The Best Time to Start is today!

If I had a dollar for every time that I heard “money isn’t everything” from someone who is broke, and mismanages money, I could have retired by 25.

As a financial literacy educator, after helping over 200 people in the last five years, I agree. It’s not about the money but money does pay bills. Therefore, I am team money.

Even if someone received a $1,000,000 with no financial literacy background, it is as good as gone. According to the National Endowment for Financial Education, about 70 percent of people who win a lottery or receive a large windfall go bankrupt within a few years. The same thing happens to rappers and athletes. Ironically, first generation students fall for the same trap with student loan debt.

Financial literacy is the $1M Answer

Financial literacy is the one true equalizer to stop the bleeding.

Why?

Understanding money shifts how you spend money. When you realize that you are trading and over-leveraging today at the detriment of tomorrow, it does something to you. See example (in three parts).

$5,000 Tulum (Mexico) travel excursion on Credit, but If you Must.

Skip the tables if math scares you.

Part 1: Action vs Alternative Action

			Value
Trigger #1 Debt Repayment for the Trip on Credit	Credit Card Debt Payment @17.99% for 16.5 years (with Minimum Payments) using Bankrate.com Min. Credit Payment calculator		-$9,693.13
	Interest Paid Principal	-$4,693.13 -$5,000.00
Trigger #2a Alternative	One-time Investment of $5,000 @ 8% for 16.5 years using Calculator.net		$17,801.72
	Interest Earned Principal	$12,801.72 $5,000.00
Trigger #2b Opportunity Costs due to Trigger #1	OC of $150/month @ 8% for 16.5 years		$59,690.68
	Interest Earned Principal	$29,990.68 $29,700.00

Part 2: Life Long Debtor or Generational Wealth Earner?

	Trigger #1	Trigger #2
Total Interest Owed	-$4,693.13
Total Interest Gained		$42,792.40
Difference		$47,485.53

Part 3: True (Final) Costs

	Trigger #1	Trigger #2
Ending Wealth	-$9,693.13	$77,492.40
Difference		$87,185.53

For the Record, I’m not a Travel Hater. I’ve Been to over 20 Countries, if you must check out this video (below).

The whole $5,000 to $87,000 surprised me too, that’s how the math worked out. Kinda makes you want to serious consider making the most of every trip.

16.5 years is a long time. To clarify, I meant YEARS!

What I laid out in the table is the truth and nothing but the truth. It would take you 16.5 years to pay off a $5,000 trip that you place on a credit card. TF

Money is merely math in progress. Many people dream of the day they can leave work but most are stuck paying down quick and easy amazon transactions for the rest of their lives.

However, it’s not all doom and gloom. The great part of all this is that you have control. You are in charge and you get to choose how your life from now on. If you want to be Financially Independent and Retire Early, Try these following steps.

#1 “Drink Water and Stay Motivated”

In the Marines, this was something we used to say all the time. No matter how tough any situation was, the right mindset and the right diet will pull you through. Your Health is Your wealth; do not waste the only physical investment you have in life. Look around you, the more successful a person gets, the more money they pour into their health. Copy them.

Start a six-weeks cleanse. This is the easy part, 1. Drink nothing but water. 2. Sleep on average 6-8hr a day. 3. Exercise 3 times a week. No matter what you activity level is, we just need to get your blood pumping and clear your mind.

Once you knock down six weeks, adjust what you need and keep the motivation going. No one said you needed to be a pro athlete; I just want you to get up in the morning. The purpose is you so GET UP! Why does this work?

Build on small wins and establish your own self-discipline. Too easy, now level up with a Spending Cleanse:

#2 Start dreaming again and Plan out the Year 

Whether you want to retire at age 40 or have to retire at 72, start thinking ahead.

It is OK to draft the plan multiple times. Start reading and checking out your next move. Defined living comfortably and work your way back to fill in the blanks. Build out a social network that aligns with your aspirational net worth.

Translation – cut out the filth from your life. All that junk looks entertaining but it is dragging you down.

