Personal Capital Review–The Ultimate Net Worth Tracker

Personal Capital Review--The Ultimate Networth Tracker

Personal Capital is by far my favorite networth tracker. It has an incredibly intuitive interface. It allows you to aggregate all the different accounts that you have–and it's free!

If you take some time to think about it you may realize how spread out your investments really are.

Maybe you have a 401(k) with your employer and a taxable account with Vanguard. You might also have a traditional or Roth IRA. And what about those stocks that are just orphaned over at Fidelity? Maybe you've had multiple employers over time and you haven't rolled over your 401(k)s, so they are all just sitting there with your previous employers. Then you likely have multiple banks that you do business with, all of which have several accounts.

Each of these accounts require you to check in and navigate all those different platforms. This can be overwhelming. It's no surprise that many people have no idea what their net worth actually is. Or worse, have long forgotten about account because it's just it requires too much bandwidth to check in on them. It's easier just to forget about it and move on.

The Net Worth Dashboard

Personal Capital eliminates that problem. As soon as you set up Personal Capital you'll get a personalized net worth dashboard. It pops up as soon as you log into your account and you're able to see all of the accounts you have in one place. Then it combines all of those accounts into a single clean chart that gives you a great visual representation of your current net worth and your progress over time.

Start tracking your net worth today.

Tracking Real Estate

You also have the option to put it in your home and rental properties values and mortgage balances as well. Personal Capital will pull estimated market values from Zillow and the mortgage balances from you lender. You can also add the market value of your properties manually if you aren't a fan of Zillow's estimates. That is just incredibly convenient! You'll link each individual account that you want to set up and then from there it kind of takes care of everything for you.

Simplicity

I think when it comes down to for me, simplicity is everything. I mean, it's 2018. You don't need to be logging into 30 different sites just to get an update on where you stand financially. This just takes care of all of it for you.

I still play around with Excel sheets just because I like to do more like future value calculations and tweak different things at the margins. So I'm not saying that you're never going to look at your Excel sheet again. But Personal Capital does all the heavy lifting for you.

Other Features

Tracking Cash Flow Month To Month

I personally don't use Personal Capital for cash flow. Not because it's not a good feature but because I don't want to add the noise of monthly expenses to my overall net worth tracker. I actually still prefer and use Mint for my month to month expense tracking. So I have two different platforms set up. But Personal Capital is what I'm using for all of my investment tracking. AKA the Perpetual Money Making Machine that we're trying to build. 

Investment Checkup

 

Now, if you really want to dig into some of the extra features that Personal Capital has then check out the investment checkup tool. This can actually take a look at your portfolio and it will allow you to look and see whether or not you're overweight in any particular category in that particular portfolio.

So if your equities are out of sync with where you want to be it allows you to quickly analyze that. You can then choose to take action or not. 

Fee Analyzer

If you are just starting to pay attention to your expense ratios Personal Capital has a feature that allows it to look at all the expenses that you're paying on your various accounts and it will highlight for you if any of them are exorbitant.

Now, I don't have a ton of mutual funds that can trick me with some of these higher fees. Not anymore anyway! But if you're just now starting to pay attention to your fees this is a great tool. If you have accounts with past employers you may find that they have some monstrously high fees. This is a quick way for you to assess that, and knowledge is power. Once you can identify that you're paying too much in fees, in many cases you can immediately make a decision to course correct and get into a fund that has much lower fees.

The difference in the fee percentages is millions of dollars over your working career so it's well worth looking into.

Start tracking your net worth today.

The Efficient Frontier

There are so many other tools that Personal Capital includes. You can go into much more detail than I can possibly include in this article, but for you math nerds you can really get into the weeds with this. It can show you where your allocation is on the efficient frontier curve. This is a type of risk modeling. This is right up Big ERN’s alley. Basically it assesses where you are on this curve in terms of being able to expect a higher return without substantially increasing your risk. The implication is that there is a point of diminishing returns, where you're really taking way more risk than you need to for very little in returns.

Allocation Checkup

While it's a total pain to have your accounts spread out all over the internet, the dangerous part is that you can't get a clear view of your allocation. Personal Capital fixes this for you with the allocation checkup. This tool looks at all your investments, from where ever they live and gives you a breakdown of exactly what you are holding. This allows you to look at your cap weight and your allocation models. You know how much are you weighted in various sectors and U.S. stocks. This is amazing.

For example, let's say you are aiming to have 80% stocks and 20% bonds. If you have mutual funds or EFTs in several different accounts, say your Roth and your 401(k), it's very difficult to know exactly what you are holding in each fund, and how that relates to your allocation goals. But with the Allocation Check up, you can see exactly where you stand and can then decide if it's time to take action. 

The Retirement Planning Calculator

It has a fantastic retirement planning calculator. so it actually does allow you to put in projected monthly spending projected investments and then actually allow you to determine whether or not you're going to be able to pull off this retirement. based on current investments and projected annual savings.

So you can say Hey I wanted to be able to spend 60 grand a year and I plan on living off of my portfolio at the age of 40 can I pull this off. It runs 5000 different calculations and then finds the median on how likely it is that you can pull it off.

