From $20,000 In Debt To A Net Worth Of $100,000
.This woman went from deep debt to retirement riches in a few years by teaching herself financial literacy
By Alessandra Malito
Published: Oct 5, 2019 12:21 p.m. ET
The Brooklyn native grew up in a low-income neighborhood with a family working hard to make a living.
Within five years, Yanely Espinal has gone from $20,000 in debt to a net worth of $100,000.
Yanely Espinal knows what the power of a financial education — she came from a low-income home with two parents and nine children, and ended up with credit card and student loan debt even after receiving a full scholarship to college.
The Brooklyn native said she often saw a difference between herself and some of the wealthier students around her. She attended high school near Lincoln Center in Manhattan, where many students wore brand-name clothes and returned from holiday break with the latest gadgets.
When she went to Brown University, her friends were often going bowling or eating at Chipotle, CMG, +1.06% activities she couldn’t afford on a regular basis.
So she opened her first credit card at 18 years old, with a $1,500 limit. “I never had that much money before,” she said. She used that credit card — and three others she opened during her college years — for textbooks and a laptop, as well as trips to the movies and restaurants.
By the time she graduated, she had nearly $20,000 in debt — $15,000 in credit card debt and $5,000 from a student loan. Her credit card interest rates were around 21%.
This woman went from deep debt to retirement riches in a few years by teaching herself financial literacy
By Alessandra Malito
Published: Oct 5, 2019 12:21 p.m. ET
The Brooklyn native grew up in a low-income neighborhood with a family working hard to make a living.
Within five years, Yanely Espinal has gone from $20,000 in debt to a net worth of $100,000.
Yanely Espinal knows what the power of a financial education — she came from a low-income home with two parents and nine children, and ended up with credit card and student loan debt even after receiving a full scholarship to college.
The Brooklyn native said she often saw a difference between herself and some of the wealthier students around her. She attended high school near Lincoln Center in Manhattan, where many students wore brand-name clothes and returned from holiday break with the latest gadgets.
When she went to Brown University, her friends were often going bowling or eating at Chipotle, CMG, +1.06% activities she couldn’t afford on a regular basis.
So she opened her first credit card at 18 years old, with a $1,500 limit. “I never had that much money before,” she said. She used that credit card — and three others she opened during her college years — for textbooks and a laptop, as well as trips to the movies and restaurants.
By the time she graduated, she had nearly $20,000 in debt — $15,000 in credit card debt and $5,000 from a student loan. Her credit card interest rates were around 21%.
A $9 book called “Women and Money” by Suze Orman caught her eye one day while she was buying shampoo at Duane Reade. “That book taught me everything I wish I knew before I was 18,” she said. She spent the next few years reading up on saving and investing, and listening to podcasts and TED talks about financial topics.
“I became obsessed with knowledge I felt I was deprived from,” she said. “It was social justice and financial empowerment, and that combination helped fuel my curiosity to learn as much as I could.” She started her own YouTube channel, MissBeHelpful, to share some of her own lessons about money as well.
After the YouTuber paid off her debts, in less than two years, she opened her first Roth IRA and then allocated whatever debt payments she used to make into savings and investing.
Three years after that, in March 2018, she had amassed just shy of $50,000. In the last 18 months, she’s doubled her net worth. Part of her inspiration was the goal to eventually have a comfortable retirement.
Espinal, now 30, is the director of educational outreach at Next Gen Personal Finance, a nonprofit organization that offers free resources and tools to educators interested in teaching personal finance.
Less than half of U.S. states have a financial literacy requirement for high-school students. Financial illiteracy is a growing problem in the U.S., especially for young adults. Less than one-third of college students (28%) could correctly answer three multiple-choice questions about interest, inflation and risk diversification, according to a 2015-2016 FINRA study, and slightly more than half (53%) could do the same.
To continue reading, please go to the original article here:
What Does It Take To Get Rich?
.What Does It Take To Get Rich?
Hillary Hoffower Dec. 29, 2018
A researcher who studied more than 600 millionaires found the same 2 qualities helped them get rich
According to a researcher who studied more than 600 millionaires, to build wealth, you need two qualities: resilience and perseverance.
These qualities are characteristics of those who can afford to retire early and entrepreneurs who become self-made millionaires.
It takes conscious effort to develop resiliency and perseverance.
What does it take to get rich?
It may seem like building wealth is impossible, but it takes two qualities that anyone can develop to do it: resilience and perseverance.
That's according to Sarah Stanley Fallaw, coauthor of " The Next Millionaire Next Door: Enduring Strategies for Building Wealth" and the director of research for the Affluent Market Institute.
What Does It Take To Get Rich?
