All posts by Hero

About Hero

I launched FinanceSuperhero in April 2016 to help others save money, get out of debt, earn more money, and live the best life possible. Send me an e-mail or a comment if I can help you in your journey. Thanks for reading!

It Is Only Money and It Grows on Trees!

This post, “It Is Only Money and It Grows on Trees,” is a review of author Cara MacMillan’s book by the same title. This review is not sponsored by the author or Halcyon Consulting Publication, and all opinions contained in this review are mine. However, Finance Superhero did receive a complimentary copy of the book. To purchase your copy of the book, visit Amazon.


The odds are good that you heard the phrase often as a kid:

Money doesn’t grow on trees!

 

Cara MacMillan challenges this notion and countless other money assumptions throughout It Is Only Money and It Grows on Trees! Inspired by interactions with two of her college students, MacMillan crafted the book in the form of a narrative which takes place in a college classroom. A fictional guest professor, Catherine, leads students through a multi-day discussion surrounding money and its wide-ranging impact upon life.

"It Is Only Money and It Grows on Trees" provides a close look at common money assumptions and challenges readers to think critically about building wealth.Chapter One illustrates an important idea which rings just as true in the real world – we all have our own unique views and definitions of money, which tend to come from our parents and other cultural influences. MacMillan clarifies a strong basis for the remainder of the book: money is simply a resource that we all use for exchange purposes. Though this idea is simple at its core, money remains a complicated subject.

As classroom discussion unfolds in each chapter, a wide variety of financial worldviews are explored and challenged by the students. Each step of the way, the characters in the story connect their beliefs on money to their personal values. The conversations flow naturally even as characters explain foundational financial concepts such as bond grades, mutual funds, and dividends. MacMillan carefully navigates discussions of faith and finances and presents characters’ beliefs with care. The students and professor discuss universal concepts and find common ground.

Throughout my reading of It’s Only Money and It Grows on Trees, I found myself asking many of the questions MacMillan intended for readers to consider:

*Why am I not rich?

*What do I need to learn?

*Do I need to change my thoughts and actions?

*Can I do it?

*Where can I go for answers?

*Can I balance my money and climate change?

"It Is Only Money and It Grows on Trees" provides a close look at common money assumptions and challenges readers to think critically about building wealth. It is a must-read for anyone who cares about managing money the right way.As Catherine and her students explore financial topics such as needs vs. wants, frugality vs. cheapness, budgeting, and starting home based businesses, most readers will naturally identify with some characters and disagree with others. At the same time, the discussions consider various viewpoints and will challenge readers to question their own assumptions and deeply rooted financial beliefs.

Readers who spend considerable time reading and think about their finances may find It Is Only Money to be basic at times, but this appears to be by design; MacMillan strives to illustrate that personal finance need not be complicated whenever the story allows. As a result, her work is likely to appear to anyone who is interested in building a better financial future and open to changing patterns of behavior.

Overall, It Is Only Money is an entertaining look at financial beliefs and paths toward building sustainable wealth. Most readers will find new inspiration to seek better management of their finances. As Joshua, a student in the class, says, “Financial management is a gift we give ourselves, and when we get to wealth, we can give back even more. We can give back our time and our skills to really make a difference.”

For more information, please visit CaraMacmillan.com. When you buy your copy of It Is Only Money, 10% of the proceeds will go to support refugees of Climate Change.


Have you read It Is Only Money and It Grows on Trees? Share your impressions or any questions you may have in the comments below.

The Easy Way to Become Rich

My uncle loves to tell the story of his friend from church. This man was unassuming – he worked a blue-collar job as a machinist in town and remained with that company throughout his entire working career until he retired in his sixties. His wife never worked – they felt it would be more valuable for her to remain home and raise their children. Last year, this old man passed away, and his wife followed just a few months later.  They had been married for more than 50 years and still lived in the tiny home which they had purchased shortly after getting married.   And nobody knew that they had discovered the easy way to become rich.

Is there really an easy way to become rich? The answer is shocking. See what two numbers you should be paying attention to if you want to become wealthy!The machinist and his wife were a model of frugality. They owned only one vehicle and preferred to drive well-maintained used cars. My uncle couldn’t recall a time in which the couple owned a vehicle newer than five years old. A true story-teller, my uncle saved the best for last in the tale of his friend, and what he told me was most-unexpected:

The elderly gentleman and his wife had amassed a nest egg worth over $1 million and willed half of their estate to the church.

You may know a similar couple. I know a few, too, and their secret is simpler than you may think.

THE SHOCKINGLY EASY WAY TO BECOME RICH SLOWLY

In The Millionaire Next Door, the late Thomas Stanley identified the common traits of PAWs, or Prodigious Accumulators of Wealth. My uncle’s friend was a PAW. He spent far less than he earned for several decades, avoided spending money on status symbols, and did not tie up his money in depreciating assets.

Some financial experts say that personal finance is 80 percent behavioral and 20 percent head knowledge. I believe that the simple approach of the machinist illustrates this principle very well. In fact, if we could interview the gentleman today, he would probably attribute his success to common sense, basic arithmetic, and compound interest.

I believe he would also talk about two very important numbers.

THE TWO MOST IMPORTANT NUMBERS TO WINNING WITH MONEY

As my uncle’s friend knew, the biggest elements contributing to financial success are not fees, return on investment, tax savings, or even time in the market. The most important factors are numbers: net income and net expenses.

The easy way to become rich is to increase the difference between these two numbers. Most financial experts call this “the gap.” How you do that is up to you. You can choose to increase your income by seeking a new job, asking for a raise, or starting a profitable side hustle. Or you can cut out wasteful expenses that do little to increase your happiness.

I will always remember the day that I read how simple it is to become wealthy. I calculated that I could retire after working only 22 years if I simply saved 40 percent of my net income. Even better, if I could save 75 percent of my net income I could retire in approximately 7 years. That short and sweet article from Mr. Money Mustache redefined my vision of what a reasonable retirement timetable looked like for me and my wife. Suddenly, working until 65 only seemed acceptable to me if it was by choice.

GROWING MY GAP

Our plan to grow our gap is constantly evolving. My wife and I do not yet have children, so our current plan is focused on growing our income as much as possible. We both are full-time public school music teachers. After school, my wife teaches piano, flute, and voice lessons in her private music studio. She built her business from the ground up. I am a realtor 24/7 and 365. Sometimes that means I work early hours before school, during my lunch break, in the few spare seconds that most teachers run to the restroom, and all other hours that my clients need me. Somewhere in between, I make time to write 2-3 articles per week on this site. My wife and I do all of this because we sincerely love helping other people grow and find solutions to their problems.

Maybe increasing your income is the best way for you to grow your gap. Maybe you’re wasting money buying things that you don’t really want to impress people you don’t even like. If you’re married, maybe you and your spouse aren’t on the same page financially speaking. In that case, a zero-based budget may be exactly what you need to turn the corner and begin saving more money.

GROW YOUR GAP

Is there really an easy way to become rich? The answer is shocking. See what two numbers you should be paying attention to if you want to become wealthy!By now, I hope you believe that the shockingly easy way to become rich isn’t so shocking after all. It is largely built upon common sense. The problem is that everything in today’s world flies in the face of common sense. We are constantly told to spend more, live for today, and seize the moment. This is one of the biggest lies marketers have ever gotten away with telling – they have softened our sensibilities and led us to believe that we’ll always find a way to make it all work as long as we can pay our minimum payments.

The only way to become wealthy and live the life you desperately desire is to drown out the noise, roll up your sleeves, and get to work. Imagine what life would be like if you had no debt? What if you had a paid-for home? What if you had six months of living expenses in the bank? What if you never needed to trade your time for money ever again?

Those are the questions that keep me motivated on the tough days.

What motivates you?

RECOMMENDED TOOLS TO MONITOR AND GROW YOUR GAP

Personal Capital is the best tool to keep track of all of your liabilities (debts) and assets in one central location. With a few clicks, you can monitor your net worth picture and also dive into specific performance of your investments. I check my account a few times each week using the Personal Capital app. You can sign up for FREE using this link!

Today’s technological advances have made investing easier than ever before. Betterment is better than your average robo-adviser. Whether you are a beginning investor or a seasoned do-it-yourself-investor, Betterment can help you achieve optimal returns based on your risk preferences. Through a combination of lower fees, smarter behavior, diversification, and automated rebalancing, Betterment can help your out earn the typical DIY investor by 2.9%. You can roll over an existing 401k or IRA or open a new IRA in minutes.

