Happy New Year, friends!

Just had a randomly refreshing chat with a fellow coffee shop goer, and as things tend to go we ventured into finances and the words that came out of his mouth were outstanding, lol… So much so I had to stop him mid-sentence a couple of times to make sure I got his phrases right!

Here were some of the highlights from our convo, in *his own words* as best as I can remember…

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“I would rather play chicken with my bills than with my savings”

Instead of spending on “wants” first like I’ve done all my life, I flipped it around and now SAVE first and pay bills second. Then if there happens to be anything left over, I use that to buy any “extras” I might want.

I went from not being able to save $1,000 and a credit score of 580, to having over $13,000 in the bank and a score of 730 within one year!

There were a handful of things that led to this, but it was mainly re-ordering my priorities and paying myself first that got me going in the right direction.

“I’ve gone to a more “spatial” system of managing my cash flow”

Another reason I was able to save so much this year was because I drastically changed my management system. Instead of having everything in 1-2 accounts, I’ve gone to a more “spatial” system.

What I mean by that is I spread my accounts across multiple banks that all serve a specific purpose:

1. I have one account for my short-term savings
2. One account for my long-term savings
3. One account for my bills
4. And then one account for my spending/wants.

My business banking looks similar: one account for savings, one account for bills, and another account for taxes (I pay quarterly). It’s a lot to manage, but it’s brought so much peace and savings.

“I threw away my debit cards”

The first thing I did when I started re-arranging everything was to move all my savings into a brick and mortar bank that had no online access. This way the only way I could access my money was by going there in person. I did get debit cards, but I immediately cut them up and threw them away.

This has immensely strengthened my discipline, and partly why I was able to go from $1,000 to $13,000 so fast. It took me over 30 years to save my first $10,000 and now the hardest part is over!

“I spend a lot of money looking for women”

Over the course of 3-4 years I’ve spent $40,000+ looking for love, or about $1,200/mo.

Part of that goes to dating apps like eHarmony (which I initially balked at as it cost me $300!), but most of it comes from just doing my best to be “visible.” So lots of eating out and hanging with friends, visiting bars/community events/etc. You have to put yourself out there if you truly want to meet people.

I initially felt bad about spending all this money with no savings in the bank, but later I realized I was prioritizing what I wanted and I became okay with it. Now I could have been more *efficient* with the way I went about it, but I am proud to say it worked out in the end and I will be getting married at the end of this month! Ironically, to a woman I found on eHarmony!!

(Editor’s Note: This was the most interesting part of the whole conversation, haha… As someone who met their partner years before online dating and apps came around, I’m always fascinated by the mixture of tech and love. And really how much dating seems to cost in general??! And I’ve surely never met anyone who has TRACKED IT ALL, lol… Probably exactly what I would do if ever back in that situation )

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So basically, yeah – most stuff we’ve heard before, but in much more entertaining ways ;)

1) Save first, spend later

2) Build a system that works for you!

3) Make yourself more “visible” when you want something. Whether it be love, business, career, you name it. If you’re not putting yourself into the position to *receive,* you’re limiting yourself! Nothing great has happened sitting on your couch – you have to put yourself out there and tell the world what you are looking for!

(This is exactly, btw, why I choose to do my projects out of coffee shops. I never know who I’ll run into or what type of magic might happen! And surely this blog post would have never been created, so who knows what you would be reading right now??! Lolol…)

At any rate, all good things to think about as we head into the new year here :)  Will you consciously place yourself in situations which allow you to get closer to your goals or farther away from them? Are your management systems still serving you okay, or is it time to blow them up and start from scratch? Where will you be putting that first dollar from your next paycheck? If it isn’t to YOU, you need to re-read this whole blog post! ;)

Your F.G.A. (Financial Guardian Angel),

[This post, I would rather play chicken with my bills than with my savings, was first published by J. Money on Elite Edge Money]

Good morning!

Here’s an outline of tips and tricks I do to help me live my Best Life :)

I started putting it together for a possible book or PDF or something?, but I also just wanted a place that captures it all for easy reference later… If you like it, I’ll do an update as other ones come to mind!

It really is amazing how good habits can compound over time… Bad ones too, but we’ll save that list for another day ;)

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A bunch of things that have gone on to
change my life:

Money:

• Tracking my net worth
• Automating all bills
• Consolidating all banking
• Rounding up all debt payments/investments
• Using one credit card for everything (and paying it off monthly)
• Maxing out retirement accounts every year
• Storing all tax documents in one spot
• Tipping 20% no matter what
• Always keeping cash in my wallet (money clip)
• Always keeping a $20 bill in the car for emergencies

Shopping

• Always buying it if it’s a book
• Always buying it if it’s under $10.00
• Asking: “Would I rather have this thing or cash?” before any purchase
• Asking: “Would I wear this out the dressing room?” before any clothes purchase
• Shopping thrift stores for cheap fashion experimenting
• Always having a back up plan for stuff you buy
• Leaving all packages needing to be returned in the trunk so they’re always ready

Productivity:

• No coffee until you’re ready to do the “real” work!
• Answering emails in batches
• Answering emails with emojis and gifs (quicker *and* fun!)
• Answering emails via iPhone (more acceptable for writing less)
• Answering emails but *not sending* them until later (slows down the back and forth)
• Only keeping emails needing attention in the inbox (archive the rest)
• Setting calendar items for all your friends’ birthdays so you never forget (esp old college ones as time passes on…)
• Spending just 15 minutes to jump start the stuff you hate (you’ll often end up doing more once you get going!)
• Going “all in” when you find something you love (It may change later, so soak it all up while you’re excited!)
• Stacking habits for better efficiency
• Re-reading Essentialism every now and then

Household:

• Making your bed every morning
• Cleaning the litter every morning
• Putting away the dishes after every meal
• Doing a load of laundry every day
• Lighting a candle at dinner
• Keeping books easily accessible around the house
• Spritzing plants every day with water (easiest way to keep them alive!)

Clarity/Mind:

• No phone in bed!
• No phone *in front of other people*
• Wearing a watch so less times picking up the phone
• Keeping phone notifications turned off
• No working on the weekends
• No working at night
• Hitting inbox zero every day
• Waking up at 5am and getting the day started on your own terms

Kids:

• You can never love them too much!
• They’d rather play with YOU than a toy
• Keeping an “adventure bag” in the trunk (with extra clothes, toys, bathing suit)
• Keeping their scooters/skateboards in the trunk (for more sporadic adventures!)
• Going with the flow while playing, even if it’s not fun (they’ll quickly move on to something else!)
• Sticking to a loose schedule for play time, nap time, screen time
• Urging them to do as much as they can by themselves
• Bribing them if it leads to better habits
• Not letting them get free stuff at yard sales…

Minimalism:

• Keeping key chains minimal (house and car keys only)
• Keeping money clip minimal (only cash and cards)
• Keeping clothes to *only what fits in a suitcase*
• Giving every thing a “place”
• Keeping a box for all stuff that needs to go out
• Keeping all email accounts/website accounts/other accounts consolidated
• Removing areas of the house that accumulates stuff easily (usually flat surfaces)
• Walking around the house looking for stuff to declutter when bored
• When stuck on an item, asking: “Would I go out and buy this again?“
• Re-reading The Power of Less every now and then

Health:

• Banana and water in the mornings
• Cut up apples w/ peanut butter in afternoons
• Stop eating when 80% full
• 1-2 walks every day!
• 100 push-ups every day
• Brushing your teeth right after dinner so less temptation to snack/drink late night

Charity:

• Always saying “yes” when asked for money
• Giving the largest dollar bill in your wallet/purse/pockets
• Setting up *automatic* donations to organizations that matter most to you
• Becoming a Lifetime Member of the clubs you belong to
• Keeping your eyes consciously *open* for opportunities to help

Reminders to self:

• No one can ever take away your success!
• Freedom > Money > Stuff
• It’s either a Hell Yeah or a No – Sivers
• You can get equal happiness from stuff that costs money and stuff that doesn’t
• “Sometimes all you need is 20 seconds of insane courage.”- We Bought a Zoo
• When in doubt, ask yourself: “Do I like who I am when I’m doing this?”
• “Never give up on a dream just because of the time it will take to accomplish it. The time will pass anyway.” – Earl Nightingale

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[This post, 75+ Things I Do That Improve My Life 🔥, was first published by J. Money on Elite Edge Money]

One of my favorite things about collecting coins is that they all have their very own personal history.

