3 compensations factors that make companies great.

The great resignation marches on and in the U.S. unemployment is near record lows. Millions of people left the workforce due to the pandemic. Whether it was creating their own income streams or boomers retiring, there are a shortage of workers in the U.S. Now let’s be very clear here, the available jobs are not high end 6 figure salary roles. Sure there are some of those but nearly everyone has leveled up, so your traditional entry level positions are the ones that have the most openings presently.

Regardless of when you get a new job or if you are evaluating your current company there is one truism you always have to remember. Companies need you to perform tasks so they can make money. You wouldn’t be employed if you weren’t either generating income for the corporation, or supporting others who did. So in this sellers’ market (you the employee are the seller) we can now be even more selective of the places we want to work. There are 3 compensation factors that make companies great. This may not be in line with other lists you see out there but from an employee’s stand point, here they are.

Surviving 2020 & covid
Great, another list…..
  1. A robust retirement plan: This includes employer match, Roth and Traditional 401K/403B options. This should be managed through a large firm like a fidelity and the vesting time line is no longer than 3 years. Retirement planning is critical and most successful retirees in the modern era have created wealth through automatic withdrawals via their employer’s plan.
  • Comprehensive benefits: Health Insurance is obvious but you should have 3+ plans to choose from. Dental, LTD, STD, a 1-year life insurance of your salary. There should be A good PTO (Paid time off plan) that scales based on tenure. Every 5 years you should receive 1 additional week of PTO capping at 6 to 8. PTO should be one lump sum, vacation and sick and you get to manage it. Along with major federal holidays. This is where you really get value as this is part of your compensation package. It’s not just the annual salary, it’s the sum of the value of these “perks” as well.
  • Profit sharing: This is one of the rarest benefits you’re going to see out there. If you get into a company with this benefit you really lucked out. Most corporations keep their profits to make distributions to their shareholders. There is nothing wrong with that, they are paying you a salary and offering you benefits. It’s a fair exchange and one that has been the norm for decades. Profit sharing can come in all sorts of forms. Ideally what you get is if the company has a surplus to budget at the end of the year that amount is distributed to employees. Some managers are offered “profit sharing” of some form. I got quarterly performance bonuses based on budget performance in one role.

The 3 items listed above are in addition to your base salary. This is a sellers’ market and employees are now in a situation where they are empowered to create very good deals for themselves. THIS WILL NOT LAST FOREVER. Look, work isn’t meant to be easy. It’s likely you fall into one of two categories. You are either someone who truly loves what they do, or you work to obtain income so you can do the things you truly love.

Most of us fall into the latter category. Work is a means to get income to live life. The more perks you can get the better life becomes. Now is the time to look around, see what’s out there, measure your current work situation. Believe me if the situation was reversed and there was a surplus of workers your company would be looking to see if they could pay you less.

Thanks for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Commodities – Should you invest?

For the first time in a long time we have inflation to the point where it is materially affecting multiple financial sectors. Bonus tip: Anytime oil prices rise, it affects pricing on nearly all consumer products. We also have the artificial inflation of the stock market due to interest rates being kept at historic low levels for over a decade. On top of that you had the pandemic that decreased production and you had governments stimulate with increase payments to individuals. These two factors alone cause inflation, less products and more money = product price increases.

Now before I get to far into this let me give you the normal disclaimer. I am a finance professional with 30 years of experience. These are my opinions based on years of observation, any decisions you make pertaining to your personal financial choices should be done so with a great deal of research beyond my blog posts.

Disclaimer out of the way, what does all of the reality of the first paragraph mean? It means commodities will increase. Oil, Precious metals, specific produce items wheat as an example. Does this mean they are a good investment? Yes, and no, first the no. Buying them now would break the basic principal of investing and wealth building (buy low sell high), you would be buying at a high, don’t do that.

Yes, because a diversified portfolio is a good thing. If you had gold in your portfolio at the start of the pandemic (3.1.20 roughly) it was trading at 1497.00 US per ounce. 2 years later? 1944.00 US per ounce that’s nearly a 30% return. Oil, wheat, Silver you can go figure it out, they are mostly up. The point here is you are seeing these items increase because the market is changing. The war in Ukraine effects commodities, specifically Wheat as Ukraine is a huge Wheat producer but what happens when markets change (with the many factors listed in this narrative) commodities tend to rise.

There is no sure thing in investing, its always a rollercoaster.

