"beginner's guide to investing"

Beginner’s guide to investing

Do you want to start an investment portfolio but aren’t sure where to start? We are here to help you! In this beginner’s guide to investing, you will learn what type of plan to use, what the best investments for beginners are, and how to how to actually invest the money. After all, what are Partners for?

Investment Plans/Accounts

The first thing you need to learn in the Beginner’s Guide to investing is what type of plan or account you should be investing in. The three best account types for beginners are employee sponsored plans, individual retirement accounts, and brokerage accounts.

Employee Sponsored Plan

If your employer offers any type of match, then the first thing you absolutely need to invest in is your employee sponsored plan. Many employers will offer matching contributions of up to 5%!  That’s like getting a 5% pay raise!  It’s basically free money, but you only get it if you contribute. So, if you work somewhere that offers the match, take it!  Start there!

Individual Retirement Accounts

Regardless of whether your employer offers a plan or not, you should be putting money away for retirement. Luckily, most investment firms offer Individual Retirement Accounts (IRAs) to let you do that! There are two types of IRA, the traditional one (usually just referred to as IRA) and the ROTH IRA.

There are two major differences between the IRAs, and whichever you chose will depend upon your individual situation. The traditional IRA is a tax deferred account. That means you can deduct all of the money you put into it from your taxes each year. It also means that you will be penalized for taking out any money before you hit 59 and a half years old. When you reach retirement age and start withdrawing, you will have to pay taxes on your withdrawals as if they are income. If you need the money before you reach the minimum age, you will have to pay the taxes and an early withdrawal penalty. You definitely want to avoid that!

The ROTH IRA is different in both of those regards. You cannot deduct your contributions from your taxes (because you are investing post tax dollars), but you aren’t penalized for taking any of your initial investment out (you are penalized for taking out any profits). You also won’t have to pay taxes on anything that you withdraw when you reach retirement age (as long as you’ve had the account for more than 5 years. There are lots of withdrawal rules for the ROTH IRA, and you can read about them all here

The main thing you should take into account when deciding upon which IRA type you want is your tax strategy. Do you want to pay the taxes now or do you want to pay them later?

IRA problems

The biggest issue with both types of IRA is the contribution limit. You can only put $5500 into any type of IRA account per year if you are under age 50, and only $6500 per year if you are 50 or over. If you want to save more than that (and you should!) you need a different type of account.

 

Non-retirement Brokerage accounts

The last main account type for investing is a brokerage account. These are great because not all of our investments are meant for retirement. You may be on a path to financial independence, so you may need to start withdrawing money from your investments before you get to the traditional retirement age. There are plenty of companies that offer non-retirement brokerage accounts. Some banks even offer them as well. Vanguard is my favorite, but there’s also Fidelity, Merril-Lynch, Edward Jones, and a whole lot of other investment management companies (you can also open IRAs with these companies, if you want all of your investments in one place). 

Types of Investments

Ok, so you’ve decided upon what type of account you need to open. The next step in our beginner’s guide to investing is to decide which type of investment is best! There are basically only three different types of investments that I would recommend to beginners. These are: index funds, target date funds, and mutual funds.

 Need a ledger to track your investments? Check out this accounting book on Amazon* 

Index funds

Index funds are my favorite type of investment. They are low cost funds that track certain market sectors. They usually aren’t actively managed, so whatever companies are tracked in the fund are the ones that you are invested in. One of the most well-known index funds is the S&P 500,  an index fund which tracks about 500 of the biggest companies in the US.

Related:  Which Vanguard total market fund should you pick?

My favorite types of index funds are full market index funds, because they basically track the entire stock market. I highly recommend Vanguard’s total market fund. It is well diversified and has a super low expense ratio. That means that it won’t tank if only a certain sector of the market tanks and it doesn’t cost a lot to maintain. Additionally, it is very very rare that a total market fund will completely go out of business. The markets may have a correction and go down, but as long as you stay invested you probably won’t lose money over time. Remember losses aren’t real until you cash out.

Target Date Funds

Target date funds are index funds that automatically adjust the amount of risk they are exposed to as the fund holders get closer to retirement. This means that they will slowly sell off equities and move into bonds as the target date gets closer.

 My work has 6 different options for target date funds: 2025, 2030, 2035, 2040, 2045, and 2050. Every five year a new fund gets created. I have some of my money invested in the 2040 fund, because that is when I’ll be close to retirement age. My older coworkers are invested in the 2030 or 2025 funds, because they are much closer to retirement.

The target funds are the absolute best for people who hate actively managing investments. If you want to be a “set it and forget it” investor, this is the best type of fund for you.

"Beginner's guide to investing"
 

Mutual Funds

Mutual funds are another good investment for beginners. Usually, a mutual fund will track a certain sector of the market. Some mutual funds are dedicated to certain sized companies while some invest in certain industries. Mutual funds are usually actively managed, which means that somebody is working every day buying and selling stocks to try to boost the fund’s performance. This also means that they have a higher expense ratio (cost more!). All of the people invested in the fund are paying the fund manager to make those trades. Sometimes this ends up being beneficial, and the fund outperforms the general market. Sometimes it doesn’t. Investing is inherently risky. If you do decide to invest in mutual funds, be sure to diversify and pick a few different ones. That way, you are protected if something happens to a certain sector.

How to invest

The last main step in our beginner’s guide to investing is how to invest. There’s really only one option that I like, and that’s dollar cost averaging. With this method, you take a regular amount each paycheck/month/week and invest it. I have $100 per paycheck automatically going straight to Vanguard, regardless of what the market is doing. Sometimes you are buying when the market is up, and sometimes you are buying when the market is down. It averages out over time.

Its also super easy to do. You just have to set up an automatic withdrawal from your checking account or bank account. Most investment firms have an online step-by-step, so it’s super easy to set up. 

