The Ultimate Predicament: No Debt

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Shouldn’t we all have a goal to be debt free?  It obviously makes the most sense; live better and more comfortably with less liability.  This has been my goal for as long as I can remember.

 Unfortunately, circumstances like a divorce, along with some bad financial decisions (at least I admit it, right?) along the way, left me in a tough situation like like a lot of others I know.

One step at a time, with limited resources, I’ve dug my way out of the hole.  Most recently I paid off my car.  Wow, what a relief!  To finally have no car payment, it’s a wonderful feeling! Of course, my car now has a lot of miles on it and I need to keep it on the road as long as possible so it can start paying me back now.

Now that I don’t have a monthly car payment, I do have to be aware and conscience of the fact that maintenance is a high priority.  This is especially true when you only have one car to get you around.   I really can’t complain though, my car has been so good to me…Toyota, you just can’t go wrong!

Outside of paying my car off, I finally paid off my kids’ braces.  I have twins that are fifteen years-old and unfortunately they both needed braces, not only for cosmetic reasons, but one had a bad crossbite and the other had a bad overbite.  It’s amazing how expensive braces are!  All I know is that it’s a big relief to have this off my plate too.

I can honestly say that I am debt free now.  Of course, I don’t have a mortgage like most do, so that’s a big weight off my shoulders.  Still, I have no credit card debt, no more car payments, no loans to repay….yep, I am finally starting to stand in the light at the end of the tunnel.  The best part of it all is there will be a lot more cash freed up to continue to invest with!  

Next up….well, I will likely purchase a home again, although I really don’t like the idea of having a mortgage.  I’ve read so many excellent financial bloggers that continue to steer clear of a home mortgage.  I can definitely see some positive  things about renting, but there are also some drawbacks that get under my skin too.  Most of all having to deal with a landlord and not being about to control the situation in the place I’m living, or just doing whatever I want to fix the place up.  It does get a little frustrating at times.  But, having a mortgage right now scares me to death, especially with the current home prices out there.  It’s ridiculous how overvalued homes are right now.  I’m not sure how the housing market will look next year, but that will likely be the time I make a decision on whether or not to buy.

One step at a time….right now, I want to bask in the radiance of a debt free lifestyle.   Feels good!

Earn Cash Credit Online With Swagbucks

downloadDo you do a lot of online shopping like I do?  If so, why not get a piece of the purchase back?  It sounds good, doesn’t it?  Well, a fellow blogger over at ThePennyHoarder.com, wrote a great article about using Swagbucks.com just for this reason.  The article clearly explains all the details of how to take advantage of this great program from signing up, all the way to cashing out the Swagbucks rewards.  For me, this is a no-brainer, why not put a piece of the purchase back in your pocket?

Saving money and getting back any type of refund or cash back is what I strive for daily. If you want to get back a piece of your hard earned money on purchases, check out the article HERE for great information and instructions on how to start earning cash back with Swagbucks.  Also, check out other excellent blogs on the site if you are interesting in saving, growing and/or making money.  I love it when you find good resources like this to help people get ahead.  Every little bit helps!

Stop Living Paycheck To Paycheck

paycheck to paycheckI ran across a great article written by Mary Beth Storjohann at Workable Wealth, about breaking the cycle of living paycheck to paycheck.  In the article, an estimated 1/3 of all US households are living paycheck to paycheck.  It’s pretty scary, but very easy to see and/or understand why.

People, especially middle-class workers, continue to live right up to their means.  What’s worse is, most also continue to rack up debt in the process.  Once the debt overcomes them, they have an incredibly hard time ever getting ahead.

I remember these days myself and that’s why I enjoyed reading her article because it reminded me of all the things I actually did right to get myself out of the hole and ahead for good.  Take a look at her article HERE.  Follow these simple, easy to understand guidelines and stop living paycheck to paycheck for good!

Check out other related blogs on my site at Middleclasssuccess.com

 

 

 

 

No Pets = Lots of Extra Cash

dogs and moneyFor all you animal lovers I don’t want to sound harsh, because in all reality I really do enjoy pets myself.  Outside of the companionship they bring, the truth is, most are expensive to own and maintain.  I didn’t really see this until after I’ve lived without a pet for several years now.

Most of my life I’ve owned a dog.   Although I really love dogs, now that I haven’t had one (or any other pet) for about seven years now, I’ve seen some huge savings in the process.  Food, vaccinations, vet bills…it’s really crazy how much money we spend on our pets.  Most people I know really spoil their pets too, spending tons of money on them buying toys, treats or luxury items to treat them like another child in the family.

At my work I know a few people that own horses.  After I started learning about owning a horse, I couldn’t believe how expensive they actually are to own.  Feeding them alone costs a small fortune!  Boarding them, vet costs with vaccinations or special care….holy crap!  The money they spend on these animals is unbelievable.   It’s like a small mortgage to own and maintain these animals.

