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Monday Money Tip: Online Bank Savings Accounts

Welcome to another addition of Monday Money Tip! I’ve used online bank accounts since 2007. They have been incredible for me, and I think they can be a very helpful way for you to maximize your savings as well! You can check out the online banks I recommend HERE.

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Monday Money Tip: How to Pay Off Student Loan Debt Faster

Happy Monday! In today’s tip, I wanted to share how you could eliminate your student loans faster! While you may believe you will still be paying on your loans in your 50s – or even later, it doesn’t have to be the case. I was able to eliminate all of my student loan debt in my 20s by using these techniques!

Want to automatically receive a helpful and practical money tip every Monday? Register FREE at MondayMoneyTip.com.

5 Essentials to Paying Off Debt – Step 5

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination

STEP 4 – Use the Debt Snowball Technique 

STEP 5 – Establish Accountability
The strongest among us can still fall to temptation! You could be making fantastic progress toward debt freedom and then a new truck pulling a new boat passes you on the road. If you’re not careful, you’ll also be pulling a new truck and boat down the road!

There are two key ways to ensure you are held accountable to your goal of debt freedom!

  1. If married, work together with your spouse. If unmarried, have someone you trust (someone who has won with their money) hold you accountable!
    There is incredible power when you work together with your spouse towards debt freedom! It is a common goal that will unify your marriage and cement your commitment to managing your resources together.I have also found that when I have a bad case of the “I wants” and “I gotta-have”, Jenn does not. She shuts me down! Then, when Jenn gets a bad case of “I really want this”, I do not. I shut her down! Why? Because we are not doing debt! We are THROUGH with it!!
  2. Plan your spending every single month!  
    Planned money goes farther than unplanned money! Every single month, Jenn and I still down TOGETHER and spend every single dollar on paper before we are paid. Don’t miss this!! Every. Dollar. On. Paper. BEFORE. We. Are. Paid.I can tell you this. I HATED the idea of budgeting and now all I do is yell from the mountaintops about how important it is and how EZ it is to budget! There are FREE budget tools that are available HERE. Use one of them to start your journey to debt freedom! Your budget will hold you accountable. I wouldn’t be surprised if it helped you free up $200-$500 per month to attack your debt even harder.

Also, make sure to add some FUN into your liberation from debt! I know that money can make you so frustrated that you want to pull all your hair out, but add some fun into it! You could make your debt pay off visual. Check it out HERE.

To learn more about becoming debt free, check out my book, I Was Broke. Now I’m Not.

 

5 Essentials to Paying Off Debt – Step 4

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination

STEP 4 – Use the Debt Snowball Technique 
We can all agree that debt is a drag. It hangs on like a bad relationship or a fixer-upper money pit house. Anyone, when given the choice, would choose to be debt free over paying debt payments every month.

The average family possess credit card debt, student loan debt, furniture debt, vehicle debt, and a personal loan or two. Then a house payment enters into the picture. Every single month, 40% or more of the family’s income is “dead on arrival” because it must immediately be sent out to lenders. Let’s work on changing that!

With Steps 1-3 complete, we can now focus on actually paying off the debt using the Debt Snowball Technique!

Let me explain the process for using the Debt Snowball Technique.

  1. List ALL debts from the smallest balanced owed to the largest.
  2. Pay the minimum payment on all debts except the smallest one.
  3. Pay as much as you can on the smallest debt.
  4. When the smallest debt is eliminated, take the monthly payment you were paying for that debt and add it to the monthly payment you’re making on the second smallest debt.
  5. Continue this process with a vengeance until you are debt free!!

I highly recommend this technique because you will see individual debt payments disappear more swiftly from your monthly budget. For more information on the Debt Snowball Technique, grab a copy of my latest book, I Was Broke. Now I’m Not.

5 Essentials to Paying Off Debt – Step 3

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date

STEP 3 – Accelerate your debt elimination
DEBT – This four letter word often consumes so much of our lives, thoughts and actions. But, it doesn’t have to!

When it comes to debt, I understand how stressful and frustrating it can be. I understand the weight and fiction it can bring to a family. However, I also know the freedom that comes when one become debt free and I want you to experience this freedom!

When you are ready to start attacking your debt, here are a few ways to accelerate debt elimination. (But before you begin, make sure you’re not making the #1 Debt Mistake – HERE.)

