Tag: saving money
How To Save Money For Retirement | Financial Planning in Excel | Funny |
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That situation will certainly not come, if you have actually saved as per your retired life objective If you recognize that I need this much cash at retirement then decide on that basis, exactly how much you should save every month or year Invest rest money on yourself. Let me show you one Retirement Coordinator where you can go into money you want at retired life and this sheet will guide you exactly how much you should conserve per year Spend remainder money on yourself This is the retired life organizer sheet In highlighted box, add overall cost savings that you are placing aside for retirement You can include quantity from type of financial savings that can be taken out at short notice like Financial institutions FDs, PPF, Market Worth of Mutual Funds Market value of supplies Money at house as well as in financial savings account Do guarantee to add provident fund value also After adding all these quantities, go into overall amount in highlighted box For example, I get in Rs.10 Lakh (1 Million)Do not include residential or commercial property value in this sum as residential property can not be marketed fast Currently in this green box, put your current age? That ' s useful at old age particularly when you would certainly dance after retirement Write Life Expectancy age as per your current life style In following box, you require to compose your monthly salary At this salary level, you are living comfortable life, at this point of time along with handling your other expenses My current salary is just absolutely nothing I are entitled to even more money However I settled on less wage as my Boss is extremely great Or else I was getting really excellent wage offer So here additionally compose the quantity that you are presently obtaining For example, “Its Rs.85,000 per month” Inflation is approx 5%which I'have currently included in this box In this box, create returns that you are targeting on your whole financial investment If you want retired life fund in excess Then you require to target this as minimal return Do not compose un-realistic returns like 40 %or 50%As you require to maintain your risk capability in mind If you do not have threat ability to take, then do not write that much return in this box Think this as minimum return just If you obtain better returns that this, after that its profit, but right here target only minimum return For example, I target minimum return “of 18 %before tax Following box enter reliable tax price taking into account complete income, assets as well as brief term capital gains For example, I enter 15 %which is additionally tax obligation price on short term resources gains Right here in this box, return after tax is 15.3%At this rate, the properties will expand for following 28 years Now enter amount that you are conserving every month In this quantity, do add your ' s and also your company PF payment As these quantities are likewise part of your month-to-month cost savings For instance its Rs.30,000 per month Next box reveals your anticipated pension revenue at Retirement This is the amount that you must obtain every year in your account, blog post retired life At this retired life revenue, you can maintain, your present life design, after retirement Following is Asset Worth on Retirement (Before Tax )This is future worth of your existing assets, that you are saving for retirement, on the day of retired life When you withdraw this quantity blog post retirement, then its after tax worth is 59,932,476 (Rs.59 Million)Next row shows amount that you Required at Retirement age to live a comfortable life In following row, the box highlighted in blue color reveals difference between Possessions at Age of Retired life and Money required at Retired life Below this is favorable which indicates you have enough funds for retirement In fact its surplus Allow ' s say I minimize savings to Rs.20,000 Examine this blue row, where fund has actually come to be adverse revealing that possessions did not expand Now I transform this to Rs.25,000 Right here once more the fund has actually become positive, so this much monthly conserving is enough for you Next rows reveals return required for Retirement income These possessions also need to be spent otherwise the worth will reduce due to rising cost of living State you pay tax obligation of 10% on retirement earnings So the return that you need to target, consisting of tax obligation as well as inflation rate is 14.48%If I raise cost savings today to Rs.30,000 per month, after that return called for at retirement, minimizes which is now 11.86% If I do not take out short term gains as well as maintain spent for lengthy term so below tax rate is 0 Due to this, surplus boosts at retirement and also return needed at retired life also reduces And if you are actually 32 years, then you can take large danger also therefore you can target greater returns too Let ' s state I transformed target return to 22% Can you see surplus increase as well as return needed at retired life also reduced With this stand out sheet, you can track your savings and also assets by altering monthly savings, or target returns or by altering tax obligation prices WIth this excel you can check if your assets and also cost savings are on track or not Wow!
NO NO If you desired to play in culture only after that you should have stayed in Mumbai itself You “could have saved more cash Why did you placed so much effort, to travel that much long range Hey, I am conserving money for Retired life Very great, you should certainly save.Anyways this event” comes every year And also dance in this celebration after retired life is much even more fun Bones get great exercise And also if any kind of point negative takes place then go for physiotherapy You anyways conserved for this only? That situation will certainly not come, if you have actually conserved as per your retirement objective If you recognize that I need this much cash at retirement after that decide on that basis, exactly how much you ought to save every month or year Invest rest money on yourself. Allow me reveal you one Retirement Coordinator where you can get in money you desire at retired life and also this sheet will lead you how much you should conserve per year Invest rest money on yourself This is the retirement organizer sheet In highlighted box, include total savings that you are putting aside for retired life You can include quantity from kind of financial savings that can be taken out at short notification like Banks FDs, PPF, Market Worth of Mutual Funds Market value of supplies Cash at residence and also in savings account Do ensure to add provident fund value too After adding all these quantities, go into overall amount in highlighted box For example, I go into Rs.10 Lakh (1 Million)Do not add residential or commercial property value in this sum as property can not be marketed quick Currently in this green box, put your current age? Or this likewise you are conserving for retired life Yes yes, I am doing it.I do broom as well as mop daily, on my very own. That ' s valuable at old age specifically when you would dance after retirement Write Life Span age as per your current life design In following box, you require to compose your monthly salary At this income degree, you are living comfy life, at this point of time along with handling your various other expenditures My existing salary is simply absolutely nothing I are entitled to more cash But I worked out on less income as my Employer is extremely great Or else I was obtaining very good salary offer So here additionally compose the amount that you are presently obtaining For example, “Its Rs.85,000 per month” Rising cost of living is approx 5%which I'have already added in this box In this box, create returns that you are targeting on your entire financial investment If you want retired life fund in excess After that you need to target this as minimal return Do not create un-realistic returns like 40 %or 50%As you require to keep your danger ability in mind If you do not have danger capability to take, after that do not compose that much return in this box Assume this as minimal return only If you get far better returns that this, then its profit, however here target only minimal return For instance, I target minimal return “of 18 %prior to tax Following box go into reliable tax price taking right into account complete earnings, possessions and also brief term resources gains For instance, I go into 15 %which is likewise tax price on short term capital gains Here in this box, return after tax is 15.3%At this price, the possessions will expand for next 28 years Now enter amount that you are saving every month In this quantity, do add your ' s and your company PF contribution As these amounts are likewise part of your monthly financial savings For example its Rs.30,000 per month Next box shows your anticipated pension plan income at Retired life This is the quantity that you ought to receive every year in your account, article retired life At this retirement earnings, you can maintain, your current life design, after retirement Following is Asset Value on Retirement (Before Tax )This is future worth of your existing possessions, that you are conserving for retired life, on the day of retired life When you withdraw this quantity blog post retirement, then its after tax obligation value is 59,932,476 (Rs.59 Million)Next row shows quantity that you NEED at Retirement age to live a comfy life In following row, the box highlighted in blue color shows distinction in between Possessions at Age of Retired life as well as Cash money needed at Retirement Below this is positive which indicates you have adequate funds for retired life In reality its excess Let ' s say I lower cost savings to Rs.20,000 Examine this blue row, where fund has actually come to be adverse showing that properties did not expand Now I alter this to Rs.25,000 Below once again the fund has actually ended up being favorable, so this much month-to-month conserving is sufficient for you Following rows reveals return needed for Retired life revenue These possessions additionally require to be invested or else the value will lower due to inflation Say you pay tax of 10% on retirement earnings So the return that you need to target, including tax and inflation price is 14.48%If I boost financial savings today to Rs.30,000 per month, after that return needed at retired life, minimizes which is now 11.86% If I do not take out short term gains and maintain invested for lengthy term so here tax obligation price is 0 Due to this, surplus boosts at retired life and return called for at retired life additionally lowers As well as if you are actually 32 years, then you can take huge threat too for this reason you can target greater returns too Let ' s claim I changed target return to 22% Can you see surplus increase and return called for at retired life also reduced With this excel sheet, you can track your cost savings and assets by changing monthly cost savings, or target returns or by changing tax rates WIth this excel you can check if your possessions and also financial savings are on track or not Wow!
