What Does Retirement Really Mean?

Ah, early retirement! Pitch your hammock right now, because you’re not going back to the cubicle like everyone else! That sounds amazing doesn’t it?

Many aspiring FIRE walkers (as we’re lovingly called) latch on to the idea of retiring early with glowing fervor because it would be so absolutely nice to kick our feet up and relax a bit before we’re in our 70’s. For us, we’d like to have our retirement while we’re still young enough to enjoy it!

Luckily, for the FI community–retirement doesn’t have to evoke the same “going out to pasture” imagery as it does for most of the mainstream. But, it also can leave those of us on the path to early retirement feeling a bit uneasy about how to make retirement a meaningful life stage.

Redefining Retirement For FI

The concept of retirement can be a touchy subject for some–since the idea of packing it in and never lifting a finger for the next decade, or three, can be more than just a little depressing. For many of us, paid work is how we measure our worth and the idea of losing that can leave many of us with questions.

How long can you go without working in some form, before it starts to become mundane? Is being retired all it’s cracked up to be? Will living without your previous salary make you question your own worth and contribution to society? For many people who retire traditionally, they may not have to explore retirement this deeply, but we do.

The great thing about approaching retirement from the perspective of FI is that you have the freedom to choose your own adventure. If you want to work, you can. If you want to volunteer, you can. Because you have solid financial footing and strong fundamentals to go along with it–you have the freedom to write your own script and define what it means for you.

For the traditional retiree–retirement may look like nonstop days at the golf course or sitting down to crochet miles upon miles of pastel afghans. It may be that way because these leisure activities were put off for decades and can finally be savored without having a job to report to.

Luckily, for FI retirees, there’s room to work and play and the lines are often blurred and there may be entire seasons with or without work when you’re an early retiree.

During the Ups and Downs, Work Because You Want To, Not Because You Have To

Your retirement and the retirement of your grandfather cannot be compared–you may still be raising your own young children instead of grandchildren when you hit your personal retirement. Being younger also means you’ll have to ride out the ebbs and flows of the market in a stretched out timeline that your parents or grandparents likely didn’t (or don’t) have the luxury to ride.

Retiring traditionally means a market downturn around the time of your retirement date can be devastating. Not only are you entering your golden years without sufficient time to potentially ride out any financial rough water until the market rebounds, if you do need to return to work–you may struggle to find employment.

Related: Why A Side Hustle Is FI's Secret Weapon

For those that retire early and live a financially independent lifestyle, choosing to periodically go back to work is another option to help ride out the inevitable ups and downs of the market. If the market does take a dive when you are in early retirement, or if you’re simply feeling unfulfilled, you have an extended timeline to ride it out.

You can return to work part-time, full-time or for a season. Again, we see the lines are a bit more blurry between work life and non-work life.

Early Retirement Means You Can Take Entrepreneurial Risks

As a FI devotee, while you’re on a somewhat fixed income as an early retiree, you’re not on a fixed talent set. With time on your hands and a desire to learn, you are uninhibited by the constraints of needing to work for a paycheck.

Traditional employment is the carrot at the end of the stick–you toil for 30-40 years of your life, and you now are taking time to knit, golf, and sleep late simply because you never got to do so during your working career. With a FI approach to retirement, you aren’t limited by a traditional narrative. Retirement isn’t waiting to die, it’s beginning to live–and you have time on your side.

Early retirement allows you to light a spark of curiosity! And the time to learn new skills, try new businesses, and diversify your investments with a bit of elbow grease. You can work, build, create, travel, explore; to become a student of life instead of a workhorse. Even actually hanging that symbolic hammock, wherever you choose.

Related: Are You Ready For Early Retirement?

Follow Your Passion

In mainstream society, we seemingly do not value unpaid work. For those of us who have been working our whole adult lives for a paycheck, it takes some time to redefine our value when it isn’t literally quantified with a weekly pay stub. Luckily though, those who have achieved FI, have the opportunity to determine and share their value however they see fit.

If you’re in the FI community, you value your time and the true gift of giving your time to others. Luckily, you also have the financial flexibility to pursue things that may not pay well or pay at all, but you feel called to do the work. You also have the choice of spending more time with loved ones, which is priceless.

Learning the violin, volunteering with foster children, building a shelter for rescue dogs, or starting your own 501c3 are pursuits that may not pay the bills, but can bring meaning of life and give purpose that money can’t buy. Early retirement with financial independence eases the path and burdens to follow those pursuits of heart and soul.

Retirement isn’t the end of a journey, it’s the continuation of a story and an adventure of your own making. For those on the FI path, the division between “working” and “retirement” can be blurry, customizable, and flexible, developing and changing over time. With FI, you have the ability to make your retirement look exactly how you want it–with or without work.

Related: Embracing Retirement  

What does retirement mean to you?