And based on your current networth and your projected annual savings it can project your likelyhood of success to hit your goals. this calculator is incredibly flexible. and will allow you to play with all the variables you could ever hope for 

It can tell you pretty precisely whether or not you're going to be able to pull this off and then the cool thing is you can actually add an extra features like your Social Security estimate, your wife's Social Security Estimate, and you can make this as accurate as you want. They continue to make this tool better and I'll be honest with you. It is so much better than when I initially when I looked at it and used to set it up back in the day.

Final Thoughts

Ultimately the reason that I love Personal Capital so much is the simplicity of being able to track my net worth in one single place. I highly recommend you check it out. You will not regret it. 

Give Personal Capital a test run right now for free.

Personal Capital Review--The Ultimate Net Worth Tracker

 

073 | Jamila Souffrant | Fail Forward | Journey to Launch

073 _ Journey to Launch _ Jamila Souffrant

Jamila Souffrant tells us about college internships, buying real estate right out of college, a few failed business ventures, and her decision to pursue FI, starting by saving $85,000 in the first year.

 

Check out what we cover today:

  • Jamila is a full-time job, full-time mom, part time podcaster.
  • As the child of an immigrant single-mother, how did Jamila’s childhood experiences impact her college and early professional career?
  • She and her husband saved $85,000 in 2016.
  • Jamila shares what wealth means to her now.
  • Failing Forward: the idea that progress is made, even if when things don’t see to have worked out.
  • Jamila landed a paid college internship that last through all four years of college.
  • What program did she use, and what is the advantage of internship opportunities?
  • How does a paid internship set you up for financial success after college?
  • Hard work, and asking questions helped Jamila move into a job that fit her interests.
  • How did Jamila buy studio apartment in one of the most expensive locations in Brooklyn, right out of college?
  • What happened in her mid-20s that led to Jamila “sleep-walking” through her finances for several years?
  • What was the inspiration for Jamila’s early business ventures and what did she ultimately learn from those failures?
  • In her early 30s, Jamila and her husband made big financial changes in pursuit of financial independence. What ignited the change?
  • What does it mean for Jamila to live her truth, and how do personal finances relate?
  • What steps did Jamila and her husband take to dramatically increase their savings?
  • Pre-tax retirement accounts accumulate savings quickly, and decrease your income, which lowers your taxes – half of Jamila’s 85k savings came in pre-tax accounts.
  • For government employees, the 457 Plan is the fast-track to FI.
  • Getting rid of a mortgage dramatically decreases monthly expenses.
  • Look for opportunities to maximize income, to put toward savings.
  • How and why did Jamila start blogging and podcasting?
  • With two children, and a third on the way, what is Jamila doing now, and how do her family responsibilities impact the financial decisions she’s making?

 

Links and resources:

 

Jamila Souffrant: Journey to Launch

INROADS Program

Mad Fientist

Radical Personal Finance

Millionaire Educator

Rich and Regular

The 4% Rule: The Easy Answer to “How Much Do I Need for Retirement?”

 

——————-

Thank you for being a part of the ChooseFI community!  ? If you want to support us, here are some easy ways:

1) Leave an iTunes review: http://www.choosefi.com/itunes

2) Use our page to sign up for travel credit cards

Note: We may receive a commission if you are approved for cards on this page

3) Most importantly, find your friends, coworkers, and family members who may be open to this message and tell them about the podcast! (Episode 21 is a great starting place)

As Jonathan would say, “The FIRE is spreading my friends!”

 

Jamila Souffrant | Fail Forward | Journey to Launch

Career Hacking As A FIRE Power

Career hacking As A FIRE Power

I absolutely loved the ChooseFI episode about career hacking with ESI from ESI Money.  I listened to it a couple times and realized this is probably my biggest FIRE power right now.

ESI was kind enough to give me some career advice specific to my situation. This article is a reflection of that advice and the action I took.

Career archive

It shouldn’t surprise you that Ms. Fiology has a colorful career history. Here are some of the jobs I've had through the years:

  • Golf course pine cone eliminator
  • Nursing home wheelchair washer
  • Lifeguard
  • Model
  • Waitress
  • Wine sommelier
  • High school math teacher 
  • Secretary
  • Account Manager (current gig, which I enjoy)

The advantage of having a wide range of experience is recognizing patterns and common themes in any industry. For the manual labor jobs, it was really about showing up on time and giving it my all while on duty. For other jobs such as lifeguarding, being a wine sommelier, or teaching there was preparation, education, and certification required to even get into that playing field.

Related: Talent Stacking to Fast Track FI

Once I got into the game, it was about preparation, showing up on time, and giving it my all. For the restaurant work, I needed to shine in my customer service skills and efficiency to make the money, but ultimately it was about showing up on time and giving it my all.

We’ll focus on my current career for the sake of building this FIRE. I currently manage client accounts for a broker/third-party administrator. 

I spend a good portion of my day doing cost/benefit analysis for clients. But, that's balanced with client interactions and focusing on ways to grow our book of business. Yep, and you guessed it, I ultimately need to show up on time and give it my best! 

