 403(b), or 457(b), as well as individual retirement accounts like a Roth IRA, Traditional IRA, SEP IRA, and Solo 401(k). While I personally invest in a few individual stocks, I largely recommend that you avoid investing in individual stocks unless its with less than 10% of your total net worth.

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The FIRE Movement | Financial Independence Retire Early

Movement whose goal is financial independence and retiring early

The FIRE (Financial Independence, Retire Early) movement is a lifestyle movement with the goal of gaining financial independence and retiring early. The model became particularly popular among millennials in the 2010s, gaining traction through online communities via information shared in blogs, podcasts, and online discussion forums.[1][2][3][4][5]

Those seeking to attain FIRE intentionally maximize their savings rate by finding ways to increase income and/or decrease expenses, along with aggressive investments that again increases their wealth and/or income. The objective is to accumulate assets until the resulting passive income provides enough money for living expenses throughout one's retirement years. Many proponents of the FIRE movement suggest the 4% rule as a rough withdrawal guideline, thus setting a goal of at least 25 times one's estimated annual living expenses. Upon reaching financial independence, paid work becomes optional, allowing for retirement from traditional work decades earlier than the standard retirement age.

FIRE is achieved through aggressive saving, far more than the standard 1015% typically recommended by financial planners.[6] Assuming expenses are equal to income minus savings, and neglecting investment returns, observe that:

From this example, it can be concluded that the time to retirement decreases significantly as savings rate is increased. For this reason, those pursuing FIRE attempt to save 50% or more of their income.[7] At a 75% savings rate, it would take less than 10 years of work to accumulate 25 times the average annual living expenses suggested by 'the 4% safe withdrawal' rule.

There are also two sides to the spectrum of FIRE. Lean FIRE refers to the ability to retire early on a smaller accumulation of retirement income and limited living expenses which will require a frugal lifestyle during retirement. On the other end of this is Fat FIRE, which refers to the ability to retire early due to a large amount of accumulated wealth and passive income with no concerns about living expenses during retirement. A hybrid of these two is known as Barista FIRE, which refers to a semi-retired lifestyle of working part-time for some supplemental income, or retiring fully but with a partner who continues to work.

FIRE is viewed as a lifestyle, not simply an investment strategy. A common thread that challenges individuals that subscribe to the FIRE lifestyle is finding partners that share the same fiscal goals. Availability of online resources help the movement to expand among Millennial high-net-worth individuals.[8][9][10]

The main ideas behind the FIRE movement originate from the 1992 best-selling book Your Money or Your Life written by Vicki Robin and Joe Dominguez,[11][12] as well as the 2010 book Early Retirement Extreme by Jacob Lund Fisker.[13] These works provide the basic template of combining a lifestyle of simple living with income from investments to achieve financial independence. In particular, the latter book describes the relationship between savings rate and time to retirement, which allows individuals to quickly project their retirement date given an assumed level of income and expenses.

The Mr. Money Mustache blog, which started in 2011, is an influential voice that generated interest in the idea of achieving early retirement through frugality and helped popularize the FIRE movement.[14][15] Other books, blogs, and podcasts continue to refine and promote the FIRE concept.[16][17][18] A Notable contributor to this movement includes Financial Freedom author Grant Sabatier, who works closely with Vicki Robin and popularized the idea of side hustling as a path to accelerate financial independence.[19][20][21] In 2018, the FIRE movement received significant coverage by traditional mainstream media outlets.[7][11][12][14] According to a survey conducted by the Harris Poll later that year, 11% of wealthier Americans aged 45 and older have heard of the FIRE movement by name while another 26% are aware of the concept.[22]

2020 saw the introduction of dating sites and blogs dedicated to bringing partners that share the FIRE lifestyle together.[23]

Some critics allege that the FIRE movement "is only for the rich",[24] pointing to the difficulties of achieving the high savings rates needed for FIRE on a low income.[14] Another common criticism is that the FIRE movement is composed only of white "tech bros", a notion that highlights the fact that men are overrepresented in media coverage of the FIRE movement.[25] A New York Times story focused on the women and women of color in the FIRE movement. It highlighted Kiersten Saunders and called Tanja Hester, author of the book Work Optional, "the matriarch of the FIRE women."[26] Paula Pant, host of the Afford Anything podcast, and Jamila Souffrant, host of the Journey to Launch podcast, are also prominent women of color in the FIRE movement.[27][28] Finally, some argue that early retirees are not saving enough for early retirement and the many unknowns that come with a longer time period. Because the retirement phase of FIRE could potentially last 70 years, critics say that it is inappropriate to apply the 4% rule, which was developed for a traditional retirement timeframe of 30 years.[7] For that reason, Hester and economist Karsten Jeske argue for a safer withdrawal rate of 3.5% or less, which means saving 30-40 times one's annual spending instead of 25 times if the goal is to retire completely and never earn money again.[29]

