Why Your Checking Account May No Longer Be Free

Why Your Checking Account May No Longer Be Free

Ana Altchek  Fri, July 5, 2024    Business Insider

Chase Bank's boss warned that new federal fee caps could make everyday banking more expensive.

Marianne Lake said the bank is planning to pass the pain of their lost profits on to customers.

Some new costs may be placed on now-free services like checking accounts and financial tools.

Everyday banking might be about to get more expensive for consumers.

Marianne Lake, the CEO of consumer and community banking at Chase Bank, said federal regulations to cap overdraft and late fees would take a bite out of the company's bottom line.  And she warned that making up that loss would be passed on to consumers, according to a report from The Wall Street Journal.

Lake said the changes would be "broad, sweeping, and significant," the report said.

Some of those costs would be tacked onto services that have been free so far, like checking accounts and financial planning tools, the report said.

Business Insider reviewed a Chase presentation that covered the expected impact of proposed regulations. The presentation estimated that two out of three consumers would have to pay a fee for checking accounts if the cap went through.

Lake also said those impacted will be the ones "who can least afford to be" and credit access will also be more challenging.

Some of the regulations include a proposed $8 cap on late credit card payment fees and a $3 cap for overdrafting bank accounts. The limit is part of President Joe Biden's crackdown on hidden fees.

The Consumer Financial Protection Bureau estimated that about 45 million people are charged credit card late fees annually, and the change could save those people up to $220 a year.

TO READ MORE: https://www.yahoo.com/finance/news/jpmorgan-warns-86-million-customers-150827155.html

JPMorgan Warns 86 Million Customers They Might Have To Start Paying For Their Bank Accounts

Chris Morris   Fri, July 5, 2024

Chase Bank customers could see some additional charges in the not too distant future.

The Wall Street Journal reports the country’s biggest retail bank is warning that it might begin charging customers for their accounts. That would impact some 86 million customers.

The potential charges, says Marianne Lake, CEO of consumer and community banking at JPMorgan, are a result of new regulatory rules that cap overdraft and late fees. Lake says Chase will be passing along those increased expenses to customers, which would put an end to now-free services such as checking accounts and wealth management tools. And she says she expects other banks will follow suit.

This story was originally featured on Fortune.com

TO READ MORE: https://www.yahoo.com/finance/news/jpmorgan-warns-86-million-customers-150827155.html

7 Expenses That Will Drain Your Retirement Savings the Fastest

7 Expenses That Will Drain Your Retirement Savings the Fastest

Casey Bond  Fri, July 5, 2024

You’ve spent a good portion of your life working and saving for retirement. Once you reach that milestone, you want to feel confident that your nest egg is big enough to cover your needs in your golden years.

As you retire, it’s important to anticipate some of the costs eating into your savings. Here are seven expenses that can drain your retirement savings — and how to plan for them.

Healthcare

Even with Medicare, out-of-pocket healthcare expenses can be significant, according to Taylor Kovar, certified financial planner and CEO at The Money Couple and Kovar Wealth Management. “This includes prescriptions, surgeries, and long-term care costs,” said Kovar.

One estimate by HealthView Services Financial finds that a healthy 65-year-old couple who retired in 2021 will likely spend between $156,208 and $1 million on healthcare costs during retirement, depending on where and how long they live.

How To Plan: Kovar said it’s a good idea to have a health savings account (HSA) or a similar fund specifically for medical expenses. “Regularly reviewing your health insurance and considering supplemental insurance can also help mitigate these costs,” he added.

Homeownership

If you own a home, that can be another source of major expenses that eat into retirement funds. “As homes age, significant repairs like roof replacements or plumbing issues become more frequent,” Kovar said. From 2016 through 2020, Americans aged 65 and older spent an average of $16,880 per year on housing-related costs, according to the Bureau of Labor Statistics.

How To Plan: Kovar recommends setting aside a home maintenance fund and conducting regular home inspections to help anticipate and spread out these costs.

Inflation

Inflation can significantly impact your future savings, since you’ll need to take larger withdrawals to make up for the higher cost of living, according to Jeff Busch, partner and investment advisor representative at Lift Financial. “This can be particularly troublesome if your portfolio is made up of fixed income strategies that can’t keep up with inflation by increasing income over time,” said Busch.