Want to read more from Shannyn? Find the rest of her articles here.

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ChooseFI’s Favorite Tips To Keep Your Electric Bill Low

lower your electric bill

If you’re working toward financial independence (FI), chances are you’re looking to optimize your expenses. By reducing the amount of money you spend each year, you shrink the amount of money you need to reach financial independence by 25 times that amount if you’re following the 4% rule. That means what seems like a small monthly savings can turn into a huge long-term savings if you can keep up the lower spending.

One bill that is a necessity for almost every American is your electric bill. However, your electric bill is highly dependent on your personal habits and your particular home. You can lower your electric bill if you’re willing to invest some money in energy efficiency improvements up front or if you’re simply willing to change a few habits.

I asked the ChooseFI Facebook group for their best tips to save money on your electric bill and compiled some of the best responses, along with some information I researched myself, in this article. If you’d like to read everyone else’s thoughts or would like to add your own, here’s a link to the post in the Facebook group.

Reduce Wasted Electricity Usage

Paying money for electricity you aren’t even benefiting from is a complete waste. Many people noted that leaving lights and ceiling fans on when you aren’t in a room are common issues. A couple members mentioned solutions that can help solve this problem.

The first is installing motion sensor light switches. These switches will automatically turn the light switch off if it doesn’t sense movement in the room after a certain period of time. If you often leave lights or ceiling fans on in rooms you’ve left, these could help you cut your electricity bill, especially if you’re still using incandescent light bulbs.

Speaking of incandescent lightbulbs, switching to CFL or LED light bulbs could offer a huge savings on your electric bill. Many LED bulbs use roughly 10-20% of the electricity an old incandescent bulb uses. If you switch all of the bulbs in one area, you won’t even notice the color difference after a couple weeks thanks to improvements in the technology.

You can even incentivize your kids to cut out wasted electricity from leaving lights, ceiling fans and other items, such as TVs, on when they leave a room. One group member said they charge their kids $1 every time they leave a light on in a room they aren’t in. I think this is genius. It should help their kids learn good energy conservation habits and pay the electric bill at the same time.

Optimize Your Heating and Air Conditioning Usage

According to the Department of Energy, heating and cooling accounts for 48% of the typical U.S. household’s electric bill. This leaves a ton of room to save money on your electricity usage.

Group members were quick to point out that using a programmable thermostat could be a big money saver. Simply set the temperature warmer in the summer and cooler in the winter for periods when you aren’t home to start saving money.

During the summer, ceiling fans can help you save even more money. Running a ceiling fan will usually allow you to bump the thermostat up a few degrees and still feel comfortable. The breeze will make you feel much cooler and help you save money in the process.

It also helps to make sure your home isn’t building unnecessary heat during the day. If you aren’t in a room, make sure you keep the drapes closed to block out the light and the heat. Room darkening curtains offer the best energy savings. You can also block out the light by growing shade trees around your home.

Finally, if you find yourself spending most of your time in one or two rooms of your home, it may make sense to get an individual room air conditioner or heater. That way, you can heat or cool the room you spend most of your time in and leave the temperature in the rest of the house at a more efficient setting.

Appliance Hacks to Lower Your Electric Bill

What appliances you use, or don’t use, can have a huge impact on your electric bill. Two in particular are your oven and your clothes dryer.

Your oven is an awesome money saving tool when you use it to cook food instead of eating out at a restaurant. However, most times you could save even more money by using a different appliance instead. While a large oven is necessary for some meals, like a Thanksgiving turkey, you don’t need a full-size oven to bake a couple chicken breasts. Instead of heating up a huge oven to cook something small, consider using a toaster oven instead. It heats up to full temperature much faster and the smaller space means less electricity will be used to cook the same meal.

Another way you could start saving on your electric bill is giving up the clothes dryer. Honestly, a clothes dryer is a huge luxury. If you don’t need your clothes right away, simply hang them up on drying racks or a clothesline outside. The clothes will eventually dry and you won’t have to pay a penny in electricity to get the job done.

Related: Tips to Make Your Appliances Last Longer

Don’t Forget to Check with Your Utility Company

The last major category ChooseFI Facebook group members suggested to save electricity was checking with your electric company for savings. In some areas, you can shop around to find the cheapest electricity provider. Even if you can’t choose a different provider, check to see if your provider offers multi-rate billing which could lower your bill. Simply avoid using your biggest electricity hogs during peak price hours and you could save a great deal.

Electric companies often offer incentives to lower your electric use or upgrade to more efficient systems like HVAC systems. Some may even offer incentives if you decide to install solar panels on your home. What’s even more awesome is the fact that many electric companies will come out to your home and perform a free energy audit to show you where you could be saving. They’ll look to see where you need to caulk windows and doors, where you may need additional insulation in your walls and attic or suggest other ways you could save, possibly including rebates.

