Not going to lie, I have daydreamed about winning it sooo many times. Planned exactly how I would invest all the money, how I would retire on it. How I would be able to help my family out financially, etc.
But, it’s impossible for me to win. Why? Because it doesn’t make sense to buy lottery tickets. Your return on investment is going to be extremely low unless you’re extremely lucky.
However, I recently found a “bank” (its a pass through bank like Chime where your actual money is under a different bank but you use their app to access it) with a weekly prize drawing. Prizes up to 10 million dollars.
You get a ticket per $25 in your account. And can get bonus tickets for setting up recurring deposits and direct deposits.
The beauty of it is you don’t have to spend anything to get tickets and chances to win. The money you have deposited is FDIC insured. What you are paying with is the opportunity to make more money elsewhere, for the chance to win here.
The bank is called Yotta, and it pays 0.2% interest (compared to a 0.6% high yield savings account you can get elsewhere). However, depending on your winnings your returns might be higher. Think of it like a slightly riskier and slightly more rewarding investment than a regular high yield savings account is, with no risk regarding your principal (the money you deposit) the only thing you stand to lose is that extra 0.4% interest rate!
One last minor perk! If you sign up with my link you get an extra 100 tickets - but they aren’t applied to your account immediately. They apply at the beginning of the next week (or current week if a number hasn’t been drawn) to maximize your possible return!
Im seizing my chance to play the lottery! And I’m going to continue to do it until high yield savings accounts start offering rates a bit better than 0.6% 😁
Hey - Join me on Yotta using my referral code AMANDA9374 and we’ll both get 100 tickets. Yotta is an FDIC insured savings account recently featured in Bloomberg and Forbes where you can win prizes up to $10M every week. https://join.withyotta.com/AMANDA9374
With Yotta, you save money and unlock the chance to win prizes up to $10m every week. The best part is you can't lose. Even if you don't win
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January this year I spent $5,000 to pay off my under-grad student loan.
July this year I got a $5,000 student loan, the first semester’s distribution.
My plans have changed. Originally I was going to work part time during school and pay for it out of pocket. But then this fall I got into a bunch of extra-curriculars that I really want to participate in - and that are nice lines on a resume.
My new plan is to pay for school with student loans, and quit my job to focus on school. I’m really not happy about being in (non-mortgage) debt. But, if I pay the loan off in 5 years (which should be feasible) then it’s basically a $3,000 fee to be able to be a full time student without the stress of work.
I’ve never had a problem with my monthly budget, mainly because it doesn’t exist. I naturally spend less than I make, therefore there’s always some money for the bills and rarely some time spent managing my money. It’s not a good situation to be in, it’s not the worse by any means, but if you want to build your savings and retire earlier you need to be deliberate with your spending and savings choices.
This is traditionally done with a budget. Now I’m not going to lie, I’m terrible at budgets. I can create them no problem, but remembering to actually follow them? Good luck.
1. The first step to create a budget is to document your expenses. If you don’t know how much you tend to spend then it will be very difficult to create an effective budget. If most of your transactions are on debit and credit cards, then you can go back through previous months to track your spending. Or you can start tracking today so you have a better idea in the future.
2. Once you have a good idea of how much money you tend to spend on various categories you can start building the budget itself. (Don’t forget about annual or semi-annual expenses like car insurance). Make sure you are aware of the differences between needs and wants when you are budgeting.
3. Once you have a budget you aren’t done, you should continue to track your expenses and adjust the budget as needed.
So, now you have a budget. How does that translate to actually spending less money? Here are some behavioral tips to help spend less money:
· Now that you know about how much you spend on things start paying for them in cash. When you go to a grocery store with a $100 bill (or a $100 gift card) you are forced to spend less than that $100. You can’t go over, but if you had a debit card a $112 bill would approve even though it was $12 over your budget.
· Change your daily habits to avoid temptation. Does your route to or from home pass by a fast-food restaurant that you just love? Did you just notice that you actually spend $50 a month there on coffee and French fries? Try taking a side street so you never see the sign. Do you habitually order delivery through your handy-dandy phone? Try deleting the apps, not seeing them on the phone can reduce temptation and the extra step of needing to redownload every time can slow you down when you’re thinking about ordering. Even if you don’t want to delete the app you can hide in somewhere in the back folders of your phone so you don’t see the icon and thing huh, think imma get myself some pizza.