How To Plan: To mitigate inflation, Busch said you may want to invest a portion of your portfolio in stocks that have historically provided better returns than bonds and cash. In general, he added, maintaining a diversified portfolio can be a big help in the long run.

Adult Children (and Their Children)

From student loans to cell phone bills, many retirees find themselves financially assisting their adult children or even their grandchildren. A study by Merrill Lynch found that in 2018, 79% of parents were providing financial support to their adult children, contributing a combined total of $500 billion annually.

How To Plan: Kovar said it’s essential to set boundaries and have open financial discussions with family to ensure this support doesn’t derail retirement plans.

To Read More:

https://www.yahoo.com/finance/news/7-expenses-most-likely-drain-170042871.html

9 Surprising Items Professional Movers Won't Move

Did you know movers won't handle your nail polish remover? Seriously. Here's what your movers won't move under any circumstances.

Dan Thorp-Lancaster  Wed, July 3, 2024

Professional movers will pack and transfer just about anything in your home, but they won't even touch some things. Federal regulations limit moving companies from handling anything deemed hazardous. That includes common household items such as nail polish remover.

Here's a list of other things you'll have to make alternate plans for before you move. You could squirrel some of them away and take your chances, but movers may make you sign a document to state you won't move any of the following items.

Potentially hazardous items you'll need to move yourself

Batteries

You may think your batteries are harmless, but they have the potential to become little, toxic fire starters. Sitting in the back of a hot truck can cause them to combust, so movers will avoid transporting them. Even if they don't start a fire, heat and punctures can cause batteries to leak, leaving toxic chemicals in their wake.

Gas, nail polish remover, and other flammable liquids

If you keep gas or oil in your garage for lawn equipment, you'll have to move it yourself. For the same reason as batteries, flammable liquids are a no-go in hot trucks where they can leak and catch fire. Even nail polish remover is a hazard, so sweep your home for flammable liquids and securely transport them yourself or properly dispose of them.

Ammunition and explosives

It should probably go without saying, but we'll write it anyway: your movers won't handle explosives. And while they will sometimes move unloaded firearms, ammunition is prohibited. If you're crossing state lines, check the local laws and regulations for how to legally transport guns and ammunition.

Corrosive chemicals, poisons, and cleaning products

Toxic chemicals can easily leak during the moving process. Not only is this a health hazard to your movers, but corrosive chemicals can damage the rest of your belongings or the moving truck. Your movers will also refuse to handle household cleaning products because of their potential to form a toxic gas when combined.

Pressurized gas cylinders

If you or a loved one has ever used an oxygen tank, you probably know how dangerous they are. The potential hazards from a puncture or leak, stray spark, or excessive heat aren't worth the risk of loading them into a moving truck. This is also true for other pressurized containers like propane tanks, fire extinguishers, hairsprays, and anything else that can pose a fire or projectile risk.

Live plants and animals

https://www.yahoo.com/lifestyle/common-household-items-movers-wont-move-190007904.html

Why So Few People Feel Secure About Money — Even When They Have Lots of It

Why So Few People Feel Secure About Money — Even When They Have Lots of It

And why the neighbors of lottery winners are often worse off.

Sean Kernan  June 21, 2024·

I’m not rich by any means. But I’ve done well enough to be comfortable, mostly because I saved aggressively early in my career. Yet I still feel like I’m only a stone’s throw from being in poverty, which is slightly irrational.

I remember having no money and having to budget until my next paycheck or risk groveling to my parents for help. It wasn’t a good life. And it still feels like yesterday, even though so many years have passed. Sadly, many people feel this way.

And to some extent — this stress can be constructive. It can mitigate risky spending. You’ll certainly never catch me with problematic expensive hobbies. But I wish I could feel more at ease about my station in life. Many of my friends are in this same psychological boat too. My buddy Brian is a software engineer, who has been making north of $180K per year — for years on end — while living in a low-cost area, and he’s still as cheap as he’s ever been.

So why are we like this? How do we level up and counteract this financial anxiety?