Even for dogs, every time any of my family members travel they normally board their dogs and pay hefty sums of money to have them taken care of.  You can easily rack up hundreds of dollars for boarding your dog just during a short vacation.   For me, I really enjoy the fact that I can go on vacation any time I want to and don’t need to find someone to take care of my pets or resort to paying to board them.

I imagine I’ve likely saved hundreds or even thousands of dollars in the past seven years, by not owning a pet. Nothing against pet owners, I just continue to look for ways to make/save extra cash.  The way I see it is, no pets equal lots of extra money for me to invest or pay down debt.  It’s a win-win situation!

 

 

 

Is Good Beer Worth The Money?

BeerI have to admit, I love beer, especially a good craft brew.  So, when it comes to buying beer, is it really worth it to spend the extra money on a micro-brew?  The answer is, absolutely!

Of course, this is just my opinion on the matter…but seriously, if you really love beer like I do, why waste your hard earned money on a lame ol,’ average beer?  Unless you plan on just getting blasted drunk (which I don’t do, or don’t recommend doing) why not enjoy a rich, full-bodied, craft brew.  Most good beers are really worth the few extra bucks it costs, in comparison to regular mass-produced beers.

Everyone that knows me and/or reads blogs on my website www.middleclasssuccess.com, knows that I am pretty critical about my spending.  I’m constantly evaluating wants-versus-needs and my financial priorities regularly.   Still, all of us need to have (and enjoy) those little things in life that help us sit back and relax or even keep our sanity at times.  For me, a great craft brew is a treat to myself for my dedication, hard work and effort I put in every day to support my family and my goals in life.  It also let’s me just appreciate the fine art of making beer.  Can any of you relate?

So, forget about Bud, Miller, Coors or any of those other lame domestic beers and start shopping for an amazing craft brew that will excite your taste buds a little.  Where I live in Colorado, we have so many great brew pubs around the state, I can literally go to just about any neighborhood and stop in for a great craft brew right off the tap. If you are not as privileged as I am with the proximity of brew pubs, stop by your local liquor store and glance at the rows of fine micro-brewed beers from around the country….you are bound to find a favorite to add to your list.

I’m also a fitness enthusiast, so obviously beer is not a regular item in my diet.  As much as I love and enjoy it, it does slow me down a bit and it’s not great when you’re trying to maintain your waist line.  Either way, a good craft beer is my way of  spoiling myself a little every now and then.  Maybe you need to be spoiled a little too!

Enjoy and drink responsibly.  Cheers!

 

I Save Tons Of Money By Being Healthy

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I can honestly say that I’ve saved tons of money, year over year, for staying healthy and eating well.  I regularly exercise and eat well with home cooked meals and a Paleo style diet.  To me, when it comes to living frugally, staying healthy is a big part of my plan.  I haven’t been to a doctor in years, so no co-pay visits, no billing from the insurance companies….most importantly, no meds!

How many people do you know that are constantly sick?  If it isn’t a cold or sinus issues, it’s stomach problems, or some other health issue.

I see people like this everyday, especially at work.   A lot of my co-workers eat really bad and have no energy, or are just not motivated to stay active.  This is especially true at an administrative job, where you seem to get stuck behind a desk all day long.    I see co-workers eating fast food every day for lunch; taking in tons of sugar with junk food and soda, gaining more and more weight, then they wonder why they are sick all the time.   I just sit back and watch and appreciate the fact that I haven’t been sick even once this year or last year for that matter.  Obviously I’m not super human, but when I do catch a bug, I can quickly shake it and will be back to 100% in a matter of a few days.

Outside of my interests with my finances and investing, I love working out.  I’m a personal trainer and enjoy exercise as one of my passions.  Of course the way I look at it, both of these hobbies actually go hand-in-hand.  If I keep myself in good shape and take care of my overall health, I stay away from the doctor and save tons of money year over year.  I can imagine I’ve literally saved thousands of dollars over the past several years (in comparison to most people I know), by just maintaining my health.  I feel better than I did 10 years ago and I’m in a lot better shape.

I actually get the best of both worlds….good health and significant savings.  Both of which play a big part in my future goals.  I plan to live well and enjoy life to the fullest as I age.  Staying in shape, maintaining my health AND stashing away all that extra cash I saved in the process to reach my financial goals.  It’s a win-win situation!

Look good, feel good, live a long healthy life and stay away from the doctors office.  No meds, no insurance bills, tons of money saved in the process!   Get active, stay active, eat clean and live well.

 

10 Ways To Build Your Wealth In 2015

2015I came across this great Forbes article written by Laura Shin called “10 Surefire Ways To Build Your Wealth In 2015”, that I wanted to share.  It has some great information that we can all benefit from to help us stay on course to accomplish our financial goals this year.  Check out the article here.