The other methods are lump sum purchases and investing when you have the money. Investing at some point is better than not investing at all, but if you make it a regular thing it’s easy to stick to. Also, with dollar coast averaging, you don’t even think about timing the market, so it’s great psychologically too.

Beginner’s Guide to Investing

So there you have, a quick and hopefully easy beginner’s guide to investing. I hope this helps you start your own journey to financial independence. In the next few weeks, we are going to talk about some of the bad investments for beginners, so stay posted and subscribe if you don’t want to miss it!

If you have any additional investment ideas or tips that would help beginners out, please feel free to share them in the comments!

 

*Links with this next to it are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra! Also, I am not in anyway affiliated with any of the investment firms that I mentioned (outside of having accounts with some of them). I recommend Vanguard because I use them and I like them, not because they pay me to!

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"Stressed out!"

I had a terrible day at work today. A miserable, terrible, epically awful day. I’m totally stressed out about it, and it wasn’t even that bad!

What happened?

I got yelled at by my boss for something stupid. I didn’t really do anything wrong, but he was mad that things weren’t the way he needed them to be, so he took it out on me. Has anyone else experienced something like this? Its pretty awful getting yelled at for anything, and when your livelihood depends upon it, it’s even worse. I wouldn’t get fired over a stupid thing, but for some reason the stress trigger in my body doesn’t know that. It’s a bit dysfunctional.

Logically, I know that what happened today wasn’t a huge deal. I know that the absolute worst thing that can possible happen is a write up, and the chances of that happening are super slim. So why am I so anxious?  Why am I so upset that I made a tiny mistake in my boss’s eyes?

Stressed out – signs of stress

Seriously, I had a hard time functioning all day after I got yelled at (and it wasn’t even an ass chewing, I could just tell he was mad and disappointed…like I said, it wasn’t even that bad). My stomach hurt, my nerves were on fire, I was super jumpy, scared that someone would come in and mention my epic failure. It was awful. And I’m sure I’ll feel the same way tomorrow, and the rest of the week as well. Trust me, being stressed out is not fun!

 

Why am I so super anxious about a minor problem at work?

Because I need this job. I do. I’m not at the point yet where I can say “fuck you!”. Seriously, some “fuck you” money would be super awesome right about now. But I don’t have it so I still need this job.  I need it for a minimum of three more years to solidify my pension. I need this job for these next three years to ensure that I’m able to live the FIRE lifestyle I want for the rest of my life afterwards. Also, I need this job to pay my current bills!! 

Related: Our Path to FIRE

I know that one minor issue isn’t going to cost me my job. I know that, and you know that. But being stressed out all day really solidified my desire for financial freedom. This isn’t healthy. Its not healthy to be so worried about a little thing that you did wrong at work that you can’t enjoy the rest of your day. It’s not healthy to have to take abuse from bosses because you need the paycheck (Not that my boss is abusive…he’s usually really awesome, but he was super stressed out today too!).

When I’m Financially Free, I won’t have to worry about any of this anymore. I can be my own boss, or I can walk out of work if my boss gives me a hard time about anything. I won’t have to be stressed out anymore. Not Needing a job will give me power that I don’t currently have. And that’s one of the reasons I’m walking this FIRE path.

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"alcoholism a disease or an excuse"

How it all begins 

Alcoholism is the most underrated and untreated disease in the world. Tons of people die from this disease daily and it shouldn’t be that way. Treatment isn’t always necessary; a life of balance and hard work is. When I first learned that I was an alcoholic treatment wasn’t even an option. It is impossible to just shove an alcoholic into a program if they don’t want to change, and I wasn’t ready to change. We have to fully accept everything and agree a change needs to be made, and if we don’t it’s a hopeless battle.

Most alcoholics figure out they have a problem way before they ever get to treatment, but they don’t want to admit and accept it. It’s a disease of the mind that moves its course depending on how much you allow it to take control of your life. What I’m trying to explain is that if you don’t allow it to gain a foothold you can actually stop. Alcoholism has messed with me my entire life and has caused me to lose many a friend and relationships. The battles it has caused in my life are a testament to how deadly of a disease it can be.

Being an Alcoholic

The uncontrollable urge to drink consumes your life. You can think about nothing else, no matter what it may cost (job, friends or even family). Alcohol is everything to you, nothing comes before it. I was between 24 and 25 years old when I let alcohol take over my life, and that’s what threw me into the hell that I have been living through for the past 9 years.

 Alcoholism isn’t about partying too much and having fun. The majority of alcoholics drink alone and don’t hang out with people. When you start down the path to alcoholism you become ashamed of yourself and no longer enjoy being around anyone. It is one of the things that makes this disease so deadly, you turn your back on everyone. I lack a better way of saying it, but you become a hermit, alone, miserable, and drowning in your own sorrow.

Related: Overcoming Mental Illness to Find Financial Peace

 As an alcoholic I can relate to all of this, M tried so many times to get me to hang out with people, only to have me say I would rather stay home. The majority of people can’t understand this about alcoholics, we fear people and anything that can save our lives. We live off misery and depression, its what motivates us in life. Depression is the only thing we can cling to and control. I know it sounds crazy, but we are only searching for some point of stability. We end up finding that in misery, and that is what makes it so easy to become lost forever.

Having someone that believes in you

I cannot stress to you how important this is and how hard it will be for the person that is trying to help you. M lived by the idea of “I am going to love you until you love yourself” and I fought her tooth and nail on it. Finding someone that is willing to expend this amount of effort is extremely rare and requires someone that has a huge heart and will love you no matter what you do. Today I am able to write about this and share my story because of what she did for me. Having someone that believes in you makes the process bearable. Things will move slowly if you’re doing it correctly, take solace in the fact that if it is going slowly you are actually repairing your life.