How Much Money You Should Have Saved At Every Age | Retirement Savings By Age
user 0 Comments Retire Wealthy Retirement Planning
hey everyone this is lauren mack with hack in the daily grind when it concerns retirement and also strategies for conserving for retirement individuals frequently ask just how much cash should i have saved at every age in order to reach my retirement goals this can be a really difficult question to answer due to the fact that so much depends upon one'' s way of life age in which they intend to retire objectives during retirement and more in this video clip i'' m going to chat about just how much cash you need to have conserved at every age for a typical american planning for retirement if you remain till completion of this video i am going to show you a tip that you could be able to utilize in order to considerably reduce the quantity of cost savings you will require in retirement and potentially decrease the quantity of time you'' ll have to function in order to get there additionally if you see this video clip and think you'' re behind or maybe you sanctuary'' t also began saving after that i have developed a workbook called from xero to retired life which walks you step by step through getting your finances in order as well as conserving for retirement i'' ll put a web link to it in the program keeps in mind listed below so let'' s jump right in the key to having enough cash to live pleasantly in retirement is to start conserving as early as possible this means beginning in your 20s lots of people in their 20s are just starting their occupations whether that'' s freelancing in the digital economy starting an organization going into a profession or finishing up university as well as starting a profession either way people in their 20s typically have really little save for retirement and also regularly not can discover themselves in the red due to institution financings training start-up prices and even entering the labor force which is all right if you happen to be somebody in your twenties that has handled to stay clear of financial obligation and also have actually cash conserved then congratulations you are in advance of the curve the very best piece of economic guidance i can give somebody in their 20s is to begin creating great economic habits while in your 20s because it will be a remarkable advantage throughout your life at this age there actually is no certain amount that you need to have saved although the a lot more the much better i generally recommend that if you'' re in your 20s you should a minimum of have an emergency situation fund of one to 2 months well worth of expenditures conserved up the factor having a reserve is that it can aid you stay clear of falling under the debt catch i actually recommend that individuals of any ages have a reserve alloted that is quickly obtainable in money so this is a great practice to start early talking debt lots of people in their 20s are fresh out of school ultimately making some great money and it can be very appealing to hurry out as well as financing and buy a fancy vehicle maybe some developer garments and even a pleasant bachelor pad yet prevent the temptation to do that naturally when you'' re simply starting there are requirements such as getting a car to obtain you to work or maybe appropriate garments for job nonetheless it'' s important to try not to live beyond your methods or max out your charge card lot of times when you do get your very first work among the benefits offered to staff members is a firm funded retirement account like a 401k frequently the firm suit implying to a specific portion the company will certainly match the quantity you place in so if the business match is 5 then if you place in 5 they will match your 5 i constantly suggest signing up for a corporate sponsor pension in my video clips and i constantly recommend contributing at the very least up to what the business will certainly match because this is like securing free cash as well as it'' s taken into consideration component of your payment package what happens if you help yourself as a freelancer entrepreneur or benefit a company that simply doesn'' t offer a retired life account then i advise opening an individual retirement account or roth individual retirement account and adding to the annual maximum restriction individual retirement account represents individual retired life account if you intend to find out more concerning the distinction in between 401ks iras as well as raw diaries i produced a video clip called roth individual retirement account versus conventional ira versus 401k i'' ll link to it over and also in the program notes below to sum it up life in your 20s need to be everything about establishing great cash routines make certain you have a reserve of at least one to two months of expenses 3 to 6 months would certainly be excellent set up a retirement account either via an employer-sponsored 401k or your own ira or roth ira as well as lastly make certain to avoid the financial debt trap live within your means the more you can begin spending beforehand as possible the quicker you'' ll have the ability to retire so currently allow ' s speak concerning your 30s now you'' ve most likely remained in the labor force for some time and also with any luck things are proceeding well with your chosen profession lots of specialists suggest by the time you reach three decades old you need to have one year of salary saved up so for instance if your yearly salary is fifty thousand dollars a year then you must have fifty 000 conserved up and also spent this quantity of financial savings should be in addition to the 3 to six months of savings that ought to be concealed in your reserve in order to shield you from falling under the debt trap as a result of task loss clinical bills cars and truck repair service talking of financial debt by the time you reach 30 you really should try to eliminate what i think about uncollectable bill some instances of these are credit history card debt vehicle loan pupil financings and so on paying on these kinds of financial obligation each and every month avoids you from investing the difference and also limitations your ability to additional spend as well as add to grow your nest egg as you saw in the earlier instance in your 30s it can be alluring to stay on top of joneses as well as live beyond your methods much of your pals as well as acquaintances will certainly obtain big fundings to get an expensive home they'' ll obtain large amounts of cash in order to acquire a luxury automobile in order to provide the illusion of wide range prevent falling under this trap and also really feel lured to complete with these individuals by making the same errors 98 of the moment these wealthy individuals are in fact very leveraged and really damaged the best means to get out of the rat race fulfill your retirement goals as well as also retire early and rich is to live frugally and also within your means alright so now you'' ve reached 40 and you ' ve managed to not give in to the financial debt trap that many individuals come under in their 30s you need to be extra financially secure than you were in your 30s so just how much must you have conserved for retired life by currently well most experts suggest that you have 3 times your yearly salary conserved up so for example if you make sixty thousand dollars a year you ought to have a hundred and also eighty thousand bucks conserved up as well as invested in addition to this should be maxing out your payments to your pension that we'' ve been discussing that is truly vital not just to aid grow your investment but payments to your pension can decrease your total tax obligation responsibility it is additionally an excellent idea at 40 to buy a house residence possession is truly essential because house values tend to rise gradually if you get a residence at age 40 with a 30-year mortgage and make all your payments your home will certainly be repaid by the time you'' re 70 and you ' ve got to retirement for that reason decreasing housing expenditures in retired life when your residence is repaid then it becomes a possession this also provides you the choice of marketing it once you get to retirement scaling down paying cash money for a brand-new residential or commercial property that'' s worth less than the worth of your house consequently giving you the additional cash to assist you spend for your retirement another advantage of owning a home or rental properties is utilize which is the mortgage if you put twenty thousand bucks down on 2 hundred fifty thousand buck house and the worth rises 10 percent after that your returns twenty 25 000 instead a 10 return on 20 000 is 2 000 as you reach half a century old lots of people are well developed in their occupation and also with any luck have actually managed to obtain a few increases over the years and also are currently making more money at this moment you ought to save around five times your annual wage so if you make sixty thousand bucks a year after that