The origins of the problem

People tend to downgrade their financial standing. For example, per a survey by the financial firm Ameriprise Financial, only 13% of American millionaires classify themselves as wealthy. Even among those who had more than $5M in total assets — many still said they didn’t feel rich.

These weren’t people living in Silicon Valley, where $5M only gets you a shack. These were everyday people from all around the United States — still feeling underfunded.

Part of this is because of the disappearance of pensions — and fear that we’ll live on our savings and social security to get us through to old age. Both of my grandfathers had pensions, with one of them having two full separate pensions (military and government). But we are now the 401K generation — in a system that is more stressful than ever.

Why do people who have so much still feel sad about their financial standing?

Elizabeth Dunn, psychology professor at The University of British Columbia, and co-author of Happy Money: The Science of Happier Spending, looked into this very question. She found that social comparison, in particular, drives much of our financial dissatisfaction.

How we compare our income to others of similar age, education, and region of residence, greatly shapes our self-perceptions and satisfaction. Unsurprisingly, those who compared themselves to groups of higher income, tended to be less happy and more anxious about money.

Unfortunately, a majority of people tend to do upward comparisons. The severity of this impact was most notable: “The income of the reference group is about as important as one’s own income for individual happiness.”

It pains me to admit it: I’m 100% a victim of this statistic. I often watch videos of lavish mansion tours on YouTube, despite knowing the likelihood of me ever owning such a property is slim (unless I somehow write the next iteration of Atomic Habits). But I still enjoy oohing and aahing over the stunning architecture, classy furniture and paintings hanging on the walls. It’s entirely possible this admiration is only heightening my anxiety about money.

Yet I know as well as you that the person in that mansion isn’t likely to be happier than the rest of us. Within a year of becoming rich, or facing tragedy, the vast majority of people return to their baseline happiness.

What’s most telling is that winning the lottery can significantly impact your neighbor’s wellbeing. One study in Canada found that as the magnitude of someone’s lottery winnings went up, their neighbors odds of financial distress and borrowing increased alongside it.

To Read More:

https://www.yahoo.com/lifestyle/story/why-so-few-people-feel-secure-about-money--even-when-they-have-lots-of-it-212029309.html

Are You Rich? Here's What Americans Think You Need To Be Considered Wealthy

Are You Rich? Here's What Americans Think You Need To Be Considered Wealthy

Jeannine Mancini   Tue, Jul 2, 2024,

Bill Gates Was The 'World's Richest Man' For A Record 18 Years. His Secret To Success? 'Saving Like A Pessimist, Investing Like An Optimist'

Bill Gates, co-founder of Microsoft and one of the most influential figures in the tech industry, is renowned for his business acumen and unique approach to financial management. After dropping out of college at 19, Gates cofounded Microsoft with Paul Allen, transforming it from a small startup into a global tech giant.

In the United States, the concept of being rich is often a subject of discussion, curiosity and, sometimes, aspiration. Charles Schwab's 2023 Modern Wealth Survey provides insights into this topic, revealing that the average American equates being wealthy with a net worth of approximately $2.2 million.

Although the most recent data from the Federal Reserve reveals the average American household is a millionaire with a net worth of $1.06 million, looking at the median or midpoint value portrays a more accurate picture. Based on the October report from the Federal Reserve, the median net worth of U.S. households overall is $192,900.

But how spot-on are Americans’ perceptions of wealth?

Top 2% wealth: The top 2% of Americans have a net worth of about $2.472 million, aligning closely with the surveyed perception of wealth.

Top 5% wealth: The next tier, the top 5%, has a net worth of around $1.03 million.

Top 10% wealth: The top 10% of the population has a net worth of approximately $854,900.

These figures illustrate a dramatic wealth gradient in the U.S., indicating a substantial increase in net worth needed to move from the top 10% to the top 2%.

Understanding Wealth Beyond Numbers

Wealth is not solely about the figures in your bank account or investment portfolio; it's also about how you perceive and use your resources. Here are some tips and perspectives to understand and potentially achieve wealth.

