January 2018 Online Earnings

Retirement Planning Considerations for All Americans

One thing is sure for those who live to a ripe, old age. These folks are likely to need to slow down at some point and retire. For some, this will be forced upon them by an employer or by illness. Others will have more of a choice as to when they decide to walk away from paid employment. Regardless of when or why retirement comes about, it’s important to adequately prepare for one’s golden years with a bit of retirement planning.

Retirement Planning is a must!
Retirement Planning is a must!

According to one recent study from the Economic Policy Institute, the median retirement savings for all working-age families in the US stands right around $5,000. This would pay for a month or two for a frugal family, but it is well short of what one might need to save up for a comfortable retirement.

Those between 56 and 61 years of age are doing a bit better than the average, but their savings still only reach $17,000 on average. How can you achieve a better retirement? Here are some ways to diversify your finances so that when you hit retirement age, you’ll be able to subsist on something other than dog food. These statistics are some of the reason that I’m saving money in an IRA and building up passive income.

Social Security Should Be Part Of Retirement Planning

Just about every retiree in the US can count on some level of Social Security payment. While the payout to future retirees may be lower than what current retirees can expect, there should be some level of income for those who reach 62 years of age in the future. Social Security should not be your only source of retirement income.

The Social Security Administration recently noted that more than a third of current retirees rely on Social Security for 90 percent of their retirement income. This is scary. This means that you should start thinking about retirement finance as early as possible.

The average social security payment is a little more than $16,400 a year.  This is something, but it’s not going to be enough for most people to live on.

Remember Tax-Advantaged Accounts

The government makes it somewhat easy to save for retirement in addition to Social Security. There are a number of different tax-advantaged accounts that have names with a number in the 400s. These allow people to save for retirement while also cutting down on the amount of federal income taxes that they have to pay. Tax-advantaged accounts should be an important part of any worker’s retirement planning strategy.

The 401k is probably the most familiar of these retirement accounts, but you can also access tax-deferred accounts if you work for nonprofits or governmental agencies. These accounts are  403b and 457b plans. Some employers will actually offer both. The maximum that employees can contribute for each is $18,000 per year.

Use IRAs As Well

You don’t have to have an employer who sponsors a retirement plan for you. It’s also possible  save money each and every year on your own. As of 2017, you can save up to $5,500 each year ($6,500 if you’re above 50 years of age) in an individual retirement account, also known as an IRA.

There are two flavors of IRA accounts. The traditional format allow you to cut your taxable income in the current year, but requires you to pay taxes on the amount you save and any growth in the account when you access the funds. A Roth IRA does not come with the tax deduction in the current year, but it does allow retirees to withdraw contributed funds and any gains and income tax free.

These accounts come with a 10-percent penalty for accessing the funds before age 59 1/2. The penalty does not apply if your employer lets you go after turning 55. This penalty is in addition to the income taxes that you might have to pay.

Why My Retirement Planning Includes Dividend Stocks

I could sit back and plan to use pensions and Social Security payments for my entire retirement income. I could also wind up eating Alpo. That’s why I’m buying stocks to build up a passive income that comes in when I can no longer work or hit an age when I don’t have to work.

Stocks (at least a broad exposure to them) have tended to grow over time. They also throw off dividends and distributions that are real cash that real companies pay. These dividends tend to grow at a rate that exceeds the level of inflation over the long run. Therefore, my purchasing power should not go down on this part of my retirement income. It likely will for pension and Social Security income.

What does your retirement planning look like? What avenues are you using?

Sign Up For Updates

If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  I’m now closing in on 350 followers, and I appreciate the support.

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January 2018 Online Earnings

Passive Dividend Income–August 2017

This site includes affiliate links. Please note that I may be compensated should you sign up for these programs. The month of August is not quite over, but the number of companies paying me passive dividend income is. One of my favorite options for earning passive income is dividends.

Of course, I have to work for the capital to invest, but the dividends come without any additional work on my part. They also provide more capital. I can then invest that additional capital to get even more passive dividend income. It’s a great cycle to say the least.

Passive Dividend Income Builds Up Slowly But Surely
My dividends continue to build slowly, but surely.

I started this blog with the title “Earn Money In Pajamas” because I wanted to earn money from home in my recliner. Dividends are the ultimate option for earning money in pajamas. The companies I own make money 24/7/365. Most of them pay me on a quarterly basis from the profits that they make. That’s an awesome concept that I really dig.

