I really enjoyed reading your original post regarding #5. However, I'm going to slightly disagree there.
I think it's important to identify BOTH how you can save $50 and how you can earn an extra $50. Working it from both ends will be more beneficial.
A penny saved is a penny earned...sure, but you aren't paying taxes on that penny saved.
plonkee
· 1 year ago
The first one is important to me and I'm making changes there now. I haven't actually got any plans to retire before retirment age, but I don't want to stand in the way.
My plan is to shift some of my retirement savings into my stocks and shares ISA - this is a British investment wrapper that works like a Roth IRA, but there is no age limit on withdrawals. This should work out ok whether or not I retire early.
FourPillars
· 1 year ago
I just want to point out that it doesn't hurt to listen (at least once) to people who don't support your point of view.
I hope I don't get banned from your master list... :)
Mike
deepali
· 1 year ago
That last part of #6 is one I've been dealing with a lot lately, so I'll be interested in reading your thoughts. I'm struggling with putting some of what's going through my mind on the page so maybe your future posts will help clarify the issue. In the meantime, maybe I'll attempt a blog post about it...
Steve
· 1 year ago
@Mike: You bring up a good point and I'd like to clarify. There's a big difference between someone who disagrees but provides a useful sounding board and someone who is just dismissive. Let's say you think investing in real estate is better than stocks, and I think stocks are better than real estate. We can have a long argument pro and con and discuss stats, opinions, etc. I don't think that's a bad thing at ALL.
However, if you said "hey, Steve, maybe you should consider real estate instead of stocks because of ..." and I say "that's idiotic, Mike," then I'm not adding much to your master mind. I thought about this when I mentioned the master mind. People who support your effort but disagree with your methods can be helpful. People who are dismissive aren't helpful.
You aren't even vaguely close to getting banned, Mike! :)
@Kacie: Oh, sure, but I think my wife and I (as I discussed in my previous post on the subject) have done a pretty solid job of saving - we need to turn our attention to earning. But I don't disagree that saving should be first, because you can save today - earning may take longer.
Millionaire Mommy Next Door
· 1 year ago
#6 is the toughest one, in my opinion, yet its also the one point that plays the biggest role. The last thing you need when you're struggling to change your mindset around is to have those closest to you plant seeds of doubt in your ear.
bubelah
· 1 year ago
I think that having a master mind group or support group is very vital to achieving the goals. Imagine you decided to lose weight and get fit and your mother tells you "oh, come on, you look fine, here, eat something". I'd rather hear from my mother "Oh, yes, great idea, let's join gym together". I had more enjoyment and success at the gym when I had my mother and my sister going with me, than when I was alone. It could be very discouraging and frustrating not to be understood. Eventually you just stop sharing your plans and goals because they just get shot down as ridiculous because they are so unorthodox.
Brooke
· 1 year ago
The mastermind set is so important. When I deal all day with (gasp) "Regular People," I sometimes feel a bit inadequate and like I need the glamorous lifestyle, just a little. Then, I come back to the PF Blogs and I feel all better!
Early Retirement Extreme
· 1 year ago
1) My current assets / retirement savings ratio is over 60. Doing the 401k/IRA thing exclusively excludes early retirement. 2,4) I think there are some "economic inefficiencies" in terms of cost of living and location. NYC and SF are overpriced compared to what they offer (in my mind). Now, where are the underpriced locations? 5) Net equals income minus expenses. Depending on your situation, it's easier to change one or the other. I have worked harder on changing my expenses, because they leverage the income required. Reducing expenses by 25% is like increasing income by 33%, reducing expenses by half is equivalent to doubling the income. Of course now I have pretty much reached the law of diminishing returns in terms of expense reduction and therefore I should work on increasing my income instead if I want more money.
SavingDiva
· 1 year ago
I agree that having a support system is important! I started my blog because I don't have any people in my life that are really supportive of saving. All of my friends spend and spend and wait for/have husbands that dig them out of their financial mess. I can't say that my family isn't supportive, but it's just something we don't talk about. My dad tells us to save for retirement, and he's content that I'm doing that....
