Category Archives: Wealth

Staring at the Financial Crossroads

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Some days (this one in particular), I feel like I am staring at the financial crossroads in my life.

I’m debt-free (including my mortgage), I have a 401K that is coming along nicely, a Roth that I haven’t contributed to yet this year, and a regular  brokerage account.  By most measures, I’m doing okay.  I’m well past Get Rich Slowly’s First State of Personal Finance, but not even close to the stage where he quit his job, and I don’t know if I ever will be anytime soon, or perhaps not even before retirement age!

While it’s true that I am debt-free, I still have expenses that are like debt, so even though I’m debt-free, I don’t really feel like it.  And to make matters worse, lately I’ve been getting the urge to say screw it, and start to spend some money on my kids and on more grande vacations.  I would love to get my son a mini-bike, and schedule a trip for us to go to Paris or Hawaii someday soon (not to mention another Disney Trip).

I’ve also been tempted to go to some of the fancier restaurants… the ones that  are a bit better than the popular food chains (like Olive Garden) that we typically frequent!  I’ve been admiring this little dated steakhouse called Diamond Grille that everybody swears by.  Yeah, the meals are over $100.00 for 2, but well worth it from what I’ve heard.

 

I’m kind of tired of living so frugally, and would like a new fancy car, then perhaps my friends would stop thinking that I am poor in comparison to them?

I could do all of the things above, and still be somewhat ahead of the curve, but I won’t.  I know what got me here, and I know that staying the path will get me to the next level. 

So, I’ll plod on, being the frugal guy that I am, with specific savings goals per year!  If I meet those financial goals successfully, then the excess money will go toward enjoying life a bit more.  That said, I’m sure if there is excess money, at least part of it would go towards investments too!

So yes, I’m still on the path to become financially independent, but I choose to do so while enjoying life just a little bit more! 

How about you?  What is your strategy?

-MR

If I Were Rich Today!

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I’d buy a yacht,  maybe…

Okay, I wouldn’t really buy a yacht, that would be too rich for me even if I had the money…  Although I might rent one for a few hours or maybe even a day during some future (after becoming rich) vacation!

For me, the definition of rich would be:  where the money from after-tax passive income equals my normal living expenses.

After I passed that magic threshold, I’d most likely plan for a big vacation with my family, perhaps a trip to Cancun or one of the islands in Hawaii, or some other place that we haven’t vacationed before because of the costs (or because of money reasons, lol).

After the celebration was over, I would start looking for a new job.  Why?  Because even though I’d be rich, I’d still like to be productive in the world.  Yes, I would make less money, but the beauty of the new job would be that the money would be all profit.  So I could literally afford to make less!  How cool would that be!!!

If I couldn’t find my dream job, maybe I try my hand at becoming an entrepreneur?  I do a little of this already, in previous years I sold items on eBay.  Hopefully, someday blogging will make me some additional money.

Now for my list of things I would buy or do if I were rich:

  • Continually invest my money to make more money.
  • Consider and contribute to asset class diversification.
  • Research and buy investment real estate.
  • Buy, or build a house with 500 more square feet (than my current house) and with about 1 to 5 acres of land.
  • Buy 2 used newer cars than what we have. (or at least 1 used)
  • Contributed more to my kid’s college funds (529, etc)
  • Buy a small used boat for playing around with.
  • Save more money for cars to give to my kids once they become 16.
  • Consider a pool or hot tube for the family.
  • More activities for my kids (horse riding lessons, piano lessons, etc).

What would you do if you were rich today?  Or if you are rich, what am I missing on my list?

-Don

Giving My Kids A Head Start In Building Wealth

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I would like for my son and daughter to have a shot at becoming wealthy when they are older!

So what is a middle income earner like me to do?

My “Work in Process” Plan

Basically to contribute $2,000 per kid until they are 21, then hope they build upon the base that I created for them.

Here is the basic calculations table that I created to help them:

Age Amount Int. Rate Interest Earned
6 $2,000.00 0.06 $120.00
7 $4,120.00 0.06 $247.20
8 $6,367.20 0.06 $382.03
9 $8,749.23 0.06 $524.95
10 $11,274.19 0.06 $676.45
11 $13,950.64 0.06 $837.04
12 $16,787.68 0.06 $1,007.26
13 $19,794.94 0.06 $1,187.70
14 $22,982.63 0.06 $1,378.96
15 $26,361.59 0.06 $1,581.70
16 $29,943.29 0.06 $1,796.60
17 $33,739.88 0.06 $2,024.39
18 $37,764.28 0.06 $2,265.86
19 $42,030.13 0.06 $2,521.81
20 $46,551.94 0.06 $2,793.12
21 $51,345.06 0.06 $3,080.70
22 $56,425.76 0.04 $2,257.03

Now I know some of you might be thinking big deal, 56k isn’t that much.  And you would be right.  But it’s not a bad chunk of change either!

I would hope that they continue to build it, but if they don’t, at least that would be a great down payment on a house.

Another option would be to keep the money for them and let them draw a little at a time.  This would be messy and my kids might start to build a dependency on me.  I don’t want that to happen.

I have to admit, another part of me just want to sock  extra $2,ooo a year into my account and let that  amount grow!  Just to see what it does!

Either way, I’ve alread started it, and so the numbers that go to age 10 has already been accomplished.

This is still a “WIP” task, I’ll update this in a future report.

-MR