I hope 2015 is a happy and prosperous year for everyone.  Stay focused on your goals and monitor your spending closely.  Watch your investment accounts grow and feel good about your accomplishments this year!

 

Retirement Savings In The US, A Sad State Of Affair

no-retirementDue to the fact that pensions seem to be a thing of the past, workers today are forced to rely on self-directed savings plans for their future retirement funds.

As millions of people are approaching retirement each year, how are forecasts looking for average American worker and their retirement savings accounts?

Among recent articles, one particular piece from the Financial Times (UK) really stood out to me.  According to the author, in one New School study of US Census data, people aged 50 to 64 in the bottom three income quartiles, or 75% of all adults in that group, averaged less than $28,000 in total retirement savings as of 2011.  And a sizable 77% of those aged 50 to 64 in the bottom income quartile didn’t have a penny of retirement savings.   The rest were not much better, with 66% of the second quartile, 41% of the third and even 22% of the highest having zero in retirement account dollars.

Other studies, including a 2013 survey from the Employee Benefit Research Institute, found similarly grave results for soon-to-be retirees, with 43% of workers aged 55 and older reporting they had saved less than $25,000.

The author also points out another issue that continues to sabotage future retirees accounts, is the continual trend of dipping into accounts for loans or early withdrawals.   A survey of 4,100 workers from the Transamerica Center for Retirement Studies found nearly a 1/4 had taken cash out of their accounts already, most often paying heavy penalties in the process.

These statistics reflect a sad realization that a high percentage of American workers will be unable to sustain current standards of living in retirement.  This is especially true as more people are living longer on average.  This will undoubtedly put a heaver strain on Social Security, as their last (or only) resort of income to support themselves.

It’s interesting to see articles come out of the UK related to issues, such as retirement for US workers.  It seems to give a more realistic and unbiased perspective, in my opinion.  All in all, it’s just another sad reminder that most Americans are not disciplined when it comes to their finances. Most, simply do not plan at all.  How many people do you know that don’t want to think about, or even discuss retirement?   It’s amazing to see patterns of massive spending, with no real consideration for their future financial standing.

I believe most middle-class people, simply think it will all just work out somehow and they will find a way to get by.  Even if that means working in their 70’s or 80’s, if they are lucky enough to have good health (that’s another thing most people don’t even account for, good health).

Obviously this trend can be changed with the right mindset and dedication to financial goals.  Let’s not allow ourselves to fall into one of the statistical categories mentioned above!  Start saving today, be aggressive and disciplined in your financial goals and don’t be one of the those middle-class folks that are “hoping” things will just work out.  Plan accordingly and later in life you will thank yourself!

Joining The “Million Dollar” Club

Million Dollar Club

Ah, don’t get too excited with the title of this blog….I’m not really there yet, although it is exciting to me to be joining a list of many others that have dedicated themselves to achieving this goal.

I recently came across a great blogger J.Money at Budgets Are Sexy that has really inspired me.   He created a Million Dollar Club for people like myself that aspire to build some serious long-term wealth.   Although, at times it seems like wishful thinking for most of us working-class stiffs to make this type of a goal, I see absolutely no reason why I won’t be there by the time I retire (or during retirement).  Unfortunately for me, I started way too late in life and I did have a financially devastating divorce right in the middle of it all.  Still, starting late is better than not doing anything at all.

Now, I’m not one to sit back and just hope to make this goal, I know it’ll take a lot of hard work and dedication. I’m also not naive to believe that reaching this goal will be the end-all for me and I’ll fade off in the glory of my riches in retirement.   This is an excellent goal for me at this point in my life, plus I get to be a part of the “Club”, that’s the cool part!

In order for me to make this goal, I need to stay focused and listen to my own good advice…..at least I think it’s good advice!  If I do the following things and make some smart financial decisions, I will make this goal.  Hopefully sooner than later.  For the most part, all I have is time, and time is what it will take to make it.  With limited resources, time is really the only thing you have on your side.  To build this type of net-worth, it’s going to take me some time, but I’ve already dedicated myself and this website to long-term wealth building, so let’s take this journey together.

Here’s my plan:

1. First off, build up my savings account to give me a healthy emergency fund to cover all my unexpected expenses. Ideally, I would like to have at least two or three months-worth of living expenses saved up.

2. Continue to live debt free.  If I can stay away from debt, I’ll be way ahead of the game.  All of my resources will go into achieving this goal.

3. Continue to aggressively fund my brokerage account, especially buying good dividend paying stocks.  If I stay focused on this path, I will be able to build a solid income stream that will snow-ball my account year-over-year.