Savings and spending habits: Being able to save, that is, spending less than you earn, is a foundational aspect of accumulating wealth. Establishing robust financial habits like budgeting and goal-setting can pave the way to wealth, regardless of the specific dollar amount.

Living below your means: In a world where consumerism is rampant, living below your means is a key principle. This might involve cutting unnecessary expenses, like reducing monthly subscriptions or dining out less frequently. Such habits not only bolster savings but also prepare you for financial emergencies.

Affording desires: The ability to save and spend wisely often leads to the capacity to afford what you desire, whether it is a new vehicle or a vacation. Achieving financial goals is a strong indicator of wealth.

Life goals over money: Wealth is not just about accumulating money but also about fulfilling life aspirations. Whether it's running a business, becoming debt-free or saving for retirement, having a clear vision is crucial.

Preparing for retirement: A key aspect of being wealthy is having a solid retirement plan. This involves understanding how much to save and starting early to build a financial foundation for the golden years.

https://finance.yahoo.com/news/bill-gates-worlds-richest-man-155055431.html

5 Biggest Money Mistakes When Retiring in the Midwest

5 Biggest Money Mistakes When Retiring in the Midwest

Gina Hagler  Mon, July 1, 2024

Retiring with little to no savings is a situation that even Americans who made the effort to save can find themselves in. Creating a nest egg is the important first step, but there are a number of ways that you can end up poorly managing it — before and after retiring.

Some of the universal mistakes include taking on too much risk or withdrawing too much, too soon. While the Midwest is attractive to retirees for its relative affordability, retiring still requires careful planning.

If you’re retiring in the Midwest, these are the biggest areas of concern through which you could slip up, according to Johnson Wealth and Income Management.

Retiring Too Early

A Bureau of Labor Statistics survey found that the average boomer-aged worker in Iowa switches jobs roughly 12 times, while a Federal Reserve Bank of Minneapolis survey recently indicated that workers are struggling to find jobs that offer higher wages and stronger benefits among the rising cost of living.

It’s recommended to not change jobs or leave the workforce without fully assessing the options you have available. You could end up losing out on 401(k) employer contributions and stock options without remaining employed for a certain period of time.

Not Accounting for Taxes

If you have a 401(k), traditional IRA or other tax-deferred account, you need to be mindful that taxes will eat a portion of your balance. If your tax bracket will be higher post-retirement, a Roth IRA or Roth 401(k) is a good idea so that your withdrawals will be tax free. If your tax bracket will be lower, opt for a traditional IRA or 401(k) so you pay lower taxes after retiring.

South Dakota is a Midwestern state with no personal income tax. This contributes to it being seen as a good place to retire, according to Travel + Leisure, but don’t forget that you still have to consider the overall tax burden (i.e., property taxes).

Not Considering Future Healthcare

To Read More:

https://finance.yahoo.com/news/5-biggest-money-mistakes-retiring-190108821.html

I Grew Up Rich: 6 Money Lessons I Learned After I Lost It All

I Grew Up Rich: 6 Money Lessons I Learned After I Lost It All

G. Brian Davis  Sat, June 29, 2024

An oft-cited statistic states that 70% of wealthy families lose their riches by the second generation, and 90% lose them by the third.

Why? Because the first generation earns it, the second generation spends it and the third finds itself back at square one.

It turns out that earning money and shepherding money long term require two different skill sets. All too often, no one in any of those three generations learns how to protect and grow wealth long term.

“I grew up in a wealthy family where my grandfather was the chairman of the largest textile processing mill in our city,” explained Muhammad Ali, sales director at George Digital. “Our business, established in the 1950s, was a significant player in the industry from 1970 to 2001 … However, our fortunes drastically changed, and by 2012, my father’s income dwindled to just $300 a month.

“In 2013, amidst our financial crisis, I developed an interest in programming. Unfortunately, we couldn’t afford a laptop, and we had to live with my grandparents, along with my father’s brothers and their families. This challenging period taught me several invaluable lessons about money and resilience.

“Eventually, I was the first person among my grandfather’s children and grandchildren to get a chance to study in the U.S.

“Here are some key money lessons I learned after losing it all.”