July was a low month when it came to dividend income, but August was much better. Two of my biggest payers provide me with income in the second month of each quarter. Without making you wait any longer, here it is:

My Passive Dividend Income For August 2017

Traditional IRA

AT & T (T)                                                                                  $24.50
Realty Income Corp. (O)                                                       $5.29
Omega Healthcare Investors (OHI)                              $32.00


JP Morgan Equity Income R5 (OIERX)                           $3.41

TOTAL DIVIDENDS FOR August 2017:                          $65.20

This was just short of my record divided income in one month, which was set last December. This $65.20 was an increase of more than $21 in just three short months. This effectively is a whole hour of freedom when compared with my income from May. As I’ve noted before, I figure that I need $20 an hour to replace the benefit of an hour of my working income.

My first dividend report came exactly two years ago. In August 2015, I earned a whopping $0.64. I just made more than 100 times that two years later. While $65 and some change is not a huge sum, it’s way bigger than literally just some change. In 2015, my passive dividend income couldn’t have even paid for a pack of gum. Now I could eat out two or three times, depending on where I decide to eat.

My dividend income for August now brings my annual total up to $287.17, which is more than I earned all of last year. And I still have four months to go. I’ve updated my monthly passive dividend income page to reflect this new income.

Passive Dividend Income And Freedom

One of the things that I like the best about dividend income is the freedom that it could eventually provide. Should I ever get to the point that I could live off of dividend income, I’d officially have financial independence. I’m a long way away from that, but it’s a goal that I can shoot for.

With all of my purchases from August added in, my passive dividend income for the next 12 months should come in at $461.82. This would provide me with slightly more than 23 hours of freedom on an annual basis, which is slightly less than 2 hours a month.

This $461.82 should come in without any additional purchases and without any dividend raises. This is a very unlikely scenario. A dividend cut would actually be more likely even though I have companies that I believe will be around and making money for the long haul.

My dividend income for the month of August 2016 was only $13.29; therefore, I increased that total by more than $50 in just a year. While is not likely to continue over the long haul, it’s setting the foundation for where 10 percent increases will be more than the $50 year-over-year increase I just experienced. That’s pretty exciting to think about.

How did you passive dividend income measure up in August? Let me know in the comments.

If you’d like to keep up with my progress, be sure to sign up for updates in the email signup box near the top of the page or via the popup that asks you to sign up. You can also follow me on Twitter.

Disclaimer: I am not a professional financial advisor. I intend this information for informational and educational purposes only. Perform due diligence before investing in any equities. See my disclosures page for more information. I’m long O, T, OHI and OIERX.


January 2018 Online Earnings

5 Reasons Why You Need An Emergency Fund

This site uses affiliate links. I may be compensated should you sign up with one of these links. I appreciate any support that you might provide in this manner. 

5 reasons why you need an emergency fund
Photo via Pixabay, CCO, edited by author.


You need an emergency fund. A recent study showed that a majority of Americans,  57 percent in fact, cannot handle an unexpected $500 expense. That’s a pretty sobering statistic.

This means that nearly 3 in 5 Americans lack a savings account with at least $500 in it. If you’ve already saved this much, you’re actually ahead of the masses.

Keep in mind that the median household income is about $53,000 and the 60th percentile for income is around$66,500. This means that people who earn more than $60,000 quite possibly have less than $500 easily accessible for an emergency.

Reason #1 Why You Need an Emergency Fund

An emergency fund can take care of unexpected expenses.

Unexpected expenses happen. No one really likes a busted radiator or a leaky pipe. However, these problems are likely to happen at some point in our lives. If you’ve not had one of these issues arise yet, you’re likely to experience them in the near future.

The problem with unexpected expenses is the fact that they’re…well…unexpected. You can’t figure on your sewer pipe collapsing today. It’s actually happened to me, and since it was outside the walls of my house, insurance didn’t take care of most of the expense. Had I not had some money stashed away, this could have been an even bigger problem.

If you have an emergency fund, you’ll be more likely to be able to handle these problems when they arise. Many financial experts, like Dave Ramsey recommend that you start with an emergency fund of $500 to $1,000.

Reason #2 Why You Need An Emergency Fund

An emergency fund can keep you out of debt.

I hate debt. Unfortunately, I’ve been in debt to some degree or another for a while. Of course, most of this is related to purchasing a house. I don’t want to go into debt for everyday purchases like food.

When the radiator busts, you need to fix it or have your car blow up. You probably need a car to get to work. You also need to eat. The physical necessity of food does not go away just because your refrigerator decides to die.

If you have $500 or $1,000 saved up for emergencies, you don’t have to go into debt to get a serviceable refrigerator or fix a radiator while also eating. Which logically brings us to the third reason why you need an emergency fund.

Reason #3 Why You Need An Emergency Fund

An emergency fund can minimize stress.

Have you been in a situation where you had a financial need and a lack of cash to pay for it? I know I have. This typically leads to debt. If you look up to reason #2 above, you’ll see that I HATE debt. I want it gone.