First, in regard to their original minting and place in our country’s story, but also in the different places they’ve traveled and hands they’ve passed through over the years – all coming together to eventually land in my very own collection in my very own home!

So in effect, my collection of coins is really a collection of *everyone else’s* coins, that I just so happened to put together and now claim as *my own* collection.

I find that so cool :)

And like a true nerd, I document where each of these coins have come from too (the “provenance”) to always pay tribute to their origins. I just counted, and almost 54% of my coins came from other collections! With the rest coming from dealers or shops or places like Ebay where the provenance is long lost (they rarely note it unless it comes from a famous collector, so all that lineage up to that point gets erased with history :( )

This “Collection of collections” can be found in a multitude of other areas as well.

The things in your home, the books on your shelf, even your circle of friends! They come from all different places and walks of life, which you’ve collected and formed into your very own group of friends :)

This is the same with knowledge too. Take, financial knowledge for example. Did everything you learn come from one central person or place or book in your life? Of course not. It was accumulated over the years by different people at different stages in your life. “A collection of advice,” if you will!

Here’s a breakdown of my own financial roots and the people responsible for them:

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Frugality — My mother! Having raised a family of 5 on a meager military paycheck, it was not only a necessity to stretch her dollars as far as she could, but she also found immense joy from finding deals and shopping second hand. Something also very much passed down to me through her genes :) Here’s an interview I once did with her that captures a bulk of her philosophy on money: Interview w/ My Mom Who Just Found Out She Can Retire Anytime She Wants.

Retirement investing — My dad. Another person who’s been hugely influential in my life, outside of literally creating me! From day 1 of starting my first job he preached signing up to the company 401(k), and while it took a few years for me to finally listen to good ol’ Pops, I finally did and the momentum only grew from there. And since retirement accounts are hidden behind a bunch of rules and fees, they’re much harder to pull from and thus the only route for them to go is UP over time! No touchy, more growy!!

Debt — Mom and Dad. Whose favorite line was, “don’t put anything on your card you can’t pay off!” Which most times I listened to pretty well, but there were certainly others where my eyes were bigger than my wallet :) Still, without their early persistence it wouldn’t have become such a strong compass in my life which I’m forever grateful for.

Net Worth Tracking — Jonathan from My Money Blog – the very first blog I read! Many of you know my story of buying a home on a whim with no money down or no real financial knowledge back in 2007, so when I Googled “how to budget” I was surprised to find so many places sharing their financial journeys and how they saved, invested, paid off debt, etc. One of these places I ended up getting hooked on was My Money Blog who did something I’d never seen done in the history of my life – share a real life net worth!! I was GLUED!!!! Sure we talk about money with our peers and family, but never do we *really* talk about money. And no way would we ever share our actual numbers.

Seeing this from Jonathan was an epiphany for me, not only for my own finances (I started tracking my own net worth from that point forward – going on 15 years in a row now!), but eventually leading me to start this blog and completely changing my life/friends/career and best of all – my mindset. All because one person decided to share their most intimate financial details with the world. So thanks dude!! And his blog is still around too, btw, if you’re interested in checking it out – he covers a lot of immediate news going on which is super helpful, esp since people like me don’t :) –> MyMoneyBlog.com

(And btw – your net worth is a “collection of collections” too! A collection of savings, a collection of investments, a collection of debts – all combined to give you your collective financial snapshot! Heyoooo!)

Early Retirement / FIRE — ERE Jacob and Mr. Money Mustache. The first people who a) taught me FIRE was even “a thing”, but more importantly b) SHOWED us how it can be done by sharing their own journeys with the community. I had already been blogging for a number of years before they even came on the scene, but as soon as they did it opened up a whole new world for me (and challenge!) and I’ve been soaking it up ever since. No more was I just chasing money so I can one day call myself a millionaire because “it’s cool,” but there was actually a *point* to it all! And a number I could work towards! Plus it’s always fun to just use the fire emojis.

Minimalism — Leo Babauta. One of the original minimalist bloggers on the scene, whose book, “The Power of Less” hit me at the exact right time in my life (when I started making more money and tempted to use it for more and bigger and better things!). Then mix in Joshua Becker and The Minimalists, and countless hours of free time, energy, money!, and of course *freedom* opened up. One of the best things I’ve ever focused on to this day, and something I *still* work hard towards daily as Lord knows I still have a ways to go in some departments… Namely, around my kids

(Though I did have an epiphany this week while decluttering – if you can get rid of areas where things naturally want to accumulate – like baskets or ledges or shelves, etc – then they magically won’t! My wife keeps bringing home more and more storage units, but I keep telling her that only encourages MORE STORING!! If you get rid of the storage, you get rid of the STUFF that tries to go into it! You still need to find *a place* for that stuff, but at least you keep the areas around you clean and tidy.)

Index Investing — JL Collins and The Dough Roller Podcast. I credit the Dough Roller podcast first because it was on that show that it struck me I should finally do something about my haphazard investing strategies… Rob had asked me how I invest and why, and like a stuttering fool I had to admit that I really didn’t know. My investing up to that point was more like a hodgepodge of ideas from “investing in what I love and use” to “copying Warren Buffett” and a half dozen other strategies I had read about and thought sounded smart over the years.

So the next few weeks after recording the show I started paying more attention to what all my blogger friends where doing (i.e. my “circle of trust!”) and it was immediately clear how a majority of them invest: through index funds. And in particular, total market funds with Vanguard. Then after devouring JL Collins’ stock series and peppering him with a million questions, I knew it was the right move for me too so I cashed out of alllll my random baskets of funds (many with insane admin fees!) and went “all in” with VTSAX.

You can read more how it all went down here:

• Say Hello to Vanguard’s Newest Member!
• My New [Lazy] One-Fund Investing Strategy

Lifestyle Design — I can’t really pinpoint *one* person who started me down this path, it was more a collective of different bloggers out there, but I can say Derek Sivers and David Cain of Raptitude are the ones influencing me these days. Always getting me to think – and challenge! – what I’m doing and why, and if it all aligns with what I say I want out of life. Highly recommend both of them, as well as a little Tim Ferriss too if you’re just starting out in your journey (he’s a bit “much” for some, but I think he can be a good jolt for those who really need one!). His book, “The 4-Hour Work Week” really opened my eyes years ago and helped me realize there is more than one path to live out there! We just gotta be brave enough to go after it!

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So basically the first half of my financial foundation was shaped mainly by my parents (how to save, stay away from debt, start investing), and the second half was influenced by the blogging community (tracking net worth, FIRE, minimalism, mindset).

Pretty cool… My collection of knowledge!

A fun exercise to go down too if you’ve never thought about where your own roots came from… We may think of our beliefs as *our own* now, but they all originated somewhere! And we should be so thankful for them!!

So thanks everyone listed above, as well as those reading this right now. Without this blog I’d be half as interesting or successful with things, and I certainly wouldn’t be as good looking ;) Y’all are constantly pushing me to be better and I appreciate it!

Here’s to more collecting

*Links to books above are Amazon affiliate links

[This post, Collections of Collections, was first published by J. Money on Elite Edge Money]

Do you have cats?

