Tag Archives: personal finance

How to Build Real and Sustainable Habits For Health, Wellness and Finance in 2019

When people tell me that 2019 is going to be their year, I have to laugh and roll my eyes. Isn’t that what everyone says? When I think seriously about how 2019 will be different, I ask myself these questions, “what did you do last year and why was it not a good year for you? What will actually be different about this year? Are you not happy with yourself? Could you be better? Are you actually going to change?”

Personally, I try to maintain a level of discipline in certain areas of my life. Over the past couple of years, I have remained focused on my goals despite circumstances changing and other challenges I face daily. Yes, each year is different, each year has a different mix of people surrounding you or different locations, but the common denominator is always the same. You. Knowing I only have control of myself in life and the choices I make, I approach resolutions in a slightly more strategic way. Before the year begins, I will set an expectation of exactly how I want to finish the year; a vision that I can revisit whenever I want to. This vision will be within the realm of possibility, but will require specific behaviors and routine changes to achieve. These routines become the foundation for the resolutions I set. They will be purposeful, actionable and measurable. I like to, as they say, “beat the market” year after year. The market being a normal progressive way of life. Whether my goal is to make more money, travel to new places, meet new people or upgrade my quality of life, I am always striving to improve.

The main way I work to ‘beat the market’ and improve my life is through altering my habits each month. Building positive habits throughout the year is a great way to make sure you ultimately achieve personal growth and embody the vision you had for yourself at the start of the year. Even small changes to your daily routine can have tremendous effects and snowball to improve other areas of your life.

Every year we all make resolutions and try to “stick to them.” But the reality of the matter is carrying out these resolutions can be daunting and feel impractical. but my method is much more sustainable for me. I try and make it into a game. So instead of making 1-2 resolutions at the start of the year, I will make 3-4 mini goals/resolutions at the start of each month and focus only on those habits/goals for the 30 days. This is a way of tricking my brain to build a strong new habit and become a better person. Grooming myself to be better and hold myself to a higher standard. I read the book the “Power of Habit” by Charles Duhigg and it takes 21 days to build a habit so 30 seemed right on par.

Instead of setting a vague resolution, for example, “get fit in 2019,” a better goal would be to specify and implement three new habits that would help to make you more fit. For example, set your alarm a half hour earlier in the mornings, drink 8 glasses of water every single day, and do (3) 1-minute planks every night. Some of the goals can be more focused toward self improvement as well. Its a collection of little things that make big changes in your life. If you can make them attainable and more specific the better. Here are some examples from my first three months.

January:

  • Only 1-cup of coffee per work day (black, no sugar, or milk)
  • Finish every shower by turning the nozzle to pool temp (supposedly much better for your body, it gets easier every day I promise)
  • Read 10 pages every day.

*It’s march and I already drink much less coffee and don’t even mind that it’s black with nothing added, I feel much healthier. Showers are cold in the winter but I barely mind it now. I read every single day much more than 10 pages a day, it’s an ingrained habit now.

February:

  • Make my bed every single day
  • Drink a glass of water first thing in the morning
  • Complete 100 calf-raises every night while I brush my teeth
  • Eat a vegetable every single day

Some month-long habits I plan to implement this year:

  • Give up “candy” for 30 days
  • “Pool temp” showers every day for a month
  • 8 glasses of water every day for 30 days
  • Pack lunch for 30 days instead of buying lunch
  • Make bed every day (psychologically, a groundbreaking feat for your day)
  • Lay your clothes out every night for the next day
  • Give away thirty pieces of clothing, one article for every day of the month
  • “No spend days.” These are days where you spend “zero” money during the day, no cash purchases and no charges to the credit card. See how many you can get a month.
  • Meal prep for 30 days
  • Take a vitamin every day, especially those that you are lacking in. I take Vitamin D every single day.
  • Get in bed by 10:30p on weekdays, 1-2a on weekends.
  • No alcohol for 30 days, or you can do “no beer”
  • Be active every day for 30 days jog/bike/gym
  • Communicate with someone from your past, 30 different people in 30 days
  • Track your finances for 30 days, income and expenses every single day. (I’ve been doing this for almost three years)
  • Not going shopping for 30 days
  • Stay below or above a certain weight for 30 days
  • Keep your room/house at an acceptable standard of clean for 30 days.
  • No TV for 30 days
  • Follow the stock/real estate market for 30 days

Many of these small habits, can develop into lasting, Keystone habits. Keystone habits provde the foundation for how you live your life and provide a stable foundation for building and adding new habits. The best way to make big changes your life is to make small changes. It’s been about three months since I’ve started doing these new, mini habits and I have already started to notice my life changing a positive changes. I hope this post will inspire you to take action with your own life and get the results you really want. Best of luck!