I think it's great that you see the importance of a public school environment. If I would have went to the local private school, I would have been extremely sheltered. While I did have to work extra hard to stay focused, I met a lot of different types of people. In a private school, I don't think I would know any one that was being raised by their grandmother on welfare or foster care children. However, I should mention that I was only allowed to go to the public school because the swim team was really good (we won state a few years while I was in school), and all of my club teammates went there.
deepali
· 1 year ago
Oh, on the school system - I can recommend a great little school in Ohio. But I might be biased... :)
Hunter Nuttall
· 1 year ago
I'm pretty new to blogging, but I'm learning that one of the great things about it is that it makes master minds much easier to establish. In the offline world, it's hard for many people to find others with a similar mindset. Online, it's much easier to find the right people, and as long as you're willing to give, it's not hard to receive.
ed
· 1 year ago
I must say I agree with number 2 the most. While I've never been to NYC, I can attest that the cost of living in Boston is a world of difference than the cost of living in Southern New Hampshire.
Sometimes it is laughable.
guinness416
· 1 year ago
Would you save money by moving back into the city? I obviously don't live in NY any more, but when we were looking for our place there we dismissed Jersey and Westchester very quickly - the property tax was obscene, and the transit more expensive/less convenient. None of which matters of course if you don't use the things that make NY stand apart, of course.
wealthy_1
· 1 year ago
I think number 3 is the hardest. I just said to my husband tonight that we need to be on the same page when it comes to our finances and our future.
thickenmywallet
· 1 year ago
I have been a member of several master mind groups for businesses and the effect on becoming a better entrepreneur is incalculable. The differing viewpoints on an issue alone is worth it. I would suspect there would be a similar effect on personal finances.
One important thing about a good mastermind group- find people with similar goals but different life experiences and backgrounds with you.
Steve
· 1 year ago
@Guiness416: You hit on something there. We have beaten that horse to death and beyond. Manhattan has simply become unrealistic for people in our situation. (1) I make a pretty good salary, but not THAT good. (2) With a second child on the way, nanny would be prohibitively expensive, but so would Bubelah staying home. (3) Public schools in Manhattan, for the most part, suck - so private schooling would be insanely expensive. (4) Having two different-sex kids means we would eventually want at least 3 bedrooms - a near-impossibility in Manhattan.
I pick on Manhattan because we see no point in living in Brooklyn or the Bronx or Queens or the far dark distant reaches of Staten Island. We could live in Manhattan, but the lifestyle changes would be drastic and not really in line with our goals and values. It's a shame, because I truly deeply madly love Manhattan. Even though I lived the first 25 years of my life elsewhere, Manhattan felt like home at a deep visceral level when I arrived there. Bubelah, although a Queens resident, loves it too. We just can't work out how to make that work.
Our plan, by the way, is to move back to Manhattan after the kids are in college :)
KT
· 1 year ago
Great article - you need the mindset
To develop the mindset and become aware of our potential - we followed a strict methodology that we have developed
I just wanted to share a free video with you that explains a service we've been using recently to *passively* generate in excess of $100,000p.a (on top my salary) without doing any extra work.
The service we've been using to do that is now being launched internationally for the first time.
If you click on the free video link below it explains everything very concisely. This is the same research that private banks pay as much as pay up to $105,000 PER YEAR to access.
Leave your email address and you will get access to an amazing video
KT
Patrick
· 1 year ago
Steve, great article. I love the point of view in #5, earn more instead of save more (as long as you continue to live at your current means and don't experience proportional lifestyle inflation). I am trying to do the same thing in my life.
#6 is also a great point. "You need people whose interests complement yours, but whose skills fill the gaps between your own."
I love that quote. This is something everyone needs to do to grow -personally, professionally, spiritually, or however they choose to grow. I even like to hear contrarian view points - as long as they are supportive and open minded. That is the only way to grow.
I'm happy to be a part of your on-line mastermind. I keep you in mine as well. You're a thinker, which is often hard to find.