Saving money on your electric bill doesn’t have to be difficult. Find at least a couple of suggestions above that will work for you and use them to start saving on your electricity bill now. You’ll be glad you did.

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

Related Articles:

 

Lower your electric bill

086 | A Live Case Study with Physician on FIRE and Allison Goddard

086. A Live Case Study with Physician on FIRE and Allison Goddard

Allison Goddard, a dermatologist from Chattanooga, Tenn., chats with ChooseFI and Physician on FIRE to review her journey through medical school and receive advice to clarify the next steps in her path toward financial independence.

What you'll hear in this episode:

  • Allison Goddard, a physician from Tennessee, is getting started on her financial freedom, having paid off $270,000 of loans.
  • When and why did Allison decide to become a doctor?
  • How did Allison get started with her education and how old was she when started medical school?
  • To what does Allison attribute to her success in medical school?
  • What does medical school in the Caribbean look like?
  • What role did mentors, former employers and colleagues play in Allison’s journey through school and getting her residencies?
  • Starting salary as an attending dermatologist in Boston $240,000, but when in Allison moved to Tennessee her pay increased nearly $100k.
  • How did Allison get started paying off her student loans, and pay them off in just a few years?
  • How has Allison increased her income through productivity and even a side hustle?
  • Has Allison thought about how she will adjust her career to create better life balance in both the short and long term?
  • Cutting costs from Allison’s lifestyle will be more effective than trying to increase her income.
  • What are the first things Allison can get rid of to decrease her yearly costs?
  • How does Allison intend to manage her three mortgages?
  • What recommendations does Physician on FIRE have for Allison’s retirement accounts, health savings and investment portfolios?
    • Fill up her 403b with tax deferred contributions – about $18k a year
    • Contribute to the 457b – similar to the 403b or 401k.
    • PoF recommends contributing to a health savings account, although Allison doesn’t have access to that through her current employer.
    • Contribute to a Backdoor Roth account – $5,500 a year.
    • Buy mutual fund, ETFs, etc., through a taxable brokerage account.
  • How does PoF manage his assets? Property or Investments?
  • How long does Jonathan project that it’ll take for Allison to reach FI?
  • Is it ever “too late”?

 

Links:

Physician on FIRE

Physician on FIRE: Calculators

Grit: The Power of Passion and Perseverance

Lume Deodorant

 

https://www.choosefi.com/086-a-live-case-study-with-physician-on-fire-and-allison-goddard/

085R | Sidehustle Coaching Series 3 | Learn to Pitch and Lean into the Uncomfortable Pause

085R _ Side Hustle Coaching

Catch up with Alan and Tallis as they zero in on the key elements of a successful pitch, and the importance of uncomfortable silence, as well as a home improvement update from Jonathan and review of Monday’s episode with author M.K. Williams.

What you'll hear in today's show:

  • Jonathan reports a wallpaper challenge/ DIY fail in his kitchen.
    • Recommendation: use drywall mud to fix blemishes in drywall after removing wall paper.
  • What home-improvement projects are worth hiring out?
  • MK, from Monday’s episode, noticed that through persistence she has not only produced more content, and that with each release, her previous work sells even better.
  • How to build your personal brand and get start building your sidehustle and/or passion?
  • Sidehustle Coaching episodes so far:
    • Episode 30: Introduction to Alan Donegan
    • Episode 56: Part 1 – meet Tallis and hear about her new business idea
    • Episode 77: Part 2 – check in about Tallis’ progress and initial feedback
  • Update since the previous episode:
    • Chris, from the fundraising department at the Northwestern Hospital, is interested in hearing Tallis’ pitch.
  • If you can’t sell your business, you don’t get any customers, and therefore you don’t get any money.
  • “Sales” is the process finding someone with a problem you can solve and explaining that you can fix that problem.
  • Why did Alan struggle to sell his own business at the start?
  • What is the problem that Tallis’ business is solving?
  • How has Tallis clarified her business’ goal?
  • The triad: include three points when you make your pitch.
  • How do people accidentally overwhelm listeners during their pitch?
  • What’s the best way to start a pitch?
  • Never end your pitch with Q&A.
  • How can you set up a strong close if you have to include Q&A?
  • At the close, it’s important to actually ask the potential customer to buy the product.
  • “If you don’t ask, you don’t get.”
  • What does Tallis want to ask at the close of her pitch to Northwestern?
  • How did Alan help a group of students pitch for an advertisement with a really strong open?
  • How to deliver a strong pitch on the phone?
  • Your moments of impact as a speaker are actually when the audience is thinking.
  • How does Alan get someone’s attention at the start of his pitch conversation?
    • Creative intro
    • Confirm he’s talking to the right person
  • Tallis’ product isn’t right for everyone. It’s important to ask questions to determine whether her product meets the need of a potential client.
  • How and when does Alan suggest delivering the price?
  • What part does the uncomfortable pause play in selling a product?
  • Why doesn’t lowering prices always equate to increased sales?
  • Tallis sets a measurable goal for number of pitches and sales.
  • Want a copy of MK’s book? Leave a review!

