Have you ever wondered what personality traits make up personal finance bloggers? Well I will mention 4 below and maybe you can let me know if you feel the same or if you have other traits I didn’t mention that you want to share with all of us. See below for the traits I have uncovered in the personal finance world. Continue reading
Hey today we have a light-hearted post for you guys. I am going to share the Top ten reasons why you should not save money ever. If you agree then you are facing one of these things below or thinking about one of these ten reasons, but if you disagree then you are a fan of the savings mantra. I think from time to time it is fun to joke around a bit.
Most of you all already know that you can earn income from many different ways. But maybe you didn’t know the actual categories each income source belongs too. I wanted to share with all of you these income sources and give you a brief description and hopefully you can understand how you earn your money better. Personal finance is hard to figure out for many people, but this post will get you one step closer to understanding how one income source favors the other.
Brief Descriptions of each Source:
Earned – Income derived from working for someone else or from a business you own or are a part of. This type of income is taxed the highest out of all the other incomes. It is also the biggest chunk of tax the government makes off individuals for GDP Revenue. In certain situations this type of income can be taxed at and up to 50% of the gross amount you make. The reason being that in this income type you have to pay Social security and medicare taxes.
Portfolio – Income derived from investments including dividends, interest, royalties, and capital gains. When you put your money in a savings account and the bank pays you for having it there that is considered portfolio income. If you write a book, then the royalties of the book sales are considered portfolio income. The tax implications from these types of incomes can be confusing, but dividends and capital gains taxes usually are up to a max of 20% and royalties can be taxed like self-employment ordinary income.
Passive – Income made of work in which you do not actively participate in. Examples include Rental real estate and silent business arraignments. This type of income is what people call gravy because you do not have to put your blood, sweat, and tears into it. Building a rental real estate empire is considered passive income for tax purposes, but believe me when I tell you managing something like a rental empire does take a lot of participation unless you hire a management company and reduce your time commitment.
In the United States people make the mistake to think that income from dividends are considered passive income and this is a mistake, the IRS clearly defines that type of income as portfolio. In my opinion I believe it is mandatory to try to build income from all three sources and then to begin to eliminate earned income and focus on growing the portfolio and passive income sources. If you can eventually grow your portfolio and passive income to cover all expenses then you are finally considered financially free.
Comment to let me know what are your thoughts to the three types of income sources listed above.
Always consult with a tax professional if you have a tax related question or if you are receiving income from different sources as mentioned above. If your taxes are complicated always consult with a certified CPA professional.
This list is a recollection of all my posts and I have selected the best personal finance tips of all time. I am looking back and analyzing those little things that made an impact in my life financially speaking. I want all of my readers to take a second after reading this list, and just pluck out those things that resonate with your life and your money habits. I am really anxious for the next few months as I am looking to expand on my personal finance capacity by reading more and asking for advice from older wiser individuals with greater experience in this field. What does that have to do with the best personal finance tips I will share with you today?
Well it all comes down to what I know regarding Personal finance, and I can either stop learning or continue to learn. That means staying current with the best money management topics. Which in turn will help me share more with all of you guys in the future. If I learn more, then I can reciprocate that back towards you with great content.
See below for The Best list you will ever come across regarding money management and personal finance:
If you are one of the lucky few who can save a large portion of your income applaud yourself, because it is a great opportunity for you to set yourself up for the future. But many of you are thinking how can anybody save that much with all the numerous bills in our lives? I have known personally a few people who actually save 30% for retirement and still been able to live life happily. Granted their situation might have been better than the average person and it might take you a while to inch up to that savings level, but believe me you can do it to.
Listed the below are the reasons I feel individuals with certain money scenarios can manage to save 30% or more for retirement or emergency savings. See below for a list of examples how one can save 30% for retirement.
|Life is a balancing act.|
Many times I think back and I re-read some of my past blog posts and think to myself I might have used some harsh words to incite change upon myself and my readers. But my intentions were not to scold down or to say you are doing very badly at money management skills. I get caught up at times with my own short comings that I am my own worst critic, and I admit I use it to fuel the fire for this blog with great content. This time I am trying something different, and it is a post that probably has been around the block more often than not. But I am still going to share with all of you, what things I have been doing right financially speaking. I will answer for you all the money habits I am doing right.
When I do things right I am actually happier, because these things are in my happy go lucky financial rule book. No not really a book, but just good ideas I have in my mind at all times. Did all of you know that finance and money management is 80% behavior and 20% math? If you can maintain this balance in life you will always win with money. Given this I am going to share with you all the behavior rules I use in my life to stay in my personal finance lane.