My favorite tool to grow the gap, Digit, isn’t an investing tool and it alone won’t make you rich. But its algorithms will transfer money from your checking account to a Digit savings account and ensure that you don’t have easy opportunities to waste money. You can pause savings and transfer money back to your checking account at any time. Sign up for free here.

And if you’re looking to increase your income, consider driving for Uber. My friend is a school band teacher and earns a good salary. He takes advantage of his spare evenings and weekends and drives for Uber. He meets interesting people and often earns over $500 per week. If you enjoy driving and want to tap into the unlimited earning potential of Uber, Uber.


Readers, is there really an easy way to become rich? Have you identified your current gap, or difference between net income and expenses? What is your plan to grow your gap?

Improve Your Health – Financially, Physically, and Mentally – With These 9 Tips

Financially-minded people – like me – spend a lot of investing in their finances, and with good reason; breaking away from the rat race requires daily diligence. But what use is good financial health if you lack good physical and mental health? Money is important, but it is only one piece of the pie. Even if you have one area under control, you can improve your health by taking steps to grow grow in all three areas.

Most financial experts attest to the value of also maintaining physical and mental health. You only live once and you deserve to be happy. Make new habits and improve your health - financially, physically, and mentally - by following these 9 tips to live your best life.Pete Adeney, better known as Mr. Money Mustache, swears by regular weight lifting and almost constant movement to maintain his physical health. Sam Dogen, the mastermind behind Financial Samurai, is a 5.0 rated tennis player. Even the Oracle of Omaha, Warren Buffett, though largely driven by data and logic, carefully monitors his rational self for any signs of irrationality. The three have different backgrounds and experiences, but they similarly demonstrate the importance of healthy balance – financially, physically, and mentally.

Improving your health doesn’t require an expensive gym, a psychiatrist, or an investment broker. These can be great places to start, but you can improve your health by taking conscious stops to cut bad habits, replace them with healthy practices, and make those changes a permanent part of a healthy lifestyle.

9 TIPS TO IMPROVE YOUR HEALTH

We all have to start somewhere; the key is to start now! These 9 tips will help you improve your health – financially, physically, and mentally – and live a happy life.

1. Drink lots of water

Did you know that the average human body is 65% water? Your body needs water, and drinking lots of it is the quickest way to improve your health.

I love coffee and an occasional soda, but nothing primes my mind, body, and soul like water. Dehydration occurs anytime you take in less water than you use, and performance suffers even due to mild-dehydration. On the flip side, proper hydration increases energy, aids in healthy weight loss, and reduces stress.

So pour yourself a glass and keep reading.

2. Start Running

Humans have been running since the beginning of creation. In a sense, we were born to run. Children instinctively know how to run and start running shortly after learning to walk. So why do people begin to see running as a chore as they age?

After a long day of teaching, showing houses, and writing, I look forward to running. It is the best medicine for clearing my mind, reducing stress, and thinking creatively. In fact, I have written many of the posts on this blog while out on a run.

All you need to get started with running is a decent pair of running shoes, headphones, and athletic shorts/shirts. Later, if you want to get fancy, you can use a FitBit or Garmin GPS watch to track statistics like mileage, heart rate, calories burned, and split times. I’ve used the Garmin 405 CX for five years and it still meets all of my needs; it has even survived -30 degree Fahrenheit temperatures, monsoon-like rains, and a few unfortunate falls on icy trails.

3. Eat Healthy Food

You’ve heard all the complaints about healthy eating.

  • It’s too expensive to eat healthy food.
  • Healthy food is boring!
  • I can’t give up my (insert junk here). . .

Bad habits and good marketing have made sure that these ideas stick in our brains. Healthy food can be expensive, but it doesn’t have to be that way. And if you know how to cook effectively and use basic spices, you can turn perform stove top miracles with only lean chicken, broccoli, and potatoes. Say goodbye to junk food cravings!

This year, my wife and I have completed one round of the Whole 30 diet. (Super fans have now thrown an apple through their computer screen, because Whole 30 isn’t a DIET. It’s a LIFESTYLE!) We ate chicken, lean beef, pork, potatoes, eggs, and plenty of fruits and vegetables. I use even learned to drink black coffee like an adult. We lost weight, improved our moods and concentration, and saved money by staying away from restaurants.

Recently, we started using Zaycon Fresh, a program that has made our healthy eating efforts even easier and cheaper. Zaycon partners with local farmers to provide high-quality, farm-fresh food at prices which beat your local grocers. Their online ordering system is easy to use, and your local economy benefits because you are shopping locally.

When a local sale begins, Zaycon will send you an e-mail with all the details – this week they sent deals on bacon straight to my heart inbox! Because they focus on a select number of meats and eliminate middle men, we’ve saved a lot of money and still managed to eat well.

If you are a blogger and would like to join the Zaycon Fresh referral program, it is easy! It only takes a few minutes to get started.

4. Automate Your Financial Life

Most of friends are always stressed out about money. If you’ve ever been surprised by forgotten bills, late payment notices, or overdraft fees, you need to automate your finances as much as possible. I automate any payments which can be automated, from utilities and savings to my mortgage payment and investing.

You only live once and you deserve to be happy. Make new habits and improve your health - financially, physically, and mentally - by following these 9 tips to live your best life.My favorite automated savings tool is Digit. It is so effective that my wife and I were able to use our Digit savings to pay for a trip to Las Vegas last fall. The secure mobile app links with your checking account and uses sophisticated algorithms to help you save money only when you can afford it by moving funds to an external savings account. You can pause savings and transfer money back to your checking account at any time with quick text commands. Digit is FREE to use, currently pays bonuses every 3 months, and ensures that you save money each month. And if you refer a friend who signs up, you’ll receive a $5 bonus when they complete their first transfer!

If you’re looking to finally start investing for your future, you can automate that, too! Betterment is a sophisticated platform designed specifically for busy  people who don’t have time to research individual stocks or mutual funds. Their advanced algorithms and Smart Rebalancing methods can help anyone develop a portfolio designed to meet their investment goals and minimize tax losses. You can open an IRA, taxable brokerage account, or even roller over an existing account and receive one month FREE if you deposit more than $10,000.

Perhaps you’ve already been saving and investing diligently for several years but have grown tired of managing and monitoring a variety of investments in your IRA, 401k, and taxable accounts. Personal Capital is a FREE tool that can help you monitor all of your investments in one place. If you need personalized guidance, they will even provide more affordable advice tailored to meet your personal goals.

Personal Capital is the only tool I trust to monitor all of my financial assets in one central location. Start your free account today!

5. Read Every Day

Did you know the average millionaire reads at least two non-fiction books per month? This statistic has remained my motivation to read daily and commit to my personal growth. At any given time, I have a stack of books on my nightstand, with topics ranging from leadership to entrepreneurship, money, running, and spiritual development. I know my ability to grow on my own is limited, but learning from others and emulating their success can lead to unlimited growth.

Daily reading stimulates healthy thought and ensures that you maintain an ability to look outside yourself. If you know the names of the last few people who were eliminated on reality TV but can’t name three ideas you’ve read and implemented this month, that needs to change if you want to improve your health.

6. Be Mindful During Mindless Activities

You probably spend several hours each week performing tedious, mindless tasks like laundry, dishes, yard work, and house cleaning. Are you using time to improve your health?

When I do laundry, dishes, and yard work, I often to podcasts. I used to dread these tasks but now find myself looking forward to them because I learn something new that I can apply to better myself.

My wife and I also have mastered efficient meal preparation. We prep for the entire week on Sunday afternoon after church. By working as a team and using Crock Pots for many meals, we are able to free up several hours during the work week. Our budget benefits as well because we aren’t making frequent runs out for fast meals out of convenience.

7. Adopt a Dog

There are countless dogs in your local community shelter just waiting to find their forever home and humans to love. My wife and I bought our two dogs because she is allergic to all but a few select breeds, otherwise we would have adopted dogs in need. Adoption is affordable and easy, and what you invest in vet bills and bags of dog food will be regained ten fold in improvements to your physical and mental health.

8. Practice Silence and Solitude

Silence and solitude seem counter-intuitive to people who aim for efficiency in everything, but they are crucial. The truth is that rest and relaxation help us to recharge.

Many people wear busyness as a badge of honor – you know the type I’m talking about. I find these people usually end up burned out and unhappy. A few of my close friends seem to be unable to rest unless they are on vacation. A planned getaway can be a great time to rest and see the world. But a staycation is often just what I need to recharge and avoid burnout – and it is financially smart.