When you leave the NYC area, you will NEVER make the salary that you are making now. That was the hardest lesson DH and I had to learn. So, make your money now, save, save, save and when you do make the move be prepared to live on much less. There are many areas in upstate New York that are cheaper to live AND have superb public schools BUT you had better check them out way before hand. They are few and far between. I was amazed at the poverty (yes, poverty) levels. I retired as a millionaire at the age of 50. DH was 45. The first year was fun then it got boring. No matter how much money we amassed, the investments could not keep up with inflation. So rather than tap into the savings, we started our own business and earn enough to pay everything WITHOUT touching the savings/investments. I think that is the real way to go. Plus, it keeps you young. We travel, sail, relax and do whatever we want but we work 2-3 days a week. When the kids got older, both work in the city and both have apartments/condo/co-op in the NYC. Whenever I have the urge to visit Manhattan, I stay at their places and keep my money invested. I will not buy again in NYC. I own 2 homes without mortgages, 1 in a ski area, the other at the beach. We go to Europe once a year. Life is good. But realistic. As a side note: I will NEVER move out of New York. It's a great state. It has one of the best consumer protection laws in the US and the legal system makes sense to me. Just my 2 cents. Good luck. Email me any questions.
Bill
· 1 year ago
Steve,
Love this post! It's amazing how many of our lives have similarities. For example, you say to move to a place with good schools. I live in the bay area in California, where the good schools are in the richest neighborhoods, so I'd have to move out of the whole area. I'm thinking Washington or Oregon. Home values haven't gone completely nuts there yet.
My wife and I just had our second child, another boy, so we have saved a bit on clothing. And they will be able to share a room. But it's tough having the second child and NOT have one of you (you or your spouse) stay home. The daycare we provide our first child is expensive. Adding our second would be cost-prohibitive. But one salary where I live is ridiculously hard to make stretch; I, too, am exploring ways not only to save, but to earn. Multiple streams of income, I think you called it wealthstreaming, is a prudent thing to do in today's society.
It's akin to NOT putting all your eggs in one basket.
Keep up the great work. I really enjoy your point of view.
All Comments
I think it's important to identify BOTH how you can save $50 and how you can earn an extra $50. Working it from both ends will be more beneficial.
A penny saved is a penny earned...sure, but you aren't paying taxes on that penny saved.
My plan is to shift some of my retirement savings into my stocks and shares ISA - this is a British investment wrapper that works like a Roth IRA, but there is no age limit on withdrawals. This should work out ok whether or not I retire early.
I hope I don't get banned from your master list... :)
Mike
However, if you said "hey, Steve, maybe you should consider real estate instead of stocks because of ..." and I say "that's idiotic, Mike," then I'm not adding much to your master mind. I thought about this when I mentioned the master mind. People who support your effort but disagree with your methods can be helpful. People who are dismissive aren't helpful.
You aren't even vaguely close to getting banned, Mike! :)
@Kacie: Oh, sure, but I think my wife and I (as I discussed in my previous post on the subject) have done a pretty solid job of saving - we need to turn our attention to earning. But I don't disagree that saving should be first, because you can save today - earning may take longer.
It could be very discouraging and frustrating not to be understood. Eventually you just stop sharing your plans and goals because they just get shot down as ridiculous because they are so unorthodox.
2,4) I think there are some "economic inefficiencies" in terms of cost of living and location. NYC and SF are overpriced compared to what they offer (in my mind). Now, where are the underpriced locations?
5) Net equals income minus expenses. Depending on your situation, it's easier to change one or the other. I have worked harder on changing my expenses, because they leverage the income required. Reducing expenses by 25% is like increasing income by 33%, reducing expenses by half is equivalent to doubling the income. Of course now I have pretty much reached the law of diminishing returns in terms of expense reduction and therefore I should work on increasing my income instead if I want more money.