7 Financial Lessons from Ancient Babylon

I just finished reading the book, the Richest Man in Babylon. This is a short book of probably 150 pages in a decent sized font. The book was written by a college professor in the 1800’s, it was all about stories translated from texts of the ancient city of Babylon. The most interesting take away from the book is that the stories, even though they were written 100s of years ago, are still relevant to many of the financial issues that we as people, millennials especially, continue to face today. The book is about a man named Arkad, who was the richest man in Babylon, even richer than the King. The King sought to find the reasons as to why he was so independently wealthy, so he invited him in for an interview to understand what he learned. In this passage, I will cover some of the lessons and issues they brought up, and show you how they are still relevant today.

Lesson One: ‘Fatten Thy Purse’

One of the first lessons of the book and I believe is the most important is to pay yourself first. How can you expect to be a wealthy man if you do not have any priority of savings in your life? If a man receives 10 pieces of gold a year he is to keep at least 1 of them for himself and adjust his expenses accordingly. We can utilize this same method today by using an extremely powerful financial tool called the 401k or 403B. You can adjust this amount to come right out of your paycheck, Pre-tax or Roth, so the savings are out of sight and out of mind. Trust me, after a while you won’t even realize this money is affecting you because you will naturally adjust your expenses to what you can afford based on the lesser amount. Now what you have to be careful of is the credit card trap. With lines of credit, you still need to save 10% of your wealth but you cannot overspend on credit so that your net worth becomes meaningless.

Lesson Two: ‘Control Thy Expenditures’

This means if you are always buying the best most delicious food, the nicest robes and the finest horses you will have no money left over for creating wealth. What this translates into is if you are buying the latest Apple products, the newest Gucci loafers, always going on vacations or living above your means in a luxury apartment you are not saving because you are spending. The money is going into your pockets then leaving immediately. One of the biggest lessons of the rich is the concept of ‘frugality’. This goes along with another lesson that being wealthy is as simple as spending less than you make. A very simple concept but hard to put into action with the distractions that life throws at us these days. Advertising and credit cards make spending the easiest thing in the world.

Lesson Three: ‘Make Thy Gold Multiply’

The story goes on to give the laws of gold. This would be to put the savings you have(the 10%) into action by investing in smart investments to earn more money. He talks about them as your children and they will have children and multiply. This will make you a very rich man. These investments could be investing in a jeweler, traveler, salesmen, sword makers and in return set up a profit structure to get paid a return plus a rental of money fee also known as interest in this day and age. Today we can invest in things such as real estate, bonds, stocks, funds, gold, commodities etc.

Lesson Four: ‘Guard Thy Treasure from Loss’

Just as Warren Buffet put it, the name of the game is, “never lose money.” Whether that is safeguarding your smart investments, minimizing risk, adding “stop losses” to your trading account, or “protecting your pouch of silver from thieves and foreign armies.”

Lesson Five: ‘Invest in Your Dwelling’

Owning real estate is a great way to build equity and wealth where you live. Every mortgage payment is a way of paying yourself first so that one day you can refinance or sell the property for its future value. This also works well if you live in the property. The value will increase as well as paying down the debt.

Lesson Six: ‘Insure a Future Income’

One of the worries the ancients of Babylon had was that when they get old and tired they will not be able to work as hard and provide for their family. They can mitigate this by ensuring future income when they are older. Making part of your investments long term will help with this. Something we can do in this day in age I invest in long term funds or bonds that we will be able to sell when we retire and live off of the sale of the assets. Or a long term real estate holdings as an investment property. Either way, you want to be prepared for when you are no longer able to work effectively and provide for either yourself or loved ones.

