Author: firecanbefun

Easy Ways To Entertain Yourself on the Road: Game of Questions

I’m adding this page as a way to entertain yourself while you’re on the road. If you’ve ever taken a road trip it usually starts off without a lot of enthusiasm in the beginning followed by everyone pulling out their devices and then ignoring each other for most of the trip. I love using trips as a way to connect deeper and share with others. Talking is free and fun and can make an ok road trip just a bit more exciting.

I’ve compiled a list of questions that you can ask while on the road to entertain yourself as you travel

Entertain Yourself on the Road: Questions

  1. If you could only get to places by any form of transportation. Assuming all place are accessible by your chosen means of transportation. What would you choose?
  2. If you could be born anywhere else other than where you were born where would it be and would you change your identity? ( including, sex, race, etc)
  3. If you could be a part of your favorite childhood movie or cartoon what would it be?
  4. If you could have any extra body part what would be?
  5. If you had to stay in one country for the rest of your life which country would it be and why?
  6. If you had to describe yourself with just animals, what animals would you use to describe your physical appearance, spirit animal and energy level?
  7. If you had the chance would you explore the deep sea or space?
  8. If you had to get to places by ONLY dancing, running or walking, which would you choose?
  9. If you could be the creator of any invention without having the credit or wealth associated in the world what would it be with it and why ?
  10. What would you invent that hasn’t been created ?
  11. If you could only listen to one genre of music for the rest of your life what genre would it be ?
  12. If you only go out during daytime or nighttime which one would you pick?
  13. If you could be any professional dancer which professional dancer would you be ?
  14. Who would bring back from the dead to see in concert?
  15. Who would you be a backup singer for?
  16. Who would you a backup dancer for ?

Personal Finance Can Be Easy With These 5 Books

If you are here, then you probably are hoping to improve your personal finance or financial IQ. I receive regular queries for personal finance books recommendations for FIRE. I believe reading and experience are two of the greatest teachers in life.

The reading of all good books is like a conversation with the finest minds of past centuries.

Rene Descartes

Top 5 Personal Finance Books

Here’s a compiled list of five of the finest minds that myself and others in the FIRE community recommend:

“I Will Teach You To Be Reach”

This book simplifies subjects like investment, retirement plans and savings showing you a way to have those guilt-free pleasures and still have a retirement plan all at once.

The biggest focuses are:

  1. Credit is good if you use it well
  2. Research & choose wisely when it comes to bank accounts and investment plans
  3. Be aware of how much you spend, how you spend and what can you do to improve your savings.

Audience: Beginner / Still in Debt

4 Hour Work Week

** My Favorite Personal Finance Book **

The 4-Hour Work Week will give you the blueprint to change the way you think about work and design your ideal lifestyle. Rather than work until you’re 65 and retire, take control of your destiny. If you work until you’re too old to enjoy your retirement you’ve wasted so many years. 

The biggest takeaways are:

  1. D.E.A.L. principle that millionaires use
    • Definition – define your end goals
    • Elimination –  eliminate what doesn’t help you get there
    • Automation – automate as much of the process as you can
    • Liberation – enjoy your end goal
  2. When it comes to productivity, less is more
  3. Hire a virtual assistant to make your life easier

Audience: Anyone who takes on too much at work / the worker who is looking for something more.

The Psychology of Money

Broken down into twenty chapters, Housel tackles a different topic in each chapter, with the majority of these chapters feeling like their own isolated essays. 

The biggest takeaways are:

Doing well with money has a little to do with how smart you are and more to do with your behavior around money. Have discipline and don’t get influenced by others playing a different game. 

  1. Role of luck and risk
  2. Getting wealthy vs. staying wealthy
  3. Tail events drive outcomes
  4. The power of compounding
  5. The role of surprises and unknowns
  6. Folly of forecasters (using the past as a guide to future scenarios)
  7. Nothings Free

Audience: Those looking for beginner investing, personal finance psychology knowledge

Work Optional

Work Optional walks you through envisioning your dream life, creating a solid financial plan to support you, and achieving a purpose-filled early retirement, semi-retirement or career intermission with completely doable, non-penny-pinching steps

The biggest takeaways are:

Living your optimal life isn’t something you have to put off until you reach FI — you can structure your life so that it’s closer to that optimal life, even while you still need to work to pay your bills.

