Category Archives: Retirement

7 Unmistakable Habits of the Rich

Our culture is intensely interested in wealth. We have a billionaire president, shows like “The Rich Kids of Beverly Hills” are huge hits, and sometimes it can be tough to tell if you’re watching the Nightly News or Entertainment Tonight. These superficial glimpses into the lives and habits of the rich have become a surprisingly vital part of the low information American diet.

Some watch the lives of the wealthy purely for entertainment purposes. Others are interested in smearing rich people for everything they do, almost as if possessing wealth is inherently immoral. “Oh, they have money?” they say. “They must be evil!”

Want to become wealthy? The best way to get rich is to study and implement the habits of the rich yourself. This article will give you everything you need to get started, whether it's time management tips, health tips, improving productivity, how to save money, how to build multiple income streams, and much more!A shockingly low number of people are interested in following the lives and habits of the rich for the most practical and beneficial reasons: studying the habits of the rich is a wise way to reverse engineer wealth and success.

The honest truth is that many people are more interested in observing and living vicariously through the wealth of others than they are learning about how to get there themselves. (Perhaps that is why an alarmingly high number of Americans have less than $50,000 saved for retirement.)

So what’s the root cause of culture’s misplaced priorities?

Seven Habits of the Rich to Incorporate to Build Wealth

The truth is that our culture has adopted and embraced all of the wrong symbols of wealth. A high credit score is really an “I love debt” score. A new leased vehicle in the driveway every two or three years is really a sign that its driver prefers operating a vehicle in the most expensive manner possible. And large suburban mini-mansions with several extra rooms are still just as empty and hollow as the hearts of their owners.

If you’re tired of simply watching of the lives of the rich on TV and want to build wealth yourself, studying the habits of the rich is a great place to start. Read the following seven habits of the rich, slowly incorporate them into your lifestyle, and start building wealth.

Prioritize Saving Money

In The Millionaire Next Door, the late Thomas Stanley surveyed a panel of average everyday millionaires to find common characteristics among what turned out to be a widely varied cohort. Among many habits of the rich that Stanley discovered, a focus on saving money above all else was key.

Across the board, first generation wealthy people developed their wealth thanks to long-term saving discipline and dedication to living a frugal lifestyle.

When it comes to choosing between saving and discretionary spending on things like new cars, larger homes, lavish vacations, or expensive clothing, a majority of wealthy people choose the former. At the same time, wealthy people value quality over quantity, i.e. they prefer to own fewer possessions of high quality rather than many possessions of lesser quality.

Avoid Debt as Much as Possible

While it may be true that debt can help you get what you want even if you can’t afford to buy it with cash, it is equally true that excessive debt is one of the top barriers to building wealth. Buying anything using debt is inefficient, more costly, and it limits your ability to build your retirement portfolio, own real estate, or start a business.

Some wealthy people enjoy trying to beat the system and leverage others’ money to their advantage, but it’s worth noting that a majority of wealthy people prefer to avoid this kind of unnecessary risk. In other words, there are far more people who actually develop wealth by following The Millionaire Next Door model than people who follow the model of leveraging others’ money touted by Robert Kiyosaki in Rich Dad Poor Dad.

Maintaining low levels of debt, if any, is one of the hallmark habits of the rich. It puts them in position to take advantage of new and unexpected opportunities to grow their wealth. Perhaps this is way a majority of first generation wealthy people are business owners.

Interestingly, the presence of debt often serves as an unexpected litmus test for whether a person is truly wealthy or just living a wealthy lifestyle. Like Dave Ramsey likes to say, “You can find out who is skinny dipping when the tide goes out.”

Drive Used Cars

One of the most surprising habits of the rich is the overwhelming tendency to drive used vehicles. The average millionaire rarely, if ever, purchases a brand new car, allowing others with far less wealth to absorb the harsh hits of depreciation during the first 2-4 years. Then they buy well-maintained used luxury vehicles with cash.

Maintain Good Physical and Mental Health

It may appear that many wealthy people are workaholics, but the truth is that hard work and good physical and mental health are not mutually exclusive. In fact, maintaining good physical health through diet, exercise, and self-care remains one of the most common habits of the rich.

Want to become wealthy? The best way to get rich is to study and implement the habits of the rich yourself. This article will give you everything you need to get started, whether it's time management tips, health tips, improving productivity, how to save money, how to build multiple income streams, and much more!
In particular, starting the day off with a focus on health is one of the hallmark habits of the rich. A recent article in Business Insider outlined the habits of several wealthy people. John Paul DeJoria, the man behind Paul Mitchell hair products, begins each day with quiet meditation. Birch Box executive Brad Lande begins his morning with hot tea and yoga. Kevin O’Leary, the investor made famous in Shark Tank, starts his day with a 45 minute workout.

