Tag: financial independence
Kevin O’Leary: Why Early Retirement Doesn’t Work
user 0 Comments Retire Wealthy Tips for Retiree's
This whole concept of economic self-reliance retire very early doesn'' t work. Let me tell you why. It took place to me.
On the sale of my first firm, I attained wonderful liquidity and I.
believed to myself, “” Hey. I'' m 36.” I can retire now.” I retired for 3 years. I was tired out of my mind. Functioning is not.
simply about cash. People don'' t comprehend this extremely.
usually up until they stop working. Job specifies who you are. It supplies a place where.
you'' re social with individuals. It offers you communication with individuals.
all day long in a fascinating way. It even assists you live much longer.
and is really, excellent for mind health. Remaining boosted is how people.
live into their 90s. I'' m not joking. So when am I retiring? Never ever. Never ever. I wear'' t know where I'' m going. after I ' m dead, yet I ' ll be working when I obtain there too.
Allow me tell you why. I retired for three years. Functioning is not.
Work specifies who you are. When am I retiring?
Frugal Living For Early Retirement | 13 PRACTICAL Frugal Livings Tips
user 0 Comments Retire Wealthy Tips for Retiree's
– This video I wan na speak
to you concerning economical living for layoff. That'' s a packed topic, yet allow me explain. Thrifty living, as in just how
can you be smarter with your spending and also much less
inefficient with your cash. And also the less inefficient
you are with your money, the much more you remain in
control of your future. I'' ll talk more about that in just a sec. As well as additionally, layoff in my modest little globe doesn'' t mean sipping on mojitos on a coastline somewhere.
– Not that you can most likely to a coastline nowadays. – I simply wan na conserve and invest enough to make sure that the revenue from my financial investments will certainly cover all my expenditures and also I can pursue whatever the hell I want. Now, for almost reasons, I'' ve damaged this video right into 4 segments. Prudent living as a whole. Penny-wise living for food, transportation as well as also for clothes. And the very best way for you to obtain one of the most out of enjoying this video clip is to take what I.
state as a source of motivation as well as take what you believe will work for you, try it for yourself and also.
see what you want to maintain. Now, if this is your.
very first time right here, welcome Keep in mind to constantly carefully.
smash that like button since I took my time to.
brush my hair for you people today, and I know, it.
looks fantastic doesn'' t it? Without additional trouble, let'' s go.
My factor is really simple.My self-reliance, as in exactly how. I select to invest my
time in the future, should need to. Now in our society we'' re so.
claiming we require this, this, this in order to more than happy, and.
the following thing we understand, our obligations as in our.
credit score card financial obligation or any kind of debt that'' s not made use of towards. producing even more income is so high that we are.
forced to go work at a task that we barely such as to pay.
for points that we hardly even intend to excite individuals.
that we barely also know.And directly that ' s not. exactly how I want to live my life in the future. And the good news is, you ' re. watching this video because you
somewhat feel the same. You put on ' t desire that and. this is where frugal living enters play. The more economical we are,. the more of an opportunity
that we need to construct our property column in our personal balance sheet. And as we construct our assets in. our personal annual report, this is where we restore.
control of our future monetary self-reliance, or.
our independence as a whole. And also the reverse is also real,.
if you accumulate obligations that doesn'' t add. to developing your assets, you are providing control.
to the world to dictate what or just how you invest.
your time in the future.Call me a control fanatic,.
I desire to make sure that I am genuinely the captain.
All right, now that we'' ve. The first section is.
you think will certainly work for you, try it on your own and also.
keep what you desire to keep.And the initial point is living. in more inexpensive areas rather of trying to live. in a city and also justifying it with it'' s less expensive. for me to reside in a city since I don'' t have to. spend cash on transportation. The most crucial point.
is do your estimation. Do you in fact save a lot more.
by residing in the city? Only you recognize that, so.
make certain you do your own estimations to see if.
you'' re in fact conserving a lot more by living in the city.
or will certainly you save a lot more by living just a little.
better away from the city. I wan na improve that factor. Currently, in the city your setting is substantially different,.
because the bulk of truly great dining establishments, at.
the very least in Sydney is type of around the city location, and also that'' s really. tempting to always consume out because good restaurants.
are truly accessible, as well as on top of that, that.
are you surrounded by? That are your top five close friends as well as what are their costs behaviors? Do they want the very same point.
as you when it concerns attempting to live frugally.
