Sunday, June 23, 2013

Retire Rich or At Least Early

I recently read an article from Afford Anything with the article titled Party Like You're a 72-Year Old Retiree.  I like to read a lot of personal finance type of blogs and this was one of my favorites.  I planned on writing about something similar, but instead I'm going to take some of the key points and write about them in a little more detail from my side.

I'm 31 am I ever going to be retired???

"My parents, in short, have the coolest retirement ever. And what’s crazy is that they didn’t start saving for retirement until their 40s. That flies in the face of conventional wisdom, which says that if you don’t start saving for retirement by age 25, you’re totally screwed"

The median income for households is right around 50K, so let's use that number for our talk.  If you take $400 every month(this assumes you have $0 saved so far) at a 6% rate(lower than historical data), at the age of 65 you will have 500K.  That's some pretty good coin, but it's so hard to think that far ahead and to be honest $400 a month sure does seem like a lot.  Also remember that we are relying solely on the stock market in this scenario and while I think the stock market is the Golden Ticket, people from the Great Depression, the .Com crash, and the recent crash of the housing market and bail outs, makes me a little nervous.  So is it possible absolutely, but 34 years of giving up $400 month to have a half of a million dollars at 65, doesn't really get me to excited, so I'm guessing it won't for you either.

Keys to Retiring Early

"Yet by the time they both turned 60, only 20 years after they began working, they were ready to retire. They probably could have done it sooner if they weren’t raising little ol’ me."  They have zero personal debt. They paid off their mortgage within 7 or 8 years. They’ve never taken out a car loan and they’ve never carried a credit card balance."

So seeing the big picture or little pieces of motivation that come along really help and the statement above did just that.  So a pretty broad example but a couple took 20 years of saving had no personal debt, paid off their mortgage extremely early, and never had a car loan or credit card balance to speak of.  I am taking steps to get rid of every one of these retirement killers.  I had a car loan and sold my car and thus got rid of the loan with it.  I have a mortgage, currently on a 7 year plan to pay it off(the other option is when I turn 60 or in 2033 it would be paid off, sounds terrible), and I can happily say I have paid off my credit card balance.  

Enjoy Today and Tomorrow

"Yes, you should still enjoy today. Don’t get so obsessed with retirement that you forget the present moment. Travel when you’re young AND when you’re old. The world will change a lot in the next few decades. You’ll get to watch it happen.
But don’t forget that packing your lunch to work, brewing your own coffee, driving an old car – that’s not really a sacrifice, is it? Not compared to what you’ll gain."

Enjoy today.  Travel, Explore, do what you enjoy the most.  Just remember that you should not do it with a credit card, cash advance, personal loan, or anything else that requires you owe someone especially the bank.  The last statement really hit home, especially with my Saving for Vacation with Grocery Money  I really don't mind packing my own lunch, brewing coffee at the house, and taking the bus or train.  It certainly can be tempting living in Chicago with all the great places to eat and drink, but like Afford Anything said it's not really a sacrifice is it?

Thursday, June 20, 2013

Finishing up a Sprint and Saving for Vacation with Grocery Money

As I update my sprint to paying down my student loan, I made a bold claim that I was going to pay off a portion by the end of July, well I am happy to say I am still on my way, it's going to be tight though, because I have been holding off on using my "man fund" to pay off the remaining balance.  I just made a payment on 6/18/13 so the balance should be right around $800 with a little over a month to pay off, then it's party time!!!  LOL No it's on to the next debt, the borrower is slave to the lender and nobody wants to be a slave.

My next plan of divide and conquer is to plan and cash flow my vacation, no credit cards, no savings that I apply to debt, it will be 100% be cash flowed by cutting back!!! Cut it out you say guy from Full House!  Oh we will, I tell you, we will.

So our plan is to travel to San Francisco and possibly up or down the coast to some nearby cities.  The cost can vary and according the San Francisco visitor's bureau, tourists staying in a hotel spend $244 per person per day.  We are going to go about this a little differently, since we plan to vacation in early September we have about 3 months to save, we will then take the amount that we save and use this during our trip, if we have a $100 total we better find someone with a couch who lives in San Francisco.  The good news to start is our air fare is taken care of, we made the right move last summer and accepted Delta's offer for some free vouchers and and extra day in Nicaragua, BOOM, airfare paid for.