 

Links:

DIY to FI

My $3,500 Tiny House Explained

Caboose Rental

How To Start Commuting By Bicycle

How To Start Commuting By Bicycle

“Nothing compares to the simple pleasure of riding a bike.” –John F. Kennedy

There aren’t many things that I get as much enjoyment out of as riding my bicycle to work. Ignoring the cost benefit for the moment, just imagine the efficiency of completing one task and simultaneously knocking three things off your “to-do” list at the same time:

  1. Spend some time outdoors in the fresh air.
  2. Exercise.
  3. Get to-and-from work.

Don't fret though, this isn't going to be a philosophical article about all the benefits of riding your bike, or a cost-benefit analysis of commuting to work. No, this is going to be a nuts and bolts article to help you get started on riding your bike to work.

Step One: Have a Bike

Now you're likely wondering how difficult it is to ride a bike to work without having a bike. Rest assured, its tough to pull off. But in the off chance that you are considering biking to work and you don't have a bike yet, don't rush out and get one before you finish this article. It'll help you narrow down your choices. Hell, you might already have a bike and haven't even realized how unrealistic it will be to ride it to work. Planning to ride your single speed beach cruiser 20 miles on a gravel trail won't exactly be setting yourself up for long term success.

Also, if you don't have a bike, or don't have an appropriate one, don't feel obligated to go out to REI or your local bike shop and drop $1,000 on a bike. Search for used ones first. Craigslist, Facebook Marketplace, OfferUp, or the occasional yard sale will have plenty of options for you to metaphorically dip your toe in the waters of bike commuting. The cost benefit of this is obvious, and it's also much easier to decide that a different type of bike, or different options or accessories would suit you better. Then you can find exactly what you are looking for and sell the used bike at little to no loss.

Step Two: Map Your Ride

Google Maps is my go-to for this option. It has a specific “biking” option that will take you on less crowded routes and trails that are available. Somehow, Google is even aware of every bike path I've come across, so if that is an option on your route, Google will pick it for you. If it's taking you completely out of the way to avoid any traffic, you can drag the route around (only an option on desktop, not the app) so you have a more direct path. By doing this, you can see how it affects the mileage as well as the general time it would take you to get there. A nifty tool at your disposal on Google Maps is the elevation tracker, so again by adjusting your route, you can get a feel for how the elevations change and help you avoid unnecessary hills. But, there are countless apps and websites that you can use to map the safest, most efficient route. Feel free to try them out. Just don't come whining to me when they lead you into a lake.

As mentioned before, your route can also be an important factor in picking out the appropriate bike. A full on road bike won't last long on a dirt trail designed for mountain bikes, but a mountain bike will be heavier and slower if you're riding purely on tarmac. A hybrid bike can be the best of both worlds, fast enough to take on the streets, but durable enough to take on light trails. An e-bike will help make a long commute much more manageable and come in varying styles. So, do some research, assess your route, and then pick your poison.

Another important factor in this step is knowing the rules and laws in your area. You have the same responsibilities as car drivers; so obey traffic stops and signals, ride in the correct lane (going with traffic, or in the bike lane if available), and ride predictably. It's important to mention that riding your bike on the sidewalk is likely illegal (there are only a handful of places in the country that it's permitted), and genuinely unsafe. So don't plan your route around a sidewalk.

Step Three: Get the Gear

Visibility is key for bicycle safety. If you are on the street at any point, at a minimum, you'll need a rear light. This will obviously make you more visible to drivers, and thus lower your chances of an accident. That little reflector on the seat won't cut it, so don't cheap out here. A front light is also heavily suggested. You'll want lights that flash, or change in some way so that it draws more attention to your presence. When I personally bike to work, I have three rear lights and two front lights. All the lights flash in different intervals, so they definitely attract attention. It's almost comedic the amount of lights I have, but I accumulated them over time. Don't feel obligated to go buy enough lights for a Christmas tree because some guy on the internet told you to. A reflective vest could be used in coordination with or, in lieu of, multiple lights; but you'll still want at least one rear light regardless.

There are a couple of small items that you'll want to carry with you on your ride. A spare tube, tire levers, a small pump, and your phone for backup. Uber has saved my wife and I from being stranded a couple times. Now, depending on your profession, your ride, and your preferences, the gear that'll make your life easier varies greatly. You could get rear racks, tons of different types of bags, fenders, electric motors, water bottle mounts, speedometers, tool kits, bike trailers, GPS's, bike racks for your car, bike locks (highly suggested), etc. It goes without saying, since this is a financial blog, but don't go overboard and spend $1,000 on accessories before your first ride.