Ideally what you want to do is use the current financial climate as notice on how to diversify your portfolios going forward. Gold as an example, will come down. Should you go heavy into gold when it does? No, you should consider SOME gold though. 2-5% of your portfolio is what I recommend to family & friends buying at a low (I use 3-5 year price averages myself). Wheat will be another one that spikes soon, keep an eye on that.

Overall, commodities are a useful buttress for lower stock values. If you weren’t in commodities prior watch the prices in 2022 it’s going to be a good year to gauge your comfort level with commodities. Just like stocks it’s a gamble, but sometimes when you gamble you win and had you bought Gold (as an example) years ago and stayed with it, you would have a spectacular sell opportunity now to make some great gains.

Always be diligent when investing and don’t close your mind off to any specific sector of the markets. A diverse portfolio that takes a long term view on investments is prudent. Commodities are a big driver in markets (look at oil prices), ignoring them as investments isn’t the smart play. Nor is using a large % of your investing resources and putting that into commodities. It’s a sell position now. Take your gains if you have them and remember the simple phrase “buy low sell high” should always be paramount.

Source for Gold comparison:

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

How to navigate the stock market roller coaster

The markets have been volatile for the last week or so. Inflation, Ukraine, Omicron lots of factors go into this. Let me say clearly that I am a finance professional with over 30 years of experience. I am not a financial advisor and anything you see here is my opinion only. Have I seen something like this before? Yes, I have. Markets have crashed many times in the last 30 years. While I wasn’t investing at the time I am old enough to remember inflation in the 70’s. Many of you are seeing inflation for the first time and are shocked at its impact.

First let me say that I think the markets have been artificially inflated for decades now due to U.S. monetary policy. Keeping the fed rate so low for so long has forced many investors into the market that wouldn’t have necessarily gone in before. Getting .25 of a % of interest at a bank is a killer, even the most cautious investors can’t stomach that kind of return. So right off the bat I think there is a 10-15% inflation of the market (approx. 3-4K points in the dow) due to fed policy, likely more.

Now it’s also true that over the last few decades many companies have created immense wealth and broadened their services. The market isn’t a complete illusion, these companies have value based on market share and branding. So how do you navigate the stock market roller coaster?

You don’t.

Am I contagious?
You don’t ? Is that the best this guy can do?

I know, not the complex detailed answer you wanted but the key to wealth building is consistent investing. If you jump every time there is a dip in the market you will not make a lot of money. Statistically the market normally returns approx. 8% a year. This link shows you the statistical return break down for 147 years…. Yes, we have that much data.

If you want the simple facts here it is: 101 years shows a positive return, 46 years showed a negative return. So statistically the chances of you suffering through concurrent negative years is low, the market usually bounced back. Additionally, if you continued to invest in those down years purchasing your assets at a lower price you balance out the actual cost of your portfolio to you when purchasing in high years.

The trick has been and always will be, when you need to convert the assets to usable currencies (when you sell). If you need to sell now, you are most likely going to take a loss. Now only you know when your sell date is. Mine is approx. 10 years. In the next 10 years I will begin to take my gains with sell offs and move my investments into more principal friendly investments. The older you get the less window you have for the sell, always be mindful of when you will need the money.

So you don’t do anything unless you are at a point you need the money. Otherwise stick with your investment plan. The likelihood of a multiyear down cycle is very low (it is possible). My instinct tells me 2022 is going to be a highly volatile year and it will not be for the faint of heart for investors. Many people can’t take the risk, it’s too stressful. I completely understand. For me, this is a buy opportunity and I am happy to keep accumulating assets at a lower price now to balance out the assets I have that were purchased in peak markets.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one?  Click here.

Finance tip – The Credit Score Secret

So the first finance piece on the blog for 2022 but the same disclaimer…. I am finance professional with 30 years of experience. That said the views expressed on this blog regarding personal finance are my opinion and any financial decisions you make you should do so after having done your own personal research.

If you live in the western world you have a credit score. Now our friends in the east (our Asian and Australian friends) might have something similar, if they do I am not familiar with what it is but its yet another “number” you are given to identify your financial prowess. Now that we are in the midst of the digital age it is very easy to accumulate data on consumers.