If I can easily take care of a $500 or $1,000 expense with some funds that I’ve set aside t o deal with the unexpected, I’ll probably have less stress in my life. The reasons for this are related to the stress that financial catastrophes bring.

People who are living paycheck-to-paycheck are more likely to have marital problems. They are more likely to have short tempers with their kids.

If you have an emergency fund built up, the little unexpected expense can roll off you like water off a duck’s back.

Reason #4 Why You Need An Emergency Fund

An emergency fund can help you through a job loss.

The fourth reason why you need an emergency fund is the fact that it can help you through a job loss. Dave Ramsey calls the $1,000 emergency fund a baby emergency fund.

After you’ve built up the $1,000 emergency fund, most financial gurus recommend that you save up between 3 and 6 months of expenses. Why? Job losses happen, and they’re one of the biggest financial catastrophes that most people can experience.

Usually, some unemployment insurance will kick in, but it will be far from enough to meet your expenses in most instances. This is where the 3- or 6-month e-fund can bridge the gap between jobs, which will help with reason 3 above–cutting down on stress!

I would point out that there is an outlier when it comes to amount you need. Suze Orman actually recommends having 8 months of expenses squirreled away in an emergency fund. Regardless of whether you stick with 3 months or 6 months or 8 months, if you have a nice emergency fund set up and you lose your job, you’ll be happy to have the money!

Reason #5 Why You Need An Emergency Fund

An emergency fund can help you build up financial confidence!

I can remember the first time I went golfing. Hitting the links used to be one of my favorite hobbies. Today, I rarely play, but the first time I went to hit the ball, I completely missed it! When I finally hit the ball, I actually hit what is referred to as a worm burner. The ball scooted a few yards along the ground before settling in the rough. Not good.

On that first time out, however, I was able to hit one really good shot. It was enough to get me to come back. I played quite a bit in college and into my mid-20s, and I got pretty good and got to where I could usually beat all of my friends. I even broke into the 70s for a couple of rounds.

So…I say that to say this–a little bit of success can usually lead to enough confidence to lead to bigger successes. Once you’ve saved up $500 for an emergency, you now know how to succeed on a small level.

You can then use that knowledge to build up the next $500 in savings. You can then build up to a month, then two, and so on. If you never get started saving toward an emergency fund, you may never build the discipline and the confidence to achieve financial success, much less financial freedom.

If You’re Ready To Start An Emergency Fund

Looking to start an emergency fund? It’s probably a good idea to start a budget (AKA a spending plan). It’s also a good idea to start looking for additional ways to make some money.

If you’re looking to build up some additional income, you might want to check out these ways to make money online without spending a penny. Even $20 a month could add up to nearly $250 a year. This could go a long way toward building your up your e-fund.

Do you have any other reasons why you might want an emergency fund? Let me know in the comments!

If you’d like to follow my progress each month, be sure to go to the top of the page and sign up for updates. You can also follow me on Twitter.  I’m now above 300 followers, and I’d like to get more than 400 by the end of summer. You can help!

Also, if you could share this latest update below via Twitter, Facebook, or any other social media platform, it would be much appreciated. I want to inspire others to improve their finances and show them some easy ways that they can do so. Just click on the “Share This” link at the bottom of this post!

Disclaimer: This site has affiliate links. If you decide to sign up with one of these affiliate links, I may be compensated. I appreciate any support you might provide.

January 2018 Online Earnings

5 Tips to Make Your First Investments with Low Capital

The following post is a guest contribution from Andrew Altman.

Is it your first time to invest? Contrary to what most people think, you do not necessarily need to have a huge amount of money in order to get started with your first investment. Even successful investors who are now raking millions of dollars in their investments started small with low capital too.

But since it is your first time investing, it’s important that you know where to put your money.

Going for low risk investments is a good place to start as a first time investor. You cannot just invest without having ample knowledge on the kind of assets you want to make and without calculating the risks.

For first-time investors with low capital, here are five investment tips that you can follow.

Look at the Fees and Minimums To Preserve Low Capital

Just about every type of investment option comes with fees and minimum balances. And if you are working on a tight budget, you have to take these fees into consideration to get the most of the amount you want to invest.

Search for funds or brokerages that do not require you to have a high initial balance. Ideally, you should find one that has a $0 minimum initial balance requirement such as Robinhood. When you have finally researched the different options, you should watch out for the ongoing fees that can siphon off some of your already low capital.

Get Certificates of Deposit

One of the best low-risk investments is a certificate of deposit. With this type of certificate, you can actually deposit your money for a certain period of time to a particular financial institution. In exchange, your money will earn interest during the specific time frame.