you ought to have 3 hundred thousand dollars conserved for retirement you must truly be seeing the substance passion impacts currently as a result of all that attentive savings throughout the years when you turn half a century old the irs enables you to begin making catch-up payments to your retirement accounts which implies you'' re permitted to contribute greater limits to the yearly payments so you must be taking advantage of this in order to expand your pension quicker and additionally reduce your overall tax obligation obligation an additional recommendation at this age is to remain to continue to be financial obligation cost-free live frugally and also remain to pay down your home mortgage by age 60 currently you'' re obtaining near to retirement by this age it is advised to have seven to 8 times your annual salary saved up so if you make sixty thousand bucks a year then you need to have 4 hundred and also eighty thousand dollars saved for retired life you'' re probably debt cost-free now and also truly appreciating watching your cost savings as well as investments grow at this moment it could be appealing to start dipping into your retirement cost savings however prevent doing this maintain up the study cost savings speed several individuals are still working and also earning wonderful incomes in their 60s and can truly boost their pension if they have actually fallen back in the early years hopefully by now your house is either paid off or near being paid off which should offer you peace of mind currently you ought to be eligible for social protection advantages yet you could intend to place that off as long as feasible to be able to get the optimum amount of cash you can most likely to the social safety and security web site they have a kind where you can enter your info and also it will certainly give you estimates of what to expect at various ages i'' ll placed a link to it in the show notes listed below you'' ll be able to identify at what factor it makes feeling to take it out and just how much will be added for waiting and if you'' re just starting saving for retired life as well as you'' re still reasonably young don'' t presume you will have social protection benefits when you reach your 60s or 70s many professionals debate whether they'' ll in fact suffice money to pay those benefits in the future currently for the incentive suggestion like i said at the beginning of this video having adequate cash for retirement depends mostly on your way of living cost of living and retirement in america however these days increasingly more people are choosing to retire outside the united states where the price of living is substantially much less and they can have a far better criterion of living for considerably more affordable than the us the thought of retiring abroad could seem frightening to some people and also i obtain it however i have traveled to over 58 nations and also lived around the globe as well as i can inform you that you may be fairly stunned retiring abroad is not uncommon in fact many americans pick to either retire early to stretch their retired life savings also additionally by joining the ever before growing listing of american expats who are making a decision to retire abroad several nations all over the world entice retirees by supplying retired life visas to come invest their gold years delighting in the beaches golf links as well as laid-back lifestyle in their country i directly know numerous people who have actually selected this alternative and none of them have regretted it you'' re possibly assuming oh lauren what regarding the healthcare overseas it can not be comparable to the u.s well my husband and i have actually received medical care in various countries throughout the world consisting of emergency surgical procedures from nations in southeast asia southern america mexico europe and i can tell you that each time we receive medical treatment it has actually been as great or much better than the treatment we obtained in america and also the bill was absolutely much cheaper if this sounds appealing to you after that take a couple of searching trips to some countries where you think you might wish to live and also invest a long time checking it out and also meeting some expats that live there to obtain their impact of what it'' s like to retire abroad in the nation that you'' re considering now i want to speak with you in the comments area would certainly you like me to do a video clip on retiring abroad have you been considering emigrating to retire if so where let me understand in the comments below if you'' re enjoying this video and you'' re believing lauren i am up until now behind or i haven'' t even began is it far too late after that see this video right below
How to Rock Your Retirement with Roger Whitney
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the first step is have a client dream expansively of what could they do if they had it all you know would they you know if they could have everything if they could retire tomorrow or go part-time and they could have their needs their wants and their wishes what would you want if you literally couldn't fail at it this is the door roller money podcast i'm your host rob berger in today's show we're talking with roger whitney he is the retirement man literally his blog and podcast of the same name or legendary and his mission is to help people shift what they think is possible in retirement by changing how they live work and celebrate what's possible in the present boy do i need that roger is a three-time plutus award winner and author of rock retirement a simple guide to help you take control and be more optimistic about the future he's been ranked by investopedia as one of the most influential financial advisors for over five years and he created the rock retirement club which is an online community which provides tools for others to build an amazing retirement roger welcome to the show wow i always sound impressive on paper and then i open my mouth well listen we can just stop here it was great having you on the show have a good day i'm done no it's great to be here it's great to be here so i want to dive right in i got a ton of obviously retirement questions to ask you uh and i'm you know i have very much self-interest in this interview i don't care about the listeners it's all about me today always um yeah but i want to start actually with your firm agile retirement management which as i understand is you know a financial planning firm you'll correct me if i'm wrong focused on retirement i'd kind of like to know like what do you do for people and how much does it cost can we kind of start there and then i'm gonna dive into a bunch of retirement questions ah sure um so agile retirement management is our firm uh we act as project managers in someone's journey towards retirement so we take a very much a project management approach to a financial planning process hence we've borrowed a lot from the agile methodology which is how software is developed right that's why your phones have to update software all the time is because they're constantly iterating and so in the firm we act as project manager and implement agile retirement management and we can talk about what exactly that is uh we aren't accepting new clients so we're i'm sorry you are or not or not oh uh okay i can talk about that we walk life with about 80 families and not really trying to grow that beyond what it is and we charge as a traditional financial advisor so our fees range anywhere from ten to twenty thousand dollars a year and uh so let's yeah let's talk about the no new clients why will that change in the future and why did you stop at 80 well so i i've been on the street so i've been a practicing financial advisor for over 25 years and you say that when it's over 25 years so you don't have to say exactly how many years ago and i've done a lot of things for over 25 years and i went the journey so my journey professionally professionally is i worked at a major firm uh as a traditional financial advisor early in my life and then in just after 2000 transitioned to establishing an independent firm and i had two business partners and we grew that to a firm of about 15 or 16 people and just over the last four or five years i've extracted myself from what i've created in order to right size my practice so i didn't have to do all the things that you have to do when you run a big firm you know the the compliance the education the coaching the all the management responsibilities and so i right sized my practice to fit what i want for my stage of life which is i want to walk life more closely with individuals i want to have a profitable practice i want to have a location independent practice i want to have time freedom personally and so i created a firm where i can have all of those things and still actually practice my craft and so when i extracted myself from the firm we're building this firm to serve the people we work with but not just simply to scale which is generally what plan business