ESI's advice is money

ESI gave me some sound advice to apply to my career so I can meet and beat expectations: 

  1. Have a conversation with my boss and get his retention expectations in writing.
  2. Discuss what is included in that number.
  3. “As you go through the process, be sure you approach it from the standpoint of ‘I want to be 100% clear what you expect (not like, but expect) me to accomplish in this position so I can be focused on your priorities.’ Then once you have this, you can work to beat it, setting you up for a promotion and/or pay increase down the road.”
  4. Keep in mind that I may be limited by the small size of my firm (how much they can pay me and how many spots they have to fill above me).

All very thoughtful suggestions by ESI, yes?

I recognized I could take action on the first three and then keep #4 in mind as I go down the road with this firm. My lack of concern on #4 is that I'm on an account management team and we all share a similar goal of scaling our business. We all want to learn, grow, and earn more money! We have a unique product so I strongly believe this is possible.

Applying this advice

Early in the first quarter of 2018, I asked my boss to meet with me to discuss 2018 goals and expectations. He agreed and suggested we focus on five areas during our meeting:

  1. Retention
  2. Growth
  3. Professional development
  4. Team development
  5. Personal development

Based on his five areas, I prepared an outline. I came prepared with two copies of the outline.

The first thing I wanted to tackle was quantifying the expected retention number. I learned that we have a mission and an expectation and while these are intertwined, they are separate numbers.

Previously I had been confusing our mission with expectation. While our mission is 100% retention, our expectations are more realistic. Together as a team, we're defining exactly what that number is. We have decided the only thing included in this number should be the retention of existing clients.  

My boss and I also discussed the other four items with a heavy emphasis on growth. While I'm not in sales nor am I expected to meet a quota, I'm encouraged to participate in growing the company (per my request). My main objective in my role is retention but I specifically asked for direction on how to participate in the growth of the company. 

Growth

A lovely new concept surrounding growth was introduced to me:

  1. Top side growth  
  2. Bottom side growth

Here's a little graphic to show some examples of what is included in these two types of growth:

Bottom side is where my boss asked me to focus and focus I will do! I met with the other members of the account management team and we discussed how we can focus on bottom side growth together. In my opinion, this is where things get really exciting! We came up with four areas to focus on:

  1. Appropriately increased fees to clients
  2. Creating new products
  3. Task management efficiency
  4. Putting business expenses on credit cards with cash back or travel rewards

Fees

Fees are something I have taken an initiative on. In my six years with the company, I notice we typically don't raise our fees. I see this as a hole and want to be analyzing if an increase is warranted or not. Sometimes not, sometimes yes, but with my direction we are now, at least, looking at it.

New products

I won't go into the specifics here as I don't want to give our secret sauce away. Let's just say I have seen a common need by many of our clients and so I have an idea of a product we can create, price competitively, and market to our clients.

Task management efficiency

We have been using a task managing program, but are feeling it is a bit antiquated. Each member of the account management team chose a different task management program and researched it. We came together to present our findings and unanimously decided on a program called Smartsheet. The capabilities of this program far exceed what we have been working on and so we are eager to begin training and setting up our whole system of tasks.

Credit cards

We do have a business credit card in which we obtain Marriott points. We have a ton of Marriott points and so it is time to diversify our rewards. We have a substantial amount of monthly expenses that are not currently being charged on credit cards. It is time to start taking advantage of travel rewards and cash back cards! We have a team in Florida and so there is some flying back and forth. Why not develop a strategy and do it for free?

Knowing what to do and aiming for it is a great feeling. The final two pieces of the career hacking puzzle are to track and report. I met with the Director of Operations on setting up some excel tracking reports and so we are off to the races!

Final thoughts

Before putting a name to it, I was doing career hacking by just working really hard. I have been rewarded for it. However, having a clear direction, a team to execute it with, and a tracking system sheds a bright light on this road. I am eagerly moving upwards and onwards and always welcome your feedback and/or suggestions.

Want to read more from Ms. Fiology? Check out her other articles here.

Career hacking As A FIRE Power

072R | The Five Most Important Financial Conversations you need to have with your Child

072R The 5 Most Important Conversations

Lively discussion about cryptocurrencies as investments, review of last week’s MidAtlantic Camp FI, and several exciting contributions and questions from the ChooseFI community.

What you'll hear in today's roundup:

  • Brad’s brother is visiting from Santiago, Chile – how is he managing his path to financial independence as an international teacher?
  • Review of Monday’s episode discussing Bitcoin with Myles Wakeham
  • What are drawbacks of cryptocurrency?
  • Is Bitcoin a good investment, or is it just a gamble?
  • How much energy is expended in the global mining of Bitcoin?
  • Michelle, from the ChooseFi community, wonders if Bitcoin’s apparently lax regulations (compared to companies like PayPal) opens it up to be used for terrorism and other illegal activities?
  • William suggests to Jonathan that regulation of Bitcoin is nearly inevitable, exposing investors to potentially difficult scenarios in regards to both taxes, and simply converting money back into tangible currency.
  • Brad and Jonathan attended the MidAtlantic CampFI event last week.
  • Tickets for SouthWest and South region CampFIs are still available here: CampFI
  • Steve tells listeners how he nearly eliminated a $1,900 tax bill by contributing to his Health Savings Account, prior to the April 17 deadline.
  • Brad talks about Camel Camel Camel, an Amazon product price tracker.
  • Brad is shocked about how much prices fluctuate on Amazon.com.
  • From Kelly: What 5 bullet points would ChooseFi give to college-bound students?
    • Save at least 50% of your income (avoid large housing and auto payments).
    • Consider “opportunity costs”: Every dollar you earn in your teens and 20s is worth more than later in life.
    • Long-term, low-cost investing: ride the market through decades.
    • Your career is a tool to get you to financial independence, but don’t just rely on your career as a sole source of income.
    • Think about life a little bit differently: think at things through the lens of FI
  • Voicemail from Jim listing two careers that provide a great path to financial independence
    • Firefighting – government pension, two 24-hr shifts a week
    • Emergency room nurse – takes local “travel” assignments for double pay with 3 shifts a week
  • Jonathan is excited about the Giant Ocean Clean Up Machine, which will soon set sail to begin collecting plastic from the ocean, and is expected to collect 5,000kgs per month.