I’ll be vulnerable for a moment – between teaching full time, my real estate business, and this blog, I appear to be the poster child for busyness. But I rarely feel stressed because I set boundaries to protect my mental and physical health; planned solitude keeps me revved up for whatever is next.

9. Limit TV Time

There is a strong correlation between success and low TV consumption, as countless studies show. Most of the time I am disciplined enough to limit TV time, and sometimes my subconscious lures me into watching three hours of Breaking Bad re-runs – yeah science!

Literally unplugging your TV is a simple way to improve your health. By making it a bit tougher to mindlessly run to Stars Hollow every time you feel stressed, you will begin to form better habits which help you to unwind, accomplish more, and keep moving. You can always plug in the TV later!

LET’S GET STARTED!

The best time to improve your health is NOW! You can put yourself on the path toward improving your physical, mental, and emotional health today if you’re willing to build even a single new habit. What are you waiting for?

And a friendly reminder – Don’t forget to check out two FREE and easy tools to improve your health fast, Digit and Zaycon Fresh

Student Loan Debt – 3 Overlooked Factors to Consider Before Borrowing

Only a few generations ago, the average high school graduate dreamed of entering the work force and securing a long-term job following graduation. A high school diploma was a ticket to a good life. Over time, the Associate’s and Bachelor’s degrees, respectively, became the new entry level standard, and dreams were adjusted. Still, higher education remained affordable for the average student who was willing to work to pay for her education. Today, however, fewer and fewer high school graduates are able to cast their dreams of continuing their post-high school education without taking on student loan debt.

The average high school student is inundated with information on student loans, yet they often remain unsure about which voices to trust. FAFSA information packets and misleading online banner ads regarding student loan forgiveness serve only as faint reminders that all student loan borrowers are obligated to repay their debt. In the end, the promise of an education combined with hope leads most borrowers to act without truly considering the consequences. For many students, the options are clear: take on student loan debt to pay for their education or miss the boat entirely.

Entering into student loan debt is a big decision for all students. Consider these critical factors before you borrow to finance your education!When I graduated high school, I found myself in this position. Despite having earned a full-tuition academic scholarship and a few other small scholarships, I did not have any means other than student loans to pay for room and board. Since I was ambitiously pursuing what amounted to a triple major, anything beyond working weekends was out of the question. I felt stuck, but I felt I had no other choice but to take a chance in that moment and hope that it would pay off.

Related: Escape From Student Loans: How Two Educators Paid of $17,831.65 in 54 Days

For any college student who is considering student loan debt to finance his education, cautious consideration of the potential ramifications is critical. Among several factors, the following three factors should be afforded special consideration by all would-be borrowers.

1. Opportunity Cost of Student Loans

Rising student loan payments represent a growing percentage of the average college graduate’s monthly budget. When I graduated college in 2009, my monthly student loan payment accounted for 11% of my monthly net income. Despite the growth of income sensitive repayment plans, other graduates may face much less favorable repayment terms. This forces many young people to make difficult decisions, including whether to

  • invest in their company 401k or pay extra on their student loans and forfeit a company match
  • continue renting longer than their parents did in order to pay down their debts
  • delay marriage and starting a family due to debt concerns
  • seek traditional employment rather than start a business due to lack of start-up funding and income-related concerns

Critics of student lending raise the point that many students are essentially tricked into a leap-before-you-look decision when the time comes to take out student loans. At age 18, most students lack the maturity and financial savvy to understand the long-term ramifications of their decision; at the same time, the industry has no problems with holding students accountable for repaying their debts.

2. Student Loan Debt Default

The impact of student loan debt stretches beyond missed opportunities and dreams deferred. According to a StudentLoans.net study, which ranked all 4,544 schools throughout the United States eligible for federal student loans according to federal student loan default rates, approximately 11.3% of all student loan borrowers default on their student loan obligations.

Entering into student loan debt is a big decision for all students. Read on to see why a major study reveals that you should consider a school's default rate before choosing a school.This statistic is alarming, as default occurs only when a borrower fails to make a minimum required monthly payment for 270 days. Many borrowers are not aware that default comes with severe consequences, including lost eligibility for deferment, wage garnishment, and sometimes severe damage to credit scores.

Though the approach might appear pessimistic to many borrowers, greater consideration should be given to college and university default rate statistics. I’m not advocating a plan-to-fail approach to choosing a university. However, the correlations as revealed in the study between school type and default rates is too clear to ignore. Not surprisingly, the type of school (public vs. private, less than 2 years, 2-3 years, 3-4 years, profit vs. non-profit) is one predictor of potential default likelihood that potential student loan borrowers should consider.

Among several takeaways from the study, the following are noteworthy:

  • For-profit schools boasted the highest default rates.
  • Public school default rates are higher than those of private schools. *Note: Community colleges are included in public school default rate calculations.
  • Students who attended non-degree granting schools were most likely to default on student loans.
  • Larry’s Barber College in Chicago, IL held the highest student default rate at 48.9%.
  • Many schools maintained 0% default rates.

You can review the study further or download and manipulate the data further here.

3. Interest Rates

Student loan interest rates have faded in and out of the American consciousness for years. Fortunately for current borrowers, the days of 6.5% interest rates on Subsidized Loans are a thing of the past. Despite improved rates over the past few years, would-be borrowers aren’t doing themselves any favors by taking student loans, especially when unsubsidized loans begin accruing interest earlier than subsidized loans.

Interest rates for loans first disbursed on or after July 1, 2016 are as follows (Source – AccessGroup.org):

Loan Type 2016–17 Interest Rate 2015–16 Interest Rate
Direct Subsidized Loans (Undergraduate) 3.76% 4.29%
Direct Unsubsidized Loans (Undergraduate) 3.76% 4.29%
Direct Unsubsidized Loans (Graduate) 5.31% 5.84%
Direct PLUS Loans (Graduate and Parents) 6.31% 6.84%

 

To Borrow or Not to Borrow

Though today’s students enjoy favorable student loan rates, a growing job market, and plenty of reason for hope, student loans remain a double-edged sword. All would-be borrowers would be wise to consider their student loan needs and all options before borrowing. The opportunity cost of borrowing to complete higher education can be costly, and as the aforementioned study illustrates, the consequences of student loan default are serious.

Thanks to Drew Cloud at The Student Loan Report for working with me to put this article together.


Do you have student loan debt? Did you consider default rates, interest rates, and other factors before you decided to borrow? 

9 Things Your Realtor Won’t Tell You – But I Will!

According to the National Association of Realtors, there are approximately 2 million active real estate professionals in the United States. Real estate is a multi-billion dollar business, and buying a home is an important transaction. The pressure understandably gives pause to both buyers and sellers. In fact, a reported 68% of Americans surveyed do not trust their realtor, according to a 2013 survey by Choice Home Warranty.  Why? The average buyer or seller has been led to believe that there are things your realtor won’t tell you.

While this is somewhat true – for example, there are certain things that your realtor cannot legally tell you – your typical realtor is an honest, hard-working individual who is trained and committed to look out for their client’s best interests. In fact, in any real estate transaction, a realtor is responsible to provide superior service by following the Code of Ethics. The Code, as it is often called, requires the following:

  • Realtors must promote their clients’ interests while treating all parties fairly
  • Realtors must not discriminate based upon race, color, religion, sex, handicap, familial status, national origin, or sexual orientation
  • Realtors must remain truthful in all advertising and marketing, including when listing a home for sale

There are things your realtor won't tell you - even if you have a great one! These home buying and selling tips will help you have a smooth transaction.

SPILLING THE TRUTH – The Top 9 Things Your Realtor Won’t Tell You

The Code has done wonders to tame the previous Wild-Wild-West nature of real estate, but as previous statistics showed, people still have their doubts. Can you really trust your realtor? Or is he or she just looking to collect a commission check and head for the hills?

As a part-time realtor who loves serving buyers, sellers, and renters, I will outline 9 things your realtor won’t tell you – but I will!

1. You Should Interview Your Realtor

Before you choose a realtor, whether as a buyer or seller, It is important to know the following about a realtor:

  • How many buyers and sellers with which they typically work at a given time
  • Whether they work as a part of a team
  • How well they personally know and understand the areas you have targeted (if you’re a buyer)

To be transparent, no realtor wants to be interviewed by their potential clients! It can be intimidating and even feel a bit unnatural, but it is vital to ask the right questions. The purchase or sale of a home is one of the largest financial transactions you will ever make, and it is important to have a knowledgeable, committed, and available adviser in your corner.