Bitcoin is a game changer

Be under no illusion, every financial transaction you make is being stored in some data base and scrubbed as part of meta data for analytics. How many people bought tooth brushes in Dec as opposed to Feb… That data is then resold to manufactures and other large corporations for great profit. Let’s follow the example a bit further… Let’s assume that in Dec tooth brush sales are 300% higher than Feb. That’s critical information for someone who makes toothbrushes, that could be the lynch pin info that creates high profits for their company. You get the idea.

So you as a consumer are given a credit score. It has been pumped up and built up to be a reflection on your overall prowess as an economic entity. Potential employers will do a “credit check” on you. Some dating sites as part of the vetting system perform these checks as a service for their clients. You even have social conversations (well pre covid anyway) where people would actively talk about their credit score as if it were some bench mark for success.

Here is “The Credit Score Secret”

The credit scores purpose is to grade you on your ability to finance material items you can’t afford

Simply put, your credit score is a benchmark on your ability to make payments on items you can’t otherwise pay for outright. Its far more lucrative for a company to sell you something and have you pay overtime with interest. First, they make more over time due to interest and Second, they can up sell you additional services that complement the original purchase.

The bottom line is, you only need a credit score if you are buying something you can’t afford. In my opinion, the only case you should ever need this is when purchasing a house. You should not be buying other items unless you can pay for them outright, and yes that means cars too. I can bend a little on cars but you don’t need a 50K car, a 10K car will suffice. It’s another illusion the finance industry has created for you.

“Give them a score so they can measure themselves against others”. Its clever, sinister marketing. That score is a curse because it really means you have a high probability of purchasing things you can’t afford and paying for them over time. It’s an indication of how poor at finance you really are, financing a TV, A vacation, a phone… It means you’re willing to pay MORE than the item would normally sell for.

Don’t be fooled by the finance industry. They want you to be good little consumers. “payments” means “interest” and interest is pure profit for them. The item is still worth 20k regardless, but you, because you want it now are willing to pay 30K for it over 10 years because you want it now. Companies love that mentality and that is the “credit score secret”

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Advanced Finance Tip: Annual Gift Tax Exclusion

DISCLAIMER: Any financial advice I give on this blog is my opinion based on 30 years of working as a finance professional. Before making any financial decision do as much research as you can to make an informed decision.

So in the U.S. we have an extremely complicated tax code, its frankly ridiculous but that’s another blog post entirely. One of the issues the more fortunate of us face is how do we leave our money to our offspring without getting killed on taxes. This doesn’t apply exclusively to the rich either. Middle class Americans who have any amount of money face taxation on their net assets. The older you get the less you actually need your assets to survive. Specifically, there comes a point in your life where you have enough money that generates income that you will not have to compromise your principal.

Again, this isn’t for everyone… Many people live paycheck to paycheck but there are some of us who have a paid for house, a good chunk of change in our 401K’s and are debt free. We aren’t multi-millionaires but we do have money in excess of necessities. You may ask yourself “well Karac, why can’t I just spend it on all those things I wanted to do in retirement?” I would say to you “what things?”

There is this myth that once you retire there is glut of items or travel that you are going to purchase. You likely aren’t going to buy a new car, a 2nd house, travel 1st class. I mean you may, but average middle class people don’t do this regularly in retirement. Once in a while? Yes. So we are sitting on cash, when we die you aren’t going to care what your 401K balance is, your heir’s or the government WILL care because they benefit from it.

Decades later, they will pay taxes on their inheritance.

This is when all sorts of tax issues can happen and depending on the family dynamic horrible drama. There is an option and that is gifting money to your heirs now prior to your death. In 2021 the U.S. allows for a Gift Tax Exclusion of 15K per recipient. So if you had 150K you could gift 15K to 10 people and not have any tax implications. There is a life time limit to how much you can gift, its 11.7 mil which most of us are never going to hit.

So the tip: When you are starting your retirement planning, it may be prudent to calculate annual gifts to your heirs. It’s likely that the money now will help them more than money later as they can then take the gift and use it to supplement their current income. 15K is a lot of money. If you retire at 62 and live the average age (in the U.S.) of 82-84 (let’s say 83) that’s 21 years. 15K a year for 21 years = $315,000.00 that your heirs are not going to inherit and pay associated taxes on.

Again this is an advanced finance/retirement tip. You should be doing a lot of research and planning when you approach retirement. For a good article on Gift’s and Gift Taxes check out the article here.