Cats that like to poo outside their litter box to remind you who’s boss?

I have one of those, and until last year couldn’t find a way to stop her madness. Then a plumber doing some work on our house gave me the best advice a cat lover could get, and it’s transformed into one of the most epic habit stacking routines of my day!

He said – try scooping out the litter *every single day* instead of whenever you happen to remember (which for me was roughly every other day), and then make sure to do it at the *same time* every day too as cats love that $hit (no pun intended).

I decided I’d give it an earnest go, and from that next morning forward I scooped the litter every single day to see if it ended this silly little game of hers…

But to do the kitty litter I have to put on my shoes first so my feet don’t get dirty from all the litter scattered around the basement, so I need to first go into the garage to get them.

And on the way to the garage is my water spritzer for all my plants, so I might as well give them a spray too while I’m at it so they get their daily dose of love* as well.

Then since I’m in the garage and have my shoes on, I might as well open the garage door to retrieve the newspaper waiting for me, as well as the trash and recycle bins on pick up days.

Then once I’m back in the house before heading down to the basement, I should also collect and start the laundry too since that also gets done daily downstairs.

And since I’m going upstairs now, I might as well switch out of my pajamas and into Big Boy clothes for one less thing to do later!

So now that the plants are spritzed and the garage door is opened and the newspaper/bins are brought in and my shoes and clothes are on and the laundry basket is in my hands, I go downstairs to do the kitty litter and have successfully (and rather effortlessly!) completed 7 tasks all within a 5 minute window.

And since our dehumidifier is also in the basement and needs to be emptied every morning, I’ll knock that out too – now making it 8 successful tasks that I don’t have to think about or remember for the rest of the day! All accomplished with barely a thought since they all flow so smoothly together.

This is the magic of Habit Stacking. And it can be applied to all areas of life :)

The beauty is that it only takes a few tries for the routine to set in too if you connect the right things at the right times together!

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Here’s another stack of habits I’ve formed, this one around my finances:

At the end of every month, usually on the 31st or 1st, I’ll sit down at the computer and update my net worth. But to update my net worth I have to log into all my accounts, which also forces me to review everything and make sure no unapproved transactions or hackery is going on**.

It also prompts me to check our credit scores to see how those are going, so I plop those numbers into my spreadsheet as well, and then update our house value while I’m at it purely for entertainment purposes (and it really is “entertainment” as one place can list our house at $100k-$150k more than another??! So we take the average of 5-6 different places and then use that as the best guess of its “value”.).

While I’m sitting there, I’ll also make it a point to update our Credit Card Tracker to see how our month of spending went compared to previous months. This has been especially fun to track in and out of Covid times where the #’s have changed pretty drastically

Look what I mean:

• Pre-Covid: $4,2071.44 avg/mo balance
• Covid: $3,262.19 avg/mo balance
• Covid Resurgence: $4,040.90 avg/mo balance
• Current times: $5,516.07 avg/mo balance

We had monthly savings of around $1,000 through the thick of Covid!, but as it started to dissipate so did the savings and we’re now spending $1,300 MORE than we were Pre-Covid, lol… Which I suspect will start going back down now that things are settling again (you stay away, monkeypox!!!) but a good thing to keep an eye on for sure…

So again – one habit here (the updating of our net worth) that kicks off multiple other similar habits that all string together to form an effective (and efficient) set of accomplishments.

Not to mention some forced reflection in this particular stack of habits too since you’re getting the lay of the land of your entire finances each month! You’re bound to feel *something* staring at your New Number whether you like it or not! Haha…

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Here are some other, smaller, habits I’ve incorporated over the years too:

I have a dedicated place where I put ALL bills that come in from the mail so I always know where they are and can pay in one swoop when I’m feelin’ it.

I have multiple folders set up in my desk drawer for all things Taxes, Receipts, Business, Car/Home stuff, etc to similarly drop items into as they make their way into our house (Receive, Process, Place!)

I also still wake up at 5am’ish every morning, setting off another string of habits that includes personal “ME” time, scrumptious food and coffees, allotted time for reflection and reading, and anything else that tends to be put by the wayside throughout the busy days.

All things kicked off, again, by one simple habit: in this case, waking up at 5am.

(I also used to have a pretty killer EVENING stack of habits too when the kids were smaller and went to bed earlier. It went like this –> dinner –> put kids down –> brush teeth (so I wouldn’t snack/drink all evening!) –> take a shower (so I didn’t have to do it when exhausted) –> relax/watch TV/read/sex? –> bed. I was all washed up by 8 every night and ready to relax (healthily!) for the rest of the evening – it was marvelous!!)

And btw, this habit stacking could also work *against* you too if you’re not paying attention!

As nicely as it can flow together to improve your life, it can work in the opposite direction to try and destroy your life!

How many times do you say you’ll go out and only have *one drink*, but then one drink turns into two then three then making all kinds of regrettable decisions and phone calls, only to wake up hours later wishing you had just ignored that first drink to begin with?

Or what about when you decide to treat yourself for being an adult so you head out shopping for some new shoes or an outfit, but then pick up some sweet accessories to go along with it and then grab some fast food since your now hangry, and maybe then pop into the theater to watch that movie everyone’s raving about as you digest (Top Gun?), thereby turning your one initial decision into a half-day spending extravaganza! And it flowed just as naturally and effectively as the aforementioned *positive* string of habits, just in the opposite way!

So the cascade of Good from stacking habits can very well be a cascade of Bad too.

Try spending the next few days taking an inventory of all the habits you catch yourself doing every day – both good and bad – and then see if you can find the activators of the group, as well as if there’s a way you can re-arrange and connect them to flow better. It may take a bit of sorting through as you’ll be amazed at how many habits you do on the daily!, but start paying closer attention and see what you can shift around for more optimal living

As nerdy as it sounds, this new routine of litter/laundry/clothing has drastically improved my mornings and it honestly takes barely any effort at all! And if you are wondering, yes – the cat is much happier now too ;) She still toys with me here and there, but the days of pooping outside her litter box are mostly in the rear view mirror…

So thanks Mr. Plumber Man! Your one tip completely transformed my mornings!

Any of you guys have any great routines that have changed the game for you too? Whether in your daily lives or careers or better yet – your finances?

Share below so we can all learn from them!!

PS: Here are a bunch of free spreadsheets for tracking net worth if you’re looking for a good one: Best Free Budget Templates & Spreadsheets (I still use a modified version of that first one up top I created circa 2008!)

PPS: And here are some good books on habit forming too if interested (links are Amazon affiliate links):

1. Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones – by James Clear (I’m currently reading this and so far so interesting! I’m only in the first few chapters, but hoping it covers habit stacking and examples of such so I can steal them for my own life ;))
2. Tiny Habits: The Small Changes That Change Everything – by BJ Fogg (This one’s on my list to read next, based on a recommendation by a friend who said he found it to be much more impactful than Atomic Habits, particularly around habits you just can’t seem to figure out. He said the science in the book is incredibly helpful too.)

* For 30-something years I could never keep a plant alive for more than a week, and then one day I decided to say hello to them in the mornings and spritz them with water, and for some magical reason that keeps them happy and alive so now I do it every single morning and they live basically forever :) So EASY and EFFORTLESS!

** Checking your accounts every month doesn’t catch everything (like my overdue water bill that almost got our water shut off last week (!!)), but it does prevent a majority of issues. And only takes a few minutes if you stay on top of it!

[This post, The Magic of Habit Stacking ✨, was first published by J. Money on Elite Edge Money]

Caught these tips off Twitter and thought it would be fun to see how many of these we can check off ;)

I’ll go first…

From The Man himself, Mark Cuban:

#1. Live like a student

Nope! I used to live like a student, but that was more out of necessity than desire lol…  I will say though that this mentality IS a good one to try and mimic though, at least in spirit, as lifestyle inflation is real and if you keep spending all the new money you earn you might as well still be a broke college student!

