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Apache is functioning normally

May 29, 2023 by Brett Tams

Certificates of deposit (often simply called CDs), by definition are time deposits. You give your money to the bank and then promise not to touch it for a specific length of time. In general, the longer you agree to let the bank keep your money via a CD investment, the higher the interest rate you will receive.

If certificates of deposit offer higher returns than a savings account, then why doesn’t everybody use them? The primary reason is that a CD investment is less liquid than a savings account in that you can’t just move money in and out without penalty as you can in a savings account. You can take your money out of a CD before it “matures,” but you are docked interest when you do. In fact, it is typical for a bank to penalize the interest amount even if it hasn’t been earned (meaning you could lose part of your principal if you close your CD early).

Anatomy of a CD

I was fortunate to win a $1,000 6-month certificate of deposit from ING Direct recently. (I never win anything!) Looking at it might be instructive:

Reviewing this screenshot, you can see that a certificate of deposit has an initial value (in this case, $1,000), an interest rate (3.50%), and a term (6 months). In other words, this is very much like a loan that I am making to the bank.

You can also see that the bank has an “Early Redemption Policy” that states that I would sacrifice three months’ interest if I chose to redeem this CD early, whether the interest has been earned or not. Because I have held the CD less than a month, I would actually sacrifice part of my principal if I were to close the account now.

When this CD investment matures on April 9th, I will have $1,017.28. Obviously $17.28 isn’t a huge return, but it’s important to remember that interest rates are low right now. (Also consider that if my $10,000 emergency fund were all in CDs, I would earn $172.80 in six months.)

Another important difference to be aware of is that, unlike a savings account, a certificate of deposit ends after a set amount of time. What happens at the end of the term depends on the arrangements you have (or have not) made with your bank. (I explain this further below.)

CD Tips and Tricks

A certificate of deposit is a great way to put your savings on steroids, so to speak, but there are ways to make them even better. Here are a few tips and tricks that can help you get the most out of your investment.

Use CDs to beat falling interest rates. When the Federal Reserve cuts short-term interest rates, you feel the pinch in your savings account. Certificates of deposit are a great way to buy yourself “protection.”

When you see a rate drop coming, open another CD. For example, the Federal Reserve just cut short-term rates another 0.50 percent last week. I would be shocked if banks didn’t follow suit, lowering the interest on their savings accounts. ING Direct could go as low as 2.25 percent.

When you see an interest drop coming, take some money from your savings account and throw it into a 6- or 12-month certificate of deposit, locking in the higher rate. (My web research hasn’t revealed what causes CD rates to move, but they do not move in lockstep with savings accounts.)

Climb the CD investment ladder. Just as you might use dollar-cost averaging to profit from fluctuations in the stock market, you can use a “CD ladder” to profit from fluctuations in interest rates.

Say you have $5,000 to invest. To build a CD ladder, you would invest the money in CDs with staggered maturation dates:

$1,000 in a one-year CD
$1,000 in a two-year CD
$1,000 in a three-year CD
$1,000 in a four-year CD
$1,000 in a five-year CD

As each CD matures, you immediately invest your money in a new five-year CD, effectively maintaining the one-year stagger, or ladder. You won’t earn the best possible rate of return, but you will earn a good one, and your income will be relatively constant. The CD ladder is also a form of diversification: you’re not betting all your money on one interest rate.

Protect yourself with parallel CDs. One of the biggest risks to your investment in a certificate of deposit is the need for early withdrawal. What if something happens and you need to pull the money out? As we’ve seen, this can be expensive. Nickel at Five Cent Nickel suggests mitigating your risk with parallel certificates of deposit.

Again, assume have $5,000 that you’d like to put into CDs. Instead of opening a single certificate of deposit for the full amount, consider opening multiple CDs. You might open three CDs at once, for example: two $1,000 CDs and one $3,000 CD.

This gives you a buffer in case you need to get at the money early. If you find you need $500, you can break a single $1,000 CD and the rest of your money is safe from penalty.

Related >> Beginners’ Guide to Investing

Beware of auto-renewals. Nicole wrote last week because she was surprised to find that her certificate of deposit at Countrywide had automatically renewed at the maturation date. Many (most?) banks will do this unless you instruct them not to.

If you know you’re ready to pull your money out of a certificate of deposit, be sure to contact your bank to find out the proper procedure for doing so. Nicole found herself locked into another twelve month CD when she needed the money now. If she broke the contract, she would be forced to sacrifice 180 days interest, whether earned or not.

(Note that Nicole’s story had a semi-happy resolution. She knows to speak up when something seems wrong. Countrywide wouldn’t let her out of the CD investment entirely, but “I was able to negotiate a compromise to transfer the money to a 3-month CD, rather than the 12 month CD. Although the interest rate is lower, I will be out in 3 months, which isn’t too bad.”)

Shop around. As with any financial decision, it pays to shop around for CD rates. You may find that your local bank actually offers a better deal on certificates of deposit than the online banks.

For example, my local credit union only offers 0.35% on its regular savings account, but its CD rates are competitive with (and sometimes higher than) ING Direct. Since I keep my checking account at the credit union, it might make sense for me to hold my CDs there. (In this case, however, they’re not high enough to make me switch; I’d rather track everything in one place at ING.)

Here’s my list of current CD rates from online banks.

CDs in Practice

I’m new to the certificate of deposit, but I can already see some uses for it. My $10,000 emergency fund, for example, is currently earning 2.75%. I may instead create a series of parallel CDs, as described above.

Also, I’m saving for my Mini Cooper. That money is also earning 2.75%. I’m nowhere close to buying the car, though, so I might as well put it into a certificate of deposit, too.

Though certificates of deposit are new to me, I’m sure that most of you have been using them for years. What tips and tricks can you offer? Do you have favorite sources for CD investments? How do you decide which money to keep there and which to keep in a savings account?

Identifying the Best CD Rates

It is important to think through how best to use a certificate of deposit in your overall financial plan, but it starts with understanding your goals and how a CD can help you reach them. Interest rates change constantly, so having up-to-date rate information is critical to identifying the best CD rates and terms to make the most of your investment. We have made the whole process easier in a convenient page that is updated weekly with the most current interest rates.

Different strategies can help you capitalize on fluctuating interest rates too.
A CD ladder can help you maintain a relatively constant income no matter how current CD rates change. A parallel CD strategy can help you maintain some accessibility to your funds during the term. Richard Barrington’s post can help you understand how to find the right CD but do shop for the highest CD rates and terms regularly to maximize your return. Bookmark this page as well so you can easily come back to our table to check rates and terms as often as you want.

Current Certificate of Deposit Rates

An online account is arguably one of the most convenient ways to manage CDs and, generally speaking, online banks offer higher rates than traditional brick-and-mortar institutions. The following listings of online banks are updated weekly too, and a little more information about each bank is given next to each listing as well. Credit unions and savings associations are also sources of CDs and other deposit accounts.

CD Basics

A certificate of deposit, or CD, is a deposit account that is generally considered a very low-risk investment. You might also hear it described as a time deposit because it is not a liquid asset that can be accessed on demand. Instead, the amounts deposited into a CD are expected to remain untouched for a specific period of time, which is the term of the CD. In exchange, the bank will pay you a fixed rate of interest.
Example investment: You put $10,000 in a 5-year certificate of deposit at an interest rate of 1.75%. At the end of five years, with interest compounded daily, you would have $10,914.

Early withdrawal penalty – The full value of the CD (your principal plus the interest earned) is accessible when the term has been reached; however, there is usually a penalty if you withdraw your funds before the end of the term. This means that the bank will keep a portion of the interest earned, which could also cut into the original principal balance if the CD has not accrued enough interest to satisfy the entire penalty yet.

For example, if a depositor wishes to close a one-year CD account after two months but the bank’s policy states that an early withdrawal penalty equal to three months’ interest would be due in that event, then the bank will dip into the depositor’s principal balance to make up for the shortfall between the interest earned and the penalty. Early withdrawal penalties vary from bank to bank, and this is another important item to consider as you shop for the best CD rates and open your new account.

Fixed interest rates – Even though interest rates change regularly, banks usually offer a fixed interest rate that doesn’t fluctuate, allowing you to lock in that particular rate for the entire term of your CD. Banks are willing to fix the interest rate, which is generally higher for certificates of deposit than for most savings accounts, because the funds remain on deposit with the bank untouched for that specific period of time. (In general, the longer the term, the higher the interest rate for a CD.)

FDIC insurance – The Federal Deposit Insurance Corporation insures most certificates of deposit so that the balance of your CD will be paid to you even if the banking institution becomes insolvent for some reason. The standard deposit insurance coverage limit is $250,000 per depositor, but it is important to verify the amount of FDIC insurance that applies to the particular CD accounts you open.

High Interest CDs that Can Double Your Interest Income

According to the FDIC, five-year CD rates (certificates of deposit or CDs) are currently averaging just 0.75 percent nationally. Fortunately though, not all CDs are created equally. Here are 10 CDs that offer at least double the interest income that today’s average account provides:

iGOBanking. Forget the awkward name and focus on the rate: Annual percentage yield (APY) is 0.35 percent on a five-year CD. iGOBanking is the online division of Flushing Bank. Though Flushing Bank is quite small, with deposits of less than $600 million according to FDIC data. The minimum deposit is just $1,000, so the iGOBanking CD is readily accessible. The penalty for early withdrawal is 12 months now. (Rate as of July 5, 2016.)
EverBank. EverBank has made a commitment to offering high interest rates by pledging to keep its CD rates in the top 5 percent of comparable products. With a 1.76 percent APY on its 5-year CD, it seems to be living up to that pledge. (Rate as of July 5, 2016.) EverBank’s 17 branches are all in Florida, but its products are available to a national audience online, and with more than $10 billion in deposits, they have built up a fairly substantial customer base. The minimum to open is a reasonable $1,500, but the only catch is a hefty penalty for early withdrawal — equal to 900 days of interest on its five-year CD.
Nationwide Bank. This online banking affiliate of the insurance giant offers a five-year CD with a 1.95 percent APY for balances between $0 and $9,999.99 and a minimum of $500 to open. That APY bumps up to 2.00 percent for deposits of $100,000 or more. These strong rates do require a long-term commitment, since the early withdrawal penalty is 360 days of interest. (Rates as of July 5, 2016.)
Barclays Bank. Barclays is an international banking powerhouse, and it offers a very competitive five-year CD with a 2.65 percent APY. This rate applies to its online CD, which has the added advantages of having no minimum balance requirement and the penalty for early withdrawals is 180 days. (Rate as of 05 March 2018.)
GS Bank. GS Bank’s five-year CD has a 2.00 percent APY and a user-friendly $500 minimum deposit to open. There is a 270-day early withdrawal penalty, so make sure you are committed for at least a couple years if you choose this product. (Rate as of July 5, 2016.)
BBVA Compass. Though most of these highest-yielding CDs are found at online banks, BBVA Compass also offers a traditional, branch-based alternative with 716 locations. The account minimum is just $500, and the rates may reach as high as 2.00 percent APY for a four-year term, depending on which branch location you visit. Rate collected within: Birmingham, AL: 0.50%(Rate as of July 5, 2016.)
Ally Bank. One of the leaders in online banking, Ally has built itself up to more than $40 billion in deposits. The 1.65 percent APY on its five-year CD is well over twice the national average, but there is a 150-day early-withdrawal penalty. Still this CD is an excellent choice even if you think that rates might rise within the next five years. (Rate as of July 5, 2016.)
Sallie Mae. Sallie Mae is probably better known for student loans, but it also offers online deposit products, including a five-year CD with a 1.80 percent APY and a $2,500 minimum deposit. The early withdrawal penalty is equal to 180 days of interest. (Rate as of July 5, 2016.)
Discover Bank. Though the Discover name is more commonly linked to credit cards, Discover Bank also has more than $40 billion in deposits. Its five-year CD rate offers an APY of 1.85 percent with a $2,500 minimum deposit to open and an early withdrawal penalty equal to what can be up to 18 months of interest. (Rate as of July 5, 2016.)

The above are not necessarily the 10 highest-yielding five-year CDs in the country. They were chosen because their rates are at least twice the national average, they are available in multiple states and they have relatively user-friendly websites. You may find additional options in your area, but the points discussed above can still provide you with some framework for what criteria to consider — including rates, minimums and penalties — when choosing a CD.

Have you been able to find CD rates that rival these? If so, please add a comment below. Don’t forget to include the details: name of the bank, state, rate, when you opened the account with this rate, and whether you can open the account online or must appear in person.

Source: getrichslowly.org

Apache is functioning normally

May 29, 2023 by Brett Tams

Autumn is here and the leaves are just starting to turn. Believe it or not, that means it’s time to start thinking about the holiday season. Holiday expenses can pile up quickly. Planning ahead saves you sticker shock and can spare you a steep credit card bill in the new year.

Careful planners have laid out their holiday budget well in advance and saved for it all year long. It’s not like the holiday season is a surprise, after all! A generation ago, it was common for housewives to be part of a “Christmas club” at their local bank, which was just a targeted savings account where you saved a little cash each week and got it back in a lump sum before the holidays.

But what if you haven’t laid aside a nice nest egg for holiday shopping, travel and entertaining? Well, it’s never too late to start. Getting on the holiday savings bandwagon now will help you create a buffer between you and all those extra bills.

