How is it that the “Rich” become rich? Were they all born into money and given trust funds as early adults? Or is there something more systematic about how they got there? Believe it or not, it has been said that 80-86% of all millionaires in the U.S. are self-made. The same figures apply to decamillionaires (those with a net worth of $10 million or more) as well. So then, what is it? What are the secrets to money that they seem to know and the rest of us don’t? In this post, we’re going to take a look at some of the strategies that the Rich and Wealthy use every day to advance their position. In many cases, I think you’ll see that becoming rich is all a matter of tipping the financial equation in your direction. The more money … [Read more...] about 5 Secrets About Money That the Rich Know and You Don’t
Is a Gym Membership Really a Big Waste of Money? Not According to These Calculations
Here’s a piece of advice you’re not going to hear often on a money blog: If you’ve got a gym membership and you love going there, it’s okay. You don’t have to quit just to save money. Really.. it’s fine. Contrary to some of the other personal finance advice you might read out there, you’re not committing some kind of financial suicide. The frugal police aren’t going to come bust you. In countless articles I’ve read, one of the first areas they always suggest you cut out of your life is that “high-priced” gym membership. And I get it. According to USA Today, the average price of a typical gym membership these days costs just under $60 per month. And to make matters worse, 67% of them go unused. For those people , that’s … [Read more...] about Is a Gym Membership Really a Big Waste of Money? Not According to These Calculations
Yes, You Can Use Your Roth IRA as an Emergency Fund – Here’s the Proper Way How
If you’re struggling to save for both retirement as well as be prepared for whatever life throws your way, then here’s something useful for you to know: You may be able to use your Roth IRA as an emergency fund. Yes, because of the unique withdrawal rules for Roth IRA’s, they have the potential to serve double-duty and accomplish both goals. You can be well-prepared for the unexpected as well as work on building up your future nest egg. Since these two types of accounts are generally best kept separate, there would be some potential pitfalls to watch out for if you choose to use this strategy. Let’s take a look at the pros and cons of both sides. Advantages of Using a Roth IRA as an Emergency Fund Assuming you’re not … [Read more...] about Yes, You Can Use Your Roth IRA as an Emergency Fund – Here’s the Proper Way How
How Does 401(k) Vesting Work? An Easy to Follow Explanation
One of the most confusing aspects of participating in an employer sponsored retirement plan is with understanding what percentage of the money is actually yours to keep. Namely, this idea of "vesting". Yes ... believe it or not, not everything in your 401(k) is yours to keep! "How does 401(k) vesting work?" was one of the more complicated concepts for me to grasp. I can still recall opening my first 401(k) statement and seeing two amounts: One for the total and one for the vested amount. "Wait, what? … Why are there two amounts?" I thought. Does this mean that some of the money I just put into my 401(k) isn’t really mine? Fortunately, the answer to that question ended up being “no”. All the money I had contributed was of course … [Read more...] about How Does 401(k) Vesting Work? An Easy to Follow Explanation
What Are the 401(k) Withdrawal Rules for Early, Penalty-Free Access?
Is it possible to withdraw money out of your 401(k) retirement plan before age 59-1/2? The short answer is "yes" - of course! But the 401(k) withdrawal rules are not without their obstacles. Remember that the IRS intends these plans to be a way for U.S. employees to save their money for one day when they are ready to retire. And in exchange, savers get a break on paying the taxes on these earnings now by deferring them to the future when the money is used. Therefore, because of this design, the rules that come along with making a 401(k) withdrawals can get a little tricky. This is especially true if you need the money in an emergency or if you intend to retire early. In this post, we're going to explore your options for getting early … [Read more...] about What Are the 401(k) Withdrawal Rules for Early, Penalty-Free Access?
How Does Social Security Factor Into Your Retirement Safe Withdrawal Rate?
Have you ever wondered what kind of impact Social Security makes on the retirement safe withdrawal rate you choose? When it comes to retirement planning, lots of people know that there exists some withdrawal rate that is considered "safe". The most popular of these rates is of course the 4 Percent Rule. This was popularized in the 1990's by Bill Bengen and The Trinity Study. However, one very important point to consider is the fact these studies did NOT account for Social Security. They merely only considered retirement savings. Since most U.S. tax-payers will stand to receive at least some sort of Social Security benefit, logically this is good, right? It means you should be able to start with a higher than usual safe … [Read more...] about How Does Social Security Factor Into Your Retirement Safe Withdrawal Rate?
My Practical Advice for Writing Blog Content That Matters
If you own a website, I’m going to guess that one of your greatest struggles is continuously writing blog content. I should know ... This week, MyMoneyDesign.com officially turns 6 years old. Can you believe it? And while I don’t have any ultra-impressive five or six-figure monthly income reports to share with you, I do celebrate the fact that we have a ton of blog content to offer you - over 500 posts (and counting)! But that’s not to say I haven’t had my fair-share of success either. Blogging over the years has been an incredible source of modest passive income; generating sometimes as much as four-figures of revenue each month. Earlier this year I even sold a few of my side-project niche sites for five-figures. That’s a … [Read more...] about My Practical Advice for Writing Blog Content That Matters
What’s the Difference Between a 403(b) vs 401(k)?
Have you ever wondered about the differences between a 403(b) vs 401(k)? In our house, we have both. I work as an engineer and have a 401(k). My wife is a teacher and has a 403(b). Early on when we first got our jobs, I honestly knew nothing about either plan. We each just simply filled out the forms and really thought nothing of it. A few years later when I started taking more and more of an interest in personal finance, I became more curious about how each one of the plans works. How are they the same? How are they different? More importantly, as we started crafting our plans to retire in our 40's, it became increasingly important to really understand the fine details behind each one. How can I get my money back? … [Read more...] about What’s the Difference Between a 403(b) vs 401(k)?