Now

 I have spent years beating the crap out of myself and saying I was a worthless person. Now I spend each day finding the ways that I was a positive influence on people. Everyone has parts of them that are positive and I have made it my goal to find them for myself. My strengths are that I work extremely hard at anything I devote my attention to, and I care about people to a point that it’s almost uncanny. Focusing on these things instead of obsessing about my hatred of myself has allowed me to find peace.

 Alcoholism is a devil of a disease, but it doesn’t require treatment. Hard work and looking at your inner self helps. Finding out what makes you may be the one thing you need. Depression will always feed off of despair, don’t allow that in your life and you’re on the right track. Any day I wake up and find that life is going to be difficult, I smile and say bring it on!

Get it on Amazon: Loving Someone in Recovery: The Answers You Need When Your Partner Is Recovering from Addiction (The New Harbinger Loving Someone Series)

 Here’s to all the other alcoholics out there and the people that are trying to help them. Stay strong and believe in yourself (or them). It’s a long process, but it’s not un-achievable. This is just my path and my story of how I overcame it. Do you have your own story that you want to share? I’m all ears. All any alcoholic/addict has every wanted is for someone to listen to there story. Well, I am here and will always will be around to listen. In future posts I will elaborate on specific situations and what it did to my life.  I am posting this so people can start to understand the disease and how horrible it is. I feel it’s important for people to understand that before I share my experiences.

Sincerely,

J

 

*Links with this next to it are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

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Lifestyle blog for financial freedom and financial independence

Are you thinking of buying a home?  Do you know what things you should look for when buying a new house?  I’ve bought two houses in the last 10 years, so although I’m not an expert, I have learned a few things about what to look for when making a decision. Check out these tips for home buyers so you can make the perfect decision for you and your family!

Tips for Home Buyers

Find the Right Realtor

Trust

The first thing to look for when buying a new home is a realtor that you trust. You absolutely do not have to buy a home from the first realtor you tour houses with. If they make you uncomfortable in any way, drop them and find someone new. I had to do this when I bought my first home. I went house hunting with a highly rated realtor team, but they seemed very pushy. Every home was the most amazing home ever and any concern I had wasn’t a big deal. I didn’t buy from these people and I didn’t go out house hunting with them again. Trust your instincts. If you don’t feel comfortable with your realtor, find a new one (it won’t be hard, they are everywhere!).

Are you a realtor who wants to provide the best experience for your clients? Check out ClickyHomes!*

Respect

You also need to find a realtor who will listen to you and respect your needs. My second home buying experience was a lot harder than my first, because I was doing it from 2000 miles away. (Check out the one thing I wish my realtor had when I was house shopping!). I contacted a realtor with awesome reviews, and the fist thing I did was discuss my budget. I was savvy at this point, and obsessed with the idea of financial freedom, so I knew I didn’t want to spend more than 200K.

 What did this realtor do?  She sent me a bunch of listings for homes priced between 220-240. She sent me 0 listings under 200k. The other realtor I contacted sent me tons of listings between 150 and 200. He sent me a few listings over 200K, and explained that he could probably get them down to 200 if I really loved those. Guess who I went with?  Definitely realtor number 2! He obviously respected my wishes way more than the first one!

Find the right neighborhood

Choosing the right neighborhood is almost as important as choosing the right house. There are so many considerations in choosing a neighborhood that this probably could have been its own blog post. However, these are all super important things to look for, so I didn’t want to leave any of them out. A whole lot goes into scouting out the neighborhood! First and foremost, you should actually like the neighborhood. But you should also take a few more things into consideration.

Safety

 You can check the crime (and other demographic) data of any neighborhood that you are interested in at NeighborhoodScout.com. Sometimes there’s a reason why that house is so cheap! In Savannah, there are some beautiful reasonably priced homes in some super sketchy neighborhoods. I’m not going to sacrifice my safety and piece of mind for a bigger home. I’d much rather live in a smaller, more expensive home in a neighborhood that is relatively safe.

WALK-ABILITY and Transportation

I really really wanted to buy a home in a walkable neighborhood. Unfortunately, most of the walkable neighborhoods in Savannah are either too close to a bad neighborhood for comfort or priced above 200K. But walkability may be a must have for you. If you want to be car free or bike to work, you need to buy a home in a neighborhood that allows you that option.

When we moved to Savannah, Jonathan didn’t have a job or a car. Unfortunately (for him) the home I chose was in the way back of the neighborhood. That meant he had to walk almost a mile just to get to the bus stop!  Even worse, the bus routes through our neighbor were very sparse, so he’d spend hours riding the bus just to go a few miles!  Talk about a waste of time! Luckily, he has a car now and doesn’t have to worry about these things, but if you don’t have a car you definitely want to make sure the neighborhood you chose has ample transportation.

tips for home buyers

Schools

Ok, I don’t have kids, so this isn’t super important to me. But most people do have kids, and if you do it’s important to check out the schools in any neighborhood that you are considering moving to.  You want the best for your children, so it may be better to buy a smaller, more expensive home in a neighborhood with good schools than a bigger, cheaper home in a neighborhood with poorly rated schools. This is an extremely personal decision, but its something to keep in mind. I went to mediocre public schools and I turned out just fine!

Amenities

Does your neighborhood have an HOA? If so, what types of amenities do they offer?  Which are important to you?  Some HOA’s offer clubhouses, pools, fitness centers, and parks. Some don’t offer anything. If any of these items are important to you, you can probably find an HOA that has them.

In my opinion, amenities also include local shopping. Is there a grocery store close to your potential new home?  How far are you willing to travel to pick up a gallon of milk?  Do carry-out restaurants deliver to your neighborhood?  These are things that may be important to you. It would suck to buy a house only to realize that your favorite pizza company refuses to deliver. Whether that’s a deal breaker or not is up to you, but you should know before you buy.