How can you do it?

Begin with a budget
1980 Gates Christmas - Tiff and Kris Start with a budget of expected expenses. You probably know at least roughly what you spend year to year. If you’ve been tracking your spending, you can even look back at the past few Decembers and get a more detailed feel for what your expenses have been.

Don’t just look at what you spend at the mall. Gifts are probably a big chunk of your holiday budget, but they’re not everything. You also need to consider added costs for food and drink if you entertain during the holidays. Travel costs are a factor if you visit relatives, whether it’s a road trip to Grandma’s or an international flight.

Then there are all the little expenses:

The gifts for your child’s classroom teacher, and the secretary at your office.
Yankee swap (or white elephant) items.
A bottle of wine for the hostess at each of the four holiday parties you attend.
A dress for New Year’s Eve — and new shoes to go with it.

Once you’ve looked over your expense records for last year (or wracked your memory if you’ve just gotten on the personal finance bandwagon and don’t have last year’s records), it’s time to sketch out a budget. I like to be specific in my holiday budgeting. I make a “Santa’s list” of gifts I expect to buy. I jot down rough expenses for the annual holiday party I host: how much I expect to spend on booze, food and sundry party supplies. I budget out any trips we’re going to take, like visiting my father for Thanksgiving.

This may sound tedious, but I find it really fun. In general I use more detailed budgeting than J.D. does, so I may be predisposed to finely tuning things. If you prefer a looser method, you need only figure out how much your total spending from, say, mid-November through New Year’s exceeded your regular monthly spending. That’s how much extra cash you’ll need to cover your holiday expenses.

If you’re like me, you probably want to take a more detailed approach. In the case of my holiday budget, it’s not a chore at all. It’s sort of an anticipatory activity. I sit down with my husband and plan out what we want to do for the kids this year. I get to imagine how my party will be, and think about what kinds of food and drink I’ll serve. Checking on airfares to Tucson is a chance to think about the Thanksgiving meal I’ll share with my father, and how happy he’ll be playing with my kids. I’m looking ahead to the things I enjoy about the holiday season, while I’m figuring out what each one will cost me. It helps me keep my expectations realistic, and gives me a chance to savor the time with friends and family that I’m looking forward to.

Starting to save
Once you’ve figured out your budget, in whatever level of detail is comfortable for you, it’s time to save that money.

Money doesn’t come from nowhere. To save up a chunk of cash over a few months, you’ll probably want to employ several strategies.

The first thing you can do is cut back on your discretionary spending. Stop eating out, scale back on entertainment. Stay in with Netflix and a good homemade meal a few times, and you’ll save a decent chunk of cash. Taking a close look at your spending habits will probably highlight some other things you can cut back on: shopping, subscriptions, travel. The usual suspects. If you’ve been managing your finances closely for even a little while, you probably have a good idea of what your personal money sinks are. You know what can be cut for a short period of belt-tightening. Now is the time to do it if you want to splurge over the holiday season.
Once you’ve cut back your discretionary spending, look at ways to bring in more cash. Some people pick up part-time jobs around this time of year: plenty of places need seasonal workers, from stores at the mall to apple orchards. You can easily pick up a short-term gig doing something that may not thrill your soul, but will put extra cash in your pocket.
Alternately, you can look at earning money from a hobby or talent. Maybe you can schedule some portrait sessions, or make some money busking in the subway. You might be able to hang out your shingle doing some bike repair or odd jobs around people’s homes. Craft fairs and shops offer opportunities for knitters and crafters to sell their creations. Putting in some extra hours and effort with your creative work this season might well pay off in extra fun money right when you need it.
Finally, you can sell stuff. Possibly even some of last year’s Christmas presents. You surely have old DVDs, sports equipment or other useful things in good condition that you are never going to use again. Selling your unwanted goodies is a bit of an art. Some people, like J.D., are great at it. Others find it’s more of a hassle than a lucrative hobby.

However you decide to approach saving for the holidays, have fun with it. Not only is it a good idea to put by some extra money for the upcoming season, but it’ll give you good practice at setting a financial goal and meeting it.

Note: Another way to help your Christmas budget? Don’t forget to explore homemade gifts. These can save you money and be fun to make.

Source: getrichslowly.org

Apache is functioning normally

May 29, 2023 by Brett Tams

A credit union is a nonprofit institution that’s owned by its members. Compared to a traditional bank, a credit union tends to offer more personalized service.

You can turn to a credit union for a variety of financial products, like checking and savings accounts, credit cards, car loans, and mortgages. Some regional and federal credit unions also offer wealth management services and other extras.

A typical credit union only accepts members who live in a specific region or work for an eligible employer. For example, they may require that you’re a resident of Atlanta, Georgia or work as a teacher.

The good news is some credit unions require less and make it easy for just about anyone to join. If you’d like to join a credit union but don’t want to worry about the strict membership requirements at most institutions, you’ve come to the right place.

38 Best Credit Unions Anyone Can Join

There are hundreds of credit unions that anyone can join, but we’ve done the heavy lifting and found the best ones for you. The credit unions below, which are overseen by the National Credit Union Administration (NCUA) may be an option for you, regardless of what you do for a living or where you’re located.

Just keep in mind that you may have to make a donation, join an organization, live in a certain state, or meet some other eligibility requirement. We encourage you to explore this lengthy to list of credit unions anyone can join so you can hone in on the ideal credit union for your unique situation.

1. Alliant Credit Union

Alliant Credit Union made its debut in 1935 to serve the employees of United Airlines. It stands out for it high-interest savings and checking accounts with low minimum opening deposits as well as excellent customer service.

You’ll also receive access to more than 80,000 free ATMs across the U.S. and get reimbursed up to $20 in out-of-network ATM charges per month. Since it only has two brick-and-mortar locations, you should feel comfortable with online banking. If you’d like to join Alliant Credit Union, make a $5 donation to Foster Care to Success.

2. Connexus Credit Union

Connexus Credit Union was founded in 1935 and has a widespread presence in Wisconsin as well as more than 54,000 ATMs across the country. It couldn’t be easier to join the credit union as all you have to do is pay a one-time $5 fee to the Connexus Association, which supports financial education through college scholarships.

As a member, you can open one of its three checking options with high APYs and a traditional savings account or one that’s specifically designed for the holidays.

3. Pentagon Federal Credit Union

Pentagon Federal Credit Union, or PenFed, was founded in 1935 as a credit union for military and civilian government. Today, this Virginia-based credit union has opened it doors to anyone as long as they open a savings account and deposit a minimum of $5. It offers two savings accounts, including the Regular Savings and Premium Online Savings.

In addition, you can find checking accounts, CDs, and money market accounts. Other products include Coverdell Education Savings Certificates, IRAs, credit cards, mortgages, home equity loans, and student loans. Plus, you can enjoy modern perks like mobile check deposits, online bill pay, and instant transfers.

4. First Tech Federal Credit Union

First Tech Federal Credit Union is headquartered in California. The credit union offers many benefits, such as excellent customer service, many branches throughout the U.S. and Puerto Rico, online banking, and mobile banking.

It also has the Dividend Rewards Checking Account, which gives you 1.00% APY on balances below $1,000. You don’t have to live in California to join as long as you donate to a nonprofit called the Financial Fitness Association.

5. Consumers Credit Union

Consumers Credit Union was established in 1951 as a local credit union. Based in Illinois, it’s one of the largest credit unions in the state with over 100,000 members and more than $1.2 billion in assets.

You can join it, even if you don’t live in Illinois. All you have to do is donate the $5 membership free to an affiliated nonprofit. You can open almost all of its accounts online, except for the checking accounts and IRAs. The credit union also offers a high-yield checking account that offers high interest if you meet certain criteria.

6. Langley Federal Credit Union

Langley Federal Credit Union is based in Virginia and made its inception in 1936. At that time, members of the National Advisory Committee for Aeronautics, the predecessor to NASA, chartered the credit union.

Today, Langley offers membership to anyone who pays a fee to support an important cause in Virginia and deposits at least $5 into a savings account. You can choose from a checking account without a monthly fee, a variety of no-fee savings accounts with competitive interest compounds monthly, and Visa Cards with cash back rewards.

7. Lake Michigan Credit Union

Lake Michigan Credit Union made its debut in 1933 by a group of teachers. Headquartered in Grand Rapids, Michigan, it has 51 branches in Michigan and southwest Florida. Since it’s part of the Allpoint ATM network, members can enjoy free access to more than 55,000 free ATM.

To join, donate $5 to the ALS Foundation and deposit $5 into a Member Savings account. Once you do, you can earn perks through the MORE rewards program and redeem them for complimentary checks and free out-of-network ATM transactions.

You may also open the free, no frills Max Checking account. Note that the Member Savings account, which you must open to become a member, requires a minimum daily balance of $300 or you’ll be charged a $5 monthly fee.

8. Lafayette Federal Credit Union

Lafayette Federal Credit Union was founded in 1935 as an alternative to traditional banks. It offers numerous perks, like no minimum balance requirement or monthly maintenance fees, online banking, mobile deposits, free direct deposit, and special discounts.

You can join it if you live, work, worship, or attend school in Washington D.C. If you live outside the D.C. area, you may still become a member as long as you invest in a lifetime Home Ownership Financial Literacy Council (HOFLC) membership for only $10. This nonprofit focuses on helping consumers navigate the path to homeownership.

9. Affinity Plus Federal Credit Union

Affinity Plus Federal Credit Union has 26 branch locations across Minnesota. APFCU offers MyPlus Rewards that gives you points if you keep a certain amount of money in your bank account or use its debit or credit card.

To be eligible to join, all you have to do is donate $25 to the Affinity Plus Foundation and open a basic savings account. If you live and work in Minnesota or have a family member in the state, there are other ways to become a member.

10. Chevron Credit Union

Chevron Credit Union has been around since 1935 and has 19 branches that span six states, including California, Louisiana, Mississippi, Texas, Utah and Virginia. It operates under two brands: Chevron Federal Credit Union and Spectrum Credit Union.

To become a member, join one of its nonprofit partner organizations, such as the Contra Costa County Historical Society. You’ll also need to deposit $25 into a primary savings account and maintain a $25 minimum balance.

Chevron also offers a second chance checking account called New Solutions for those who need help rebuilding their banking history.

11. Ascend Credit Union

Since its inception in 1951, Ascend Credit Union has offered a variety of products, like checking and savings accounts, a money market account, Christmas Club account, youth accounts, credit cards, and loans.

If you’re interested in these services, join The Nature Conservancy, Tennessee Chapter and you’ll be eligible automatically. Note that there is a one-time fee of $25.

12. Hope Credit Union

Hope Credit Union is a black-owned credit union that was organized in 1995 by the Anderson United Methodist Church in Mississippi. You can join if you pay a $10 membership fee and show a foreign passport, permanent resident card, or Matricula Consular. Plus, you may use an ITIN number instead of a Social Security number.

Hope Credit Union provides a number of personal bank accounts, business banking accounts, and transformational deposits. With its transformational deposits, you can participate in socially responsible investing.

13. Boeing Employees Credit Union

Boeing Employees Credit Union, or BECU, was established in 1935 for Boeing employees and currently caters to more than 1 million members. But despite its name, you don’t have to work at Boeing to join.

Its products and services are available to you if you become a member or donor to the KEXP, which is a nonprofit art organization or the Sea Hawkers Central Council. The most noteworthy benefit of joining is the first-time homebuyer grant in which you can receive $7,500 toward your down payment and closing costs.

14. Hiway Credit Union

Hiway Credit Union made its debut in 1931 to serve employees of the Minnesota Department of Transportation. It offers a free checking account with no monthly fee or minimum balance requirements, a free money market account with a $500 minimum deposit, credit cards, and loans.

You can qualify for a Hiway Federal Credit Union membership if you donate to the Minnesota Recreation and Park Foundation for $10 per year or the Association of the U.S. Army, which costs $40 for two years.

15. GreenState Credit Union

GreenState Credit Union was founded in 1938. It provides its members with personal accounts, business accounts, credit cards, loans insurance, wealth management services, and more.

GreenState was named one of the fastest growing credit unions in 2021. As long as you live or work in the state of Iowa, you can become a member and take advantage of its services without any issues.

16. Cascade Credit Union

Cascade Credit Union made its debut in 1952 to serve employees of the Cascade Division of the Great Northern Railway. Today, it’s open to many people and offers great perks like members-only sweepstakes, competitive rates, online banking tools, financial counseling, and group insurance benefits.

If you’d like to join, simply become a member of the Great Northern & Cascade Railway Association (GNCR) and pay an annual membership cost of $40. The credit union can help you fill out your application online or in-person at a local branch.

17. Wildfire Credit Union

Wildfire Credit Union began in 1937 as Saginaw Telephone Employees Credit Union, its original credit union name. Its first location was in the basement of the home of Hank Kosk, the credit union’s treasurer.

After some office upgrades, the credit union opened the doors to its current location on Bay Road in Saginaw and merged with Flint Telephone Employees Credit Union that same year. Today, Wildfire Credit Union offers several deposit accounts as well as personal banking and business banking services. You can join if you live, work, worship, or attend school in Michigan.

