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May 25, 2017

The Great Directives

I believe that in life, there are three directives that are unavoidable and essential for a quality life. These Great Directives choose us from the moment we’re born, and we risk squandering life if we ignore them.

The Great Directives are as follows:

Use money for good

Money chooses us. We can’t avoid it, but many of us fear and misunderstand it. It comes into our life out of necessity, but often leaves our life through waste.

But to achieve a full life, we must choose discipline and control over our money.

Choose to use money efficiently and effectively. Choose to give it away when there’s a need. Choose to use it as a tool for good rather than a means of self-worth.

Become a wise master of money or risk becoming a slave to it.

Embrace your health

Our body is the greatest gift we’ve been given, and our health is the greatest gift we can give ourselves.

Our health reveals our discipline, passion, and vitality. While some may lose their health to age or misfortune, to knowingly abandon our health is to abandon our potential.

Improving your health is the only selfish act that creates a selfless outcome: to be healthy is to be present, mindful, and useful, and the world desperately needs more useful people.

Care for others

We live on a planet of 7 billion people, yet many of us choose to focus our life’s attention on just one — ourselves. No matter who we are or where we live, our life was created, influenced, and will be remembered by other people. We’re raised by a family, given knowledge by teachers, find passion in lovers, and inspired to greatness by leaders. To go through life without compassion for others is to forfeit our humanity.

Be compassionate, serve people, and celebrate life by caring for others.

Avoid these directives at your own peril.

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Here’s what I’ve discovered over my 4 year journey to financial peace.

Being broke doesn’t mean you’re broken

“I’m broke,” you’ll say, and you’ll hang your head and feel terrible. According to most people, being broke is the ultimate form of not having your sh** together. Running out of money means running out of life, energy, and opportunities.

We feel bad about being broke because we associate our financial situation with who we are as people. Our self worth is tied too closely to our net worth.

But you’re not defined by the size of your bank account. A rich jerk is just a jerk who happens to have money. But a compassionate person who’s broke is still compassionate; they might not have much money at the moment, but they’re still quite valuable.

Our resistance to financial change is built on shame

The heart of all money stress is rooted in shame. We feel ashamed that we struggle with money. We feel ashamed that we can’t afford to live like our peers. We feel ashamed in our inability to save even a penny for our future. It’s exhausting.

In my talk with Kyle Naylor, he described shame as one of the most destructive forces in our lives. It leads to depression, self-doubt, inaction, and many other negative physical and emotional effects.

But our positive money changes come from forgiving ourselves for past money mistakes and not letting shame dictate our actions. We’re all in need of positive financial changes and we’re all capable of making them happen. And that’s nothing to be ashamed of.

Money habits reflect our life habits

We’re not the size of our bank accounts, but we are what we choose to do with those bank accounts. If we hoard our money, we’re hoarders; if we give it away, we’re givers; if we want more, we’ll take more until the well runs dry. The habits we build around our money are the habits that define our lives.

As Lynne Twist says in her book, Soul of Money,

Money is so intricately interwoven with every other aspect of our lives that when we take a stand to make a difference with our life, it has an organizing effect on our relationship with money, and when we take a stand to make a difference with our money, it has an organizing effect on every other part of our life.

So when we develop healthy money habits, we’ll develop healthier life habits as well.

Money management is a craft that can (and must) be learned

Most people approach new financial habits like they would a diet plan: they start on a Monday, quit their habits cold-turkey, find themselves growing restless by Wednesday evening, and accept defeat by Friday morning.

Money changes must be adopted slowly, and money management must be approached for what it is: a skill that can and must be learned through research and experimentation. Read a personal finance book, listen to a personal finance podcast, or seek out a reliable financial advisor. Just don’t fall for quick changes; in the world of money, that leads to being scammed, losing more money, or simply developing more destructive habits.

Take the time to learn how to manage money the right way. The investments you make in your financial education will pay for themselves.

Financial peace comes not from frugality or extravagance, but from balance

Ultra frugality creates misers; ultra extravagance leads to a joyless life; the spot in between is where you find financial peace.

When my wife and I paid off our debt and began looking to the future, we planned for the route of ultra frugality — we’d give up everything to save every penny we could.

And for what? We didn’t know.