So a hearty yes to channeling this, but no to giving myself a point here as I def. live more lavishly than my 19 y/o self could ever stomach ;) That guy would never spend $6.00 on a latte!

#2. Don’t use credit cards

FAIL. We use one main “house” card for all bills to rack up cashback and keep things streamlined, but we also pay it off at the end of every month because we don’t like lighting our cash on fire… If you struggle with that 2nd part though, then a hell yes to whipping out those scissors and chopping them up!! The c/c perks will never outperform the loss of fees and stress from debt! Better to just avoid it altogether than play the devil’s game if you don’t trust yourself enough.

(And as much as I don’t want to admit it, I’m 99% sure we overspend using plastic vs cash too… It’s a “convenience” fee I’m willing to pay though after decades of hustling ;))

#3. Save 6 months income

Next Level Activated! 3-6 months banked does wonders to your peace, and honestly even if you can just pull off ONE MONTH of savings it’s game changing..  And the beauty is that once you hit whatever level you’re going for, you don’t have to add any more to it and can divert all future $$$ elsewhere to more exciting things!! Like Pokémon and NFTs! ;)

And remember too, not every dollar needs to be maximized. Even though it looks like the money is just sitting there “doing nothing” and not earning anything, it’s still serving the magnificent purpose of giving you INNER PEACE. And I know a lot of people who would pay good money for that, so soak in as much of it as you can!

#4. Put savings into SPX mutual fund

YUP!!! Well, technically we’re invested in Vanguard’s VTSAX which tracks the TOTAL MARKET and not just the S&P 500 stocks which is what SPX does (or VFIAX – another popular fund from Vanguard), but it’s all a similar concept. You’re betting on a giant portfolio of hundreds/thousands of stocks instead of trying your hand at picking out individual ones which is very (very) hard to do well, especially long-term. And a bonus perk – you can just set it and forget it! A lazy man’s dream!

#5. Invest a % of money into high risk

Score here too! Always smart to have a “long shot” going on the side, though I can’t say it helps too well with that whole “inner peace” stuff as it’s amazing how much MENTAL bandwidth it can take up for being such a small sliver of your net worth, lol… You give me .0001 bitcoins and it’s all I can think about for the next year even though it’s so insignificant! So hopefully your brains work much better at keeping the overall perspective than mine, or at least betting on things that aren’t in the news 24/7 :)

I would also put starting your own business, or buying up other small businesses, in this department too btw… Stuff that has a higher rate of failure, but also a higher rate of rewards when they succeed! And notice Mark didn’t put a specific % amount there either, which I like since our risk tolerances are all different… Though typically you’ll see recommendations anywhere from 5%-10% of your overall net worth to play with which I tend to agree as a good starting point.

#6. Buy consumables in bulk

FAIL. This is kind of embarrassing as it’s such a core tenant of frugality – especially for a money blogger (!) – but for whatever reason we just don’t do much of it… Or I should say, my wife doesn’t do much of it, and ain’t no way I’m going to pipe up and ask her why to then have the task transferred over to me, haha… I let her run the show there, and I run the show here with our finances!

But yes. More bulk = more sex…y. So good on all you Costco and Sam’s Club shoppers banking those savings around the world… At least I think Costco is around the world?! (I googled: “Costco has 833 warehouses worldwide: 574 in the United States, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.”)

#7. Negotiate with cash

Do yard sales count? ‘Cuz if so I’m an undefeated champ there – BOOM! But can’t say I do much negotiating outside of that… Except for house buying times, but even then we always end up choosing the mortgage route than cash money for ultimate flexibility… Not that we usually *have* the cash to pony up most times anyways, haha… do you know how expensive homes are these days??! It’s insane!

But overall, yeah – anything that tips your hands in negotiations is great, and if you have the cash to back up that fast-talking mouth of yours then you go with your bad self. Not many things feel better than pulling off a good deal!

*****

And those are his 7 tips!

So let’s see here… Out of the 7 recommended it looks like I can confidently check off at least 3 of them, and then maybe partially 1 or 2 others.

So I’m going to give myself a solid 4 out of 7 here which means I’m definitely no Mark Cuban, but something tells me Mark Cuban isn’t Mark Cuban either ;)

No way he doesn’t use a credit card these days or leverage his millions of billions of dollars to strike deals… I’m sure he buys in bulk and lives like a college student at least in his mind, but obviously these tips are geared more for the general public than an entrepreneurial rock star like himself.

Still, a fun checklist to go down and always good to at least *consciously* be choosing to take one path or the other than living financially oblivious! So see how many you can check off too, and then share below so we can compare!

Your financially conscious friend,

PS: For more insight from Mr. Cuban, here are his thoughts on How To Get Rich

*****

Photo by TechCrunch / Doodles by J$

[This post, 7 Money Tips From Mark Cuban, was first published by J. Money on Elite Edge Money]

Let’s be honest, ANY paycheck is a good paycheck…

But sometimes, an extra special payday rolls around and the money makes you feel absolutely on top of the world! It’s not about the size of the check but rather *how and when* the money is received that makes it stand out.

Here’s a countdown of the best 9 paychecks in the world, ranked by how awesome they make you feel… 

9. Payday when you are on vacation

You’re sitting there, poolside, sipping on a pina colada… as you reach down to grab your cell phone, a message pops up on your banking app: “Cha-ching! You just got PAID!” You’d forgotten all about what day it was because you were too busy relaxing on vacation.

The feeling of getting paid while doing nothing on vacation is awesome (even though you know in the back of your head that you busted your ass to earn time off and that paycheck) because it’s a glimpse into what future financial independence feels like!

8. Payday falling on your birthday

It’s always fun when it’s Friday, your birthday, AND payday all at the same time. Three separate celebrations, all coming together on one glorious day!

(What are the chances of having a payday on your actual birthday?   I thought the answer would be about 1 in every 14 years… But after researching a bit more, this is actually a really complex problem to solve given the weirdness of a perpetual calendar and the doomsday rule. Any math nerds out there care to figure this problem out?)

7. A random cash bonus (or tip!)

One of my old bosses stopped by my cubicle on a random Friday afternoon. He pulled out a crisp $100 bill from his pocket, placed it on my desk and said, “Thanks for all your hard work this week, Joel. Why don’t you knock off early and take your girlfriend out for a nice dinner.” I’ll never forget how appreciated I felt that day.

Teacher appreciation cash, thank you gift cards, large tips in the service industry… Random acts of kindness combined with cash = A GREAT DAY!

(Not to mention when you get a CASH gift – usually you don’t pay any taxes. Double bonus!)

6. The paycheck you forget about

You know when you do contract work for someone, or maybe you lend money to a friend that’s hard to collect on… After chasing payment for a few months, you kind of write off the money and put the whole experience out of your mind…

Then out of nowhere one day, a check shows up! You think to yourself, “Dang! I’d forgotten all about that!” What a great feeling that all is right in the world again.

5. First paycheck from a new side hustle

Whether it’s making your first $1 online or picking up a new side gig to increase savings, getting that first initial paycheck is such an empowering feeling.

No matter the size, first paychecks are proof that your ideas and efforts are paying off. Hustling can be hard (which is why most people don’t do it!), so the rewards are truly well earned and they taste sweeter because you’re earning money on your own terms.

4. The biggest, baddest paycheck you’ve ever received

I know I said size didn’t matter, but in this case it does. Massive paychecks are memorable moments!

I remember the first massive commission check I ever made. It was like $30k, paid in a lump sum after finally bringing in a huge new client for my company. The sale took ~18 months, countless client meetings and problems to solve, but all my effort was worth it in the end.