The reason behind such health-consciousness is simple: it is foolish to gain wealth if you do not maintain adequate health in order to live a long and enjoyable life.

Read two non-fiction books each month

Among the main habits of the rich, ongoing learning and growth is a consistent priority across the board. It’s not uncommon for people who have accumulated wealth to read two or more non-fiction books each month in an effort to learn new things.

For many people, the habit of reading and implementing new ideas served as the impetus for growing their brand or starting a business in the first place.

Build multiple streams of income

Of the most common habits of the rich, the development of multiple income streams separates the financially independent from typical high-earners. These forms of income vary greatly, from active to passive, and include the following:

  • Investment income via dividends
  • Owning real estate bought with cash
  • Developing a product
  • Owning a business (or multiple businesses)

The time and effort required to build these income streams is usually a heavy sacrifice initially. But there is no question that it pays off.

Give generously

Despite a report in The Atlantic which claimed the wealthy only give 1.3 percent of their annual income to charity, it is important to remember that large variances and anomalies tend to skew these types of statistics.

Ultimately, the main reason behind why so many wealthy people do give generously is that they have developed a healthy, well-adjusted attitude toward money. Psychologically-speaking, they understand that helping others who are in need is rewarding and self-satisfying. Simply put, it makes them happy.

One thought I heard on giving has always stuck with me. I don’t recall who said it, and I’m paraphrasing, but here is the basic idea: It is difficult to receive anything in life with a tightly closed fist.

How can you apply the habits of the rich in your life?

Studying the habits of the the wealthy has a very limited payoff without application. As in most endeavors, you can get started by chasing after the lowest hanging fruits.

If you’re not in the habit of saving and investing money, you need to take definitive steps toward gaining control of your cash flow. If you’ve never made a budget or analyzed your current financial situation, that is an easy place to start.

One of the simplest ways to gain a birds-eye view of your financial big picture is by signing-up for my favorite FREE financial tool, Personal Capital. With Personal Capital, you can monitor your spending by category, track all of your debt and assets, and even receive a personalized review of your finances. Get it here!

If you’re looking for a quick win, you can join thousands of others who have trimmed their budget of unwanted and unused recurring subscription services by using the FREE Trim Financial Manager. When you sign-up, Trim will review your regularly-recurring transactions, negotiate for better rates on your behalf, and even help you cancel unwanted subscriptions for you. You can learn more about Trim here.

Developing better habits may seem unlikely or even hopeless if you find yourself struggling with the burdens of debt. Refinancing is not the silver bullet to debt problems; in fact, it just serves to lessen the symptoms of the underlying problem. But if you’re paying sky-high interest rates, reducing them is an incredibly smart way to jump start a rapid repayment plan.

If you have high-interest student loan debt, I recommend giving LendEDU the opportunity to review your situation and provide options. If you have 90 seconds, you can fill out a quick form now and receive quotes from up to 12 different lenders without affecting your credit score one bit. If you still owe a sizable amount on your Associates, Bachelors, or Masters degree loans, this is literally one of the easiest ways you can free up money in your budget.

Finally, with mortgage rates likely to continue their recent slow rise, now is the time to consider refinancing and locking in a better rate, especially if this has been on your radar for a while. The two companies I recommend most to gather your options are LendingTree and GuideToLenders. Both can match you up with the most competitive rates for which you qualify and help you save thousands of dollars over the lifetime of your mortgage.

From there, start adding new habits to your daily routines. Go for an evening walk, grab a new non-fiction book at the library, and start practicing silence and solitude.

Remember, the common thread in all of the habits of the rich shared above is intentionality. Act consciously and deliberately and you can achieve great success!


How many of the habits shared above do you currently practice in one form or another? What other habits do you think wealthy people have in common?

Want to become wealthy? The best way to get rich is to study and implement the habits of the rich yourself. This article will give you everything you need to get started, whether it's time management tips, health tips, improving productivity, how to save money, how to build multiple income streams, and much more!

Helium Investments – Professional Advice, Low Investment Fees

Basic economics show that when you and I buy anything, we are paying for more than just the product or service. This is true of cars, groceries, landscaping services, and of course, investment services. While many of these fees are one-time hits on your wallet, the painful impact of investment fees continues for years and wears away at the size of your retirement portfolio.