Diversify Your Income Streams

“Our family focused solely on the textile business, and when it failed, we had no backup.

“In 2015, I came across Russell Brunson’s book ‘DotCom Secrets,’ which sparked my interest in an online business. By September 2016, Adam C. Miller introduced me to the world of digital marketing. Despite the lack of resources and guidance, I persevered, slowly learning about digital PR … I also delved into local SEO (search engine optimization) and e-commerce business models.

“After our family’s textile business shut down, there was no one to restart the hosiery textile business. However, years later, I decided to reignite this passion to continue my family legacy and started Molani Enterprises, a textile sourcing and trading company. Alongside my ventures in PR and e-commerce, reviving the textile business was a way to honor my family’s history and rebuild our presence in the industry.”

Maintain a Financial Cushion

Everyone needs an emergency fund. Whether you keep two months’ or two years’ worth of living expenses in it depends on how stable your income and expenses are, but you need that cash cushion to carry you through the inevitable nasty surprises that life throws at you.

“Always keep cash savings to cover basic living expenses and emergencies. This reserve should not be touched for business investments. This lesson was crucial for me, as I witnessed bad financial decisions during our business downfall, where more money was sunk into a failing enterprise.”

Seize Opportunities

They say that when an opportunity knocks at your door, it does so dressed up like work.

To Read More:

https://www.yahoo.com/finance/news/grew-rich-6-money-lessons-210008891.html

6 Ways To Build Wealth After Getting Laid Off — That Don’t Include a New Job

6 Ways To Build Wealth After Getting Laid Off — That Don’t Include a New Job

Vance Cariaga   Thu, Jun 27, 2024

Layoffs are a fact of life in the modern economy — even when the economy is growing and unemployment is low, like now. The list of companies that have announced layoffs this year alone reads like a “who’s who” of corporate titans and includes Amazon, Walmart, Microsoft, Alphabet (Google), Tesla, Bristol Myers Squibb, Nike and Disney.

The disconcerting thing for workers is that employers sometimes announce layoffs even when they’re doing well financially. In some cases, businesses announce layoffs to make up for past hiring sprees. In other cases, they simply replace workers with AI or other technologies.

Given the size and frequency of layoffs these days, it’s understandable that some folks who have been given the pink slip have decided to stop looking for jobs altogether. If you fall into that category, here are six ways to build wealth that don’t include getting another full-time job.

Find a Side Hustle Instead

Unless you were given a generous severance package after getting laid off, you might need to bring in some immediate income to help navigate the initial rough patch. That doesn’t mean you have to get another job, however. There are plenty of side hustles available that let you work on your own schedule and be your own boss.

If you have expertise in a particular field, for example, you could serve as a consultant and earn up to $100 an hour or more. If you have a strong background in social media and a large network of online friends and followers, consider becoming an influencer. It’s not uncommon for successful influencers to earn six-figure incomes through sponsored promotions, brand collaborations, merchandise sales and other means.

Rent Out Part of Your House

If you are a homeowner, one of the best ways to earn immediate income following a layoff is to turn your house into a moneymaker. As the Virtual Vocations website noted, sites like Airbnb and Vrbo let you list single rooms in your house to travelers and traveling workers. You can earn an average of about $924 a month renting a room with a bed, bathroom access and cleaning services.

Invest In Dividend Stocks

You don’t have to be a stock market expert to find securities that can provide immediate income. The best way to do this is to build a portfolio of dividend stocks that let you collect regular passive income, which can compound into substantial long-term wealth.

Use your dividend payments to purchase additional shares through a dividend reinvestment plan (DRIP), and keep adding new capital. Modest initial investments can snowball into diversified six- and seven-figure portfolios over time.

Invest In Real Estate

To Read More:

https://finance.yahoo.com/news/6-ways-build-wealth-getting-220008576.html

25 Things You Should Never Do With Your Money

25 Things You Should Never Do With Your Money

Roger Wohlner  Sat, June 29, 2024

Do enough digging and you’ll find that there is possibly an endless list of things you shouldn’t do with your money. From bad habits to decisions based on wishful thinking, some of the bigger missteps can really cost you.