You can be economically independent in the future,.
due to the fact that inevitably, if you are trying to live.
frugally and in their eyes they see it as being affordable,.
it'' s really hard for you to maintain inspired as well as online.
frugally over the long term.And essentially, there ' s. really a difference in between living frugally and also cheap. Thrifty really indicates attempting.
to be smart and also much less wasteful with your money, whereas.
cheap is that you know this thing is gon na break, yet.
you just wish to get the cheapest variation anyhow. I prompt you to believe about.
that are the top five individuals that you'' re bordering yourself with, because they eventually.
add to your ability to live frugally and eventually.
be financially independent at some time in the future. Currently the following point is a little tough, as well as it needs to sting a little and that'' s enjoying. those expensive practices, particularly those pricey. behaviors that ruin your health.And a really fine example. of that is smoking.
Currently, if you ' re a cigarette smoker, I. wear'' t need to inform you just how much cash you require to stay up to date with that habit, not to state it ' s destroying. your wellness along the way. Imagine putting that money,. and spending it rather, that whenever you wake. up, you ' re earning money.
The selection is yours. But I just wanted to at. least present the viewpoint and also you can choose on your own. Currently one more basic economical. living tip is watching your credit card spending. Bank card are an excellent tool. to handle your money flow, particularly in times of. need that you just require to invest a little
of additional money, but any type of various other times you. need to never lug an equilibrium, and you should always pay.
it down as high as you can, because those high interest.
payments are simply such waste of money.It doesn ' t generate more assets, it doesn ' t develop your.
riches, unless you ' re making use of a bank card'to build your.
organization and spend that money to produce even more income, after that hey, do you. And also the following prudent. living tip is absolutely not for every person, which ' s giving on your own a haircut. Now, as you noticed, I shaved my very own head.I provide myself a hairstyle. every two to three weeks and also by doing that I am conserving.
around $700 a year. Currently as dumb as it.
sounds, I utilized to spend $ 40 on company hairstyles so. that I look really great in business world.
( man coughing)- Oh no no no.- Yet by doing this, I. no much longer need to pay $ 40 every a couple of weeks, and. yes, there ' s possibly more affordable places where I could.
have actually gotten my hair cut, and since then I ' ve been conserving. around $700 a year,'that as opposed to spending. that money on hairstyles, I spend that cash so.
The next two is very simple. You must never have a late. As well as the last point is.
of money in the future with costly clinical. costs if you just take treatment
of on your own now. And also the next segment I want.
to speak about when it comes to frugal living is food.Now, when it concerns food.
I ' m not going to recommend you to grow your
very own food due to the fact that one, it ' s ain ' t no one got time for that. And coffee at home, actually isn ' t that bad. And also currently
that I ' m investing.
Envision putting that. cash in the direction of investments and also every time you wake up,. there ' s a lot more dollar expenses around you, which one would you instead? Currently, one more segment when it involves living frugally is transport. Now among my most significant transport costs just a pair of months. back was possessing an auto.
If you ' re a car proprietor yourself,. You recognize that it comes with insurance coverage costs,. And also it transforms out, that.
a couple of months ago I marketed my cars and truck and because.
I ' ve being able to conserve just a lot of prices when it.' involves operating a lorry.
As well as not to discuss, that the. amount of cash I save utilizing public
transport is simply,. phew, once more, mind blowing.
On the point of public transport additionally, if you ' re in Australia, or. any type of other nation with an off peak time slot, where if. you circumnavigate that time, you obtain a discount rate with. you transportation prices
, try as well as capitalize. of that when possible.
Now in the Sydney, Australia,.
we have an off peak hour if you take a trip before 7 or.
travel prior to three o'' appear the mid-day as well as.
because I'' m a very early riser and I help myself I.
often tend to utilize those time ports in a manner to reduce my expense as well as the amount, allow me show you on the screen right now.In a given year, I invested.
regarding $2,700 if I wear'' t benefit from those off peak hrs. Now, if I take advantage. of the off peak hrs, I save 30%. At a 30% discount rate, I save $810 dollars. Think of placing that.