is about always scaling and getting bigger i'm not i'm trying not to do that so do you foresee taking on new clients anytime in the foreseeable future or not can you imagine periodically yes yeah i can imagine periodically yes so then what we need to know is how folks can um perhaps approach retirement the way your firm does without obviously hiring you and you mentioned you know you see your role as a project manager which uh i like that idea although i've never really heard of it applied in the financial planning perspective so how does that work so i i call myself a classically trained financial planner so i was trained in the cfp curriculum and i taught the cfp curriculum to cfp candidates for a number of years and i equate that to how we used to develop software it was this huge bloated process where we tried to solve for everything at once to create this thing which is called a financial plan or a retirement plan and that is generally how financial planning has been done and it's all had as the hub investment management yeah that's where the money is well for a lot of reasons it's come it would you know the financial planning process was developed by financial advisors and insurance people so the natural hub is what their center of the universe is which are those products right that's not necessarily good or bad it's just how things develop and in reality with a modern retiree say you someone who's going to retire the dynamic is different than any generation in history because one you're going to live longer than any generation before you two you're going to be healthier and more active than any generation before you in the later part of life three you're likely not going to have a pension and be more responsible for your own retirement all of these things collide where the traditional financial planning approach approach generally gives you a lot of bad options right if you go through a traditional retirement planning process it does it you know it actually does net present value how much you need on the day you retire and because of the dynamics you're going to spend more you're going to live longer et cetera essentially the math doesn't add up near as often as it used to for people that had pensions and that didn't live long or active lives and so the the solutions that generally advisors offer clients are one hey you know what these numbers you're probably going to have to work longer than you think right maybe we should have you work longer to make this math work or two we need to probably inves you know take on more investment risk to try to get returns to catch up three i mean you probably should start saving more um so we can build up a bigger nest egg for when you retire or four maybe we settle for less of what you can spend during retirement so we make sure you don't run out of money so those are the four general recommendations that you get from the financial advice system or some combination of those four right you know maybe we work and to be blunt all of those choices suck right because they sacrifice your life if you work longer well that's more of your life that you don't have time freedom if you save more money there's a financial there's actually human cost to that right you means you can't take that extra vacation maybe you have to work more hours maybe you do without certain things and all of those are reasonable recommendations but there's a lot more than just simply the math when it comes to creating a retirement plan right um there's a lot of dials that people can move if you get out of the mindset of financial products and portfolios which is generally the hub and i can we can talk about a lot of examples so what we do with clients is an agile process that is based off of the you know agile methodology but there's three major pillars to a retirement plan process the first step is have a client dream expansively of what could they do if they had it all you know would they you know if they could have everything if they could retire tomorrow or go part-time and they could have their needs their wants and their wishes what would you want if you literally couldn't fail at it we try to help people think in those terms rather than sacrifice their life before they understand what's possible and then we organize our financial resources because you're gonna pay for your life from three sources of capital uh human capital which is your ability to earn income we think of that as a job but there's lots of different ways to earn money that's not full-time um what does it covered by your income can be covered by what we call social capital which is like pensions and social security and then lastly whatever isn't covered by those two has to come from your financial capital and so the the first pillar is dream expansively look at the resources you have and see if it's feasible and so my goal in a agile process is i want the first iteration to fail miserably i want their dreams to be so big of what they would what they would want if they could that they really don't have the resources and that seems counterintuitive but the reason i like to do that is because now you have all the things on the table and then you end up negotiating with yourself we all know we can't have it all but we should define what it all is so we can flush it out so there isn't something that was unsaid by say your spouse or your partner or your that was unsaid to yourself and then you end up negotiating with yourself to get to a feasible plan something that is focused on the things that you truly care about most and that you know from a long-term planning perspective is feasible as a road map and what will happen is and i've had many instances where people on paper almost are identical but one you know person a or couple a says their deal killer is i have to get out of this job that's killing me as soon as possible and so we negotiated understanding that that was what they really needed to solve for and they were willing to give up their sacrifices elsewhere i wonder if you've had clients where you go through this process they say okay we need we need to get your wants and your wishes and we might fail in the first iteration as you just said and they have trouble coming up with them oh yeah yeah they're definitely because i think that's probably again not that this interview is about me that's probably the bucket i would fall into so what do you how do you get people you know how do you break the dam so to speak and get people to figure out what in the world they want to do with their life and you're right that is a problem for some right it's and it well let's not call it a problem right and let's take you rob let's lay down you have a lay on the couch let's have a chat um it's a journey right because a lot of us are especially the people that have the most options in retirement generally are great accumulators they're used to self-sacrifice and delayed gratification every everything else and we're going to do a series on our show next year called overcoming frugality i was going to ask you about that because i listened to your show i know you're going to do it and it's a great topic so how does some someone what's it mean to overcome frugality and how does someone actually do it well what it means to overcome frugality is to realize that you can't take it with you and start to and the way you overcome it is a journey right so a good place to start is the thing you know to decrease the friction in your spend money to decrease the friction in your life right the classic example that's a great one would be mowing the lawn right when i gave up mowing the lawn it was a big deal it's like the money i could afford but it was annoying it was enough money and i sort of enjoyed it but that decreased the friction um yeah flying first class if you can another good one that seems silly when you look at the number but if it decreases the friction and enhances your life and allows you to be more well rested when you're there etc so that's a great place to start so i think really rob it's a journey and a lot of times why we don't make that journey is we don't have a framework to know whether it's really being flitted away if i fly first class just as an example that's a lot of money and if i do that consistently that could really you know without a context we think that could hurt us i can't afford to spend this money because i might need it when i'm 90.
and without a framework to understand that the decision you make today that you'll still be okay later on absent that framework you're likely going to sacrifice because you want to make sure you're okay tomorrow so let's talk about the framework what does that look like and how can someone how can someone build the framework that you envision on their own well that's you know do they read your book what resources would they use so what's the framework look like because because ultimately that is the question right how much money can i spend today how much money can i spend this year without worrying about when i turn 90.