Thanks so much for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Finance Tip: Commercial real estate vs residential real estate

Another financial tip post for the moderate to advanced investor. Normal disclaimer: This is my personal opinion based on decades of work in the finance industry. The intent of this post is to give you my opinions, observations and insights into my experiences to help you gather a more robust knowledge base to help you make good financial decisions.

We are in a hot real-estate market right now. Historically low interest rates that have been sustained for decades by the federal reserve have (IMHO) negatively impacted housing prices. That’s issue 1, issue 2 is Covid and the rental issues we saw over the last few years. Depending on where you lived there were eviction moratoriums, rent relief, on and on.

The long and short of it is, it’s a sellers’ market. Houses are going for premium prices and it’s likely that on the next down cycle those houses will decrease in value leaving many new home owners in an upside down equity position. We have seen this many times in the past, housing goes up and down but over a 30-year period you will likely make money on the investment. The other issue there is many people aren’t spending 30 years in a residence anymore.

As an investor real-estate is a great investment because the down turns normally don’t last too long and even when your equity position has down cycled the asset is still generating income via rent. Land is an entirely different discussion as the asset value is really predicated on the anticipation of are growth so I am not going into that here at all. Residential vs Commercial though is a very important discussion and when (and if) you are at the point in your investing life that you want to get into real-estate its crucial to decide which way you want to go.

In a market like the one we have now, if you had a portfolio of residential properties you could flip it and make a killing, again it’s a sellers’ market. The issue with residential properties is, and always will be the landlord tenant relationship. Flipping houses is one thing, that in my mind is a commercial endeavor you are never renting this space you are purchasing an asset and reselling the asset. Residential real estate is a headache because you have tenants.

The housing market is on fire, buy low, sell high….

Of course you have steady income via rent, assuming they pay of course. The downside is you are trusting your asset to people whom are using the space to live. Unlike a commercial property where your tenants are using the space to generate income.

I bolded the above because it is the lynch pin in the advice. How people live has so many variables we can’t discuss them all in one post. As a landlord you are beholden to their lifestyle, they could be wonderful and have the same moral compass you do, or they may not. The worst part of residential real estate is when you sell (if you do) the residential value isn’t simply the location of the asset but how the asset was maintained and other residential locations in that area.

Commercial property? Its highly likely that a commercial renter is going to do their best to maintain and in some cases upgrade the property to make sure they can generate income from their rental investment. The residential tenant has no income potential from your condo, sure their quality of home life is impacted but they go elsewhere to get money to live. The Commercial tenant relies on your property to generate income so they can live their life.

Its logical then to conclude your best possible income outcome is from commercial property. They are more expensive but you are renting (leasing) your asset to someone else who has in their best interest to maintain and maximize your property so they make money. The lease payments come in every month, the property is maintained, the tenant makes money. Everyone is happy and your asset is much more secure.

The residential property? Maybe you got lucky and got a renter who cares. Maybe you didn’t. Anytime something happens at the residential property you have to fix it. The commercial property? They will likely do it and ask for a credit. Residential, you have to take care of it and that time cost is immeasurable. At the end of the day, Commercial properties are less headache and higher income potential due to less time investment required by the landlord.

Today’s real-estate market is hot and residential properties are through the roof. That 3 store strip mall that services those residential properties? It’s always there, it’s always got traffic regardless of how much houses cost.

Thanks for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Advanced finance tip – Aristocrat stocks

As I embark on this post I want to remind everyone that any financial advice you read here is my opinion. You should always do your due diligence when it comes to your personal finance. Talk to as many people as possible, read as much as possible and get educated. On this blog you can find many basic finance tips that are basic and require very little in the way of finance knowledge they are common sense based.

This tip is common sense based to, but it is a more advanced approach to accumulating income. Aristocrat stocks is a term used for companies who pay out dividends, with two very important distinctions.

  1. A company is a dividend aristocrat if it increases the dividend it pays to shareholders for at least 25 straight years.
  2. A dividend aristocrat must also be a member of the S&P 500, and some investors may add additional screening criteria.

Source data https://www.investopedia.com/terms/d/dividend-aristocrat.asp

Compounding interest over time is the secret sauce to increased wealth.

The first distinction is the most important, it increases its dividend payouts for at least 25 years straight. These are companies like McDonalds, Exxon, IBM, Walmart, all huge corporations with decades of a track record of sales and growth. These are expensive stocks, they are blue chips, they are some of the most cash flush companies in the world. Some of these companies’ net sales in a year are greater than many countries GDP.