How much quicker I'' ll be. Now one of the last segments.
when it concerns living frugally is clothing. Currently clothes is really.
Currently because I'' m trying
to.
is extremely minimalistic. I have over 14 to around 20.
exact same black tee t shirts from H&M or other locations that is.
really, very affordable, that'' s regarding 10, 15 bucks a pop. I don ' t really need a great deal of apparel, I have a couple of. coats that maintain me cozy in the winter as well as a couple pair of jeans. That'' s, really is regarding it. And also I just try as well as not invest. excessive cash on clothes. I do have to acquire knapsacks.
or footwear every so often when they'' re broken, yet.
that actually is about it.I put on'' t actually invest that. much cash on clothes, I ' d just rather invest. money on various other points, such as this cam that you see right here. That, I am prepared to put cash in since that'' s essential to me. On that particular note in fact,.
when it concerns apparel, attempt as well as stay clear of those buy.
now, pay later kind choices or solutions due to the fact that those.
are developed with the intent that buying really feels frictionless. It doesn'' t expense anything. It only costs a number of.
bucks to have the latest and biggest of every.
fricking point on Earth, and following thing you know,.
there are many of those little payments it truly does rack up.And it'' s not always totally free,.
since you'' re paying in maintenance costs, account configuration expenses as well as a lot of other points.
that you need to pay. Believe me, I recognize,.
because it'' s part of my task to convince other individuals to.
make the most of buy currently pay later on kind scenarios.
That I can increase the sales of the business. Be skeptical of that, since.
those things are really developed to benefit from individuals that just want things today. Thank you for enjoying this.
video clip all the means to the end.As you can inform throughout.
the video clip my illumination has been transforming little bit, it'' s. a little out of my control since I'' ve been recording.
momentarily currently and it'' s obtaining a little dark exterior. And also I wan na complete the video clip on this note. Currently for you to go on the.
journey of living frugally, you need to recognize why you'' re doing it to begin with. And also for me personally, just how.
I select to spend my time in the future should.
not depend on any person else with the exception of myself, and my.
independence needs to be in my hands and unqualified any person else. Provided that is my personal goal, thrifty living is a trick.
component that will permit me to save much more, and after that spend a lot more. So that maintains me going. Now, keep in mind earlier.
in the video clip I pointed out that your surroundings, not.
just physical environments but additionally your buddies and also.
household that you surround on your own with actually influence.
your capacity to live frugally as well as I'' m a real testimony of that, because in my family.
Currently, my family members and my loved ones they'' re
all. trying to have the exact same thing.We ' re all
trying to live.
listed below our methods and save and invest as high as I.
can so that we can have that monetary independence.
a little previously, rather than functioning to our.
50'' s and also 60 ' s just so that we can retire. Now if you really feel like you'' re. going on this trip alone, you wear'' t have to feel alone currently. You'' re enjoying my video
,. you ' re right here with me. If you wan na just speak to.
me, leave me in the comments below in terms of what.
was your hardest challenge until now when it involves living frugally? Has you family members and.
buddies encouraging you, or are they drawing you down? Allow me understand in the comments.
below so we can have a discussion, because I'' d. love to discover from you too. And also as typical, I actually do.
value you watching right through the end.
since that really aids me out a great deal, and also if you wan na support me, simply ensure you carefully.
shatter that like button, subscribe to my channel,.
clicking onto the bell, so that each week when I.
release my brand-new videos you'' ll be the first one to know.And up until
following time,.
see you extremely, really soon. (positive music).
Now, if you ' re a cigarette smoker, I. put on'' t need to tell you exactly how much money you require to maintain up with that habit, not to discuss it ' s destroying. I ' m not going to advise you to expand your
own food since one, it ' s ain ' t no one got time for that. And also currently
that I ' m investing. That, I am prepared to place money in because that'' s essential to me. 50'' s as well as 60 ' s simply so that we can retire.
