2010. március 11., csütörtök

AP's Millionaire Club Pledge

Since I had plans of saving up a million dollars to [not sharing] in the long future anyway, I joined the Millionaire Club. Basically, I want to buy[not sharing] so that I can amass enough wealth to reach people in need, or be used by God to carry out whatever He so desires through me. I am completely okay with plans changing. However, I like a flexible road map to head toward tentative goals. I am not sharing my future goals because they may change; they're unique to my vision and don't want others copying me; the anonymous blogger(s) leaving half brain dead comments on my blog lately have made me inclined to keep my best kept secrets to myself.

Here's my pledge:

1. Contribute 15% to my Roth 401(k) a year plus receive 6% of my salary from the firm for a total of 21% contributed to retirement per year.

2. Save $1,300-$2,000 a month for investing in stocks for the long (not for retirement) using my value investing philosophies. This money will go towards my plan to buy a particular business I have in mind. If I change my mind, whatever!

3. Don't spend money on people who wouldn't spend their money on someone else.

4. Donate 12-15% of my income a year.

5. Re-evaluate myself when the times change; look for new things to learn to increase my value and ability to generate revenue for an employer or for myself.

6. Live below my means. Never buy what I can afford but always buy half or less than what I can actually afford.

7. Put God first in all that I do and let Him have all the glory.

2010. március 10., szerda

This Is It: I'm Debt Free.

I am now absolutely debt free. I'll never go into debt again. I'll probably get a mortgage some day, but no other debt.

I loaned money to go away to school for four years to get a degree that would get me a management consulting job at 21, starting at $60,000 and a $12,000 signing bonus. Some people told me that they wouldn't go to my school because it's too expensive, but the only expensive part is living costs for four years. These same people who said they wouldn't go to my school are still putting themselves through school at a local college while working at a fast food chain and will make half of what I started out at age 21. When I worked with them, I knew I wasn't there for the rest of my life. I knew it was a temporary job. Some of them believed me, but some of them probably thought I was only worth $7/hour.

I could have gone to my school without taking on so many loans. That's the only thing I would change if I went back in time. Do I regret going to my school? No way. Was I a school elitist? Yes, probably. Am I now? Not as much, but as long as you know with an 80% probability what you will make coming out for going to a certain school, take on the debt. If it's an area of study that can be done cheaper, do it cheaper and without debt.

Always do a cost benefit analysis before you pay for ANYTHING. Is the money you have to put in worth the money you will get out of it? I thought I wanted to become an executive so I went to my school and paid the money I paid. I don't want to be an exec anymore, but yes the opportunities I took while at the university have changed my future earning power forever.

If you have the scores and the requirements to get into a top 5 national school, do it. But not if you're going to party every weekend and not compete with your classmates for the best job. And not if you never seem to come out on top no matter how hard you try. If you're just average, just go with what costs less. Why go where you have too much competition? You have to know yourself, your strengths, and your weaknesses while in high school. You have to position yourself for the future at a very young age and you can't just go from step A to step Z without steps B-Y. Do what you're good at. Go where you come out on top. I never applied for the jobs that the whole entire graduating class was interviewing for. I went for the ones that were a little more obscure or the ones that came after ME, not the other way around.

My internship was a stepping stone for me to get into management consulting. I didn't plan on doing what I did at my internship at the time. I took it to get my foot in the door. Be creative in how you get through life! My jobs and all my extracurricular activities since high school were things I did to develop skills I wanted to improve, and obtain experiences that would help me get myself into consulting. I didn't do it just because I just LOVE going door to door to businesses, asking for sponsorship money for a non-profit. I did it because it would help me gain confidence, help me learn to sell an idea, and help me apply my leadership skills. Everything I've done since high school may not be directly related to my future, but each offered me a new facet to my personality and that's why I was so active.

Open all your doors of opportunities so that it's up to you to close them. Most good things in life don't just happen. You make them happen. Above all, don't forget to put God first because He will lead you to do what He specifically put you on this earth to do. You can do far more with God than without Him. I know I couldn't have done what I did if it wasn't part of God's will for my life. No matter through bad or good things in life, always lean on God. God is not a good luck charm; He knows this earth is full of sin and consequence. We have the assurance that He will be there for us to lean on, no matter what, and our eternal life is secure in Him. In that sense, no matter how rough life gets, if you know you will spend eternity with God, that's all that matters. That is the hope that we have as Christians. Not hope in earthly promises, for they will fade away. God cares about our soul- what stays when we are gone from this earth.

2010. március 9., kedd

Should I Use My EF to Be Debt Free?

I'm so close to being debt free, but I don't know if I should string it out one more month into April.

Here's the deal:

After my second paycheck for the month of March, I will have around $1,234 left to pay off my student loans and be 100% debt free! Should I just use my emergency fund or something else to pay that $1,234 off this month and get rid of the $5,800 left?

Emergency Fund Components:

Account 1 - $2,230
24 Month CD - Only on month 1 of 24 - $2,000 @ 2.09%
24 Month CD- Expires October 2010 - $1,057 @ 4%
6 Month CD - Matures March 10, 2010 but I get an additional .5% interest if I roll it over to continue 6 more months - $506 @ 1.75%

Or should I ask my brokerage account I trade stocks in for a check for the stock I just sold? I was thinking of buying a particular company really soon but the market has been going up so I haven't bought it yet and have been waiting for prices to dip.

I have about $1,300 available in the brokerage account as proceeds from a recent sale. I was going to use that to buy my next stock I am looking at. I kind of don't want to use this money because if I buy this stock I want it will return me a lot more than 3%, which is the interest I pay on my student loan. I'm not very inclined to use the money out of there.

My 401(k) has $36,000 in it which I can't touch until I'm 65...so that's out of the question. Once I get out of debt, I'm going to jack up my contributions to 25% for three months to make up for not contributing for the last three months. Then I'll take it down to more like 5-10%. My employer gives 6% of our salary to our 401(k) so I have to remember to add 6% to whatever amount I choose to contribute. If I contribute 5%, it would actually be 11%.

What should I do? Just be debt free in April? Or take the money from EF Account 1 and have almost nothing in my EF for a month?

I'm finally almost there!! I get to KEEP my money instead of pay off my education! I think it's funny when the school sends me requests for donations and they try to say things about how you got a good value out of it and the school got you a great job...to that I say... TELL THAT TO THE ONES WHO GOT SCHOOL PAID FOR BY THEIR PARENTS :) I feel like 90% of the students at my college didn't have to pay! There were only two other people besides myself that I knew who had to pay. Although I really want to donate, I'm like nehhhh I am not obligated to!! I paid for my schooling! Maybe if I ever get really wealthy I will donate some....but for now, I think $70,000 is enough! :P Even though that includes my living expenses for 4 years...

There's a guy in my sister's class who is apparently royalty in China and during a group discussion game about race and opportunity, he shared that when he was in his country he was part of the government and everyone made way for him, but he blends in here and no one knows how rich he is. Guys like him can donate!! :D