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Tips for Achieving Early Financial Independence

July 6, 2012 / Guest / 25 comments

The following post is a guest contribution from Early Financial Freedom.

Giving the state of the economy, can you really achieve early financial independence? Is it a mirage that you can only imagine? My wife and I would like to assure you that it is real and attainable if you are serious about it. The bottom line is that you need to desire financial freedom in order to achieve it. The desire is the driving force for making early scarifies for later pleasures.

How We Got There:

Let me introduce myself. I am an engineer from New York and am happily married with a wonderful 7-year-old son. After working 10+ years as a hands-on engineer and later as a supervisor, I resigned in April 2012 to stop working for others and join forces with my wife (who is also an engineer). Together, we run our IT/Web consulting company full-time where I have been working part-time since 2003. Our business is home-based and it does not require us being psychically in New York or anywhere in particular as long as there is an Internet connection.

Category: Retirement / Tags: below your means, credit card debt, Early Financial Freedom, Early Financial Independence, Guest, saving

Why Care About Money?

June 13, 2012 / MMD / 21 comments

Before you can decide how to invest your money or how much to stash away, it’s important to ask yourself the fundamental question:

• Why care about money?

The answer is harder than you think.

Are We Fools for Saving Our Money?

February 17, 2012 / MMD / 11 comments

What would be the point of a blog if we didn’t explore an idea that may be slightly controversial?

Anyone who reads this blog knows that my quest for financial freedom heavily relies upon disciplined saving and planning for retirement. Like many people, I am using my employer-sponsored retirement plans, IRA’s, and personal savings to build up a fortune that I can one day live off of.

All of that is fine and good in theory, but what if everything I just said was ALL WRONG! What if all the money I’m saving will one day be worthless? It sounds crazy, that’s exactly what one famous author is promoting in one of his new books.

A Strategy for Maxing Out Your Retirement Savings

February 3, 2012 / MMD / 15 comments

We all know that we should be saving more money for retirement, but how do you make that happen? How do you go from nothing to maxing out all our tax-advantaged savings options like your employer sponsored retirement plan or individual retirement account (IRA)?

As I’ve mentioned in previous posts, my wife and I have been on this path for sometime. I’m proud to say that we currently have reached the maximum amount allowed for my 401k and for our Roth IRA’s. It wasn’t easy, but looking back I’m sure glad we did it!

So what steps did we take along the way to get to this point? Here is the strategy we used:

When Is the Best Time to Start Saving for Retirement?

January 6, 2012 / MMD / No comments

Once you have your reasons for saving money and your motivation to one day retire, there’s only one thing left to do:

• Start saving today!

Why?

One simple reason: The effects of compound interest. Simply put, when you save your money, the effects of compound interest cause your money to grow far beyond anything you could have ever saved on your own. See for yourself:

Category: Retirement / Tags: 401K, Compound interest, money, pension, rich, saving

Help! I’ve Got 401k Questions! – Your Complete 401k Guide

September 18, 2011 / MMD / No comments

Let me be the first to say “Congratulations”! Despite the intimidating packet of papers you need to review and fill out as well as the dozen 401k questions you probably have, this is a great opportunity for you!

Not only will you be starting down the road to financial freedom (in other words: retirement), but you’ll also be given the opportunity to make FREE MONEY! Yes, I said free money! Why is it free?

1) The money you put away comes out of your paycheck BEFORE taxes and it grows tax free until you retire!

2) Your company will likely (as a lot of companies often do) kick in a little bit extra cash in addition to the money you plan to put away. Who wouldn’t take a little extra money for free!

Without further ado, let’s see if we can tackle some of your 401k questions with a few of the topics below:

Category: Retirement / Tags: 401K, 401k questions, asset allocation, bonds, contributions, free money, investing, pension, retirement, saving, Stocks & Investing, vesting

Traditional vs. Roth IRA – Part 3: Why I Prefer a Roth IRA

September 6, 2011 / MMD / No comments

Welcome to Part 3 of this series of posts. In Part 1, we introduced the concept of an IRA and defined the differences between a Traditional and a Roth. In Part 2, using an example by Charles Farrell from his book “Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage in Life”, we found that fundamentally both types of funds are the same because they will both yield you the same amount of money after all is said and done. The real advantage is what you believe your tax situation will be later on in life.

However, I told you I would find the twist in this argument and I will present it to you now:

Traditional vs. Roth IRA – Part 2: Which One is Better?

September 5, 2011 / MMD / No comments

In Part 1, we introduced what an IRA is and the differences between a Traditional and a Roth. Although each one has its own unique tax benefits, you were probably left wondering which one is better. In this post, we’ll put some numbers to paper to illustrate what will happen to our money depending on which route we take.

Crunching the Numbers – An Example:

This example comes to us from a truly great book called “Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage in Life” by Charles Farrell. In the chapter on IRA’s, Farrell weighs in his opinion on which type of fund he feels is better:

Category: Retirement / Tags: Charles Farrell, Individual Retirement Account, investing, IRA, mutual funds, retirement, Roth IRA, saving, Stocks & Investing, taxes, Traditional IRA, Your Money Ratios

Traditional vs. Roth IRA – Part 1: The Basics

September 3, 2011 / MMD / No comments

Congratulations if you are investigating, considering, or have already opened an IRA. If you are new to this subject, then this series of posts will be for you. To start, an IRA (Individual Retirement Account) is a special type of financial account that gives you special tax privileges. Although it is typically used for saving towards your retirement, it can serve a variety of purposes and save you a ton of money in taxes.

Tag Archive for saving

Tips for Achieving Early Financial Independence

How We Got There:

Why Care About Money?

Are We Fools for Saving Our Money?

A Strategy for Maxing Out Your Retirement Savings

When Is the Best Time to Start Saving for Retirement?

Help! I’ve Got 401k Questions! – Your Complete 401k Guide

Read more

Traditional vs. Roth IRA – Part 3: Why I Prefer a Roth IRA

Traditional vs. Roth IRA – Part 2: Which One is Better?

Traditional vs. Roth IRA – Part 1: The Basics

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