· If there’s a consistent ‘treat’ you like to get, think about low-cost alternatives. For example, I love pizza. Like, it’s not healthy, neither is my solution but we’re talking about money not fitness. I will often keep some tortilla shells, a cheese blend, and a bag of pepperonis on site. Then if I’m craving pizza, I can make myself a 400 calories pizza roll that costs less than 50 cents instead of spending the minimum of $10 (to deliver) which usually ends up being a $12 order which also has a delivery charge, tax, and tip and becomes something closer to $20 for a single craving?
· Consider how your spending habits change when you’re emotional, are you more likely to buy yourself a treat and how much does that treat cost a month? Make the decision before-hand to redirect emotional buying to other positive behaviors instead. Things like working out, calling a friend, drawing a doodle of whoever pissed you off then burning it in the sink, or meditating. Whatever you do, don’t open up Amazon.
· Ask yourself if you need something or want something before you buy it. Do you need those new shoes? Or do you want them? Taking the time to add one more mental step before actually spending the money can help reduce impulse purchases. My No Spend Year | Michelle McGagh | TEDxManchester is a great TED Talk on this topic.
· Forget trends. Don’t even bother trying to keep up with all the newest fads. And if a fad looks really cool? Take a step back and ask yourself if you really think that this new item is actually useful and will add joy to your life, or if you just think it is because of herd mentality.
· Don’t go into debt to buy things. This mainly applies to credit-card debt and doesn’t really apply to houses (especially if you plan on getting a duplex and renting out of it). If there’s something that’s really cool, it will still be really cool when you have the money saved up to buy it in cash. It might even be really cool and cheaper if a new model comes out in the meantime.
Pay down your debts. This is less advice to reduce immediate spending and more advice to avoid future spending on interest payments. There are two main schools of thought when it comes to paying down debt:
1. Start with the high interest debt. This makes the most logical sense as high-interest debt will end up costing you more in the long run.
2. Start with the lowest balance, regardless of debt: This makes the most emotional sense. People are human, and they like to see progress on their goals. The feeling of success when you pay off a debt completely can help spur you on to tackle the next debt.
Starting with the high interest debt is my preference. I want to save every penny possible, and that’s the way to do it. But if you know that you may have difficulty sticking to a plan, or if you want the satisfaction of paying off your debt then the second option is a fine one to take.
Changing your behavior and paying down debt are some of the harder steps to take when trying to spend less money overall. Here are some simpler, practical, pieces of advice:
· Buy in bulk. When you go grocery shopping do some meal planning first and buy in bulk. If you have a larger family then stores like Costco or Sam’s Club can be very useful to get some discounted prices. However, if you’re like me and live in a very small household then buying some items in bulk at a local cheap grocery store can be just as effective without cluttering up limited storage space.
· Explore secondhand shops for new appliances, clothes, furniture, etc. Online marketplaces like Craigslist and Facebook Marketplace can be great places to get good deals. There’s no need to spend $50 on a waffle iron when the Youth Ranch down the street or Bob around the corner is selling one for $5.
· Price-shop. Amazon won’t always have the cheapest prices, and while convenience is nice they aren’t the only home delivery store. Shop around to see where you can get the best price for your purchases.
· Don’t buy as much stuff, borrow it if you can. If anyone knows me then know how much I love books. I used to have multiple bookcase that I would move about once a year when I switched apartments. Over time I forced myself to give away or sell most of them, and now check the local library for my next read. And by now I mean pre-COVID-19. But post Covid I’m sure I’ll be back at it!
· Look for long lasting, high-quality versions of products. A nice pair of shoes can last you five years or more in my experience. If you can, save up for the longer lasting versions so you don’t have to replace them as often.
· Reduce any monthly bills that you can. If you consistently have rollover data that may mean that you should pay less for less data. If you’re going to the gym just to use the treadmill, consider walking around the block a few times instead. Decide if you really need all those streaming services that you pay for.
· Adjust the thermostat, especially if your home isn’t especially energy efficient. Keep the apartment a little colder in the winter and a little warmer in the summer for power savings.
Finally, this is all well and good. But how do you actually follow through? The best person to answer this is yourself, but here are a few options:
1. Get an accountability partner. You can go through each other’s finances to make sure you are hitting your goals. Having an extra set of eyes can be incredibly useful to not only spot places where expenses can be curbed, but to make sure that what’s on paper matches what you wanted there to be.