3 Ways to Accelerate Debt Elimination:

  1. Reduce Interest – Many people with substantial consumer debt do not realize that 50% – 75% of their payments are merely going to the lender as interest. This greatly reduces your ability to lower your debt. So, here are a few ways to lower your interest:
    1. Transfer to a 0% Interest Credit Card (Learn more HERE)
    2. Call & ask for a lower rate
    3. Pay on-time
    4. Establish automatic payments
  2. Increase Income – Since we’re all friends here, if we’re being completely honest, we all vote for this option, right? But a lot of people don’t realize that there are numerous ways to increase income that are within your hands. Here are a few:
    1. Pay Raise (see salary.com)
    2. Tax Refund
    3. Bonus
    4. Work Overtime
    5. Extra Job
    6. Sell Some Possessions
  3. Decrease Outgo – This is an option that is always available to us, but it’s probably not fun. If you can decrease the outgo to other things, you can increase the outgo to liberating your life from debt!
    1. Create and follow a budget!
    2. Sell some possessions

You can learn more about each of these steps in my book, I Was Broke. Now I’m Not.

5 Essentials to Paying Off Debt – Step 2

In this series, I want to equip you to become debt free!! Jenn and I became debt free in just 14 months by following this process. I can tell you this – there is NOTING like living life without the weight of debt!

STEP 1 – Understand the WHY before the HOW

STEP 2 – Calculate your Debt Freedom Date
When I meet with people, it’s a guarantee that I will calculate their debt freedom date. When I do this, it’s clear that people do not like debt! It’s also apparent that people have not been paying attention to their finances and do not have a well-defined plan for their life. Otherwise, they would not have incurred most of the debt. However, there is always HOPE and a way out! 

In these meetings, I often use the example of a dragon. Follow me here! How can you effectively defeat a dragon if you don’t know how many heads it has or how large the dragon is? So, before we calculate your debt freedom date,  let’s establish three things: 

  1. Who do you owe
  2. How much do you owe
  3. What are the payments that you are ACTUALLY making

You can list these on the Debt Freedom Date Calculator. Now we can calculate your debt freedom date! This date is simply the date that you will be debt free (including and excluding the house).

Let’s look at a sample. In this sample, the couple listed all of their non-house, non-business debts, as well as their house debt. After all of the debts are inputted, the debt freedom date is calculated. This couple will be debt free, excluding the house, in just 3.3 years and completely debt free, including the house, in 7.7 years!! Get fired up!

Debt Freedom Date Calculator

Are you ready to take your next step? You can calculate your debt freedom date HERE!

IMPORTANT NOTE: When you take this next step to become debt free, you must eliminate the potential for new debt! If you keep swiping the credit cards and running up the balance, you’re just eliminating your potential of becoming debt free.

Have you calculated your date? How many months until you’re debt free?

 

5 Essentials to Paying Off Debt – Step 1

I have found that a large group of those who attend one of my events, are living paycheck-to-paycheck AND carrying debt. In fact, statistics from a recent survey I conducted show that 57% of people are living paycheck-to-paycheck and 73% of people are in debt (excluding the mortgage). When asked how people are doing with managing their money, 45% said that they were barely keeping their head above water or drowning! Only 9% of people feel like they are winning with their money!

No matter where I go, I see the footprint of debt on people’s lives – marriages failing, stress and depression taking over, and hopelessness closing in. And all of this is happening in the wealthiest country on the planet! This is entirely unacceptable!

I WANT YOU TO BECOME DEBT-FREE!! It changes your life! It enables you to accomplish far more than you ever thought possible with your personal finances! It allows you to do exactly what you were put on earth to do – regardless of the income! In this series, I’m going to share the process that I followed to become debt free. Are you ready?

STEP 1 – Understand the WHY before the HOW
I believe this is the most important step in becoming debt free! In the hundreds of financial coaching sessions that our team has led, it’s amazing how many people do not have a plan for their lives. We ask them the “why” and they stare at us like we’re speaking a different language.

Unfortunately, this is the first time that many of these people have ever seriously thought about what they want to accomplish with their lives. As a result, they are bumbling through life just trying to make it through the day. What a miserable way to live!