4. Finish out my current employment and earn the service credits it takes to lock-down a significant pension at my State job.  I pay 10% (mandated) right off the top of my salary every month for my pension.  If I can get 25 years of service, I will be able to secure about 65% of my three-year highest average salary for my pension income.  I already have 14 years of service, so I’m not too far out now.  This will be the life blood for me in retirement!

5. Build up my 401k and don’t take any loans against it (although this has been a great resource in a pinch).  I just pay myself back with a low interest rate and it doesn’t show on my credit report.   It’s has been a life saver in the past.

6. Build up my wife’s accounts: savings, Roth IRA, etc.  Remember, it’s a team effort when your married!  Ultimately, I want to make this goal with my accounts and investments, but we can get there twice as fast together.

7. Continue to fund my investment club with my co-workers.  At this club we use a separate brokerage account with four of us contributing monthly.  It’s been a nice pool of money building on the side.  I really don’t think about this one, I just fund it with the other accounts and it continues to grow.  It’s just another great way to build wealth on the side!

8. Look into purchasing rental properties.  I’m especially interested in vacation condos at destination resort areas.  I can rent the condo year around and occasionally enjoy it myself!  I have a good friend that has successfully owned and rented condos for years.  His guidance will be crucial and absolutely priceless when I get to that point.

9. Dedicate my spare resources to all of the above.  Continue to make smart financial decisions as I go.  Stay healthy and fit to hopefully avoid any health issues along the way.  Eating well along with routine exercise will keep your body healthy for the long haul.  I feel like I’m in better shape now than I was 20 years ago!   Good health can keep you away from expensive doctor bills and medications.  How many people do you know that rely on meds to get them by everyday?  It’s sad, but true.  Stay healthy, not only for your own life (and your kids, if you have any), and start to realize how much long-term health care could potentially cost you.   It’s extremely scary to think about health care costs in retirement.  I’ll take care of myself to try and avoid this hazard!

10. Last but not least, I should have a Social Security benefit as well.  I paid into the system for many years, so I’ll take whatever I can get from this income stream.

If all goes well, I will wear the badge of the Million Dollar Club.  Good luck to everyone else on the list!

Compound Interest: The Miracle Behind Wealth Building

imagesAn important feature of investment returns is something called “compound interest”.  With compound interest you can turn a modest middle-class investment account into millionaire status by the time you retire.

So how does compound interest work?

With compound interest, not only your initial investment appreciates in value over time, so does all the gains on that initial investment.  For example, you might expect $100.00 that gains a 10% annual rate of the stock market to appreciate to $110.00 after one year and $120.00 after two years without compound interest.  But if no money is taken out, then in the second year it is not just the initial investment ($100.00) that grows at 10%, but also the gains on that initial investment from the first year ($10.00).  So, after two years the investment is actually worth $121.00. After many years of compounded interest, the gains on the initial investment become very significant, making more money year over year.

The really cool thing about compound interest is how it can double the account value after years of saving.  It’s really like a snow-ball effect; it keeps growing, doubling and doubling over time.  Investment professionals refer to the “rule of 72”, which is basic rule of thumb that illustrates the power of compound interest over time.  The “rule of 72” basically says to determine the approximate number of years an investment will take to double in value, you divide 72 into the annual average rate of return earned on the investment.  So basically,  if an investment earns a 10% rate of return it will double approximately every seven years (72 divided by 10 is just about 7).  An investment that doubles every 7 years, will double twice over 14 years, quadrupling your account value.   You can see over time how this snow-ball effect works.  After 35 years of saving, your account could potentially double 32 times.

Wow, that’s crazy to imagine, but this is part of the mindset that you need to have to secure long-term wealth with limited resources.  The average middle-class worker really can manifest some serious wealth with compound interest.  This is why it’s so important to start saving today.  Obviously the younger you are, the better off you are, because you have time on your side.  The more years you can take advantage of compound interest, the better.  Start saving whatever you can at first, even 1% of your paycheck will get you in the right direction.  Then start adding an additional % of your pay whenever you can.  Imagine yourself getting to a point where you can invest 50% or more of your paycheck!  Can you imagine how much wealth you can accumulate when you dedicate that type of income to your investments?

Take a look at some of the investment tips that we have discussed on Middleclasssuccess.com and do your own research to help you try to achieve the best possible return on your money.  The better the rate of return on your investment, the more you can accumulate faster.  Historically the stock market over time has produced solid 10% returns.  Determine what the best investment vehicle will be for you….a brokerage account, IRA, Mutual Funds, 401k, real estate/rental income….maybe eventually all of these will be a part of your portfolio (I hope so!).

Stay focused on your long-term goals and start saving today.  Before you know it, 10, 20, 30 years go by.  If you start the process and stay on track, you will set yourself up for financial success and true wealth building.