so what's that framework look like for you and how can someone whether it's books obviously listen to your podcast but what resources are available to folks so that they could take your vision of the framework and implement it well i think the podcast is where we that's my laboratory for talking about it and talking through the different elements um the rock retirement club is meant to teach people we have a master class that walks you in an agile way through building what we call your plan of record right so okay peer one is knowing that your roadmap is feasible right and but having a feasible plan isn't enough right because it's feasible for me to swim across you know a two and a half mile lake but what happens if a storm comes in or what happens if the current shift then the second period you have to make it resilient if i'm going to embark on this journey i have to put some guard rails in place so i don't get thrown off course or swamped with the storm whether it's a life event or the markets or inflation and then you get to optimization which is all the bling of financial planning right all the stuff that people talk about most so those are the three pillars and so if you get a feasible plan and then you make it resilient we call that a plan of record which is our working project model this is the project that we're on and that's going to include you know and that's what we teach in the class when we talk about on the show the feasible part of it is mainly financial planning software like in the club we have club members get new retirement plus calculator which is one of the best public-facing calculators so you get the software approach and then when you make it resilient you have to you have to actually go to spreadsheets you have to create your roadmap of how i'm going to pay for life early in retirement so what we do you know a good feasible plan that is resilient is once you know the model say you're fine long term we we recommend or suggest that people retire having the first five years of old life pre-funded so they know exactly just a savings account somewhere a cash account um yeah you can get you know that's the optimization stage how do you eke out yield but the key is you want to have that money set aside to essentially be your payroll account to create your paycheck for yourself when you're not working and that we have spreadsheet templates that we have there and what's interesting about this rob to me is and this is why we think it's a project not a plan is you're always iterating because when rob has his plan of record and he starts iterating on that the problem is his plan is going to change a million times because rob and his wife or partner i don't know if you have a wife a partner they're going to change their mind and you're going to pivot she does occasionally from time to time she's actually in the other room so i should probably keep my voice down and and so using a project man once you have this plan of record that's really setting up the project then then the key there rob is what i call creating the wham really what people need is the wham and that's what we try to deliver in an agile way and that is basically every time you're reviewing your plan of record that you know is feasible and resilient you're always asking yourself whether it's verbally not well what do i do next or you know what should i focus on what do i do next to improve the plan because of an opportunity or shore up the plan by addressing a risk so people want to know the what and then they want to okay once you identify the what and one thing about that is it's very you know if you think of levers that you can pull in your life it's in because everybody thinks so tactical we can focus a lot of our energy on things that have very little impact in our life right and in planning that's generally where most people stay because they read an article about roth conversions or about you know irma with medicare and they spend all this time thinking about it when they could have a very easy task over here that could have a huge impact on their life that they just totally ignore because it's not very sexy so we want to know what do we focus on and that's what we help people figure out and then how do i do it you know the actual how and then some assistance and accountability to actually get that little step done which creates momentum because you've completed it which leads you back to what do i do next so an agile approach to planning never ends because it's always now what do i do and it's all these little decisions to try to improve the plan and i think that's where you need to live and this is all in the rock retirement uh club course that folks can take this is what we teach them yeah but i mean that your your firm doesn't take new clients but but folks can sign up for the class you're describing is that right yeah so the the club is structured around gives you the education of how to put this in place and then it gives you tools to actually do those things and then it gives you the community of people that are all doing them together okay um and what you said one of the tools is new retirement right that's one that you like which i've used for a long time i know steve steven the founder very well yeah he's a good guy um yeah uh and uh okay so that's good you mentioned and i and i plan to ask you about this in terms of prioritization because you know when you're planning for retirement in retirement there's a thousand little things you could be thinking about but as you pointed out you really at least should start with the low-hanging fruit so to speak right um the things that are going to make a big difference that you know might be easy to implement uh my question for you then is what are some of those things what are some of those those priorities that you see folks sort of ignoring that they probably should focus on first it's a good it's a good question and i'm going to start by saying a lot of this process is you want to think strategy tactics not tactic strategy right you want to think from a strategic level and let that dictate the strategy the tactical execution of things and most people approach it an incorrect way um probably one of the biggest things if you're within five years of retirement is starting to address boundaries around work you know bound you know because what happens as you get closer to retirement is you're used to being on a career track and pleasing your boss and the superiors in the company and working for whether it's the recognition or the promotion or the raise or whatever else that's a cycle a lot of us have been on for decades and we can easily sacrifice our life to it because we care so deeply about our teams and what we're doing right when you're close to retirement one thing a lot of people i don't have time i don't have time to think about what i want afterwards i'm too busy i'm traveling whatever else is to start realizing hey you're not on this career advancement treadmill anymore and just you know so i think one low-hanging fruit is start to create some boundaries so you can capture some time to start thinking about the transition that you're getting ready to go to right so i think that's a big thing to work on i think another one is especially with if you're within five years of retiring have you ever been to the gym and have seen like those dudes that all they do is upper body they're just huge walking around i mean they're really developed you know from the waist up that is how a lot of us are when we're close to retirement because we're so good at accumulating you know the game has been work your butt off save reinvest every dollar embrace investment risk and we've done that for decades to prepare for retirement and then we've had the joy of especially our generation the joy of updating our net worth statement seeing those balances go up saying this is how much i saved this year all that affirmation cycle that comes from all that saving so we're like really strong accumulators well when you get close to retirement that changes you're decumulating you're you're switching from a decumulation or from a from a sewing to a reaping standpoint and so that's like all your legs now you're so big up here and you're supposed to run a marathon and you've never developed those muscles because so think of what happens and so that transition from accumulation mindset to decumulation mindset and what that actually means is so i think low-hanging fruit that if you understand that it makes everything else a lot easier yeah that was the biggest shock to me i i retired about four years ago now i ended up going back and doing more work and i have a side business so you know i'm not really spending my nest egg right now but when i sold part of my business i thought okay that's it i'm gonna be spending my nest egg and psychologically it's a it's a very very difficult thing to do uh for me just like you've described and at one point it was because you know the fear of running out of money but after a while you kind of get used to that at least i have and that's not really the fear anymore uh although it helps when the market's doing well so yeah you know if the market crashes maybe that fear will come back but it was also kind of like you described i just like doing barbell curls i like accumulating money i don't really do that many barbell curls but you know you like accumulating money it's fun to invest it the thought of watching your balance go down who likes that so how do you overcome that well that's why it has to be a process and not a plan yeah so i have a question for you um when you left work did you know you're going to be doing part-time work or building a business no uh i mean i thought that i might some point down the road um i had a non-compete so i couldn't really do much for two years in terms of my own business i ended up doing some work though it fell into my lap you know how this happens like three weeks after i sell my business i get a call from forbes and they they want me to do some things for them and i was allowed to do that and that was enough to sustain us financially but it was totally unexpected and then and then eventually i started my websites back up and i'm doing this podcast right you know and uh a few other i got a youtube channel and so we live off of that income now and so i've kind of i've sort of accidentally unretired but i'm