Read MoreThe 4% Rule for Retirement (FIRE)
user 0 Comments Retirement Planning
If you have spent any time researching retirement planning online, you have heard of the 4% rule. If you haven’t heard of it, the 4% rule suggests that if you spend 4% of your assets in your initial year of retirement, and then adjust for inflation each year going forward, you will be unlikely to run out of money. To put some numbers to it, if you wanted to retire and spend $40,000 per year, adjusted for inflation, from your portfolio, you would need to retire with one million dollars to adhere to the four percent rule. This rule is alternatively described as the requirement to have 25 years worth of spending in your portfolio to afford retirement. 1/25 equals 4% – it’s the same rule. While it is simple and elegant, the 4% rule is probably not the best way to plan for retirement, especially if you plan on retiring early. I’m Ben Felix, Associate Portfolio Manager at PWL Capital. In this episode of Common Sense Investing, I’m going to tell you why the 4% rule is not a rule to live by.
The 4% rule originated in William Bengen’s October 1994 study, published in the Journal of Financial Planning. Bengen was a financial planner. He wanted to find a realistic safe withdrawal rate to recommend to his retired clients. Bengan’s breakthrough in determining a safe withdrawal rate came from modelling spending over 30-year periods in US market history rather than the common practice of simply using average historical returns. Using data for a hypothetical portfolio consisting of 50% S&P 500 index and 50% intermediate-term US government bonds he looked at rolling 30-year periods starting in 1926, ending with 1992. So, 1926 – 1955, followed by 1927 – 1956 etc., ending with 1963 – 1992. The maximum safe withdrawal rate in the worst 30-year period ended up being just over 4%. From this simple but innovative analysis, the 4% rule was born. More recently Bengen has adjusted his spending rule to 4.5% based on the inclusion of small cap stocks in the hypothetical historical portfolio.
While the 4% (and the 4.5% rule) may have basis in historical US data, there are substantial problems with these rules in general, and specifically in the case of a retirement period longer than 30 years. In his 2017 book How Much Can I Spend in Retirement, Wade Pfau, Ph.D, CFA, looked at 30-year safe withdrawal rates in both US and non-US markets using the Dimson-Marsh-Staunton Global Returns Dataset, and assuming a portfolio of 50% stocks and 50% bills. He found that the US at 3.9%, Canada at 4.0%, New Zealand at 3.8%, and Denmark at 3.7% were the only countries in the dataset that would have historically supported something close to the 4% rule. The aggregate global portfolio of stocks and bills had a much lower 30-year safe withdrawal rate of 3.5%. Considering returns other that US historical returns is important, but, in my opinion, one of the most important assumptions to be aware of in the 4% rule is the 30-year retirement period used by Bengen. People are living longer, and many of the bloggers citing the 4% rule are focused on FIRE, financial independence retire early.
In Bengen’s study the 4% rule with a 50% stock 50% bond portfolio was shown to have a 0% chance of failure over 30-year historical periods in the US. That chance of failure increases to around 15% over 40-year periods, and closer to 30% over 50-year periods. FIRE likely means a retirement period longer than 30 years. Modelling longer time periods using historical sampling becomes problematic because we have data for a limited number of historical 50-year periods.
One way to address this issue is with Monte Carlo simulation. Monte Carlo is a technique where an unlimited number of sample data sets can be simulated to model uncertainty without relying on historical periods. Even with Monte Carlo simulation, there is an obvious risk to using historical data to build expectations about the future. The world today is different than it was in the past. Interest rates are low, and stock prices are high. While it may be reasonable to expect relative outcomes to persist, such as stocks outperforming bonds, small stocks outperforming large stocks, and value stocks outperforming growth stocks, the magnitude of future returns are unknown and unknowable. To address this for financial planning, PWL Capital uses a combination of equilibrium cost of capital and current market conditions to build an estimate for expected future returns for use in financial planning. This process is outlined in the 2016 paper Great Expectations.
Using the December 2017 PWL Capital expected returns for a 50% stock 50% bond portfolio we are able to model the safe withdrawal rate for varying durations of retirement using Monte Carlo simulation. We will assume that a 95% success rate over 1,000 trials is sufficient to be called a safe withdrawal rate. For a 30-year retirement period, our Monte Carlo simulation gives us a 3.5% safe withdrawal rate. Pretty close to the original 4% rule, and spot on with Wade Pfau’s global revision of Bengen’s analysis. Now let’s say a 40-year old wants to retire today and assume life until age 95. That’s a 55-year retirement period. The safe withdrawal rate? 2.2%. I think that this is such an important message. The 4% rule falls apart over longer retirement periods. So far we have talked about spending a consistent inflation adjusted amount each year in retirement. One way to increase the amount that you can spend overall is allowing for variable spending. In general this means spending more when markets are good, and spending less when markets are bad. The result is more spending overall with a lower probability of running out of money. The catch is that you have to live with a variable income or have the ability to generate additional income from, say, working, to fill in the gaps when markets are not doing well.