Thus the title “Aristocrat”. So what does this mean for you? As you move into a more comfortable space with your finances you will come to a point where you will want to generate income. Stock growth in of itself isn’t income until you sell the security. Dividends however are payouts you get for just owning the stock. Now why Aristocrat stocks are a “thing” now (they always were, but you see it more now) is due to the fact that interest rates have been so low for decades you cannot earn decent income from banks.

To put it in context, in the 1990’s your range on 6-month Certificate of Deposit was 8.62% – 3.53%. Now that’s a 5% range which is significant. A 6-month CD now? Good luck getting more than .5%. So of course investors have looked elsewhere for securities which gave you a guaranteed return. Believe me if CD rates were 3% or higher we would be discussing that. So we turn to aristocrat stocks. Even during economic down turns, we know places like Walmart, Apple etc. aren’t going to go out of business they are too big.

So investing in single stocks is dangerous, the market could take a down turn and the actual PRICE PER SHARE might go down. In that instance you may actually have a loss of value but you will still get a dividend. Remember Aristocrat stocks are a great means to getting guaranteed income. We used to be able to get this income from CD’s and saving accounts. The downside to this is, many people are in the stock market hence why it is so bloated. Ideally we get back to a reasonable interest rate that enables a good asset mix.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this? Click here.

Finance secret finance professionals won’t tell you (but I will)

It’s time for another finance piece on the blog. Before we get to far in remember that any advice you see here is my opinion based on 30 years of experience working in the finance industry. You should always obtain as much information as possible before making any financial decisions, and not take one bloggers advice as gospel.

The basis for wealth is income. Surviving in today’s world you need money and the more of it you have the more you can secure positive future outcomes. Simply put, income allows you to purchase things to make life better. TV’s, Food, Furniture, Housing on and on. The more income you have the more wealth you accumulate and that allows for the ability to make those purchases over longer periods of time.

“What’s the finance secret then Karac?”

It pertains to how you obtain income. Most of us exchange our time for money, you are getting an hourly wage. Even salaried people, you equate the hours worked to the money received. The problem with this method is there is a fixed number of hours you can potentially work. So your plateau for this income model can be reached quickly.

More governments will start regulating Bitcoin in the next 3 years.

Sure you can change jobs and get a raise or get a promotion but you pretty quickly cap at that level as well. A few years go by maybe you get raise but overall you are stagnant you are not growing your income profile and your wealth building slows. That isn’t to say you can’t have a great life and build wealth in this model, millions have. However, it always requires you to live with less now so you can have the same later on.

The secret is results based income. Essentially sales or production. Most people do not have an income based on results. Income based on results nullifies the weakness of time based income because results directly correlate to your skill. What may take me 3 hours may take you 1. Let’s say we are selling a graphic design for 5K. You worked 5 hours on it, I worked 10. Effectively you made double what I did, for the same result because it took you less time. Had we both been time for money based, I would have made more money for the same outcome.

Results based income is a fantastic way to maximize your earning potential and so little people do it. The finance industry wants you locked in to the time based job, making a fixed amount and saving a fixed amount. This enables them to project their earnings based on your investment strategy. A results based income earner is a finance professional’s nightmare. You could earn 50K in a week and then not have income for 2 months.

How can I forecast my fee’s off your investing with that kind of income model? This is why they don’t tell you about this income and wealth building model. Yes, it’s hard to pull off, but results based income is a great way to make a lot of money quickly. How do you do this? Look at all the people on EBay, they are essentially working on result based income models. They sell more they make more. So ya they have to hustle to get the product but that’s the return for them.

You? Go to work for 10 hours a day and make “X” every day, regardless of how hard you work. Even as a side hustle, selling the result = the greatest income potential for you. People will by anything, there is great demand. Teach someone a language, cut lawns, clean gutters, make walking sticks, resell used clothes on and on and on.

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

3 quick ways to find more cash

Below are 3 things you can do right now to get more money. These will not be side hustles, or huge amounts of money but they will save you money over time and thus increase your income and allow you to become more financially solvent. As a reminder any finance advice you see on this blog is my opinion only, based on my decades of experience in the finance industry. Before making any financial decision always obtain as much information as you possibly can.

