Path to Millions: All About Deals?

One of the coolest things I’ve read recently came from a blog that I had never visited before. It was an article discussing large gains in Net Worth. This has been something I’ve been thinking about lately since creating my Net Worth goal.

Basically the main point is that there is a significant amount of wealth to be made through “doing deals.” The typical path to wealth is to be frugal and save over the long-term. This can work, but the post advocates looking outside that typical path to take appropriate risk by doing deals that will more rapidly increase your Net Worth. Although I do advocate growing wealth slowly over time, I have also see the significant impact that doing wise deals can have on one’s Net Worth.

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Preparing for Another Rental

I have been working towards buying another investment property for some time now. I want to buy one by 2017 and I think I’m about to succeed in the month of October (or maybe November). I’ve written about the two houses that I didn’t get when I was using a real estate agent. I also wrote about my adventure on memorial day where I spent a lot of time researching a house offered by a wholesaler. But I think this one is going to work out!

One of the things I have been learning at work lately is how beneficial it is to plan ahead and to have a backup plan if the situation changes on you suddenly. So I’m writing out some of the steps I’m taking to plan for adding another investment property to my portfolio. Maybe some of my readers can offer improvements on these as well! I’m always open to suggestions.

So here are some of my thoughts.  Continue reading “Preparing for Another Rental”

401(k) Discussion

I was recently talking to my older brother about investing in our 401(k) and was hoping to encourage him to invest more in it. I am a finance blogger and employed in the field of finance so I figured I could offer some thoughts from the things I’d been writing about recently and convince him to increase his savings.

I didn’t realize that he would actually be the one encouraging me!

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The Price of Financial Freedom

One of the more interesting aspects of American history was the practice of indentured servitude. This was a way for people who wanted to come to America to afford the journey and also to provide a stable job situation once they arrived. No one wanted to come over and starve to death due to not having a situation where they had lodging and a way to earn their keep.

There were major downsides to being an indentured servant. You were basically a slave for many years. The term of service was usually a five year commitment. Sometimes the indentured servants were abused or tricked into longer periods of service. Other times the situation was a lot less favorable than advertised. Indenture contracts were sometimes transferred or sold and the total time commitment was not honored by the owner. It was really a desperate situation.

In fact some masters even beat their servants. If an indentured servant complained or tried to escape, the courts generally upheld the contract in favor of the owner.  It seems like a horrible situation, but for many people this was better than the alternative in their home country.
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Net Worth Goal Revealed: Increase 10X In 10 Years

It is impossible not to notice that within the personal finance blogging community there is a practice of reporting Net Worth periodically. I find these posts incredibly interesting. It’s like tagging along with a professional athlete, seeing their daily eating schedule and workout routine, and then following their reports of performance improvements.

It’s also like getting the benefits of a mentor who shares their current progress and the reasoning behind their choices. What’s better is that you can get the benefit of multiple mentors at different Net Worth levels. Some people are out there tracking a few thousand dollars each month while others are showing increases in the tens of thousands! It’s really exciting to see how things progress over time for various people and their various strategies.  Continue reading “Net Worth Goal Revealed: Increase 10X In 10 Years”

Advice I Wish I Had When I was 18

I am currently on vacation in and was discussing my blog with some family and friends. One of the questions that came up as we were discussing personal finance and investing was, “what is the advice you would have wanted to hear when you were 18?”

This is a really great question. I think there is a big opportunity for those of us who have experience investing to share what we have learned and the painful experiences we’ve gained with the younger generation.

In fact, about five years ago I had an older and wiser person share with me some concepts from Dave Ramsey that were extremely helpful to me.  Even as a CPA, I benefitted from getting an understanding of the value of living debt-free and the value of being disciplined with my finances.

So here are the pieces of advice I wish had been shared with me!

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Why Only a Million?

Years ago I read a very helpful article about financial goals and the author said that focusing arbitrarily on saving one million dollars was ridiculous. What? Isn’t that the goal of everyone who is saving and investing? Most of the financial literature we read is geared towards saving a million!

But why?

The author’s point was to actually think about what things make you happy and how much money you would need to buy or maintain those things.  You then add it all up and that is your financial goal. This may only add up to $700,000 or even less if all your debt is paid off.

But I actually want to take a different approach.

Why Only One Million?

If one million is good why not shoot for more? The longer you invest and the more disciplined you are the more likely you are to reach much more than one million dollars.

And to me that makes a lot of sense. The one million dollar goal is more suited to getting you out of a job that you don’t like. That seems to be the big fad right now. But there is a better way!

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How Would the “Future You” Want You to Invest Now?

If someone were to ask you in 2046 how you should have invested your money in 2016 what would you say? I think this is a really helpful question.

I’ve been thinking about this a lot lately and it has really been a helpful thought experiment. Asking yourself this questions leads to other questions which help focus your goals.

For instance, how old will you be in 2046 and what will your lifestyle goals be at that time? What kinds of things will be truly important to you then? Being able to help your children and grandchildren? Being financially independent? Giving to a non-profit that is special to you? Creating an endowment or a scholarship in honor of someone you respect? Or how about creating a trust for your grandchildren to fund their education or for them to purchase a house?

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Motivation to Stay Disciplined

Being a patient investor is very difficult.  There always seems to be someone who pops into our life that was able to seemingly quickly and easily obtain some financial goal.

As an aside, I usually find that these seeming successes are really just a poor decision to make a large debt-financed purchase.

But when these things happen while you are slogging along dilligently investing week in and week out it can be a bit demotivating. It is tempting to think, “what is all of this careful and disciplined investing really getting me after all?”  These kinds of thoughts weigh heavily on us when we see others who have a seemingly carefree attitude towards their finances and purchasing decisions.

Keep Your Eyes on Your Goals

The best thing to do in times when you are not feeling motivated is to review your goals. It is important to test your goals and your plan against your personal values and lifestyle.

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