 

Links mentioned in the show:

It’s Like Summer Camp for Money Nerds: My CampFI Review

The Revolutionary Giant Ocean Cleanup Machine Is About To Set Sail

The Simple Path to Wealth

Design Your Future

Freelance to Freedom

Beginner DIY: Some Tools To Get You Started

Some Tools To Get You Started

So, you finally feel like tackling that big project at your house, and you want to do it yourself. You’ve watched a few YouTube videos, seen at least three episodes of This Old House, read some terrific DIY blogs, and you’re itching to get started.

Time to get some tools

kids tool set

Ever since the dawn of humanity, tools have been an essential part of our evolution. Without them, we would have quickly died off from starvation and saber-tooth tiger attacks.

While our tribulations have changed a bit since then, our need for tools has only increased. The tool isle can be a little intimidating to someone who is starting from scratch, and you certainly don’t want to blow a whole bunch of hard-earned cash on what amounts to a Fisher-Price Set for Grown-Ups!

Have no fear, your old pal Captain DIY is here to help you pick out the basic essentials to get you started.

Make a list and check it twice

I’m going to tell you about the most basic tool set you can use to do most beginner repair jobs around your house. There is always room for improvement and addition of course, and if you’d like to learn about what quality level you should consider, check out this article on quality levels and lifetime warranties.

Hammer

hammer
the persuader

This is one of the most basic tools, and probably the first one ever used by a living creature. As the old saying goes, “if at first you don’t succeed, try getting a bigger hammer.” I may be paraphrasing, but really a hammer is an indispensable tool for any homeowner. Just be sure to pair it with the next tool which is…

Safety glasses

safety glasses
the nerds of the tool world

Sure, you feel a little silly putting these on, and sure, your kids and/or your spouse are going to laugh at you. They won’t be laughing after you jab them in the eyes Three Stooges style, though! Legal is advising me to tell you not to do that. Don’t do that.

But seriously, getting something in your eye sucks, and having a shard of metal flying into your eye at high speed sucks a lot more. Just put the darn things on.

Screwdrivers

screwdrivers
no, not the kind you drink

Bring along an assortment of these guys and your hammer, and you can do just about anything! You’re going to want to get a #1 Philips (the one that looks like a plus), a #2 Philips, a 3/16” flathead, and a 1/4” flathead.

This will comprise the most basic screwdriver set, and these will take care of just about anything the average homeowner will encounter.

Tape measure

tape measure
old timers call this a “measuring stick”

Now, I’ve heard that some folks out there don’t know how to read one of these. Don't be intimidated by all of the little tiny lines, and don’t worry if your mark ends up between them. Just know that whatever you do is going to be wrong, and you will have to cut it again.

I’m kidding, of course you’re going to nail it! Tape measures are easy to read, and I’m willing to bet you will not need to be any more specific than 1/8”. A lot of tape measures even number the lines for the first few inches. If you’re really worried about it, YouTube is always there to help.

Ladder

ladder
taking steps to improvement! (groan)

Don’t think you can just stack up some chairs on a table with a milk crate at the top and as long as nobody breathes on you you’ll be fine. Get the right tool for the job, and if that job involves you higher than ground level, you are going to need a ladder.

I personally only use fiberglass, as they are not electrically conductive, but if all you’re going to be using it for is painting then aluminum is fine. Just don’t pull your grandfather’s old wooden ladder out of the storage unit and think you’ll survive. You won’t.

Power drill

power drill
helping you screw up faster!

I saved the best for last. This one is a step up from the rest, and it is only necessary if you need to drill holes. Sure, you can use it to drive screws, but you can use the aforementioned screwdrivers for that as well.

This one is a step up based on the potential for personal injury. The drill, especially if it is in the lower speed setting, is definitely stronger than you. If it catches while you’re drilling, it will twist your arm up and possibly break something on you and whatever is next to you. Trust me on this one.

That being said, this is an incredibly useful tool that I always bring with me on service calls.

Wrapping up

There you have it; your tool box has now been officially created. All you need now is a pegboard on your basement wall and a marker to trace the tools on it, and your friends will be calling you “Tim the Tool Man Taylor” in no time! They’ll also be calling you to borrow your tools, but that’s another story for another day.