So because my wife doesn't like sharing any details about money and the fact that I love my wife and my marriage, I will only share the money we save, not any incomes or what we have budgeted for.  We will keep things simple, if I have $100 budgeted for and only spend $30, then more of the BOOM! saved $70 for "San Francisco is Fantastico"(patent pending).  This will also include money budgeted for eating out, this is our real vice where we spend far too much money.  The same plan will apply $100 budgeted, spend $40, and yep you got it BOOM Baby!!!! $60 saved.  Based on this while I don't have a concrete number my projected savings we will need is probably about $1000, which is about $300 or $400 month, so that's a lot of savings, but I love a challenge.

Here are a couple of simple plans to save a few extra dollars:

  1. Make a list every week for our Groceries and project what we will spend before we go.  I did this and came within a dollar it was kinda freaky actually.  This way I know what I'm spending before I ever step into the grocery store.
  2. Cash only.  I take out my budgeted money after each paycheck and only use that to pay for groceries.  If I want the chocolate cookies dough and it's $2 over what I brought, I politely ask to have it removed.
  3. Do not eat out.  This will be the hardest to accomplish.  This will involve wait for it, making coffee and breakfast at the house, eating leftovers and sandwiches I brought from home, and even planning our dinners for the week and taking it out the night before(nice little Pot Roast in the slow cooker right now).
  4. Say NO.  This also rings up as one of the more difficult things to do.  Say no to eating out, say no to that work lunch with everyone.  We are not going to totally cut off the eating out for lunches, but 1x a week is the limit.
The message here is finish up a sprint and let's save some money to go on vacation, because honestly do you want to wait till your 65 to go on cool vacations???????? 

I would love to see some comments on how you save on groceries and going out.  Thanks for reading.

Saturday, June 15, 2013

Creating a Business-Multiple Avenues, Multiple Streams-60 Days on Fire

Squeezing me for my wallet!
I just got back from vacation from visiting Disney World and watching my Brother In-Law's graduate from high school, Congrats Omar and Jesse!!!!(If you read my blog that is, haha).  I will get into some of the saving and extra spending in another post I did during this vacation, hint Mickey and Minnie killed me.

Reading a comment from my previous post I realized I need to talk about and write about what I will be doing over the next 60 days and beyond.  I will be taking the steps to start an online clothing company, where I will be selling new and used clothing.  I heard a quote when starting a business, of course I can't find it right now to give them credit, but starting out, "I want you to put as much work as you would in 2 years into the first 60 days".  Sounds crazy right???  Absolutely does to me, that's why I'm doing it!!! I'm a big believer in if it was easy everyone would do it, so I'm hoping this is going to be terrible!

So my business plan is to acquire and sell clothing online, first with eBay, mixed in with Storenvy, and possibly Etsy, that's to be determined, the majority of the items for sale will be on eBay with a small mix in Storenvy.  All of this will be done in 60 days, the 60 day of Fire launch will be on June 9th and will go until August 7th, after this I will take a 2 week break and get all nerdy and put together spreadsheets, some ongoing, about what sells for brands, price, best days to sell, etc.  I also plan on really working on a process to see how long things take and if any of this can be done by others or is me doing all the work.

Delay in Writing for a couple days, work will do that to you.

So the 60 day launch has begun, not of course with some obstacles.  I currently have around 75 items for sale found on the link above.  The obstacles included not having Internet for a couple days, we only use a Wi-Fi card and I left it in Miami and work always gets in the way.  So because of the promotions offered by eBay I used a majority of Buy It Now(just like it sounds) and only a few Auction with the Buy It Now option.  Another recent promotion will allow me to list the rest of my items available which is about 20 or 30 over the next couple days with what I have used the majority of the time with the 7 day Auction and Buy It Now.  I will continue to keep buying and keep listing, but so far i'm on Day 6 and things are on there way up

I'm on pace to sell an item a day with what I have currently listed, which needs to be a larger number, but with some of my Auctions ending on Sunday, this number should pick up.  60 Days on Fire has begun!!!!