Related: Getting Lucky with Real Estate

Know the HOA rules

I mentioned HOAs when I was talking about neighborhoods, but they do far more than just provide some cool things for the neighborhood. They can also provide some really ridiculous rules. Did you know that most HOAs in Savannah don’t allow you to have an RV in your driveway or on the street?  Seriously?  Some HOAs are really strict about stupid things, like the length of your grass or whether there is a spot on the side of your house. Others won’t let you make any improvements on your home without their approval.

There are some benefits to living in a community with an HOA though. An HOA generally helps keep the property values up. Most of the stupid rules are to the benefit of the community as a whole…the entire point is to ensure that values don’t drop. Read through the HOA manual of your new community before committing to a purchase. Make sure you can live with the rules.

Don’t skip (or skimp on!) the Inspection

The inspection process is where we failed epically in buying our second home. I like to say it wasn’t our fault though, its hard to find time to take a trip across the country for a home inspection when you are trying to sell a house and move. But it’s definitely not a step that I would ever skip again!

We didn’t technically skip the inspection. We just trusted a representative from our real estate company to be there and catch any problems. The issue with that is the realtor isn’t us. They don’t know what we’d call a problem. And they are probably more concerned with ensuring that the sale doesn’t fall through than they are with identifying major problems!

There were a few huge easy to identify issues with the house that were not caught during the inspection. The sprinkler system had a major leak. The garage door didn’t work. Water seeped into the garage whenever it rained (maybe not easily identifiable until it rains, but whatever). If we were present during the inspection, we would have easily caught the fact that the garage door didn’t work, and could have had the previous owners fix it before we moved in.

Both Go!

If you are in a committed relationship, and both of you are planning on living in the new home, you should both probably go house hunting. I know, this seems pretty standard. But if you are moving to another state, sometimes it’s hard for both of you to find the time to travel and see the new digs. Trust me, it’s important!  I went while Jonathan stayed home. He’s way better at repair work than I am, and he would have probably identified issues that I’m clueless on. He also is stuck with the neighborhood that I chose, which, as it turns out, isn’t very walkable.

Stick to your budget

If you remember any of my tips for home buyers, make it this one! One of the biggest mistakes that first time home buyers (and second time, and third time!) make is not sticking to their budget. Sometimes this is because they didn’t take the hidden costs of homebuying into consideration. Other times though, it’s because we let our realtor smooth talk us into looking at this fabulous house that’s just a little over budget. We fall in love with the house and can’t imagine living anywhere else.

 Don’t let your brain fool you!  You’d be just as happy living in the 190K house as you would be living in the 210K house, as long as both meet your basic requirements. You don’t need a luxury jet hot tub. It would be nice, yeah, but you could always install it in the cheaper house for less than 20K. Be realistic and don’t get swept up in the “I have to have it” mentality. That’s how they get you!

Know what you need

I had some absolute requirements for my new home. I’m sure you do to, and that’s ok! We are going to live in these things for hopefully a very long time, so we should get something that we are happy with. But they key is to know exactly what you want before you start house hunting. Know what you absolutely have to have, and know what your “nice to have’s” are.

My absolutes were two bathrooms, a yard, and a master bedroom big enough for a king bed (You’d be surprised at how many master bedrooms were the size of utility closets). My “nice to have’s” were an open kitchen, a 2-car garage, and covered patio. I ended up buying a home with a semi-open kitchen and no patio, but you had better believe it has two bathrooms! Knowing what you need verses what you want will help keep you out of the “I have to have this!” mentality that realtors hope to suck you into.  Make a list and stick to it.

Look for Easy Fixes

It’s amazing how many people will pass on a home because the paint is ugly or the carpet is dirty. These are relatively cheap and easy things to fix, so why are you passing on a great house because of it?

The house I bought in Savannah had the ugliest master bedroom you had ever seen in your life. The room was painted poop brown, and had a tan/brown mix half shag carpet. The lighting was so dim that you could barely see a thing! However, the size of the room was perfect, and the rest of house was pretty great too (except one random wall in the living room that was also poop brown for some reason). 

These were super simple fixes!  I paid about $800 total to create my perfect master bedroom, and I couldn’t be happier with the house. Don’t let minor, fixable, details deter you from buying your perfect home!  Know what you can DIY, and know what would be huge problems. And, you could even use the fact that you need to fix some things as a negotiating tool! 

Find The Home that Works Best For you

Buying a home is a super exciting and super stressful experience. There are tons of things to take into consideration during the homebuying process, and the most important things will be different for everyone. Make a list of must have verse nice to haves and stick with it. Set a realistic budget for the purchase price and any renovations. You may not find a perfect house, but it will be a perfect home for you.

Do you have any additional tips for home buyers?  Add them in the comments, we’d love to hear your opinions!

 

*Links with this next to it are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

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"Mental Illness"

 

Mental Illness

Mental illness effects tons of people across the world in a variety of ways. I have suffered from a series of mental illnesses including alcoholism, bipolar and severe depression for most of my life. I would estimate that I didn’t even know I had issues for about 90% of it.  As sad as it sounds, I always just assumed that there was something wrong with me. Now that I know about these mental health issues I can look back and understand exactly how they have affected me. I’m also able to see how they fed off of each other making my mental state worse and worse as each one fought for dominance in my head. I used alcohol to combat my bipolar so things would seem normal, but that fed the depression and led to some incredibly erratic moments.