Step Four: Get Started

At some point, all the limiting beliefs you have need to be ignored, just for a few minutes, so that you can actually get started. I completed my first ride to work on an early Sunday morning so there was less traffic and so I could gauge the route, and the time it would take me. My first ride took 23 minutes and it almost killed me. My next ride took 19 minutes, and it continued to drop, day after day, as my endurance and strength grew. It will be tough at first, but if you don't want to push as hard, just leave earlier and make it a leisurely ride.

“Don't do nothing because you can't do everything. Do something!” –Colleen Patrick-Goudreau

If your only way to work consists of a major highway or interstate, don't not ride because of that. Drive that portion and bring your bike along with you and bike the rest of the way. Or if your commute will be 10 miles and you're unsure if you could make it, drive the first six and bike four. Then you can either work your way further and further until you can complete the whole route, or just stick with that. There are any number of ways you can structure your ride to best suit you.

Now that you have an easy step-by-step process laid out for you, there should be less apprehension and paralysis analysis about commuting on your bike. You will have a little leg work (pun intended), but after a little research and a little open-mindedness, I'm sure you could figure out a way to save yourself some money, make yourself happier, get in some exercise, and spend more time outdoors all at the same time. Now, get out and ride.

Fortified Bicycle Price: $749 Fortified is offering a 20% off Discount to ChooseFI listeners, Enter in Promo Code CHOOSEFI at Checkout Fortified Bicycle Full Disclosure: We earn a commission if you click this link and make a purchase, at no additional cost to you.

Related Article: How To Get The Most Mileage Out Of Your Car

BIO

James and Emily at Rethink The Rat Race are a young, married, child-free couple that write about frugality, travel, real-estate, and general life optimization. The two of them are planning to reach FIRE in 2020, which will be before they’re 30. Their hobbies include DIY projects around their house-hacking rentals, working out and riding bikes together, and spending time with their dog. Follow them at rethinktheratrace.com to get a peek inside their fast track to FI.

How To Start Commuting By Bicycle

Are You Maxing Out Your 401(k)? Don’t Miss Out On The Employer Match!

Don't Miss Out On The Employer Match!

One super easy way to put an extra few percent toward your savings rate is earning a retirement savings match at your employer. Every additional percent of your income, or your employer’s match, that you put away puts you a few months or sometimes years closer to financial independence (FI).

If your employer offers a retirement savings plan at work, such as a 401(k), 403(b), 457, Thrift Saving Plan or other plan, you may be eligible for a retirement savings plan matching contribution to help you get to FI faster. Of course, not all workplaces have retirement saving plans and even those that do don’t always match.

That said, it’s super important that you’re aware of what options are available to you and how they work or you could be inadvertently missing out on essentially free money. Whether you have access to a plan now or may have access to a plan in the future, here are a few things you definitely need to be watching out for to make sure you get every penny of retirement matching funds that you can.

Retirement Savings Plan Matching Rules Can Be Tricky

In an ideal world, all retirement savings plans would be super straight forward. The matching formulas would be intuitive and companies would do the right thing and honor the match no matter how you contribute your money. Unfortunately, confusing rules could be costing you some of your retirement savings plan matching dollars.

Confusing Matching Formulas

If you’re just getting started contributing to your workplace retirement plan, you may not be able to max out your benefits. Even so, getting the employer match is a great way to get started when you have high interest rate debt that still needs to be paid off.

Unfortunately, matching formulas aren’t always as easy as matching dollar for dollar on the first 5% of your salary. Some employers have confusing formulas like matching 50 cents on the dollar for the first 5% you contribute and 25 cents on the dollar for the next 10% you contribute.

In total, you’d receive a 5% matching contribution from your employer, but in order to get that 5% you’d actually have to contribute 15% of your salary. No matter what your employer’s matching formula is, make sure you understand how much you have to contribute in order to get the full employer match.

Maxing Out Early in the Year Could Cost You

Some employers contribute the employer match dollars each paycheck, which is great. Be aware, if you max your retirement account out early in the year, instead of contributing equally throughout the year, you may not get the full employer match. Instead, you may only get the employer match each pay period where you had a retirement contribution and miss out on the employer match in those pay periods where you couldn’t contribute anymore because you had already maxed out for the year.

Thankfully, some companies realize this is crazy and make a true-up contribution at the end of the year to give you the full employer match, but not all companies do. Make sure you either spread your contributions out throughout the year to get the full employer match or make sure your company will give you a true-up contribution. You don’t want to miss out on free retirement matching dollars.

Vesting Schedules Mean You Don’t Always Earn Your Match Dollars

If you just started a job in the last few years and you’re thinking about leaving for greener pastures, you might be surprised to learn you may not get to take all of your retirement matching dollars with you. Some employers don’t actually give you your employer match dollars right away. While they’re invested just like regular employer match dollars, you only earn the match dollars on a year by year basis according to your employer’s vesting schedule.