  1. Consumption apps: What does this mean? Simple example the Starbucks app. If you consume coffee, food, gas and you frequent a particular place regularly you should see if that place has an app that offers discounts. So many of them do now, drug stores, grocery stores, fast food, sit down restaurants you name it. What many of them do is offer you discounts based on your purchases. If you are going anyway why not? Do not go out of your way to buy more, just keep your consumption at its normal level and take advantage of their promotions and you will over time save money.
  2. Health plan reimbursements: Many health plans have an annual reimbursement for gym memberships, and working out. If as an example you walk regularly, you can have your doctor sign a letter stating you do so and submit it to your health plan. Many health plans give a % back to you of your cost (gym membership, shoes) or have a flat reimbursement annually $100-$1000 if you prove you were exercising preventatively. This can mean basketball league, after work softball, a gym membership, a martial arts class, yoga instruction. Even several state sponsored and federally sponsored health insurance plans have this kind of reimbursement.
  3. Sell stuff you aren’t using: Old golf clubs, Clothes, kids toys, pets supplies as examples. There is an entire economy out there on EBay and craigslist (and others) of people buying and selling used items. It’s not hard to set up an eBay account and sell things, with the internet you can get a good idea of the value of items as well. It maybe that you have an old leather jacket in your closet you haven’t worn in years and don’t plan to. What if that sold for $75 on EBay?

Bonus Tip!

Look through your stuff and see if you can identify hidden gems. Have an old comic book collection? An antique watch? A vase from your great grandmother? Some of these items may be worth a lot of money. Ever see a show called the Antiques roadshow? Most of those people have no idea what they have, and who knows, maybe that random painting you have in storage is worth something….

Thank you for coming by and supporting my blog I really appreciate it. Want to see another post like this one? Click here.

Couple of quick thoughts on “FIRE”

FIRE = Financial independence retire early. It is one of the newer concepts in the finance world and the practioner of it have some amazing stories, many are complete successes. Make no mistake about it, this is an extreme practice in the sense that your goal is to save as much as possible as fast as possible to achieve enough capital to generate income that enables you to retire early. Most of us have been trained by the media, government and financial professionals that you want to work until you’re in your 60’s then retire.

FIRE looks at those principals and proposes “Why not retire at 35 and take back 25 years of my time?” It’s a great concept and If done correctly is absolutely viable and something everyone should strive for. The issue is how do you come to a point where you are able to save 50-75% of your income? That’s essentially the range you’re going to have to hit to achieve this goal to retire in your 30’s, depending of course on your income year over year but that range is generally accepted in the FIRE movement.

What does that actually look like?

  1. No vacations
  2. Cheapest food possible
  3. Second hand clothes
  4. Used cars
  5. Cheapest rent possible
  6. Minimum utilities (no cable, no Wi-Fi)
I’m begging you, no more lists….

To list a few. See this is the hardest part and it’s something a lot of the FIRE sites don’t go into too much detail on. The fact is you have to have extreme discipline and sacrifice for a short to mid amount of time to achieve the long term goal. 10 years of living a minimalist life while accumulating as much income as possible while everyone else lives life? That takes a unique person to pull off but the payoff is what makes it all worth it. Imagine for a moment you have accumulated 400-800K thousand in savings via investments whatever by 35 and have no debt?

Could you live on that for 40 years? Yes, you probably could. You would not be leading an extravagant life style though. New Lexus? Nope. Vacation homes? Not likely. European trips once a year? Probably not. If you invested your money well and the markets return their historic averages which is between 8-10% on a 600K nest egg you would be generating between 45-60K a year (estimated).

That would all be passive income, you wouldn’t be working and you would have the benefit of being able to do whatever you want with your time. FIRE is a very unique nuanced movement it does work, you can do this, but it takes the right person to pull off. I admire the people that have done this, I didn’t I took a more traditional route and now in my 50’s I have a great financial situation but I’m 20 years removed from many of the FIRE practioner. I could probably retire now but that would mean my kids would have to pay their own educations which isn’t horrific, I mean I did it….

Maybe FIRE is right for you, I don’t know. If you really want to retire early you have to start working on it ASAP. Generally, the best way to accumulate wealth is to be debt free so all of your income you generate is not sent to someone else. Simply put, anything you can’t pay for outright you can’t afford and “payments” are giving someone else money so you can have something you can’t afford. You need to get out of that cycle ASAP and stop sending other people your income. Once that happens all your income can be used to generate more income and build your wealth profile. It piles up fast, but it remains stagnant if you do nothing.

Thanks for coming by and supporting my blog I appreciate it. Want to see another post like this one? Click here