To find out the biggest money mistakes you should avoid, GOBankingRates asked financial experts for their best advice.

Never Cash Your Paycheck Right Away

If you cash your paycheck right away, you might burn through it too quickly.

“You will most certainly spend it all if you cash your paycheck rather than have your employer directly deposit it into your bank account,” said Barbara Friedberg, a personal finance consultant. “Even better is to automatically transfer a percent of your paycheck into a retirement investment account and direct-deposit the remainder into a bank account.”

One advantage of having a workplace retirement plan, such as a 401(k), is that money is automatically deducted from your pay and invested. You don’t see it, so you won’t spend it. You can use a budgeting template to get the most mileage out of your paycheck.

Never Fall For ‘Special’ Finance Deals You Can’t Afford

Promotional finance offers that provide zero or low interest rates on a big purchase might sound like a great deal — until you wind up paying more than you expected. That’s what happened to Grayson Bell, founder of personal finance website Debt Roundup.

“Don’t finance a new vehicle, or watercraft in my case, based on the low promotional monthly payment,” he said. “I financed a new $10,000 Jet Ski with no money down and no real way to pay for it based on a radio ad promoting a super low $69 per month payment. What I didn’t read was the rate was only for two years, then it changes to include retroactive interest based on the loan amount.”

“Those financing deals can ruin you if you’re only looking at the monthly payment,” he continued. “Go through the math and read all of the fine print. They get you in with the low monthly payments, but keep you paying for much longer than you anticipated.”

Never Co-Sign a Loan You Can’t Afford

Michelle Schroeder-Gardner of personal finance blog Making Sense of Cents said you should never co-sign on a loan for someone unless you have the means to pay it back fully.

“The fact is that you never know if the person will be able to pay every single payment, so it’s best to prepare yourself,” she said.

Never Live Above Your Means

One of the tenets of building wealth is to live below your means. Saving and investing should be your priorities so you can help pay for your children’s college costs and live comfortably in retirement, said Cathy Curtis, a certified financial planner and author of “The Happiness Spreadsheet: How To Create A Budget Aligned with Your Values, Beliefs and Ideals.”

Never Rely Only on Cash When Traveling

Sure, carrying and using cash is a good alternative to running up credit card bills. But Curtis suggested using traveler’s checks or credit cards as an alternative to cash.

Holding substantial cash when you’re traveling can invite unfortunate situations. You could lose it or be a victim of theft, which is not uncommon in certain tourist areas.

To Read More: 

https://www.yahoo.com/news/finance/news/25-things-never-money-143113401.html

I Grew Up Rich: 6 Money Lessons I Wish My Parents Would Have Taught Me

I Grew Up Rich: 6 Money Lessons I Wish My Parents Would Have Taught Me

Cindy Lamothe   Fri, June 28, 2024 a

There’s no doubt that being born with a silver spoon in your mouth gives you a leg up in the world — but it can also have its downsides, financially speaking.

Growing up rich has many perks, but it can also hinder a person from learning essential money lessons.

GOBankingRates spoke with people who come from privilege but recognize their upbringing didn’t equip them with the necessary financial skills to set them up for long-term success. Read below for their insights on money lessons they wish they had learned.

Appreciating the Value of Money

“Having grown up in a wealthy family and now working for my own business, I have unique insights into the financial lessons often missed when money is readily available,” said Ben Hilton, founder and managing director of Switch Jam Digital.

 “I never felt the need to worry about money as a child, and therefore, I failed to understand its real value. I now wish that someone had inculcated in me an appreciation of the actual work that goes into making money,” he said. “For instance, why did someone waste hours in the pursuit of a better deal or draw up a stringent budget? If I had known better the value of money, perhaps I would have been more enlightened about money management and spending habits.”

Budgeting Skills and Money Management

“I didn’t have to budget because it wasn’t expected or required in my home, and I’m still unaware of how to properly maintain a budget,” Hilton said. “When I first left home and lived alone, I struggled to balance my expenses and income.”

He noted that making sure a person knows how to set up and maintain a budget is a rather important skill that prevents overspending and helps to uphold and support personal financial stability.