 

The Early Years

One of the earliest things that I remember is constantly spending money on superficial items. I used this as a way to boost my self-esteem. Another thing was my inability to focus in school, which affected my grades so much that I didn’t go to college. The lack of a college education resulted in missing out on a lot of job opportunities in life.  Nevertheless I was still ambitious about my opportunities.  I didn’t give up; I kept trying to live by the idea of “you can accomplish anything in life if you try hard enough”. Unfortunately, this isn’t always true. I ended up failing miserably at a lot of my life goals, which gave the depression a chance to gain a solid foothold. This opened the floodgates for all of my illnesses to band together and create a never-ending train wreck of epic proportions.

Train Wreck

This period of my life was a blur of wild drunken binges, manic phases that usually involved blowing large amounts of money, and severe bouts of depression that made my obsession with hating myself worse. Throughout these years I could barely hold down a job, and when I did there was this inevitable feeling that I would find a way to lose it. I finally got to the point in my life where it was just easier to do nothing rather than having to worry about something. My philosophy was “if you don’t do anything you can’t fail at anything”.

Meeting M

It wasn’t until I moved in with M that I started on my path of recovery. However, there were still a lot of hurdles to overcome and the process was slow. Finding yourself as a person isn’t easy, and having a mental illness makes it all the more difficult. Over the years she worked with me, and I began to overcome some of these issues. However, my mental illness fought back. I struggled to manage them and this was a trying period for both of us.

 Do you struggle with Bipolar II? Check out this workbook on Amazon that teaches you how to manage your symptoms*

Life on its terms

Currently there are still parts of my life that haven’t been fully corrected.  I have been slowly addressing all of the mental illnesses and seeing a therapist. I’m working on managing a budget and learning to live life on its own terms, whereas in the past I tried to fit everything into my own narrative. I have a job that I like, and I’ve started putting money into my 401K and buying company stock. It’s not much yet, but this is my start to FI/RE and my path to financial peace.

 

Mental Illness

My Path to FI/RE

I know my path to financial peace isn’t going to be quick or easy. It’s a long-haul journey,  and I’ve accepted that steady will win the race. I have a great start with a good job that offers a 401K. I’ve started putting away money (starting small, I know I can’t afford to give up 20% of my paycheck yet, and that’s ok!). You would be amazed at how far a small win like starting a 401K goes towards boosting my energy and making me actually want to do more with life. I’ve learned that having a mental illness doesn’t have to keep me from FI/RE or anything else in life. It can be tough, but it’s not impossible.

I want to stress that if you or someone you know struggles with mental illness it’s not impossible to get on the right path. The key is to start slow. Get the little things in life figured out first – find a good job and manage your medication correctly (Can’t stress how important this is!). It’s also incredibly important to see a therapist once or twice a month. Sometimes just being able to vent every once and awhile can make all the difference in the world. I’m not going to sugar coat things, it’s a long process that won’t be figured out overnight (One of the biggest mistakes I made was attempting to fix everything overnight). But nothing worth doing is easy, right?  It’s definitely achievable, and having partners on your path will make it that much easier.

I’ve just started my path to financial freedom, but I am loving the journey so far. Here’s to the coming years and all it has to offer.

– Sincerely, J

 

*Links with this next to it are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

 

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I love getting a tax refund

Hey folks! Transparency Disclosure- Some of the links in this article are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

Most finance bloggers will tell you that getting a tax refund is actually a bad thing. Why give the government a free loan?  These finance bloggers make an excellent point. If you really think about it, the money you are receiving from your refund really is money that the government “borrowed” from you throughout the year, without paying you interest! Maybe that’s one of the reasons why they insist on making taxes so complicated. But I digress.  Still, in spite of logic telling me it’s a bad idea, I love getting a tax refund. Here’s why:

1. It’s usually pretty hefty

Because I own a home, I have access to some pretty awesome tax deductions. I can deduct the interest I pay on my mortgage and the taxes I pay on my property. Whoo-hoo!  These two deductions usually push my refund up into the 2-3 grand territory, which is pretty awesome. And last year (when it was still tax deductible, did the new tax bill take that away?) I moved 2000 miles for a job!  So I’m thinking I’ll get a pretty nice return this year.

File Your Taxes with H&R Block* 

2. I feel good about getting a large sum

The thing about getting a pretty nice return is that it’s actually pretty nice. It is freaking awesome to get a hefty lump sum deposited into your bank. I know this isn’t logical or practical in any way, but sometimes we can let our emotions win. Getting a random check for 2-3 thousand dollars feels pretty dang good. It definitely feels better than getting that same 2-3 grand over the course of an entire year!

3. It’s easier to budget

Not only does getting a large sum feel better, but (for me anyway) it’s so much easier to use a large sum like this for investing and special treats than it is to use your regular paycheck. I’m good enough at budgeting, but I’m not spectacular. That 2000 spread out over 26 paychecks is only 76 bucks a paycheck. Now you super frugal awesome money managers may be able to easily calculate that and squirrel it away, but 76 bucks isn’t much to me. It would be gone. I’d use some of it to reload my Starbucks card, or some of it to order a pizza (if you can’t tell, I’m very food motivated). I definitely wouldn’t save up $500 from that to buy new clothes (yes, I usually go clothing shopping once a year, and use my tax refund to do it). I may or may not put some of it into an investment or savings account, but why leave that to chance?  It’s way easier for me to manage that extra money when I get it in a lump sum.

 

 

4. It helps me quickly achieve goals

This is another psychological rather than logical point but hey, we are all human, and we all have weird emotional things. It feels quicker to take $1000 from my tax refund and put it towards my vacation fund than to put $50 per paycheck in my vacation fund. I know, I could save for the entire year and by tax time I’d have the exact same amount, but it just doesn’t feel the same.

I think it’s important that we give ourselves psychological wins sometimes. Everything can’t always be about logic. I find that I actually do better with my overall investment strategy if I let myself have some of these.