The rest is here:

FIRE movement - Wikipedia

Noah Solomon and Larry Hite

By Noah Solomon

Special to the Financial Independence Hub

Last month, I had the privilege of meeting legendary investor Larry Hite.

Larry was born into a lower middle-class family, had a major learning disability, did poorly in school, and was completely blind in one eye and half blind in the other. In his own words, I was not handsome. I was not athletic. Whatever I did, I sucked at it badly.

In 1981, after dabbling as a music promoter, actor, and screenwriter, Hite founded Mint Investments. Mint was a true pioneer, eschewing human judgment and instead basing its investment decisions on a purely systematic, rules-based approach rooted in statistical analysis.

By 1988, Mint registered average annual compounded returns of over 30%. In its best year, Mint registered a gain of 60% (1987, the year of the stock market crash), and in its worst year, it produced a gain of 13%. By 1990, Mint was the biggest hedge fund in the world, with a record-breaking $1 billion under management.

When it awarded Larry the Lifetime Achievement Award, Hedge Fund Magazine wrote:

Larry Hite has dedicated the last 30 years of his life to the pursuit of robust statistical programs and systems capable of generating consistent, attractive risk/reward relationships across a broad spectrum of markets and environments and has inspired a generation of commodity trading advisers and systematic hedge fund managers.

Although Hite began his investing career in the early 1980s, his philosophy of markets and approach to investing are remarkably similar to our own, which are summarized below.

Failure: A Foundation for Success

Hite maintains that his early failures were instrumental in his eventual success. He believes that accepting that failure is sometimes inevitable led him to develop an investment strategy that would limit losses.

In his book, The Rule, he wrote:

I believe the success Ive had arrived because I always expected to fail big. Solution? I engineered my actions so that a failure could not kill me. I won because I expected to lose. Failure became my advantage. Once you understand your potential for failure that is, there are times you cant win you know when to fold your cards and move on to the next. You will do this more quickly than others who stay in the game too long, hanging on and hoping that their losing bet will turn around.

Its not all about Being Right

Many investors focus on being right as much as possible on maximizing their ratio of winning vs. losing investments. On its face, this seems like a good idea all else being equal, if you win more than 50% of the time, then over time you will make money.

Hite takes a different approach. Whereas he has no issue with trying to be right as often as possible, he is far more focused on maximizing the average magnitude of his winning positions relative to that of his unsuccessful ones, asserting that:

Becoming wealthy and successful isnt simply about being right all the time. Its about how much you win when you are right as well as how much you lose when you are wrong. The Mint trading system did not prioritize being right all the time. We prioritized not losing a lot when we lost but winning big when we won. But as a result, we were frequently wrong. We understood and expected this and taught our clients the wisdom too.

Risk: A No Fooling Around game

Hite places a greater emphasis on risk management than on generating profits, claiming that mistakes regarding risk can lead to catastrophic results.He assertsthat,Risk is a no fooling around game; it does not allow for mistakes. If you do not manage the risk, eventually it will carry you out.

His approach to investing clearly reflects his respect for risk. Specifically, Hite divulges that We approach markets backwards. The first thing we ask is not what we can make, but how much we can lose. We play a defensive game.

One of my favorite anecdotes regarding risk is Hites reflection on a conversation he had with one of the worlds largest coffee traders, who asked, Larry, how can you know more about coffee than me? I am the largest trader in the world. I know where the boats are; I know the ministers. Larry responded, You are right. I dont know anything about coffee. In fact, I dont even drink it. The coffee mogul then inquired, How do you trade it then?, to which Larry answered, I just look at the risk.

Five years later, Larry heard that this magnate lost $100 million in the coffee market. Upon reflection, Hite states, You know something? He does know more about coffee than I do. But the point is, he didnt look at the risk.