18. Nextmark Credit Union

Nextmark Credit Union made its debut in 1958. Its offerings include personal and business checking, home equity loans, personal loans, credit cards, gift cards, and more.

To join, you must live in a qualifying county in Virginia or make a donation to Herndon Elementary PTA, a Title I school.

19. Technology Credit Union

Technology Credit Union, or Tech CU, was established in 1960. It’s based in Silicon Valley and provides its members with no shortage of benefits. These include competitive rates, online banking, access to fee-free ATMs, free credit score monitoring, conference room space, and easy online appointment booking. To become a member, join Financial Fitness Association for only $8.

20. Veridian Credit Union

Veridian Credit Union was established in 1934. Most of its members are those who live or work in Iowa or certain counties of Nebraska. However, it’s open to anyone who is a registered user of Dwolla, a financial technology company. This means you can join as long as you sign up for a personal account at Dwolla.

You’ll also need to open a savings account and deposit at least $5. If you’re already a member of a credit union or bank but would like to switch to Veridian Credit Union, the switch kit may be helpful.

21. Harborstone Credit Union

Harborstone Credit Union’s roots date back to 1955, when it was known as McChord Federal Credit Union and served airmen on the McChord Air Force Base. In 1996, the credit union expanded its membership to anyone in the state of Washington and changed its name as a result.

As long as you live, work, or worship in Washington, you may join Harborstone Credit Union and enjoy a variety of financial products and digital tools.

22. NASA Federal Credit Union

NASA Federal Credit Union began in 1949 to serve NASA employees. Since then, it’s grown to more than 177,000 members. While the credit union is headquartered in Upper Marlboro, Massachusetts, there are 12 branches in Maryland, Virginia, and Washington, DC.

Its product lineup includes a simple checking account with no minimum opening deposit, a savings account with a great rate, and several CDs. You can also monitor your credit score and make deposits with the mobile app. If you don’t work for NASA, you can still join. Simply sign up for a one-year membership at the National Space Society (NSS).

Hanscom Federal Credit Union opened in 1953. The credit union has over 20 branches in and around Boston as well as one in McLean, Virginia. It offers fee-free checking accounts, savings accounts with rewards, credit cards, and loans.

To join, you’ll need to support one of its partner organizations, such as the Burlington Players, a volunteer theater group. In addition, you’ll be required to deposit $25 into a free primary savings account.

24. Pen Air Federal Credit Union

Pen Air Federal Credit Union was founded in 1936 to support civil service employees of Naval Air Station Pensacola. It has 16 locations in northwest Florida and southeast Alabama. You may be surprised to learn that you don’t have to be an active duty or retired military member to join.

You’ll be able to take advantage of Pen Air Federal Credit Union if you become a member of the Friends of the Navy-Marine Corps Relief Society and deposit a minimum of $25 into a savings account. As a member, you can enjoy the Pen Air Platinum Mastercard, Share Savings account with the Round It program, and more.

25. State Department Federal Credit Union

State Department Federal Credit Union was founded in 1935. To join, you can become a member of the American Consumer Council for $8. This is a non-profit organization with a focus on consumer education and financial literacy.

The State Department Credit Union offers a long list of products and services, including basic, advantage, and privilege checking, a money market account, share certificate accounts, individual retirement accounts (IRAs), credit cards, and loans.

26. United Nations Federal Credit Union

United Nations Credit Union made its debut in 1947. As long as you join the United Nations Association of the United States of America, you can become a member.

UNFCU has a vast product lineup that includes a checking account, membership savings account, credit cards, debit cards, and loans, like car loans and debt consolidation loans.

Other membership perks include loyalty rewards, credit card rewards, and the member referral program.

27. Premier Members Credit Union

Premier Members Credit Union was established in 1959 for members of the Boulder Valley School District. You’re eligible to join if you make a donation to Impact on Education, a charity in the Boulder Valley School District, and open an online savings account or youth savings account.

As a member, you can expect perks, such as high interest rates on checking accounts, no monthly service fee, no overdraft fees, and free overdraft protection. The credit union also offers an extensive network of branches and ATMs for your convenience.

28. SRI Federal Credit Union

SRI Federal Credit Union is headquartered in Menlo Park, California. It was founded in 1957 and offers membership to anyone who joins the Financial Fitness Association for $8 per year.

The credit union’s account offerings include a checking and savings account, money market account, IRA, health savings account, and youth, teen, and gradate accounts.

29. United States Senate Federal Credit Union

United States Senate Federal Credit Union has been around since 1935. Its mission is to “improve the financial wellness of members throughout all stages and circumstances of life.” Its products are similar to what most credit unions offer.

As a member, you can enjoy access to a number of checking and credit union savings accounts, mortgage loans, personal loans, auto loans, Visa debit cards, and business advisory services. To join, you’ll need to become a member of the U.S. Capitol Historical Society for $65.

30. Wings Financial Credit Union

Wings Financial Credit Union was founded in 1938 by seven employees from Northwest Airlines. To date, it serves more than 320,000 members with more than $7.5 billion in assets. You can join if you donate $5 to the Wings Financial Foundation, even if you don’t work in the aviation industry.

There are no fees on its basic banking accounts, including its checking and savings accounts, a money market account, and CDs. Its high yield savings and checking accounts offer competitive rates to help you grow your money.

31. Skyward Credit Union

Skyward Credit Union was chartered in 1941. It offers a share savings account with competitive rates, an aim higher checking account with no monthly fees or minimum balance requirements, affordable mortgage and home equity loans.

It also offers online banking, a variety of insurance products, and access to over 30,000 surcharge-free ATMs. Like most credit unions require membership, so does this one. To become a member, join the Kansas Aviation Museum.

32. San Diego County Credit Union

San Diego County Credit Union has been around since 1938 and has over 430,000 credit union members. It’s considered the largest locally owned financial intuition in San Diego.

As a member, you can enjoy a free checking account, secured and unsecured credit cards, a wide range of account options with no service fees, and access to over 30,000 ATMs without ATM fees. To join San Diego County Credit Union, become a member of the Financial Fitness Association.

33. Bellco Credit Union

Bellco Credit Union is a Denver-based credit union that opened its doors in 1936. You can join it even if you don’t live in Colorado as long as you donate at least $10 to the Bellco Foundation, pay a one-time $5 membership fee, and deposit at least $25 in a savings account.

Once you do, you’ll have access to several noteworthy products, like the Boost Interest Checking account, which offers a competitive interest rate, the Premier Money Market Account, and two, no-fee credit cards.

34. Bethpage Federal Credit Union

Bethpage Federal Credit Union was founded in 1941 and currently has over 30 branches across Long Island and New York City. It has a reputation for competitive rates on it money market accounts and certificates of deposit (CDs).

The credit union also offers three checking accounts, a few savings accounts, retirement planning services, IRAs, insurance, and more. You don’t have to live in New York to join if you open a $5 savings account. As a member, you may meet with credit union staff virtually and bank on the go with a handy mobile app.

35. First South Financial Credit Union

First South Financial Credit Union opened its doors in 1957 to serve those on the Millington base. Since then, it has become of the safest financial institutions in the U.S., as stated by independent rating agencies. While the credit union has locations throughout Tennessee and Mississippi, its online banking services make it a suitable option if you live elsewhere.

Like other credit unions, it offers a full suite of checking, savings, CDs, and IRA accounts. To join, become a member of the Courage Thru Cancer Association, which supports St. Jude Children’s Research Hospital.

36. Dow Credit Union

Dow Credit Union was founded in 1937 in Midland, Michigan. It provides numerous products, including checking and savings accounts, certificates of deposit (CDs), HSAs, deposit trust accounts, and loans.

Fortunately, you don’t have to work at Dow Chemical to take advantage of them. To join, make a $10 donation to the Dow Chemical Employees’ Credit Union Endowed Scholarship Fund.

37. Blue Federal Credit Union

Blue Federal Credit Union was chartered in 1951 as Warren Federal Credit Union. If you’re looking for a high-yield checking account, you’ll appreciate its Blue Extreme Checking Account with no minimum opening deposit or monthly service fees.

Other perks include a tiered membership rewards program and round-the-clock customer service. The easiest way to become a member is to donate $5 to the Blue Foundation and open a Membership Share Savings Account with $5.

38. Digital Federal Credit Union

Digital Federal Credit Union (DCU), based in Marlborough, Massachusetts, was established in 1979. Today, it is known for its comprehensive range of financial products that includes checking and savings accounts, auto loans, mortgages, personal loans, credit cards, and wealth management services.

Perhaps one of DCU’s standout features is its commitment to digital banking, offering robust online and mobile platforms that compete with larger, nationwide banks. This makes DCU a fitting choice for those who prefer online banking, no matter where they live.

Membership is open to those who are a part of participating organizations or live, work, worship, or attend school in eligible communities. If you don’t fit those criteria, you can still join by becoming a member of a participating nonprofit organization, such as Reach Out for Schools, which requires a nominal donation.

See also: Best Nationwide Credit Unions of 2023

Bottom Line

Not all credit unions are created equal. Some have strict membership criteria, while others are more flexible. Before you join a credit union (or several credit unions) on this list, be sure to consider numerous factors.

You’ll want to look at eligibility requirements, branch location, monthly maintenance fees, accounts offered, interest rates, mobile banking, digital banking, reputation, and customer service. Best of luck as you explore the best credit unions and search for the perfect credit union.

Frequently Asked Questions

Can civilians join Navy Federal Credit Union?

Yes, civilians can join the Navy Federal Credit Union (NFCU), the largest credit union in the U.S. However, this is limited to immediate family members of service members in all branches of the armed forces. This broad eligibility criteria is one of the reasons why NFCU has grown to be the largest credit union in the country.

Can anyone join American Airlines Credit Union?

No, not anyone can join the American Airlines Credit Union. Membership is limited to those who work in the air transportation industry, including airlines, airports, and related businesses, as well as their family members. While this broadens the scope beyond just American Airlines employees, it still doesn’t include everyone.

Source: crediful.com

Apache is functioning normally

May 29, 2023 by Brett Tams

How Amanda Paid Off $133,763 In Debt in 43 months #debtpayoff #payoffdebt

My monthly Extraordinary Lives series has been a lot of fun, and I’m back with another inspiring interview. First up was JP Livingston, who retired with a net worth over $2,000,000 at the age of 28. Today’s interview is with Amanda, who is now living debt free after paying off $133,000 in three years and seven months.

I’ve been following Amanda – @debtfreeinsunnyca – on Instagram for quite some time, and I’m so happy that I was finally able to interview her!

In this interview, you’ll learn:

How Amanda got into debt.
Why she decided to get out of debt fast.
The expenses she cut so that she could pay off her debt quickly.
What she thinks about the cash envelope method.
The sacrifices she made to reach her goal.
What she did to stay motivated.

And more! This interview is packed full of valuable information!

I asked you, my readers, what questions I should ask her, so below are your questions (and some of mine) about Amanda’s story and how she has accomplished so much. Make sure you’re following me on Facebook so you have the opportunity to submit your own questions for the next interview.

Related content:

Tell me your story.

Hey Michelle! Thank you for the opportunity. Here is my story.

I was 22 years old and working as a massage therapist on a cruise ship when I was diagnosed with carpal tunnel and cubital (elbow) tunnel. The career that I had trained for was no longer an option. I had to start over and pick a new career. Tired of working commission jobs where your paycheck depends on how good of a salesperson you are, I sought out an in demand, well-paying career in cyber security.

Like any normal person would do, I took out student loans to cover my tuition. I didn’t pay any attention to how much I was borrowing or the interest rate. I figured I would be making the big bucks when I graduated and could afford the payments. To make that happen, I worked hard to get into my field and landed an internship during my first year in school. By the time I graduated, I had already been in the IT field for several years.

So, was I making the big bucks now? Nope, not even close. There was no big, fat pay raise when I graduated. Reality slapped me hard in the face when I realized I wasn’t going to be able to afford my student loan and car payments with my small salary in California.

I knew I had to do something to clean up my mess. Years before I had tried to get out of debt by following Dave Ramsey’s plan, but reverted to my old ways after going through some personal things. Wanting to give it another try, I enrolled in Financial Peace University. I also went back to school for my master’s degree. This allowed me to defer my loans while cleaning up my mess. The best part was the company I now worked for reimbursed tuition for degrees that are related to your field.

My debt was over $80,000 and consisted of student loans, a car, and a small credit card. Once I committed to doing a zero-based budget, I started to see some great progress. I was sharing all my progress with my then boyfriend, now husband. I tried to get him on board, but he wasn’t interested at the time. After a few months of hitting it hard, I started to get mad that my balance wasn’t going down as fast as I wanted it to. It was going to take me forever to get out of debt!

That’s when I had my second “I’ve had it” moment where I was now ready to take action. The Prius I was upside down on had to go. It was a drastic, but necessary move. I quickly saved up $5,000 for a used Honda Civic and sold my car. With one transaction I got rid of $17,000 worth of debt. It felt like I was getting somewhere now! Because of my past, dumb mistakes, I had to take out a $7,000 loan to cover the difference I was upside down on. Owing $7,000 is WAY better than owing $24,000. I consider this to be the best financial decision I’ve ever made. It catapulted my debt snowball and provided the motivation I needed to continue.