2. Zillow Is Actually Useful

Inevitably, if you gather a group of realtors together, it’s only a matter of time before they start complaining about clients who rely on Zillow as if it were The Gospel. Truthfully, though most realtors tend to pour out hate on Zillow, it can be helpful.

For example, when I begin working with a buyer who has spent time searching on Zillow, I know that they have likely developed an idea of what they are looking for in a new home. By looking at hundreds of homes and thousands of pictures, it becomes easier to create a wish list, even if it may not be 100% realistic at this stage.

Zillow is also a good tool for casual buyers who are just interested in window shopping. However, Zillow data should not be trusted in most cases. It is often outdated (in some cases by nearly two weeks), inaccurate, and sometimes hilarious, as any realtor who has viewed an absurd “Zestimate” can tell you.

So keep using Zillow for window shopping, but when you get serious about buying, don’t bother. The data your agent pulls from the local Multiple Listing Service (MLS) is the only data you can trust.

3. Pre-approval Is Everything

If you’re a buyer and one of the first questions your agent asks is “Do you have pre-approval?” you have found yourself a winner! By asking this question, your agent is protecting his time and best interests, but he is also doing the same for you.

Written and signed notice of pre-approval from your lender is must if you want to be taken seriously, especially in a hot market. Without pre-approval in place, you could waste your time viewing homes which you cannot afford, find a home only to have another buyer’s offer accepted because they were pre-approved and you were not, or worse – you could discover that your credit history or debt to income ratio makes you ineligible for a mortgage!

Before you seek pre-approval, it is important to review your credit history. I recommend that you pull a free credit report to be sure no surprises or errors ruin your chances for a timely pre-approval. I recommend MyFreeScoreNow.com for this purpose, and they are – you guessed it – FREE!

Your 2017 Credit Score May Have Changed. See Your FREE Credit Score – $0 from MyFreeScoreNow.com. Sign up Now!

When you are ready to seek pre-approval, it is advisable to gather multiple quotes from a variety of lenders. Don’t worry – this will not damage your credit! I recommend Lending Tree as an option for my buyers because they provide personalized rates with a variety of options to meet a buyer’s lending needs. They have facilitated over 55 million loan requests, and they work quickly to get buyers pre-approved.

I have also had buyers who had good luck with SoFi. If you have good credit (700+ credit score), you may be able to save money with them. Contrary to what many realtors will tell you, SoFi works with buyers who have down payments as small as 10%.

4. This isn’t HGTV – it’s Real Life!

Touring a home like people do on HGTV doesn’t cut it. Most of those people are actors! Even if they’re not pros, they are being coached to say certain things and ask certain questions.

I like HGTV as much as anyone, but you must remember that it is all about entertainment value. When you are a serious buyer, you aren’t looking at houses to be entertained – this is important, so act like it!

Open closets and cupboards, check out the unfinished basement and look for cracks, and go walk around the yard. You’re not a professional home inspector, but you can save yourself a lot of stress, heartache, and money if you perform a DIY mini-home inspection prior to the true inspection.

5. You Can Request Multiple Showings of a Home

Yes, it is true: you can ask to see a home a second, third, or fourth, time. And, yes, it is equally true: your agent won’t like this. But you should do it if you’re at all on the fence. The additional 15-30 minutes of time are worthwhile for everyone, so don’t be afraid to advocate for yourself and tell your realtor what you want.

Among the things your realtor won’t tell you, this item is fairly inconsequential, but it is good to know that you’re not out of line in this request.

6. There Are No Stupid Questions

In real estate and in life, there are no stupid questions – other than the ones you don’t ask.

In short: ASK QUESTIONS! Your realtor is an expert on the home buying and selling processes. If you don’t ask questions, you won’t receive the best possible service.

No, realtors don’t always have all of the answers. If you are asking good questions, most of the time we will have to get back to you.

7. You Will Learn As You Go

The process of buying a home is a learning experience. While you should determine needs vs. wants before your first home tour, we know that you will probably still be feeling out this process during the first several tours. It is a good practice to keep a check list of features that you desire and review it while touring homes.

8. It’s OK to Buy the First House You See – Sometimes

A good buyer agent shouldn’t push you into a quick offer, but if the home meets your expectations, is priced right, and is in a hot market with lots of competition, you should move fast.

Our team hates to see clients walk into the house of their dreams and decide to “wait it out” for more options because it often leads to disappointment. It happens far too often all because buyers haven’t reached a point of emotional readiness needed to buy.

9. Your Attorney is More Important Than Your Realtor

In most states, your attorney is more important than your realtor. While your realtor is there to advise your search process, complete offers using fillable form contracts provided by their local professional associations, and negotiate on your behalf, your attorney holds far more power. He or she is your last line of defense in protecting your legal options, modifying transaction documents, and in some cases, facilitating the closing process.

Your realtor is always happy to recommend a quality attorney who will facilitate a smooth closing, but virtually any experienced real estate attorney would be a wise choice.

YOUR NEXT MOVE

If you’re planning to buy or sell a home, you need a committed, available, and connected realtor on your side. With nearly 2 million real estate professionals currently working in the United States, you’re sure to have your choice among many quality realtors. With pre-approval in hand and in the guidance of a good realtor, the home search can be a pleasant process.

Throughout the process of hiring a realtor and buying or selling, put your trust in your realtor. Though there are things your realtor won’t tell you, he or she has your best interests in mind and wants to make the process as smooth as possible.


Readers, do you have a realtor you can trust? Have you had any poor experiences with a realtor?

Achieve Success in Everything Through C.A.S.E.

I spend a lot of time thinking about success. It is one of the most fascinating topics we can encounter in life because everyone values and desires success to a certain degree. How we define success, respond to success, measure success, and seek to achieve success can vary significantly from person to person. However we choose to shape the model of success, one thing is clear: we all look to others in varying degrees as we shape our own success paradigms.

When I was a kid, I shot hoops in the driveway and envisioned what it would be like to be Michael Jordan. Though I wasn’t a Chicago Bulls fan, I was an MJ admirer. I watched his games, checked box scores, and read his interviews. I learned that Jordan often spent many hours practicing his skills outside on the family hoop, even if meant practicing in the dark and rain. This seemed like a smart idea to me, so I began began doing additional shooting drills in the dark and rain. That year, I became a starter on the school basketball team.

Around the same time, I began playing competitive chess and was drawn to Frank Brady’s Bobby Fischer: Profile of a Prodigy, which outlined the noteworthy, up-and-down life of the genius chess champion. I became enamored with the work ethic, drive, and determination exhibited by Fischer, and once again, I patterned some of my study habits after Fischer. I played over hundreds, if not thousands, of games of masters like Capablanca, Morphy, and Lasker, often taking detailed notes while being careful not to tip off my parents that I was still awake and studying into the early morning hours. Later that year, I won my division in the Michigan Amateur Chess Championship.

I had no idea at the time that my method of seeking success – emulation – was common. A kid acting on intuition doesn’t think about these things in this way. But over time, I found that my practice of following the paths of the greats was paying off handsomely.

Somewhere along the way growing up, I lost my way and stopped doing many of the things that had made me successful. I sought my own path, which was primarily built upon hard work. When others grew tired or decided to quit, I dug a little deeper and worked a little longer.

Sometimes it worked out, and sometimes it did not. Now, at the comparatively-ripe age of 30, experience has reminded me that there is a smarter way to achieve success in everything: C.A.S.E.

Goals can be elusive, but you can achieve success if you are in touch with your dreams and willing to emulate others using C.A.S.E.

Achieve Success and Build Momentum Using C.A.S.E. (Copy and Steal Everything)

In the last year, I have become increasingly interested in returning to my intuitive childhood roots and studying the lives and habits of all sorts of top performers like Steve Jobs, Bill Gates, and even Jordan and Fischer. In Outliers: The Story of Success author Malcolm Gladwell consistently attributes the success of top performers to what he calls the 10,000 Hour Rule. Through countless examples, he reasons that most successes can be attributed to practicing a skill the correct way over and over and over. Finding that “correct” way is best achieved by examining others’ habits and practices.

In other words, we should copy and steal everything if we want to put ourselves on the path toward success. If it is true that we are what we repeatedly do, then success can often be as simple as repeatedly doing what the top performers do enough times that it becomes who we are at our cores.

Am I advocating that we need to become a version of someone else before we can become the best version of ourselves? Not necessarily. But it might not be a bad path to getting there. Maybe the way to achieve brilliant success is not to blaze an entirely unique trail, but to spend some time on the trail blazed by others first. Consider this a sort of internship in success, if you will.