  • Learn to build a solid early retirement financial plan and account for future expenses you can plan for—and those you can’t
  • How to retire early with kids, as a single person, or while supporting loved ones
  • How to make your plan bulletproof to withstand economic downturns

Audience: Those struggling to design a lifestyle and find a why for their retirement

Essentialism

Focus: Trains the reader to maximize the “essentials” of life by strategically eliminating everything else.

The biggest takeaway:

A discipled approach to true happiness is only attainable by subtraction.

Audience: Those that feel constantly stressed, tired, hopeless, or pulled in too many directions.

Thanks for reading! These books will help get you started or further along your journey. If there are other books you’ve read and believe are helpful to improving your financial knowledge add them in the comments below!

Property Owner: How To Survive The Worse Case Scenario

As a property owner, this question or some version of it has come to mind at least once or a few times, “How do you sleep at night with 600K of debt?”. The 600K of debt that I’m referring to are two unpaid mortgages that I still carry. We know it’s not exactly ALL debt because it’s an appreciating asset, etc etc, but I wanted to dive into this a bit further.

I have two mortgages. They are being rented and are cash flowing properties, but they are still debt that I’m carrying. This post will look at the absolute worst-case scenario. As a property owner, you should know or at least think about how long you could survive if you had to cover the full cost of your mortgages if your tenants were unable to pay the rent. It’s not a great thought but it is a necessary one. Without knowing what the worse case scenarios could be then you can’t protect yourself from it.

How To Prepare For An Apocalyptic Time Like Covid

Due to Covid, many people lost their job, perhaps lost the top earner or all earners in their household, virtually overnight. Things were shutdown with no clear end in mind. Government help took time as they had millions to assist as they scrambled to come up with a plan. Although events as tragic as these are rare, they still happen. You wouldn’t want to be caught without a plan, so let’s make one.

Define the Worse Situation As a Property Owner

First, let’s define the worst-case scenario as a property owner: You lose your job and all of your tenants stop paying rent. Looking specifically at my situation, my monthly debt would sum up to $6363.55. This includes two mortgages, student loan payment, a car note, car insurance, phone bill, food budget, dog food, and utilities.

Know Your Total Savings: Liquid & Non- Liquid

My emergency fund consists of $154,000 of liquid assets with $60,000 of that being easily accessible cash. The easily accessible cash I’m referring to is a combination of security deposits and cash in my brokerage accounts. The rest of the cash is in my 401K, Roth IRA, or HSA account. It would take longer to access these funds.

Know Your Exit Strategy

My first plan of attack would be to use the money I have in my savings accounts. During the start of Covid, the market dropped by at least 30%. If I immediately sold what was in my brokerage account I would lose 15K in a similar scenario.

Using my savings I could cover 2 months worth of expenses, leaving me with $47,247. After two month I would expect my unemployment to be approved. I’d received $713 a week, the max weekly unemployment benefit based on my salary for New Jersey. That would bring my monthly expenses down to $3511. Although due to covid, there was an additional $400 benefit that was provided by the government, I will exclude this as I’m planning for the worst case. Unemployment benefits last for only 6 months, so at the end of 6 months I would be left with $26,181. That would allow for an additional 4 months of survival before I would have to tap into my retirement accounts. In summary, I would be able to stay afloat for about a year on my savings.

Nothing is worse that facing a disaster without a plan. Thinking about what could go wrong doesn’t mean you’re focused on things going wrong. It mean should things go wrong you’ll be better prepared for the situation.

Quick Recap: Remain a Property Owner

  1. Save up an emergency
  2. Know how much cash you have
  3. Know how you could access your cash
    • unemployment benefits
    • security deposits
    • retirement accounts

403(b) Options: How to Get Out Of A Horrible One Now

If you have a 403(b) keep reading. A member of my F.I.R.E. group has horrible 403(b) options and for this reason, I’m writing this post. Surprisingly, he is dealing with high fees from his 403(b) accounts which will take away about 20% of his gains over time. Yes, you read that correctly, 20%! Together with this 20% loss, there are employment taxes as he’s contributing them into a Roth 403(b).

The Question: Brokerage or 403(b)?

Specifically, “Would it be better to contribute to a brokerage account instead of my 403(b)“? He’s considering this option to avoid the forced 1% management fee and the expense ratios, which in fact, would result in about a 20% loss over time.

