There is a fine line between appearing wealthy and actually being wealthy. Studying under professors like William D. Danko, co-author of The Millionaire Next Door taught me a lot about what it really means to well…be a Millionaire.
Often times we equate wealth with material possessions; cars, homes, and clothes. But most millionaires don’t parade their net worth around like a logo on a well-crafted sweater. An essential key to amassing great wealth is living below your means. Earning more than what you spend leaves extra cash, and extra cash means more to save and invest for long term financial gains.
Here are some things you can alter to add to your bank account:
- Make your coffee at home. You are wasting money buying a $4.75 cup of coffee. It’s okay to get an amazing reusable coffee mug and make your morning joe or my favorite blueberry tea with honey at home. A bag of coffee can run about $9. You already getting your money’s worth with brewing just three cups.
- Walk, bike or take the train. Don’t get caught up in having a set of wheels. If a car isn’t making money or making your life easier take public transportation or jog.
- Be creative with your extra-curricular activities. If you are experiencing financial difficulties chances are the closest 5 people around you are too. News flash, your friends aren’t making millions either. Be real about your money and be resourceful when it comes to fun. If your squad can’t understand, they will when you level up in the near future.
- Credit Cards aren’t free money. Friendly reminder: You actually have to pay back what you spend on credit. Instead of using it while dining out or shopping, use it for monthly bills you already have the cash for. Then pay it off at the end of every billing cycle. This helps build your credit and prevents you from overspending.
- Have Patience. You don’t need that extra pair of shoes or video game now. By cutting back on items like those above, you open the door to spend on things you really like but don’t blow it all in a day. Think about your next purchase for about one week. If you still really want it go get it (if you can afford it). But you may be surprised once the social media frenzy fades and your heart slows down after seeing that latest must have, you may realize your just fine without it.
5 Hidden Risks in Retirement That Could Affect Your Financial Security
Being well-prepared for retirement is wonderful, but there is no fail-safe plan. Things can unravel due to many inherent post-retirement risks. Understanding those risks that lie ahead and how they can harm financial security is key to making critical adjustments in a retirement plan. Sometimes without those changes, the impact of unfavorable and unpredictable events can be far more severe.
“Once you have a retirement plan in place, it’s not set in stone,” says Clayton Alexander (www.retireteton.com), an investment adviser and founder of Teton Wealth Group. “
Alexander says retirees and those making retirement plans should be aware of these five risks:
Running outof money before they die is one of the primary concerns of most retirees. This worry is heightened by the fact that the average life expectancy has increased. “A pension or an annuity can lessen the risk, but carefully investigate anycompany where you’d place an annuity and be cautious of fees and interestrates,” Alexander says. “It’s best to tailor your plan to run to life expectancy plus five years.”
- Loss of income. “Make sure both you and your spouse are protected from the unexpected,” Alexander says. “Consider the financial impact of the loss of one spouse. Remember that your surviving spouse will only get the highest of your two Social Security checks. A spouse’s death can bring additional financial burdens, including lingering medical bills and debts. Life insurance and estate planning are important vehicles to protect survivors.”
- Health care costs. Longer life expectancy could lead to high costs in a long-term care facility. “It’s estimated that approximately 50% of people over 65 will need long-term care,” Alexander says. “Do not overspend on policies that may be subject to drastic premium increases. And surprising to some, Medicare is not free — your premiums for coverage are usually deducted from your Social Security check. Medicare doesn’t cover dental, hearing or vision, is subject to deductibles, and doesn’t cover long-term care. Long-term care insurance is advisable.”
- Negative return risk. “A 50% gain does not allow a portfolio to recover from a 50% loss,” Alexander says. “In fact, a 100% gain is required to restore a 50% loss. The ‘buy and hold’ strategy that works when you are young — where
you waitfor the markets to come back up after a downturn — does not apply inretirement as we saw in 2008,when many people’s retirements were wipedout. Common stocks have substantially out-performed other investments over time and thus are usually recommended for retirees as part of a balanced asset allocation strategy, but the rate of return you earn can be significantly lower than the long-term trends.”
- Inflation risk. “
You shouldplan on prices for food, goods andservices getting higher duringretirement, reducing your buying power incrementally as you are livingon a fixed income,” Alexander says. “Your retirement plan has to factorthat in. Ways retirees can curb the effects of inflation include annuity products with a cost-of-living adjustment feature and investing in equities, a home, and other assets.”
“Understanding what the potential post-retirement risks are and considering them in the retirement planning stage,” Alexander says, “can help to ensure that they are mitigated and properly managed.”
Are Americans Undervaluing Paid Time off + Quick Trip Tips
It’s August, which for many Europeans means taking almost the entire month off. So why is it difficult for Americans to take even the little vacation time they receive? A recent piece in The Economist states workers in the U.S. are doing it all wrong by going on short holidays, which can add even more stress or taking none. Instead, it’s essential for employees to recharge their batteries. It’s also beneficial for companies to have a consistent holiday month during which junior employees can head to the beach, and managers can take stock of things, says the report.
While many Americans may not receive paid time off, especially those that only work part-time, even those who receive it generally don’t take all of it. What we don’t realize is that not taking a vacation is like giving money back to your employer, especially with companies that have a use it or lose it policy. Which should encourage employees to use their time but unfortunately it does not. According to recent polls conducted by Bankrate, nearly 2600 US adults say they plan to take a quarter of their vacation days while 4% are not planning to take any vacation time at all.
Time off is a valuable perk, to the tune of millions of dollars! Just to bring the point home in 2017 Americans gave up 212 million days off that amounts to $62.2 billion in lost benefits! So, take your vacations and follow the tips below to not break the bank while taking time off:
- Take a Staycation – Stay local and vacation somewhere that is less than a day drive away, this helps save gas, mileage, and spending on lodging. Look for local attractions, vineyards, interesting museums and landmarks or even travel to your closest big city and be a tourist for a day. You would be amazed at how much you can discover and learn by staying local and all on the cheap! It’s a bonus if you have friends in the town your visiting they can serve as a tour guide and let you stay over for free if they have the room.
- Book Flights Off-Season – July 4th, Memorial Day and Labor Day seem like a great time to go on vacation; unfortunately, everyone is planning to take time off during those busy weekends, and ticket prices are through the roof because of it. Book flights after major holidays and during the week you will generally find that they are cheaper than weekend flights.
- Take a Road Trip – Road trips are fun and cheaper than taking a plane, especially if you must rent a car when you get to your destination anyway. Plan cool stops along the way and finds interesting places to eat that way you can make the journey part of the vacation.
- Plan to Eat In – Food adds up on vacation so pack food and making one or two meals in your hotel can keep you under budget.
Top Ten Freshman Money Myths
Starting college is one of the most important and exciting times of your life. Now that you’re all “checked-in,” enjoy your college experience without worrying about where your next meal will come from by chasing away these common freshman money myths. (more…)