guessing you probably have more control of your time and time freedom yeah i mean and i wouldn't do it otherwise if i had to go to an office eight hours a day i wouldn't be doing this and in surveying our audience over the years probably one of the biggest insights i i've had is asking them what retirement actually means because i use the word just simply because that's the word that's used yeah but my understanding is most people don't want to not do anything yeah they just want to slow down and have some control of their time yeah right absolutely absolutely and i think you know low-hanging fruit from uh if you understand this it changes it makes it much more multi-dimensional than the classical way is retirement is framed in planning as a light switch you're working you're not most people don't want that so if you can think more multi-dimensionally and think of it like a dimmer switch where you can get out of the rat race take a breath most people and this is true in my private practice as well are doing something because they enjoy it and they're earning some money from it and it's the pace of life that's really the difference not not working yeah absolutely absolutely well let me let me drop down to some tactics i guess this would qualify as tactics uh at some point you can do all the planning to talk about all sort of the psychological issues uh but at some point you know a retiree needs to know okay how much can i spend in the first year of retirement what's the number and it may be a range i suppose but i don't know but how do you think through that question and and how do you you know how do you advise folks uh in trying to answer that and this is where i think planning even even a professional planner you get beyond the charts and the graphs to the okay exactly how does this work and what do i do it starts to get a lot lower resolution um and and so the way that i'll just tell you how we do it this is what the course digits do is once we know it's feasible we're making it resilient we want someone to go into retirement with a contingency fund and then an income floor which will be anywhere from pa pre-paying for life two to five years out and then so if you have a million dollars let's say you're gonna have your normal contingency emergency fund and let's say after part-time work in in pension or social security you need a hundred thousand dollars from your portfolio these numbers aren't going to work right but you get the point well then that means if you need a hundred thousand dollars a year for the next five years you need a half million dollars is basically pre-paying your consumption so that million dollars half of that is going to go to consuming and then you have a half million dollars left and that goes to upside portfolio and so i call it a pie cake first lay we have multiple asset allocations we have contingency we have the income floor which pays for your life early and then we have the upside portfolio that will help pay for future life because you have too big risk when you're allocating assets in retirement from a financial standpoint you have near term you have sequence of return markets just being bad right up front and long term you have inflation so those are the two things and we're on a teeter-totter trying to balance those two so to your question when once we identify how much they need in years one through four or five say we identify then we identify what accounts are we going to get that money from yeah and there's some tax planning in there and then now that we know the accounts that we're going to get the money from we set ups we sequester or segregate that money and we call that a payroll reserve to pay for what years one through five so psychologically it's like a bucket system so if someone said to you okay that sounds good i'm gonna take my five years of of income need whatever that number is and i'm going to invest it in say i don't know 50 index funds stock index funds and 50 bond index funds would you say no no no slow down it's got to be an all in cash uh how would you think through investing that five year i'll call it a bucket it almost to me sounds like the bucket strategy but slice and pie or that whatever you want to call it how would you invest that five years and so so to answer what is that money for that money you know when you and this is a basically a pension management way of doing things an asset liability matching so if rob needs a hundred thousand dollars in three years that's really a liability on your balance sheet you owe a hundred thousand dollars in three years and so we're matching your assets to that liability your spending is a liability so but to answer your question cash you know in ideal world you would buy a inflation-adjusted security that matured right before you needed the money right so you neutralize inflation if you need a hundred thousand three years from now you take a hundred thousand dollars you buy a inflation-adjusted security that matures right before you need it now you've pre-paid it in reality we use high-yield money markets we use cds we'll look at three three year fixed annuities you can look at tips you can look at individual bonds that mature on a certain date it's really not the environment for that but we've had periods of time where we'll actually buy bonds that mature right before they need the money so how how would you respond to someone who said that that's that's gonna end up creating a portfolio that's got too much in short-term you know fixed income and that it's going to really hurt you you don't take too much risk but maybe the argument that that's too conservative how would you respond to that too much relative to what right well relative to a portfolio that and i think in terms of percentages when i do asset allocation i don't think in terms of years of expenses um that you'd be better off coming up with an asset allocation based on percentages 60 40 70 30 whatever and only taking out and from that in terms of cash what you need say in a given year uh so you're still going to have probably years two through five and maybe even longer depending on how much money you have in some form of fixed income right uh but it's going to be allocated based on percentages uh rather than pulling out from the allocation five years of expenses i i think and you're going to have ups and downs if the stock market crashes though that's okay because you'll sell fixed income to buy stocks which is exactly what we want to do anyway that would be sort of the alternative in my mind and that and that that approach is essentially taking asset allocation and investment management uh from an accumulation mindset and trying to fit in the decumulation model which is where we come up with four percent rule and things like that now you can accomplish it that way right um i think a lot of this is accounting because one is what are we trying to solve for we have to understand that and in retirement unlike accumulation we're not trying to solve for optimization of returns relative to risk that we're taking which is what efficient market theory says right or modern portfolio we're trying to minimize risk for a given level potential return and in modern portfolio theory inflows was never part of never in the universe of that model that was about accumulating assets in retirement what we're trying to solve for is life outcomes right so i'm not against a systematic withdrawal model in the way you speak but first you have to know feasible because in when you create a feasible plan we put people into three buckets they're either underfunded for the spending they want they're constrained or they're over funded and it's important to understand that because if you're over funded meaning you have much more in assets than you have in spending liabilities you can do a systematic withdrawal because you have so much excess you can absorb a period of time when stocks and bonds go down because you have so much excess it's okay to do a systematic but the more you get into the constrained category which is where most people are the more you better secure the outcomes and what ends up happening rob when you go through this exercise actually when you have contingency floor upside you end up getting to a fairly balanced model because the upside can have more equities because essentially it's a time horizon structure you know you wouldn't put money into something for four if you needed the money in four years you're probably not going to put 60 of it in stocks yeah so if some so folks listening and they're thinking well am i underfunded or over funded or constrained i mean do you see the four percent rule as at least a rough starting place to think about that issue or how do you how do you help clients determine whether they're underfunded you know or over funded you build a household balance sheet and understand the liabilities that you have from a spending standpoint um that's what we that's what the class does you get to a that's how you determine your feasibility is through building your household balance sheet to see how overfunded or underfunded you are and once you know that that will help to determine the toolbox for how you make it resilient so as an example if somebody is highly constrained the knee jerk would be well i need to take more investment risk to get less constrained right yeah that's actually the last thing you want to do because you can't afford the risk of taking more investment risk it will just exacerbate an already tight situation so somebody that's highly constrained is going to have a more safety first approach which wade fowls talks about because there's this there's this dial from safety first on one extreme to systematic withdrawal on the other extreme where you are at between those two extremes is going to be dependent one on your personality profile which people are just now developing things to solve for and it's also going to be determined by how funded you how you know how funded you are yeah but i mean doesn't it at the end of the day it still comes down to numbers right so like i'm guessing if someone said i got a million bucks i'm going to spend 100 000 the first year and that's going to be my income floor i'm going to guess what i don't care what tools you're probably not funded they're probably underfunded right if they say i want to take 40 grand out or maybe even 50 grand well okay it's probably