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Why Cars Often Delay Financial Independence

life hacking Jul 18, 2024

I drive a 2012 Toyota Tundra with 140,000 miles on the motor and I love it!

I sent my Dad a video the other day of a Toyota Tundra that made it to 999,999 miles on the odometer before the owner finally decided to get a new one. I told him that was my goal too!

These Toyotas can go forever!

My previous car was a Toyota Camry. And before that, I had a Toyota 4Runner.

All bought used, with cash, with quite a few miles already on them.

Only reason I didn’t drive them forever is because someone hit me in the 4Runner and totaled it & we sold the Camry so my daughter would have a larger car to drive for her first car.

I learned early on in our financial journey that cars are a terrible investment & can crush all of your financial dreams if you buy them the wrong way. LOL!

Dave Ramsey has joked that driving cars, especially new cars, is like driving around with your window rolled down & throwing hundred dollars bills out of it.

And, while most people probably know cars...

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Why I Like Vanguard

life hacking Jun 13, 2024

Vanguard is the largest provider of mutual funds in the world.

And their index funds are world-renowned.

In fact, it’s commonly said that the first index funds available to individual investors were created by the founder & former chairman of Vanguard, John Bogle.

His followers, who are avid index fund investors, are often called Bogleheads.

Warren Buffett has famously said that upon his passing, his wife would do well to be invested primarily in an S&P index fund at Vanguard.

Since I was a teenager, I remember my Dad recommending to me that I invest in index funds at Vanguard.

Me and my wife both have personal IRAs at Vanguard along with our taxable brokerage account.

We’ve invested there for years.

Vanguard is unique in that it is owned by the mutual funds it manages, and therefore owned by its customers.

That’s likely why Vanguard has some of the lowest fees in the industry. And fees can eat up your returns in a hurry.

One of their most famous index...

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Two Great Books on Financial Independence

life hacking May 17, 2024

Most people I talk to are interested in financial independence.

And most of them would like to be financially independent before retirement age.

They just wonder if that’s even possible.

Financial Independence (FI) is simply where your investments will cover your living expenses in perpetuity.

JL Collins is one of the bloggers who first started writing about FI.

His Stock Series became so popular that he eventually turned it into a book, along with other financial principles that have contributed to his financial independence.

This is a book I often recommend to people as a good place to start in learning about FI.

It’s called The Simple Path to Wealth (JL Collins).

This book helps to simplify the process of becoming financially independent.

Late last year he released another book with 100 stories of people who have gone on a similar FI journey.

I just finished it, and thought it was great, so I wanted to recommend it to you as well.

It’s called Pathfinders...

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Retirement Account Investing Order

life hacking Mar 22, 2024

In what order should you invest your retirement savings? Which account should you max out first, then second, and so on? I’ll share with you my opinion and process.

Here’s a quick guide:

  1. Employer’s Match - if your employer matches your retirement contributions up to a certain amount, invest at least enough to meet the match. This is free money. Make sure you take it.
  1. Health Savings Account (HSA) - if you’re on a high deductible insurance plan, you may have an HSA plan option. Max this out next. You can contribute tax free, it grows tax free, and you can pull it out tax free for medical expenses (a triple dip). You can invest up to $8,300 in 2024 for families.
  1. Roth IRAs - both you and your spouse can contribute $7,000 in 2024 for a total of $14,000. You can use a Traditional IRA if you are above the income limit for a Roth.
  1. Max Out Employer’s Plan Above the Match - for 2024 this could be up to $23,000 per person.
  1. Taxable Brokerage Account -...
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Building Your E-Mail List

life hacking Mar 14, 2024

One of the first steps in starting an online business is to build an e-mail list of prospective customers that you can serve.

Perhaps the best way to build this list is to create a lead magnet that you give out for free in exchange for an e-mail address.

A lead magnet could be:

  • A PDF Guide
  • An eBook
  • A short course

Or anything you can give away for free that helps your audience accomplish some goal.

For me, I offer 3 free PDF guides on the following topics:

  1. Make $1,200 Quickly Guide
  1. Free Hawaii Trip Guide
  1. Earn Extra $10k Guide

These cater to my audience of pastors, missionaries and Christian leaders wanting to earn extra income in their spare time.

Another way to capture e-mail addresses is by starting a newsletter to offer weekly valuable content to your subscribers.

Once you have your lead magnet and/or a newsletter, you can start encouraging people to grab one of your guides or subscribe to your weekly newsletter.