Hillary Hoffower Dec. 29, 2018
A researcher who studied more than 600 millionaires found the same 2 qualities helped them get rich
According to a researcher who studied more than 600 millionaires, to build wealth, you need two qualities: resilience and perseverance.
These qualities are characteristics of those who can afford to retire early and entrepreneurs who become self-made millionaires.
It takes conscious effort to develop resiliency and perseverance.
What does it take to get rich?
It may seem like building wealth is impossible, but it takes two qualities that anyone can develop to do it: resilience and perseverance.
That's according to Sarah Stanley Fallaw, coauthor of " The Next Millionaire Next Door: Enduring Strategies for Building Wealth" and the director of research for the Affluent Market Institute.
A follow-up to the 1998 bestseller " The Millionaire Next Door," written by her father, Thomas J. Stanley, and William D. Danko, the book provides updates and new studies on Stanley's original research on millionaires. Stanley Fallaw's findings are based on a survey of more than 600 millionaires in America conducted between 2015 and 2016.
"To build wealth, to build one's own business, to ignore critics and media and neighbors, you must have the resolve to keep pursuing your goals past rejection and pain," Stanley Fallaw wrote.
She added: "Millionaires and other economically successful Americans who pursue self-employment, decide to climb the corporate ladder, or strive to create a financial independence lifestyle early do so by perpetually pushing on."
To continue reading, please go to the original article here:
https://www.businessinsider.com/qualities-that-help-build-wealth-resilience-perseverance-2018-12
13 Money Goals To Improve Your Finances For Good
.13 Money Goals To Improve Your Finances For Good
Personal Finance - Millionaire Mob - June 6, 2019
These crucial money goals will set you off on the right track with your personal finances… for good once and for all.
13 Money Goals To Improve Your Finances For Good
Here’s the reality. A lot of want to improve our finances but many of us don’t know how to do it or don’t even know where to start.
Believe it or not:
Improving finances starts with having money goals and working through steps to reach those goals. For example, if your goal is to be a doctor, you need to get your college degree, go to medical school, get the training you need, pass the medical board exam, among others.
If you’re one of those people with money goals, kudos to you. You’re one step ahead of many people. If you don’t have money goals yet, don’t worry there is still time to make those.
That time is now.
A lot of us have money goals in mind. Some would like to increase their wealth (i.e., become rich fast) in a few years, some would want to buy a car or a house, and some want something else.
This post will exactly detail some of the money goals you could get inspiration from. Better yet, you can literally use these goals and call them your own.
13 Money Goals To Improve Your Finances For Good
Personal Finance - Millionaire Mob - June 6, 2019
These crucial money goals will set you off on the right track with your personal finances… for good once and for all.
13 Money Goals To Improve Your Finances For Good
Here’s the reality. A lot of want to improve our finances but many of us don’t know how to do it or don’t even know where to start.
Believe it or not:
Improving finances starts with having money goals and working through steps to reach those goals. For example, if your goal is to be a doctor, you need to get your college degree, go to medical school, get the training you need, pass the medical board exam, among others.
If you’re one of those people with money goals, kudos to you. You’re one step ahead of many people. If you don’t have money goals yet, don’t worry there is still time to make those.
That time is now.
A lot of us have money goals in mind. Some would like to increase their wealth (i.e., become rich fast) in a few years, some would want to buy a car or a house, and some want something else.
This post will exactly detail some of the money goals you could get inspiration from. Better yet, you can literally use these goals and call them your own.
If you are onboard and ready to make changes to your finances, read on!
1. Create a Budget. Period.
One of the best things you need to do to start improving your finances is to create a budget. Yes, creating a budget is one of your money goals.
Here me out on this.
No matter how small or big your money goal is, without a budget, that goal may not be achievable or may be hard to achieve, to say the least.
Why?
Because you don’t have a way to track your finances or income and expenses.
When you jot down and detail your finance, you know exactly where your money is going.
Does the benefit of a having a budget stop there? No, not at all.
When you consistently budget and track what’s coming in and going out, you’ll eventually identify which expenses are excessive, which ones you may need cut or adjust, and which ones you don’t need anymore.
When you identify these, you can make adjustments and put the savings towards your bank account, investments, or some other important expenses.
But there’s more:
When you have a budget, you will be able to identify if your expenses exceed your income.
If or when you’ve identified that your expenses exceed your income and need money urgently to fill the gap and/or save some more, you could make a tweak on your expenses or get a side hustle or two to make extra cash and improve your income.
This is where Personal Capital comes into play. It’s a free budgeting app that allows you to monitor your cash flow and income in real-time.
2. Always Check Your Credit Score
If you want to improve your finances, one of the money goals is to always check your credit score.