Lesson Seven:  ‘Increase Thy Ability to Earn’

Once you have mastered the other lessons it is essential that you increase your wage as to multiply the lessons and become richer. Everyone has something that they are good at and the point is to find that skills and act on it to increase wealth for something that pays the most. If you have a job you need to figure out how to outperform as to get promoted or if you are a business owner how can you increase sales or product lines to bump up your income.

It is crazy to think that these lessons are still relevant in this day and age. When Babylon was uncovered from the sand, archeologists found ancient rock texts with these parables. You see them today to build your wealth as the ancients did in civilizations a long long time ago.

Reference:

https://www.entrepreneur.com/article/249179


FOUR Financial Lessons from the Homeless

New York is one of the biggest financial capitals of the world. Finance is everywhere in this city, whether in the billion dollar hedge funds that are making million dollar deals or the restaurant owners calculating bar tabs, brunch receipts or tenants saving for the unruly rent they owe their landlords at the start of each month. 

One lesson I have learned from observing the homeless on my street, is that being a pure minimalist has its benefits. These people carry with them only what they need and nothing more. It would be inefficient to carry around dead, excess weight. We as millennials need to understand why excess is bad and recognize how our spending habits are based on desire instead of necessity. If we all became more aware of the things that we buy and their ability to clutter our lives, we might start to realize that material goods do not help us meet our goals or delay the process.

The second lesson we can learn from the homeless is how we can market ourselves well to attract the attention of others. I regularly encounter homeless individuals on the subways and in the streets. They are holding signs that tell their story or are yelling at passengers about their specific misfortunes. Many of them have had a lot of practice doing this, so they know what works and what doesn’t. They are forced to put their best foot forward and try and try again to sell the bystanders on a few dollars of investment into them. They are essentially pitching themselves to an audience of investors, like you see startups do on Shark Tank. When you want money for an investment or business, or are trying to land the perfect job, you need to market yourself to your best ability. This means looking the part and connecting with the given audience on a personal and real level. The homeless live it everyday. Their survival depends on it.  Since yours doesn’t, if you were to apply the same sincerity and passion into improving your current state, you would likely get very far.

The third lesson is utilizing the resources around you to the best of your best ability. I was in the train station one time and a homeless man was cleaning all of his clothes in the bathroom sink. Since the station is a public facility, this was free to him. He was being resourceful. I also see many homeless people using public places for shelter or the public library for entertainment to pass the time and read or subway seats as beds. We as millennials also have boundless resources around us that will cost us little to no money to utilize things such as books, mentors, the internet, newspapers, other people in our field willing to help us if only we just ask. Many of us do not use these resources to our advantage as we should.

The fourth lesson is that homeless people ask for what they want. If asking doesn’t work with one person, they try and try again. They are relentless because they need to survive. They will badger so many people and most of the time it works. I know because I see so many people fall prey to their tactics and reach into their pockets to grab money. Its human nature to feel empathetic towards other people and want to help them out. Ask for what you want and if you get denied ask someone else.

The final lesson to consider is that homeless people use a cash based accounting model. These days everyone is in debt. Debt is a tool, but most of the time people, especially people our age, abuse this tool. Homeless people collect cash, use that cash and simply go and try to get more when they run out. They don’t just put their purchases on a credit card. People need to realize that we should only spend what we have available. Try carrying around a specific amount of cash each day, spending only what you need and nothing more. Don’t always be putting the little things in life on a credit card because it creates bad habits that are hard to stop.

 

So you want to be Rich? 9 tips to get you started

The other day I read a fact on the internet: “The middle class today is 20% poorer than the middle class 30 years ago, in 1984.” At first I was startled by this statistic, but then I thought about it more. It all started to make sense to me. I thought about money… how money in this day and age, has become such a taboo topic. It’s like, we sit around looking at Instagram and Facebook photos of everyone flashing their wealth or attempted portrayals of lives they want to appear to be living. Money is a tool, and while it may seem to cause more problems than good, we all want it. If you are serious about obtaining this tool, as we often don’t like to admit, continue reading. I have compiled a list below of tips to help you take yourself more seriously and make more money.