What is nice with this kind of investment option is that no matter what happens to the interest rates, the rate is fixed. There is a locked in period, and if you wish to withdraw the money, you will incur penalties.

How about the interest that you can earn? It actually depends on the interest rates in the county when you initially make the deposit.

Even those with low capital can start to grow their wealth over time.
Even those with low capital can start to grow their wealth over time.


Invest in Money Market Funds

Another great investment option for those with low capital is to invest your money in money market funds. This is basically a mutual fund created with a purpose of not losing the value of any investment.

The goal of money market funds is to have a net asset value amounting to $1 per share. If you are willing to take a risk, this investment option is still relatively secure.

Invest in Treasury Inflation Protected Securities

Even if you have low capital, and it’s your first time to invest, you can invest in TIPS or treasury inflation protected securities. They are considered to be low risk investments, and depending on your choice, you can choose among the different kinds of bond investment. The one that offers the lowest risk is the Treasury Inflation Protection.

There are two different methods of growth for this type of investment. The first one comes with a fixed interest rate which means that it doesn’t change for a certain period of time.

The other one comes with a built-in inflation protection which is guaranteed by the government. In deciding to invest with TIPS, you have to option to buy them individually or invest in mutual funds that own TIPS.

Have an IRA

Having an individual IRA or Individual Retirement Account is a must-have investment for everyone. As early as possible, it is important that you prepare for your retirement. There are two types of IRA options. The first is the Traditional IRA, which is a tax-deferred vehicle.

Unlike the traditional IRAS, the money that goes into a Roth IRA has been taxed on the front end. This only means that you have to shoulder low tax costs, and when you finally retire and withdraw the funds, you never have to worry about the tax.

In preparing for the future and establishing your financial wealth, you have to start with a decision to invest your money. It really doesn’t require you to have huge amounts of capital to start off. As you study more about the different investment options and as you take the time, you can definitely achieve your financial goals.

Most of the time, it can be tempting to just put your money into a savings account. But if you want it to grow, you should find ways as to where you can invest your money and get the highest possible returns.


Andrew Altman is the editor-in-chief of SlickBucks.com which is a site dedicated to helping people learn more about the crazy world of investing. From reviews to informative articles, SlickBucks aspires to help people achieve the type of wealth they hope to achieve.
January 2018 Online Earnings

Loyal3 Is Shutting Down

Prioritize Your Finances to wind up with a suitcase of money
You won’t be maximizing your money with Loyal3 any more.

Back in 2015, I learned about a relatively new investing platform that allowed users to invest in increments as low as $10 per purchase. Additionally, you could buy partial shares, which made the opportunity even more attractive. This platform was Loyal3.  This actually got me to start investing. Unfortunately, after having used this online brokerage for about two years, I got an email that Loyal3 is shutting down.

Loyal3 Is Shutting Down

This email that I received from the company was a bit of a surprise, but not too big of one. The company did not charge any fees, claiming to make money from marketing the stock of the 60 or so companies that it provided for investors as well as the interest from holding onto cash that was not yet invested in an interest-bearing money market fund.

Loyal3 is shutting down.
Loyal3 is shutting down.

This did not seem like the most sustainable of business models, but because Loyal3 was a member of SIPC, I figured at the time that my investments were safe. I enjoyed the chance to build my investment holdings in small increments over time.

Many in the investing community advocate buying stock in increments of $1,000 or more because of fees that hurt long-term returns. This can make it difficult for small-time investors to begin the process of investing. It can also make diversification a very slow process. With Loyal3, I had as many as eight holdings at one time, built up with purchases that ranged between $10 and $200 for any single transaction.

This was a pretty cool deal.

But now it’s done.

What To Do Now?

Now that Loyal3 is shutting down, what is the small-time investor to do? There are some investing options that might work. RobinHood is one that comes to mind. I’ve not used this platform, but I’ve read about it. RobinHood requires investors to buy full shares, which makes the minimum investment a bit higher.

The email from Loyal3 indicated that those who choose to leave their holdings alone would automatically have them transferred to a new brokerage called FolioFirst. This new brokerage, according to the email, is just for Loyal3 clients. The offerings for FolioFirst accounts will grow to around 200 companies and funds, which is good. Then comes the bad news.

There are still free trades( at least up to 2,000 a month), but the new outfit is going to start charging a $5 monthly fee per account. The minimum investment will now go up to $25 from $10. $5 a month might not sound like much, but it would add up to $60 a year.

Let’s say that a new investor has $50 a month to invest. This fee would mean that the investor would go from paying $0 with Loyal3 to paying $60 with the new FolioFirst platform. That’s a fee that would take up 10 percent of the total investments for the first year. Admittedly, the fee would go down over time as more money gets invested, but it would slow down the growth process quite a bit.