Impact on Retirement Savings with Varying 403(b) Expenses

Plan APlan BPlan C
*Gross Annual Return*7%7%7%
*Expense Ratio*0.58%0.80%1.30%
*Net Annual Return*6.42%6.20%5.70%
*Assets in Year 40*$1,831,422$1,728,534$1,441,189
*Difference from Plan A*-$102,888-$390,233
*Shortfall in Assets in Year 40 vs. Plan A*6%21%

Here are some options we considered:

  1.  Do you expect your taxes to be lower when you retire?
    • Upon retiring, will you be moving to a state with lower taxes?
    • Will you be making less income when you retire?
      • Specifically, will you be in a lower tax bracket?
    • Do you have an employer match?
  2. Can you contribute to a 457(b)?
  3. Should I contribute to a brokerage account instead?
    • Do you have an employer match?
    • Are you eligible for a 457(b)?
    • Will your contribution be pre or post-tax?

403(b): When you retire, do you expect your taxes to be lower?

If this is the case, I recommended contributing pre-tax. Although you will get taxed 20 percent over time through the fund, you will be in a lower tax bracket upon retirement. You still pay less in taxes.

Should you contribute to a 457(b)?

Particularly, a 457(b) could be a safer choice if the employer plan fees are too high. A 457(b) is a retirement plan available to employees of the state, local governmental agencies, and 501(c) organizations. You may be eligible to contribute to both a 403(b) and a 457(b). This plan is occasionally referred to as a deferred compensation plan.

You can contribute to both a 403(b) and 457(b). In fact, if you have an employer match I would contribute up until the match in the 403(b) account and contribute the difference in a 457(b).

Should I contribute to a brokerage account instead?

Specifically, if you are trying to determine what will be the best option, consider these things. Firstly, does your 403(b) options all have very high fees? Secondly, does your employer not offer contribution matching? Thirdly, will you be contributing post-tax and are currently are in a higher tax bracket? Lastly, you cannot contribute to a 457(b).

To sum up, the best option would be to contribute to a brokerage account to save money on 403(b) fees. Furthermore, I hope this helped you if you’re in a similar situation.

You can read more of my posts here!

Tired Of Trying To Time The Market, Do This Instead

I hear this so often and it makes me cringe a bit every time, “I want to invest but I’m going to wait until the market dips to buy in”. While purchasing stocks on sale is the goal you can not time the market. There’s no way of knowing when the market will go up or down. Anyone who says they know are guessing or speculating.

Instead you should do one of two things. The first is what I recommend and follow:

  1. Dollar cost average: divide up the total amount to be invested across periodic purchases of a target asset. Be sure you pick a long enough time period to reduce the impact of volatility on the overall purchase.
  2. Do sufficient and proper research on individual stocks so you know what the sale price is, then purchase that stock when it’s on sale and wait for it to grow

The second is more risky and not something I recommended, but if you are dead set on purchasing individual stocks then do your proper analysis. I use Phil Town’s methods described in Rule #1 as it follow Warren Buffet style analysis which look at:

  • Business
  • Management
  • Financial measures
  • Value

The path to wealth is a journey not a marathon, be patient you will get there. Here’s how I got started on my journey

Food Haul for Under $150: No Spend November

The goal of this food haul is to cut my spending on groceries while still getting the nutrients I need from my food. This food haul is expected to cover 90 meals and 16 snacks.

I’m going to go shopping once every two weeks so things don’t spoil and will be making all of my meals at home. I have the staples at home, such as olive oil, oats, peanut butter, rice ramen, eggs and seasoning so I won’t have to purchase that since they’ll be leftover from my last shopping trip.

I used Instacart, a grocery delivery service so I’m able to shop at a few different stores to get the best prices

Shopping Trip:

Food Haul Store #1: Aldis – $51.26

Family Pack Chicken Thighs, 36oz Ground Turkey, 4 Plantains, 2 Bags of Spinach, 2 Green Onions, Celery, Cilantro, 2 Frozen Pizzas, Deep Pie Shells, Graham Cracker Pie Crust, Condensed Milk, Instant Corn Masa, Dry Yeast, Rising Yeast, 3 8oz Baby Bella Mushrooms, Dates, 2lb Red Onions, 2 14oz Organic Tofu

Food Haul Store #2: Costco – $36.16

4lb Berry Blend Frozen Fruit, 40 Pack water, Minced garlic, 48oz Beef Bulgogi Mandu

Pantry – Leftover from recent shopping trip $40

Flour, Almond Milk, Eggs, Pinto Beans, Peanut Butter, Spaghetti Squash, 8 Oui Yogurts, Quinoa, Oats, Frozen Stir Fry Vegetables, 3lbs Deli Meat, Baking Soda, Baking Powder, Mozzarella Cheese

I’m going to list the meals I’ve planned for the month based on what I purchased. It’s separated out into Breakfast, Lunch and Dinner. I repeat a lot of these meals so it wouldn’t be worthwhile to list out each day, but the total meals yielded will be about 60 – 90 meals with me eating 2-3 meals a day. I sometimes do intermittent fasting which is why my meals would be 2 large meals instead of 3 smaller meals.