Market Predictions, Storytelling, & Good Copywriters

Larry is skeptical that anyone can predict markets.Hein no way bases his approach to investing on making predictions, which he believes is an exercise in futility. In his own words:

I respect the sheer intelligence and devotion of economists who have attempted to develop a unifying theory of market dynamics. But I dont believe any such theory will hold up to scrutiny in the real world of money on the line. When you start believing you have remarkable market predicting powers, you get into trouble every single time.

Hite is also critical of Wall Street research reports, claiming that they possess little investment value and are designed to exploit peoples natural tendencies to listen to entertaining narratives, stating:

Stories began at the dawn of human society to entertain and instruct the next generation. We are wired to learn from well told stories. And unfortunately, Wall Street preys off our basic human weakness to want stories.

In his typically blunt and straightforward manner, he adds, When you start following slick reports filled with predictions, youre just finding out who has good copywriters.

A Computer cant get up on the wrong side of the bed in the morning

Larry was a pioneer in his exclusive reliance on a data-driven, systematic approach, using statistical analysis of historical data to develop trading rules, which are the basis of his investment decisions. When he launched Mint Investments in 1981, his goal was to create a scientific trading system that would remove human emotion from buying and selling decisions and rely instead on a purely statistical approach built on pre-set rules. Continue Reading

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Financial Independence Hub | Personal Finance, Stocks ...

What is financial independence?

Financial independence is having enough wealth such that you no longer have to work for money. You become financially independent when your wealth's assets produce enough income to cover your expenses.

For example: If you have $500,000 in assets and your assets produce $20,000 per year (4% of your total assets value) and your expenses for the year are $20,000 or less, then congratulations, you are now financially independent. Your assets are producing more income than you spend in a year.

Everyone has a different financial independence number. Some people want to have a more lavish retirement and therefore will need to save more money. Some people want to retire as soon as possible and are more willing to cut back some expenses. The key to financial independence is how much money you spend. The more you spend, the more you will need to save. The less you spend, the less you will need to save.

You need to save at least 25 times your annual spending.

Why? In 1998, three professors at Trinity University released what is now called the Trinity study. The study looked at a number of different stock/bond mixes of portfolios and their withdrawal rates from 1925 to 1995 in periods of 15 to 30 years. The study concluded that if you withdrew no more than 3-4% of your investment portfolio every year, then it would be extremely unlikely that your portfolio would run out of money. Thus, from this study, 4% became known as the safe withdrawal rate.

Therefore, withdrawing 4% of your investment portfolio every year should cover your annual expenses. Since this is 1/25 of your portfolio, then as a general rule, your portfolio must be at least 25 times your annual spending in order to retire.

Some people might be more conservative and go with a 3% withdrawal rate. That decision is up to you. However, keep in mind that the Trinity study did not assume the following:

With some of these assumptions in place, we do not have to be so conservative with our safe withdrawal rate and can use the standard 4% safe withdrawal rate.

An important factor to financial independence is your savings rate, which is how much of your income you can save. The more you save, the quicker you will reach financial independence. Take a look at Mr. Money Mustache's article on The Shockingly Simple Math Behind Early Retirement. Assuming a net worth of zero, if you save 50% of your income, you can retire in 17 years. If you save 75%, you can retire in 7 years. If you can save 85%, you can retire in 4 years.

Before we get started, we're going to assume a simple scenario: you don't have an emergency fund, you have some sort of debt (credit card, student loans, house, etc.) and you have no investment accounts.

Your first step should be to track every single dollar you are spending and earning. It will be very difficult to get a good grasp on your finances without knowing exactly what your accounts look like now and where your money is going. If you are looking for an automated approach, Mint.com is an excellent website to link to all of your accounts and pull your financial data automatically. However, I highly recommend using YNAB (You Need a Budget), which will require manual entry of every transaction in your accounts. Alternatively, you can manage this manual process with custom spreadsheets. I recommend doing this process manually (YNAB/spreadsheets) over automatically (Mint.com) as you will know where every dollar is going instead of being merely told where it went after the fact.

Once you are tracking every dollar, you should be able to easily spot where your money is leaking into unnecessary expenses. You should next create a budget, starting with a list of your essential expenses: housing, utilities, food, etc. Then starting listing your non-essential expenses: hobbies, alcohol, vacations, etc. Then you need to set aside a set dollar amount for each of these expenses, essential and non-essential, and try to not go over that monthly alloted amount.