5. I’d rather get a refund than owe money

Let’s be honest, the US tax system is complicated at best. There are so many different rules and income levels and percentages that it can be confusing to keep track. I wouldn’t want to calculate things incorrectly and then end up owing the government a huge amount (or anything at all, for that matter). I do know that with my income level and my typical deductions, I usually get a pretty decent refund. So why mess with that and risk owing money?

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6. I don’t want to do the maths (or research)

Not only do I not know how to calculate things out so that I’d be at a big fat 0 come tax season, but I don’t care to find out. I don’t want to do the math here. I don’t want to calculate how much money I should send to the tax man each paycheck, and I don’t want to figure out how much of my new, bigger paycheck is due to my tax changes.  And, tying into the reason above, the system is so freaking complicated that I don’t think I’d be able to figure it out even if I had the desire! Or maybe I don’t have the desire because of how complicated it is. Either way though, learning the ins and outs of the tax code and figuring out exact numbers isn’t something I’m interested in.

That’s why I love getting a tax refund

So there you have it. Six reasons why I, a logical personal finance/lifestyle blogger, actually prefer getting a tax refund. Do you like to get a tax refund or would you rather not give the government an interest free loan?  I want to know if I’m a huge outlier in the personal finance community!  Let me know in the comments!

 

*Links with this next to it are the affiliate links that we talked about above. We appreciate your readership!

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Well, here we are at two months in!  It just flew by, didn’t it? I feel like we made some great strides towards growing our blog in this second month, but let’s see how we did!

Blog Growth Strategies for our Second Month

Readership

We really improved our readership over this second month!  According to google analytics, we had 305 individual users during this second month, as compared to 89 during our first month. That’s an increase of 216 readers!

How did we increase our readership?

The majority of our readers are still coming from Twitter. One of our major blog growth strategies has been continuing to grow and develop our Twitter community. Seriously, I love the PF Twitter community! 

I also started a free trial of Tailwind early in the month, and we have seen a pretty nice increase in traffic from Pinterest. However, just adding pins isn’t enough. Another thing I did to boost the traffic from Pinterest is create better pins. I started using high quality photos from Unsplash and worked a lot harder to improve the aesthetics of my designs, which I think that was a huge success. We went from 2 referrals from Pinterest during the first month to 22 by following this strategy.  I  bit the bullet and signed up for a paidTailwind* account for the year, so hopefully our Pinterest traffic will continue to grow. 

 blog growth strategies

Posting

I think sticking to a regular posting schedule for this month also helped contribute to our increased readership. We posted twice per week (generally Sundays and Thursdays) so that gave us a total of seven posts for the month. I think it’s easier to get users and page views if you have new, relevant content to share at least on a weekly basis.  You can seem kind of spammy if you are re-sharing the same content over and over, but sharing things regularly keeps you on people’s radars. It’s a thin line!

Social Media

We totally kept up with the killing it on social media game for our second month. Partner’s in Fire has over 1000 Twitter followers and almost 500 Instagram followers!  We even increased our number of Facebook likes by a tiny bit even though that wasn’t a major focus (maybe once we get over 1000 Instagram followers we will focus on Facebook!) The best part about this is that I feel like the Twitter community is even more engaging as it was before. I’m definitely achieving the goal of maintaining an engaging follower-ship as the numbers increase!

Education

We are still learning so much when it comes to blogging!  I’ve done much better with Canva and creating images – I just learned that using the blog banner template makes the featured image look way better! I’m creating multiple pins per blog post rather than just re-pinning the same image.

We are also learning a lot about SEO. There are a few really cool keyword research tools that I’ve been utilizing to help me find better keyword phrases (though that’s not really transferring to pageviews yet…I’m still learning!)

My writing skills have greatly improved over the past month. I’m regularly getting green readability scores after my first edit, which is great!  During the first month all I saw was red! I’m learning how to separate my content into easily digestible sections, rather than just posting a huge wall of text. I think that really enhances the user’s experience!

Monetization

Affiliates

We added a bunch of affiliate links (tastefully, I hope) to the blog this month to begin the process of monetization. We know these things take time, but thought think it’s best to get started as soon as possible.

 

Amazon

One of the limitations of  using Amazon as a new blogger is that the Amazon* affiliates program kicks you out if you don’t have a qualified sale within the first 6 months.

Luckily for us, we did get a few Amazon sales this month!  We got them by being supportive of other bloggers.  Being supportive and lifting each other up is seriously the best way to start.  We reached out to our Twitter friends asking for links to their affiliate stores, so that when we need something from Amazon, we can support them. I started my list and bought the thing I needed from one of my blogger friends (and will continue to use the list every time I need something) and miraculously, someone decided to pay the favor back and purchase something through our store!

Related: Are you interested in starting a blog but don’t know where to begin? Check out the Blogging For Dummies series on Amazon. This series can always be counted on for relevant, useful advice*

                                                                

We also created a google docs spreadsheet with a huge list of bloggers that we can support, so if you are interested in having it or adding your blog to it, please send me an email (melanie@partnersinfire) and let me know!  I’m not going to post the list on this blog because I don’t want to get banned from Amazon. I don’t think having a list is specifically against any of their rules, but why risk it?

 

Other Affiliates

We also signed up with some additional affiliate programs, to include Clicky-Homes* and Flex-offers. Flex-Offers is interesting because it’s a website that’s just a conglomerate of affiliate links. You have to register to access the website, and then you have to apply for each company you’d like to partner with. Most of the companies that are members aren’t really applicable to the field of personal finance (lots of retail) but I did sign up for a few of the travel affiliates and incorporated them into my travel blog.

Ads

We are still using Adsense to generate ad revenue for our blog. Currently, we’ve made about twelve bucks total with it (and they don’t give you a payout until you reach 50). We are hoping to get enough unique visitors and page views in the next few months to upgrade to a better ad program.

What’s Next?