No kidding you credit score or credit can make or break your finances. A lower credit score may mean you won’t be qualified for better interest rates on loans and other forms of debts. Also a lower score may mean that a lot of companies won’t extend credit to you.
Believe it or not, some employers also require that you allow them to check your credit score especially if you are applying for a job that involves managing finances.
Your credit score provides creditors a way to see your financial health and capability. A high credit score means that you manage your credit well. A low score could be a red flag and your potential creditors may or will question your dependability.
Checking your credit score carries additional benefits.
By checking your credit report, you can assess if all your credit information is correct and accurate. A mistake in your credit can negatively impact your score.
Worse, you could be liable to pay any loan, credit card, and other debts that were opened in your name even when those aren’t really yours to begin with.
To continue reading, please go to the original article here:
What Is The Difference Between Rich And Wealthy?
.What Is The Difference Between Rich And Wealthy?
Personal Finance - Millionaire Mob - March 8, 2019
Difference Between Rich and Wealthy
Is there a difference between a rich person and a wealthy person?
In this article, we will differentiate between rich and wealthy.
What is the Difference between Rich and Wealthy?
Most people use the two terms rich and wealthy interchangeably. But, do they mean the same thing? There is a difference between rich and wealthy.
In this article, we will focus on some of the significant differences between rich and wealthy
So, who has more money between wealthy and rich people? Before we look at the main differences between the rich and wealthy, let’s first look at the definition of rich and definition of wealthy.
What Is The Difference Between Rich And Wealthy?
Personal Finance - Millionaire Mob - March 8, 2019
Difference Between Rich and Wealthy
Is there a difference between a rich person and a wealthy person?
In this article, we will differentiate between rich and wealthy.
What is the Difference between Rich and Wealthy?
Most people use the two terms rich and wealthy interchangeably. But, do they mean the same thing? There is a difference between rich and wealthy.
In this article, we will focus on some of the significant differences between rich and wealthy
So, who has more money between wealthy and rich people? Before we look at the main differences between the rich and wealthy, let’s first look at the definition of rich and definition of wealthy.
Definition Of Wealthy
Wealthy is a term defined as the number of days that a person can sustain their existence without having to work. The wealthy make money doing nothing and can maintain their standard of living during their life without physically working or anyone in their household physically working.
What matters to the wealthy is not how much money they make, but rather how much money they keep as well as how long that money can work for them.
Can your wealth sustain you and pay for all of your bills for the rest of your life. Can you eat, drink, and travel the world without having to worry about how you will meet all these expenses?
The wealthy do not only have lots of money, but they also don’t worry about money. They can afford all their basic as well as a luxurious lifestyle with no money worries. The wealthy generate a lot of residual income, and their money keeps growing exponentially.
Money works for them and not the other way round. They have excess to keep them going and doing what they want as long as they want and their money does not get diminished. They have infinite wealth.
There are only a few wealthy people around the world. Most of these people were born in wealthy families, and the much they do about it is to maintain their status. However, there is no definite measure of wealthy and different people have varying perceptions on the issue.
Attributes of the Wealthy
Here are some of the characteristics of the wealthy:
Money works for them and is continually invested through fractional share investing
They have accumulated enough money that will likely never run out for the rest of their life
They have created multiple passive income sources
So, let’s have a look at some interesting research findings of the lifestyle of the wealthy people according to a specific group of people.
Research findings on what people believe it means to be wealthy
Here are some thought-provoking results in the survey about what being wealthy meant for different people. While 62% of people said that being wealthy means spending time with family, 55% alleged it as having time to oneself. 49%, on the other hand, believed it means owning a home, and 41% said it means eating out or having meals delivered to you by Uber.
A 33% thought that if you’re wealthy, then you can afford the cable, subscription services like Netflix movie/TV and music streaming and 27% said it means owning the latest tech gadgets. 17% held it means having a gym membership or a personal trainer and 12% said it is means using a home cleaning service.
Almost half of the people who were surveyed believed that to achieve the definition of wealth; one must save and invest money in the right investment vehicles to reap the benefits of compound interest.
Definition of Rich
The rich can be defined as people who have a lot of money which is a characteristic similar to the wealthy. A difference between wealthy and rich is that unlike the wealthy that have a lot of money and fewer expenses, the rich have a lot of money with many financial liabilities and expenses to meet.
Unlike the wealthy, the rich have many bills to pay, and they generally worry about money. Most of the income of the rich end up in the expenses column and not much end up on the assets column. This behavior differentiates the rich vs. wealthy.