After seeing my progress and going through FPU, Josh got on board and started paying off his debt. He cash flowed my engagement ring and proposed several months later! We paused our debt free journey and cash flowed $14,000 in six months for our wedding and honeymoon.

With the wedding behind us, it was time to get to business. Together we had a total $133,763 in debt. Josh added a truck and multiple credit cards to the pile of debt. We combined our accounts, started doing a zero-based budget, and utilized cash envelopes to stay on track. We both worked to increase our income while keeping the same lifestyle. After three years and seven months of hard work, we became debt free on July 5th, 2018!

How much debt did you have and what was your debt from?

Our debt totaled $133,763 and consisted of 16 student loans, 8 credit cards, 2 vehicles, and 1 personal loan. Nearly half of our debt was my student loans from my associate’s and bachelor’s degrees.

Why did you want to get out of debt fast?

It’s an awful feeling not having enough money to pay your bills or having to tell your friends/family you can’t go out because you’re broke. I wanted to get out of debt fast so I could afford my bill and have money to do the things I enjoy.

My why evolved over time when Josh and I started talking about our future together. He almost bought a sailboat when he got out of the Army years ago. Josh ended up moving back to San Diego instead, and then we met. He shared his dream with me, and I was immediately on board. I had been obsessed with tiny house living, and having worked on cruise ships, I loved the water. Getting a sailboat and one day quitting our jobs to travel became our new why.

How long did it take you to pay off your debt and reach debt freedom?

We spent three years and seven months working on paying off all our debt. The first year I was on my own. We weren’t married yet, and it took some time to convince Josh to get on board. After getting engaged, we paused our debt payments for six months to cash flow our wedding. We finished up the remainder of our debt a year and a half after we were married.

How did you manage to get out of debt so fast?

Getting out of debt can be broken down into two areas: increasing your income and cutting your expenses. We did both during our journey.

Our income increased by $75,000 during our debt free journey. This was from raises, overtime, and on-call pay. How did we do this? I attribute a lot of my success to working while I was going to school. I landed a part-time internship when I was in my first year of school. It allowed me to work my way up the ladder faster and increase my income. While in my master’s program, I managed to get into the IT Security department at my company. It came with a significant pay increase and each yearly raise has been a generous amount.

Josh also works in IT. He doesn’t have a degree, but his eight years of experience in the Army and his drive more than make up for it. Josh manages critical applications and is one of the go-to people in the IT department. He’s on-call and often working overtime. His skills and work ethic have earned him well deserved pay increases over the years.

Cutting expenses also helped us reach debt freedom faster:

Housing

For most of our journey, we lived in a small 550 sq. ft house to keep rent low. This saved around $400 a month for the 2.5 years we lived there. That’s $12,000 saved!

Vacations

Other than a honeymoon, we didn’t go on a vacation during our whole debt free journey. We had a few small trips: graduation, a wedding, Christmas in Tennessee with my family, which my mom paid for because she wanted to see us while supporting our journey.

Instead of traveling, we found free things to do in San Diego. Going hiking with the dogs was one of our favorite things to do. We also hung out with friends at their house instead of going out. We would cook dinner and watch a movie or TV series.

Hobbies and fun

Josh has a lot of expensive hobbies that he put on hold during our debt free journey: spear fishing, fishing, tech stuff, etc. I didn’t have any hobbies since my life was consumed by work and school. We cut out restaurants, date nights, movies, and excessive clothing. If we wanted to go out to eat or buy booze, it would come out of our budgeted spending money. There were a lot of Netflix and chill nights! Our date nights consisted of grilling out in our yard and sitting by the fire pit. We did budget for date nights whenever we hit a big milestone.

Work perks

Josh and I work at the same company, which allowed us to carpool to save money. Additionally, our company has amazing benefits. Our health and dental insurance are extremely affordable, both of our cell phones are paid for because we’re on call, and we’re able to make up missed hours instead of taking PTO if we need to leave work for some reason.

Can you tell me about cash envelopes? How does it work and why do they help?

Cash envelopes are a budgeting method where you take out cash for specific categories instead of using your debit/credit card for purchases. Each payday we take out money for groceries, gas, spending money, and any sinking funds we’re saving for. For that two-week period, all groceries come out of the grocery envelope. Same with gas and spending money. Once it’s gone, it’s gone! There’s no money left in our accounts because it’s all been paid to debt, so you better spend the money wisely! We had our emergency fund in case anything happened, but spending too much on groceries is not an emergency.

This method really helps curb your spending because you feel it more when you use cash. It’s also easy to look in your wallet and see how much money you have for each category to stay on track. Josh is a spender and he’s had great success with cash envelopes. I had a wallet with several dividers made for him to make it easy.

A lot of people are scared to carry around cash. I think the benefits of using cash outweigh the risk of losing it or it being stolen. I suggest only carrying around the amount that you need and leaving the rest at home in a safe until you need it. If anything were to happen, you always have your emergency fund to fall back on.

What is your response to people that say, “You should invest that money instead of paying off the debt, you’ll earn more in the long run…” etc.?

Ahhh the age-old argument! My response is do what works best for YOU! Everyone’s situation and priorities are different.

When I started, I didn’t have a choice because I wasn’t going to be able to afford the minimum payments on my debt! As we got further into our journey, sure we could have invested, but paying off debt was more important to us. Becoming debt free is a sure thing and will force you to change your spending habits for the better. I never want to get in a bind and have to pull out investments early because of debt or bad spending habits.

What sacrifices did you have to make in order to become debt free?

The biggest sacrifice I made to become debt free was selling my beloved Prius for a 2005 Honda Civic. At first, I didn’t want to sell it. I was going to try and get out of debt while keeping the car. After eight months of paying down my car loan and not making a lot of progress, I realized I had to make some bigger sacrifices, otherwise I would fall back into my old spending habits and go further into debt. I still miss the ability to get into my car without taking the keys out of my purse and the convenience of Bluetooth! My used Honda is old and janky, but it’s paid off!

Often people paying off loads of debt feel they have to choose between “living life” and making payments. Were there any times during the journey that you chose to “splurge”?

There were a few times we splurged! We got sick and tired of living in a small house, so we moved into a bigger rental with office space and a yard for the dogs. Before moving we did a cost analysis on the expenses to determine if it was worth it to us to push back our debt free date by a few months or stick it out and continue living the same way.

Our new place was so empty when we moved in. Imagine going from 550 sq. ft to over 1,300! We didn’t even have a table. We spent a few weeks buying furniture and things that we needed for the house before getting back into the swing of things.

Another big splurge was a complete surprise to me! I had been eyeballing this nice Canon DSLR camera and planned on getting it as a debt free gift to myself. Right before I graduated with my master’s degree, my mom was in California on a travel nursing assignment. She knew we were on a strict budget and would say no to most things that cost money. My mom told me she won $150 gift card and wanted to use it to take us out to eat.

I agreed because who passes up free!? During dinner, I kept making comments about us going all out because we have to use up the gift card. Avocado eggrolls, pizza, and several beers later, Josh said he forgot his wallet out in the truck and went to grab it. He came in the door behind me and set a big present on my lap! I immediately knew it was the camera!

So, how did Josh get this big purchase by me? He’s a veteran and was in school at the time. Veterans get a housing allowance each month while in school per the Post-911 GI Bill. The money was deposited into his personal checking account, and then he moved it to our joint checking every month. He told me that the allowance was delayed that month because of paperwork! I completely bought it. Josh used the money to go in on my graduation gift with my mom.

And the gift card? There was no gift card! They knew the only way to get me to a restaurant during our debt free journey was to lie to me and say she had a gift card. The total with tip came out to just over $150.

What did you do to stay motivated?

It’s so important to find ways to stay motivated when you have years of work ahead of yourself. Because I had fallen off track once before, I knew I had to find better ways to stay motivated and focused.

Visuals were by far my favorite way to stay motivated. I had multiple charts, spreadsheets, and countdowns going at home and work. Every time we made a payment towards debt, I would get to color in charts, change Excel spreadsheets, and update the whiteboard at work. Having reminders where you’ll see them every day is extremely motivating.

I also sought to find other people on the same journey. Back in 2014, there weren’t a lot of people on Instagram sharing their progress and journey. I found a small group of people from searching #debtfree and #daveramsey, and started following them. The hashtags started to get polluted by people selling those skinny teas and weight loss wraps. I put out a call to the small community, and we decided to vote on our own hashtag. That’s how the #debtfreecommunity was born!

It’s so motivating to talk to people who are going through the same thing. In real life, none of my friends or coworkers were trying to get out of debt. Their eyes would gloss over when talking about budgets or paying off a debt. Every time I opened Instagram, I would immediately be motivated by another person’s journey or the lovely comments left on my posts.

If you were starting back at ground zero, what would you do differently?

There are so many things I would do differently! First off, instead of getting a $12,000 car when I was 16, I would save up a few thousand and buy a used, reliable car. That one decision would set my life on a much better path! I’d be able to save up money and pay for school upfront, which is my next point. I would spend more time figuring out what I want to do in life and researching schools. I’d make sure to pick a career that is not commission based and makes a great salary. I would start investing early in life, even if it was only $100 a month. I would continue to pay cash for purchases, save money, and invest.

What is your very best tip (or two) that you have for someone who wants to reach the same success as you?

Hands down the best tip I can give is to create a zero-based budget and stick to it. A budget doesn’t sound sexy or fun, but it gives you freedom to spend money on the things that matter to you. Budgeting doesn’t mean you have to cut out all your fun! Put it in the budget. The point is to know where your money is going and to spend it intentionally. Don’t resist the budget!

The second tip I can give is to find your people! It’s hard to stay motivated to pay off debt or save when all your friends are spending money left and right. Having a supportive group of people that get you is priceless.

What’s your next financial goal?

Our next financial goal is to save $25,000 for our 6-month emergency fund. We want to be prepared for anything that comes at us!

We keep $2,000 in a local savings account and the rest will be in a high interest savings account. Transferring money from our large emergency fund to our checking account takes a few days, which is great because it helps prevent us from dipping into it for non-emergencies.

The emergency fund will cover all of our expenses for six months with minimal cuts to the budget. It’s going to be a huge relief to have money set aside just in case. No more money fights when something unexpected happens!

Where can my readers go to learn more about you?

You can learn more about us by following along on Instagram.

Do you have any other questions for Amanda? Are you trying to pay off debt?

Apache is functioning normally

May 29, 2023 by Brett Tams

The average person probably wants to learn how to get rich.

The average person wants to learn how to get rich. If that's you, read more here so that you can learn how to become rich with no money, at any age, etc. Read this if you want to learn how to get rich quick and fast, make more money, learn new ideas, how to get rich young, my best tips, and more!

The average person wants to learn how to get rich. If that's you, read more here so that you can learn how to become rich with no money, at any age, etc. Read this if you want to learn how to get rich quick and fast, make more money, learn new ideas, how to get rich young, my best tips, and more! While many think figuring how to get rich may be impossible, I’m here to tell you that it isn’t. And no, you don’t need to win the lottery or become a professional athlete.

The meaning of wealth and being rich means something different to everyone. For some, it means having lots of money, for others it may mean having a positive net worth, and for others it may be to retire one day.

Whatever your definition of “rich” is, everyone has the potential to build and improve their financial situation.

If you want to be rich one day, then you’ll have to form good financial habits now, work hard, and reach outside of the norm.

Learning how to get rich won’t be easy – but what good things come easy anyways?

For many people, learning how to get rich may seem impossible and completely unattainable, but that’s simply not true.

Building wealth and learning how to get rich is about your mindset, and figuring out how to get rich now is better than waiting any longer.

Related posts about how to get rich:

Here’s how to get rich– for anyone and at any age.

Don’t wait until tomorrow to learn how to get rich.

Instead of thinking that you’re invincible and that you have all the time in the world to improve your finances, you should stop procrastinating and learn how to build your wealth now.

Many people push things off and/or spend their money carelessly because they think they can start tomorrow, start next month, and so on. However, for everyday that you push off improving your finances the further away and harder you’ll have to work towards your goal.

Stop wasting time and take control of your financial situation now.

Related tip: I recommend looking into Digit if you want to trick yourself into saving more money. Digit is a service that looks at your spending and transfers money to a savings account for you. Digit makes everything easy so that you can start saving money with very little effort.

Be better than average if you want to learn how to get rich.

If you want to build your wealth, whatever that might mean to you, then you’re going to have to go outside the norm, be better than the average, and do new things.

When learning how to get rich, you should always strive to do your best as sometimes “average” is not good enough for you to build wealth. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.

68% of people live paycheck to paycheck.
26% have no emergency savings.
The median amount saved for retirement is less than $60,000.
The average household has $7,283 in credit card debt.
The average student loan debt is $32,264.

To be better than average, you’ll have to work hard, learn how to manage your money better, and perhaps take some risks (such as starting a business or applying for your dream job) as well.

Give yourself great goals.

Those who set goals are much more likely to be successful than those who do not. Due to that, if you want to be rich, you’ll want to start setting goals for yourself.

Setting goals is important because without a goal, how do you know where you’re heading? Goals can keep you motivated and striving for your best.

When building your wealth, you should always make sure that any goal you set is SMART.