roughly in the ballpark i suppose um for your course i know you mentioned new retirement so new retirement comes up with numbers uh but in order to come up with those numbers the user of the tool right has to make an assumption about the returns and and future inflation so i know i'm getting into the weeds and we don't have to go down too far into the down the rabbit hole i suppose but those two things are a big concern for people the returns are a concern because uh stocks at all-time highs more or less and bonds are at all-time highs meaning the yields are low uh although the 10-year has been rising today who knows um and people are scared of inflation so how do you i mean again folks can take your class obviously to get into the nitty-gritty but just how do you do you think we're in sort of the chinese curse may you live in interesting times are we living in interesting times right now we always are that's sort of the the crux of that that saying right um that's a lot rob so first off i think the one reason that's why an agile approach is more important than ever yeah so one story i tell people is that hey and i'm gonna use a you know i'm gonna say trailer and that's not a bad thing but most people don't live in a trailer i tell people and very wealthy people like look we can do everything right and you may still have to live in a trailer it is and it's the truth because we the the hard part with this type of planning is you cannot figure it out it is unknowable it's unknowable inflation's going to be it's unknowable what returns are going to be it's unknowable what your life is going to be that's just as fluid as all these other things we're talking about life events happening and so forth and given that you better have a very well thought out process to make lots of little conversations so you can identify risks and opportunities early enough to take little actions rather than big actions that is the best we have that's one reason why we've adopted an agile methodology so to answer your question on inflation and returns in the class we have new retirement calculator which is more of a traditional forward-looking calculator which has return assumptions in the class when we build a household balance sheet we have no return assumptions we we actually bring back to net present value everything today so if we're talking about spending what rob and his wife are going to spend when they're 85 and let's call it 180 000 inflation adjusted we discount that back to make it a present value as of today so we can look at your we know what your assets are right we know what your assets are you bring back present value all the cash flows for social security and pension and we do the same thing for the spending so we can compare them more apples to apples um that is much more conservative and what ends up happening than traditional software because what ends up happening if you forecast forward which is the traditional sense and i do that with monte carlo scenarios and etc what ends up happening is especially with monte carlo the scenarios though the time frame is so long the possible outcomes just spread yeah they're crazy yeah so now when you bring everything back down you make you make zero prediction on investment returns and you're dealing essentially with your inflation assumption and your discount rate okay right which are still focused i want to find your class they go to rockretirementclub.com rockretimer.comclub.com is where the course and the community all of that is talked about okay and how long does the course like if someone wants to go through the course how long does it take or how long does it last yeah it's right it's nine modules and it's structured as an agile project so it's little baby steps starting from the first remember the yellow brick road when you start on the first step you have to go back you start and you iterate people do it at their own pace okay that's terrific i'm gonna check it out myself uh because it may be uh perfect for me um so folks that want to follow you follow your work your writing where should they where should they go best place to find me is in podcasts on the retirement answer man show that's where we do everything okay i've been listening to that i'm it's funny i'm not a big podcast person uh but i started listening to your show and enjoy it immensely uh you're doing a great job it's it's uh it's really helping a lot of people thank you uh it's my lab i don't have any uh illusions that i haven't figured out i'm trying to be a very organized thinker about things yeah absolutely well roger thanks for tolerating my my persistent tactical questions thank you for coming on the show you bet buddy have a great holiday you
Read MoreAcute Wealth Advisors has tips on spending in retirement
user 0 Comments Tips for Retiree's
So you've save save save your whole life and then it comes time to retire and you've got to start spending that money down well for many baby boomers spending that cash isn't as fun as they thought it would be Matt Deaton of acute Wealth Advisors he is here this morning to explain and Matt is one of the valleys leading financial advisors he and his partner Damon they have a weekly retirement radio show and they help folks prepare for retirement and Matt it's it's mind boggling really when it comes time to actually go out and spend the hard-earned money that you've worked hard for you said that some people can't do it they're they're fearful why well part of its they've they've developed habits of saving their whole life and now it's time to start spending I've got this client that I'm working with right now she had hurt us at one of our workshops and she came in and she was currently being with her advisor once a month because she was so worried about her money she had just retired she didn't know what to do and as she talked and she talked through these things I found that she was basically paralyzing or spending she just really didn't know what to do she I told her I said you have some investments but you don't have a financial plan you don't have a plan for how you're gonna spend this money and so you're really really scared about it oh yeah and so so we're working with her to kind of put that plan in place so that she can you know and she doesn't have to meet with her advisor every month right and be worried about this that she can go out and enjoy retirement all right so how do you suggest that those folks out there who might be like her how do they overcome their fear well I think there's a couple things number one I think knowledge is power the more you can understand about a subject the better and so we believe when we sit down with someone to educate them and teach them and so we spend the first few appointments just talking and educating about those the other thing that we have started to do is we've started to do these college courses okay so we hold these courses that's a community college close it's two nights it's for two hours each night so it's not long it's not extended but it's enough time to go into depth on these classes in this subject so that people can now own their finances because now they can learn about fees they can understand how to analyze their statements all these things that people get petrified and worried about that cause the issues when they were and so this to our class it's two nights for two hours it's a I mean are we you're teaching us basically how to spend so we're taking notes oh there's a workbook we're gonna teach people how to maximize their social security so the first thing we're trying to teach people is how to get the most out of their money okay but then once you understand that you're gonna know okay this is the money I need to set aside for the income I'm going to need ten years down the road but this is the money money I can spend now so I can have some fun while I'm young and I'm healthy and I can move and I can go on the cruise and all the things you've been doing so it's it's a it's a course that just starts from the basics and builds on them alright so after we finished this two-day course you've given us a plan of action our distribution plan do you suggest that we update that oh absolutely so just because you go to the one class or just because you've sat down with a financial advisor at one time you cannot just stop there you need to continue to develop and make changes to that because things are gonna change your health is going to change your spending is going to change and so you need to make adjustments to your financial plan and I would have to imagine that after they have this plan that they the fear is lifted a little bit absolutely because again instead of just having investments you have a plan and so if you're an emergency and you have a plan a lot of the fear goes away you know what you're supposed to do that class and go gosh darn it I gotta get out there and enjoy my retirement well that's all probably overwhelmed and and excited well she's turning to become more excited you know she's been overwhelmed she's been fearful now she's starting to get where she's like okay I can really enjoy the travel I don't do it I can do it and I think that you know that fear is normal because we're not getting the income anymore so we don't want to stop our current lifestyle right great information well let's give you some information let's to give you the tools that you need to enjoy retirement if you want to learn more you can attend that upcoming two-day educational course that we were just talking about hosted by acute wealth advisors there are two courses that you can choose from in October now one is going to be held at Mesa Community College the other at Glendale Community College and if you call in the next thirty minutes you're going to receive 50% off the tuition for that course so it's half off four eight zero six two zero six nine zero seven is the number to call spaces filling up so be sure to reserve your seat today acute wealth advisors they have offices across the valley for your convenience learn more by visiting acute wealth advisors dot-com
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Read More5 Easy Tips To 💰Save Money💰…Money Saving Hacks
user 0 Comments Tips for Retiree's