Now get out there and break some stuff! Er, I mean fix some stuff! And be safe! (Thank legal for that.) Captain out!

Want to read more from Captain DIY? Check out the rest of his articles here.

Beginner DIY: Some Tools To Get You Started

403(b) Vs 401(k)–Which One Is Best For You?

If you're like a lot of people, you've contributed to a 401(k) at some point in your life. It's usually intentional and not automatic, though that is changing. A good thing about that change is that new employees are automatically enrolled as opposed to having to sign up. The bad part is that the percentage is usually only 3% of their salary. Either way, contributing has many benefits. Forced savings, an employer match, and saving on taxes immediately (if the tax-deferred option is selected), are among the benefits.

My current job offers a 403(b), “something like a 401(k), but for teachers” is the way it is often presented. This is not really true. If you're between jobs and especially when you're considering options, be sure to inquire about which type of plan your prospective employer offers. The consequences of an inferior plan could mean the difference between tens of thousands of dollars, if not more.

Related: The Failing 403(b) Was My Wake Up Call

Here are some of the key differences between a 401(k) and a 403(b).

Background and the Vocab

The IRS isn't looking out for you, it's looking to get money. Yes, they will encourage you to save money for your future, but they have good reason to. By giving you an incentive to defer some income and let it grow, when you DO use it, you'll have MORE of it to spend, and MORE of it to pay MORE taxes on.

Put another way, the IRS is offering a legal tax shelter for your earnings. Because they have a close relationship with investment banks, and there is mass marketing from them, most plans only allow you to invest in the financial markets, and since 1974, mutual funds. If you want to dig deeper, you'll find out that you can also buy other investment types—often termed alternative investment vehicles—such as real estate or gold.

The HUGE difference between a 401(k) and a 403(b) is that the same law that governs employers offering 401(k)'s, ERISA, does NOT apply to those offering 403(b)'s. As a result, these public institutions—schools, colleges, hospitals, municipalities, and non-profits—are NOT accountable for choosing fair and competitive fund options for you 403(b). Many do not even know what a fair fund option looks like!

How 401(k)'s and 403(b)'s are similar

  • Elective deferred salary is generally not subject to federal or state income tax until it's distributed.
  • Distributions, including earnings, are included in taxable income at retirement.
  • Both force you to begin withdrawing money at age 70 1/2. This is called Required Minimum Distribution (RMD). If you die before it's depleted, your heirs will pay the taxes in their lifetime. (There is talk about changing that to five years instead of an heir's lifetime).
  • Allow transfers and rollovers.
  • A distribution from a custodial account may not be paid or made available to a distributee before the employee attains age 59-1/2 separates from service, dies, becomes disabled, or, encounters financial hardship.
  • Employers can contribute to employees’ accounts.

How 401(k)'s and 403(b)'s are different

401(k)'s:

  • 401(k)s offer a quality investment choice to all of their workers.
  • Generally, ONLY include low-cost investment options (fees less than 0.3%) no-load mutual funds.
  • Offerings exclude higher-cost insurance companies and their high-cost annuity products.
  • Often have low administrative costs.
  • Offer mutual funds and index funds in stocks and bonds with a single low-cost fund family.
  • Access to lower cost investment products is the norm.
  • ARE protected by ERISA rules, meaning the employer's administering staff is obligated and held accountable for choosing fair and competitive fund options.
  • Benefits administrators are expected to have 401(k) knowledge.
  • Will use the standard Request for Proposal (RFP) process to ensure vendor quality.
  • Employers with 401(k)s must be compliant and provide plan administration to employees.
  • Offered to private sector employees.

403(b)s:

  • Notoriously, 403(b)s do not offer a variety of quality investment choices to all of their workers.
  • Generally, DO NOT include low-cost investment options such as no-load mutual funds (fees less than 0.3%).
  • Used for employees in public institutions—schools, colleges, hospitals, municipalities, churches, and some non-profits—teachers, nurses, ministers, and the like.
  • Offerings are limited to higher-cost insurance companies and their high-cost annuity products.
  • Often have high administrative costs.
  • Have two categories of investment products available: Annuity products and a 403(b)(7) custodial account made up of mutual funds. (See more on those here, at 403bwise.org).
  • Access to lower cost investment products is limited and often comes with wrap-fees.
  • Are NOT protected by ERISA rules, meaning the employer's administering staff is not allowed to pass judgment, good or bad, on what they offer, and very often don't know much.
  • Benefits administrators are not required to have 403(b) training and knowledge and face the fear of legal reprisal for commenting on the plans they offer employees.
  • DO NOT use the standard Request for Proposal (RFP) process to ensure vendor quality.
  • Frequently enlist a third party administrator (TPA) for plan administration and compliance oversight.
  • Offer flexibility in contributions because of Catch-up allowances (See examples of that here).

While this comparison might not be comprehensive, it does shed light on the discrepancies in investment vehicles between the private and non-profits. Therefore, if you're career planning, or know someone who is, take note.

While the Millionaire Educator has suggested not contributing in a 403(b) that has only expensive options, you might feel that a bad plan is still worth contributing to, especially if it means not saving for retirement at all. Because your investments might be on autopilot, take a close look quarterly at your funds and expenses.