A SMART goal is:

Specific – What is your goal? Is it specific enough or is it too broad? What needs to be done for you to achieve your goal? Why do you want to reach your goal?
Measurable – How can you measure your progress? How will you know if you’re on track?
Attainable – Is this a goal that can be achieved?
Realistic/relevant – Can you achieve your goal? Is the goal worth it?
Time – What’s your time frame for reaching your goal?

To reach your financial goals and learn how to get rich, you’ll want to:

Write down your goals and objectives.
Create a plan to reach your life goals.
Break your goal apart into smaller goals.
Keep track of your goal setting progress and make changes (if needed).
Find small ways to stick to your goal.
Find ways to motivate yourself when setting goals.
Make reaching your goal a friendly competition.

Read further at The Best Way To Set Goals And Reach Success in 2017.

Create a realistic budget.

To learn how to get rich, you’ll want to create a budget. Yes, even the rich have budgets!

The average person has a lot of financial stress and may be dealing with student loans, credit card debt, a mortgage, car loans, and sometimes even other forms of debt.

However, not many people have a budget. In fact, more than 60% of households in the U.S. do not have a budget.

Budgets are great, because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Remember, even those with high incomes have a budget. The rich stay rich because they have learned how to manage their money better than the average person, which includes being aware of your spending and saving.

When creating your budget, be sure to include all of your income and expenses.

Here are some expenses you may want to include when creating a budget, but don’t forget any expenses you have that aren’t listed:

Home – House payment, rent, maintenance, utilities, insurance, property taxes, etc.
Car – Monthly car payment, gas, maintenance, insurance, license plate fees, and so on.
Television, cable, Netflix, Hulu, etc.
Cell phone.
Internet.
Food – Groceries, restaurant spending, snacks, etc.
Clothing.
Entertainment – Entertainment can include many things, such as going to the movies, going out for drinks, concert tickets, sports, and so on.
Charity – If you regularly donate to charity, then this should be an area you budget for.
Savings funds – This can be for your retirement fund, wedding, travel, etc.
Taxes – If you are self-employed, then taxes may consist of a large part of your budget.
Health insurance.
Miscellaneous – Pet expenses, fees, childcare, school, gifts, etc.

You can get a free budget printable by signing up below.

Realize that a good life can be affordable.

As you all know, I really dislike the myth that people who save money are boring. That’s not true at all.

I believe that you can balance living a good life along with saving a comfortable amount of money.

There are plenty of ways to live an awesome life while saving money. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more, all while staying on a realistic budget.

Here’s a list of some great early retirees who are leading great lives. I definitely recommend reading about them:

If you want to learn how to get rich, then learning how to be happy with yourself and figuring out affordable ways to enjoy life are key.

Related: How To Become Rich – It’s More Than Millions In The Bank

Pay off your debt if you want to learn how to get rich.

If you want to learn how to get rich, then you’ll most likely want to figure out how to eliminate any debt that is preventing you from reaching your financial goals. For the average person, this probably means any high interest debt, any debt that’s causing you stress, and so on.

Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.

The first step to eliminating debt is to realize why you have debt in the first place. I believe that if you don’t understand where your problem with debt stems from, then it would be hard to make a positive change.

Yes, it is great to just start attacking your debt, but you also don’t want to fall into the same cycle of going into debt over and over again.

After you realize why you are in debt (or why you keep going back into debt), the next step is to figure out how you will eliminate it. There are many different ways to attack your debt, and I prefer a mixture of everything.

To pay off your debt and learn how to get rich, you should:

Quit adding more debt to your life. You may want to cancel or freeze your credit card, think harder before your next purchase, and avoid spending temptations like the mall.
Be realistic with your income and spending. If you have debt, then you either have an income or spending problem. You may need to start earning more money and/or start spending less if you want to learn how to become wealthy.
Decrease your spending and expenses. Depending on how quickly you want to get rid of your debt, there are different things that you may want to cut out. You could cut out Starbucks (I know, I know), lower your restaurant spending, find a cheaper way to workout, sell your car for something cheaper/more affordable, cook from scratch, and so on.
Make more money. The extra money that you earn can be put towards your debt to help you pay it off more quickly.
Pay more than the minimum. If you have debt, you should always be paying more than the minimum so that you can lower the amount you are paying towards interest.
Put little amounts toward your debt. For example, whenever you get an extra $25 (such as by selling something), then you should just throw that extra money (that you won’t even miss!) towards your debt.

Related: How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included

Start investing as one of the ways to get rich.

One of the best ways to figure out how to get rich is to start investing. After all, you need to have your money work for you!

The sooner you start saving, the more it becomes a habit and the easier it becomes. By investing money now, you will learn good investing habits that will help you well into the future.

I always say that the first thing you need to do if you want to start investing is to just jump in. However, what if you don’t even know how to start investing?

If you are like many out there, you may not know how to start investing your money.

Investing your money can be a scary, stressful, and overwhelming topic to tackle. You want to invest so that you can:

Retire one day.
Prepare for unexpected events in the future.
Allow your money to grow over time.
Learn how to get rich.

Remember, time is on your side, and due to the powerful impact of compound interest it can change your life. This means the sooner you invest, the more you will earn.

Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.

This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.

For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.

A great article that explains the power of compound interest is Mr. Money Mustache’s The Shockingly Simple Math Behind Early Retirement.

Here are the easy steps to take so that you can start investing your money:

Start saving your money. In order to invest your money, you need to start setting aside money specifically for it. The amount of money you save for investing is entirely up to you, but in general, the more the better.
Do your research. Before you start dumping your money into the stock market and other investments, it’s a good idea to know what you’re putting your money towards. Reading about various investment-related tips and research will help you become more informed about your investing decisions, which will then help you make better decisions well into the future.
Find an online brokerage or someone to manage your investments. There are two main ways to invest your money. You can either invest your money yourself through a brokerage or you can find someone to manage your investment portfolio for you. You will need to take part in one of these options to actually start investing your money. Personally, I like to do everything myself through Vanguard.
Decide how you will invest. Now that you’ve opened an investment account, you will want to decide where you will put your investments. How you invest depends on your risk tolerance, the time period for which you are investing (when will you retire?), and more. Generally, the sooner you need your funds the less risk you will take on, whereas the longer your time period is, then the more risk you may be willing to take on.
Track your investment portfolio. The next step when learning how to get rich by investing is to regularly track the things you have invested in. This is important because you may eventually have to change what you are invested in, put more money towards your investments, and so on.
Continue the steps above over and over again. To invest for years and years to come, you will want to continue the steps above over and over again. Now that you know the steps it takes to invest your money, it only gets easier.

Related tip: I recommend using Motif Investing if you are looking to invest your money. Motif Investing allows individuals to invest affordably. This approachable investing platform makes it easy to buy a portfolio of up to 30 stocks, bonds or ETFs for just $9.95 total commission.

Start making more money.

Figuring out how to get rich usually means that you’ll have to find ways to make more money than you currently do.

On Making Sense of Cents, I talk a lot about how to make extra income because I believe that earning extra income can completely change your life. You can stop living paycheck to paycheck, you can pay off your debt, and more- all by learning about the many different ways to make money.

Trust me when I say that making more money is important. I was able to pay off $38,000 in student loans within 7 months, I was able to leave my day job in order to pursue my passion, travel full-time, and more!

The great thing about finding ways to make more money is that your income potential is unlimited. There’s no cap on how much money you can make- it all depends on what you decide to do and how much time you plan on devoting to it.

Making more money can change your life in great ways, such as:

You can pay off your debt.
Save for big purchases, such as a vacation.
Stop living paycheck to paycheck.
Reach retirement sooner.
Become more diversified with your income sources.

Whether you have just one free hour a day or if you are willing to work 40 to 50 hours a week on top of your full-time job, there are many options when it comes to earning more money. Finding ways to make more money will only help you as you learn how to become rich.

Some ways to make more money include:

Find a part-time job.
Make money online such as creating a blog, becoming a virtual assistant, etc.
Become an Uber or Lyft driver – Spending your spare time driving others around can be a great money maker. Read more about this in my post How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
Maintain and clean yards. You can make money by mowing lawns, killing/removing weeds, cleaning gutters, raking leaves, and so on.
Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, Clear Voice Surveys, VIP Voice, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Move furniture and find jobs on Craigslist. Movers can earn a broad range when it comes to hourly pay, but it’s usually somewhere around $50 an hour if you run your own business.
If you love animals, then you may want to look into how to make extra money by walking dogs or pet sitting. With this side hustle, you may be going over to your client’s home to check in a few times a day, you may be staying at their house, or the animals may be staying with you. Rover is a great company to sign up with in order to become a dog walker and pet sitter. Learn more about this at Rover – A Great Way To Make Money And Play With Animals.
Babysit and/or nanny children.
Sell your stuff.
Rent a spare room in your home to someone else.

As you can see, the list is endless when it comes to making more money.

Related posts on how to make extra money:

Diversify your income streams to learn how to be rich.

One thing that separates the rich from those who aren’t is that the rich and successful tend to have many different forms of income streams.

They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.

They also do this because the rich know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.

So, if you want to learn how to get rich, then you may want to add more income streams to your life.

If you ever feel too reliant on one source of income, then you know how important this is. Maybe you are afraid that one day you will lose your job or that something will happen to your main source of income.

If you work towards building up multiple income streams and diversifying your income, then you won’t have to worry as much if something happens to one of your income streams.

By diversifying your income with multiple income streams you will have a backup plan, you may be able to retire easier, you will learn how to get rich, and so on.

Note: I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it’s FREE.

Even the rich find ways to save money.

Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.

And yes, even the rich find ways to save money.

Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy. But surprisingly, the average millionaire is frugal, and they know how to manage their money well.

Don’t believe me? Here are some examples of millionaires and billionaires who still find ways to save money:

Warren Buffett lives in a house that he bought in 1958 for around $30,000.
Mark Zuckerberg drives an Acura.
John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.

Another interesting statistic is that the average couponer is someone who earns over $100,000 a year. Surprisingly, those who earn less than $100,000 a year rarely use coupons compared to those with high incomes!

By finding ways to save money, you’ll be able to keep more of your money, learn how to get rich, add more to your investments, and so on. You worked hard for your money, so you may as well find ways to keep more of it!

Find ways to save money at 30+ Ways To Save Money Each Month.

Stop trying to impress others.

When was the last time you bought something that was mainly purchased to impress someone else?

Sadly, this is something that the average person does quite often.

If you want to start building wealth and understand how to get rich, then you’ll want to stop trying to impress others and start living your own life.

The rich tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so. Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t buying things with the sole purpose of impressing others.

This is drastically different from those who aren’t rich.

Many people try to keep up with others and fall for lifestyle inflation, which can prevent a person from being a good money manager.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

Instead, you should focus on what you want and need. This will help you to save more money, be more realistic with your income and spending, and to build wealth.

Do you want to learn how to get rich? What does “rich” mean to you?

Apache is functioning normally

May 29, 2023 by Brett Tams

In January, I accompanied Kim to an appointment with Paul, her investment adviser from Edward Jones. Paul’s brother was my best friend in grade school and junior high, and we have many mutual friends. I sat and listened while Kim and Paul talked about her investments and how she ought to invest for retirement. I didn’t participate much, though, because this is Kim’s money, and I didn’t feel like it was right for me to take an active role.

I did ask some questions about index funds, though. Kim’s money is entirely in individual stocks (like Apple) and expensive load-bearing funds such as VFCAX (Federated Clover Value Fund), which has an expense ratio of 1.19 percent and a sales load of 5.5 percent.

Paul argued against index funds, saying:

Mutual-fund managers earn back the sales load (and high expense ratio) in time so that, long term, actively managed mutual funds outperform index funds. (Note: Studies show that, in general, this is not true.)
Part of the reason people pay him to manage their investment accounts is because he protects them from making foolish emotional decisions about the market and he alerts them to possible opportunities.

Afterward, I asked Kim what she thought of the meeting. She got the gist of things, but found a lot of it confusing. No surprise. I know this stuff and still found some of the presentation confusing.

“What do you think I should do?” she asked.

“Well, I still think you should be in index funds,” I said, but I didn’t push it. Again, we’ve been dating almost two years, but it’s not like we’re married. I didn’t feel comfortable making this decision for her.

Over the next few weeks, I wrote the investment chapter for my ebook. And then I rewrote the chapter. And then I rewrote it again. (This ebook will finally see the light of day at the end of April, by the way.)

As I wrote, I realized that I truly believe index funds are the right way for most people to invest. And it’s not just me. Warren Buffett believes this, as do many other well-known investors. The evidence is overwhelming. The smartest way for the average person to invest is to put all of their money in broad-based, low-cost index funds and never touch it. End of story.

Meet the New Adviser — Same as the Old Adviser

Between January and March, Kim switched jobs. Her new employer also contributes to retirement, but uses a different investment adviser. Last week, we met with the new guy, Evan. This time, I asked Kim how she viewed my role before the meeting. “I want you to speak up,” she said. “I want you to act like you’re my husband.” Well then, OK.

The meeting with Evan started very much like the meeting with Paul. Evan talked about how much Kim needs to save to meet her retirement goals (answer: a lot!). He also talked about where she should put the money. He agreed with me that it’s probably best not to shift around Kim’s existing investments (although I can’t help thinking we’re falling victim to a sunk-cost fallacy by not moving to index funds). He recommended that all of her new money should go into shiny new mutual funds that his company sells — funds that carry loads of 5.75 percent.