Money Habits I am Doing Right:
1. I write this blog which keeps me accountable for my actions. (I can’t Believe it’s 1 Year already)
2. I am saving a good portion of my income. (About 15% soon to be about 20%)
3. I am on top of my investments and assets. (Mostly monthly and sometimes daily.)
4. I am thinking in a long term perspective for my money. (Not what can I buy with my next paycheck mindset)
5. I take the advice of other PF blogger’s / financial guru’s if it benefits me or awakens a need to an improvement change.
6. I look at time in a productivity mindset and look to maximize my efforts. (Always finding a balance between family and work)
7. I hate debt and am working on eliminating my school loans while not going into any other future debt.
8. I am always looking for a new book to read on finance as I still find it intriguing to expand my personal finance horizons.
9. I am excited to help others improve while helping myself become a better communicator. ( Face to Face and written)
10. I see options and opportunities that investing gives me now and can give me in the future. (Passive Income)
These are some of the things I am currently doing to better myself every day and improve my finances. I hope I can lead by example with these steps and help any willing person with a desire to improve their personal finance picture in these uncertain economic times. Will these steps increase your income? No, but with time and effort it can help anyone improve financially and with goal setting. Behavior modification is not very easy, including how to manage finances. That can be one of the most important things you can do to help yourself achieve life’s basic money goals. Goals were made to be accomplished and surpassed.
In an uncertain world we have to do our best to help us be better prepared if another recession, depression or emergency were to occur in our lives. A layoff or a reduction in income can pop up at any time for anybody working for somebody else. Can you live on less than you make if it were to happen to you today? If you can just get over living the paycheck to paycheck syndrome you have succeeded in a personal goal that many people find too daunting. I will do another post in the near future and list all the bad things I am doing because nobody is 100% perfect in this life. But remember to keep striving to achieve a better more balanced you in this life.
What are some of the things you are doing right with money behavior that you would like to share?
Rich Uncle EL
Pic is credited to the movie called Man on Wire.
I have come across a few people who like to live for the Now in life. They are always going out and doing everything in their power to be present at numerous events while negating their future security. I ask myself when I see this happening, what kind of void are those individuals trying to fill? Don’t get me wrong I enjoy a good party from time to time when it’s important to me, but all that spending those people are doing strikes me as a red flag. Twenty years later those people are going to be wondering and most likely regretting why didn’t I prepare for my future.
An unfortunate event took place on my way to work on a recent Friday morning. I make my usual stroll to my car about two blocks away from my apartment building and that’s when I saw the travesty right in front of my eyes. My 1999 Camry was hit and my driver side mirror was shattered in pieces and hanging for dear life. Well you know, what was my first thought when I sat down in my car? How much is this going to cost me? See picture below for your viewing pleasure.
During my lunchtime chat with a co-worker I reveal my recent incident and he quickly tells me a story of a similar situation he went through several years ago. It cost him about 200 bucks back then to fix. Now my mind is checking off the dollar signs to the tune of $400-500 because:
1. His accident was a few years ago and Inflation will get the best of me.
2. His car is a newer Camry and I figured newer parts should be cheaper to find.
3. His mirror didn’t need a complete replacement with some body work / painting involved.
NOW I am freaking out because as you already know I am not fond of spending money on miscellaneous transportation costs. It’s the next day and now I have a plan to get at least three estimates from local body shops and go with the best price and customer service I receive. It’s more important to me for the work to be done quickly and efficiently than the overall price.
Now for the Details:
Estimate 1: Body Shop closest to my house- $225 to order part, paint and Install.
Estimate 2: Body Shop about a mile away- $210 to order part, paint and Install.
What did I actually Spend: $35 for a driver’s side mirror found at a local junk yard, 55 to paint and Install part at body shop number 2. $90 dollars total.
So there you have it folks I saved about $120 because I took matters into my own hands and tracked down the exact auto part I needed and hustled my way to getting some huge savings. I stopped at the second body shop because the owner was cool and very open and honest about the details of the job. Because of this I gave him my business.
These tactics can be used by anybody if you just take the time and make a plan to negotiate and save some dollars. I could have just given in to the first body shop estimate, and been happy with the first quote given. But luckily for me that I am never 100% trusting with service quotes, plus I love to shop around for better deals. Never ever forget to get a second opinion in anything you need to get done service wise. Because different people charge different prices at different times, and it may help you tremendously if one of those individuals is in a good mood.
Examples of Price Quotes/Estimates to save a buck:
Mortgage Loans (Good Faith Estimate Docs)
Any type of tutoring / lessons
Financial Advisor Fees
Cable / Cell / Internet Services
Now is the time to Comment if you have a cool story on how you saved a buck by taking matters into your hands.
Watch your Money!
Follow by Email so you can be up to date on all my posts: RSS