We had a few vague goals in mind to fuel our ultra saving, but we knew that those goals didn’t align with our true passions in life.

While we’d love the opportunity to retire early (and we’re still on a path to do so), we’re already living a life of happiness by striking the balance of frugality and extravagance. We save most of our income, but we dine out often and love traveling throughout the year. We have business ideas, non-profit/charitable goals, and an extensive list of life quests to complete, none of which are cheap.

We live with balance, we’re happy, and we’ve achieved financial peace.

So remember: you’re not defined by the size of your bank account, but instead, what you do with that bank account; if money mistakes come along, embrace them and seek opportunities to learn how you can avoid those mistakes in the future; lastly, find balance in your financial life, and you just might find financial peace.

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Three years ago, my wife and I made the final payment on a $17,500 student loan bill. It took us one year using post-grad, middle class incomes, and we dedicated 40% of that combined income to debt repayment.

Beyond the initial excitement, debt freedom has had a tremendous impact on the trajectory of our life. Here’s what we’ve learned over these past three years.

Debt repayment provides valuable lessons

I’m thankful for my student loans.

When my wife and I were paying off our debt, we were forced to build good money habits. Overspending wasn’t much of an option if we hoped to climb out of the red. It was too stressful to ignore, and debt was holding us back from achieving our goals like world travel and buying a home with a respectable down payment.

Not only were we forced into good habits, there was an added benefit of discovering that, in our marriage, we didn’t need much stuff to make us happy. We were happiest when spending time together with a quiet night in or when we took a trip out for some cheap tacos and a matinee movie.

Happiness, for us, wasn’t expensive.

As a result, the months following our final debt payment were spent hitting the ground running. After a post-debt spending spree to celebrate, we got to work. We reallocated funds previously spent on debt repayment to investing in our future. We put money into index funds, increased our emergency fund, and started researching affordable and worthwhile options for world travel.

Lastly, with good habits in place, we found we were much less likely to slide back into debt. After three years of building our investments and cash reserves, debt is now a strategic choice for investment opportunities rather than a necessity for a comfortable life.

No more living paycheck to paycheck.

Net worth becomes a useful metric

Net worth is now our most-tracked metric of financial health. While we were in debt, we dreaded seeing the big red bars indicating our below zero financial standing. It was discouraging, so we avoided it.

But after climbing our way out of debt, we were able to analyze our net worth, watch for trends, and celebrate our monthly increases from investments and cash saving wins.

At every point in one’s financial life, net worth is either rising or falling. It’s important to remember that paying off debt is a rising action for net worth, so don’t be afraid to make monthly net worth checks part of a financial strategy early on.

Debt is a tool (that you’re probably not skilled enough to use)

You can only take advantage of debt as a tool once you’ve learned to live without it. If you’re falling victim to credit card debt or buying houses and cars you can’t afford, you’re the tool being used to generate a steady revenue for banks.

By comparison, someone who’s learned to manage debt effectively and not rely on it for basic needs can leverage it to start a business or invest in rental properties.

Credit cards can be incredibly useful if handled properly

When you’re not using credit cards as a means of buying what you can’t afford, they become an invaluable tool for securing inexpensive travel and other handy financial perks.

By aligning our credit card purchases to our budget and paying off our credit card in full each month, we’re able to take advantage of those credit card perks without paying credit card companies a penny in interest.

Money doesn’t have to be stressful

Debt freedom has many benefits, but one of the most important advantages is the alleviation of stress. In fact, contrary to the common marital stereotype, my wife and I don’t fight about money much these days.

Without debt, money troubles can go away entirely, if you so desire. Money becomes a tool to be controlled; it can be given away, used to travel the world, or a means to quit jobs and pursue passions.

Debt can control your life if you let it. It can determine where you live, what job you take, and how you think about finances. But if you find a way to remove it’s negative impact on your life, you’ll gain full control over your money, and by extension, the trajectory of your life.

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February 10, 2017

You Probably Don’t Need It

I overhead an old man, ahead of me in line, next to the impulse buying station, “does anybody need any of this crap?”


Don’t forget to occasionally look around at your stuff and ask, do I really need this crap? The less you bring into your life, the more full your life can be.

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It’s entirely possible not to worry about money anymore, even if you’re not a millionaire.