Selling a house, your business, or another big investment has the same big paycheck feeling. When the money hits your account, you have to do a double-take because the balance is so unusually high… What a great feeling! (Until you “spend” the money a few days later by moving it into your brokerage account. )

3. First rent check from a rental property

Buying a rental property takes a TON of time and effort. Not to mention a pretty hefty down payment saved up from years of hard work.

There’s a lot to be excited about when real estate investing, but there’s no better feeling than the day your first incoming rent check hits your bank account. Ideally, tenants are paying down your mortgage, as well as giving you some excess cash flow for the month. It’s time to celebrate!

2. Your final debt payment!

Being in debt means a portion of everything you earn is going to someone else. Credit cards, auto loans, student loans, etc. all have interest payments that can hold you back and make you feel trapped.

Well, when that last paycheck rolls in and it’s applied to your final debt payment, the freedom feeling is euphoric. It makes you want to SCREAM with joy. In fact, Dave Ramsey built an entire show about having people share their feelings and give a debt free scream!

Congrats to all of you who have achieved and felt this. Truly, you are amazing.

1. Any PASSIVE paychecks after achieving FIRE

And the No. 1 best paycheck you can receive is ANY and ALL paychecks that come to you passively, fully covering your cost of living.

The road to financial independence is loooooong. It requires hard work, sacrifice, and consistency. But all that hard work pays off when you’ve built enough investments to provide a passive income stream for the rest of your life. At that point, you never have to work for money again — if you don’t want to.

What did I miss? Any of you guys celebrating any of these right now!!?!?!

Have a great weekend, y’all!

Love, Joel

[This post, The 9 Best Paychecks in the World 🏆, was first published by 5am Joel on Elite Edge Money]

Woot woot! Exciting news…

The winners have been announced for this year’s 401(k) Champion® Awards, and 1 of the 3 winners is from our community here! 

Congrats, Kiersten Peshek! You got $1000 coming your way!… Not a bad prize for just loving your 401(k) — and telling people about it.

Also… Massive shout-out to the contestants and runners up who entered the competition! A lot of people shared stories and essays with me which I loved reading… So I included both some winning essays and a couple other stories below for everyone to check out. (Someone sent me a “what *not* to do with your 401(k)” story which was a fun read too that I’ll include at the end. )

Winning Essay: “Get That FREE MONEY y’all!”

Here are Kiersten’s essay answers and how she encourages others to contribute to her company’s 401(k) plan at work…

If you were to advise co-workers about why they should contribute to (and/or maximize) their 401(k)s, what would you say? 

The big reasons I contribute to a 401(k) are the employer match (if available), the contribution limit, and the tax advantages.

If your employer offers a match for your retirement account this is a part of your compensation package. If you are not contributing enough to receive the full match (or not contributing at all) you are leaving money on the table that future you could use! On top of that, 401(k)s allow you to contribute up to $19,500 per year. That is significantly higher than the IRA contribution limit of $6,000 per year.

Finally, by contributing to a pre-tax 401k, you can reduce your current tax burden because those contributions are not included in your income. Or, by contributing to a Roth 401k, you can reduce your tax burden in retirement as the contributions and growth will come out tax-free. The choice is yours!

Ultimately, receiving the full match is step one. If you have an employer match of 4%, contribute 4% to your 401(k) so that your employer is contributing the full match. Get that FREE MONEY y’all!

Beyond that, it’s up to you and your financial situation on whether you want to go as far as maxing out the 401(k) or contributing to other investment vehicles such as IRAs or taxable brokerage accounts. My goal for 2022 is to max out my 401(k) for the first time and to continue to do so until I retire in about 15 years!

What actions have you taken to inspire non-participants to participate in the 401(k)?

At my previous job, I created a Personal Finance workshop for my co-workers discussing emergency funds, high yield savings accounts, the company 401(k), and what types of assets are available for investment. I presented this workshop to about 60 of my coworkers at different times over the course of two years and provided a copy in our wiki so folks could review it at any time.

One of the big points in my presentation was that our employer has a 401(k) that offers a 4% match if you contribute a minimum of 4% of your salary to the account. That match vested immediately (cha-ching!!) AND they offered what is known as “True Up”. The True Up feature looks at the previous full year of income, deferrals, and matching to determine if your 401(k) needs an additional employer contribution after the end of the year to make sure you get the full 4% match on your earnings. What a sweet way to support and even boost your retirement savings!

With goofy memes scattered throughout to get folks laughing and enjoying the content, I presented this information as simply as possible. At the end I offered to sit with my co-workers as they set up their 401(k)s so they could ask questions of me during the process. Several of my co-workers took me up on that offer. Plus, I had a few reach out to tell me they are now contributing to their 401(k)s when they weren’t before my presentation! It was and continues to be an incredible feeling knowing I was helping spread the good word about taking care of your personal finances and investing in the company 401(k) for retirement.

As an added bonus, I changed careers in May of this year and now, as an Associate Wealth Advisor, I spend much of my time advocating for 401(k)s (and other retirement savings vehicles) with my clients. I truly love helping folks save and invest to meet their retirement goals.

*****

“3 Irrefutable Truths” About Your 401(k)

Here’s a fun response I received from a reader, Randy H. 

If you were to advise co-workers about why they should contribute to (and/or maximize) their 401(k)’s, what would you say?

I work with a lot of younger colleagues, many of whom have recently graduated college and are just starting their careers. I’m at the other end of the spectrum, having worked for decades and am seeing retirement just over the horizon. I have the same pitch for everyone regardless of where they are in their careers. Take advantage of 3 irrefutable truths and contribute as much as possible to your 401k:

Truth #1: Compounding: Einstein called “compound interest” the greatest invention of the 20th century. Who am I to refute that? Your investments will grow and compound over time.

Truth #2: Taxes: You get tax breaks for donating to the 401k! You reduce your taxable income for every $ you contribute AND defer taxes on the gains and income earned on those donations until after you retire. Our plan also offers a Roth 401k option where you don’t get the tax deduction, but you do enjoy tax-free growth on all your contributions so when you retire, you won’t owe a dime in taxes when you need to tap it for that round-the-world cruise!

Truth#3: 2.5% Match: The company matches 50% of your contributions up to 2.5% of your annual salary. Even if you can’t afford to maximize your contributions, at least contribute enough to maximize your match. Don’t leave “free money” on the table!

Even if we didn’t have a company match, it doesn’t take a towering intellect to recognize a good deal when you see one. Put away as much as you can every month. Your future self will love you for it.

**Sadly, Randy didn’t win the 401(k) award this year. But here’s how he said he would have spent the money if he had won…

“I’d probably just put it in ye olde savings account or put $500 each toward our sons’ “matching Roth IRA contributions.” One is in college and another is a senior in high school. We’ve been matching their contributions to a Roth IRA since they’ve been working part-time jobs. Never hurts to start them off on a good foot early, eh?”

LOVE IT!!! Nice work, Randy! Get them kids hooked as early as possible!

*****

“Dollar-Cost Averaging Through The Good and The Bad Times!”

Olaf from Mile High Finance Guy was a finalist in the competition… Working at Fidelity, he knows 401(k)s like the back of his hand, encouraging everyone to invest consistently…

What actions have you taken to inspire non-participants to participate in the 401(k)?

At Fidelity, everyone I knew participated in the 401k plan. However, my job used to be working as an advisor for the 401k plans that Fidelity administered. I regularly interacted with participants who had never contributed to a 401k or wanted to lower their contributions. 

On every phone call, I made it my goal to encourage and push participants to receive the company match offered, so long as it wouldn’t lead to new debt. I talked countless individuals out of abandoning their contributions during the pandemic plunge that the stock market experienced last year and reiterated the importance of dollar-cost averaging through the good and the bad times.