Investors with Loyal3 also have the option of instigating an account transfer to the brokerage of their choice. Option 3 involves selling all shares and then cashing them out.

What Am I Doing?

After getting the email that Loyal3 is shutting down, I decided that I’d opt for the third option. My account has some modest gains. I figured that my $100 in gains would cost me about $20 in taxes at most. Not too bad.

Furthermore, I also took into account the fact that I’m investing for dividend income. With the current size of my account, I’d have to pay about 4 percent of its value in account fees over the next year. That’s more than the roughly 3 percent yield that I’m earning on my holdings.

I’m planning to take the proceeds and invest them into my IRA account with TradeKing. This will provide a positive tax effect because I’ll be able to cut my current-year income by the amount I invest and then save 15 percent of the investment in deferred taxes.

I am planning to make one major purchase or two smaller purchases with the proceeds. This will not have me as diversified as I was, but it will cost me a max of $9.90 in trading fees, which is much less than the $60 I’d lose when looking at the monthly fees that FolioFirst would charge.

I can also buy REITs, telecoms, and utilities that pay higher dividend yields, so my overall dividend income for the next 12 months will probably go up with the purchases.


Loyal3 is shutting down. This is sad in one regard. Small-time investors who are getting started will have one less option when it comes to making small purchases and not having to pay major fees.

I’m cashing out and cutting my current-year taxes by putting the proceeds into a traditional IRA. I should also see a bit of a bump in my annual dividend income as a result.

January 2018 Online Earnings

How To Prioritize Your Finances

The following contribution comes to us from Dave Chen.

How to Prioritize Your Finances

Your finances are a crucial part of your life. Without them, you would not have a place to live, you would not be able to afford to drive your vehicle, and so on. Your finances need to be properly managed to ensure that you do not wind up in a huge debt hole without a way to climb out. Below, we will provide you with some tips and steps to prioritize your finances.

Of course, you want to make sure that you ALWAYS pay your obligations first because you need a place to live, and sacrificing this to put money into your savings account does not make much sense. Okay, let’s take a look at the tips now.

Prioritize Your Finances to wind up with a suitcase of money
Prioritize your finances, and you could wind up with a suitcase of money. Image via Pixabay.

1. Pay Off High-interest Debt

The first priority is for you to pay down your highest interest debt and also any dangerous debt that you may have. You need to tackle these first  because they will hurt you and stick with you if you do not. Many people do not know what debts to consider as dangerous debt. These debts include those with high interest rates, tax liens, debts in collection, and so on.

Pay-day loans, credit cards, high-interest car loans, and high-interest personal loans need to be paid off immediately. The longer you wait to pay them off, the worse off you will be. You will accumulate interest on this debt at a rapid rate, and the sooner you pay it off, the better – you will save thousands.

Pay off credit card debt to get finances in order
Pay off high-interest debt to get your finances in order. Image via Pixabay.

2. Save For Retirement

You want to retire at some point, right? If so, you need to think about your future and start to save for retirement. The longer you wait, the more money you will need to put away. For example, if you do not start saving for retirement until you are 40, you may have to put away half of your salary to be able to have a nice nest egg when you retire.

Your retirement account will ultimately determine whether or not you will live in poverty when you retire. The less you save, the more government help you will need, and the longer you will have to work.

To help you determine how much money you should save, if you were to save $500 per month for a period of 20 years and earn 10 percent on the money, you would save about $380,000 for retirement.

3. Create an Emergency Fund

What would you do right now if the roof on your home caved in? What about if your vehicle’s engine blew? These are things that you need to think about and consider. Many people do not have any type of emergency fund set up, and this means that they have to forgo some of the things they need because of it.

An emergency fund will cover three to six months of all of your living expenses in case the worst situation ever happens. For many people, this means more than $10,000. You should start putting extra money into this account and leave it there. Even if you save one or two percent of your income yearly, you could easily reach a target of $500 per year or so.

4. Go Over Your Expenses

If you already live paycheck to paycheck, the only way that you will be able to have room to save would be to sit down and think about your expenses and then look at them from an unbiased view. If you have a cable bill at $200 and your car insurance is another $200, you may want to cut back on the cable and talk to your agent about a better rate.

You need to explore areas where you may be paying too much and then try to lower the cost. In addition, you should eliminate any expenses that you do not need. On top of this, there are ways to make extra money that can help handle these extra expenses.

Start to Prioritize Your Finances Today

If you are ready to get your financial future into focus, now is the time to do it. We have helped you above by letting you know what we think you need to prioritize first when it comes to your finances. You should focus on the highest interest loans you have because these loans can throw you into a crazy whirlwind of debt, especially if you only make the minimum monthly payments each month. Quite often, this may be private student loans taken out to pay for college. Even more often, these rates can be much higher than federal options.