Unlike the wealthy that can exist for the rest of their life without worrying about money, the rich worry about several things related to money. They worry about their jobs and businesses as well as how to maintain and manage them to sustain their lifestyle.
The rich can afford all the essentials as well as the luxuries of life, but they must also ensure that their businesses and investments are still running well and the right systems are in place to avoid collapse.
Unlike the wealthy that have enough money at their disposal and don’t have to work to afford luxuries, the rich work and some have even gotten into debts to afford the fine things in life.
A lot of rich people have acquired their money through hard work, and only a few inherited their money. Most rich people must work or get employed to seek the money that they need to maintain their lifestyle.
To continue reading, please go to the original article here:
https://millionairemob.com/difference-between-rich-and-wealthy/
The Beggar’s Guide to Getting it Together
.Begging for Money: The Beggar’s Guide to Getting it Together
By Melissa @ Perfection Hangover
Has begging for money become the new norm? It seems that the internet has become an easy way for people to become online panhandlers. I’ve shared many ways to make extra money from home, online, and even creative side hustle ideas (ie “Dave jobs” for all of you Dave Ramsey fans).
From Cyber Beg to Begging Money, there’s no shortage of sites available to ask strangers for financial help.
But at some point, you have to get your financial shit together and take responsibility for your own successes and failures.
Here are five ways to get it done.
Step 1: Evaluate your Income
Do you make enough money to support yourself, your partner, and/or your kids? According to the US Census Bureau, median household income was $61,372 in 2017. Income is calculated including wages and salaries, as well as any kind of governmental entitlement such as unemployment insurance, disability payments or child support payments received, along with any personal business, investment, or other recurring sources of income for all persons over the age of 15 in the household (whether related or not).
If you aren’t currently earning enough money, find ways to make extra cash, such as starting an online business or donating blood plasma for up to $400 per month.
Begging for Money: The Beggar’s Guide to Getting it Together
By Melissa @ Perfection Hangover
Has begging for money become the new norm? It seems that the internet has become an easy way for people to become online panhandlers. I’ve shared many ways to make extra money from home, online, and even creative side hustle ideas (ie “Dave jobs” for all of you Dave Ramsey fans).
From Cyber Beg to Begging Money, there’s no shortage of sites available to ask strangers for financial help.
But at some point, you have to get your financial shit together and take responsibility for your own successes and failures.
Here are five ways to get it done.
Step 1: Evaluate your Income
Do you make enough money to support yourself, your partner, and/or your kids? According to the US Census Bureau, median household income was $61,372 in 2017. Income is calculated including wages and salaries, as well as any kind of governmental entitlement such as unemployment insurance, disability payments or child support payments received, along with any personal business, investment, or other recurring sources of income for all persons over the age of 15 in the household (whether related or not).
If you aren’t currently earning enough money, find ways to make extra cash, such as starting an online business or donating blood plasma for up to $400 per month.
There are so many ways to bring in extra money that there are literally no excuses worthy of holding you back. You just have to make the decision to hustle. Work nights and weekends if you have to. Work two jobs if you need to. Go back to school if it will improve your financial situation.
Step 2: Start Budgeting Every Single Time You Get Paid
Many times, financial problems are the result of overspending and improper budgeting (or worse, failing to budget at all). Budgeting is so important, especially if you are an impulse buyer.
You don’t need fancy planners or complicated spreadsheets to create a budget. I use this cheap family and finance bill organizer from Dollar General (and have used it for years) to keep track of my budget.
Best Budgeting Apps
If budgeting with pencil and paper isn’t your jam, using apps or spreadsheets can be a great way to track spending. The Balance put together a list of the best budgeting apps available to help you track your income and expenses.
Here they are:
By creating a written plan for your money every single time you are paid, you’ll be able to set realistic financial goals as well as expectations for your spending.
To continue reading, please go to the original article here:
https://themoneymix.com/begging-for-money-the-beggars-guide-to-getting-it-together/
For additional articles from Melissa, her website is
7 Mistakes Six-Figure Earners Make
These Are The 7 Mistakes Six-Figure Earners Make
By Clint Haynes
Earning a six-figure salary can make building wealth easier, but it’s not a magic solution for your financial woes. Earning a high income is only one part of the equation. If you want to be financially secure, you need to make your money work for you.
A high paycheck can make it easy to gloss over financial mistakes since you can still cover your bills. However, if you want to build wealth rather than an inflated lifestyle, you need to focus on reaching your full financial potential.
Most of the mistakes that six-figure earners make are easy to fix. Here’s how to use that high income to your advantage and build your net worth.
These Are The 7 Mistakes Six-Figure Earners Make
By Clint Haynes
Earning a six-figure salary can make building wealth easier, but it’s not a magic solution for your financial woes. Earning a high income is only one part of the equation. If you want to be financially secure, you need to make your money work for you.