Your objective is that you want to reduce your expenses such that your monthly income is greater than your monthly expenses. You will then take this left over money (income minus expenses) and place it into your soon-to-be created emergency fund, debts, investment accounts, etc. It is very important that you try to stick to your budget and to reduce and remove any expenses that are not necessary, at least temporarily until you are out of debt, if not permanemently (if you wish to achieve financial independence sooner).

An emergency fund is an important initial step to take. With your budget in hand, you should now know exactly how much your monthly expenses are. Now you need to save your excess monthly money (income minus expenses) into an emergency fund account. This account should be a cash account at your local bank or an online bank. The importance is that the emergency fund should be easily and quickly accessible during an emergency. Do not worry about trying to earn much interest on an emergency fund account. Think of it as a self-insurance against future unexpected expenses from emergency situations, such as non-regular car repairs or an emergency veterinary visit.

Start by saving up enough money to cover one month's worth of your budgeted expenses. With this money set aside, if something comes up in the near future, then you won't have to worry about adding more debt to your credit cards due to an unexpeceted emergency. Instead, you pay for that emergency with your saved cash on hand and then re-build your emergency fund for the next inevitable emergency down the road.

Once most of your debts have been paid off, you can expand your emergency fund to the typical recommended 3-6 months worth of expenses. The number of months to save is ultimately up to you and how risk averse you are. Some people save up to a year's worth of expenses (meaning they could possibly go without a job for up to a year!). I would not recommend more than a year's worth of cash in an emergency fund, as you will eventually be placing your excess saved money into an investment account, which is absolutely necessary to become financially independent.

This page is maintained by Bryan Denny. I am a software developer who is trying to achieve financial independence. I created this page as a starting point for others who are interested in doing the same thing.

This page is for informational purposes only. I am not a financial professional. See a professional for financial advice. I am not responsible for your decisions. Please take some time before you make any financial decisions.

This page is still under development. Have a suggested change? Make a pull request on GitHub!

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Financial Independence, Retire Early

Poornima Iyer, Executive Director,Om Apex Investment Services

Jay was a young man,who had recently opened his first Cafe.His wife had recently quit working after conceiving their first child.Just when everything seemed perfect to him,a pandemic called COVID struck and caused havoc in his happy land.Suddenly business plunged to an all time low. There were hardly any orders or customers rather - otherwise full of life place, something that was totally un-thought off.The income became almost nil, but the liabilities didnt. He still had to pay rent, EMI on the loan he took to set up the caf, etc.Having no savings or second source of income worsened the situation, but his father came up to his rescue and helped Jay pay the liabilities and get through the tough year. In the past year many people have been in place of Jay but werent as fortunate as him to have someone help them.The pandemic has truly brought forth the need to be financially independent.

Financial independence can be defined as the status of having enough income to pay one's living expenses for the rest of one's life without having to be employed or dependent on others.But in reality,it might mean different things to different people with the common foundation that its a state where one can afford at least basic needed necessities without being dependent on someone under all weathers of life.Its a phase where the money you have worked to accumulate,works for you to generate an annuity each month.But why is it important? many may ask.The reasons are innumerable, some of which include:

The earlier generation used to have the village system which gave a sense of financial and emotional security and each one would help the other in case of need,this system crumbled and then the joint family system crumbled.Now with single families being the trend each one has to fend for himself,and this is leading to imbalance both in financial as well as the Emotional and Social Systems.Stability which was the base is now gone,hence the need for Early Financial Planning to meet the basic as well as aspirational needs of each and every one needs to be planned early with goal setting.

Today loan is available literally for everything -personal /vehicle/ travel loan,etc but there is no loan available for life post retirement.Life expectancy is increasing,while the productive earning period of a person's life has gone down considerably.The new norm is retire by the age of 50 and live up-to the age of 90.Also,unlike before life starts at 50 and expenses have escalated in the form of vacations, fulfilling one's aspirations/hobbies and medical expenses follow.You need enough savings for a comfortable post retirement phase.

It is often seen that a person who is financially secure works more efficiently,grows faster and excels in career and lives happier and stress free because then the motivation to work doesnt come from a place of necessity but by choice.

Financial independence can be achieved by following good financial habits and properly planning and investing.The right age to start financial planning is when you give pocket money to your child,when today's world is all about instant gratification,we need to teach them that delaying gratification leads them to enjoy the anticipation of greater reward while working and waiting for it. It helps to bring about dedication,self control and self- discipline at an earlier age thus making them better human beings and prudent financial Investors.As the saying goes - Early to invest, best to harvest.