From there, you should then focus on your retirement, your savings account, and setting goals for yourself. Now is the time for you get a head start and get on the right financial track by starting to prioritize your finances.

— Dave Chen is young professional working in the engineering field. On the side, he skiing, hiking, and writing about all things personal finance at MillenialPersonalFinance.com.

January 2018 Online Earnings

Top 8 Ideas To Stay On Top Of Personal Finances In 2017

The following was contributed by Amy Nickson:

Many people ignore their personal financial health because they know fixing the problem is not an easy task. However, many people don’t even know where to start. Most of them ignore the idea of staying top of their personal finances, but instead of ignoring, you must take care of your personal finances to see good results in the coming year.

If you’re not sure where to start, this article may help you. Read carefully:

1. Keep Your Household Budget in Order

Once you create a budget system according to your financial ability, you can manage emergencies, save money for the future, and make some additional expenditures. A budget also teaches you how to overcome bad financial habits as well. Once you start following a suitable budget, you’ll be able to know the amount you spend and the amount you save. Thus, you can seek to save more after meeting your daily necessities.

Be Sure to Balance Your Budget
Be sure to balance your budget

2. Take Advantage of Free Budgeting Tools and Apps to Create Your Budget

Budgeting is not as scary as many people think. Many budgeting tools and apps are available online. If budgeting sounds dull, then install a free budgeting app on your smartphone and start using it. Soon you can see the positive results in your personal financial health.

3. Save More Money Than the Previous Year

Saving money is the only way to stay top of your finances throughout the year. If you have saved 15% of your income as of now, then try to increase your savings percentage in this year. Set aside 20% of your monthly income to save more than before. Don’t use the savings account for day to day purchases. Allow the money to grow and keep saving for a longer time. Thus, you will be able to build up a solid financial cushion.

4. Manage Your Debts to Stay on Top of Your Personal Finances

If you are carrying high-interest credit card debts, then you can consider a balance transfer to a credit card that offers low-interest rates. Try to find out a credit card that doesn’t charge a balance transfer fee. Don’t miss any monthly payment to avoid charges.

You may not be able to pay off all of your personal debts (credit cards debts, student loan debts) within few months, but you should start making extra payments towards your debts to pay them off as early as you can. Save money every month to make some extra payments toward your highest-interest debts.

For example,

If you’re planning a splurge of $100 this weekend, then use the money to make extra debt payments instead of splurging on something you don’t need.

This way strategy will be more beneficial in the long run by allowing you to be a debt-free person.

5. Start Funding a Retirement Account

If you don’t have a retirement fund yet, then open an account and start funding. If your workplace has a 401 (k) plan or an IRA, then take advantage of them to get the tax benefit as well. Remember, there is no particular time or age to invest money for your retirement years. The earlier you think about your retirement, the sooner you secure your financial future. Try to put money into a retirement account as soon as possible to take advantage of compounding.

6. Ask for a Raise

If you’re working hard and performing well in your workplace, then this is the right time to ask for a raise. Approach to your employer to attempt to get paid according to your capability. You can also consider a side hustle to boost your income. Go online to get a sample of ideas.

7. Financial Trouble? Seek Professional Help

Knowing the exact solution for each personal finance problem is not possible for most people. To get proper guidance and solutions, seek professional help. A financial advisor can help suggest the right option that helps you make the right decision.

For example:

Consider professional help before investing money, making a will, and taking out a loan.

8. Utilize the Internet and Subscribe to Coupons

Couponing is one of the most effective ways to save money in your daily life. It helps to save money on groceries and other household expenses. If you have a smartphone and an Internet connection, then you can sign up with many manufacturers’ websites to find branded coupons. Many companies offer coupons on a regular basis on the Internet so you must keep eyes open to grab some great deals on regular purchases.

Finally, setting goals for personal finances is important, but set realistic and achievable goals. Don’t imagine yourself as a multimillionaire at the beginning of your personal financial career. There is no such shortcut to becoming rich. You must earn money and save money with determination. Research well and read more to invest your money for the best return. Thus, you can ensure your personal financial health in future.

Author’s Bio: Amy Nickson is a web enthusiast. She works for Oak View Law Group, a leading consumer and bankruptcy law firm based in CA and operational across US. She loves social media, as it gives her endless opportunities to reach out to a larger audience in a more unbiased way.