For instance, some employers allow you to vest 20% per year for five years. At the end of your first year of employment, you’d get to keep 20% of the match dollars you’ve earned, 40% the second year and so on until you earn 100% of the match dollars after year five.

The vesting is retroactive on all match dollars earned, so once you hit year five you get 100% of the previous match contributions and all match contributions going forward. However, if you left after the end of year three, you’d only get to keep 60% of the match dollars contributed to your account to that point.

End of Year Match Contributions Could Result in No Match the Year You Leave Your Job

Not all employers match your retirement contributions each pay period. Instead, some choose to deposit match dollars into your retirement account once per year. For these employers, many require you to be an active employee as of a certain date, such as December 31st, to earn the match for the year. If you leave your job on November 30th, you wouldn’t get a penny of employer match dollars for the year even though you were an active employee contributing for 11 months.

Not All Employers Match Catch up Contributions

People age 50 and older can contribute extra money in most workplace retirement plans called catch up contributions. The catch is, not all employers will match those catch up contributions. This is another scenario when maxing out the regular portion of your workplace retirement plan early in the year could hurt you. Make sure to check with your plan to see how catch up contribution matching would work. Figure out a way to get the match and max out your catch up contribution, too.

Recheck Your Contributions Annually

While contributing to a workplace retirement plan should be easy enough that anyone could understand it, many plans have complicated rules when it comes to the employer match. Make sure you understand all the ins and outs of your plan’s employer match to make sure you don’t miss out on it. Then, check in once per year to make sure the rules haven’t changed. At that time, make sure you’ll still get the full employer match and, if the retirement plan contribution limits have increased, increase you contributions to max out your retirement account again to continue being a retirement savings rock star.

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

 

https://www.choosefi.com/dont-miss-out-on-the-employer-match/

How To Get Books For Free (Or Crazy Cheap)

How To Get Books For Free (Or Crazy Cheap)

If you’re an avid reader, or want to instill a love of literacy in your children, new books can be mighty pricey. While most of us bibliophiles love the exciting allure of a well organized bookstore, most of us do not love the price of a brand new hardcover! If this is you–read on to see how you can get books for free, or crazy cheap!

The Library

This one is obvious–but if you’re feeling a bit frustrated that your local library doesn’t have the titles you want to read, there are other ways to get what you want without paying. If a book isn’t available, many branches offer an inter-library loan system in a partnership with local universities. You’ll have access to textbooks, best sellers and some obscure research journals to your heart’s content.

Related: 10 Things You Can Get for Free at Your Library

Another hack is to see if your library has contracts with digital book sharing services like Hoopla and Rakuten OverDrive. Both services can be free with a valid library card and can open you up to a wider range of titles. Of course, just like your library–digital books can be limited, especially if they’re popular, and you may have to wait.

Some libraries also have small stores, where they are selling books they are no longer lending for whatever reason. You can pick up books here for crazy cheap, such as $1.

Amazon

While Amazon made a name for itself in bookselling, it also has a small digital lending library where Prime members can get books completely free. Via the Kindle Owners' Lending Library, you check out one e-book per month and read that book on your Kindle or Fire tablet.

Additionally, they offer Kindle Unlimited for $9.99 a month–but it luckily comes with a 30 day free trial first! Kindle Unlimited gives you access to 1 million titles, gobs of audiobooks, and a plethora of current magazines that you can enjoy on any device with the Kindle app.

Bookswapping

If you have books you’d like to get rid of, BookMooch is a bookswapping service that allows you to send out books and get others on your list as well via credits.

For those of us who would rather swap in person, coordinate a bookswap as a frugal event and all books that aren’t taken home can be donated. Of course, you can also just ask someone you know if they have some books you’re after as well!

Okay–shameless plug here: Choose FI’ers are naturally well read and also fun in person–coordinate a meetup! Being anxious to read The Simple Path To Wealth and not wanting to wait, I was thrilled when a local FI’er brought a copy to our local Choose FI meetup along with some other excellent books to lend out.

Meeting people and swapping books is a great way to get books for free, plus you might get some excellently curated recommendations in the process!

Join a ChooseFI local group here.

BookScouter.com

Amazon, luckily, isn’t the only place to unload your used books so you have the cash to buy more! BookScouter allows you to scour the internet in one place and compare prices to unload your old books, or price compare to shop for a good deal. So whether you’re buying or selling, BookScouter is the CamelCamelCamel of books.

If you have a college student in your life, have them check out BookScouter, as it’s exceptionally good for textbooks instead of unloading them on campus at the bookstore for the rock bottom price.

Free Books For Children

You’ve heard of Dolly Parton, right? She started a foundation, the Imagination Library, to give free books to kids throughout the world. If your child is under five years old and your community is participating, you can enroll in your local program. They will send you a brand new, age appropriate book every month.