If you have goals and feel that you aren’t successful at this time, consider utilizing the C.A.S.E. method to jump start your progress. I recommend considering the following points before you start, as they will support your efforts to achieve success.

Craft Your Own Definition of Success

Following a blueprint to achieve success without actually pausing to consider what it is you wish to achieve is a major stumbling block for many ambitious people. They are heading completely in the wrong direction, but they’re just happy to be making excellent time! Be sure that you fully consider what success looks like to you before you take specific action.

If you don’t chart a path to achieve success as you see it, you will find yourself copying the life and values of another person. This approach has severe limitations, most notably that you are not exactly the same as others. The skills you possess will influence the path you take to achieve success.

For anyone who lacks understanding of his skills,  StrengthsFinder 2.0 remains my most treasured guide for discovering them. For mere pizza money, the book has had a profound impact on the direction of my life.

Copy and Steal From the Right People

Once you’ve defined your goal, it is important that you copy and steal from the right person. You must identify someone who has taken steps to achieve success in an area that is at least similar to your vision.

While you’re at it, do not limit yourself to emulating only one high achiever. We all stand to learn at least one piece of actionable knowledge from virtually any top performer.

Compare Yourself to the High Performers You Select

I’m a firm believer in the notion that comparison is the thief of joy, but I also believe this idea has its limitations. We can compare ourselves to others in a manner that brings us down, or we can identify strengths that we see in ourselves which are also manifested in the lives of others.

Before you identify a top performer to emulate, it is important that you first find common ground with that person. Fortunately, finding shared attributes with high performers is not highly difficult in most cases, but if overlapping strengths are not readily apparent to you, it may be time to look elsewhere.

For example, if you’re a writer who works best after a day’s worth of thought, movement, and exercise have taken the edge off, emulating a writer like Hemingway (who famously rose early to write each day) won’t likely work for you.

Don’t Rely on C.A.S.E. to Solve Everything

Personal growth guru Tony Robbins said, “If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results.” Actress Judy Garland reportedly said, “Always be a first rate version of yourself and not a second rate version of someone else.” The key to successful implementation of the C.A.S.E. method lies at the intersection of these two quotes – we should seek to emulate top performers who have achieved the success we desire while also remaining true to ourselves.

By starting with an understanding of your own values and what you hope to achieve, it is possible to copy others without becoming them. Surely copying others has its limitations, but human intuition cannot be entirely wrong. C.A.S.E. alone won’t solve all of your problems – whether they’re tied to your career, marriage, spending, or investments – but when utilized properly, it can jump start the pursuit of your dreams and help you to achieve success.


Readers, do you implement aspects of the C.A.S.E. method? If not, what is your primary method for seeking to achieve success?

Stop Money Fights With This Simple Solution

This post, “Stop Money Fights With This Simple Solution,” was updated on February 16, 2017.

Over 70 percent of couples report fighting about money over anything else. You can stop money fights by following this one simple recommendation!

Like many people, I lived in the dorms back in my college days. After surviving one semester with The World’s Worst Roommate™, I was fortunate to be granted a housing change. My new roommate, Erik, was everything one could hope for in a roommate: he picked up after himself, showered daily, loved to play table tennis until all hours of the night, and could binge watch TV like a pro.

Among the many shows Erik and I binged on, Married With Children was our favorite. Can you blame us? Ed O’Neill played the role of Al Bundy, a henpecked husband, broke shoe salesman, and father of two, to perfection.

Over 70 percent of couples report fighting about money over anything else. You can stop money fights by following this one simple recommendation.Brief digression: It is a crime that O’Neill never won a Golden Globe for his performance as Al Bundy, though his career has been unquestionably validated by countless nominations and awards for his performance as Jay Pritchett in Modern Family.

In one memorable scene, Al’s wife, Peggy, has just returned home from a lavish shopping spree. Al takes a look at the bills and delivers a typical, priceless line:

I hope one of these bills is for a coffin, because your shopping is killing me.

While MWC was a slapstick, controversial comedy which often crossed the line, this particular money fight between Al and Peggy hit the nail on the head in terms of its value as a social commentary.

Research supports my assertion. According to a Huffington Post article from 2014, a survey showed “that 70 percent of couples argued about money more than household chores, togetherness, sex, snoring and what’s for dinner.” Furthermore, survey records that the focus of 46% of all money fights was “frivolous purchases.”

I suspect that 54% of surveyed couples were not being entirely honest.

Over 70 percent of couples report fighting about money over anything else. You can stop money fights by following this one simple recommendation.
Graph credits to Huffington Post and Money.com

Mission: Stop Money Fights in Marriage

Last fall, I volunteered as a co-facilitator for a popular personal finance course. I have always enjoyed engaging in financial discussions with others, despite the general unwillingness to do so in most people, and serving as a group leader satisfied that urge while also providing a platform to help people and sharpen my own knowledge.

During our session on purchasing, a student in my group shared that she and her husband had previously been through several fights about spending over the years. I braced myself for a plea for advice, but what she said next surprised me.

“We found a solution that has stopped most of our money fights.”

Chatter among the group instantly ceased. Each group member, including me, was eager to learn this couple’s secret to stop money fights?

Solution: The Thirty Day List

In the moments which followed, we learned a lot about this couple’s experiences. Throughout their marriage and subsequent ushering of two children into the world, this couple had fought about many purchases: vehicles, clothing, electronics, and even groceries. Matters were not made any easier when the couple encountered financial hardships. In order to reduce and stop money fights specifically related to purchases, this couple implemented a procedure that they called “The Thirty Day List.”

They outlined the rules as follows:

  1. When considering a purchase over $50, write the item and cost down on the list and date the entry.

  2. Provide a brief rationale regarding the item’s utility and importance.

  3. Revisit the rationale in 30 days. If it still sounds like a good idea at that time, purchase the item.

Naturally, many students (budget nerds) were in favor of this approach, while other students (free spirit spenders) were against the restriction associated with this process. However, as the couple explained how it worked for them, the tone of the room shifted toward acceptance of this uncommon procedure. Some people even expressed hope that use of The List could stop money fights in their marriage.

Why The List Works

Among the benefits of the list which were described that day include the following:

  • The List often prevents unnecessary purchases. Sometimes you don’t buy the item because you realize don’t really need it.
  • The List eliminates susceptibility to high-pressure sales techniques. When a smooth talking salesman is rolling out every tactic in his arsenal to get you to purchase that new refrigerator with built-in social media access, you don’t even have to feel bad saying “no” because you are acting on a matter of principle.
  • The List causes you to wait, and sometimes this nets you a better deal. Patience puts you in a position to negotiate a great price. This extra time also allows you to thoroughly research a product, weigh the pros and cons of the purchase, and make a careful evaluation.
  • Similarly, after waiting 30 days, you retain the willpower to reject a bad deal. What is a few more days? You are in control and have the power to walk away.

Why The List Works

The Thirty Day List works in many situations because it leads to communication. When a couple collaborates to generate a unified position, a meeting of the minds and melding of ideas is often the result. However, this does not always happen quickly.

In such cases, a couple must take a step back and view the possible purchase from a wider perspective. By considering the purpose of the purchase from a variety of perspectives, the tone of communication shifts from one which is adversarial to one which is inclusive of both partners’ values.

Related Posts: See Values and Budgeting Part One and Values and Budgeting Part Two

Finally, the List provides accountability for larger purchases. It provides a framework and protocol which eliminates one partner from “going rogue.”

Downsides to The List

While the Thirty Day List may seem faultless in theory, it can be more difficult to implement in actual practice. After all, we live in a society in which it is easier and (often preferred) to ask for forgiveness after the fact rather than seek permission in advance. Many people would agree that this is a terrible way to act within your marriage or other committed relationship, yet that doesn’t stop some people. If this is your preferred practice, the List won’t work well for you.

The List is also not a good idea when you find yourself in a housing search, especially in a seller’s market. Often times, you will need to be poised to make quick decisions. This shouldn’t be a surprise, however, as when you are in the midst of such a search, you know the rationale and utility for the purchase.

Make the List Work For You

Perhaps the greatest feature of the List is that it can be modified to fit your circumstances. A high school student with a part-time job and an annual income of $1,200 and a married couple with a combined annual income of $500,000 can successfully use the List to their respective advantages. The figures may need to be modified, but at the end of the day, the principles remain the same whether zeros are added or removed.