Starting early allows investors to garner the benefit of compounding returns, the time value of money increases over a period of time and with a small amount of money you could create a big corpus.Patience, discipline and dedication to stand by your goals are the virtues needed along with an earlier start to create wealth and achieve true happy and secure independence that doesnt get eroded by any unprecedented event like a pandemic.

You have celebrated the countrys independence so many times, but when are you going to celebrate the day marking the start of your financially independent future?

Views are personal:The author is Poornima Iyer, Executive Director,Om Apex Investment Services Pvt. Ltd

Disclaimer: The views expressed are of the author and are personal. TAML may or may not subscribe to the same.The views expressed in this article / video are in no way trying to predict the markets or to time them.The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice.Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you.

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Importance of Financial Independence in Today's World - Economic Times

Marc Cary is a conduit between the past and present. He has become a griot of sorts, one who regularly pays homage to those who helped shape him including legends he has worked with, like Abbey Lincoln, Betty Carter, Dizzy Gillespie, Sekou Sundiata and Roy Hargrove.

The Pulse featuring Marc Cary

Carys new album, Life Lessons, chronicles the peaks, valleys and plateaus he has traversed over the course of his life, and the connections made along the way. Although the album was recorded pre-pandemic, the timing of its release couldnt be more auspicious. It has an assuaging quality, an element he cites as essential to his sound. His mission has been to use his music to heal the community, just as it healed him.

During his teens, Cary was always an entrepreneur. Being one of five children, he was always on a quest for financial independence. He mowed lawns, had a paper route, and led an award-winning go-go band called High Integrity Band and Show. His quest also took him down a dark path. It was at age 14, while in an addiction recovery program, that he auditioned for Duke Ellington School of the Arts in Washington, D.C. His sponsor, an herbalist and acupuncturist whom he lived with during his late teens, took him to school as a condition of his acceptance to the prestigious school for the first six months.

But Cary was determined to take control of his life and his destiny. It is this mode of operation that has guided his career ever since. Now, he preaches the necessity of studying chord changes just as intensely as the business of music changes. When he isnt performing, he is passing on his knowledge on to students at both the Manhattan School of Music and Juilliard. He encourages them to not just be jazz historians mimicking the greats, but to make their own history by infusing their sound into their music.

In addition to being an educator and entrepreneur, Cary has always been focused on being in service to the community. His weekly Harlem Sessions is a community jam inspired by Sundiatas Community Sing project, which he once served as his music director. Carys trio on Life Lessons, with Dan Chmielinski on bass and Diego Joaquin Ramirez on drums, was birthed out of these Harlem meetups. Cary and Ramirez played together there for three consecutive years, and Chmielinski was one of his students.

Marc Cary - It's Not A Good Day to Die

While Life Lessons is a reflection on Carys personal story, it also recounts events that were turning points in society. When asked about one of the tracks on the album titled, Its Not a Good Day to Die, he was overcome with emotion as he recalled how singer Gina Breedlove gave him the inspiration for the lyrics dedicated to Amadou Diallo, who was killed by New York City police offers in 1999. They first performed the song along with Sundiata on the first anniversary of 9/11.

For more about Marc Cary, visit his website.

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Pianist Marc Cary surveys a winding path on 'Life Lessons' - wbgo.org

Even the most compatible of couples can find it tricky to manage their finances together. Where you previously had to think only about your own money needs, suddenly there are someone elses financial goals and habits to consider.

So, what do people need to keep in mind about managing finances in a relationship? Here are some tips from the experts on pitfalls to avoid when managing money as a couple

1. Not maintaining your own financial independence

Emma Watson, head of financial planning and advisory services at Rathbone Investment Management, says: Every couple manages their finances differently, whether thats splitting everything 50:50 or having one salary used to pay for everything day-to-day and the other to save for the future its whatever works best as a couple.

For those who feel comfortable to, setting up a joint bank account can help keep track of your joint expenses. However, before signing up to this, be aware that if one person has a bad credit rating, as soon as you have an account together you will be co-scored and your credit ratings will become linked, Watson cautions.Whether youre married or not, its wise to maintain your own financial independence too, by keeping your own bank account and savings.