If your community isn’t participating or your child is over age five, see what you can find in local parenting Meetup or Facebook groups, or with friends and family whose children may be aging out of certain books. A little digging goes a long way!

Free Books For You

Unfortunately, if you aren’t able to borrow books by other means, you likely will be leaving your frugal literacy games to chance. If you’re more of a reader for pleasure than a genre specific bookworm with a must-read agenda, you can benefit from the various places you can snag books for free in bulk.

Local “Buy Nothing” groups on Facebook, and sites like Freecycle and Craigslist are a great way to find free paperbacks and hardcover books from people who are ready to unload them for free or a few cents per book.

A new trend has also been popping up–Little Free Library, which are tiny wooden libraries that usually look like oversized bird houses and are placed in public parks or installed on street corners. The idea here is that you can leave a book to lend or borrow a book from the library, but return it when you’re done.

Other Sources of Cheap Books

If you’re looking for alternatives to Amazon to purchase cheap books, you can check out BetterWorldBooks, which donates both books and funds to literacy initiatives worldwide. You also may find some real gems of used bookstores within driving distance of your home as well!

How do you read for free (or crazy cheap)?

 

How To Get Books For Free (Or Crazy Cheap)

Should You Pay Off Your Mortgage Or Invest?

mortgage or invest

When it comes to optimizing your money, one hotly debated topic is whether you should use your available income to pay off your mortgage faster or invest the money for the greatest return. The future is unknown, but there are emotional and logical arguments to be made for investing or paying off the mortgage first.

Planning for financial independence means you consider even more factors to find the right answers for yourself. To invest or pay off the mortgage, is the question. Let's take a look at the arguments so you can make an educated decision about which is better for you. After all, personal finance is personal and this is a decision you’ll have to make for yourself.

The Arguments for Paying Off the Mortgage

There’s something special about being completely debt free including the mortgage. When you’re debt free, not a penny of your income should go toward making interest payments. You no longer worry about setting aside a portion of your monthly income to pay for your housing. While you do still pay for things like repairs, maintenance, insurance and taxes, these costs won’t be nearly as big as the principal and interest on a mortgage payment, in most cases.

When you’re no longer making principal and interest payments for a mortgage each month, chances are your monthly expenses will decrease by quite a bit. This also reduces the amount of money you’d use in calculations to see how much money you need to set aside for FI like the 4% rule. If you have carefully planned to pay off your mortgage before you reach FI, the reduction in expenses due to no longer having a mortgage payment could play a big role in your plans.

While others would rather invest money to potentially earn a higher return, those that decide to pay their mortgage off have one major fact on their side. Paying down a mortgage gives you a certain return on your money. If you make extra principal payments on your mortgage, you don’t pay interest on that money you no longer owe. The certain return on the money you put into your mortgage will be the interest rate of your mortgage. Of course, this assumes your home value stays constant or is increasing. If the value of your home is decreasing, this may not hold true.

Emotionally, paying down your mortgage may make more sense, too. While investing to reach FI definitely speeds up the process rather than just putting money in a savings account, sometimes it’s harder to get excited about building up an investment account than it is to get excited about paying down a mortgage.

When my wife and I were paying down over $80,000 of student loan debt, we did everything we could to put a few extra dollars toward paying off that debt. I imagine there is a similar feeling when someone is trying to pay off their mortgage quickly. That same intensity may be more difficult to achieve when it comes to investing, resulting in putting more money toward paying down the mortgage than you would invest.

The Arguments for Investing

While paying off the mortgage may be the emotional option, investing is often seen as the logical option to optimize your money. Mortgage rates have recently been at all-time lows. Mortgage rates of under 5% make it easy to see how investing rather than paying down the mortgage could result in a higher return for your money. If your average rate of return on your investments is at least 8%, you have quite a bit of wiggle room above the 5% or lower rate you’re probably paying on your mortgage.

Related: M1 Finance Completely Free Automated Investing

Another reason why investing is the logical answer to the debate is the fact that the principal and interest portion of a fixed rate mortgage will remain the same each year as time goes on. So, you can use future dollars that are worth less than today’s dollars, due to inflation, to pay off your mortgage. You don’t have to lower your returns by the rate of inflation because your mortgage payment won’t be increasing with inflation like all of your other expenses will.

Here’s a quick chart that shows the difference in time it would take to pay off a mortgage between applying money toward a 5% interest rate mortgage versus investing that money at an 8% annual return. This also assumes a brand new 30 year fixed rate mortgage with a $200,000 starting balance.