If thirty days is too cumbersome for you, modify the procedure to fit your needs. You know yourself better than anyone, and using this knowledge is the best course of action when designing a List which will work for you to stop money fights and support wise purchases.

Further Recommended Reading: 

Money and Marriage: How to Talk About Money With Your Spouse

Want To Be Rich? Maintain Great Relationships


Readers, do you have a procedure similar to The List in place to assist when making significant purchases? Do you and your spouse or significant other routinely fight about purchases? What do you do to stop money fights?

How to Stop Fighting Over Money With Your Spouse

 

According to a Huffington Post article from 2014, a survey showed “that 70 percent of couples argued about money more than household chores, togetherness, sex, snoring and what’s for dinner.” Furthermore, survey records that the focus of 46% of all money fights was “frivolous purchases.” In my opinion, 54% of surveyed couples were not being entirely honest. And I bet 100% of couples would love to stop fighting over money with each other!

Even my wife and I find ourselves fighting over money more than anything else. Of the top five money arguments listed in the graphic below, we tend to argue most about our monthly budget allocations. In the grand scheme of things, we’re fortunate to be arguing about spending on things like dining out, clothing, and gifts to others. Though we mostly have our act together in this area, I’ll be honest – it still bugs me that these money fights pop up from time to time.

Research shows that over 70 percent of couples fight about money. This simple solution will help you stop fighting over money with your spouse or partner.
Graph credits to Huffington Post and Money.com

Mission: Stop Fighting Over Money With Your Spouse

I recently wrapped up another session of Financial Peace University at my church. I enjoyed engaging in financial discussions with others, despite the general unwillingness to do so in most people, and serving as a group leader satisfied my urge to help others while also helping me sharpen my own knowledge.

During our session on purchasing with last year’s group, a student in my group shared that she and her husband had previously been fighting over money repeatedly over the years. I braced myself for a plea for advice, but what she said next surprised me.

“We found a solution that has stopped most of our money fights.”

Chatter among the group instantly ceased. Each group member, including me, was eager to learn this couple’s secret.

Solution: The Thirty Day List

In the moments which followed, we learned a lot about this couple’s experiences. Throughout their marriage and subsequent ushering of two children into the world, this couple had fought about many purchases: vehicles, clothing, electronics, and even groceries. Matters were not made any easier when the couple encountered financial hardships. In order to stop fighting over money, purchases, this couple implemented a procedure that they called “The Thirty Day List.”

They outlined the rules as follows:

  1. When considering a purchase over $50, write the item and cost down on the list and date the entry.

  2. Provide a brief rationale regarding the item’s utility and importance.

  3. Revisit the rationale in 30 days. If it still sounds like a good idea at that time, purchase the item.

Naturally, many students (budget nerds) were in favor of this approach, while other students (free spirit spenders) were against the restriction associated with this process. However, as the couple explained how it worked for them, the tone of the room shifted toward acceptance of this uncommon procedure. Some people even expressed hope that use of The List could help them to stop fighting over money.

Why The List Works

Among the benefits of the list which were described that day include the following:

  • The List often prevents unnecessary purchases. Sometimes you don’t buy the item because you realize don’t really need it.
  • The List eliminates susceptibility to high-pressure sales techniques. When a smooth talking salesman is rolling out every tactic in his arsenal to get you to purchase that new refrigerator with built-in social media access, you don’t even have to feel bad saying “no” because you are acting on a matter of principle.
  • The List causes you to wait, and sometimes this nets you a better deal. Patience puts you in a position to negotiate a great price. This extra time also allows you to thoroughly research a product, weigh the pros and cons of the purchase, and make a careful evaluation.
  • Similarly, after waiting 30 days, you retain the willpower to reject a bad deal. What is a few more days? You are in control and have the power to walk away.

Why The List Works

Research shows that over 70 percent of couples fight about money. This simple solution will help you stop fighting over money with your spouse or partner.The Thirty Day List works in many situations because it leads to communication. When a couple collaborates to generate a unified position, a meeting of the minds and melding of ideas is often the result. However, this does not always happen quickly. Simply starting the conversation can often be the hardest part!

In such cases, a couple must take a step back and view the possible purchase from a wider perspective. By considering the purpose of the purchase from a variety of perspectives, the tone of communication shifts from one which is adversarial to one which is inclusive of both partners’ values.

Related Posts: See Values and Budgeting Part One and Values and Budgeting Part Two

Finally, the List provides accountability for larger purchases. It provides a framework and protocol which eliminates one partner from “going rogue.”

Downsides to The List

While the Thirty Day List may seem fail-proof in theory, it can be more difficult to implement in actual practice. After all, we live in a society in which it is easier and (often preferred) to ask for forgiveness after the fact rather than seek permission in advance. Many people would agree that this is a terrible way to act within your marriage or other committed relationship, yet that doesn’t stop some people. If this is your preferred practice, the List won’t work well for you.

The List is also not a good idea when you find yourself in a housing search, especially in a seller’s market. Often times, you will need to be poised to make quick decisions. This shouldn’t be a surprise, however, as when you are in the midst of such a search, you know the rationale and utility for the purchase.

Make the List Work For You

Perhaps the best feature of the List is that it can be modified to fit your circumstances. A high school student with a part-time job and an annual income of $1,200 and a married couple with a combined annual income of $500,000 can successfully use the List to their respective advantages. The figures may need to be modified, but at the end of the day, the ideas remain the same whether zeros are added or removed.

If thirty days is too long for you, modify the procedure to fit your needs. You know yourself better than anyone, and using this knowledge is the best course of action when designing a List which will work for you to stop fighting over money and support wise purchases.

Further Recommended Reading: 

Money and Marriage: How to Talk About Money With Your Spouse

Want To Be Rich? Maintain Great Relationships


Readers, do you have a procedure similar to The List in place to assist when making significant purchases? Do you and your spouse or partner routinely fight about purchases? How have you been able to stop fighting over money?

Make the Most of Your Tax Refund in 2017

Tax refund. Next to the words “pay day” and “debt free,” these are my two favorite finance-related words. Whether my annual tax refund is a modest sum or a mid-size windfall, I am always happy to see my refund directly-deposited into my checking account. Once you know it is on its way, knowing how to make the most of your tax refund can be a daunting task.

Still haven’t submitted your 2016 tax returns? If you have a simple return, such as a 1040-EZ, I recommend completing your simple return with E-File.com today. You can complete your Federal return for FREE and receive free support along the way. And FinanceSuperhero readers can receive a discount on state returns by using this link – $6 Off State Filings With Coupon Code “6OFFSTATE”.

If you’re planning to complete a 1040A or require additional schedules, the team at Liberty Tax has local offices in your area to help you every step of the way. Other tax preparation services come and go, but LibertyTax has been helping people file their taxes the easy way since 1997.

Receiving a tax refund is a great opportunity to improve your financial outlook. Follow these 9 pro tips to make the most of your tax refund in 2017!

The FinanceSuperhero Guide to Taxes – Make the Most of Your Tax Refund

Assuming you have a tax refund coming your way, you could be on the verge of changing your financial picture.  With great opportunity comes great responsibility! The following advice will help you to make the most of your tax refund and make significant progress on your financial journey. I recommend following the steps in numerical order.

1. Give a Portion of Your Tax Refund to a Charitable Organization

Longtime readers will not be surprised that I am suggesting giving as the first step to make the most of your tax refund. As previously mentioned, Mrs. Superhero and I have placed Giving at the top of our monthly budget. Giving aligns with our values, and helping others provides us with much more satisfaction and enjoyment than buying more stuff or eating delicious food.

I strongly believe that giving 10% is the best way that we can make a charitable contribution prior to reaching financial independence (at which time we will significantly increase our giving). We have always done this, dating back to the time when we faced a mountain of debt, and we continue to do so today, even though we are only a few months away from carrying no debt other than our mortgage.

Why? As I mentioned, we believe helping others is both a calling and the most satisfying use of our money. Giving is also a strong reminder that money is not something to be hoarded out of greed. We want to value money and practice good stewardship, but we also want to remain far removed from the love of money.

Many people reject giving in favor of keeping their money strictly to themselves. Ironically, it is usually these same people who senselessly give their money to big banks and other financiers in the form of outlandish interest payments on cars, boats, and other stuff.

Personally, I would rather give in a meaningful way. Even if you give 1% of your tax refund, you will help others and begin to change the way you view money.

2. Increase Your Savings and/or Emergency Fund

When looking to make the most of your tax return, simply saving money can be a wise choice.
When looking to make the most of your tax return, simply saving money can be a wise choice.