I cannot overstate this fact – YOUR LEVEL OF EXPECTATION DETERMINES YOUR LEVEL OF PREPARATION!

When Jenn and I wrote down our plans, hopes & dreams on paper, we realized that our lack of money management proved we had no real expectations of accomplishing these plans, hopes & dreams. We wanted to move back to South Carolina to take a job that paid way less than what we were making, but every single dinner at Outback was robbing us of that opportunity. Every single debt payment went off to make the bank wealthy while at the same time robbing us of our God-given dreams!

That made me MAD! It made me FURIOUS! It made me realize how incredibly stupid I was to be managing our money so crazily! I had a significant amount of our income going to pay car debt, credit card debt, and student loan debt. Add in the stupid house payment, and I had thousands of dollars per month running off to make the bank wealthy!

By writing out our plans, hopes, & dreams on paper, Jenn and I were motivated to manage our money differently. It caused us to view debt differently.

Take your first step today by writing down your plans, hopes & dreams. If you are married, you need to do this separately and then take time to discuss it with each other. By the way, one of my plans, hopes, & dreams is for you to become debt-free!

Why do you want to be debt free? It’s not easy! After you get started, it might be easier but it’s not going to be easy. There are so many things that compete for your money. So, why do you want to break free from debt? One of the most common responses I get is, “so I can do whatever I want”. I don’t believe this is the best response. I believe a better response is, “so I can live a fully funded life doing exactly what I’ve been put on this earth to do!”

What has kept you from attacking your debt?

 

 

Monday Money Tip: Make Your Debt Pay Off Visual

It’s that time again…time for today’s Monday Money Tip! In today’s Monday Money Tip, I wanted to share one of the ways my family had FUN while attacking our debt – coloring! It made our Debt Freedom March much more visual and enabled us to see the progress we were making. It was awesome!

Want to automatically receive a helpful and practical money tip every Monday? Register FREE at MondayMoneyTip.com.

 

Monday Money Tip: Using the Debt Snowball Concept

During the month of April, I’m focusing on all things related to debt. To start this week off right, I’m sharing the process that I used to eliminate all of my non-house debt in just 14 months and my house mortgage in 10 years.

Get fired up! YOU CAN DO THIS!

For more information on how to eliminate debt, pick up a copy of my latest book, I Was Broke. Now I’m Not. 

5 Basic Steps to Investing – Step 5

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest

STEP FIVE  Continue to Learn about Practical Investing Opportunities
There are so many different types of investment opportunities, so I’ve broken down a few of them.

Stocks – When you own stock in a company, you technically become a part owner of that company. You have some claim to the assets and earnings of the company. Stocks are foundational to most investment portfolios. They are known to be very volatile in the short term but have historically outperformed other investments in the long run. 

Mark Twain has famously said this about investing in stocks: “October: This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February.”

There are two major types of stocks:

  • Common Stock: Common stock allows the holder to vote in the shareholder meetings (depending on the amount of stock owned) and provides access to dividends or profit sharing produced by the company.
  • Preferred Stock: Preferred stock holders have priority over common stock holders. This applies in many areas including when dividends are being paid to shareholders.

Bonds – A bond is a large debt owed by a company, government, or even a school, where the borrowing institution has agreed to repay an established amount of interest payments for a set period of time. When this time expires, the borrower then returns all of the principal back to the lender(s). Bonds can vary in maturity times anywhere from 1 year to 30 years. I like to think of my personal residence as a bond investment. A bond is generally less risky.

Mutual Funds & Exchange Traded Funds (ETFs) – Mutual funds and ETFs let you accumulate a wide variety of investments that couldn’t normally obtain without consuming large amounts of time and money. Mutual funds and ETFs are funded “mutually” by you, me and millions of our closest friends. Our money is pooled together and then used by the “mutual fund managers” to invest in hundreds of other company stocks, bonds, and other sorts of investments. Usually, mutual funds and ETFs have specific charters that direct their investments. Our mutual fund might only focus on established companies in the USA while another could focus on investing in up-and-coming companies in third world countries.

Other Investing Opportunities – People so often hold themselves to these common types of investing and never branch out. Investing opportunities are all around you! You can invest in a small home and rent it out. You could invest in small businesses in your community. When you are investing, you can think outside the box. Some of the greatest returns can be found when investing in unorthodox ventures.