Think better and do better. Follow me instead on IG @theneighborhoodfinanceguy

Review your current income, savings and investments. Estimated your monthly expenses after retirement. Know the end goal and expect the unexpected.

#3 Slash Interest Fees by Cutting down Consumer Debt 

By the way, eliminating consumer debt is one of the most effective and confidence building exercise there is.  

Interest fees are draining your bank account fast. Whether you have high student loans, crippling credit cards or other personal loans, it is hard to save while being hit monthly with fees. Do more than the minimum and be better than average.

Eliminate your high interest debt first.

On the other hand, if you have multiple credit cards, do this instead.

1. Make sure you are paying the minimum on all your credit cards first.
2. Add anything extra on the highest one.
3. If you manage to pay it off or get bored, look at the smallest one and add extra on that one.
4. Keep doing this with the Debt Blizzard Repayment hybrid and you will be doing better than 80% of Americans.

Where do you get the extra cash?

Cut down unnecessary spending. Turns out, you really do not need to eat out all the time. Secondly, you really do not need to spend an extra dollar on Amazon.

I had to cut my wife’s AT&T $105 per month bill. It was insane. No worries, she was added to my T-Mobile plan for +$12 per month. That’s how you cut down. you address the leaky faucet.

Finally, you do not need multiple streaming access. Pick one and move on. Your wallet, waistline, and mind will thank you for this.

#4 Scared Money Don’t Make Money!

Don’t waste too much time saving for eternity.

Emergencies will happen. I can guarantee it. When they do, they won’t ask you for your bank savings account number. They will ask you for your credit card. Keep those clear and available.

I recommend saving $2,500 per adult person in the home and $1,000 for kids under 10 and $1,500 for teens. At less than 1% in a savings account, keeping $10,000 idle is doing you more harm than good. People are making moves paying their credit cards, investing in themselves, etc. At less than 1%, while others are bringing in more than 12%, it is insane. 

Like my cousins-in-law from Jersey say, “Scared Money don’t Make Money!”

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#5 Be Critical about How Much you are spending

Not sure, what happened to society but people are scared to do a personal evaluation of their own bad habits. 

You have to be hungry for change and establish new patterns if you want to win. For clarification, stop spending for happiness. The money will not bring life-fulfillment or happiness even with Amazon Prime. Money is merely a tool. The stuff that you purchase, are merely stuff. Purely inanimate objects with no soul and no benefit.

It is up to you to add value to your life.  You have been overspending and that is your fault. The best part of that, you can change “You”. Start by cutting something, go without it, and do something more productive in its stead.

This is the Opportunity of a lifetime. Do it!

Bonus: More than 10% Effort

Passive income is key. 2020 made additional income streams mandatory. You have to clock in. Set a goal to make at least $100 more a month than you did last year.

To do so, get another job or pick up more hours. When you start down this process, maybe you want to head by to school or better yet learn something online. Build new dollar value in your hours. From that point, invest more in yourself and in the market.  

You have put more than 10% effort. It is winner take all. Play the game.

Interested in overhauling the way you budget and save, be sure to chat with a financial literacy professional to set up the right plan for your needs and lifestyle. Need to plan for your retirement, speak with a fee-only financial advisor. If you need insurance, just remember that term is better than whole life.

In Summary. Let’s Get it!!

Establishing systems and processes. In order to get more done, be regimented, healthy and excited. Rest accordingly.

Getting back to shape – Please!

Creativity and dollar conversions. Create and Use passive income.

Working on investing at least $10,000 in M1 Finance Brokerage focused on Dividend Income that generates at least $1,000 in passive Income for starters in 2021 and beyond. Check out the portfolio in real time. If you like the platform and want to start investing, I have the $10 for $10 referral if you need it – https://m1.finance/SYdqDJ2SyADC.

New Gear to Work From Home ­– I recommend Yeti for Podcasting and Logitech Brio for Zoom Lives and such. Check out the Amazon Associates link.

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