After supporting societal progress by giving, use your tax refund proceeds to improve your liquid savings. Unless you are an extremely high income earner or have a stable passive income stream, you absolutely must have an Emergency Fund. If you do not have one, consider this a full-blown, alarm-sounding crisis that must be addressed immediately! Statistically-speaking, there is close to a 100% chance that you will experience some form of an emergency within the next decade, so be ready!

While I recommend maintaining an Emergency Fund of at least 3-6 months of minimum living expenses, you may also wish to establish an additional Opportunity Fund. I do not specifically recommend amounts or figures for this fund, and you may wish to skip it entirely in favor of moving onto Step 3. However, an Opportunity Fund could allow you to make a fun, somewhat impulsive decision without any accompanying feelings of guilt or regret.

3. Get out of Debt – Once and For All!

After you have given and increased your security via your Emergency Fund, you are fully-prepared to take on the primary barrier standing in the way of Financial Independence: Debt.

The sooner you eliminate your non-mortgage debts, the sooner you free a significant portion of your monthly income and simultaneously gain the freedom to invest in tax-advantaged retirement accounts. Both the Snowball and Avalanche methods are valid means to achieve debt freedom. For the purposes of this post, I am less-concerned with the method you implement to eliminate your debt; just get it done. You may get the push you need if you make the most of your tax refund in this way!

4. Invest in Tax-Advantaged Investments

The real fun begins when you no longer have non-mortgage debt. If you are free from the shackles of debt, the next optimal use for your tax refund is to maximize your retirement contributions. For the purposes of this limited space, ensure you are maximizing employer-offered plans, specifically if they offer a match, and then move onto your Roth IRA.

Want to make the most of your tax refund? Opening an IRA or taxable brokerage account with Betterment is a smart way to maximize the impact of your refund.
Betterment returns vs. US Market and Typical Investor Returns (Credit: Betterment)

If you’re looking for an easy to use platform for investing, Fundrise offers real estate investment options with low financial barriers for entry.. Their Tax-Coordinated Portfolio works to maximize your earnings and minimize tax burdens across all types of accounts, including taxable accounts, Roth IRAs, and traditional IRAs. It is simple to sign-up or rollover an account, select a portfolio of ETFs, and be on your way toward earning better returns right away.

Compared to other platforms, the Betterment portfolio is designed to achieve optimal returns at every level of risk. Through diversification, automated rebalancing, better behavior, and lower fees, the Betterment approach to investing can help you generate 2.9% higher returns than a typical DIY investor.

Make the most of your tax refund and start investing with Betterment by signing up today!

5. Contribute to Your Children’s College Funds

If you do not have children, skip ahead to Step 6. If you have children, you need to learn the nuances of the Coverdell ESA (Education Savings Account, also nicknamed the Education IRA) and 429 plan. The ESA has income and contribution limits (currently $2,000 per year), but I recommend you start with the ESA in most circumstances, if eligible.

The important thing to understand is that minimal contributions to these vehicles will place you in a position to send your children to college without the burden of student loans if you begin early.

Related PostEscape From Student Loans: How Two Educators Paid Off $17,831.65 in 54 Days

6. Destroy Your Mortgage Debt

Pause with me for a moment and imagine a life without a mortgage payment. If you can’t image it, check out the FREE E-book, How to Hack Your Mortgage and Save Thousands, written by my friend Andrew at FamilyMoneyPlan. This is the plan he and his wife used to wipe out their $320,000 mortgage in 6 years.

What could you do with an extra $1,000 per month? $2,500? $5,000? I just felt an overwhelming sense of excitement  and peace typing these words. The next time I visit my doctor and have my blood-pressure checked, I am going to visualize the wonders of a mortgage-free life to improve my numbers.

For the average family, mortgage interest represents the second-largest expense that they will pay in their entire lifetime. In some cases, total mortgage interest paid on a 30 year mortgage can be approximately 75-80% of total principal, even at today’s advantageous interest rates! Make the most of your tax refund to accomplish progress on an annual basis and you could shave several years off your mortgage, especially if you are already paying extra on principal on a monthly basis.

7. Invest in Non-Retirement Funds and/or Real Estate

If you have made it to Step 7, please allow me to offer my congratulations. With no debt whatsoever, healthy savings, and kids’ college covered, you are poised to generate significant wealth. At this stage, you may have achieved Financial Independence, depending upon your lifestyle.

I recommend using tax refund money to invest in simple index funds at this stage. A modest tax refund sum is enough to get you started with many index funds. Adopt a long-term approach, relax, and watch your money grow.

Similarly, this is the time to invest in real estate, if interested. Becoming a landlord isn’t for everyone, and paying a property manager could eat into your net profit from owning a rental property. However, a rental property can yield some of the highest annual investment returns if managed well and purchased at prices below market value.

Want to make the most of your tax refund? Investing in real estate with Fundrise is an exciting option for investors in 2017.Fortunately, today’s investors can invest in real estate without the hassle of becoming a landlord or hiring a property manager. Fundrise offers real estate investment options with low entry costs.. As of February 2017, they offer three eREITs for new investors: the West Cost eREIT, the Heartland eREIT, and the East Cost eREIT. It is amazing that technology has brought common investors like you and me the opportunity to invest in multi-million dollar buildings half way around the country!

Even if you’re on the fence about real estate investing or just not quite ready to dip your toe in the water, I recommend signing-up with Fundrise today – it is 100% FREE, with no obligation, and in doing so, you’ll position yourself to learn more and possibly avoid wait lists.

8. Improve the Value of Your Primary Home

At this stage, true fun begins. When you are financially well-poised for the future, a tax refund represents an opportunity to both invest and add joy to your life simultaneously. This is the time to make improvements around your home which increase your happiness and feature a high return on investment.

Good Investments: new front door, landscaping, deck or patio, kitchen or bath remodel, walkway lighting

Bad Investments: swimming pools, utility sheds

9. Build Sinking Funds for Bucket List Items

Last, but not least, comes additional saving for specific purchases. If you make it down to Step 9 when determining how to implement your tax refund, you are an authentic Superhero. I recommend establishing separate sinking funds for a variety of priorities, such as vacations, new car purchases, secondary homes, or major home additions.

The purpose of a sinking fund is to plan for future purchases which are far off in the future. At this stage, you do not want to be fooled into getting back into debt or be caught off guard by large, necessary expenses. With a sinking fund, you won’t be financially caught off guard when your house needs a new roof, your furnace fails, or your vehicle sputters and dies.

Are You Ready to Make the Most of Your Tax Refund?

A tax refund is a great opportunity to get ahead in your finances. I am confident that you will not fail to cover all of your bases by following these steps. Depending upon where you are in your journey toward Restoring Order to Your World of Finances, you may wish to skip steps or modify the order. For example, renters may wish to place saving for a home down payment in the Steps.

If you haven’t yet filed your 2016 tax returns, be sure to check out E-File.com or LibertyTax today. Either way, careful consideration of your circumstances will put you on the path to make the most of your tax refund this year!


Readers, did you receive a tax refund this year? Are you currently awaiting a refund? How do you plan to make the most of your tax refund?

How to Make the Most of Your Tax Refund

Tax refund: Next to the words “pay day” and “debt free,” these are my two favorite finance-related words. Whether my annual tax refund is a modest sum or a mid-size windfall, I am always happy to see my refund directly-deposited into my checking account. Admittedly, knowing how to make the most of your tax refund can be a daunting task.

Still haven’t submitted your 2016 tax returns? If you have a simple return, such as a 1040-EZ, I recommend completing your simple return with E-File.com today. You can complete your Federal return for FREE and receive free support along the way. And FinanceSuperhero readers can receive a discount on state returns by using this link – $6 Off State Filings With Coupon Code “6OFFSTATE”.

If you’re planning to complete a 1040A or require additional schedules, the team at Liberty Tax has local offices in your area to help you every step of the way. Other tax preparation services come and go, but LibertyTax has been helping people file their taxes the easy way since 1997.

Receiving a tax refund is a great opportunity to improve your financial outlook. Follow these 9 pro tips to make the most of your tax refund in 2017!

The FinanceSuperhero Guide to Making the Most of Your Tax Refund

Assuming you have a tax refund coming your way, you could be on the verge of changing your financial picture.  With great opportunity comes great responsibility! The following advice will help you to make the most of your tax refund and make significant progress on your financial journey. I recommend following the steps in numerical order.