Note: These mutual funds are from American Funds, and I’m very familiar with them. When I was married, Kris put a lot of her savings into the American Funds family.)

“How are you compensated?” I asked.

“Great question,” Evan said. “I’m paid out of the sales charge, out of the front-end load of the mutual funds. A part of that goes to me, a part of that goes to my company, and a part of that goes to the mutual fund company itself.”

After a few minutes of discussing these new funds, I decided to speak up.

“Look,” I said. “I write about money. I’m not an investment guru and I don’t have any specific training, but I’ve read and written a lot about investing over the past few years. Everything I’ve read says that the only reliable indicator of future mutual fund performance comes from a fund’s fees. The lower they are, the better the fund is likely to perform in the future.”

“That may be so,” Evan said, “but that’s only part of the story. With proper management, a traditional fund can outperform an index fund. Besides, index funds only work if you’re able to control your emotions. Studies show that most investors earn returns far below those of the market because they make poor choices under the influence of emotion.”

“Sure,” I said. “The Dalbar study shows that every year.” I cite this study over and over again in the articles and books I write. “But investor behavior is only one part of the problem. The other part is costs.”

Evan protested. I didn’t blame him. His livelihood is tied up in this. Besides, I think he truly believes in his funds.

“If Kim were to buy index funds through Vanguard or Fidelity, how would you be compensated?” I asked.

“I’d take 1 percent,” Evan said.

“One percent up front?” I asked. “Or 1 percent per year?”

“One percent per year,” he said. With the roughly 0.25 percent expense ratio for a typical index fund, that would give her a cost of 1.25 percent annually. That beats the expense ratios from the funds Evan was proposing, especially when you factor in the 5.75 percent sales load.

Following My Own Advice

At the end of the meeting, Kim smiled and shook Evan’s hand. “Thanks for your help,” she said. “We’ll go home and figure this out.”

We walked next door to have a glass of wine while gazing out at the stormy Willamette River. “What do you think I should do?” she asked.

“Do you want to know what I would do if this were my money?” I asked.

“Yes,” she said.

“First, I’d contribute as much to retirement as needed to get the match from your boss. I’d have that put into an index fund, and I’d pay Evan his 1 percent per year. I don’t like it, but that’s your best option to get the match from work.”

“For everything else, though, I’d invest on my own. I wouldn’t do it through Evan. I’d open an account at Vanguard or Fidelity and schedule monthly contributions. He says you need to be putting away $920 per month for the next 20 years in order to have the equivalent of $50,000 per year at retirement. Do that. To be honest, I’d rather you didn’t pay me rent or utilities. I don’t need that money. I’d rather see you put it directly into an investment account every month. It’ll still feel like you’re paying me rent, but it’ll be going to your future instead. Does that make sense?”

Kim nodded. “It does,” she said, “but I still don’t like it.” (We’re still hammering out the financial side of our relationship. She wants to pay her half of things — which I appreciate — but I don’t want to take her money. When she pays me for rent or utilities or anything else, I tuck the money into a “secret” savings account at Capital One 360. That makes both of us happy.)

Unconventional Success

After our meeting with Evan, I began to have bouts of self doubt. It’s one thing to make decisions with my own money; it’s another to make them for somebody else.

To boost my confidence, I turned to books. I re-read the rationale behind investing in index funds. In particular, I turned to David Swensen’s Unconventional Success. During our meeting, Evan had pointed to the Yale University endowment as an example of investing success. Swensen is the mastermind behind that endowment. He’s also a passionate supporter of passive investing.

Unconventional Success contains nearly 400 pages laying out the arguments for index funds as “a fundamental approach to personal investment.” It explores asset allocation, market timing, and security selection before ultimately concluding that “overwhelming evidence proves the failure of the for-profit mutual-fund industry.”

Note: You can read a much shorter version of Swensen’s arguments in his 2011 New York Times editorial about the mutual fund merry-go-round.

Refreshing myself about the evidence in favor of index funds allowed me feel much better about our second meeting with Evan. On Monday night, we returned to his office to explain our decision. In short, we wanted to put all of Kim’s future funds into the following asset allocation using Vanguard index funds:

45% into VTSMX, the Vanguard Total Stock Market index fund
25% into VGTSX, the Vanguard Total International Stock index fund
20% into VBMFX, the Vanguard Total Bond Market index fund
10% into VGSIX, the Vanguard REIT index fund (a REIT is like a mutual fund for real estate)

“That’s great,” Evan told us. “We can do that. But there’s just one problem. Our investment platform requires a $25,000 minimum in order to make this happen. Otherwise, it’s not worth our time.”

At first, I thought this was a barrier. Kim doesn’t have $25,000 in new money to invest. But then I hit upon a couple of solutions.

First, we could move our shared “dream fund” from the Capital One 360 savings account where it currently resides. Instead, we could place it in index funds. Sure, this would introduce greater risk, but I’m OK with that. By the time we’re ready to tap this fund, the stock market should be higher than it is today — and it should outperform savings accounts in the meantime.

Second, we could liquidate Kim’s existing mutual funds and move the money to Vanguard funds instead. That’s probably the smartest move anyhow. We had planned to leave her existing accounts at Edwards Jones, but this makes more sense.

In the end, Kim came up with a fun plan. Here’s what we’re going to do:

We’ll move all of her investment accounts from Edward Jones to the new company.
We’ll sell half of her existing funds in order to meet the minimum requirements to begin putting money into a Vanguard retirement account. (And because index funds are the better choice.)
We’ll keep half of her existing funds as they are and allow her new adviser to manage them as he sees fit. Let’s see if he can actually beat a portfolio of index funds.
Meanwhile, she’ll funnel $460 per month into her employer-sponsored retirement account.
Finally, she’ll open a personal Roth IRA account at Vanguard. Into this, she’ll contribute $460 per month. This will give her a chance to see what it’s like to manage an investment account on her own.

This process illustrated some of the problems the typical investor faces. First, she receives self-serving advice from advisers (even when they don’t intend to be self-serving). Second, even when she knows the right thing to do, it can be tough to stick to her guns in the face of trained expertise. Third, there can be barriers to making smart choices, barriers like high minimums and additional fees.

In the end, it’s important to make your own informed investment decisions. Remember: Nobody cares more about your money than you do. If you don’t take the time to educate yourself, you can’t expect anyone else to make the right decisions for you.

Source: getrichslowly.org

Apache is functioning normally

May 28, 2023 by Brett Tams

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How many times have you thought about how much FI would it take to retire?

It’s a question that can be frustrating, especially since the answer is different for everyone.

What if there was an easy way to calculate your personal FI number and find out what kind of portfolio you need based on your spending habits? That’s where this handy calculator comes in!

Calculating your FI number is not as difficult as it sounds.

This is an important personal finance number to know.

If you desire to do something else or are just looking forward to retirement, you need to know how much money you need!

Find out your FI Number Calculator and learn how to FI. This is a very important tool for anyone looking to change their life.

What is FI number?

FI number is the amount of money needed to retire.

It can be calculated using your salary, interest rate, and the time period in which you need to save for retirement.

The 4% figure is a reasonable place to start. The 4% rule is a conservative estimate, with the expectation that Social Security will play a larger role in retirement income.

Why Choose Financial independence?

Financial Independence, or “FI”, is a term used to describe the state of not needing to work for a living because your passive income from investments or savings can cover your living expenses.

It doesn’t mean you have to stop working altogether, it just means you’re no longer tied down by the need to earn a certain amount of money each month.

FI is an attractive proposition for many people because it allows them the freedom and flexibility to pursue their passions or hobbies without having to worry about financial constraints. And if you have money saved up, you can live comfortably off your savings or investments!

How to calculate your FI number?

There are a few different ways to calculate your FI number. The easiest way is to use an online calculator. This will give you a ballpark estimate of what you need to save in order to achieve financial independence.

Option #1 – Using Yearly Spending

One way to calculate your FI number is by multiplying your annual spending by 25. This will give you the amount you need in savings to have 25 times your annual spending available each year without having to touch the principal.

FI Number = yearly spending * 25

For example, if you spend $50000 a year, your FI number would be $1,250,000.

Option #2 – Using a Safe Withdrawal Rate of 4%

Another way to calculate your FI number is by using the safe withdrawal rate of 4%. In fact, many studies believe that 4% is the too old way of thinking and 3.3% is a better safe withdrawal rate (SWR).

You can calculate either way. If you prefer to pull more money out at retirement, then stick with 4%.

FI Number = yearly spending / Safe Withdrawal Rate

For example, if you spend $50000 a year and choose a 4% Safe withdrawal rate, your FI number would be $1,250,000.

Using a 3% safe withdrawal rate, your FI number would be $1,666,666.

The Financial Independence Formula

Do you know your FI number?

It’s a question people are often too embarrassed to ask, but if you don’t have an idea of what it is or where it comes from, you might be spending too much of your money.

Let’s start with the basics and work our way up to where we are today in terms of financial independence!

Calculate Your Spending

In order to calculate your spending, you need to know how much money you spend in a year. To do this, simply multiply your monthly spending by 12. This will give you an estimate of how much money you spend on an annual basis.

It’s important to have a detailed zero based budget before calculating your Financial Independence Formula. This way, you can be sure that you are including all of your regular expenses (and irregular expenses) in your calculations.

The FI Formula is based on conservative retirement calculations, so it’s important to include all of your regular expenses in the formula. The more accurate your figures are, the better idea you’ll have of how much money you’ll need for retirement.

Find Your FI Number

In order to achieve financial independence, you need to find your FI number.

This is determined by two factors: spending and withdrawal rate. The safe withdrawal rate (SWR) determines how much money you are able to withdraw each year without running out of savings in your lifetime. You divide your current spending by SWR to find out how much wealth you need in order to reach a certain financial target.

FI Number = yearly spending / Safe Withdrawal Rate

Everyone will have different FI numbs.

Determine Years to Financial Independence

The Financial Independence Formula may help estimate how much time it will take to reach financial independence. The formula is only a rough estimate, and you must adjust it as needed for more accurate calculations for your own savings plan.

The Financial Independence Formula factors in how much you need to save each year to become financially independent.

The goal of the Financial Independence Formula is to achieve financial independence before the typical retirement age of 45.

Years to FI = (FI Number – Amount Already Saved) / Yearly Saving

Using the example above, we calculated your FI number to be $1.25 million. You have already saved $450,000 and currently saving $25000 a year.

32 Years to FI = (1250000 – 450000) / 25000

However, if you increase your savings rate to $80000, then

10 Years to FI = (1250000 – 450000) / 80000

As you can tell, the more you are able to save and invest, the quicker you will reach FI.

For the amount already saved, you need to use the amount saved in retirement plans as well as any taxable accounts that will fund your lifestyle.

A commonly asked question is… should I include my house value? Honestly, the answer is no – unless part of your FI plan includes selling your house and moving to a lower cost of living area. Then, you would use the difference of your appreciated house value minus the cost of a cheaper home.

How to FI – Create a Plan

Picture of a lady working on how to FI and create a plan.

One of the most important aspects of actually achieving financial independence is to create an action plan.

Without action, you will be spinning on the same cycle over and over.

So, take an hour and start making your plan.

Step #1 – Figure out Numbers

The first step is figuring out your FI number and how many years away you can be.

There are many ways to make variations on finding your FI number. So, make sure you take into account how many years it will take for you to reach financial independence at your current savings rate.

This is the most important step!

Step #2 – Pick a Realistic Date

This is when most people get motivated when they pick a realistic date to retire early.

Every single decision you make will take you one step closer to your goal.

You are working backward from your “selected” date.

Step #3 – Take Action to Enjoy Life

The hardest step for actually making the decision to FI is to take action.

There are so many factors going into what you need to do once your know your FI number.

You can’t just sit back and do nothing once you know your FI number. You have to follow the steps below on saving and investing to reach financial independence.

For many people, this is choosing to live a frugal green lifestyle while saving money.

How to FI – Saving to Achieve Financial Independence

The FI Number Calculator is a simple tool that helps you calculate how much it will take to reach financial independence when investing in the stock market and using your savings rate as well.

But there are certain steps you must take to be able to save more money to jumpstart your path to financial independence. While many of our money saving challenges will help you, you need to find ways to save more money.

Step #1: Pay Off Debt

When you’re working to achieve Financial Independence, it’s important to address your debt. Paying off debt will help you achieve financial independence faster.

There are two types of debt that are especially important to pay off:

Credit card debt
Student loan debt

Credit card companies have high interest rates, so it’s important to consolidate your credit card debt by using Tally or an equivalent service. This can help you find a lower monthly payment and reduce the amount of time it takes to pay off your debt.

Before seeking to consolidate your credit card debt, make a plan for how you’ll avoid future use of this type of loan!

Debt is a cash flow drain while pursuing Financial Independence.

Step #2: Reduce Expenses

There are many ways to reduce expenses and achieve financial independence faster.

One potential area for savings is housing, which can be achieved through refinancing, house hacking, or downsizing.

Other options include trading in your new car for a beater car, scaling back on eating out or cutting back on your streaming services.