**Olaf also wrote a nice post about what to do with your 401(k) after leaving your employer. Great resource for any of you switching jobs right now.**

*****

This last story comes from Laura G, who shares a great example of how borrowing from your 401(k) might seem like a good idea at the time, but can also completely backfire. A great warning for anyone with a big account thinking about dipping into the retirement account. Don’t do it!…

“A GIANT Caution to Anyone Thinking of Borrowing Against Your 401k”:

We are long since retired and no longer contribute or own a 401k, but I wanted to share with you our biggest regret regarding one.

Many years ago, when the kids were the right ages, we decided to install a built in gunite swimming pool. The initial cost was $39,000, but the county required a deck and fencing before signing off the final permits, bringing the total to $53,000 at the time. We had the option to do a cash out refinance on our first mortgage, or add a HELOC, or borrow against my husband’s 401k. After doing some research, I decided the 401k route made the most sense, since there were no fees at all beyond a $50 application, no waiting, and we would essentially be “paying ourselves back.”

Fast forward to the completed pool, spa and deck. All is well, until my husband’s division of the company he’d worked for for the last 15 years is sold to a third party vendor and rebranded. He got up everyday and went to the same place, performing the same function, for the same pay, but received a paycheck from a different entity. This action, which we never anticipated, triggered a “job change” acceleration of the 401k loan, and it all became due and payable. We wasted a lot of time trying to argue he hadn’t changed jobs, to no avail. We ended up with very little time and two options, get a loan to pay it off, or have the entire balance be considered a distribution and taxed accordingly. At the time, lenders were backed up weeks and weeks on cash out refinances, and neither a new first mortgage nor a HELOC would close before we owed the funds.

Long story short (somewhat), we couldn’t come up with the funds and ended up owing the IRS and the FTB thousands and thousands of dollars, since on the 61st day the entire amount borrowed was considered an early distribution. We were unable to pay, and both of us received notices our paychecks would be garnished. We ended up going back to the 401k, paying off the nearly $53,000 we still owed for the pool, $17,000 to the IRS in taxes and penalties, and $12,000 to the FTB, in addition to the taxes we had withheld from that early distribution to pay off the first one.

And that’s how our $53,000 pool ended up costing us over $100,000 in fees, penalties and taxes in addition to the original building costs, never mind lost opportunity costs.

A GIANT caution to anyone thinking of borrowing against your 401k: Sometimes the unthinkable actually happens; be prepared for the unimaginable. We are very fortunate in that this costly financial error didn’t derail our entire retirement, but it very well could have. We are reminded, on a daily basis, of how much more money we would have had, had we not made what is easily the biggest, most foolish financial mistake of our lives.

*****

Again, THANK YOU to everyone who participated in the 401k champion competition and I’ll let you know if/when it happens next year!

Cheers and have a great rest of the week!
– Joel

[This post, “If Your Employer Matches… Get That FREE MONEY Y’all!”, was first published by 5am Joel on Elite Edge Money]

Wow — there were a ton of responses to the recent letter to my wife post about estate planning if I were to suddenly die. I guess I’m not the only one feeling underprepared for that type of situation!

Researching this stuff a bit further, I wanted to share with you all what I’ve been learning. At the top of my list has been figuring out some type of formal will(s) for me and my wife. Surprisingly, it doesn’t seem as difficult as I expected.

**Also, because death is such a sad topic, I’m going to sporadically include pictures of Cooper as a puppy to lighten the mood. Everyone likes puppies, right!?**

This was taken the day we picked him up at the shelter in 2013. We lucked out big time finding this lil guy!

Defining All the Estate Planning Terms

First, here are some words that I had to google. You might know this stuff already but I thought I’d share anyway ‘cause I found it helpful!

• Probate: This is a legal process where a court decides how a deceased person’s estate is going to be administered. If there is a will, the court decides whether the will is valid. If there is no will, the court will follow intestacy laws.
• Intestacy (or “intestate”): For people who die without a will, each U.S. state has a set of laws that determine who inherits the assets. Usually this is heirs, relatives, descendants, etc., but it can get pretty complex if there are step-children, in-laws, undocumented partnerships and stuff like that. Many people get screwed by sucky state laws, so having a will is better!
• Last Will & Testament: This is a legal document with the wishes of the deceased person. It lists how they want their property to be divided, and also *who* they want to help manage the distribution.
• “Living” Will: This is different from a will for when you die… A living will is for when you are still alive but are incapacitated or can’t handle your affairs. It’s also called an Advanced Healthcare Directive.
• Executor: Person (or people) chosen to carry out the transfer of assets. If there is a will, the executor is usually named already and they follow whatever the will says. If there is no will, the court appoints an executor (usually a relative), and they have to follow whatever the court deems is the correct transfer for the assets.
• Beneficiary: This is the person who will receive the benefit of stuff. They can be named inside the will, a trust, or with financial institutions directly designated within an account.
• Trust: This is kind of like a will, but it’s a more custom and hardcore legal document to pass assets between people. Having a trust can bypass probate, keep transfers private, and can have tax deferral/avoidance measures. **Note** A trust cannot decide who will be the guardian of children; only a will can name guardians for kids. Check out more will vs. trust stuff here.
• More estate glossary terms here

FYI: Many people choose to have *both* a will and a trust. Even though there’s a lot of overlap, one can provide a back-up for the other if something’s not executed properly.

Me and Coops, almost 9 years ago!

How to Avoid Probate

If possible, I’d like my wife to avoid probate court because it seems expensive and time-consuming. There are a couple of ways I can help do this:

1. Listing beneficiaries directly at financial institutions: If I can pass assets directly to my wife legally through bank accounts, retirement accounts, etc., then she can take ownership without going through probate court. (I’ve already done this for our checking, savings accounts and retirement accounts.)
2. Having joint ownership for assets and properties: For our duplex, other rentals and joint brokerage account, my wife is already a co-owner. Owning assets jointly means if one of us dies, the other survivor takes ownership and in most cases doesn’t have to go through probate.
3. Getting a living trust: Having a trust can avoid probate… But, ALL assets need to be transferred into the name of the trust for this to be applicable. This seems like a real pain in the ass to do, and might be more applicable if we had kids.

All in all, I think the majority of our assets — and certainly the most valuable ones — are going to be easy to transfer without probate if one of us dies. I’m feeling MUCH BETTER knowing all this stuff.

**If you haven’t done this already, add it to your to-do list ASAP… Go through ALL your accounts/assets and call the bank/broker/county to make sure your designated beneficiaries are up to date. Only takes a few minutes, and could save a HUGE amount of time for your loved one if you die.**

Cooper and I took photos like this every couple weeks, but soon enough he couldn’t even fit on my lap anymore. :)

Writing a Will

My wife and I have already thought through the scenario if one of us dies, but what will happen if BOTH of us die at the same time? Weird to think about, but this is actually a very possible scenario being that we travel together and do almost everything together.

Having a basic will and testament would help whoever cleans up our financial mess and inherits our stuff. I certainly don’t want to leave it up to the government to decide!

The good news is, writing a will doesn’t seem as hard or as scary as I thought it’d be. In fact, we could even write one ourselves pretty easily.

I found this article helpful: Should you write your own will?  And also this list of basic will requirements per state. 

In California, the basic requirements for having a legal will are:

a) be 18 or older

b) not be drunk/on drugs when it’s written

c) signed by a couple of witnesses

Although we could do it ourselves, given the size of our estate, it’s prolly a good idea to have some professional help. Also, it seems that estate planning software covers a handful of other scenarios if disaster strikes.

