Tag Archives: happiness

Happy Valentine’s Day!

Whether or not you’re in a relationship, Valentine’s Day is about more than just your significant other.

It’s easy to get swept up in the demands of the job, but moments of joy, for me,  only happen with the people I love. (LL#10)

I know for me, work gives me purpose. But the people I love give my life meaning.

The First Most Important Lesson I Learned About Money

There are many books about how to obtain financial independence. This one book, “Your Money or Your Life” changed my life. No exaggeration.

Why? Because it introduced the concept of being able to pay your expenses through income derived from savings, not just salary.  I always thought the only way to live was to earn wages.  But I knew I wanted more flexibility, independence, and freedom in my life. I wanted choices. So I was willing to save to do it.

It’s not easy to do, but everything starts with one step. You have to become an HCS (Highly Committed Saver).

The step is to decide how much money you will commit to saving for you. You’ve probably heard this in the form of “Pay yourself first.” It can be any amount you choose, but it has to be something you will commit to and do with every paycheck.  Like everything in life worth having, it depends on consistency.  Most people look at what they have leftover AFTER they’ve paid all their bills…..and a lot of times, there isn’t much.  This step requires you to commit to a number ahead of time.

By making this commitment to yourself, you’re more likely to make the decisions that you need to make during the month to ensure you’ve got the ability to cover your promise. You’ll pass on the spur of the moment purchase, the sweater on sale that you don’t really love,  the brunch with the huge group of people which isn’t a lot of fun, but costs you $75 by the time the bill is split. And little by little, it will start accumulating.

Here’s why this is so important. It’s because of compounding. The power of time. So here’s how it works based on a study which was done by Market logic:

Joe opens an IRA at 19 years old. For 7 years in a row, he puts $2,000 into his IRA, avg growth of 10%. Then he stops. No more contributions. He’s done.

Tom doesn’t contribute until 26. Then he puts $2,000 a year until he’s 65. Avg growth of 10% again.

Joe ends up with $930,641. Tom ends up with $893,704.

Now it takes more than just this to obtain financial independence. And yes, 10% returns are high and won’t happen every year. But no matter what the rates are, you get the point. New Year’s Eve is around the corner: doesn’t this seem like a great resolution? What are you waiting for?

“It’s not how much you make, it’s how much you keep.”