As the owner of several (really) small businesses, including a consulting practice and a financial strategy practice, here are the top 3 things I learned to not do, from my own experience and the experience of clients.
I met Jane (made up name) for a one-off coaching session to help her with this one.
Every January, April, June, and September, she’d get stressed and upset because of the large sums of money she needed to send to Uncle Sam and her state’s taxing authority. …
I love simplicity.
But sometimes, even if you avoid the trap of over-simplifying things, the simple answer is far from easy.
Case in point — the 1000-a-month savings retirement rule. If you’re not sure what that is, here’s a quick explanation, including how to tailor it to your personal situation.
Great, let’s start figuring out how to use the rule without getting overwhelmed by how much you think you’ll need to save for retirement.
Let’s imagine a hypothetical guy, John, age 40, who makes $80,000 a year, putting him above 56% of Americans. To figure out how much income…
“For every $1,000 per month you want to have at your disposal in retirement, you need to have $240,000 saved.”
He called this “The 1,000 Bucks-A-Month Rule.”
The math behind the $1000-a-month rule-of-thumb is simple.
If you take 5% of a $240,000 retirement nest egg each year, that works out to $12,000/year, which divided into 12 months gives you $1000 each month.
Moss assumed that if you retire between the ages of 62 and 65, you could safely withdraw 5% each year and not run out of money before…
The only argument for paying your mortgage off early is a psychological one. If you can't stand having a lien on your home, and are willing to sacrifice (almost) anything to get out of that situation, then paying as much extra as you can against the principal each month (or paying off the whole loan at once if you can) makes sense.
In all other circumstances, this is the opposite of being financially savvy, as I explain in detail here: https://medium.com/financial-strategy/why-prepaying-your-mortgage-is-almost-always-a-terrible-idea-88fa87977d77
The Cliff Notes version is this:
1. Your mortgage is the cheapest money you can get, and you will…
Occasionally, you run into somebody doing something super-creative and cool.
It happened to me today, when I saw a cool video created by James Eagle, self-described “Investment writer, blogger, data junkie and entrepreneur,” which he captioned: “The Dow Jones is 125 years old. In its honor, I’ve put together this animated chart.”
Here it is:
Set to music, the video tracks the Dow Jones Industrial Average through 1500 consecutive monthly closes, calling out significant events such as the Great Depression, founding of various companies, and many recessions.
Like many others here, I saw my monthly partner program payments slump by as much as 90% from 2019/2020 to early 2021.
Given that Medium had never been a significant source of income for me I wasn’t devastated, but I was unhappy, so I started thinking what could have led to this disheartening decline.
I came to this country owing more than I owned.
In personal finance terms, I had a negative net worth. Negative $4000 to be precise.
But in reality, my finances were even more fragile than that sad number. That’s because part of my nominal net worth was tied up in a used car for which I’d paid $8000.
If an emergency came up and I needed money, I’d be hard-pressed to sell my car immediately, and even if I managed it, I’d probably have had to lower its price significantly.
How do you capture that fragility, or in a better…
Hate your boss?
The daily 9–5 grind?
The sense that whether you want to or not, you have to keep working to avoid financial ruin?
There’s an almost magical allure to the thought of being the master of your own time. Being able to pick and choose what to work on, when, how long, and how hard, without your financial survival hanging in the balance.
That magical time is called Financial Independence (FI for short).
If you’re striving for your own FI, know that there are two monsters lurking in the dark, like vampires waiting to suck the…