Typically those who budget consistently have an easier time reducing their expenses. Using a budget binder will help you find ways to reduce your expenses.

Step #3: Boost your income

Picture of a sign that says extra income.

This is probably the most important step to be able to increase your saving percentage significantly!

There are many ways to boost your income and save more money.

For example:

Find ways to increase your income from your 9-5 job.
Develop skills or get promoted to earn a better job with higher pay.
Side hustling can help you earn a decent income every month.
Find passive income streams as ways to start earning more money without any effort on your part.
Sell your old stuff on websites like eBay or Amazon for some quick cash infusion into your savings account.

Finding ways to make money fast is important during your FI journey.

You must search for additional sources of income, as they can help you save more and invest more in the future.

Step #4: Invest Money

It’s important to invest money in order to grow your wealth. You can do this automatically by investing through most online brokers.

This way, you’ll avoid making any rash decisions based on fear or greed. Investing consistently is a great way to get an average of 8-12% returns on your investments.

The idea is to save as much as possible and invest in assets that provide a high return on investment. This could include buying stocks, real estate, or other investments that offer long-term stability and growth potential.

Learn how to invest $100 to make $1000 a day.

How to FI – Investing to Reach Financial Independence

Now is a good time to start investing for financial independence.

When you’re ready to invest, it’s important to make sure the investment risk matches what you can handle. A portfolio must match your risk tolerance and long-term goals if you want to achieve financial independence.

We will cover various options on how to use investing to help you reach FI sooner.

Step#1: Make Investments Automatic

When you invest your money automatically, you don’t have to think about it and you can take advantage of dollar-cost averaging.

This means that over time, you’ll get a better price for your investments since you’re buying them in small batches instead of all at once.

In layman’s terms, that means investing a certain amount of money each month.

Step #2: Choose an Index Portfolio

Creating a lazy index portfolio is one of the best ways to invest your money.

This type of portfolio is made up of low-cost index funds or ETFs, which means that you don’t have to worry about timing the market or trying to pick stocks that will outperform the rest.

All you need to do is hold on for the long term and let the market do its thing – in good times and bad.

Step #3: Track Your Progress

As you save and invest your money, it’s important to track your progress so that you can see how well you’re doing and whether or not you’re on track to reach Financial Independence.

This can be done easily by creating a budget and tracking your net worth, both of which will give you great insight into where you are with your finances.

Also, track your liquid net worth separately.

Seeing this progress in black and white is often motivating enough to encourage people to keep saving and investing!

Empower is a comprehensive suite of financial tools that offers a FREE way to track your investment and cash accounts. You can connect all of your accounts so you can see an overview of all of your finances in one place, and the best part is that it’s free! Check out my Empower Review.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

FI Number Calculator

The Financial Independence Number Calculator uses a range of variables to calculate the length of time it would take to save for FI. This information can be helpful in developing a savings plan that is tailored specifically to your individual needs.

Here is a simple FI number calculator.

As you can imagine, there are many different scenarios for finding your FI number.

For starters, get a ballpark range and amount you need to save each year to reach your goal. As you get closer to actually, hitting that switch and becoming fully financially independent, then you can refine your FI number.

Remember, while this formula provides a ballpark estimate, more precise results are possible by using a financial independence calculator such as Networthify’s model.

Saving for Retirement or More Savings to Quit work?

If you have some money saved already, the time to reach FI will be shorter than if you are starting from zero. Saving at a high rate is important to reach FI in the shortest time possible; saving at a lower rate or not saving anything makes reaching FI impossible.

Financial Independence is reached by saving a certain amount each year.

This number can vary depending on your unique circumstances, such as income and expenses.

There are a variety of reasons people are pursuing FI – more than likely it is because I hate my job or you want to spend your time doing something else.

The FI Number formula is just a starting point: remember that there are many other variables that could impact your individual savings plans, such as debt load, income, and monthly spending habits.

While using this formula can provide helpful insight into when you might achieve financial independence, it’s important to remember that there is no one-size-fits-all answer.

Every person’s situation is different, so it’s important to tailor your savings plan to your own needs and goals.

Source: moneybliss.org

Apache is functioning normally

May 28, 2023 by Brett Tams

A short while ago I wrote reviews of two services that recently launched, both of which intrigued me. One is a free online savings account called Digit, and the other is a free automated investing adviser called Axos Invest.

Both companies are different from anything else out there.

Digit’s claim to fame is that they will automatically save money for you after analyzing your spending and account balance trends. Once Digit figures out how much it can save without you noticing, or overdrawing your account, it just does it. It saves small amounts to your Digit savings account throughout the month. At the end of the month, you’ve got a nice lump sum saved in your account. (Digit review here)

Axos Invest is gaining traction because of its unique business model as well. They’re a robo-adviser, an automated investment advisory along the lines of Betterment or Wealthfront, but they’re different in that they don’t charge any management fees as most other companies do. They invest your money in ETF index funds with no trading fees and no management fees whatsoever. They plan to make their money off of premium add-on products like tax-loss harvesting in the future. (Axos Invest review here)

I liked the ideas behind these services and signed up for both of them to give them a trial run. While I was at it I decided to turn this into a bit of an experiment. I plan to see just how much money I can automatically save and then invest with them through the end of the year. I thought it would be interesting to show just how much you can automatically save and invest (at no cost), without even thinking about it. Saving and investing doesn’t have to be hard, or expensive!

Digit Savings Account

According to Ethan Bloch, the founder of Digit, the company was started to help people, “maximize their money, while at the same time driving the amount of time and effort it takes to do so as close to 0 minutes per year as possible”

So how does Digit work? You sign up for an account, and link your checking account. Digit will then analyze your income and expenses, find patterns and then find small amounts that it can set aside for you – without any pain for you.

So once you sign up and turn on auto-savings, every 2 or 3 days Digit will transfer some money from your checking to your savings, usually somewhere between $5-$50. Digit won’t overdraft your account, and they have a “no overdraft guarantee that states they’ll pay any overdraft fees if they accidentally overdraft your account.

Open Your Digit Savings Account

Axos Invest Investing Account

Axos Invest launched with the goal of being the world’s first completely free financial advisor. Their founders had a mission “to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge fees.”

Axos Invest’s founders understood that one of the drags on the typical person’s portfolios is the fees that they’re paying to invest, as well as the friction point of having to invest thousands of dollars to start. They changed that with no minimums to invest, and no fees charged for investing. Axos Invest will be releasing some premium add-on products for their users, which they will charge for, but a basic investing account will not cost anything beyond the mutual fund expense ratios associated with your investments.

What do you invest in with Axos Invest? Axos Invest will invest your funds based on Modern Portfolio Theory (MPT). Your investments will be diversified, low cost, and recognize the value of long term passive investing by investing in ETF index funds.

Open Your Axos Invest Investing Account

The Digit + Axos Invest Experiment (D+AI Experiment)

For the experiment I plan on using the two accounts I have just opened with Digit and Axos Invest in order to show just how easy it is to invest.

From now until the end of the year I plan on allowing Digit to automatically save money from my checking account and put it into my Digit savings.

When the amount in the account gets to around $75 or more, I’ll transfer it back to the checking and transfer the same amount over to my Axos Invest Roth IRA to invest in their automated investing service. I figure by doing it this way, I’ll engage in a bit of dollar-cost averaging, instead of waiting until the balance is higher and investing once or twice. Since Axos Invest has no minimums and you can buy fractional shares, why not?

When the end of the year rolls around I’ll do a review and look at how much money I’ve been able to save and invest using these two sites.

The Experiment In Progress

Once I had setup my Digit and Axos Invest accounts I started putting the experiment into action in early February. I turned on the automated saving feature of the Digit savings account, and waited for the small savings amounts to start showing up. After about 3-4 days, my first few deposits into Digit appeared. There were deposits for $5, $6.50, $8.45, $2.35 all within the first 7 days. I have also referred friends to Digit, and $5 referral bonuses started showing up as well.

Day after day the referrals and savings deposits started piling up and before I knew it, I had $186 in the account. At this point I decided to withdraw and make my first investment over at Axos Invest.

Amounts Withdrawn And Invested So Far

I’m only about a month into my little experiment, and so far I’ve withdrawn my Digit savings balance and invested it in my Axos Invest Roth IRA twice. The amounts were:

$186.00
$74.72

Here’s a screenshot from my Digit account showing my latest withdrawal for the purpose of investing.

After withdrawing the money I then transfer it from my checking account over to Axos Invest. Here’s a screenshot of my latest deposit with Axos Invest.

Once this deposit goes through I’ll have a little less than $260.72 invested at Axos Invest since the market has gone down slightly since I started. You can see the $184.84 total invested for my first $186 deposit below.

Here’s the portfolio’s asset allocation in my Axos Invest account currently. Probably a tad more aggressive than in my other retirement accounts, but that’s OK.

The funds that Axos Invest uses and their expenses are shown below (and are subject to change)

Vanguard Total Stock Market ETF (VTI): 0.05%
Vanguard FTSE Developed Markets ETF (VEA): 0.09%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.12%
Vanguard Short-Term Government Bond Index ETF (VGSH): 0.12%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.20%
Vanguard REIT Index Fund (VNQ): 0.10%

Depending on how the market does, we’ll see what kind of returns my account sees. No matter how it goes, I’m already ahead of the game as I don’t have to pay any account management or trading fees. Can’t beat that.

Join In The Digit & Axos Invest Experiment

If you’re intrigued by Digit and Axos Invest like I was, and want to join in the “D+WB Experiment”, I invite you to join in.

Open an account with both services (both accounts are free), set Digit to start automatically saving and get started. Let’s see how much we can save and invest this year – without lifting a finger!

Source: biblemoneymatters.com

Apache is functioning normally

May 28, 2023 by Brett Tams

Confession time: Despite a financial and business education more comprehensive than most, I never invested. I grew up poor and just couldn’t wait for my first “serious” job and those big bucks. It was so bad, I decided to drop out of college in my senior year. “None of this ivory-tower crap is going to make me any more money,” I told everyone who would listen. Fortunately, both of them were able to talk me off the ledge. One of them was my future wife, bless her little gizzard.

After graduation, my illusions were shattered: There are no high-paying jobs in a recession for someone with just a bachelor’s degree. There are hardly any jobs at all. Carol Burnett came up with the formula: Comedy = Tragedy + Time. That explains why I’ve been able to entertain so many guests after dinner with the now-humorous details of my early career. Bottom line: It took several years to set up a household on entry-level wages. My big break came when, in the final year of my MBA, I landed a job that tripled my income. (No matter what all the critics say, no single degree makes you as much money as an MBA.)

Finally, we were rolling in it. The top restaurateurs in town knew us by name. You would think that someone with such a solid education (in accounting and finance, no less) would realize the time had come to start investing. You would be wrong. We had accumulated us some Joneses along the way, up with which we had to keep, and we did some serious “keeping” for the next few years.

Of course, we told ourselves we were “investing.” (All big spenders do that.) You could call that spectacular wooded plot in the Cape (Town, not Cod) for our next dream custom-built home an investment. We did. You can call anything you spend money on “an investment” — nice cars (they will be collectible one day, you know), good wines (more valuable when aged), jewelry, and any number of other wanna-haves — investments, one and all.

Deluding yourself that what you’re doing is smart is not hard. Wise readers know where that journey ended: Our debt tripped us up in our 40s, and we got wiped out in yet another recession.

That’s when I got mad.

And that’s when I got smart. I discovered the more you make, the more you spend. And it’s true what they say: Money can’t buy you happiness. Lack of money, though, doesn’t bring you barrels of fun, either. I haven’t heard too many people say that, because it sounds materialistic; but take it from someone who’s lived on both sides of that railroad track. There is more peace in the house when the finances are in order.

This post was started in response to a question from a reader, who asked: How do you get started investing? Penny stocks, maybe? In response, I wrote a nice, sterile post with the five-point plan to get started. But after reading it over, I did the electronic equivalent of crumpling it up and tossing it in the wastepaper basket.

Why? Because I’ve heard that all before and it never got me to start when I should have started. Why, then, would it help the non-investing reader?

Everybody has heard the message that you’ve got to invest. And if I have a dollar for every “get-started” plan written, I’d be one of the sharks on “Shark Tank.” And yet, it is equally well documented how Americans are headed for retirement disaster because they don’t invest.

Why not?

1. Passion

Because none of those articles, lectures, books, posts, speeches, or admonitions addresses the starting point: passion.

Until you get mad, you’re not going to change. That’s true for any lifestyle improvement: losing weight, quitting smoking, getting fit… or investing.

So, Step One is making a passionate decision. It doesn’t matter if it’s fear, anger, humiliation, or even (dare I say it?) greed. Investing is a long, long grind. Along the way, you’ll face thousands of temptations to derail you, and very few to keep you on track. In the face of that barrage, you’ll only stay the course if you have a steely resolve, and we human beings are wired in such a way that pretty much the only way to maintain that steely resolve is to have it fueled with a long-term fire in your belly. Nothing but that passion will neutralize the onslaught of temptations coming at you day after day… after day.

Once you’ve made that resolve, pretty much anything you invest in can work. My father-in-law only invested in a savings account. You could argue with him all you want (“C’mon, Dad, you can double your earnings with any other investment!”) but a savings account was the only investment he felt passionate about. He made it work. With passion, you can make anything work.