A high paycheck can make it easy to gloss over financial mistakes since you can still cover your bills. However, if you want to build wealth rather than an inflated lifestyle, you need to focus on reaching your full financial potential.
Most of the mistakes that six-figure earners make are easy to fix. Here’s how to use that high income to your advantage and build your net worth.
7 Six-Figure Money Mistakes
Mistake #1: Not Using A Budget
Just because you have a lot of money coming in every month doesn’t mean you shouldn’t keep track of where it’s going. This makes it easy to squander your paycheck without making any financial progress.
Creating a budget doesn’t have to be hard. Think of it as your spending plan. Make a list of all monthly expenses and use it to create your budget. Does your spending in each category align with your values? Can you cut back or cut out any expenses?
Certain expenses such as eating out or groceries can get out of hand if not kept in check. Cut back on these areas by cooking more at home and shopping smart. You can still have fun with no regrets when you know you’re sticking to your budget.
Review your accounts for subscriptions you are not using and cancel them. Look at your other expenses and think about ways you can cut back with little sacrifice. It may surprise you how spending can escalate when left unchecked.
Make sure to track your spending so you know where your money is going every month. Just because you can pay your bills every month doesn’t mean that it justifies your spending. Every dollar you invest instead of spending sets you up for a better financial future.
Mistake #2: No Long-Term Financial Plan
Having a long-term plan is an important part of setting yourself up for financial success. Making a six-figure income won’t mean much if you lose your job or if you don’t save enough for retirement.
If you want to continue to enjoy the lifestyle that your high income provides, you need to get your retirement plan on track. Having a financial blueprint will give you peace of mind since you know what financial moves you need to make to ensure your success. It will also help you align your finances with your long-term goals and values.
It also means you know how to invest your future dollars so you can maximize returns. Make sure to involve your spouse in all future financial plans so you can get on the same page. Figure out what is important to both of you, such as paying for your kids’ education, saving for retirement, buying another property, and aligning your spending with your goals.
To continue reading, please go to the original article here:
When Lying to Yourself Pays Off
.When Lying to Yourself Pays Off
By Charlotte Cowles
The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to mytwocents@nymag.com
Some depressing (but unsurprising) news for optimists: We are delusional. Things generally take longer, cost more, and have a higher chance of going awry than we think they will, and there’s not much we can do about it.
We should probably know better than to cling to our unrealistic expectations, but somehow we never learn. This persistent phenomenon (known as optimism bias) afflicts about 80 percent of humans, according to Tali Sharot, a neuroscientist at University College London.
While optimism has its benefits, it’s not exactly great for financial planning. It causes people to underestimate the likelihood that they’ll experience expensive, commonplace setbacks like injury, market downturns, or a leak in the roof.
Almost all entrepreneurs test high for optimism — and most of their businesses fail. And on a larger scale, optimism bias can cost billions: A Harvard study of 33 countries found that most government agencies were overly confident in their budget planning, particularly when times were flush, resulting in large deficits.
When Lying to Yourself Pays Off
By Charlotte Cowles
The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to mytwocents@nymag.com
Some depressing (but unsurprising) news for optimists: We are delusional. Things generally take longer, cost more, and have a higher chance of going awry than we think they will, and there’s not much we can do about it.
We should probably know better than to cling to our unrealistic expectations, but somehow we never learn. This persistent phenomenon (known as optimism bias) afflicts about 80 percent of humans, according to Tali Sharot, a neuroscientist at University College London.
While optimism has its benefits, it’s not exactly great for financial planning. It causes people to underestimate the likelihood that they’ll experience expensive, commonplace setbacks like injury, market downturns, or a leak in the roof.
Almost all entrepreneurs test high for optimism — and most of their businesses fail. And on a larger scale, optimism bias can cost billions: A Harvard study of 33 countries found that most government agencies were overly confident in their budget planning, particularly when times were flush, resulting in large deficits.
As an optimist myself, I can personally attest that my “it’ll work out” mentality has cost me more money than I care to think about. When you add up all cab fares from when I’m running later than expected or stuff I bought because I believed it was a “good investment,” it’s a lot. I consistently spend more money than I think I will, and it’s gotten me into some tight spots.
Which is why I was surprised to read that, in a survey of over 2,000 Americans who were evaluated with the Life Orientation Test, an optimism scale developed by the University of Miami’s psychology department, 90 percent of optimists had put aside money for a major purchase compared to just 70 percent of pessimists. What’s more, nearly two-thirds of optimists had started an emergency fund, compared to less than half of pessimists.