We also need to talk about fees. Fees reduce returns. Fees may be negligible if you are using low-cost ETFs, but they become extremely important if you are using high-fee mutual funds, or if you are paying for financial advice. The safe withdrawal rate in the worst 30-year period in the US drops to 3.56% with a 1% fee, making the 4% rule the more like the 3.5% rule after a 1% fee.
Adding a 1% fee to the Monte Carlo simulation reduces the safe withdrawal rates by around 0.50% on average. In both cases this is a meaningful reduction in spending. Of course, fees need to be considered alongside the value being received in exchange for the fee. This value should be heavily tied to behavioural coaching and financial decision making. There have been two well-known attempts to quantify the value of financial advice, one by Vanguard and one by Morningstar. Vanguard estimated that between building a customized investment plan, minimizing risks and tax impacts, and behavioural coaching, good financial advice can add an average of 3% per year to returns. Morningstar looked at withdrawal strategies, asset allocation, tax efficiency, liability relative optimization, annuity allocation, and timing of social security (CPP in Canada), to arrive at a value-add of 2.34% per year.
PWL Capital’s Raymond Kerzerho has also written on this topic, finding an estimated value-add of just over 3% per year. Based on these analyses, one could argue that paying 1% for good financial advice could even increase your safe withdrawal rate. I would not go that far, but the point is that while fees are a consideration, they may be worthwhile in exchange for good advice.
As found on Youtube
Read MoreHow we Retired at 40..💰7 tips to succeed for Early Retirement💰
user 0 Comments Retire Wealthy
Hey guys retired at 40 I’m going on a little road trip today just me and Murph and last week I reached a milestone on my channel and I hit a million views total and 10,000 subscribers in the same week since I’ve been getting requests for quite a long time about how I retired at 40 and I’m on a long road trip right now I figured what better time to share the story so without further ado here’s the retired at 40 story so before I get started I want to say that this is not in any way a brag story in fact I’m definitely not a showy type guy I enjoy very simple things in life and money to me is more of just a vehicle to be able to retire young and have my family live a comfortable and an easy life and to be able to enjoy lots of life experiences and be comfortable in life before I’m old and gray so really the journey began in about 2002 graduated from Iowa State University with a degree in marketing and business and by that point I have met my wife Kelly she had already graduated from school and she was kind of waiting for me and we wanted to move west out of the Midwest to move west see some new territory and get closer to the outdoors so I grabbed my degree ran out the door packed up my 1987 Ranger fully equipped with eight foot hay racks full of all of my personal belongings and we drove to Littleton Colorado and at this point in my life I had $200 in my pocket and Kelly had about the same so being completely naive and basically completely broke but with a degree I was on the search for the best suit and tie job that I could possibly find so I bounced around for a couple months just working some kind of halfway jobs and I quickly realized that I did not want to wear a suit and tie and I wanted nothing to do with the man and working a nine-to-five job well Kelly had found a job in a real estate office working the front desk and she had become friends with a couple of the big-time Realtors there one of which you caught wind that I had some handyman type skills but he made me a deal that if he paid cash for a house and I fixed it up that he would split the profit with us 50/50 and at this point in my life all I saw was dollar signs if I was completely blown away that there was someone that could pay cash for a house this is coming from a guy who had less than $200 in his pocket at this point it was pretty much scraping by I tried to hold back my excitement to him but naturally I said yes please let’s do that I was working the graveyard shift at Target stocking shelves I’d worked for 10 hours I would go home grab a little bit of breakfast and I’d head over to the property and work on it for another five or six hours I try and catch a few hours of sleep and then I would rinse and repeat it was at this point in my life that I learned a few different things one you really have to dig deep to reach your goals in life because I was not getting paid by the hour and at this point I didn’t know how much money I was gonna make I didn’t know if I would make $500 when this was all done or if I was going to make $5,000 when this is all done so I learned that a lot of things that can benefit you financially you have to put in the work upfront without knowing what your final outcome is going to be after about three months which seemed like an eternity of working seven days a week for sometimes 15 sometimes 20 hours a day on this house the house was ready to go on the market and it was all finished it looked great and then before you knew it it’s sold and then the house closed and at this point I still didn’t know what we were gonna make off it but for me it didn’t matter the hard part was done I didn’t have any of my own money into it I just had my time basically so the guy we were doing the investment with hands me an envelope and