LegalZoom is one I’ve been looking into. For their basic bundle it looks like I can get:

• Last will and testament – for me
• Last will and testament – for wife
• Power of attorney – for me
• Power of attorney – for wife
• Living will – for me
• Living will – for wife

Bundle price for all these: $279

What I like about using professional software to prepare documents is they use all of the state-specific requirements and ask the right questions to produce a complete will. My biggest fear is that in a probate situation they might determine that a will is not valid, in which case I’ll have done all this work for nothing. So having professional help is nice.

As for a trust, I don’t think my wife and I really need one at this point. This might change as our family grows, but for now we’ll just start with getting basic wills.

Read this if you’re wondering if you should set up a trust.

Figuring out how mirrors work ;)

You’ll Need to Have Hard Conversations About Inheritance

Welp, here comes the hard part for us.

I was just about to start the LegalZoom process, but then it hit me… My wife and I still need to talk about who the heck inherits our mess if we die!

And this — I think — is the hardest part of anyone’s planning process. Filling out forms is easy. But actually sitting down and having tough conversations is what most people avoid.

Since my wife is still touchy and crying about the last letter I wrote, I’ll need to figure out a way to make this as unemotional and easy as possible. More to come on this!

Any of you done this already and have any tips?

Stay safe out there my friends,

Love, Joel

Byyyyyyeeeee!

[This post, All About Wills and Estate Planning in Plain English, was first published by 5am Joel on Elite Edge Money]

I was thinking the other day that although my wife and I make all of our financial decisions together, I am usually the one pulling the trigger and moving the money around. I like to read boring terms and conditions, geek out on all our tax stuff, deal with real estate, etc. 

I have a passion for personal finance, which helps! She does not — and I don’t blame her as most people find this shit boring.

Anyway, this morbid thought came to mind … If I die before we’re financially independent, my wife might have a hard time converting our “couples FIRE plan” into a “single person’s FIRE plan.”

Thinking about death isn’t fun, and planning for it is even worse. But hey, we all die someday. And with the increased shark sightings at my local surf spot recently, maybe I’ll be gone sooner rather than later. Bad joke — sorry.

Until now, I haven’t done much estate planning. Since we don’t have kids yet and no big debts, I’ve kind of just assumed that when I die, my wife would be fine financially. She’s certainly capable of figuring stuff out on her own (10x my smarts). But because our portfolio landscape is a little messy right now (various real estate investments, random bank/credit card churning, multiple retirement accounts, etc.), maybe it’s time I start documenting some of this stuff and coming up with a formal plan that would help her.

So, I started writing down some changes my wife would want to make to streamline our (her) finances when I am no longer in the picture. Our overall FI strategy wouldn’t change that much (Coast FI), but having some written plans is never a bad idea — especially for someone dealing with grief of a lost loved one.

Below is a draft letter, which is just a starting-off point. This coming year I’m going to prioritize more official estate plans, including a will, proper records, and all that grow-up stuff I should have started years ago.

***BTW… As I was researching some of this estate planning stuff, I came across 2 much more thorough articles you might want to check out. Checklist for when a spouse dies and Write this letter to your family before you’re gone.***

Things to Do With Our Money If I Die

“Dear beautiful wife,

So sorry I broke my promise to live until we’re both 100… And I’m even more sorry about the financial shitshow I’m leaving behind! Hopefully, this letter will help you clean up the mess, simplify our stuff, and help you create a new/clean plan moving forward.

Things to Do Immediately

Nothing! Honestly, there’s nothing you need to worry about within the first few weeks of my death.

• You have enough cash in our checking accounts to live for a few months.
• Your name is on ALL our cash accounts as a joint owner.
• ALL our credit cards are on auto-pay.
• ALL our bills and utilities are on auto-pay.
• ALL our properties and syndications are cash flow positive with rent auto-deposited into our accounts.

So don’t freak out or worry about money right away. Nothing needs to be handled urgently.

Things to Do Within ~1 Month

Before you can do anything with our (your) accounts, you’ll probably need to show the bank/brokerage/etc some paperwork, like official copies of my death certificate and our marriage certificate. A copy of our marriage certificate is with this letter! But you’ll have to order my death certificate from the city or county. Order a few of them. You might be surprised how often you have to give someone this document.

To start taking action, contact the Social Security Admin office and report my death. You can do this over the phone (1-800-772-1213) or in person at an office.

• If we have a child, you are eligible for monthly survivor benefits of $2,132 per month starting right now, until the kid is 16! Also, the child gets $2,132 per month. So in total, you’ll receive $4,264 per month. 
• If we don’t have children, you’ll only get survivor benefits when you reach retirement age. ~It’s like $2,843 per month starting when you’re 67.

Next, (this is optional, totally up to you) withdraw $20k – $50k in cash from our taxable brokerage account (TD). You will need to sell some stock to do this — just call the TD Ameritrade number and they will walk you through it. Transfer this cash into our checking account.

Use this cash to:

• Cover funeral costs (Don’t do anything fancy – just throw a massive party and invite all our friends! Maybe fly my fam out from Australia?)
• Take time off work, as much as you need. 6 months, 1 year, or longer, it’s up to you.
• This cash will cover living expenses (auto-pays the credit cards)

Please don’t feel bad for taking time off work and spending our money. Spending $50k only puts a tiny dent in our overall net worth and won’t majorly derail any of your early retirement plans.

Things to Do Within 1 – 3 Months

Log into our Mint.com account, and you’ll see a list of all our assets, accounts, credit cards, etc. These are also all listed in our Net Worth spreadsheet. Here is what to do with each of them:

Checking Accounts: Since you are listed as the primary beneficiary on all my accounts (100%), you don’t need to go through the probate process. Just call the bank directly and change them into your name. For any old account with a $0 balance, just close the account completely. You probably only need 1 main checking account going forward.

Credit Cards: Sorry we have so many, you really only need 1 going forward! Contact all of the banks and credit card companies and cancel the cards in my name with a $0 balance. These are old and no longer needed. You just need 1 main CC going forward → whatever one you decide, just make sure bills are auto-paid from the main checking account each month.

Investment Accounts: Again, for the ones in my name, you are listed as the primary beneficiary (100%). You can deal with the banks/brokers directly to change the names without going through probate.

Joint brokerage: Change this into your sole name. Should be easy-peasy.

My IRA: They will convert this into an “inherited IRA.” Don’t touch this account, just let it grow until the year 2045. (That’s when I would have turned 60). There will be about ~$1M in this account by then. You’ll be taxed when you withdraw this later in life, so do it in small amounts annually as needed.

Roth: As my spouse (and listed primary beneficiary) you can just change this account into your name, and it will be treated as if it was yours all along! (Ideally, try to consolidate my Roth with your existing Roth!) This is called a “Spousal Transfer”. Remember, Roths grow tax-free so leave the assets in this account alone as long as possible.

HSA: Same as the Roth → do a “Spousal Transfer” and this now becomes your HSA account. Let it grow tax free as long as you can for future medical costs.

Gift accounts for nephews: This money technically isn’t ours, it’s owned by our nephews. But since they are still minors, an adult custodian must be assigned (me currently). My advice would be to change the custodian to the kids’ parents → get the management off your plate.

Physical Rentals: Contact xxxx at xxxx management company and she’ll help you transfer the titles into your name. Since we have joint ownership, when I die, the ownership should revert to you as the sole survivor.

Syndications: The full list of contacts is *here.* Notify everyone and ask them how to change the ownership into your name. The private partnership agreements make this pretty easy and your name is listed on most of the shares anyway.

Things to Do Within 3 Months – 1 Year

Set an appointment with our tax guy, xxxxxx. Tell him everything that’s going on, the changes you’re making with our assets and ask him what forms to save and collect. He’ll help file your taxes.

List and sell all the physical rental properties. Xxxxx will help you do this! Put all the sale proceeds into our TD brokerage account. Invest everything in VTI, just like all the other money in there. (This is optional, of course. But I think you’ll be much better off owning no physical real estate.)