1. Go where the money is. Wealthy people don’t become wealthy by staying in one place, simply hoping to win the lottery. You have to be proactive by relocating yourself to areas where larger influxes of money are more common. Money breeds money, it’s a natural fact of life. So if you want to increase your chances for making some, you first have to find where it is being made.

2. Don’t show off. Showing off your money is for people who either don’t have it or have just come into a lot of it too quickly—new money, for lack of a better term. As I’ve mentioned previously (and will continue to mention) investing your money is key! Yes, while it may be a fun drunk activity to try to impress girls by buying bottle service in meatpacking with your $10k bonus, but everyone sobers up eventually and you want your money to be there when you do too. Be smart, and let your money work for you in the future. Whether it be investing in your 401k or in a small business venture, both options have a greater return value than a one-night stand with a social climber.

3. Show up. Another quote for you today: “80% of success in life is just showing up.” Even when it’s a struggle, you don’t want to miss a day taking a step toward achieving your goals. Perseverance is very important, even when you feel discouraged. In sales they use the phrase “pounding the pavement” to represent this idea. This means physically going out and making sales happen, shaking hands and kissing babies… basically doing whatever it takes to get ahead. Keep this in mind. Alcoholics don’t go to one AA meeting and call themselves sober. It takes time and effort. Always show up.

4. Find a mentor. If you don’t know how to make money on your own, there are plenty of people out there who do. Network and ask successful individuals for advice and guidance. A lot of times people will be more willing to help out than you might think, or they might have other connections that may lead you to future job opportunities or business ventures. Remember money breeds money.

5. Avoid debt when there is no return on the charge. My father once told me “don’t put it on your credit card unless it will pay you back or last you for more than a few months.” He was right. Only invest with money you don’t have if it’s going to pay you back the same amount or more. Do not ever put yourself in a position where you have to work for your money. You always want your money to be working for you. So be smart, invest wisely, and think thrice about what you are swiping your credit card for.

6. Shoot big. So you want to be wealthy!? Instead of aiming for $1 million, aim for $10 or $20 million dollars. Lofty goals will keep you hungry and make you less likely to settle after your first big paycheck. Many people stop working hard after they feel comfortable enough. This is why lottery winners never stay millionaires for long. If lotto winners had a financial savvy mindset (side note: they likely wouldn’t be playing the lottery in the first place), they would invest their money. And the disappointment that 80% go bankrupt after a few years (fact), would not exist.

7. Understand that Money doesn’t sleep. Just like the Michael Douglas in the classic Wall Street. You have to be a hard worker. Even though your job ends at 5pm, this does not mean the opportunities to make more money do as well. Opportunities to make more money are always arising, day or night, you just have to go out and find them.

8. Treat money like its a girlfriend. Keep a close eye on your wealth and money. If you don’t make your money your number #1 priority, it is going to leave you and walk right into the hands of someone else. So don’t ignore money because after a while it will end up ignoring you.

9. If you want to be rich avoid embracing the idea of being poor. If you want to truly be happy, this does not make sense. Yes, yes I know the saying that goes something like “it’s not about they money, it’s about being happy.” Well let’s be honest for a brief moment here. Whoever said that, definitely did not live in our generation. Money can bring you a lot more happiness than financial insecurity. No matter how happy you think you are, nothing is worse than not knowing when your next meal will be or how you will make next months rent. Stress resulting from financial insecurity can make even the most optimistic person unhappy. Money gives you more freedom in life… freedom to live how you want to live. As selfish Americans, we know how important our freedom is.

Don’t Redline your Financial Health, Stay Under Control

Continuation from the last article..

If you drive a stick shift car, then you are likely well aware of the dangers of redlining. Redlining refers to the red area on the RPM meter; This is the area above which the engine is designed to be safely operated. In terms of spending habits, riding the redline consistently will not only hurt your financial health, but will surely cause you problems down the road. When driving a stick shift car, it is important to shift when necessary so you don’t break your car, or your bank account. In terms of finances, redlining can be defined as spending or taking on more debt than your income can afford. Which is the opposite of creating wealth.

