Many of you may have probably heard of the phrase, “You should have money in different buckets.” What does that really mean? What are these buckets? How many are there? How much should you have in each? I am going to start a series that will take us through several newsletters. Please complete each exercise as it will build on the previous one during the following month. The process will require you to figure out and calculate some monthly expenses and then goals and dreams later on. We will start simple and get deeper as we proceed. Bucket One: Financial Protection This bucket … [Read more...]
How Much to a Million
It always seems to be the magic number: “How do I get to a million?” Just like when we set goals for the year in my office, the yearly figure seems big, but when broken down to monthly, or even weekly, it doesn’t seem as difficult. If you plan on an 8% return on stocks and 4% return on bonds and 2% for inflation and age of 65 for your goal, you can use the following monthly figure to get you to a million: 20 years old: $306 (what you think kids?) 30 years old: $645 40 years old: $1,396 50 years old: $3,406 55 years old: $6,055 (what the heck you been doing?) Note: $1 … [Read more...]
Your Newfound Riches
Now that tax season is nearing its end, it is time to decide what to do with your newfound riches and wealth. How about a new car? Pay off bills? Invest in the stock market? All valid ideas. Here are a few you might not have thought of and have been proven to increase your happiness significantly: Buy some time for yourself: Hire someone to do yard work, house cleaning, grocery shopping, errands, etc. The extra time will allow you to do something that you have really been wanting to do but not had the time. Donate it: It has been proven that donating money to your favorite charity … [Read more...]
7 Wealth Strategies
You have read in previous editions how wealth is 80% psychology and 20% mechanics. Here are 7 wealth strategies I would like to share. Pay Yourself First – the oldest and most proven point to wealth creation (that would include investing) Discipline – Not wanting it all at once, saving, planning Life Style vs. Wealth Creation – Living a little less expensive lifestyle in order to accumulate wealth Focus & Freedom – Making powerful habits when it comes to money, focusing on the importance of wealth Financial Competence – Have some financial knowledge when it comes to money, … [Read more...]
What is Your Net Worth?
Filling out a net worth document should be something you do at least once a year (twice if you are really into it). You should also involve your spouse. It is simple to do, but may involve a little research at first. It is simply your assets and what you own minus what you owe. Having this written down also helps you track your accounts and allows you to see how you have done the past 12 months at paying down your loans, saving for retirement etc. Here is a nice example from Schwab. Action Step for You: By the end of January, fill out your net worth worksheet. … [Read more...]