2. Pay for everything in cash. This is reminiscent of Dave Ramsey’s cash budget. But if you have an envelope of cash labeled food, and that’s all the fast food and grocery money you have for the month it will be difficult to go over the limit. There’s also something more visceral in giving up cash as opposed to sliding a card that may make you think twice about going through with your purchase.
3. Feel broke to be rich. Try opening a second bank account for your paycheck and bills, then set up a recurring transfer to your main checking account. If you never see the bulk of your money, and if your bank balance looks low every time you open the app to check it may be easier to avoid spending money. This isn’t a mindset that everyone wants to be in, but I’ve found that constantly feeling broke means I am far less likely to spend money on frivolities.
If you have more ideas on how to save money on a daily basis leave a comment below!
What do you think of when you say you want to be rich? Do you think you're tired of people calling you Richard?
Don't worry, I know I'm not funny :)
When I talk to people who say they want to be rich they're often thinking of high salaries, anywhere from $60,000 - $1,000,000 depending on where they live and what living expenses are to them. But your income doesn't determine how rich you are, instead your spending determines how rich you are. Your goals play into it too.
I mean, just look at https://newrepublic.com/article/158555/whiners-earn-200000-complain-theyre-broke. Your salary could double or more without changing your economic posistion. (I mean, in the long run. Short term it would surely help). Making $50,000 a year is very different in New York, New York compared to a small town in the middle of Montana. And $50,000 a year is different to people with high credit card debt than to brigh-eyed bushy tailed kids out of college.
Let's use me for an example, I can't really afford to eat out more than once a month. And when I say eat out - I mean iHop, Applebees, that sort of cost. Upgrading my internet in this rural town? Fuggedaboutit. But my friends, who are younger than me and still working in the retail/food jobs can afford to go out far more often! (I'm pretty sure their internet is cheaper too, but they still live about 40 minutes away from me and they have infrastructure).
Why? Because of expenses. I spend 70% of my paycheck on retirment accounts and taxes, and while I could stop those contributions and start buying some (insert fancy restaurant here, all I could come up with was Red Lobster. . . ) one a week I'm not going to. Instead I'm going to live far, farr below my means and work less.
So, who's rich? Me, or my friends? The answer is actually both of us.
I may be broke but I've got assets building and I can pay all my bills. I'm making progress towards my goals, and I live comfortably because my idea of living comfortably is pretty darn cheap. When I went car shopping my standard was air conditioning (and that it runs of course). That has saved me a ton of money in actual car costs as well as insurance and interst.
My friends may not be investing as much, but they are enjoying life and they can pay their bills. One of them has bought a nice car because having a nice car is important to them, they have a studio apartment because privacy is important to them.
My point is, figure out what's important to you. And then figure out how much that's going to cost you. Who cares if you're making $50,000 or $200,000 if you can be happy on $15,000?
And that's that. That's the secret to being rich, live on less that you get.
I'm going to follow up on this to say that I'm trying to be concious of people who don't yet make enough. Not everyone is in a position where they can reduce their means. You may want to move two cities over because the housing costs are so much lower, but you need a deposit first.
I'm not trying to say everyone is rich. Just that being rich is closer than $100,000 a year.
And the whole money doesn't buy happiness? Bullshit, to a point. Money makes you happier for as far as it covers your expenses and lets you experience new things. I belive $70,000 is the median income before the increased happiness to increased money correllation tapers off. Having $70,000 a year should would make me happier, but that doesn't change the fact that I am rich because I spent my entire working career spending as little as possible to save as much as possible. And I got used to having < $12,000 a year so now $15,000 makes me feel great!
I just got married, and moved to a different state!
Both decisions were financially motivated (no I did not marry him for the money - I mean, I did. But not his money. I wrote us a prenup that made it clear his money was his and mine was mine).
I've mentioned in the past the potential tax benefits of getting married. Especially the increased HSA contributions and the potential reduced tax burden. Well, my dropping to part time and his getting a way better job meant that filing jointly would actually save us several thousand on our federal tax bill. Not counting his ability to contribute $7k to his HSA pre-tax!