In last week’s article, I emphasized that becoming wealthy means that you absolutely must spend less than you make. This still rings true, but it is very important that this principle  isn’t over simplified or misinterpreted.

Living by this simple principle means that you must spend less than you make at every spending opportunity. The simple mind will look at their spending on the most basic of levels. I am very much guilty of this, as are most of my millennial friends. It seems so easy to justify spending $400 of your $600 dollar pay (post rent) on clothes, sunglasses, shoes, clubs, restaurants, bars etc. because technically, you are spending less than you earn. You may even think to yourself, ‘If worse comes to worst I will just skip a couple of meals.’

When most people think of the word expenses they think of the bare minimums such as

  1. Rent, water, electricity
  2. Food
  3. Going out

As a 20-something these are probably, the big expenses that you have to pay. From my personal experiences I have justified my frivolous spending on material items by making sure that these three bases were somewhat covered before I just went for it. This mentality is flawed, there are many other expenses that we tend to forget about, these include: lunch at work, Netflix, Spotify, gym membership, late night street meat, refilling bathroom supplies, dry cleaning/wash and fold, that extra round you bought everyone when you were already wasted, movies, dates, 5% to savings and many other random expenses that come along with living in the city. These are the extra expenses that will cause you to redline your personal financial health that you need to remain cognizant of (and don’t forget, just because the charge went on your credit card doesn’t mean that it shouldn’t be counted in your expenses).

When we’ve already spent all the money that we have early on in the pay period because we decided that we needed new Allen Edmond oxfords or those Jimmy Choo heels we are left with a credit deficit because it turns out they were just not our 20-something year old personal budget, go figure.

When I tell you to spend less than you make this means spend less after every single expense has been accounted for and sometimes this means that you actually don’t have enough money to drop $500 on a new suit or hand bag one Saturday of the month because it just doesn’t work within your means (also remember to base your income on your take home pay and not the amount you get before taxes). You can’t afford to be redlining. Redlining is bad for your financial health and makes saving impossible. The hardest part about credit card debt which is inevitable at our age is trying to save and pay off the debt at the same time. If you really really want to be wealthy you have to be consistent and strict with your money until you actually can afford to spend a little. I will be the first one to tell you that every once in a while its fun to rev the engine and redline a bit, splurging on something big but making a habit of this can become a downfall to any wealthy person.

Now is the time to save and skip the redlining because it only gets harder as life goes on and gets more complicated!

Stay tuned for part three of the spending sections.

Don’t Skip On Your Taxes, Keep Every Penny

Approximately one month ago, I had a big decision to make. Do I pay a professional or do my own taxes. After about 3 seconds I knew the answer was clear. It’s like I had forgotten that I just graduated from business school with a major in finance. When people hear the word taxes many tend to cringe because of thoughts of endless paperwork and boring meticulous detail. Thankfully this isn’t 10 years ago and technology has advanced tremendously. We have TurboTax at our fingertips, and for all of you who don’t know, even a child can use this product. It makes doing your taxes as easy as those computer games they make for 5-year olds with the colorful pages and big text.

Here are a couple of reasons to do your own taxes.

  1. The software is easy to use, TurboTax does a great job making their product as unintimidating as possible.
  2. You are more aware of your own money, how much you are making and how much you are saving.
  3. Understand more about politics and where your money is going, if you don’t like how much you’re paying; make sure you vote in the next election.
  4. Saving money. Why pay your local accountant $150-350 when you can use turbo tax for free; if you qualify for the free version. If you make more than $55k, the other version will run you about $90.
  5. 1-step closer to becoming financially independent and more of an adult.
  6. The more you know about taxes the more you can benefit from deduction such as student loan Interest, job hunting costs, and moving expenses.

As a young millennial, most of us will be filing single with no dependents. This means that for most of us our taxes will be simple and less complicated than our parents. We can see our deductions and get every penny that is ours in our tax return. The average tax return is just shy of $3,000, which is a pretty big incentive to just get them done.

It may be tempting to just spend this money on frivolous toys such as a new laptop, expensive sunglasses, shoes or bottle service, but I would recommend investing in your student loans, credit card debt or investing for the future. With interest rates and loans as high as they are it’s almost as if you’d be paying yourself more.