Next Steps
– Review your investments and know what you are invested in
– Start to think OUTSIDE of the stock market when you’re investing
– Start investing!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 4

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money

STEP FOUR  Unleash the Power of Compound Interest  
Have you ever heard the say, “my money is working for me”? This is exactly what compound interest does for you! When you utilize the power of compound interest, you’re allowing the interest you’re making to also earn interest.

For example, let’s say we have $100 in an investment account that grew to $105 in one year. This is the equivalent of 5% interest. Now suppose the $105 is left alone for another year and continues to grow at a rate of 5%. Will it be paid another $5 interest when the second year is up? No! It will be paid $5.25 because interest was received on $105 – not just $100. Interest earning interest!

Take a look at the below example of a $100/month investment growing at an annual compound rate of 12%.

Compound Interest Table

 

 

Remember,  you are only investing $100 each month! After 40 years, you’ve only invested $48,000 BUT your account balance is $1,176,477! This means that $1,128,477 is the interest you have gained!

Now do you see the POWER of compound interest?

Where do you find investments that offer 12% return? I have found no investments that constantly return 12% every single year, but I have found several mutual funds that average over 12% return over the past 50 years. Some years could lose 15% while others gain 30%. You can see a list of my current investments HERE.

How to maximize your investment growth:

  1. Invest enough to receive the entire company match: By investing in an employer-sponsored retirement plan that matches a portion of your contributions, you could even receive a 50% or 100% return!
  2. Monitor your investments at least every six months: I track my investments at the end of every single month. This helps me understand how each one is performing and allows me to make necessary adjustments.
  3. Consider investments beyond the stock market: The stock market is just one place to invest. Consider investing in a small businesses, real estate, and intellectual property – like patents and licensing rights. Remember, a higher interest rate almost always means a higher risk.

Next Steps
– Establish a consistent investing habit. Invest into your retirement account every paycheck for the rest of your working life. Even if you can only invest a small amount, it will add up to more than you can imagine!
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 3

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 

STEP THREE  Get the Free Money 
Yes, I said FREE money. Many employers will match a portion of your contributions into a self-directed retirement plan! I encourage you to go to your human resource department and sign up for the retirement plan. Start investing money into it immediately! Contribute enough money to obtain the entire employer match. Remember, this is really just FREE money!

Each company is different, but most companies will usually match up to a certain percent of your pay. I worked for an employer that matched me dollar-for-dollar up to 8% of my pay (100% automatic rate of return!!). Another matched dollar-for-dollar up to 6% of my pay. Still another matched dollar-for-dollar up to 3% of my pay. Whatever your employer is willing to give you is FREE MONEY!

It is baffling that many people don’t take advantage of this opportunity. I have heard several excuses about why people choose not to, excuses like:

  • “I can’t afford to contribute.”
  • “I’m living paycheck-to-paycheck already.”

These people are basically saying they can’t afford to be given free money. Doesn’t make a whole lot of sense. This is an opportunity to receive 100% return on your investment! DO NOT WASTE THIS CHANCE!

Next Steps:
– Talk to your employer TODAY and sign up for your company’s retirement plan. Start contributing something – at least enough to get the full match.
– As quickly as possible, increase your investing contribution to at least 10% of your gross income. I know this is a lot of money, but you will NEVER regret this decision.
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Step 2

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 

STEP TWO  Automate Your Investments 
Make your investments automatic! Your bank account can be set up to auto draft money into different investment plans (401k or a child’s 529 college-savings plan).

When your investments are automated, it prevents you from forgetting to transfer money each month. It also eliminates the possibility of using that money for splurge purchases. This is awesome for those of us who are highly susceptible to spend any and all extra money! You’ll also see your net worth increase every single month.

One thing to note, if you have to ever switch banks, you’ll need to set up the auto-drafting again at your new bank. I would try to do this ASAP! I know from firsthand experience how hard it can be to write a check to your savings account or 529 college-savings plan when the auto-drafting isn’t set up. There are moments where you will think, “Wow! I could really use this money elsewhere!”

If I had to write a check every month to my investments accounts, there is a good chance that my investing plan would be seriously off-track. Make it automatic!!

