10 Characteristics of Debt-Free People

On February 6, 2014, in Finance, by Early Financial Freedom
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I just read an article on MarketWatch.com titled “10 characteristics of debt-free people”. I am a debt-free person so I was curious to see what they have listed. You may read the original article here.

 

10 Characteristics of Debt-Free People 

1. They pay attention to details [I totally agree with this]

2. They know their stuff [I totally agree with this]

3. They pretend they make less [I agree with this]

4. They think long term [I totally agree with this]

5. They aren’t afraid to ask [I totally agree with this]

6. They save [No brainer - I totally agree with this]

7. They set goals [Another no-brainer, I totally agree with this]

8. They say no [Skipping That Latte Alone Won’t Make You Rich! but I agree with this]

9. They know the value of cash [I personally like using credit cards so I can keep track of my expenses to pennies. I of course pay it off every month]

10. They value experiences over stuff [I totally agree with this]

 

Here are the Some Financial Rules that Our Family Practices:

First and foremost, have your family in order. A stable family where husband and wife have similar or same set of goals is the bedrock of financial and emotional stability.

It’s always The Family Finances, never his or her finances.

Be happy with what you have, not with what you could or should have!

Do not compete with Joneses! One of the best ways of doing this is to live in a neighborhood that does not force you to compete with others in the first place. For example, drive a modest car and live in a place where everyone drives modest cars. Don’t get me wrong competition can be a good thing, but in the case of “Keeping up with the Joneses” it can lead many to an unhappy bankrupt life.

Be mindful of your financials. Always plan ahead. Never ever carry any credit card debt. That does not mean don’t use credit cards. Do use cash reward credit cards all the time so you can track your expenses AND earn money, but don’t go above what you know you can’t afford.

Try to make as much money as you can. One of the best ways of doing this is to work for you; own a business. Keep in mind that owning a business could be as simple as having a website or selling something that is in demand and you know how to make or provide!

Save as much as you can. Choice of saving may vary, but do save!

Always live below your means, regardless of your income.

Know, plan, and track your cash flow for short-term and mid-to-long term

OVER estimate your future/potential expenses and UNDER estimate your future/potential income.

Live in a good public school district so you can avoid the expense of a private school and take advantage of the free amenities, such as library, community center, tennis court, etc.

 

Retirement Roadmap: 12 rules of the road

On January 23, 2014, in Retirement, by Early Financial Freedom
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I have an account with Fidelity and like their weekly Viewpoint articles. In the latest Viewpoint, they have rules of road suggestions for a successful retirement. I am just mentioning the main points, you may read the full article here.

 

1. Aim to save 10%–15% or more of your income each year, including any company match

2. Don’t be too risk averse

3. Be mindful of taxes and expenses

4. Location matters

5. As a starting point, plan on needing 85% of your preretirement, after-tax income in retirement

6. Aim to accumulate at least 8X (eight times) your ending salary before you retire

7. Plan for success

8. Guard against inflation

9. Plan on covering essential expenses in retirement with guaranteed income like Social Security, pensions, and annuities

10. Be careful not to withdraw too much too fast

11. Stick with your plan

12. Take action if you’re behind

 

I think these 12 rules of the road followed properly would make you a happy and healthy retiree when it is time!

Retirement and Financial Planning Related Resources and Links

On December 26, 2013, in Retirement, by Early Financial Freedom
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There are many easy to use and free websites/resources available for retirement and financial planning in general. Below are a few of my favorites. Please feel free to recommend your favorites.

Morning Star Instant X-Ray

“At a glance, understand the basic characteristics of your portfolio including its asset allocation, exposure to different investment styles, geographic regions, and sectors. Plus, easily analyze how well your holdings and expenses are adding up to meet your financial goals.”

T.RowePrice Retirement Income Calculator

“Our award-winning retirement planner can assist you in calculating how much you may be able to spend each month and how long your savings will last. Use our retirement calculator to better manage your financial assets and get the most value from your retirement savings.”

Vanguard Retirement Nest Egg Calculator

“How long will your retirement nest egg last? How much could your investments grow? Answer a few questions to see a long-term projection. Then try making a few changes to view the impact on your results.”

FinancialMentor The Ultimate Retirement Planning Calculator

“This retirement calculator has more functionality than most. It does all the usual forecasting of retirement savings needs, adjusting for inflation, etc. that other retirement calculators do consistent with the way people used to retire, but in addition it allows you to plan a modern retirement with phased income, part-time business income, real estate income, and much more.”

The Flexible Retirement Planner

“A financial planning tool powered by Monte Carlo Simulation”

FIRECalc®: How long will your money last?

“How long will your money last?”

The Bogleheads Tools and Calculators

Miscellaneous tools and calculators

MarketWatch Mutual Fund Comparison

Mutual fund comparison tool

Taxable vs. tax-advantaged savings?

Which one makes the most sense for your situation?

The Bogleheads Historical and Expected Returns

Historical and expected returns of various financials

Portfolio Visualizer

“Portfolio Visualizer offers a set tools for analyzing multi-asset class portfolios and the benefits of asset class diversification and multi-factor investing. The provided tools include portfolio backtesting based on both historical asset class returns and realized returns from US mutual funds, ETFs and stocks. In addition the site provides tools for Fama-French factor analysis, Monte Carlo simulation, visualizing efficient frontiers, asset correlation testing and comparing timing models.”

MSN Money Plan Your Retirement

“Will you have enough money to enjoy a secure and happy retirement? Use our retirement calculator to see if you and your spouse have an effective retirement plan. Calculate how much money you will need to withdraw each year, and whether you need to save more now and play catch up. Also, you will be able to factor in Social Security income and expected inflation.”

Target Your Retirement – Financial Security Initiative at Boston College

By Financial Security Initiative at Boston College

Bankrate Home Values

For New York it says “The median existing single-family home price in the Northeast rose 4.5 percent, to $256,800, in the third quarter of 2013 compared with the third quarter of 2012. Scroll down to see how your hometown fared.” Find out for your own state!