Category Archives: Popular Posts

Finding Your Growth Engine…Finding Yourself

Remember I told you that I completed an exercise that is helping to align myself with the person I really want to be? Well, I wanted to share with you that exercise.

This exercise comes from 7 million in 7 year’s team in training website. Even if you are not searching to become the next millionaire, it has some very worthy exercises to complete. I am rather enjoying the self discovery. 🙂

Called Finding your Growth Engine. It helps you to figure out what it is going to take to reach your number, your financial goal. And, as you can see… it helped me figure out what I really am all about and where it is I want to go.

click to enlarge picture

I mentioned to you lately that I have been feeling this change within me. That it is time to live the life I yearn to wake up to each morning. In fact, in my New Year Resolution 2009 I mentioned the year is about “Keeping it Simple”… about connecting with life, friend’s, family & community. It’s going to be about finding the true sense of my life.

“Keeping it Simple”… Just doing.

Well, I have found out what I really want to do! But, a master plan has to start out with baby steps. Well, at least in my case it needs to be that way.

Master Plan = open Farm Market: Fresh produce, bakery, nuts, cheese, beer and wine. Fresh flowers. A small cafe’. A place to come by and relax. Listen to live music.

Baby steps…

Well, I would love your opinion. The object: to find the commonalities within the four rows. What kinds of things stand out that I could do to help raise money for the master plan now?
I see:

  • craft business: candle making, soap making
  • writing: cookbook or craft book
  • teaching a local craft or food class

    • But, I would like to see what potentials you make from this picture.

    Tinkering with the bank accounts

    I think I have done a couple of great things. I have tinkered with my bank accounts and made a more systematic structure for my PF journey and I have shrunk my teal notebook to a size of 4″x6″. Here are the pros:

    • I can no longer exceed or borrow from my other accounts for my weekly ‘cash allowance’ funds (aka: funds used on groceries, gas, entertainment, and other). Motto: if the funds aren’t there…then you ain’t gettin’ it (my kids will love that one)
    • What ever is in the ‘bill pay’ pot is used exclusively for that reason, to pay bills; snowball; avalanche.
    • The savings… just that savings where it holds my Emergency Fund & Hawaii Fund
    • My teal notebook now is 10 times lighter and fits in any purse

    You say: “How did you do such a thing? Did you use your automatic shrinking machine?”
    I say: “No silly, that is what computers are for!”


    Here is what I did:

    • Bank Account 1: Paycheck is direct deposited. Leave in my weekly cash allowance, transfer 7.9% into Savings Account, tranfer remainding funds into Bank Account 2 for paying bills.
    • Bank Account 2: Bill Pay funds (love the Bill Pay feature!). Few clicks of the keyboard and my bills are sent out every Friday. What ever is left over gets used in next weeks bill pay.
    • Savings Account: Holds my Emergency Fund, Hawaii Fund, and accepts my 7.9% weekly transfer
    • Formated my PDF Bill Pay Pages to print 4 on a page, cut, stacked small pages and did a little arts and crafts by using a manilla folder as a cover, staple all together and now you have a 4″x6″ PF Folder (pic to follow soon). I’m sure with time I could get pretty creative with the cover.

    If you want a PDF Bill Pay Page, email me: [email protected] . Please put “Bill Pay” in the subject line. Unfortunately, google docs does not allow me to publish PDF pages.

    Verdict: I think I just made my life alot easier. My “notebook” and my mind is now lighter, too. I eliminated the need for a spending log, because now that Bank Account 1 is only for my Cash Allowance…when that runs out, it’s gone! 🙂

    Have a great Easter weekend!

    Your Retirement Lifestyle

    I flipped through my KPF magazine and read a great article on, “Your Retirement Lifestyle”. So yesterday, I decided to figure out my Net Worth (see bottom of post) and was thinking about what I am going to need to financially accomplish to meet my retirement lifestyle. Of course, I want the grandest. Don’t we all? 😉

    But, I would settle for mediocre, too. Read the section below. What’s your dream retirement?

    From Kiplinger’s Personal Finance Magazine, February 2009

    Most experts recommend that you replace 75% to 85% of your pre-retirement income in order to meet your needs after you stop working. But the size of your nest egg will dictate how many extras you can afford.

    The snapshots below look at a 65-year-old couple who earned $90,000 a year while working and who need about $70,000 annually in retirement to maintain the same lifestyle. Their expenses were calculated in the 2004 Retirement Income Replacement Ratio Study by Aon Consulting and Georgia State University. We assumed the couple withdraws a conservative 4% of their savings initially, adjusted for inflation each year (add 3%), and then we imagined how they might spend it.