Nischay Rawal, CPA, founder and managing partner of NR Tax & Consulting, shared a similar experience.

“Growing up with wealthy parents, I never learned the value of a dollar or what it meant to budget,” he said. “Money was always there for whatever I needed or wanted. As a result, I didn’t develop key financial skills that most people gain from an early age.

“When I started my own business, I had no idea how to forecast expenses, set financial goals or manage cash flow,” Rawal explained. “The first few years were a crash course in Finance 101. I made many mistakes that could have been avoided if I had a better grasp of basic money management.”

Investing Wisely

“While I had the money, I never learned how to invest early. I lost the basis for generating wealth through investment,” Hilton said. “A clear illustration of this is the fact that I was unaware of compound interest when I was 20 years old, a knowledge that could have significantly increased my financial worth.”

Learning investment principles and how to build wealth is crucial, according to Hilton. “How to invest wisely is a critical lesson for long-term financial growth,” he said.

Financial Independence

“Financial security during childhood is typically already wealth-dependent,” Hilton said. “I wish somebody had taught me about financial independence very early. For instance, in the early days of my career, it became easy to reach out to family for money and support instead of struggling and fighting to succeed financially independently.”

To Read More:

https://www.yahoo.com/news/finance/news/grew-rich-6-money-lessons-180010744.html

How To Achieve Financial Freedom: 9 Steps Towards Financial Independence

How To Achieve Financial Freedom: 9 Steps Towards Financial Independence

Sheiresa McRae Ngo   Thu, June 27, 2024   Bankrate

If you’re like many people, you dream about reaching a point where you don’t have to worry about money, and you can quit your 9-to-5. According to Bankrate’s recent Financial Success Survey, 41 percent of Americans would consider themselves financially successful when they never worry about their finances.

Most Americans say they wouldn’t feel secure until they’ve made at least $233,000 a year, according to Bankrate’s Financial Freedom Survey. To feel rich and financially free, Americans said they would need to earn an average of $483,000 a year.

Fortunately, it’s possible to achieve financial freedom. With careful planning, disciplined savings and wise investments, you can reach your goal. Here’s how you can become financially independent.

What is financial freedom?

Financial freedom means different things to different people. Some define it as never having to work again, while others say being financially free means eliminating debt.

Among Bankrate’s Financial Success Survey, 19 percent of Americans say having enough money to quit working represents financial success while 41 percent say living without debt fulfills this goal.

“Financial freedom describes having enough wealth to live without having to work actively for necessities,” says Dennis Shirshikov, head of growth at gosummer.com and finance professor at the City University of New York. “It means having the means to afford the lifestyle you want for yourself and your family.”

“Achieving financial freedom allows you to make decisions that are not solely based on financial constraints,” Shirshikov adds. “For example, you can choose to pursue passions, hobbies or even career changes without worrying about the financial repercussions.”

What is the FIRE movement?

The Financial Independence, Retire Early (FIRE) movement is a lifestyle and financial strategy that aims to achieve financial independence and early retirement. The goal is to save and invest enough money to provide a sustainable income for the rest of one’s life, allowing for retirement at a much earlier age than the traditional retirement age.

FIRE gained attention after the publication of the book Your Money or Your Life by Vicki Robin and Joe Dominguez. The movement emphasizes assessing each purchase by analyzing the working hours needed to make the purchase.

Followers of the FIRE movement typically aim to save 50 percent to 70 percent of their annual income and plan to retire when their savings reaches around 30 times their yearly expenses, or roughly $1 million. Once retired, they make small annual withdrawals (usually around 3 percent to 4 percent) from their savings to cover living expenses.

“One would have to live significantly below their means and be aggressive when it comes to their asset allocations,” says Steven Charlton, certified financial fiduciary and founder of Wisdom Financial. “The FIRE movement can be utilized to find financial freedom by growing assets proportionately in order to be able to live off interest and dividends. This way you won’t have to live off the income when you decide to retire.”

How to create financial freedom

Achieving financial freedom involves careful discipline and planning. The following steps can help you reach this milestone.

To Read More: 

Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.

https://www.yahoo.com/finance/news/achieve-financial-freedom-9-steps-175605001.html