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2. Not considering how financially compatible you are

Watson explains: Its not only about pounds and pence, but also attitudes, aims, and beliefs. If you are to share a lifetime with someone, it helps if you are both on the same wavelength when it comes to your life goals. Do you both have the same aspirations such as starting a family?

All life goals will require saving, so its good to know you are on the same path early on in your relationship. As part of this, take some time to figure out your money style. For example, is one person more of a saver than a spender or vice versa?

3. Being financially imbalanced

Watson says people can be left vulnerable if their other half mostly manages the finances. For example, if the main bill payer or finance controller became seriously ill or passed away, would the surviving partner know how to access their finances or how to pay the bills?

4. Not knowing your rights

Watson says: Whether youve been with a partner for two years or 20 years, if youre not a married couple or in a civil partnership, you need to be aware that the same legal and financial rights do not apply as if you were. If you are living together, or thinking about it, its worth considering making a cohabitation agreement to ensure you both know where you stand, she adds.

5. Only thinking about the here and now

Do you and your partner talk about money? (Alamy/PA)

Watson says this could include a lasting power of attorney (LPA) a legal document that lets you appoint one or more people to help you make decisions or to make decisions on your behalf if you are no longer able to.

Writing a will is one of the most important things you can do for any loved one, particularly children, as it means they can be financially cared for and protected for when youre no longer around, she explains.Its common for many people to only write a will when children arrive, but really, they should be written and updated at important life stages.

6. Not making time to talk about money

Zainab Kwaw-Swanzy, a Millennial finance specialist at Barclays suggests setting aside specific time to discuss money calmly. Make a list beforehand of what you want to discuss, and any concerns you might have. Whether thats how much you set aside towards goals or splitting bills, its always good to be on the same page before spending money.

7. Feeling guilty

Its likely that couples will have different financial situations. Kwaw-Swanzy suggests: If a partner makes a generous gesture, dont feel like you have to replicate this financially. There are many ways you can show your appreciation in different, budget-friendly ways. For example, cooking a romantic dinner, helping them with a task, and simply being there for support when they need it.

8. Believing plans cant be changed

Kwaw-Swanzy adds: Our financial situation, circumstances and goals are constantly changing, and its important to be open, aligned and check in on a regular basis.

9. Leaving valuable items vulnerable

Insurer Aviva settled over 300 UK claims for wedding rings being lost, stolen or damaged between July 2020 and July 2021. Theft was behind the bulk of claims, but others involved rings slipping off or being cut off following injuries. Many insurers have a single item limit on valuables, typically between 1,000 and 2,000. And if youre using grandmas antique engagement ring, fluctuating metal prices could mean its worth getting an updated valuation.

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9 pitfalls to avoid when managing your finances as a couple - The Independent

IT IS a long-standing debate whether or not you should start charging your children rent as they grow up and get a job themselves.

Some parents think it is a good idea to charge their children rent as they get older to instil the value of money and responsibility that comes with growing up.

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Other parents, see charging their children rent as a hinderance on their future and would rather their children save their money to put towards a house of their own.

One mum, who anonymously posted to Mumsnet, sparked a debate on the matter, when she asked if she was unreasonable for not making her kids pay rent.

The mum wrote in the forum: "I have a few friends who charge their adult children rent to live at home.

"I personally find this very strange, no matter their age, my children will always be my children and welcome in my home without any expectation of money.

"I think as well with it being so hard for young people to get on the housing ladder these days one of the only ways they can do is to live at home rent free so they can save for a deposit.

"Am I being unreasonable?"

One user wrote in response: "Stealth boast? Some of us can't support another adult for free..."

To which the woman replied: "Not sure how it's a stealth boast. It doesn't make sense to me that you'd have children but the second they turn 18 you can't afford to have them around anymore."

Lots of parents in the forum said that it was difficult to cover all the bills or food for their adult children, and that they should contribute to the household.

One user wrote: "Thats all very well if youre wealthy. We arent. So our adult dc, who is 21-years-old, who lives at home cant live here for free!!! Why should we fully support another adult when we are struggling ourselves?"

Another person commented: "How will they learn to manage their money and budget if they dont pay rent?"

A third person said: "Well because they are adults and contributing to the home is an adult responsibility unlike children. Not all families can afford to cover bills/food for their adult children, so if theyre earning, asking for a contribution isnt a huge scandal. And in most cases its still less than market rent, so you can still put a decent chunk away if working."