The key, says researcher Michelle Gielan, is finding the sweet spot of “rational optimism” — a balance of expecting good things, making a realistic assessment of the present, and perhaps most importantly, believing that our behavior can improve our circumstances.
She likens it to wearing a seat belt: Not doing so might be the more optimistic choice, technically, but it would also be stupid. “Irrational optimism” is about believing your situation will somehow get better, while rational optimism is about believing that you can make your situation better.
With saving money, Gielan explains, optimists gain the upper hand simply because they think they can do it. “When people believe that their behavior matters, especially in the face of challenges, then it predicts so many success measures — their performance at work, their energy levels, their productivity, and of course their finances,” she says.
“When optimists encounter a setback, they tend to see it as a temporary and local event, only one part of their reality, and they believe that if they take steps towards creating a solution they’ll be able to get through it.”
To continue reading, please go to the original article here:
https://www.thecut.com/2019/05/why-optimists-are-better-with-money.html
How To Teach Yourself to Succeed with Money
.Personal Finance 101: How To Teach Yourself to Succeed with Money
Invested Wallet
Personal Finance 101 is the beginning steps you can take to really become self-sufficient with your money. It will include various areas like understanding expenses, creating a budget, saving and investing basics, and more.
Many of these concepts may appear difficult to manage or that you must be highly educated to do so on your own. But you — and anyone — can teach themselves to succeed with money.
You don’t need to be an expert to manage your finances and you can have little to no previous background, but still gain control financially.
Below, I’ll share some of the steps I took to teach myself and hopefully you can apply this to your own personal finances. Will it be easy? No. But it’s certainly not extremely challenging either.
Personal Finance 101: How To Teach Yourself to Succeed with Money
Invested Wallet
Personal Finance 101 is the beginning steps you can take to really become self-sufficient with your money. It will include various areas like understanding expenses, creating a budget, saving and investing basics, and more.
Many of these concepts may appear difficult to manage or that you must be highly educated to do so on your own. But you — and anyone — can teach themselves to succeed with money.
You don’t need to be an expert to manage your finances and you can have little to no previous background, but still gain control financially.
Below, I’ll share some of the steps I took to teach myself and hopefully you can apply this to your own personal finances. Will it be easy? No. But it’s certainly not extremely challenging either.
Changing Your Money Mindset
Before we get into my Personal Finance 101 steps, I think a big gatekeeper to managing your money successfully is your mentality and mindset.
Firstly, many times the media or financial experts make this stuff seem like complicated rocket science. Surely some aspects to finance can be, but the majority is really not. This can mess with your mindset and feelings towards money from day one. I know it did for me.
Other times, it’s easier to be in-denial about our financial situations. If you don’t pay attention to the problem, it doesn’t exist, right?
But as you know, that temporary “solution” will inevitably snowball in the future where it becomes a much more challenging problem.
Another way your mindset might be hindered is maybe you are relatively on the younger side, say 20’s to early 30’s and finances is just not a priority to you. The “I’ll worry about it later” mentality creeps in because you have time on your side.
Whatever it is, your understanding of personal finances and dedication to get it under control has to start with the right mentality. Otherwise, it won’t be a priority to you nor will you dedicate time to learning.
I unfortunately can’t give you the magic “aha!” moment or steps to get on the right mental path. We are all unique in what works.
Teach yourself about money
Personal Finance 101: Teaching Yourself About Money
Hopefully, the section about mindset made sense and did not come off has some “self-help” preaching. My intent is really to ingrain that mindset is the first key ingredient to determine your success with teaching yourself about money.
We all know saving, investing, and budgeting is important, yet so many fail to take any action. This includes myself until 2014. Why?
Nothing will change if your mindset is stuck and you lack the willingness to erase the misconception that personal finances is “too hard.”
The cycle of change has to come from within.
Usually a moment in your financial life can be the motivation and drive you need, but even then there is no guarantee.
If you don’t think you are there mentally ready yet, the steps below won’t be impactful in the long-term. And that’s okay! Work on how you can motivate yourself and get in the right frame of mind to pursue teaching yourself about money.
I realized I needed to make changes in 2013, but it took me until 2014 to really do anything about it and felt ready.
But if you are stoked, truly motivated to make changes, and understand that it will take some dedication — then you are well on your way to successfully teaching yourself.
To continue reading, please go to the original article here:
The Only Fix Is Taking Matters Into Your Own Hands
.Notes From The Field By Simon Black
September 30, 2019 Bahia Beach, Puerto Rico
The Only Fix Is Taking Matters Into Your Own Hands
On Friday evening, the government here in Puerto Rico made an announcement to local retirees that many of them would have their pensions cut.