This will begin to build your e-mail list. And...

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A Great Resource for Pursuing F.I.R.E.

life hacking Feb 23, 2024

I’ve written several newsletters about pursuing F.I.R.E. (financial independence, retire early).

Today I wanted to share a resource that I’ve found especially helpful on the journey.

It’s a website called Early Retirement Now: https://earlyretirementnow.com

This is a technical blog written by Karsten Jeske, a PhD in Economics with a CFA (chartered financial analyst) certification.

He writes about his own story of achieving financial independence and gives a ton of helpful wisdom for those of us on a similar journey.

He talks about topics such as:

  • How much you need to invest to become FI (financially independent)
  • What the safe withdrawal rate is for your portfolio once you hit FI
  • Ways to invest your emergency fund
  • Preferred allocations of your investments to achieve your FI goals

He also has a really helpful calculator to determine how close you are to reaching FI.

You can find it here: https://earlyretirementnow.com/safe-withdrawal-rate-series/

I’ve...

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Should You Invest 15% Into Retirement Accounts?

life hacking Feb 02, 2024

Investing 15% of your income into retirement accounts is Dave Ramsey’s Baby Step 4.

Is that a Baby Step worth following?

Absolutely, but with a caveat!

I think the percentage is too low.

Really?

Yep, here’s why.

Let’s assume you are in your early 40s like me (some of these variables will change with your age).

Average net worth of someone in their early 40s is: $549,600

Now, don’t panic if you’re my age or older and you’re not there. Some say median net worth is a more accurate estimate than the average (likely due to some people who are worth tens of millions or more at that age).

Median net worth of someone in their early 40s is: $135,600

Median household income: $74,580

Plugging in the median net worth & income at networthify.com with a 15% savings rate, you’ll be financially free (able to live on your investments) in 33.1 years, or when you’re in your mid 70s.

Is that what you’re hoping for? I would guess not.

...

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Treat Making Money As a Hobby

life hacking Oct 27, 2023

I once heard an investor say this & it has stuck with me ever since.

Treat making money as a hobby.”

For most of us, we don’t think about making money this way.

A hobby implies you do it on the side for fun. That it’s not your main gig.

But, for most of us, making money is a full-time job or a business that we work in full-time.

Of course, there’s nothing wrong with that.

But how great would it be if you made all the money you needed as a hobby and you could spend most of your time doing whatever the Lord led you to do?

Some pastors have told me that they’d probably be in a different ministry position if it wasn’t for the money. And they mean this in the most sincere way possible. Not that they’re in their current position for the money, just that what they have a vision for doing doesn’t pay much or anything at all. As a result, they feel they can’t pursue that passion yet, because they need more money than it can...

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How to Pay Back Your Student Loans Quickly

life hacking Oct 13, 2023

A few weeks ago, student loan payments resumed after a significant pause due to the pandemic.

I’m constantly amazed by how much student loan debt is out there.

Even people who didn’t do masters or doctoral work can have tens of thousands, even hundreds of thousands, of student loan debt.

And I know it is suffocating so many people.

If you have student loan debt, I want to help you get it paid off ASAP. For many of you, it’s hung around way too long.

While paying off a little at time will eventually get you there (after years & years), putting huge chunks of cash on it will certainly get you there much quicker.

Where can you get huge chunks of cash?

You may be able to guess my answer.

Real estate.

In real estate, you are paid for value delivered, not for time spent. As a result, you can generate significant chunks of cash without spending the time you’d have to spend working overtime or at an hourly side gig.

There’s multiple ways to do this.

...

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Why You Should Own a Business

life hacking Sep 15, 2023

Do you own a business?

I’d guess that most pastors, missionaries, and Christian leaders do not.

I’d like to give you 10 reasons why I think you should consider it.

  1. A business can add an additional stream of income. I’ve talked extensively in these newsletters about the importance of having multiple streams of income. I advocate having enough streams of income that if one dries up, the others can cover your basic expenses.
  2. A business can protect you if you lose your job. Jobs are not guaranteed. Most of us in ministry know this first-hand. Your church/ministry/organization may have the funds to pay you now, but they may not be able to pay you 6 months from now. Many church leaders learned this during the pandemic. Having a business allows you to be in control of at least one of your sources of income.
  3. A business can give you great flexibility. This is ideal for those of us in ministry. You can come & go as you please. And you can make extra money on the side in...
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