Be prepared for your 403(b) “advisor” to tell you there are no fees or hidden expenses. It won't be the first time or last time they mask the truth. It is imperative that you do your own homework. Here's a few hidden bits:

  • Sales charges of 5.25% with every payroll contribution.
  • Rolling fund fees of 1% or higher.
  • Wrap fee of 1-2%, over and above the fund fees.
  • Annuities with surrender charges if held less than 5 -15 years.

In conclusion, investigate your options and map out your entire plan for a Roth IRA, an HSA and your 403(b)/401(k). As a result, you might find a bad 403(b) plan could substantially alter that map.

I welcome your questions and comments.

Want more from Earlier FI? Check out her other articles here.

403(b) Vs 401(k)--Which One Is Best For You?

The Why Of FI

Why of FI

Why Choose FI ?

What’s wrong with following the traditional path and retiring at 60? Nothing’s wrong with that! In fact, you can still reach FI and continue to work. FI is simply a life of financial independence–a life without debt, monetary concerns, and over consumption.

Everyone has a different reason for wanting to reach FI–maybe you want to spend more time with your family, or you want to pursue a career that you really love, or maybe you just don’t want to spend your entire life working in a field that no longer fascinates you or holds your attention

That’s what I’ll be talking about today–and you can also listen to the episode here.

What life looks like without FI

First things first, let’s look at what a “typical” life is without FI. You’ll probably be able to see pretty quickly why being financially independent is preferable.

According to society, to be “successful” we have to:

…go to a four-year school, maybe go to grad school get a $50,000 a year salary or more…and do whatever it takes to get that salary, [even] if it involves going six figures into student loan debt. And when you get out it's your responsibility to buy the biggest house you can afford, because you need to support our economy and that is a surrogate marker that we use to identify someone that is considered successful in our culture… -Jonathan & Brad | Ep 38 The Why of FI

Sounds pretty dismal to me. Go into debt so you can afford to get enough credit to go into more debt…that about sums this glittery facade that has co-opted the American Dream.

FI is about defeating that mindset. Sure, you can work your whole life if you want to. But that’s the thing about FI–it’s a choice. If you’re financially independent, you can choose to do anything.

Why of FI

Now we get into the gritty details.

Our whole lives revolve around money. Usually how to make more of it so we feel safer just in case we lose our jobs. It’s exhausting thinking about money and it sucks feeling guilty every time we spend. Imagine a life where we didn’t have to think about money every hour of the day. Well, that’s exactly why many people seek out FI.

And not only is this [FI] about happiness and reclaiming your time, but it's about freedom, it's about freedom to have potentially decades back in your lives that otherwise would have been spent at a job that you may or may not like.

So FI is placing a value on your time and prioritizing your purchases and discretionary spending in a way that reflects that. Making time in your life to do what you really love. For those not on the road to FI, most of our free time is spent buying things to make up for a job that we barely tolerate and are only able to use on the few days we have off each year. FI isn’t about running away from what you hate, it’s about “running towards something. It's being intentional about life not just grazing through it.”

“FI is the obvious choice because you were born to do more than pay bills and die.”

It's this realization that allows you to take action, to radically transform the life we want to build for our self and our family. Which brings us to the next point.

The How of FI (aka the Pillars of FI)

The Pillars of FI have their own post and episode, but there are a few important points to reiterate.

FI is not about deprivation

Reaching a point in your life where you’re free from money worries sounds like it should involve a lot of deprivation, but it’s all about intentionality. Because we’re conditioned to believe money is the root of all happiness it can be hard to see areas where we can cut back.

For Brad, he and his wife intentionally chose a “dramatically smaller house” than they could have afforded. They also both drive 2003 cars that have well over 100 thousand miles on them and spend just $15 a month on their cell phone bill.

It's really as simple as that. Having a huge house, a nice car, and unlimited cell phone data is not the recipe for happiness. What does make you happy? One of our favorite books Your Money or your Life describes the fulfillment curve. It illustrates that we need a certain amount of stuff for survival and past that point as we continue on the curve we acquire some basic stuff and it makes us incredibly happy. Our first baseball mitt or doll as a child or your first car or home as an adult were all very exciting to receive. But there is a point of diminishing returns where we hit enough, and past that point we move into clutter. When you don't want to go into a room because you are overwhelmed by all the stuff you have accumulated it's probably a good sign that you have passed that point of enough and moved solidly into clutter. We want to extract the maximum amount of happiness/value from every dollar we spend because your money is tied to your life energy. It represents your most precious resource your time

Anyone can reach FI

What if you’re living paycheck to paycheck and all your money is accounted for–can you still reach FI? Of course you can!

Like I said above, FI is all about choices and intentionality. Everyone’s choices are different. Those who started on the journey to FI years ago are going to be in a vastly different place than those just discovered it. As long as you follow the pillars and start taking action–no matter how small, your 10 year future self will thank you. and it's not the single action you took in a vaccuum, it's that success brings success. It's an addictive cascading effect of just getting a little bit better in every aspect of your life.

The Universal Equation of Wealth Creation

There is a simple equation to which we are all subject.