1. Give a Portion of Your Tax Refund to a Charitable Organization

Longtime readers will not be surprised that I am suggesting giving as the first step to make the most of your tax refund. As previously mentioned, Mrs. Superhero and I have placed Giving at the top of our monthly budget. Giving aligns with our values, and helping others provides us with much more satisfaction and enjoyment than buying more stuff or eating delicious food.

I strongly believe that giving 10% is the best way that we can make a charitable contribution prior to reaching financial independence (at which time we will significantly increase our giving). We have always done this, dating back to the time when we faced a mountain of debt, and we continue to do so today, even though we are only a few months away from carrying no debt other than our mortgage.

Why? As I mentioned, we believe helping others is both a calling and the most satisfying use of our money. Giving is also a strong reminder that money is not something to be hoarded out of greed. We want to value money and practice good stewardship, but we also want to remain far removed from the love of money.

Many people reject giving in favor of keeping their money strictly to themselves. Ironically, it is usually these same people who senselessly give their money to big banks and other financiers in the form of outlandish interest payments on cars, boats, and other stuff.

Personally, I would rather give in a meaningful way. Even if you give 1% of your tax refund, you will help others and begin to change the way you view money.

2. Increase Your Savings and/or Emergency Fund

When looking to make the most of your tax return, simply saving money can be a wise choice.
When looking to make the most of your tax return, simply saving money can be a wise choice.

After supporting societal progress by giving, use your tax refund proceeds to improve your liquid savings. Unless you are an extremely high income earner or have a stable passive income stream, you absolutely must have an Emergency Fund. If you do not have one, consider this a full-blown, alarm-sounding crisis that must be addressed immediately! Statistically-speaking, there is close to a 100% chance that you will experience some form of an emergency within the next decade, so be ready!

While I recommend maintaining an Emergency Fund of at least 3-6 months of minimum living expenses, you may also wish to establish an additional Opportunity Fund. I do not specifically recommend amounts or figures for this fund, and you may wish to skip it entirely in favor of moving onto Step 3. However, an Opportunity Fund could allow you to make a fun, somewhat impulsive decision without any accompanying feelings of guilt or regret.

3. Get out of Debt – Once and For All!

After you have given and increased your security via your Emergency Fund, you are fully-prepared to take on the primary barrier standing in the way of Financial Independence: Debt.

The sooner you eliminate your non-mortgage debts, the sooner you free a significant portion of your monthly income and simultaneously gain the freedom to invest in tax-advantaged retirement accounts. Both the Snowball and Avalanche methods are valid means to achieve debt freedom. For the purposes of this post, I am less-concerned with the method you implement to eliminate your debt; just get it done. You may get the push you need if you make the most of your tax refund in this way!

 

4. Invest in Tax-Advantaged Investments

The real fun begins when you no longer have non-mortgage debt. If you are free from the shackles of debt, the next optimal use for your tax refund is to maximize your retirement contributions. For the purposes of this limited space, ensure you are maximizing employer-offered plans, specifically if they offer a match, and then move onto your Roth IRA.

Want to make the most of your tax refund? Opening an IRA or taxable brokerage account with Betterment is a smart way to maximize the impact of your refund.
Betterment returns vs. US Market and Typical Investor Returns (Credit: Betterment)

If you’re looking for an easy to use platform for investing, Fundrise offers real estate investment options with low financial barriers for entry.. Their Tax-Coordinated Portfolio works to maximize your earnings and minimize tax burdens across all types of accounts, including taxable accounts, Roth IRAs, and traditional IRAs. It is simple to sign-up or rollover an account, select a portfolio of ETFs, and be on your way toward earning better returns right away.

Compared to other platforms, the Betterment portfolio is designed to achieve optimal returns at every level of risk. Through diversification, automated rebalancing, better behavior, and lower fees, the Betterment approach to investing can help you generate 2.9% higher returns than a typical DIY investor.

Make the most of your tax refund and start investing with Betterment by signing up today!

5. Contribute to Your Children’s College Funds

If you do not have children, skip ahead to Step 6. If you have children, you need to learn the nuances of the Coverdell ESA (Education Savings Account, also nicknamed the Education IRA) and 429 plan. The ESA has income and contribution limits (currently $2,000 per year), but I recommend you start with the ESA in most circumstances, if eligible.

The important thing to understand is that minimal contributions to these vehicles will place you in a position to send your children to college without the burden of student loans if you begin early.

Related PostEscape From Student Loans: How Two Educators Paid Off $17,831.65 in 54 Days

6. Destroy Your Mortgage Debt

Pause with me for a moment and imagine a life without a mortgage payment. If you can’t image it, check out the FREE E-book, How to Hack Your Mortgage and Save Thousands, written by my friend Andrew at FamilyMoneyPlan. This is the plan he and his wife used to wipe out their $320,000 mortgage in 6 years.

What could you do with an extra $1,000 per month? $2,500? $5,000? I just felt an overwhelming sense of excitement  and peace typing these words. The next time I visit my doctor and have my blood-pressure checked, I am going to visualize the wonders of a mortgage-free life to improve my numbers.

For the average family, mortgage interest represents the second-largest expense that they will pay in their entire lifetime. In some cases, total mortgage interest paid on a 30 year mortgage can be approximately 75-80% of total principal, even at today’s advantageous interest rates! Make the most of your tax refund to accomplish progress on an annual basis and you could shave several years off your mortgage, especially if you are already paying extra on principal on a monthly basis.

7. Invest in Non-Retirement Funds and/or Real Estate

If you have made it to Step 7, please allow me to offer my congratulations. With no debt whatsoever, healthy savings, and kids’ college covered, you are poised to generate significant wealth. At this stage, you may have achieved Financial Independence, depending upon your lifestyle.

I recommend using tax refund money to invest in simple index funds at this stage. A modest tax refund sum is enough to get you started with many index funds. Adopt a long-term approach, relax, and watch your money grow.

Similarly, this is the time to invest in real estate, if interested. Becoming a landlord isn’t for everyone, and paying a property manager could eat into your net profit from owning a rental property. However, a rental property can yield some of the highest annual investment returns if managed well and purchased at prices below market value.

Want to make the most of your tax refund? Investing in real estate with Fundrise is an exciting option for investors in 2017.Fortunately, today’s investors can invest in real estate without the hassle of becoming a landlord or hiring a property manager. Fundrise offers real estate investment options with low entry costs.. As of February 2017, they offer three eREITs for new investors: the West Cost eREIT, the Heartland eREIT, and the East Cost eREIT. It is amazing that technology has brought common investors like you and me the opportunity to invest in multi-million dollar buildings half way around the country!

Even if you’re on the fence about real estate investing or just not quite ready to dip your toe in the water, I recommend signing-up with Fundrise today – it is 100% FREE, with no obligation, and in doing so, you’ll position yourself to learn more and possibly avoid wait lists.

8. Improve the Value of Your Primary Home

At this stage, true fun begins. When you are financially well-poised for the future, a tax refund represents an opportunity to both invest and add joy to your life simultaneously. This is the time to make improvements around your home which increase your happiness and feature a high return on investment.

Good Investments: new front door, landscaping, deck or patio, kitchen or bath remodel, walkway lighting

Bad Investments: swimming pools, utility sheds

9. Build Sinking Funds for Bucket List Items

Last, but not least, comes additional saving for specific purchases. If you make it down to Step 9 when determining how to implement your tax refund, you are an authentic Superhero. I recommend establishing separate sinking funds for a variety of priorities, such as vacations, new car purchases, secondary homes, or major home additions.

The purpose of a sinking fund is to plan for future purchases which are far off in the future. At this stage, you do not want to be fooled into getting back into debt or be caught off guard by large, necessary expenses. With a sinking fund, you won’t be financially caught off guard when your house needs a new roof, your furnace fails, or your vehicle sputters and dies.

Are You Ready to Make the Most of Your Tax Refund?

A tax refund is a great opportunity to get ahead in your finances. I am confident that you will not fail to cover all of your bases by following these steps. Depending upon where you are in your journey toward Restoring Order to Your World of Finances, you may wish to skip steps or modify the order. For example, renters may wish to place saving for a home down payment in the Steps.

If you haven’t yet filed your 2016 tax returns, be sure to check out E-File.com or LibertyTax today. Either way, careful consideration of your circumstances will put you on the path to make the most of your tax refund this year!

 

Note: This post was last updated on February 14, 2017.


Readers, did you receive a tax refund this year? Are you currently awaiting a refund? How do you plan to make the most of your tax refund?