Poof. Just like that.
The pension cut is part of a debt restructuring plan to help Puerto Rico emerge from bankruptcy, which they declared in May 2017.
Bankruptcy is complicated, so I’ll explain a bit here.
Notes From The Field By Simon Black
September 30, 2019 Bahia Beach, Puerto Rico
The Only Fix Is Taking Matters Into Your Own Hands
On Friday evening, the government here in Puerto Rico made an announcement to local retirees that many of them would have their pensions cut.
Poof. Just like that.
The pension cut is part of a debt restructuring plan to help Puerto Rico emerge from bankruptcy, which they declared in May 2017.
Bankruptcy is complicated, so I’ll explain a bit here.
When individuals, corporations, and even local government take on so much debt that they can no longer make payments, they go through a specific legal process called bankruptcy.
During the bankruptcy process, a judge temporarily relieves the bankrupt from making any principal or interest payments on their debt while all sides work out a solution.
The bankrupt puts all of their assets and liabilities on the table, and then works with the bondholders to figure out a plan that everyone can live with.
Sometimes they’re successful. Occasionally you’ll hear about a big company (often an airline) ‘emerging from bankruptcy’.
This means the company was able to work out a deal with its bondholders, i.e. the company agrees to sell some assets and cut costs in order to pay the bondholders, but the bondholders agree to take a loss and only recover, say, 50 cents on the dollar.
Once the deal is settled, the debt is struck off the company’s balance sheet and they begin operating normally again.
Sometimes, though, a deal cannot be reached. And the Bankruptcy Court appoints a special representative to liquidate the company’s assets and split up the proceeds among the bondholders.
But governments can’t exactly do that. Bankruptcy courts don’t have the latitude to sell off police cars, fire trucks, and elementary schools in order to repay government bondholders.
And that’s why Puerto Rico’s debt negotiations have taken so long.
Puerto Rico has more than $70 billion in debt, worth nearly 70% of GDP. And making payments on that debt was consuming nearly 30% of government tax revenue every year.
That’s totally unsustainable, and declaring bankruptcy was inevitable.
To continue reading, please go to the original article here:
To your freedom & prosperity, Simon Black Founder, SovereignMan.com
.11 Steps to Make $1 Million Last 30 Years in Retirement
.11 Steps to Make $1 Million Last 30 Years in Retirement
Derek Silva, CEPF® | OCT 02, 2018
The average life expectancy in the U.S. has increased dramatically from about 70 in 1967 to about 80 in 2017. Those who reach age 65 also have a one in five chance of living into their 90s. A longer life is great news. It means you have time to check more off your bucket list.
At the same time, it means you need to plan for a longer retirement. If you retire at 65, a 30-year retirement is quite possible. Even if you save $1 million for your retirement, you have to make sure to budget it out so it lasts.
Here are 11 steps to set yourself up for a happy retirement without draining your savings too soon.
11 Steps to Make $1 Million Last 30 Years in Retirement
Derek Silva, CEPF® | OCT 02, 2018
The average life expectancy in the U.S. has increased dramatically from about 70 in 1967 to about 80 in 2017. Those who reach age 65 also have a one in five chance of living into their 90s. A longer life is great news. It means you have time to check more off your bucket list.
At the same time, it means you need to plan for a longer retirement. If you retire at 65, a 30-year retirement is quite possible. Even if you save $1 million for your retirement, you have to make sure to budget it out so it lasts.
Here are 11 steps to set yourself up for a happy retirement without draining your savings too soon.
1. Maximize the Return on Your Savings
Imagine $28,243 more dollars in your bank account. It is doable. That is the interest income you would earn from generating an additional 1.0% in interest on on a $100,000 deposit over 25 years.
A very common mistake is to leave money in a checking account accruing no interest. People either think that interest rates are too low and it will not make a difference or the money will not be in your bank account so it will not make a difference. Fortunately that is just not true.
If you use a high-interest savings account you can earn up to 1.85% and still have unrestricted access to your savings. To put that into perspective the national average savings account rate is 0.23%.
By choosing an account that offers the highest rate of 1.85% you can earn a lot more. Here’s an example: If you have $250,000 in a savings account and save over 20 years in retirement, you would generate extra interest income of $110,712.
Recommended Action: Open a high-yield savings account. This CIT Savings Builder Account offers 2.45% interest as long as you deposit at least $100/month or maintain a $25,000 balance.
2. Keep Investing Intelligently
To get an accurate picture of your expenses and retirement needs, we recommend speaking with a financial advisor that specializes in retirement planning.