In response to people's comments, the woman said: "I'm by no means wealthy, less than 100 left over each month. But I won't top up my budget at the expense of my children. With regards to teaching financial independence- they budget an amount of each month to go towards a deposit and then they have to pay their bills (phone, car etc) so they are being responsible. Not like I'm letting them live here rent free so they can p**s all their money away."

The woman added in a separate comment that she understands if parents are struggling that they would ask their children to contribute, but says her point was in relation to a friend of hers who charges their kids around 350 a month, whilst the children are trying to save for a house themselves.

She said in this scenario, it seems sad because they are not in a position where they have to charge their children.

There were also a lot of parents and adult children who agreed with the mum, saying they would rather them put the money towards a house of their own.

One user replied: "I'm with you OP, I don't charge my adult children rent. It's our family home. They pull their weight in terms of cleaning and cooking though."

Another user commented: "My parents asked for a 10% contribution of my monthly wages once I was out of full time education and I never begrudged this. Why should I keep all of my money whilst my parents pay all the bills and do all the shopping etc. I was still able to save, enjoy my free time and it definitely taught me good life skills. Each to their own."

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Plus, a mum reveals why smacking only causes more tantrums and doesn't prevent bad behaviour.

And, how your handbag could be LETHAL for your baby and six other dangerous things in your home you've never noticed.

Meanwhile, a new mum shames her ex for leaving her for a 16-year-old using her babies top, but people say she's 'trashy'.

FABULOUS BINGO: GET A 5 FREE BONUS WITH NO DEPOSIT REQUIRED

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Mum asks if she is unreasonable for saying shell never charge her adult kids rent but not everyone s... - The US Sun

The DuPage County Regional Office of Education, in partnership with College of DuPage Hire-Ed and GPS Education Partners (GPSEd), is proud to announce the rollout of a hands-on work opportunity and career exploration experience for high school students in DuPage County.

The DuPage Work-Based Learning and Youth Apprenticeship Collaboration, which was first piloted during the 2020-2021 school year with eight DuPage high schools, is designed to help students ages 16 and older access employment, education, training, and support services to succeed in the labor market. Students enrolled in this program are paid student apprentices with local business partners. As student apprentices, they work towards 450 hours of work-based learning during the year-long course.

During the 2020-2021 school year, 11 students participated in the pilot version of the program, and three of those students are continuing as apprentices with the College of DuPage Hire-Ed program. Program coordinators say several additional high schools will be participating in the program during the current school year -- as well as many more students.

Dr. Darlene Ruscitti, Regional Superintendent of DuPage County Schools, says the overarching goal of the program is to serve DuPage County. "We hope to give students the tools they need to have positive workplace experiences pre-graduation so they can experience successful careers post-graduation. This, in turn, will strengthen the DuPage County workforce with skilled workers both now and in the years to come," Ruscitti explains.

With many businesses experiencing worker shortages, the Work-Based Learning Collaborative helps the community by matching employers with student workers who are serious about contributing to the success of their respective industries.

Last spring, the ROE, in collaboration with WorkNet DuPage, hosted an event for business leaders to showcase the program, and the response was enthusiastic. More than 100 people attended the event.

Greg Carrico, the human resources director at Camcraft, Inc., a components manufacturer in Hanover Park, commented, "We didn't know how to get started on getting young folks in our business. It was really refreshing to get some help with that."

High-demand sectors such as manufacturing, cybersecurity, information technology, health services, and logistics are just some of the career pathways that will be available to students. Students in the program are also given the opportunity to tour workplaces, job shadow, intern, and participate in paid pre-apprenticeships.

Ruscitti hopes more schools and students will take advantage of the program. "We have received really positive feedback from participants. One of the biggest benefits for students is that they are able to earn high school credits and earn a paycheck to begin their pathway to financial independence. In addition, they can explore college and career options while developing valuable workplace skills and technical competencies -- all before graduating from high school," said Ruscitti.

The DuPage ROE is seeking additional funding for this program. They have secured one funding source that contributes to a limited student demographic, but they are hopeful additional funding will serve all participating students. In the meantime, the ROE is working alongside Project Hire-Ed (College of DuPage), WorkNet DuPage, and GPS Education Partners, to develop marketing tools and a website where students, parents, schools, and businesses can get more information on the program.