Next Steps
– Set up auto-drafting with your bank (via phone or online) and start automating your investment account(s) , such as a 401k, retirement account, or 529 college-savings plan.
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

5 Basic Steps to Investing – Steps 1

Investing! This is consistently given as one of the most confusing topics individuals face. In this series, I wanted to share some basic investing fundamentals. My goal is to help you understand this topic better and walk away with practical steps.

STEP ONE  Evaluate & Diversify 
Before we begin, you need to assess what investments you currently have. You might be saying, “Joe, I don’t have any investments.” My question to you would be: do you contribute to some type of retirement plan at work, own a home, or own a business? Investing is much more than owning stocks. To start, let’s make a list of all your investments. (A great place to list these investments is on the asset side of the Net Worth Calculator.) Now that you have all your investments listed, lets evaluate to make sure they are diversified.

I’m sure you’ve heard the saying, don’t put all your eggs in one basket. This directly relates to investing! A key step when investing is to diversify your investments. For example, you should not put all your money into one company’s stock, instead spread your investments out. By spreading out your investments you greatly lower the risk of your investment.

You can research countless times where people have put a large portion of their money into one company, only to have that company fail. Several people lost large sums of money when they invested solely in Enron during the early 2000’s and the company went under. If these people would have diversified their investments, they could have softened the blow.

An easy way for you to diversify is to invest in mutual funds. A mutual fund allows you to purchase a portion of many stocks and bonds with a single share purchase. This purchase automatically diversifies your investments, even though you’ve only bought one share! Also, don’t just think stocks. Invest in a new business or a home that can be rented out. Investing is much more then the stock market. You have a world of things to invest in – real estate, land, new businesses, or even your own business!

Next Steps:
– Review your current investments. Are they diverse?
– Are you only investing in one type of company? If yes, take steps to address right away!
– What other investments could you make outside of the stock market?
– Recommended Resource ==> OXEN: The Key to an Abundant Harvest – Learn how to maximize your money through investing

Joseph Sangl’s Current Investments – 2015

Anyone who has attended a Financial Learning Experience has heard me say that it is important to INVEST money and to do so every single time you are paid money. At the end of our live events, I am regularly asked or emailed the following question:

“What investments do you recommend?”

My answer is always, “I don’t recommend specific investments. I can only tell you the investments I own, and they have worked well for me. The investments you choose are up to you.”

Occasionally, I update everyone on the investments I currently hold. Below is a chart of the current investments we hold. If it is publicly-traded, I have included the ticker symbol. Click on the chart itself (or HERE) to see a larger version.

JSInv2015

It is hard to believe that another year has passed by! If you look at last year’s update, you will see quite a change in the allocation of my investments. This is most noticeable in our real estate holdings. This is due to acquisition of more properties as well as the appreciation in the value of other real estate holdings. You can click the pie chart below to see a larger version of the chart.

PortfolioDistribution2015-02JDS

My views of the investing market place:

  1. I anticipate the stock market will continue to grow at a moderate pace. While the current Price-to-Earnings Ratio (P/E) for the overall market is at nearly 18, there are are many reasons to believe that we will see some growth. These include:
    • (a) cash rich companies – I believe we will see a hastening of the investment of these monies through 2015,
    • (b) low interest rates – while the Federal Reserve Board has ceased QE3 and are clearly signaling an increase in interest rates, these rate hikes are going to be low for the foreseeable future, and
    • (c) oil price collapse – while this certainly affects Big Oil stocks, it has an overall economic stimulus effect as it puts substantial dollars back into the pockets of consumers
  2. I continue to believe there will be ample investment opportunities within the real estate markets in 2015. I travel throughout the U.S. and Canada and rarely have I seen construction – both large-scale commercial and residential – at the levels I’m observing right now. It’s only a matter of time before this shows up in the profit statements of the largest contractors.
  3. I also believe there will be ample investment opportunities into new business start-ups and purchase of existing businesses
  4. Worldwide instability has existed since the beginning of time. It exists today. While the problems may change names tomorrow, I’m convinced we will still face worldwide instability tomorrow as well. I believe a great risk is in not investing at all. I will continue to be an investor!

I welcome your thoughts on the investing market place as well. What do you think? What are your strategies?

Read previous installments of Joe Sangl’s “Current Investments” posts HERE.

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