Studies show consulting a financial advisor can help you earn up to an extra 4% return on your investments. Advisors are also skilled in identifying areas where you could be overpaying in taxes and fees, as well as how to best allocate your savings among your retirement accounts and investments.
A Voya Financial report found that 79% of people who use a financial advisor “know how to pursue achieving their retirement goals.” The study also found that 59% of those who use an advisor have calculated how much they need to retire, while 52% have a formal retirement investment plan in place.
Recommended Action: Find a financial advisor. We've simplified the process to get in touch with one by designing a tool to match you with the top financial advisors in your area.
Here's how it works:
Answer these few questions about your current financial situation.
To continue reading, please go to the original article at
.To Gift or Not to Gift
.To Gift or Not to Gift
By TRACY CRAIG, FELLOW, ACTEC, AEP®, Partner and Chair of Trusts and Estates Group | Mirick O'Connell September 10, 2019
Sometimes it can be wise (or just pleasurable) to give your assets away while you're still alive.
In estate planning, giving away assets during your lifetime has traditionally been used to help lower estate taxes when you die. However, the federal estate tax exemption amount (the amount under which federal estate taxes do not apply) is currently $11.4 million per person and has been increasing each year due to inflation indexing, so federal estate taxes only apply to 0.1% of people.
The federal exemption amount is scheduled to fall to approximately $6 million (when taking into account future estimated increases for inflation) per person in 2026 (unless Congress changes the law), and even then only about 0.2% of people will be affected.
So, while taking action to avoid federal estate taxes is not necessary for over 99% of the population, there are at least three reasons why gifting may still make sense for you and your family:
To Gift or Not to Gift
By TRACY CRAIG, FELLOW, ACTEC, AEP®, Partner and Chair of Trusts and Estates Group | Mirick O'Connell September 10, 2019
Sometimes it can be wise (or just pleasurable) to give your assets away while you're still alive.
In estate planning, giving away assets during your lifetime has traditionally been used to help lower estate taxes when you die. However, the federal estate tax exemption amount (the amount under which federal estate taxes do not apply) is currently $11.4 million per person and has been increasing each year due to inflation indexing, so federal estate taxes only apply to 0.1% of people.
The federal exemption amount is scheduled to fall to approximately $6 million (when taking into account future estimated increases for inflation) per person in 2026 (unless Congress changes the law), and even then only about 0.2% of people will be affected.
So, while taking action to avoid federal estate taxes is not necessary for over 99% of the population, there are at least three reasons why gifting may still make sense for you and your family:
State Estate Taxes Could Be an Issue for You
While federal estate taxes aren’t a problem for the vast majority of people, state estate taxes are another story. Twelve states and the District of Columbia currently have a state estate tax, and their exemptions are much less generous than the federal limits — with some as low as $1 million. (See 9 States with the Scariest Death Taxes.) In those states, gifting can help reduce the state estate tax.
For example, in Massachusetts, lifetime gifts are not subject to the Massachusetts estate tax. As a result, by making gifts, the value of the assets you own when you pass will be reduced, and the state estate tax will be lowered.
However, before giving away assets to reduce state estate taxes (which are often graduated and never exceed a top rate of 20%), you need to keep in mind the issue of unrealized capital gains and what is known as the “step up in basis.” At death the fair market value of most assets (except most notably retirement accounts) becomes the tax basis of those assets.
Because most assets appreciate during life, the basis of assets is said to “step up” to the fair market value, essentially wiping away all potential capital gains taxes. This is true even if your estate is not large enough to pay any federal estate tax.
When you give away assets, instead of a step up in basis there is a carryover basis, meaning the recipient takes your tax basis. That means, if you paid $10 for your stock and it was worth $100 when you gifted it, a recipient who sold the shares would pay taxes on the $90 of gain.
However, if you don’t sell the stock in your lifetime, the cost basis resets to the value of the stock on the day you die. So, for example, if you had low basis stock, it could make sense to hold the stock until you die if the state estate tax would be lower than the potential capital gains taxes if the asset were sold.
An important consideration here is that in some cases capital gain taxes can be imposed at higher rates than state estate taxes. Federal capital gains tax rates are 0%, 15% or 20% depending on your income and filing status.
There’s also state income tax to consider, plus an additional 3.8% Medicare tax for higher income earners. (For example, in Massachusetts — where the state income tax rate is about 5% for individuals in a high income tax bracket — combined capital gains tax rates can equal almost 30%.)
Therefore, while gifting to save on estate taxes is possible, it should be analyzed carefully to make sure you don’t inadvertently expose yourself or your loved ones to capital gains taxes.
To continue reading, please go to the original article at
https://www.kiplinger.com/article/retirement/T021-C032-S014-to-gift-or-not-to-gift.html