Image Credit: stevepb via pixabay

January 2018 Online Earnings

Book Review–Your Money Map

A few months ago, I visited a Christian bookstore and I decided to check out the personal finance section. Some of the books appeared to be from health and wealth guys who encourage you to “sow some seed” to benefit their ministries. I’m not into that by any stretch. I then happened upon a book titled Your Money Map: A Proven 7-Step Guide to True Financial Freedom. The author of the book was Howard Dayton, and it was published in 2006. Moody Publishers published this book, and it’s pretty far removed from the health and wealth scene. I then decided to pick up the book to see if it was the same as Dave Ramsey’s Total Money Makeover, which has seven baby steps. It did not.

Rather than just giving seven “baby steps” that are singular in purpose and that readers must follow in order religiously, this book shows more of a lifetime journey that a person might take. Both Ramsey and Dayton argue that financial freedom is a process that could take quite a bit of time.

Your Money Map Is Christian In Outlook

Your Money Map is distinctively Christian in its outlook. Therefore, those who have a more secular viewpoint might have more interest in other personal finance books. This book follows a couple that Dayton counseled regarding personal finance and the advice that he gave them through each step of the way.

The book starts out by arguing that all wealth comes as a stewardship from God. Therefore, it’s important to ensure that we are effective stewards with the money that God entrusts with. Dayton argues that one of the first steps that anyone should take when getting their personal finances in order is to begin charitable giving toward religious purposes. This is one of the areas that nonreligious people might disagree with Dayton, but starting to give is part of Destination 1 on the money map that’s included in the chapters of the book, as well as the schematic money map at the very end of the book.

Step 1

Other goals involved in reaching Destination 1 include the obligatory budget and $1,000 emergency fund. These two steps seem to be pretty standard among the community of personal finance gurus. Both are pretty good ideas. Budgeting ensures that you can avoid spending more than you bring in. If you spend more than your income each month, you’ll wind up with a negative net worth if you’re not already there.

If you spend less on a monthly basis, you’ll build up a solid net worth over time. It’s pretty simple, actually. Also, stashing $1,000 allows you to pay for any unexpected expenses that might come up–like the busted radiator I had to replace a couple of months ago. Definitely not cool, but necessary. Learning to handle money God’s way is a little outside the realm of personal finance gurus who are not religious in nature.

Your Money Map

Steps 2 and 3 on the money map are where Dayton is a bit different than some of the other personal finance books and websites that I’ve read. Most of these other books emphasize paying off debt at the expense of savings. Your Money Map argues that people should build up a larger emergency fund (for one, and then three, months of expenses) while simultaneously paying down credit card debt and all other consumer debts. This blended approach is refreshing to me, because cash flow is important. Having more money available at any given time can help people avoid building up additional debt should an unexpected job loss or other catastrophe occur.

Earning money in pajamas can help you achieve financial freedom.

A possible destination after reaching Step 7on Your Money Map.

Step 4 relates to saving up funds for major outlays like a home or retirement (childrens’ education is optional here). Dayton recommends saving up a substantial down payment for a home so that a downturn in the local housing market does not get a buyer upside-down on his or her mortgage. This is generally sound advice (although I didn’t follow it personally because renting in the markets I’ve lived in has been more expensive than buying–I took advantage of loans with low down payment requirements).

Getting Closer To Financial Independence

Steps 5 and 6 deal with actually buying the house, paying it off early, and investing additional money outside of retirement accounts, working toward the multiple goals at the same time. Step 7 is financial freedom. The goal of financial freedom is retiring and actually having something to leave as a legacy, be it through an inheritance to your children or some nice gifts to organizations that you feel strongly about. Retirement also means that you have more time to give to endeavors that you feel really, really passionately about.

The story of Matt Mitchell, the car salesman that Dayton counsels, appears throughout the book. Dayton himself has basically donated his time as a personal finance coach for decades, so he discusses how he walked his pupil through the steps toward financial freedom. I liked how this book showed that you can focus upon more than one thing at a time because compounding is an important and powerful aspect of investing. This is actually not as common in personal finance advice as you might think. Those who start with just saving a few bucks regularly early in life will actually be better off than those who save up more of their income later in life.

Some Jobs Aren’t Worth It

I also liked the argument for having a single earner for many couples. After paying for child care and additional clothing, food, and transportation expenses, Dayton shows how one working wife earned an effective wage of $0.64 per hour on $18,000 of gross earnings over the course of a year. Many people don’t look at it this way, but it’s the rationale we used when my wife decided to stay at home with the kids. Low real earnings like this are also all too common. Overall, Your Money Map did a good job of showing how disciplined people can achieve financial independence over time.  If you’d like to check out this book and read it for yourself, I’d encourage you to scroll up and click the link near the top of the page

Disclaimer: If you decide to sign up for various programs or buy products from my referral links, I may receive compensation. You can get the same great benefits from just going to the websites themselves, but I definitely appreciate your support. It’s one of the ways I’m able to earn money in pajamas while helping others do the same. 