Income-Expenses= The Gap

We need to identify all the levers that we have access to. These levers allow us to grow the gap. Some people have great incomes but lifestyle creep has run rampant. For this individual focusing on the expenses is all they need to change course. Others will need to focus on income. What does it look like to crush the income game through Career Hacking, changing industry, real estate or starting a Side Hustle. I say why limit yourself? ChooseFI is dedicated to uncovering all the different ways that people are winning at this game. This isn't a dogmatic single path to FI, this is a pick your own adventure, where the journey matters.

What you can do with FI

Have you ever considered the opportunities that open up to you when you reach FI, or even as you approach it?

First, you can become “location independent”–which simply means “you can live somewhere that in the past you were worried wouldn't allow you to earn a living. Now you now longer “need” the income. This is not to say you can't or won't earn income again but your motivation for doing so is radically different. This mindset allows you to travel and pursue your true passion regardless of where you’re living.

And finally, perhaps the most compelling reason you may want to reach FI is simply freedom. Freedom from fear and worry.

You were born to do more than pay bills and die.

Let us know what you think in the comments below. What is your Why of FI? And share this with a friend 

The FIRE is Spreading!

The Why Of FI

072 | Should I Buy Bitcoin | Myles Wakeham

072 _ Bitcoin _ What Am I Missing _ Myles Wakeham

Myles Wakeham tells us how he discovered Bitcoin, how and why cryptocurrencies have to value, and gives us a nuanced perspective of where cryptocurrency might go in the future.

  • Myles is a software developer.
  • How did Myles come to invest in Bitcoin?
  • Myles spent years figuring ways to pay his Bangladeshi software developer, until mid 2011, when his contractor discovered Bitcoin as a more effective method of payment.
  • How is Bitcoin an alternative to PayPal, and has it helped Myles support the growing digital economy in less developed regions?
  • Bitcoin value fluctuates pretty drastically – how does Myles pay his contractors a consistent amount?
  • What is Coinbase, how secure is it, and how does it work?
  • How is Bitcoin similar to the ways people used to trade virtual goods within video games?
  • Bitcoin was originally developed as a way to operate outside the banking system after the global financial crisis in 2008.
  • Myles purchased Bitcoin early (in 2011) and left it in a “savings account”. What’s happened to the value since then, and how does Myles feel about Bitcoin’s place within global investments and conversation?
  • Does Bitcoin have a place in the future economy?
  • What are the limitations of a Bitcoin economy?
  • What gives cryptocurrency value?
  • How does the growth of Bitcoin parallel the California Gold Rush of 1849?
  • What causes intangible things to have value, and when else have we seen that?
  • What are the tax implications of Bitcoin, and how have things changed since the start of 2018?
  • How should people make sense of the huge number of cryptocurrencies?
  • Myles suggests that only a few current cryptocurrencies have actual value.
  • What is Blockchain, and what it its relation to cryptocurrencies?
  • Is it possible to invest in the Blockchain?
  • Is it possible for cryptocurrencies to maintain their decentralization?
  • Myles suggests that governments that allow, monitor and encourage development of cryptocurrencies is a global benefit, and government’s that oppose cryptocurrencies are shutting themselves off from digital development in the world.
  • Is Bitcoin fading in comparison to other cryptocurrencies?
  • What cryptocurriency(s) does Myles have his eye on for the future?

 

Links from this episode:

Bitcoin

Coinbase

Mr. Money Mustache: Why Bitcoin is Stupid

The Starfish and the Spider book

Hack Into The Middle Class–How To Become A RN For Less

Solid middle class jobs can be found in many different fields of study. ChooseFI has featured opportunities for entry into the middle class from being a golf caddy, an air traffic controller, or a Registered Nurse.

Or, you could forego college and find excellent opportunities in trade professions. Workers can start as an apprentice, receive on the job training, and work their way up to journeymen.

Community and tech colleges also produce many financially feasible options, and endless opportunities abound in self-education in our digital age.

Today, I would like to focus on one of these opportunities. Here's one of the best strategies for gaining entry into the middle class and hacking a RN degree.

Getting your degree

Nursing degrees can be obtained in as little as 2-3 years with an Associate's Degree in Nursing (ADN). This degree allows a student to sit for the nursing licensure exam and gain the Registered Nurse title.

ADN RNs work in almost any healthcare setting, including: Hospitals, nursing homes, home care, hospice, school nursing, occupational nursing, and many other settings.

Many community colleges have existing Associate's programs for nursing. But, many hospitals prefer or require a Bachelor's Degree (BSN) in nursing. However, with our aging population and the high demand for nurses, this preference is often foregone. Plus, many hospitals that require a BSN will give the nurse five years to gain their BSN often with tuition assistance.

Here are a few actionable tips:

  1. Start with an Associate's Degree at a community college.
  2. Obtain employment in a patient care setting.
  3. Utilize employer tuition reimbursement to gain Bachelor's Degree.
  4. Find reasonable RN to BSN online programs.
  5. Utilize scholarships.
  6. Investigate grant.
  7. Utilize loan reimbursements.

Community college degrees can be accessed for a fraction of the cost of regular four-year universities. The average cost of community colleges for the 2017-2018 academic year was $4,868 according to community college review.