Our goals for February are to work really hard at alternate forms of marketing. My biggest challenge is E-mail marketing.  The goal is going to be to get ball rolling on e-mail subscribers, though I’m not entirely sure how to do that yet.  It’s probably going to take a lot of research, but I’d love your input! Also, if you aren’t already subscribed, don’t forget to sign up in the side bar!

My other big goal for this month is to continue growing our readership. I want to increase by 200 readers again, so that we have 500 total users for this next month. It’s a hefty goal, but I think its achievable. 

I also signed up for the Share-a – Sale affiliate program. I haven’t used it yet, but I’ll be sure to add it to my updates for next month!

What are your favorite blog growth strategies?  Leave a comment and let us know!

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Hey folks! Transparency Disclosure- Some of the links in this article are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

 

Ok, the disclaimer is a bit mis-leading in this one. This post is mostly one big affiliate advertisement for the one thing that I wish my realtor had when I was trying to buy a house: Clicky-Homes*.

Wait, stay with me! This isn’t an advertisement for most people. Only realtors can sign up for Clicky-Homes. For those of you who aren’t realtors, this is just a fun post about my experience trying to buy a home from 2000 miles away (and there may be a cat picture in it for you if you stick around!). Seriously, its not an easy thing to do! But maybe if you are ever in the market for a home, you will remember this post and look for a realtor who uses Clicky Homes.  It won’t cost you anything.

Why Buy?

Now, why do I wish my realtor had clicky homes?  If you read any of my previous posts or know anything about me at all, you’d know that I recently moved from Los Angeles to Savannah (and if you don’t, you can read my first blog post about Lucking Out in Real Estate here!). I had to house shop from 2000 miles away!!

A lot of people tell me that I didn’t have to buy a house. Well, they are wrong. You see, what I don’t always advertise here on the blog (or on social media) is that I’m a cray cat lady. I have four of the little demons plus two pretty good-sized dogs. I actually looked all over the place for a rental in Savannah. Apparently, nobody in Savannah wants to rent to a crazy cat lady. Well, nobody who advertises nationwide at any rate (I can’t for the life of me understand why, even as I stop one of them from scratching at the couch for the hundredth time today).  Anyway, I had to buy.

 

How do you buy a house from 2000 miles away?

Zillow was my best friend for many weeks while I was still living in LA. I was scouring listing after listing from the other side of the country!  I made spreadsheets of my favorites with little notes about the pros and cons of each, and talked with my realtor pretty much every day about new listings. Next, I booked myself a weekend trip to Savannah to see all these great places in person and make a final decision.

I’m sure most of you have looked at homes on Zillow and Realtor, am I right?  Aren’t they so perfect in the pictures?  Don’t all the homes just look absolutely amazing?  Well, the photos lie. At the very least, they are super misleading.  That beautiful 3-bed 2 bath ranch home actually has a master bedroom the size of a storage unit. One of those tiny ones! That “walk-in” closet is more like a shelf in real life. Pretty much every home that looked super amazing in the photos had serious design flaws that were left out.

Related: Are you into PF and real estate Blogging? Want to be an affiliate for Clicky-Homes? Check it out here! I don’t even think I get paid for referring you!

Why I wish my realtor had Clicky Homes

And this is exactly why I wish my realtor had Clicky Homes. Clicky Homes is the first and best visual media platform for real estate. They have live streaming events, virtual tours, and even use Youtube! It’s the best way to see a home without actually being there.

Obviously in person home shopping is the best idea, but we don’t always have that option. I’d rather have a realtor who could live stream a walk through to me than only have pictures. If my realtor had clicky homes, I would have been able to knock off 70% of my list of homes before ever stepping foot in Georgia. I wouldn’t have had to waste hour after hour looking at homes that pretended to meet my requirements but didn’t in real life. I could have focused more on the 30% of homes that really did meet my needs. Do you know how much easier my life would have been if I only needed to look at 10 homes instead of the 50 homes that I crammed into that one weekend?? Clicky Homes would have been a lifesaver!!

clicky homes

It might help you too

I’m sure I’m not the only person ever to need to buy a home from a distance. Having a realtor with access to Clicky Homes would be a huge boon to someone who is in that position. But I’m sure it would be super helpful to those buying a home in a city they live in as well. Touring homes is fun at first, but after the 15th or 20th one, it just gets exhausting. Having an easier way to narrow down the houses that aren’t a good fit right off the bat is an advantage to anyone.

So if you are buying a home, ask your realtor if they use clicky homes. It might save you a lot of stress.

And if you happen to be a realtor, look into Clicky Homes*. Help your clients have an easy, stress free home shopping experience.

 

*Links with this next to it are the affiliate links that we talked about above. We appreciate your readership!

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Hey folks! Transparency Disclosure- Some of the links in this article are affiliate links. That means I’ll receive a small commission if you decide to click on it and buy something. Don’t worry, it doesn’t cost you anything extra!

Most people I talk to have told me that they wish they could be on a FIRE path.  Some wish they made enough money to consider it, while others wish they had high enough paying jobs to squirrel extra cash away. Still others wish that they could find ways to cut their budgets. People wish a lot of things, but the bottom line is that those wishes sound a lot like excuses to me. I think most of them can do all those things, and I think you can too. Angela Duckworth helps explain how in her engaging New York Times Bestseller Grit.

Grit Review

Grit isn’t actually about financial freedom. It’s not even about finance. It is, however, about something that many of my peers on the FIRE path have expressed again and again. It’s about the power of hard work and perseverance. It’s about the power that having passion for something gives us to succeed.

In this book, Angela Duckworth explains that people intrinsically tend to value talent over hard work. We think that successful people are just naturally talented, because it’s easier to think that someone has natural talent than it is to think that they tried harder than we did. Grit proves that this way of thinking is flawed. With interviews from some of the planet’s most successful people to include Olympic swimmers, Super Bowl Champions, Military Leaders, and CEOs, Duckworth takes us behind the scenes of success and shows us exactly how much hard work is involved.