Hope you’ll enjoy!

Breakfast

Berry Oats Smoothie – I don’t usually follow a recipe for my smoothies as I eye ball it but this is about the closest to ingredients I add to my smoothie (minus spinach + cinnamon).

Peanut Punch Smoothie

3 Eggs & Arepa

3 Eggs & Sweet Plaintain Arepa

Overnight Oats with Berries, Honey & Cinnamon, Peanut Butter

Tortillas with Eggs & Black Beans

Biscuits with Eggs

Eggless Waffles / Eggless Pancakes if you don’t have a waffle maker

Omelet

Lunch / Dinner

Spaghetti Squash Lasagna w/ Ground Turkey

Quinoa with Habichuela & Stew Chicken

Beef Bulgogi Mandu w/ Vegetables

Frozen Pizza

Turkey, Eggs & Spinach Wrap

Homemade Tortillas Tacos w/ Ground Turkey

Quinoa with Curry Chicken

Curry Tofu w/ Potatoes (following same curry chicken recipe but substituting tofu)

Roasted Sweet Potato, Quinoa, Black Bean Salad

Mushroom Ramen

Snack

Sweet Potato Pie

Sweet Potato Chips

Potato Chips

Yogurt

Candied Nuts

Living On 22K A Year, How Feasible Is This?

I’m 28 years old, have no children, although I plan on having two someday. THE GOAL: Become financially independent and retire in 10 years. That retirement will look like me living off of $40,000 a year with a $1,320,000 nest egg, but I’ll have to live off of 22K a year now to get there

My current debt

My total debt ($681,805.45): $4,000 left to pay on my car, $23,319.33 in student loans, and $654,213 in mortgages. Although my mortgages are considered assets, they aren’t paid off yet so they are still considered debt.

Where did this 22K a year living expense come from?

According to the trinity study, if you plan on retiring early and living off of your passive income from your retirement funds, you first should take the amount you plan on spending each year and multiply that by 33 to get your retirement number: (40,000 * 33) = $1,320,000.

I make around 120K a year. For me to get to $1,320,000 in about 10 years, I would need to invest $75,000 a year, while achieving a 8% return. I also would have to only spend $22,000 a year.

Image for post
10 year view of if you made 8% on your investments, while continuing to invest 75,000 each year:

Now Is This Actually Doable?

Current monthly expenses ($1414): $325 car payment (10 payments left), $125 monthly utilities, $35 phone bill, $143 cable/internet, $113 car insurance, $120 gas, $250 groceries, $50 gift fund, $253 student loan, $50 travel card. Amount I need to invest ($6250): $1625 401K, $500 IRA, $291.60 HSA, $3833.40 brokerage account. Based on my expenses and monthly income, I should be able to do this and still have ~$590.00 dollars who don’t yet have a job. I’ll call them my spontaneity dollars, but what does a lifestyle like this actually look like.

What does a 22K A Year Lifestyle Look Like?

Being that I have about $590 dollars left to play with on this journey. I can do a mix of a few things each month. I could put this towards additional debt (student loans, car payment), invest more to cut my 10 year goal down further, or enjoy the journey. I’ll focus on some fun things that’d I’d spend my money on:

  • I can afford to eat out about once a week ($50 *4) = $250
  • I can spend $100 on entertainment a month( Netflix, museums, concerts, etc) = $100
  • 2 one hour massages ($60 + $20 tip) = $160
  • Put the rest towards my travel budget / save it for a fancier month next month

Ways I can stretch this $590 — coupons, eating out for lunch vs dinner, splitting/sharing meals while out, thrift shopping, free activities, etc. The goal isn’t to spend the $590 a month but to give myself an idea of the sorts of activities that I can still do while doing this extreme savings plan.

I wrote this post to help anyone else thinking of retiring early. I As with any goal, it will require sacrifices. If you sacrifice for 10 years to enjoy a more flexible lifestyle that gives you the option to retire at least you now have a plan on how to get there.

What appeals to me most is being able to have the option to stop working if I wanted to. I would plan to live off of $40,000 a year. If I wanted to live a more lavish lifestyle I would look for part-time work. Instead of being forced to work I would choose when and if I wanted to work.