I'm going to do a video on 5 simple things you can do to help your financial situation and I realized that I need to do a follow-up to the retired at 40 story video because there's a huge need for financial education in this country and really everywhere it pertains to every single person doesn't matter what your financial status is you can always use help and there's always little tip tips and tricks that and things that you can do to better your status it always amazes me how scared people are to talk about their finances to put something on paper to basically take a look at where their money is going what's getting saved and how everything is getting spent and I've met people time and time again that are highly educated very smart people but they know nothing about finances and they are terrible with money management so before we get into the 5 tips I want to strongly urge you to make a financial statement for yourself figure out where your money is going currently and figure out how much you're saving and basically figure out where you can trim the fat for so many people a financial statement or just finances in general is like a bad word they're just terrified of it but the only way that you're gonna be able to improve your finances is to face the music alright so now that you've had a chance to go through your financial statement you definitely know where your money is going but how can we save more and what you really need to aim for is about 6 months of reserves especially if you're getting ready to invest money into something or if you're doing some kind of career change or some life-changing thing and all of these five tips will more than likely be a line-item on your financial statement so let's go to financial tip number one hey I'm going to have to call you back I'm shooting a video right now so this first thing is something that we've all become very very accustomed to in the last 10 to 15 years and that is a cell phone and people tend to spend absurd amounts on their cell phones whether it's the bill or the cell phone itself mainly the cell phone itself so that's my first financial tip is shop on eBay or Amazon for a cell phone that's refurbished or used or one this may be just a couple years old I actually just purchased a cell phone on ebay because I'm having trouble with my current one and I got on to my cell phone providers website and the most expensive phone that's like mine now is $1,200 that's insane to me so I got on eBay I found one that's similar to the one I have right now it's new but it's a couple years old and I got it for less than $200 another thing that you can do is ask for some kind of loyalty benefit from your cell phone provider cell phone providers are constantly trying to earn your business and if you've been with them for a long time and you can convince them to keep you around by offering you some kind of benefit they'll jump on the chance just by going into my provider recently I have a cell phone bill that was about a hundred and ten dollars a month I told them that I've been with them for close to 15 years they knocked it down to sixty-seven dollars and I have unlimited everything now tip number two is what I call going to youtube University or getting a YouTube education we live in the most amazing time ever right now there is information everywhere and it's so easily accessible don't ever stop educating yourself it's so easy to find out how to do things these days you're doing yourself a huge disservice if you don't take advantage of that so how does that pertain to saving money well you can save money by doing tons and tons of things yourself instead of paying someone else to do it just look at the platform that you're watching right now for instance you're watching a video on how to do something so that how-to can be anything from changing brake pads on your car to changing the oil on your car to fixing a leaky faucet or the toilet flapper not working on your toilet all the way to how to the meal which brings me to my next point number three so food is a necessity in life but is it a necessity to go out to eat or go to Starbucks once or twice or every day the amount of money that people spend on food and going out to eat fast food Starbucks McDonald's it really adds up quick and I don't think that people realize how much money they're actually spending on it because it's just five or six or seven dollars here and there but if you add that up over the course of a month or a year or five years or ten years I think the result would be pretty staggering cook your meals at home pack your lunch for work make that fancy coffee at home it's not that tough to do there's so many great ideas and resources on YouTube and Pinterest and vlogs and blogs this channel included if you need a place to start scroll through my channel I have lots of cooking videos if you want to take that a step farther you can start growing your own food and if you don't have a big green house like this you can grow a lot of food just in five gallon buckets even on a little deck if you don't know where to get started see tip two number four is something that really hits home for me because me and my wife are both self-employed and we have been for 15 plus years so number four is insurance and although I don't like insurance companies because I think they're a giant scam it's a necessary evil and you can also use that to your advantage you can put them against each other insurance companies much like cell phone companies are begging for your business and they're constantly trying to outdo each other with with certain benefits or promotions so make them put their money where their mouth is and put them up against each other constantly and not just insurance companies you can do this with all kinds of different companies you should always be price checking these companies the ball is in your court make them earn your business all right I'd saved the best for last tip number five is taking advantage of bank account and credit card bonuses and this tip is begging for a separate video all on its own because I could go on about this for a long time but if you're not taking advantage of credit card bonuses for sign ups or credit card cash back or travel miles or if you sign up for a bank account a lot of them will give you a large sum just for putting your money with them now I want to be clear I'm not promoting just going out and spending a bunch of money on a credit card but more putting the things that you already spend money on into the credit card it's money that you're spending anyways put your mortgage on a credit card if you can insurance is a good one it's not super expensive but at least we'll get you a couple hundred bucks on your credit card unless of course it's health insurance and then you're talking in my case thousand to twelve hundred dollars a month here's another good one groceries it's something that you always have to have and depending on how much you go to the grocery store it could add up to three or four hundred bucks a month sometimes six hundred maybe even more no-brainer here put your gas on a credit card you can always put your utilities on your credit card too if your utility company will allow it next from tip one your cell phone bill now depending on how much some of these are and if you are allowed to actually put them on your credit card you're talking some pretty major money that you can get a bonus from if you're getting two percent cashback that really adds up not only that but you're increasing your credit score while you're doing that so as long as you're financially responsible and you pay this every month you're reaping a large benefit a lot of credit cards will give you a 2% cashback they'll give you a $500 signup bonus that's free money in my opinion the free bank bonuses or even better than the credit card in my opinion because the bank account is something that you have to have anyway a lot of them will give you $500 for a small deposit as long as you put your direct deposit with them all the way up to I've seen $1,000 before and if you have a little bit more money to play with some of the online money market accounts like Capital One will pay you up to 2% or some even up to 2.5% just for keeping your money with them so some of these things may not seem like it's saving you a ton of money but when you take up those extra fives and tens and occasional hundreds and you put them to work for you as opposed to something that you're normally spending you're not only saving the money because you're not spending it but you're putting it to work and doing something else with it and you'll find that your your finances will start to collect very quickly so if you found the video helpful and you enjoyed the content take a second to give me a thumbs up it really helps out the channel and it helps the YouTube algorithm get this video out to people who actually need to see it also don't forget to subscribe we do some gardening some frugal living some food preservation and cooking some gardening and you get to join me and my family on our retirement at the age of 40 after you've clicked subscribe click the bell notification also and it will notify you every time a new video comes out and it'll keep you in the loop of the community all right I appreciate you sticking with me through this whole video so I'm gonna give you an extra bonus tip with an extra 100 or 200 or 300 or more dollars per month that you're saving with just cutting back on a few things you take that extra money and you pay down debt with it the faster you get out of debt the closer you're going to become to financial freedom and whenever you're paying off debt always choose the smallest balance first because it gives you that extra little boost and if you can pay it off faster it gives you that extra bit of confidence to rock into the next one so once you've paid down your smallest debt move on to your next smallest debt take that money that you're saving from the smallest debt that you're not having to pay any more and add it to the money you're saving from the 5 tips that I'm giving you and apply it to the next smallest debt and when that one's paid off you roll it into the next one you roll that one into the next one and so on and so on in the meantime this is retired at 40 check out these other helpful videos if you have a minute remember to live a life simple and we'll catch you next week oh hey I'm gonna have to call you back and shooting a video right now this is right my god get out of debt
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