I opened it up and at $8,000 being twenty-two years old and having $8,000 I might as well have hit the lottery and that brings me to my second valuable lesson that I learned and that is being responsible with money so when you have $8,000 and you’re 22 years old a lot of people would go buy a new car they’d go buy some flashy things some pretty things but to me I had realized that if I can make $8,000 once I can make $8,000 again and again and again and again so I can either go p*&% the $8,000 away that I had worked my a#* off for or I can take that $8,000 and do exactly what he did but do it myself and potentially make twice or three times as much money so my wife being in a real estate office we became acquainted with quite a few smart people financially smart people we learned a lot about real estate very quickly because we were willing to learn which is my next valuable life lesson is that you never stop learning so we took our $8,000 we put a small down payment on a condo in Littleton because we realized that giving someone else our money was you might as well be throwing it away we wanted to be working towards something and it own something on our own so we took our other four or five thousand dollars and we started our search for a real estate investment that we could do all of our all on her own and get a hundred percent of the profits so after some searching we did find a place we found a small town home it was not in as nice of area as we were living it was smaller it needed lots of work but that takes us to our next light life lesson that we learned and that is to sacrifice for a greater payoff in the future so we had only lived in our condo for a very short time but we realized that if we moved into the real estate investment that we could rent out the place that we are living at and move into the place that we were fixing up that we’d have to be paying a mortgage on anyway we had our first real estate investment and we had our first rental so being 22 years old and owning two properties and carrying two mortgages and at this point I’m still working at Target was a pretty scary proposition in life but all I could see was that $8,000 check they had started to change our lives I also want to point out and kind of give a shout-out to my parents and to my wife’s parents because neither one of our parents ever handed us anything in life they always made us work for what we achieved in fact when we move we tried to convince my parents to co-sign on our mortgage for the condo that we bought and they said no way at the time I was very very mad at them and I thought I would never forgive them in hindsight it was one of the best things they’ve ever done for me because it just made me have that fire in my belly and really just want to work to get what I wanted so back to having two mortgages that was a completely scary thing in my life I was making something like 10 dollars an hour at Target I think Kelly was making $13 an hour at the real estate office she was working at we could barely afford the condo we had but now he had two.
God bless the banks lending money to anyone at that point on the very plus side of that we learned that someone else can pay our mortgage and we’re basically getting that money for free and then later we figured out that there are many many many tax benefits and huge benefits of owning a rental property so we quickly learned that trying to pay for materials and the things needed to fix up an investment property on just barely over minimum wage is not easy to do the thing that happened next couldn’t have come at a more perfect time so all of a sudden I had money to spend to fix up this house and it would just get me to that next big paycheck that much quicker so that’s what we did we fixed up the house we doubled our money we rolled it into the next one so we kept bouncing from house to house quite a few times and that sacrifice of from going from a nice house to live in to going to a crappy house to live in to fix up to making it nice again to going to another crappy house to fix up it became pretty stressful but we always had our eyes on the prize “are you still with me Murph?” after doing this two or three times I remember getting a check for the last one and the check was forty one thousand dollars so at that point it didn’t make sense to work at Target anymore so I just started doing it full-time but we never took the big proceeds from the real estate and put it into our actual living we always rolled it into the next property and that kind of gave us the baseline of even how we live today we always live well below our means we take the money that we make and we put it into things that will make us an income not into something that will lose us money but you do have to treat yourself every once in a while otherwise there’s no reason to make the money in the first place Kelly saw many of the high producing Realtors making large amounts of money so she decided to get a real estate license and she created her own real estate business so now we really felt like we had the world by the balls because we were getting paid a commission to buy the property and then we were saving half of the Commission when we sold the property and I was fixing him up so we just get rolling our profits in rolling our profits in rolling our profits in until family we were able to buy a house and now that we could get a house we were playing with the big boys the profits were much larger but so was the risk and we really didn’t want to lose all the way it