    $500,000 Nest Egg
    Simple Pleasures
    Annual Income: $70,000
    ($30,000 From Social Security);
    $20,000 from a Pension;
    $20,000 from Personal Savings

    Lifestyle: With a cushion of about $20,000 a year, you can put a down payment on a used RV and tour the country. Focus on staying healthy and active because your budget doesn’t include long-term-care-insurance premiums. If you need cash in the future, you could take out a reverse mortgage.

    $1-Million Nest Egg
    Vintage Moments
    Annual Income: $90,000
    ($30,000 From Social Security;
    $20,000 from a Pension;
    $40,000 from Personal Savings)

    Lifestyle: You’ll savor life in your golf-course community and even splurge on an occasional cruise or a trip to Disney World with the grandkids-as long as you paid cash for your new home. If you still have a mortgage, you might have to trim some of the extras., such as annual theater subscriptions or season tickets for your local team. The rate of return on your investments will determine how long your money will last. You might want to use some savings to buy an annuity.

    $2-Million Nest Egg
    Sparkling Future
    Annual Income: $130,000
    ($30,000 from Social Security;
    $20,000 from a Pension;
    $80,000 from Personal Saving)

    Lifestyle: You might want to trade in your big house for two condos – one in a warm-weather destination. You shouldn’t have to worry about running out of money, even with a 50% chance that one of you will live to 92 or beyond. Take advantage of the market downturn to gift more stock to family members while reducing the size of your taxable estate. Pay attention to estate-tax changes and adjust your plans.

    Look at my Net Worth. In the negative. 🙁

     

    But, I am going to fix this right? 🙂

    But, I am wondering what it is going to take to build $1-Million in Assets to satisfy the medicore lifestyle.

    A mortgage, of course. A rental property or two… depending where you live (I’m in the 1/2-million or more state of CA). But, then I need time to build equity in the homes to sell and make the large Personal Savings.

    Or should I keep buying more rental properties to pass to my kids. Hopefully, there will be equity in them. Then the ‘rent’ paid by the tenants can be a passive source of income.

    Thoughts to ramble in my head.

    So tell me, what do you think it will take to reach the Retirement Lifestyle you Want? And don’t forget to place yourself in the fact you still have the everyday lifestyle to still support. I would love to hear some tossed thoughts from your mind.

    I really wonder how all these finance experts expect us to financially fulfill every category (kid’s college, weddings, buying a house, saving for retirement, etc…)! But, I did come to the conclusion that maybe its time to whip out the Monopoly game again and polish my skills.

    My 2009 Personal New Year’s Resolution”Keeping It Simple”

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    There are certain moments in life where you see a different side of things.

    Last night was one of those times. My husband is one of those people who can get along with anyone. He can spark up a conversation with anyone. He was able to get my girlfriend’s husband, who is normally shy & introverted, to completely open up and have fun. I thought about this event last night and realized this is one of the things I really enjoy about my husband. I am the opposite and am not good at sparking up conversations. I start nerdy conversations or what would be considered ‘normally off the wall subjects’ and people tend to give me ‘the eye’ that I am wierd or they cannot relate (for instance on a normally off the wall subject, I am really knowledgeable in tarot & numerology and if you get me started I will go right on into the subject). Then…

    During a Christmas party, my son told me he had so much fun talking with my mom in a deep conversation. And when my son was telling this information to me, I was cherishing that he was connecting with me in our own conversation. This is a rarity, as he is a teenager and we have our issues connecting, much of the time. I enjoyed that my mom can connect with her grandson, like she did, and I would like to learn how to do that with him more.

    Anyhow, you are probably wondering what this has to do with presenting my 2009 personal New Year Resolutions. This year, “Keeping it Simple” is about connecting with life, friend’s, family & community. It’s going to be about finding the true sense of my life. Exploration into my personal realm and how to connect with those I love and cherish. It’s about enjoying the simple things in life like making a warm loaf of bread. Then enjoying it with butter & jam and a hot cup of tea. Or fully decorating one room at a time and seeing, enjoying the fruits of my labor. About crafting with my hands or spending special moments with my family. The ‘simple’ list goes on. And so with out further adoo, here is my 2009 Personal New Year’s Resolution(s):

    Keeping it Simple

    Health

    • Just, Walk More
    • Start eating Healthy again by using The Great (10″) Plate as reference
    • Get outdoors more (ex: find a new trail, time @ the beach, picnic in the park, start gardening again)

    Personal

    • Clean my photo collection up – put photos in albums/frames, delete unnecessary pics from computer, etc…
    • Take a ‘hobby’ class solely for pleasure – thinking cooking or craft or yogapilates class
    • read a historical book(s) for pure interest – thinking Egyptian, the hidden tunnels in France or the Civil War
    • learn to read & understand a full book in a foreign language – a kid’s book count

    Family

    • Learn to understand my husband more. Fully realize those things I truly cherish about him.
    • Learn to connect with my son more – spend time connecting with my son over coffee or a meal. His youth years are numbered and I want to fully enjoy them.
    • Continue nuturing my great relationship with my daughter. Alot of the baking & crafting will be done together, I am sure.