Figure out the DMV process to put the Prius in your name. Here’s a list of forms and paperwork you might need for that.

Contact my retirement broker in Australia. I have about $30k down there in a retirement account and you are the non-contingent beneficiary. I believe you are able to “withdraw” these funds as a lump sum, being that you are not an Australian citizen. My parents can help you research and figure out that crap. If you’re able to get the funds out, move the money to the U.S., stick it in your brokerage and buy VTI.

Things to Do Between Years 1 – 5

I’ve got some good news and bad news…

The bad news is, we are not financially independent yet. So you’ll have to continue working at some point, and growing our (your) retirement nest egg.

The good news is, you have a 1M+ net worth, which gives you considerable momentum! If you can cover your basic living expenses and leave all the investment accounts untouched, you will probably retire before your 45th birthday! We’ve been on this train for a while already — Coast FI baby!!

Some things to help you out…

Take a year to figure out your *new* approximate annual spending (without me in the picture). Continue to use Mint.com to track expenses and spending trends.

Keep using our budget template in *google docs* to make sure you’re on track each year.

If you overspend a little within a year, no problem! It will just take you a tiny bit longer to reach FI. A $10-15k variance isn’t a huge deal at this point. Don’t stress.

If you underspend a little within a year, that’s great, too! Keep putting all excess savings into the brokerage account and buying VTI.

Track your net worth every few months to make sure things are trending upward. If the market crashes or has dips, don’t freak out. Just leave everything untouched and let it rebound.

Once your net worth reaches 25 – 30x your annual spending, you’ve reached FI and can do whatever you want for the rest of your life!

You know most of this already, but I wanted to write it down anyway. It really is this simple, and you can do it.

My Wishes for the Rest of Your Life

You get to design your own life after I die. So don’t feel compelled to follow any of the plans or advice that I give.

That being said, I hope you find and pursue work that you truly enjoy and are passionate about. I know teaching is an underappreciated and underpaid profession, but you have a gift and I encourage you to continue sharing that with the world.

I hope you spend and enjoy all of our money. Please don’t feel bad about treating yourself, living comfortably, and giving as much as you can to others.

Love you so much,

Joel

PS: If and when you are ready to start dating again, there’s a dating app — FireDating.Me — where you might be able to find another personal finance nerd to date! Just don’t get remarried before you turn 60, or else you’ll forfeit my Social Security survivor benefits! (Actually, never mind, you’ll be FI long before then anyway and won’t need that money.)

*****

Well, there you have it. That’s my starting point and I’ll build from here.

Now if you’ll excuse me, I’m off to go cry my eyes out and hug my wifey for 100 hours.

Cheers!

– Joel

Any of you readers created a letter like this with a financial roadmap for your spouse or heirs? Care to share some stuff that you included — and perhaps things I’ve missed in mine?

[This post, Dear Wife, Here’s How to FIRE If I Die Early, was first published by 5am Joel on Elite Edge Money]

Hey there, happy people! How’re we all doing this morning?

This year is FLYING by. I just stumbled across a list of money goals I wrote down at the start of the year (I say “stumbled across” because I literally found them buried within a stack of messy papers on my desk — the WORST place to keep your goal list!). 

Anyway, despite my horrible organization skills, I’ve somehow managed to complete 6 ½ out of the 9 goals I wrote for 2021. Woohoo! Also, I’ve added a couple more cool things to my project list this year.

So, I’m doing a review/revise/reset of the goal list to finish out the remaining 3-4 months of this year…

***BTW — Although progress feels great, I can’t help but also feel a little wimpy for not setting loftier goals. The fact that I ticked off — and exceeded — most of my goals without even trying hard means perhaps I should strive for harder goals in the future. Maybe try some stuff that I know I will likely fail at? Perhaps some things that scare the shit out of me?… I could end up surprising myself.***

Here’s My Original Goal List for 2021

Some of these are money-related, some are more work/life stuff…

1) Fund Roth accounts   Wife and I added $6k to each of our Roth IRAs in January.

2) Max out available 401k   Before my 401k got discontinued in March, I did 100% salary contributions which was ~$10k.

3) Sell a rental property   We actually sold 2 so far! (and have a 3rd listed rn!)

4) Build a donation machine   Sad to say, I’ve made zero steps towards setting up a donor advised fund. More on this another time.

5) Continue the foster/adopt process   As of May this year, my wife and I are fully approved resource parents for LA County DFS! We are in the looooong process now of being matched with kids.

6) Digital nomad-ing   I’m trying to get better at working while traveling (not as easy or fun as it looks btw, albeit a very handy skill to build). I’ve taken trips to HI, NV, UT, WY, MT and Oaxaca, MX this year without missing a single work deadline.

7) Make $1k selling junk online   Even though I’ve made ~$9k in side hustles this year, only $549 has come from online selling. Gotta step up my Craigslist game to meet my 1k goal!

8) Be a guest on 3 podcasts   Crushed this one – I think I’m up to 7 guest recordings this year! (Latest one was Road To Wealth podcast, where we talk about pros/cons of FIRE as a Sales Rep)

9) Create a free beginners writing course   I’ve got a basic outline for this but it’s more of a short presentation rather than a course of sorts. I’m also working on a 90 day writing challenge outline, but it’s not finished yet due to … procrastination.

Soooo… I’ll still be kicking away at these remaining ones. And in addition, I have a few projects I want to add this year.

Adding a Few More Goals for This Year

Here are a few things I’m working on or want to tackle before year end:

1) Create a Solo *Roth* 401k (and max it out!): I’ve actually started the paperwork process with TD Ameritrade for this… My main goal is to get more after-tax money into my Roth IRA. Since I’m getting paid as an independent contractor right now, I’m eligible to set up and administer my own 401k plan. The reason I’m interested in Roth contributions (vs. regular 401k) is because my wife and I are in a low income tax bracket this year and it doesn’t make a lot of sense to defer taxes. Also, with the sale of our rental properties, we have a lot of after-tax cash we can use for living expenses while we siphon our income into a 401k. More to come on this!

2) Investing our emergency fund: As of this writing, I’ve dumped $20k from our emergency cash into a total stock market index fund. (If you missed it, check out this post on dropping our emergency fund down to $0.00). We still have ~$10k in cash reserves to cover some cashflow logistics, but now that my wife is back earning regular income we could drop our account balance even lower. Also, we have a large separate emergency fund for our rental property I need to figure out what to do with.

3) Replace roof on our rental duplex: I’ve purposely delayed this replacement because we wanted to wait until hail season was over in Texas. But, now we are approaching hurricane season so maybe this will become a December project. Insurance is paying for this roof replacement so will only cost my deductible, which is ~$2,300.

4) Sell 2 x more rental properties: My partners and I are pretty set on getting rid of our remaining joint rental properties. And since the real estate market is doing crazy things right now in favor of sellers, we’re gonna fast track our selling plans. I’m not really looking forward to the selling process and negotiations, but am very excited to get rid of the ongoing management long term!

5) Build Kegerator 2.0!: Sad news, my kegerator died a few weeks ago. RIP Jeffrey. 

The fridge electronics blew out — probably because kitchen appliances aren’t meant to sit outside in extreme temperatures year round with beer being poured all over them. Anyway, now I have to figure out how to design and rebuild a new beer fridge without spending too much money (I still think brewing beer is cheaper than buying in the long run – and definitely cheaper for cider/seltzer drinks). 

So… That’s everything I’m up to between now and end of year. What do you guys have going on? How are your 2021 goals going?

Cheerio!

Joel

[This post, 2021 Money Goals: Mid-Year Review/Revise/Remove!, was first published by 5am Joel on Elite Edge Money]