Tunnel Vision Approach
Whatever you vividly imagine, you can achieve! Set your intentions today to accomplish a lofty goal of saving, no matter how much debt at the start of your unique financial equation. Acknowledge the road is tough, dedicate yourself now to mastery of your goal.
You First
Your mindset will change dramatically as you acquire drive and ambition to accomplish the goal to get rid of debt. Acknowledge monies required in an emergency fund; one full year of funds to equal what it costs to pay your bills for a year. Tragedies do happen, be ready, prepared, understand that when a tragedy arises, the last thing you want to think about is “oh no, there is no resources to allow yourself to grieve, to take time, to pay bills, to cover expenses, to care for yourself, for health, to travel somewhere necessary when the time comes”. Once you get accustomed to this mindset, believe me things get easier.
Cut, Cut, Cut
Line item by line item, no matter how tedious, look at each thing you spend each and every day. It was not until I started at square one, looking at each bill that could I get to the bottom of spending. For each and every dollar spent, review is this as a necessary line item in your budget, can it be eliminated without major disruption to your lifestyle. How can you accommodate for change that will happen without this expense, benefits?
The first things slashed, daily latte run, ordering out at work and a very expensive gym membership at a resort. Crazy, who would imagine my life would have gotten to the point I would deprive myself literally of long term savings and emergency money for fleeting pleasures at the risk of long term happiness and freedom to pay Starbucks $100 or more each week for lattes, to get Indian food $100 each week, and to work out paying a membership fee of $450 each month not to consider the initiation fee. So far, that totals $1250 of spending cuts, now for the wake up call, keep the internal competition going!!!
Sink or Swim- Budget for Life
Utilize software to keep your budget stimulating; Personal Capital and Mint are resources. Even though my expenses are directly funneled through my debit account, I was reluctant at first to see the big picture. I hemmed and hawed avoiding numbers not wanting to see school debt, subscription debt, purchase debt. Reward yourself for taking the debt in, analyze spending, dedicate yourself to the change required to move from here to financial recovery. There are countless before you and I who are accomplishing the goal of financial independence. Reward yourself in fun ways, exercise, walk, hike!
Automate The Process
Automate 20% movement of your money from your pay check deposited directly into a long term 403B account. 403B money cannot be touched until retirement at a time when your earnings and therefore your tax levied upon withdrawal is lower than today. Understand fully what you are investing in, the 403B is a basket, know where the money is going each month, what are the monthly gains, what are the stocks that comprise each fund rather than blindly taking money from yourself into the abis.
Automate another 20% of your available funds to enrich a pay off account. This account is best automated with after tax dollars for ultimate flexibility to move monies in and out of the fund without penalty of paying off bills in large chunks without any consequence of a tax consequence. The goal here is to look at the interest rate charged on loans and start reducing the amount owed and therefore the long term interest rates accumulated when you take out such debt.
The remaining 60% is divided dedicating 40% to your existing bills. For example, for someone who earns $1000000 annually hypothetically, $20000 annually should go to 403B, $20000 should go to long term debt, of the remaining $60000, $40000 should pay off bills annually and the remaining $20000 annually should go to an IRA and or an Emergency Fund.
Create a Side Hustle
The side hustle, “fun money” dedicated to additionally paying down massive debt or money not otherwise available in your budget for improvements, self interests and fun. There is nothing wrong with an occasional night out with friends or family. Alternatively this becomes the additional money to pay down debt. You can become your own self made entrepreneur in this space. Many do amazingly well with an Air BNB account, renting out a room, driving for Uber, creating a Udemy Course. The sky is the limit!
Investing and Compound Savings
Caution, Caution, Caution, Caution, Knowledge is Power! First obtain strong and sound and fundamental education about the markets, choose to trust someone to teach and mentor understanding about individual stock selection, acknowledge there is fluxuation in the markets, there are no guarantees to an investment horizon, acknowledge the long term effort to your roadmap involves some degree of volatility on a continual basis, this is the nature of a healthy and dynamic stock market. Become empowered starting now.
Though Blue Chip Stocks are understood to have less risk than their internet counterpart, there is no steadfast rule that one group of stocks is safer than any other group of stocks. Best way to find and invest in stocks is to study the Business, understand the fundamentals of the company, is it sound, are there earnings, is the vision for the company long term? Prior to investing one must carefully digest each company’s fundamentals and not be drawn to trends or fads. Take the time to understand all of this and your portfolio may be less likely to fluxuate however at any given time the market may fool all of us! Beware, be careful, be knowledgeable.
Money Consciousness
Your goals are based on your time horizon, your goals, risk tolerance, life expectations. Before you learn to invest in the markets, purchase your first home or make any commitment with lasting and long term consequences, make certain you start with a money consciousness transcending all you will do. This is a multiple step process involving learning about money, learning about savings strategies, learning and gaining insight about you, your family and how money was cared for growing up. Then trust in yourself and mentors around you who pave the way to empowered growth.
Sponge Effect
Gain insight from the books you read about investing, not only the patterns and styles of investing also the individuals who invested and how they profited during their tenure as investors in the marketplace both in the stock market, real estate and investing in themselves and their ability to become the controling factor of their personal and long term success- self made entrepreneur. Start a money diary, meet with like individuals.
Learn from great of the greats, Market Wizards, Warren Buffett, George Soros including business moguls Steve Jobs, Oprah Winfrey and Karl Icon. Tesla did not just become a great company nor did Apple. It took dedication, determination and mind set to lead the way to greatness. Then it took dedicated action period. Understand Investment strategies, savings strategies, trading mentality. Be humble, patient and focus on the long term. This is a life commitment to grow savvy and smart long term. I call it the “tunnel vision approach.
The platforms available to you are diverse including among the many (not in order of importance or worth) E-Trade, Interactive Brokers, Fidelity, Morgan Stanley, Sink or Swim. There are many professing to teach and mentor money consciousness, in the end and at the end of the day the proof is in the pudding- you control. Believe me, the more you think, act and talk about money and savings the more you will attract to your life the things that make financial independence possible and freedom over your life.
Philanthropy
I run a small group for millennials, college students and eager investors to empower a mindset of saving and the automation of finances. I teach very basic strategies about how to watch and how to understand the markets, setting up a dummy account, moving forward knowing risk tolerance. My goal- mentor caution, care diligence long term. It is fabulous to start now. If you begin with 100 per month or whatever it is you can afford in cash and never allow anything to stand in your way, investing cash on a regular and systematic basis, the power of compounding over the years and over time will allow you to amass a great fortune that will place you in a position of attaining financial independence.
Stay on track. Stay focused. Save for the Long Term as This is Where Money is Made.
Be Empowered and Emotionally Grounded prior to Investing in the Markets.
Sincerely,
Jan
Jan Attard, MBA, RIA
J. Oliver Maxwell, LLC
jolivermaxwell@gmail.com
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