If you have any tips, questions or comments feel free to drop them below.

If you’re on Medium: Support with claps

Life Lessons Learned on My Journey Saving 130K

On my journey into and out of debt, I’ve learned a few life lessons along the way. I graduated college at 22 years old with 70K worth of debt. After 6 years of budgeting and discipline, I saved 130K, and bought two properties. I still have 26K left on my student loans, but I’m on track to pay that off my next year.

Life Lessons 1: Poor Spending Habits = Negative Debt

In 2014 I read Rich Dad, Poor Dad. That book changed my life, but it didn’t change it immediately, because habits are hard to break. The book opened eyes to the idea of a rich life. I just didn’t know how to create that life just yet because I still had a consumer mindset. I grew up in a household where it was normal to carry credit cards balances month to month. My weekly hangouts involved going shopping, nail appointments, buying food daily, etc, the list goes on. I knew I spent a lot of money but I just didn’t know how much I was spending. Rich dad poor dad moved me to make an expense tracker so I knew where the majority of my money was going. If I could figure out where my money was going, I could redirect where it would go.

Braking Habits & Settings Goals to Payoff Debt

I graduated Stevens Institute of Technology in 2015 with a job making 70K a year, and I thought I hit the lottery. Looking at the majority of my family and people my age, I was making more than them, so I thought I hit it big! I financed furniture, I leased a new car, and accumulated more debt. I never thought I was making financially irresponsible choices because people would congratulate me along the way. What changed for me here was I would look at my credit card statements and it would say it’ll take you 23 years to pay for this if you just make the minimum payments. I didn’t want to work for at least 23 years to pay off a couch I barely used, so I knew I had to change what I was doing. Breaking my spending habits and ridding myself of debt would free me from always having to have a job.

Life Lessons 3: If You Cut Your Expenses, Increase Your Income, You Can Easily Eliminate Debt

2016 was the start my debt pay down journey. I found a way to change industries, increase my salary while lower my monthly expenses. I looked at my rent, cell phone bill, grocery budget and was able to pay off all 20K of my credit card debt. The biggest weight had been lifted off of my shoulders! After I took care of my debt, I focused on savings and how I could further lower my expenses again. I had a small emergency fund in place but knew I wanted to start investing.

Preparation is Where Luck & Opportunity Meet

By 2017, I was saving steadily, and I even opened an IRA. Although I didn’t know what to do with it, it was open. Increased my contribution to my 401K accounts and I started thinking more seriously about buying a house. When I would throw the idea around everyone would ask me if I had 20% saved up for a down payment and the answer was no. Initially, I was discouraged by this. I wanted to buy a house in a year but I didn’t have anywhere near 100K+ saved up.

It wasn’t until I met someone who said you know you don’t need 20% for a down payment, you can put 3.5% down as long as you live in one of the units. Hearing this was the best news ever! I knew I would be able to qualify for a loan because I had good credit and a stable income ( even then don’t let this be a deterrent because there are smaller banks who are will to work with you if you’re credit isn’t great or if you’ve just recently been employed). I went through my pre qualification, which helped me know exact how much money I would need to complete the process and how much loan I could afford. Knowing I would have to save up at least 30K by then, I set a goal to purchase a house by next year.

Life Lessons 5: Secure First Real Estate Investment

2018 Once I purchased my house this was the best thing for my journey not just because I had a house but very specifically when I purchased a house. It searched for a home that would allow me to cut my rent to as close to $0 as possible . I was initially paying $500 out of pocket and later refinanced to have my rentals cover the mortgage.

Tax Advantages & Second Real Estate Property

2019 – 2020

I got more involved in learning how to invest by reading more books on rental property investing & learning how to invest in the stock market. I started maxing out all of my tax advantaged accounts (401K, IRA, HSA) and then I contributed to my individual brokerage accounts.

Right as Covid hit, I purchased another house, this time with 3% down. I viewed this house when the market froze because people were uncertain and, saw this as the perfect time to shop because if most people are too afraid to make a decision then there’s less competition. This was one of those preparation meets luck ordeals as the market took after not even a most after I closed as the stimulus packages were released and rates dropped.

It took me about 6 years of consistency and discipline to get where I am today. I’m on a journey to retire in 10 years. I’ll definitely purchase another property but my timeframe will be in another 3-5 years, so I’ll be building the majority of my wealth by paying down my properties and investing in the market. I’ll share progress posts and tips along the way.