    Cooking

    • Learn to make Shortbread Cookies (to enjoy with my tea), a Loaf of Fresh Bread (for my butter & jam), and Biscotti (cuz I love the stuff)
    • Cook at least one recipe from each untouched cookbooks I’ve bought (probably about 6 cookbooks. Not too many)
    • And possibly, defeat my fear and throw my first dinner party

    Crafting – 65% Handmade gifts 4 a year

    • Complete my 2009 Personal Handmade Gifts (see Calendar) – if the gifts are not constructed in time, then I will purchase remaining Handcrafted gifts from Etsy or Craft Fair (supporting ‘urban’ artists)

    Finances

    • Keep on track with my Snowball Schedule
    • Save 1/2 (or $2500) of the money needed for a family trip to Hawaii (target trip date: Summer 2010)

    Charity

    • Discover ways to donate a bit of time or money to local charities. MoneyMateKate’s Cheap Charityblog is great inspiration to me.

    House

    • Finish decorating the kitchen before moving onto another room
    • Focus on decorating one room in the house at a time

    Rediscover… realign my life. This year is about gaining a deeper understanding and connecting with my life. To slow down and enjoy the full process of things in my life. Alot on my plate? Maybe. If it is too much, then I will revise. It’s not going to be about making it a ‘must to complete’ every task. It’s about taking a step back and relishing in the moment. I just have a feeling this is going to be a good year! And I will be sure to share my resolution efforts with you.

    So, with that… start everyday with a smile and develop your personal footprint with your best effort. 🙂 ~MF

    College or not to College?

    Now don’t get me wrong. I think when you are young, college is an invaluable tool towards gaining a great career. So no, I am not knocking a good college education. I have every intention of my children attending college or a vocational school.

    But, if your are going to college to make lots of money in the future, there is a much simplier way to do accomplish this goal. Time and dedication.

    What to do: Put away $450 a month (you know that typical car payment?) into an interest bearing mutual fund averaging 12 percent (the seventy-year stock market average) from the age 25 to the age of 65 and you will have $5,458,854.45.

    I really wish someone told me this plain and simple advice when I was younger!

    If you give a Mouse a Cookie (my edition)

    • If you give a woman a (personal finance) blog,
      she is going to lay her financial life out there.

    • When she lays out her financial life,
      she’ll find out it is in disarray.

    • When she realizes the extent of her dysfunctional financial life,
      she’ll ask for a tracking sheet.

    • Then she’ll want to update it everyday.

    • When she notices the (large) amount of credit card debt,
      she’ll notice she needs to do some card cutting.

    • So, she’ll probably ask for a pair of scissors.

    • When she’s finished cutting up her credit cards in little, tiny pieces,
      she’ll feel like cleaning the clutter out of another place.

    • She’ll start cleaning the house.

    • She might get carried away and clean every room in the house.

    • She may even completely declutter the closets and cupboards as well!

    • When she’s done, she’ll probably want to bag it all up.

    • She’ll throw it all in her car, take it to the Goodwill and donate the stuff to charity.

    • When she comes home,
      she’ll get excited at the thought, “less is more”.

    • Then she will look at the computer will remind her that…

    • she needs to share the excitement with you.

    • So…

    • She’ll open up her blog editor.

    • And chances are that when she opens up her blog,
      she is going to lay out her financial life (and tell you her excitement)!

    I’ve been a CLEANING MAD WOMAN this weekend! Cleaned out closet and cupboards. My daughter cleared out 3 bags of old toys and clothes. I found a few items in the house that I took pics and am placing for sale at my work’s eBoards (selling mecha at work. Neat, huh?). But the rest of my stuff, I immediately packed in the car and drove it straight to Goodwill. If I didn’t complete that task right away, it would of piled up in our garage. Yes, I did consider a garage sale. But, until I find the time to clear out the remainder of the house…it would have piled up in our garage. It didn’t fit my mentality at that moment. I just wanted to GET RID OF IT! And so, I did. 🙂

    I still have a couple rooms left. The garage needs a serious decluttering, too. But, we are planning on doing a rehaul of the garage in the spring (new workbench, shelves, every box will be sorted and put into new rubbermaid boxes that are clearly labeled, the unused stuff will be sent to Goodwill, etc…). I will be sure to take pics of the before and after. That is going to be such a tiring project. But, so worth it!