worked for for the last couple of years so we did a few houses and we made some great money but instead of selling them and pulling out our profits we kept them as rentals and it was at this point that we really started building up our rental inventory at this point it was about 2006 or 2007 and real estate was starting to slow down a little bit but we have purchased a large house I’m a courage that was really a big risk for us it was a large house to fix up it was our biggest project for sure it took us the most money to fix it up and we had the most money into it so we lived in this house for about 8 months while we were fixing it up and we kind of decided after doing about 12 properties that the moving all the time was starting to get kind of old and we were kind of getting older ourselves and we decided that we wanted to have kids and kind of settle down a little bit Murph are you with me? sometimes I feel like I’m just talking to myself so after the eight months was up we finished the house we sold it and shortly after the real estate market completely crashed the bubble had burst and Colorado was one of the hardest hit States we got out of the house just in the nick of time and not only did the real-estate market bubble burst we found out that we couldn’t have kids and it seemed like a real low point in our lives but around 2007 when all this happened we realized our next lesson with every negative there is a big positive that can be gained from it and you can just use it as fuel for your fire so the recession was tough we thought our great life had come to an end we thought we were gonna have to get regular jobs you know people were losing their jobs left and right people were losing their houses Colorado was hit very very hard one of the worst states during the recession and we learned that what goes up must come down and in this case it came down hard in many cases not just real estate when things are bad that’s the time to invest and if you’re smart with your money and you’ve been saving while everyone else spending that’s the time to benefit though from about 2008 to 2012 we were buying rentals so we were able to adapt I started doing contracting because that’s pretty much what I was doing before but now I had to be doing work for someone else and Kelly’s always been a mover and a shaker and even a bad real estate market she was able to keep her business moving we were buying things for pennies on a dollar and even though we were not making great money and in some cases losing a little bit of money on rentals we were able to stick it out and after lots of lots of years of lots of lots of heartache and lots of lots of doctors we were able to have two boys so about 2014/2015 real estate started creeping back up again prices kept going through the roof and just when he thought it was the peak they just kept going up stuff was flying off the shelves you could list a house and it would have multiple offers within 24 hours so we had about age 35 we were completely debt-free we had several rentals that we were cash flowing we didn’t owe any money on the rentals so all that money was just rolling into a bank account when you have no bills and you have an income coming in your net worth starts to grow very quickly so we rode out the storm Kelly’s business was doing great my contracting business was doing great we have liquidated a lot of our real estate in Colorado we had capital to play with we had two beautiful young boys and then I fell to my knees crying like a little baby I had herniated a disc in my back and I was on a walker for about a month contracting for me was out of the question I didn’t even want to think about picking something up so I took some time off and I raised our kids which at first I thought would just be for a few months and then a year passed and then another year passed and I decided that I kind of liked it we had rental income coming in Kelley’s business was doing better than it had ever been in fact she had started her own she had several people working for her and just as a little side income I got to do what I love to do which is antiques I was just buying and selling antiques so we were trying to be very strategic at this point because we owned a fair amount of property in Colorado but we knew that our ultimate goal was to retire at 40 and at the rate things were going up we didn’t want to sell too early because we didn’t want to miss out on that upside but we didn’t want to sell too late because we didn’t want to risk the chance of taking a step back so as some regret we sold the majority of our properties in around 2017 but this was a game-changer because we were able to make cash for every rental that we purchased so we loaded up on rentals in Iowa we actually purchased our property that we’re going to move into which is actually where I’m headed now and that kind of brings us up to speed to current date I take care of our 10 rentals which keep which keeps me pretty busy just in itself i buy and sell antiques i get to see my kids all the time we have a good rental income coming in now we do youtube oh yeah we also do a couple fix and flips every year Kelly has her real estate team with about 10 employees and in June of 2020 we’re going to retire at 40 so all in all life is great I have a wonderful family I have enough assets and passive income to live a comfortable life
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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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