I think it's great that you see the importance of a public school environment. If I would have went to the local private school, I would have been extremely sheltered. While I did have to work extra hard to stay focused, I met a lot of different types of people. In a private school, I don't think I would know any one that was being raised by their grandmother on welfare or foster care children. However, I should mention that I was only allowed to go to the public school because the swim team was really good (we won state a few years while I was in school), and all of my club teammates went there.
Sometimes it is laughable.
One important thing about a good mastermind group- find people with similar goals but different life experiences and backgrounds with you.
I pick on Manhattan because we see no point in living in Brooklyn or the Bronx or Queens or the far dark distant reaches of Staten Island. We could live in Manhattan, but the lifestyle changes would be drastic and not really in line with our goals and values. It's a shame, because I truly deeply madly love Manhattan. Even though I lived the first 25 years of my life elsewhere, Manhattan felt like home at a deep visceral level when I arrived there. Bubelah, although a Queens resident, loves it too. We just can't work out how to make that work.
Our plan, by the way, is to move back to Manhattan after the kids are in college :)
To develop the mindset and become aware of our potential - we followed a strict methodology that we have developed
I just wanted to share a free video with you that explains a service we've been using recently to *passively* generate in excess of $100,000p.a (on top my salary) without doing any extra work.
The service we've been using to do that is now being launched internationally for the first time.
If you click on the free video link below it explains everything very concisely. This is the same research that private
banks pay as much as pay up to $105,000 PER YEAR to access.
Here's the link:
http://www.investmentintelligence.com.au/cmd.ph...
Leave your email address and you will get access to an amazing video
KT
#6 is also a great point. "You need people whose interests complement yours, but whose skills fill the gaps between your own."
I love that quote. This is something everyone needs to do to grow -personally, professionally, spiritually, or however they choose to grow. I even like to hear contrarian view points - as long as they are supportive and open minded. That is the only way to grow.
I'm happy to be a part of your on-line mastermind. I keep you in mine as well. You're a thinker, which is often hard to find.
http://wastrelshow.blogspot.com/2007/05/how-to-...
here is my two cents, as having done already what you write about:
When you leave the NYC area, you will NEVER make the salary that you are making now. That was the hardest lesson DH and I had to learn. So, make your money now, save, save, save and when you do make the move be prepared to live on much less. There are many areas in upstate New York that are cheaper to live AND have superb public schools BUT you had better check them out way before hand. They are few and far between. I was amazed at the poverty (yes, poverty) levels. I retired as a millionaire at the age of 50. DH was 45. The first year was fun then it got boring. No matter how much money we amassed, the investments could not keep up with inflation. So rather than tap into the savings, we started our own business and earn enough to pay everything WITHOUT touching the savings/investments. I think that is the real way to go. Plus, it keeps you young. We travel, sail, relax and do whatever we want but we work 2-3 days a week.
When the kids got older, both work in the city and both have apartments/condo/co-op in the NYC. Whenever I have the urge to visit Manhattan, I stay at their places and keep my money invested. I will not buy again in NYC. I own 2 homes without mortgages, 1 in a ski area, the other at the beach. We go to Europe once a year. Life is good. But realistic. As a side note: I will NEVER move out of New York. It's a great state. It has one of the best consumer protection laws in the US and the legal system makes sense to me.
Just my 2 cents. Good luck. Email me any questions.
Love this post! It's amazing how many of our lives have similarities. For example, you say to move to a place with good schools. I live in the bay area in California, where the good schools are in the richest neighborhoods, so I'd have to move out of the whole area. I'm thinking Washington or Oregon. Home values haven't gone completely nuts there yet.
My wife and I just had our second child, another boy, so we have saved a bit on clothing. And they will be able to share a room. But it's tough having the second child and NOT have one of you (you or your spouse) stay home. The daycare we provide our first child is expensive. Adding our second would be cost-prohibitive. But one salary where I live is ridiculously hard to make stretch; I, too, am exploring ways not only to save, but to earn. Multiple streams of income, I think you called it wealthstreaming, is a prudent thing to do in today's society.
It's akin to NOT putting all your eggs in one basket.
Keep up the great work. I really enjoy your point of view.