Beyond that, I've left the state I was born and raised in. And have instead moved to a gorgeous state with no income tax, this will save both of us about 7% of our incomes. And we are renting here (and renting out the duplex we own) so we don't pay the higher property taxes. Win win! In fact, the rent for half our duplex is almost exactly what we will be paying for an apartment in the new state, so our net expense change will be almost neutral.
Honestly, the best part is being around trees again. I've always lived in a desert, and my favorite vacation was driving about four hours to the nearest national forest. Now I live in a tree filled city, that's actual trees rather than flower only fruit trees carefully placed by the city.
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Okay - the title goes wayy too far, but I’m an impatient person, alright?
Here’s what my FIRE perceptions are:
Learn about FIRE, and decide which (if any) FIRE you want to pursue.
Take the first steps, budget, reduce spending, etc.
Increase your income, side hustles, job hunting, etc.
Invest, invest, invest. This is brokerage accounts, tax-advantaged accounts, real estate, etc.
?????
Start on your Roth conversions, and other money movement so you’re optimized to retire.
Retire.
So, here’s my problem. Step 5, I’m pretty sure, is just the slog. The time you spend actually saving once you have the knowledge you need to work towards your goals. (Now, I’m not saying you’re never going to learn anything again - because that’s ridiculous. Just that the bulk of the basics are done.)
Now, I’m sort of floating around the 3rd and 4th steps. I’ve slashed my expenses as far as I can without giving up things I value. (Like, I could stop spending on some things if I needed to survive, but I don’t think it’s worth it just to retire faster.)
I’m sort of working on step 3 because I’m currently in school to move to a better paying career. But because I still work, and because I’m going to school full time, it feels like I don’t have any time for a side hustle. And if I did have more time, I’d just put them towards work (I’m hourly and basically set my schedule) to where I’d get a guaranteed and immediate benefit of more pay.
So, it feels like I’m step 5 because I can’t seem to do anything else. But I haven’t progressed that far - so I keep going back to step 1 because it’s the only other step I can reach and take action on. (Already reduced my budget, already saving and investing every dollar I can, and simply do not have the time to try and start an additional income stream without a total breakdown). But, I don’t know where to go to learn more. I’ve been listening to podcasts, reading blogs, but it’s all basics - things I already know because I go to where I’ve been. I don’t know where to find new places to learn new things.
It feels incredibly frustrating, because it feels like I’m making no progress (and I basically am not between reduced work and school expenses) unless you consider 100% reinvestment progress. And, I should consider progress, I’m just a good two years from seeing the payoffs. And. . . I’m impatient.
So, anyway. Incredibly frustrating, because it feels like I’m making no progress and that I can’t do anything to start making progress again. Even though logically I know that in two years, my salary will (hopefully) double and potentially quadruple depending on the practice area I go into.
So, my current goal is to find a new rental market. And honestly, I don’t know if there’s much point to this goal because my income is only slightly higher than expenses right now. So the likelihood of me getting a down payment saved is low. But, I still want to find one for the sake of finding it.
In other words, I have no real idea how to go about finding a rental market with a good cap rate. My current property was purchased from a local pool, because I wasn’t planning on moving anywhere. So it’s not great for cash flow, but it was a good option compared to others on the market at the time.
I do actually plan to move in the next 6 months or so. Specifically to Washington, because it has no income tax. My partner and I haven’t decided if we want to buy there or not though. Property taxes are higher in Washington than my current state - but it would still be a net gain. I’ve started poking around, looking for duplexes in various parts of the state. But so far the cap rates have been horrible.
We may also just rent, but it seems like a lost opportunity. Personally, I lean towards renting a cheaper place and saving up for a duplex, triplex, etc. in a different part of the country with good cash flow. Which brings me back to the title of this post.
How do you find new rental markets to invest in? Right now I’m just brute forcing the question in a limited market (Washington). But beyond that I expect I will need to do a base average home value compared to average rent comparison. Then, in areas that look promising, do some additional research about local industries, population, growth projections, etc. to see if the investment will likely still be sound in years.
This is all going to be learning as I go though, so if you have any tips I’d be happy to hear them!
Total distributions in 2021 are absolutely crushing it. I was expecting Capital gains distributions and dividend increases but not to this extent. Almost a 500% YOY increase in CG and 35% YOY increase in dividends. #reinvested #StockMarket #personalfinance #fireblogger #finacialfreedom https://www.instagram.com/p/CX40VdKlfnb/?utm_medium=tumblr