For more information on this exciting new program and how to get involved, visit the Work-Based Learning & Youth Apprenticeship Collaborative website.

About the DuPage Regional Office of Education

The DuPage Regional Office of Education is a service organization whose role is to provide high quality service and support to all stakeholders and collectively expend every effort to prepare DuPage County children for the world they will face. In addition to the myriad of services provided directly to educators and schools, the office also provides services and support to community members, private schools, parents, children, business leaders, and others. For more information, visit DuPageROE.org.

About Project Hire-Ed (College of DuPage)

Project Hire-Ed is an apprenticeship program providing a bridge between hiring and education to help employers find the right talent for their organizations and teach students the skills employers are looking for. They've been in existence for two years and currently offer apprenticeships in the manufacturing and horticulture industries. In 2022 they will be offering opportunities in the information technology fields. For more information, visit http://www.cod.edu/project-hire-ed/index.aspx.

About GPS Education Partners

GPS Education Partners (GPSEd) is a nonprofit that has been leading the work-based learning revolution in Wisconsin for over 20 years. GPSEd now serves as an intermediary partner to schools, businesses and communities -- across the Midwest and beyond -- to provide scalable, quality work-based learning solutions that impact educational systems, talent pipeline needs and unite and lift local economies through the development of technical talent and young leaders. For more information, visit GPS Education Partners.

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DuPage Regional Office of Education starts new work-based learning program for high school students - Chicago Daily Herald

The National Association of REALTORS (NAR) is proposing a series of changes to its multiple listing services (MLS) in the new year, according to recent reports.

NARs MLS Technology and Emerging Issues Advisory Board passed a bundle of motions focused on sprucing up the transparency and functionality of its association-operated MLS for participants and subscribers.

The advisory board moved forward with these recommendations because we think they ensure that MLSs are up-to-date with advancements in technology and consumer preference, operate with transparency and maintain policies that make the consumer experience better, said Greg Zadel, chair of the advisory board in a statement following the committees Sept. 9 10 meeting.

If accepted by the Multiple Listing Issues and Policies Committee and NAR Board of Directors in November, the policies will go into effect on Jan. 1, 2022, and MLSs will have until Mar. 1 to adopt the changes locally, according to NAR reports.

Zadel, who is also the broker/owner of Zadel Realty in Firestone, Colorado, suggested the proposed policies would serve the interest of consumers while also strengthening NAR policies and its code of ethics.

Based on the list of recommendations, the advisory board wants to eliminate filtering features that show MLS listings based on the level of compensation offered to the cooperating broker or by the name of a brokerage or agent.

The advisory board recommended amending the language in the Internet Data Exchange (IDX) policy and the Virtual Office Website (VOW) policy to make it consistent with the prohibition on filtering and restricting MLS listings.

Another motion would restrict MLS participants and subscribers from advertising their services to buyers and sellers as free, according to the list of recommendations.

While REALTORS have always been required to advertise their services accurately and truthfully, and many REALTOR services have no cost to the recipient, this change creates a bright-line rule on the use of the word free that is easy to follow and enforce, read an excerpt from the advisory boards recommendation list.

Along with improving transparency, the advisory board recommended a batch of best practices for the MLS Standards Work Group that it claimed could deliver a higher level of service and engagement with MLS participants and subscribers.

The suggested best practices include:

Disciplining participants who violate MLS rules Informing participants about the data feeds and technical support available to them and their vendors on the MLS site Sharing aggregated data with state associations and NAR for statistical and advocacy purposes Clarifying MLS officers and directors fiduciary duty Developing an annual MLS strategic plan with specific consideration to leadership training, partnerships, technology, participant outreach, financial independence, diversity, equity and inclusion

The group also suggested creating a written plan with a timeline and cost estimate for complying with the Real Estate Standards Organizations (RESOs) Data Dictionary by July 2022.

Other recommendations included adding listing broker attribution in the IDX and VOW policies and requiring MLSs to offer participants or their designees a single data feed and a brokerage back-office feed.

The list of potential changes could grow as the advisory board prepares for another meeting in October.

The MLS Issues and Policies Committee and NAR Board of Directors are set to vote on the policies on Nov. 13 and 15, respectively, during the REALTORS Conference & Expo.

Jordan Grice is RISMedias associate content editor. Email him your real estate news to jgrice@rismedia.com.

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NAR Advisory Board Approves Motion to Alter MLS - RisMedia.com