2. Foreground

I started (late, to be sure) with a savings account. I wanted to open a brokerage account, but back then you needed a couple thousand or some huge number like that to open a new account. Along the way, I discovered a nice thing about a savings account: there’s no minimum to start, or to deposit. When we got a $15 refund for something, I could deposit that into the savings account and nobody would frown. It became a game: how high can we make it grow this month? Saving became a foreground activity, not a background activity as so many people think it ought to be.

And that, I think, is Step Two: Make your investing an intentional, “foreground” part of your life. Facing my mid-40s with nothing forced me to admit that my lifestyle was proof that I’m not a natural saver/investor. And so, just like a recovering alcoholic, I need to be very deliberate in staying off the spending wagon. No more fancy cars, no more fancy nothing… and no more Joneses.

I began measuring my worth in things other people couldn’t see.

We were surprised to see how quickly our savings grew when it became an endeavor of passion. So we signed up for 401(k) plans where we worked, and went for the maximum deductions, matching or no matching.

Mechanically, I think it’s important to start with safe investments, like a savings account, a 401(k) plan at work, stock market index funds — stuff like that. For the first four or five years, the lion’s share of your investment value will be your contributions, not your returns. You can always change your investments along the way.

The important thing is picking a safe investment you’ll feel the most passion for. Then learn as much as you can. You’ll find out soon enough what generates the most passion. Then study that for a few years and you’ll be good.

3. Opportunities

There’s something else very few people talk about, and that’s opportunity. J.D. wrote about it recently, but he’s one of very few. I discovered this a few short years into my now-passionate investing career: Once you make investing a foreground part of your life (i.e., you think about it a lot) it’s natural to want to learn more. As you do that, you become aware of things that passed over your head before. And one of those things is… opportunities.

Life brings everyone a string of opportunities. Until I became conscious of investing and made it a priority, I was totally oblivious to them. When someone would mention something that sounded like an investment opportunity, I’d cut them off with a put-down like, “Oh, that’s just a scam. Nothing could be that good. What a waste of time. Wall Street’s just a casino!” And then I’d continue debating whether this great chef’s new restaurant would be as good as his previous one.

When you’re thinking of buying a Honda, what do you see? Hondas all around you. Same with investment opportunities. It’s a well-known trait of the human brain that once you’re conscious of something, you notice much more of it. Every person has a few outstanding investment opportunities that come their way. So I’d say Step Three is to keep your eyes open for all investment opportunities that come along. Be prepared to pass on 90 percent of them, but be ready to pounce on a good one when it comes along. Being prepared comes naturally with anything you’re passionate about because you love to read about it, talk about it, and think about it.

The nutshell

As I said, it doesn’t really matter which particular investment vehicle you pick to get started, as long as it’s not too risky. Success in the long run will come from:

Passion
Putting investing in the foreground of your mind
Preparing yourself to take advantage of unique opportunities which will, almost inevitably, cross your path. Preparing includes learning how to distinguish between get-rich scams and real opportunities.

No two of the people I know who succeeded in their investing followed the same path to success, or invested in the same things. But all of them were passionate about it, thought about it a lot and took advantage of at least one good opportunity which gave them that boost you can never plan for.

It’s easy to talk yourself out of anything and find fault with any option. Those who succeeded didn’t talk; they acted. To misquote my good friend Vern: thinkers think and doers do. Until thinkers do and doers think, investing is just another word in the overburdened vocabulary of broke Americans.

Source: getrichslowly.org

Apache is functioning normally

May 28, 2023 by Brett Tams

About 6 months ago I discovered two cool new services that had recently launched, both of which were a part of the recent trend towards automated saving and investment account options.

The first one was an free online savings account from Digit, an account that helps take the busy work out of saving. It analyzes your checking account daily and at regular intervals it saves small amounts of money from your checking and puts it into your Digit savings account – without your intervention. It allows you to save money, a little bit at a time, without even realizing it.

The second account is a free automated investment adviser from the folks at Axos Invest. When you have an investment account from Axos Invest, their system will allow you to regularly invest in a taxable or tax-advantaged retirement account, and it will automatically invest your funds in a portfolio of low-cost ETF index funds. It’s a great new long term investing site, along the lines of Betterment or Wealthfront, but without any account management costs.

Digit and Axos Invest are both big on the idea of automating things in order to make them more efficient, more cost-effective and better for your bottom line. I liked the idea behind both sites, and after signing up I decided to take them on a trial run and to run an experiment.

Just how much could I save automatically for the year using Digit’s tools? How much would I be able to invest at no cost using Axos Invest? How much intervention would I need to have – and just how much could I save over time? First, let’s take a brief look at these two accounts.

Digit Savings Account

According to Ethan Bloch, the founder of Digit, the company was started to help people, “maximize their money, while at the same time driving the amount of time and effort it takes to do so as close to 0 minutes per year as possible”

So how does Digit work? You sign up for an account, and link your checking account. Digit will then analyze your income and expenses, find patterns and then find small amounts that it can set aside for you – without any pain for you.

So once you sign up and turn on auto-savings, every 2 or 3 days Digit will transfer some money from your checking to your savings, usually somewhere between $5-$50. Digit won’t overdraft your account, and they have a “no overdraft guarantee that states they’ll pay any overdraft fees if they accidentally overdraft your account.

Open Your Digit Savings Account

Axos Invest Investing Account

Axos Invest launched with the goal of being the world’s first completely free financial advisor. Their founders had a mission “to ensure everyone can achieve their financial goals, which starts with investing as early as possible. This is why there is no minimum to start and we do not charge fees.”

Axos Invest’s founders understood that one of the drags on the typical person’s portfolios is the fees that they’re paying to invest, as well as the friction point of having to invest thousands of dollars to start. They changed that with no minimums to invest, and no fees charged for investing. Axos Invest will be releasing some premium add-on products for their users, which they will charge for, but a basic investing account will not cost anything beyond the mutual fund expense ratios associated with your investments.

What do you invest in with Axos Invest? Axos Invest will invest your funds based on Modern Portfolio Theory (MPT). Your investments will be diversified, low cost and recognize the value of long term passive investing by investing in ETF index funds.

Open Your Axos Invest Investing Account

The Digit + Axos Invest Experiment (D+AI Experiment)

So for my Digit and Axos Invest experiment, the goal was not only to try out these two free products, but also to show just how easy (and low cost) it can be to invest.

When I started in early February my goal was to allow Digit to automatically save money from my checking account and put it into my Digit savings. Whenever the amount in my Digit savings reached $75 I would transfer that money over to my Axos Invest account and invest it in their highly diversified set of ETF index funds.

Why was I doing it this way? I did it this way because Axos Invest has no minimums and you can buy fractional shares, so why not? I can transfer money in small chunks, and engage in a bit of dollar-cost averaging while I’m at it.

So how are things going now that we’re more than half the way through the year?

The Experiment In Progress

Once I had setup my Digit and Axos Invest accounts I put the plan in action and allowed my Digit account to start saving on my behalf. After a few days Digit had started saving small amounts in my account. There was $7.50 here, $15 there – as well as $5 deposits for referrals of friends and readers. Multiple transfers and deposits ended up adding up to larger amounts over a couple weeks time. The first time that I invested with Axos Invest I deposited $186 that had accrued in my Digit account.

From then on every time the amount reached around $75 or more, I would transfer the money to Axos Invest.

Amounts Withdrawn And Invested So Far

I’m now just over 5 1/2 months into my little experiment, and so far I’ve withdrawn my Digit savings balance and invested it in my Axos Invest Roth IRA 14 times. The amounts were:

$74.36
$79.76
$121.75
$82.03
$95.67
$81.27
$93.28
$109.47
$76.20
$99.08
$99.32
$90.88
$74.72
$186.00

Here’s a screenshot from my Digit account showing my latest withdrawal for the purpose of investing.

After withdrawing the money I then transfer it from my checking account over to Axos Invest. Here’s a screenshot of one of my latest deposits with Axos Invest. In the screenshot you can also see how deposits are then used to purchase fractional shares of the ETF index funds used in the account.

Once my latest deposit of $74.36 goes through I’ll have $1380.70 invested at Axos Invest.

Here’s my portfolio’s asset allocation in my Axos Invest account. It is a bit more aggressive than in my other retirement accounts.

The funds that Axos Invest currently uses, and their expenses, are shown below (and are subject to change)

Vanguard Total Stock Market ETF (VTI): 0.05%
Vanguard FTSE Developed Markets ETF (VEA): 0.09%
Vanguard FTSE Emerging Markets ETF (VWO): 0.15%
Vanguard Intmdte Tm Govt Bd ETF (VGIT): 0.12%
Vanguard Short-Term Government Bond Index ETF (VGSH): 0.12%
iShares Investment Grade Corporate Bond ETF (LQD): 0.15%
State Street Global Advisors Barclays Short Term High Yield Bond Index ETF (SJNK): 0.40%
iShares Barclays TIPS Bond Fund (ETF) (TIP): 0.20%
Vanguard REIT Index Fund (VNQ): 0.10%

We’ll see what kind of returns my account sees over the coming months/years, but I’m sure it will about match what the market does. Since I’m not paying any account management fees as well, I’ll be coming out ahead as compared to some other robo-adviser competitors.

How’s It Going So Far?

So how is the experiment going so far? I think it’s been pretty successful. I’ve saved $1380.70 over the 5 1/2 month period. If we round that up to 6 months it means an average saved of about $230.12/month.

Multiply the $230.12 by 12 months and it means that if I continue this experiment for an entire year, I could expect to see somewhere in the neighborhood of $2761.40 saved for the year.

While $2761.40 isn’t going to profoundly change someone’s life, it isn’t a small amount of money either.

If you look at that $2761.40 amount, it’s just over half of the annual $5500 contribution limit for a Roth IRA. So essentially, over half of my year’s worth of Roth IRA contributions are happening without any pain for me.

The money is coming out in small chunks, so small I don’t even notice. Over time those small chunks are adding up to larger dollar amounts that do make a difference to my long term strategy. All in all I think it’s a pretty powerful idea, making savings and investment happen automatically in the background, with only a small amount of intervention needed from you. The fact that both of these tools are also free is just icing on the cake.

Join In The Digit & Axos Invest Experiment

Interested in joining the “Digit and Axos Invest Experiment”? I invite you to join in! The only risk you’ll have by joining is that your retirement accounts will grow over time and that you’ll likely be paying fewer costs than your current retirement account provider.

Open accounts with both services, set Digit to save automatically, and get started. You’ll be glad you did. Let’s see how much you can invest – with minimal effort or intervention!

Source: biblemoneymatters.com

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38 Best Credit Unions Anyone Can Join

1. Alliant Credit Union

2. Connexus Credit Union

3. Pentagon Federal Credit Union

4. First Tech Federal Credit Union

5. Consumers Credit Union

6. Langley Federal Credit Union

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8. Lafayette Federal Credit Union

9. Affinity Plus Federal Credit Union

10. Chevron Credit Union

11. Ascend Credit Union

12. Hope Credit Union

13. Boeing Employees Credit Union

14. Hiway Credit Union

15. GreenState Credit Union

16. Cascade Credit Union

17. Wildfire Credit Union

18. Nextmark Credit Union

19. Technology Credit Union

20. Veridian Credit Union

21. Harborstone Credit Union

22. NASA Federal Credit Union

24. Pen Air Federal Credit Union

25. State Department Federal Credit Union

26. United Nations Federal Credit Union

27. Premier Members Credit Union

28. SRI Federal Credit Union

29. United States Senate Federal Credit Union

30. Wings Financial Credit Union

31. Skyward Credit Union

32. San Diego County Credit Union

33. Bellco Credit Union

34. Bethpage Federal Credit Union

35. First South Financial Credit Union

36. Dow Credit Union

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38. Digital Federal Credit Union

Bottom Line

Frequently Asked Questions

Can civilians join Navy Federal Credit Union?

Can anyone join American Airlines Credit Union?

Tell me your story.

How much debt did you have and what was your debt from?

Why did you want to get out of debt fast?

How long did it take you to pay off your debt and reach debt freedom?

How did you manage to get out of debt so fast?

Can you tell me about cash envelopes? How does it work and why do they help?

What is your response to people that say, “You should invest that money instead of paying off the debt, you’ll earn more in the long run…” etc.?

What sacrifices did you have to make in order to become debt free?

Often people paying off loads of debt feel they have to choose between “living life” and making payments. Were there any times during the journey that you chose to “splurge”?

What did you do to stay motivated?

If you were starting back at ground zero, what would you do differently?

What is your very best tip (or two) that you have for someone who wants to reach the same success as you?

What’s your next financial goal?

Where can my readers go to learn more about you?

Related Posts

Here’s how to get rich– for anyone and at any age.

Don’t wait until tomorrow to learn how to get rich.

Be better than average if you want to learn how to get rich.

Give yourself great goals.

Create a realistic budget.

Realize that a good life can be affordable.

Pay off your debt if you want to learn how to get rich.

Start investing as one of the ways to get rich.

Start making more money.

Diversify your income streams to learn how to be rich.

Even the rich find ways to save money.

Stop trying to impress others.

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