In the Midwest, new graduate RNs can find many opportunities for employment. Many of these employers have funds available for tuition reimbursement for RNs looking to gain their BSN. Tuition assistance typically comes with a commitment to continue employment for a set amount of years (typically two years).

Or, a quick search can yield many options for ADNs to gain their BSN online. Searching for reasonably priced institutions will yield the biggest return. Many in-state universities will offer these programs and will be some of the more logically priced colleges.

If you get a BSN, your options as a nurse may increase. Some hospitals, like the Department of Veterans Affairs, will pay more for nurses with a BSN.

Salary

The average starting salary for registered nurses nationwide is about $61,000. In my state most registered nurses start around $45,000-$48,000. However, with shift differentials and a few overtime shifts $61,000 stands as an attainable goal.

There are numerous opportunities for PRN (as needed) or even part time travel shifts. All these possibilities can increase your salary without too much effort.

My scenario

I attended a community college out in Wyoming. The cost was $77 dollars per credit hour approximately eight years ago. Presently, tuition has increased to just over $200 per credit hour. My family and I lived off campus at the time. Therefore, no room and board was required.

We were paying $750 per month for rent and payed around $100 per month for utilities. To save even more money, my in-laws offered their basement and garage for us to live in while I attended nursing school.

I had a Liberal Arts Degree which allowed me to avoid almost all non-nursing classes. This community college was united to the only public university in the state and this permitted studying BSN courses while enrolled in the ADN program.

The state had an investment in a nursing loan forgiveness program. They would loan you a certain amount of money each year, and once graduated the nurse would obtain employment in that state. After two years the state would forgive the debt. I applied and got my first year's tuition paid for through this program.

My college encouraged students who were married and had children to apply to a specific grant program. This grant paid for tuition and helped with living expenses while in school. The grant allowed dental hygiene, nursing, construction, welders, electricians, and a few other majors to join as well.

I was accepted my second year into this program and paid no tuition. Two years later, I graduate with my BSN from the University of Wyoming, and had no debt! I used my current employers expense reimbursement which covered $500 a semester with at least a B average.

Final thoughts

Being a registered nurse is not a career for everyone. There tends to be lots of bodily fluids, verbally abusive patients, back breaking tasks, thankless days, and mentally numbing situations. You'll see people at their most vulnerable, and you'll have the opportunity to make a positive impact on their lives.

If a career in healthcare interests you, look for alternative ways to get into nursing without the large upfront cost of an expensive Bachelor's Degree.

Any other nurses out there have other ways to hack an RN degree?

Read more from CodeBlue FI here! 

Hack Into The Middle Class--How To Become A RN For Less

071R | The Value of Soft Skills

071R _ The Value of Softskills

Brad and Jonathan compare their college experiences to Chris Hutchins’ from the Monday episode, they discuss the importance of owning your own FI decisions, and we get updates from several members of the ChooseFI community.

What you'll hear in today's show:

  • Brad considers starting a blog for his daughter as second-generation FI.
  • Review of Chris Hutchins’ episode last Monday.
  • Brad compares his experience of packing meals ahead for vacation to Chris’ grandparents growing up.
  • What is value of cultivating relationships, and how did Brad find success in that?
  • What would Jonathan do differently if he was going to redo college?
  • How can students optimize the expense of college?
  • What was the benefit of Jonathan attending community college for two years prior to completing his degree at Virginia Tech?
  • Take an inventory of your all your skills, to market yourself for future opportunities.
  • Chris got his early start(s) because he made a significant effort to stand out among his peers. How can you stand out when looking for opportunities?
  • How do Brad and Jonathan explain their somewhat abnormal financial choices, in pursuit of financial independence?
  • Don’t be ashamed of your decisions – you need to feel comfortable with your choices.
  • Scott, a writer at Simply Finance, emails to say that listening to the ChooseFI podcast helped him clarify his beliefs and decisions about personal finance.
  • What is the worldview that matches up with pursuit of financial independence?
  • How are Brad and Jonathan processing Chris’ idea of creating memorable moments?
  • What problems did Chris seek to solve with his Grove financial planning business?
  • Jared, blogger at Fifth Wheel Physical Therapy, introduced Jonathan to M1 Finance.
  • Introducing M1 Finance, Jonathan shares why he is so excited about it
  • M1 Finance allows customers to purchase fractional shares which gives it incredible flexibility and versatility for your taxable investments.
  • M1 Finance has plans to make the Heloc obsolete and will be introducing a margin loan in the upcoming month where you can borrow up to 50% of your assets under management without a credit check. This could be an attractive offering for someone looking to park a portion of their emergency fund in a investment account
  • Voicemail from Tim, who is chipping away at his student debt, working toward his family’s FI number, and shares a little about his investment habits.
  • People get to “enough” long before they get to “rich”.
  • Another voicemail from a 29-year-old military man named Luke, who asked for house-hacking ideas a few months back via the ChooseFI Facebook, and reports back now that he opted to live in a renovated, vintage camper trailer.
  • An encouraging review from Arthur, who is making life changes in pursuit of FI.

 

Links:

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As Jonathan would say, “The FIRE is spreading my friends!”