 

                                                                          

 

What is Grit?

 As it turns out, it really is hard work and passion that lead us to success, not talent. Talent without hard work is wasted but hard work without talent can actually lead to success. Passion gives us the drive to work hard.  Passion plus hard work is what Angela Duckworth refers to as Grit.

Grit will allow us to gain Financial Freedom without any inherent talent or special skill. If you are gritty enough, it doesn’t even take a hefty paycheck!  Some of the grittiest FIRE enthusiasts carve out a path to FIRE on forty thousand dollar per year salaries. They find ways to live on that (or less!) for the duration of their retirements (affectionately known as Lean FIRE).

Related: Want to see how Gritty we are? Check out our 2018 goals!

Can I get Grit?

But what if you lack the passion to work hard at something?  Don’t worry!  Duckworth also outlines ways in which you can build Grit in yourself and in others. She has also developed “the Grit test”, a series of questions that will help you determine just how gritty you are. 

You won’t get to FIRE on a wish and a dream. You will get to FIRE if you put in hard work, and if you are passionate about it. Grit can help you get there.

“Each was chasing something of unparalleled interest and importance, and it was the chase – as much as the capture- that was gratifying” – Angela Duckworth, Grit

Be Gritty. Chase Financial Freedom. Capture it. Let Grit show you how.

Interested in reading Grit for yourself?  Check it out on Amazon*!

*Links with this next to it are the affiliate links that we talked about above. We appreciate your readership!

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Why Fire?

Jonathan and I are on a path to fire because we want to live life on our own terms. We don’t want to be tied to any job or employer. We don’t want the stress of needing a job. Being stressed out at work sucks!  We don’t want to deal with that anymore.

Our Path to Fire

If you recall from our article on the Fire Fundamentals (and you can read it here if you don’t!) I mentioned that there are four steps to getting on a path to fire. Step 1 is learning about Fire – I think I have that covered. Step 2 is deciding what you will be comfortable with. The third step is to make a plan for getting there, and the final step is to execute that plan.

What type of Fire will I be comfortable with?

I know we want to travel, so lean fire probably isn’t for us. But we also want to have a comfortable, secure traditional retirement (We absolutely don’t want to be in poverty when we are seniors!), so we need to at least get to Coast fire. We want to be financially independent as soon as possible, and we decided that we will probably need about 60K per year to be comfortable. We are also ok with working odds and ends types jobs, so I’d be totally comfortable with a barista fire type of lifestyle (financially independent, but taking an easy part time job to fill any holes that come up or for extra spending money).

How are we going to get there?

Sixty thousand dollars per year without working a full-time job seems pretty daunting. We need big gains and passive income! I got super lucky with real estate – and by getting lucky I mean I bought at a great time in a market that would only increase. My big gains could come from selling the house! But we also knew that meant we couldn’t stay in the crazy expensive metropolis of Los Angeles. We needed to find a new city in order to really capitalize on those real estate gains. 

Passive income is the real key though, so we needed to figure out a way to generate income without working. Blogging and Investment funds for the win!

Executing the plan

The first step to executing the plan was selling the house in a high COL area and moving to a low COL area. Done!  We packed up and moved from Los Angeles, CA to Savannah GA. Next, I used  my new found capital to set up diversified investments and open an account with Vanguard. Third, we dedicated ourselves to working like crazy for these next three years to shore up our investments and ensure that we are 100% ready to take that plunge into early retirement.

Related: Which Vanguard Total Market Fund should you chose?

We also set up additional income streams. We launched this blog, and have dedicated ourselves to updating content and marketing it whenever we can. I went back to my travel blog and updated the content, adding affiliate links and increasing the social media presence. Every little bit helps!  Every cent we can make via blogging gets us one step closer to freedom (full disclosure, we haven’t really made anything blogging yet. But Partners in Fire is super new, so we are hoping to generate some income off it in the coming months!)

I also have my 401K account for additional income when I reach retirement age, a pension, a Real Estate Investment Trust (REIT), and a few individual stock holdings. These different types of holdings should ensure that we are well diversified and should provide dividend income when we are ready to stop working.

Not Your Plan

We get that not everyone owns a home in a high COA area, and not all those who do will make huge gains by selling. That’s why my path may not be your path. Don’t worry, there are tons of other ways! Check out this small list of personal finance bloggers to see their paths to fire. You can take what you like from each and start your own journey!

Other Paths

 Downsize your 2080’s  Path to Independence involves downsizing the amount of time spent working. Some paths are simply about finding that work/life balance! Check out how they do it here!

Fifty Week Vacation is investing in both the stock market and real estate to create short, medium and long-term cash to achieve FIRE. Read about their investment journey here!

Saving Sherpa is perusing FIRE by putting experience over luxury, not having kids, and saving 70% of his income w/o side hustles. Read more about his $26k/yr Boston lifestyle here!

Military Dollar is going to achieve Fire by taking advantage of the programs offered to members of the armed services and creating multiple streams of retirement income. Follow her journey and learn some additional awesome finance tips for service members here!

Tread Lightly Retire Early is going to reach Fire by living an eco-friendly life and cutting spending to maximize their savings rate while minimizing their carbon footprint. Find out how they help the planet while gaining independence here!

What’s your Path to Fire?

As you can see, there are lots of different ways to get to financial freedom. There isn’t a one size fits all approach. And these blogs I listed are just a small sample of the paths different folks are taking, there are thousands more out there. Hopefully you will get some ideas from these and other blogs about what will work for you.

What does your path to Fire include? Do any of these bloggers resonate with you?  Is there a totally different path that I’m missing?  Let me know in the comments!

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