Extra Principal PaymentsYears To Pay Off Mortgage With PrepaymentsYears For Investments To Reach Mortgage Balance Remaining With No Prepayments
Extra $50015 years 2 months13 years 11 months
Extra $1,00010 years 4 months9 years 6 months
Extra $1,5007 years 11 months7 years 5 months

Keep in mind, you may have to pay taxes on your investment earnings and dividends you may receive. On the other hand, you won’t be able to deduct your mortgage interest unless you’re one of the few people that will still itemize your deductions after the recent tax law change.

Ultimately, You Decide

What matters is you decide what is best for you and your situation. Keep open to adjusting as future needs and wants become evident. Compare the numbers; the interest rates, the time intended in the home, and your risk tolerance. And remember, you can do a little of both if you’d like or change your mind and switch methods later on. The decision is in your hands.

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

Mortgage or Invest pin

085 | From Passion to Profit | M.K. Williams

085 | From Passion to Profit | M.K. Williams

Science-fiction author M.K. Williams talks about her journey toward financial independence, the decisions she’s made along the way, and self-publishing her first three novels.

  • How did Mary Kate and her husband get started on their path to financial independence?
  • What adjustments did they make while sticking close to the Early Retirement Extreme plan, and why did they choose to make those decisions?
  • How did MK’s house hack work?
  • What did MK and her husband do with their income after they had paid off their mortgage and student account?
  • Where did MK and Jason keep their savings?
  • What suggestions does MK have for listeners?
    • Don’t let assumptions of your community hold you back.
  • How much did MK save by not having a car, and walking to work?
  • What choices did MK make to save money during college and keep her student debt low?
  • High school students: Spend more time writing scholarship essays.
  • What gift did MK’s parents give her, in regards to student loans, that helped her pay off her loans quicker?
  • How did Jason’s college experience differ?
  • What is MK’s side hustle and how did she get started?
  • Why did MK decide to self-publish?
  • What advantages does a traditional publishing company have?
  • How does someone get access to MK’s book?
  • What does marketing a self-published book involve? Check out MK's article about self-publishing.
  • What is MK’s preference: digital, paperback or audiobook?
  • How does MK get reviews?
  • Is writing financially profitable yet, and what is the ultimate goal?
  • How many books would it take to fully fund MK’s lifestyle?
  • What is MK’s perspective on grammar, and how has she worked to improve her writing?

 

Links:

Enemies of Peace – digital book

Enemies of Peace – audio book

Nailbitersnovel.com

Mr. Money Mustache

Sell your crap. Pay your debt. Do what you love. – Adam Baker

 

From Passion to Profit | M.K. Williams

084R | Mindset of FI

084R The Mindset of FI

The essential steps to a FI mindset, travel rewards updates from Brad, voicemails from the community, and highlights from Monday’s episode with Jillian from Montana Money Matters.

  • Brad’s 15-year-old Honda might breakdown soon. How much should he be willing to spend on repairs?
  • How much does depreciation impact specific cars, and how much should that weigh into Brad’s decision?
  • Review of Monday’s episode with Jillian from Montana Money Matters. Discipline equals freedom.
  • How can we train ourselves to withstand fear?
  • What was Jillian’s strategy for creating the life she wanted?
  • Chad, from Facebook, was excited by how relevant and relatable Jillian’s story is, even for people with vastly different life circumstances.
  • Voicemail from Tay, who is hoping to find a step-by-step guide to getting from zero to FI.
  • Mindset recommendations from Jonathan:
    • Exposure yourself to the right information – podcasts, books, articles, etc.
    • Practice a growth mindset – be willing to make changes.
    • Accept and celebrate marginal gains, as they compile.
  • Nuts and bolts recommendations
    • Evaluate your current financial landscape – what’s going in and out?
    • Which scenario describes you?
      • Are you in debt?
      • Do you live paycheck to paycheck?
      • Is your income higher than necessary, but not achieving your goals?
    • What you earn – what you earn = The Gap
    • Increasing “The Gap” comes from optimization.
    • Getting to a 50% savings rate is a different scenario for every person.
    • Finding ways to create passive income through real estate, side hustles or investments.
  • Maxing out your retirement accounts decreases your taxable income.
  • Message from Carrie, is looking forward to minimizing.
  • Voicemail from Jason, hoping for an update on travel rewards.
    • Chase Sapphire rewards have decrease the rate at which you can get rewards
    • Brad still recommends as the best travel rewards
    • Chase Ink Business cards are a great choice for someone with a business.
    • Generally, best use is to transfer points to an airline partner for airline miles.
    • Starwood Preferred Guest program is end on Aug. 1, 2018
    • Barclaycard Arrival Plus just returned as a fixed-value, personal card.
  • Voicemail from Tyler, suggesting that doesn’t have to be an expensive hobby, and talking through his method for optimizing his golf hobby.

 

Links:

The Beginner’s Guide to FI

The 10 Pillars of FI

Arsenal Discs

The Simple Path to Wealth

Design Your Future

Freelance to Freedom