Debt-related stress sits deep in your bones; in its absence comes an overwhelming sense of confidence and security in your finances.

Debt is only a “tool” if you’ve first learned to live without it.

Paying off your debt is an expensive gift you can give yourself that you’re guaranteed to never regret or get tired of.

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August 15, 2016

Having “Enough”

This year, something exhilarating happened.

I realized that when it comes to the things I’ve wanted in my life, I truly have enough.

I have enough money to supply the most basic of needs – warm food, a comfy bed, and a living space to store those things.

I have the ability to work.

I have my emotional needs met – love and companionship.

I have a stack of books and a guitar for when I get bored.

I have a friendly cat that sits in my lap while I work.

I have a feeling of independence.

I’ve found that there’s nothing more that I need to enjoy life at this stage.

But what about setting new goals? How do we move forward when we realize we have enough?

I may have enough “stuff”, but continued improvement will always be important. Our mission should be a forward march towards further self improvement, improvement of the lives of others, and the kindling of adventure at every turn. Once you have enough stuff, those improvements become much more attainable thanks to a lack of frivolous distractions.

At this very moment, do you have enough? If you look closely, you just might find that you actually have everything you need.

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April 21, 2016

Money is simple, but…

It’s your bad habits that make it difficult.

Strained budgets, impulse spending, heavy reliance on debt, and the inability to see beyond the short term in regards to your finances – each of these habits can add mountains of stress on your life, and each of these are self-inflicted.

Stop making things so difficult on yourself. If you really want that $50,000 car, keep in mind that’s 50 grand that your future self won’t have access to. Every impulse purchase is just another wad of cash you might wish you had later down the road.

If you have a steady job, money is pumping into your life. It’s you that sends it away.

And sure, things happen in life that can yank money out of our hands, but when you’ve learned to hang on to most of your money, these events become little more than an inconvenience.

So when it comes to money, keep things simple.

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Having trouble working up the willpower to improve your finances? Maybe these perks will convince you.

You can loan yourself money, interest free

As you learn to save money like a champ, you’ll find yourself building a healthy emergency fund. And while emergency funds aren’t the most exciting topic for some people, let’s consider this:

An emergency fund is a pile of cash that allows you to loan yourself money.

That’s a benefit that over 60% of Americans don’t have.

Need new tires? Loan yourself a few hundred dollars.

Need to pay a hefty medical bill? Ouch. Take out a loan from the Bank of You.

Do yourself a favor, and build up that emergency freedom fund.

You can make magic happen with credit cards

In just a few months, my wife and I will have the ability to take 5 or more completely free, round trip flights around the US.

How? Credit card reward points.

By utilizing credit cards responsibly and using them along with a solid budget, we’ve been able to rack up a large amount of reward points without any fancy tricks or paying a penny in interest.

To the financial novice, credit cards can be dangerous and misleading. They’re easy avenues to debt and misery. But in capable hands, there’s actually a treasure trove of benefits you can take advantage of by using them.

When in doubt about credit card usage, less is more. Cut them up and throw them out. From there, study up on how to use credit cards effectively. You just might get a few cool perks out of them.

You can live anywhere

As we discovered when we moved across the country, one of the biggest challenges in making a move is finding a suitable place to live.

Not only is there a challenge in finding a great location, but as soon as you pick out your dream home/apartment, it’s time for the dreaded credit check.

Having great credit and a pile of cash sitting in your bank account is one of the most attractive things to most banks and landlords. The more you save and the less debt you carry, the easier it is to set out on an adventure.

These are just a few of the perks you’ll discover if you’re able to get your financial life in order. Just remember, it starts with just a few simple habits.

Happy saving.

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I’ve spent the past year writing about money. Here’s a list of the highlights that came out of it so far.

  1. Diversifying your income sources helps you sleep a bit better
  2. Having a cash buffer in your checking account is invaluable
  3. People get super weird when you talk about money
  4. Investing is much easier than you’d expect
  5. Your money habits are the best reflection of your personality
  6. It’s very possible to retire before you’re 65
  7. Being debt free amplifies wanderlust
  8. Paying off debt is just the beginning
  9. Market declines are normal and present some good opportunities
  10. Buying a house when you’re young isn’t always best
  11. Good money habits == happy marriage
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