January 2018 Online Earnings

Taking the Long View of Personal Finance

Do you want the bad news first, or would you rather have the good news? I’ll start with the bad news. Most people in the United States live for today. The average American is deep in debt, and this debt can really lead to many difficulties in life.  A person’s savings rate is the leading indicator for future wealth. This indicator reached an all-time high of 17 percent of income back in 1975, but by July 2005, the rate was at an all-time low of less than 2 percent. Today, the savings rate for the average American has reached 5.7 percent, which is three times what it was just a decade ago.  The good news is that there are some pretty easy steps to take to improve your personal savings rate and shore up your finances.

The reason for this increase is probably related to what happened between 2005 and today–the Great Recession.  People were shaken by the sudden crash of the economy. While a savings rate of between 5 and 10 percent might seem impressive given where it’s come from just a few years ago, it’s still not all that great. The popular site Mr. Money Mustache has a pretty amazing article on “The Shockingly Simple Math Behind Early Retirement” that looks at how the savings rate can determine how long a person has to work.  A person who saves 5 percent a year will have to work about 66 years to be able to retire comfortably. Fewer teenagers are working today, so this means that a 20-something who starts to work today will need to work until about age 90 before they can let someone else take over their job.

This math presupposes that there is no pension waiting on a worker and that the doomsday scenarios of Social Security that claim it will pay nothing at sometime in the not-too-distant future will come frighteningly to fruition.  This means that the savings rate of American workers is woefully short of what it needs to be. Even the record savings rate in the post-1959 world that was noted above will require quite a bit of work. A 17 percent savings rate means that a worker can retire right around the “traditional” retirement age after working approximately 40 years, again assuming that there is no pension or Social Security payment coming. Needless to say, this is not a terribly comforting situation.

These numbers are why it’s important to take a long view when it comes to personal finance.  Those who fail to plan actually plan to fail, so getting some goals together is a good idea. I don’t know about you, but having to work until 90 would mean that I’d probably be dead before I can afford to quit working on a full-time basis.  That does not seem like a terribly enjoyable path to take. The time to start planning for retirement was 10 years ago. However, if you didn’t put in the effort to plan 10 years ago, the second best time is now.

This is where earning money in pajamas proves to be a great idea. If your main gig barely pays the bills, there are exactly two ways to save money (outside of having a long, lost extremely rich uncle give you a massive inheritance or hitting the lottery, which is a losing proposition because the house always has to win). These first of these two realistic methods is cutting expenses. With the number of high-paying jobs not being what most Americans might wish, keeping expenses down is definitely an important step to take to ensure that you can build wealth over time.

The second option for saving more money involves finding other avenues to make money. With the advent of the Interwebs, the opportunities for making more money are quite extensive. Here are 11 such options that I’ve shared before for making extra moolah online .  Few jobs require employees to work every waking hour, so most workers will have several hours each week to earn more money. The best part about utilizing the Internet means of making money is that you don’t have to leave the house. You can literally sit around in your pajamas on a Saturday afternoon and make a bit of money while watching football. If you have a connection to the Internet, there is absolutely no reason why you shouldn’t attempt to make more money. The link above has some great ways that I’ve been able to make money. I’ve used a few to make more than $1,000.

It’s important to take the long view of personal finance when thinking about making money online because it’s easy to get discouraged. A few hundred dollars a year might not seem like much, but your future self will appreciate that your current self decided to save some money for the future. I’ve noted before that saving just a dollar a day between the ages of 16 and the “normal” retirement age of 65 will yield an account of around $286,000 if an 8 percent return can be realized.  The power of a simple dollar can be quite amazing.  If you can raise this amount to $2 a day in additional income that you can save, you’ll have around half a million by retirement. Only $4 a day will lead to a cool million by 65 if you can start at 16. Discipline is important through all of this, and it’s important to stay in the market.

Those who are able to engage in both of the strategies listed above can super-charge their trek toward retirement. Cutting $4 in spending each day and then making just $4 extra per day and then saving the $8 would lead to nearly $3000 in savings after just a year and nearly $2 million over a 50-year period if you were able to earn an 8-percent return. Those who do not have 50 years to play with can still make some major progress with just a few small tweaks. Even if you’re only looking at 20 years until needing the money, you’ll still be way ahead of what you would have should you never have started to begin with. The time to start making some money in pajamas is now. The sooner you do, the sooner you can start saving and taking advantage of the compounding process.  Thinking of the long terms is the only way to make this happen, however, so be sure to get started today.

Disclaimer: I can receive compensation if you sign up for some of the programs that I’ve reviewed using one of my referral links. I definitely appreciate the support, but in the interest of full disclosure, you can still get the the same benefits without using my link. 

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