    Anyhow, back to clearing the Clutter. I thought it would be cute to mimic my thoughts to the kid’s story, “If You Give a Mouse a Cookie”. My daughter and I love to read it as a bedtime story. Same with, “If you have a Moose a Muffin”. A lot of times I ponder on the moral of a story in relations with money. Or even an event, like gardening (but, I will bring that analogy up in a future post). It’s kind of neat to see how the simple lessons in life can mean so much.

    Perhaps that is why Confucius became so important with his teaching known as “brief aphoristic fragments”. Fragments with big meanings.

    Clear out the clutter ladies. It will immediately lighten your mood! And it may fatten your wallet, too. 🙂

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    The Upside-Down Car Loan – Bleck!


    Cars. Automobiles. Junkers. Bling. Gas Guzzlers. Tinker Toys.

    First thing that comes to mind: “Chaching!”. Car maintenance, cost of the car, cost you pay the dealer. But, I live in California, commute 80 miles a day to work, and have children equates to “I need a car to drive the insane freeways, get to work in 20mph traffic, and will have wheels just incase something happens with the kids”.

    Well, here is my issue. I bought a $14,000 car at 15.9% interest. When I finished paying it off, I will have paid $28,000 for the car. Dreadful, right? I know.

    (Now I remember why I didn’t refinance! Light bulb moment! My car is upside down. I didn’t have the cash to pay the ‘extra’ on the car. So, I would need to refinance the car’s worth and take out a loan for the ‘extra’. Which would equate to the same, if not more, of an annual percentage rate. Hence the fact I didn’t refinance my car. Glad I figured that out!)

    At this time, I owe $11,500 for the car and it is only worth $6,800. I am at a steady rate of owing $5,000 more than the car is worth.

    Every once in a while, I began to ponder on my options of getting out of this upside-down car loan. So, this time I decided to search my options and this is what I found:

    • If you have a lot of car debt and you want to relieve yourself of a butt load of debt very quickly, then get rid of the flashy car(s). If tooling around in a sweet ride is more important than being financially healthy, then you need to seriously re-evaluate your priorities. Some people might not sell their car, because they do owe more than it is worth. However, if you owe $18,500 and you can sell the car for $16,000, go ahead and do it! If you don’t have the cash to cover the $2,500, then go to a local credit union and apply for an unsecured loan to cover the difference. You can get a loan for this range fairly easily. You’ll still have debt, but I’d rather have $2,500 in debt rather than $18,500. *I really don’t want to take out another loan. I will have to ponder this one. It’s pay $22K left remaining or pay $5K. The other problem is that I need money for another car. So, that is requesting another $5-$6K on top of the $5K loan. So, it would be pay $22K or $11K?

    • The best advice for someone who is upside down on an auto loan? Hang on to the car and keep on making payments. Keep the car they have, that’s probably their best financial bet. You’ll want to stick out the old loan until it’s paid for or, at the very least, until the amount you owe is roughly equal to the car’s market value. *The amount will never become roughly equal to the car’s market value. At least that I can see. Since, I’ve had the car it has always remained $5K above.

    • You may want to investigate refinancing your auto loan with a home equity loan, which will likely carry a lower interest rate. *Forget the home equity loan. No more loans! And I don’t need anymore New Debt!

    • If you refinance at a lower interest rate and keep your monthly payments the same, you will pay down the loan principal faster. If you can afford it, speed things up even more by shortening the term of the loan and increasing your monthly payments. *Speed things up… this is a possibility to consider. But, I am not sure I can since I am on a ‘schedule’. However, I could always move this up on the Snowball schedule to pay sooner than later.

    After looking at my options on paper, this is what I figure: First, I don’t know that anyone would consider giving me ‘another’ loan for $11, 000. Nor do I really want to incur any new debt. I do not think at this time, I will be able to pay-off the extra $5, 000 at the same time buying a used car at approx $5,500 (come up with $10K on my own accord while Snowballing debt?!?!).

    It seems my options stands at:

  • Hang onto the car, keep making the payments, and accelerate when possible (not the car, the loan ~ silly)
  • And, Move this up on the Snowball schedule. I really wonder the dent it would make in the interest payments? Will it be significant? I still need to figure that one out.

    • Well, as you can see: Cars can be a nuisance, if you let it. Someone with a Smart Money Mind (according to statistics) would have bought a used car (roughly 2 years old) and paid with Cash.

    So, let this be a hard lesson learned on my behalf. As, this one is my biggest financial blunders. But, now we all are grazing better pastures, right? We will heartily learn from our past mistakes, become debt free, and become Smart Money Minded people rich beyond belief!

    So, what’s is your biggest financial blunder? Or what was your biggest financial blunder? Come on… I know we all have them. :)~

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