Consider the chart below, as produced by the Securities and Exchange Commission, which illustrates the incredibly disastrous impact of investment fees over a 20 year time period.

impact of investment fees over time | fees hurt your investment portfolio
Source: SEC.gov

A quick glance reveals that even a difference of 0.25% in annual investment fees can reduce portfolio value by $10,000 over 20 years (see the gap between the blue and red lines). The $30,000 difference is even more disastrous when comparing the 1.00% annual fee portfolio to the 0.25% portfolio (blue line and green lines, respectively).

Investment fees are far from the only factors worth considering when selecting investments and choosing an adviser or service, but the graph above is proof that failure to consider investment fees is a serious and costly mistake.

Many professional advisers and services tout their reputation and experience in an attempt to justify their high investment fees, but as an investor in today’s market, it is possible to design an investment portfolio to achieve your goals AND receive personalized professional advice without sacrificing thousands upon thousands of dollars of long-term portfolio growth to investment fees.

Enter Helium Investments.

High investment fees can make or break your retirement and your family's future. In fact, did you know that high fees could rob you of thousands upon thousands of dollars over many years, even if you don't have a million dollar portfolio? Helium Investments is on a mission to change that by minimizing fees and maximizing investors' returns. You can start an account with them today and pay 0% fees on accounts under $10,000. Click to read more of our review!

What is Helium Investments?

Helium Investments logoHelium Investments has made it their mission to give average investors access to leading financial industry investment techniques at a fraction of the cost of large investment advisor firms.

Simply put, Helium offers low fee, low tax investment options to help investors maximize returns now and over the long haul.

How is Helium different?

Thanks to the internet, investors have more options than ever before. Stocks, mutual funds, and ETFs are available and accessible through a number of avenues.

However, many of these companies willingly set-up your retirement or taxable brokerage account, take your money, and then the air waves go silent. Your money is still invested, but when it comes to paying attention to your investments, you’re on your own. And if you want to make changes to your portfolio, perform periodic rebalancing, or make trades, you’re charged a fee.

Helium offers a different model built upon low fees and professional advice. When you deposit or withdraw money from your account, there are no fees. As your portfolio grows over time, Helium performs rebalancing for you based upon your goals at no cost to you. There are no fees for buying or selling securities within your portfolio, and if you want to connect with your advisor online or via phone, that is also free.

How does Helium earn a profit?

With extremely competitive low fees, Helium generates its profits based on a simple fee model.

  • Accounts valued under $10,000 are free
  • Accounts valued over $10,000 and under $250,000 are charged a 0.50% fee each year
  • Accounts valued over $250,000 are charged a 0.40% fee each year

As our opening example from the SEC above showed, investment fees can eat away at your retirement and other investment accounts in dangerous ways over time. Maximizing your returns and access to professional advice while carefully minimizing fees is one of the best ways to protect your future.

What can Helium do for you?

Helium’s mission is to help you save money while also investing your money in a manner that aligns with your goals and dreams. They achieve this by offering a rare combination of individually tailored client services, tax loss harvesting, automatic investing and rebalancing, carefully crafted portfolios, and low fees.

Helium investments portfolio offerings
An overview of a few of Helium’s tailored portfolio offerings

Whether you’re looking to build for your retirement, save money for a home or boat, or even build an emergency fund, Helium offers a variety of accounts to help you meet your goals:

Traditional IRA

A traditional IRA is a great investment account to help you save for retirement. Yearly contributions are deducted against your gross income, which you’ve most likely already paid income tax on. The IRS will typically issue you a refund for the excess income tax paid.

Taxable: No (Deposits), Yes (Withdrawals)
Maximum Contribution: $5,500 per year under 50 years old, $6,500 above
Maximum Age to Contribute: 70½
Withdrawal Must Start: April 1st after you turn 70½

Roth IRA

A Roth IRA is an excellent investment vehicle to save for retirement, but it has income limits. If you earned more than $132,000 in 2016 – you’re unable to contribute to a Roth IRA. Unlike a Traditional IRA the gains and withdrawals from a Roth IRA are generally tax-free even before age 59½

Taxable: Yes (Deposits), Typically no (Withdrawals)
Maximum Contribution: $5,500 per year under 50 years old, $6,500 above

Rollover IRA

You can move your employer based 401(k) into a Rollover IRA account and have the funds managed by Helium. You can roll up to one account per year. The contributions from a 401(k) are not taxed but still need to be reported. Most 401(k)s have management fees – the average American will pay over $138,336 in 401(k) fees.

Unregistered Accounts

Unregistered accounts are still a valuable investing tool as short term savings and when you reach your yearly IRA contribution limits. With an unregistered account the deposits are not taxed, however the gains are taxed at your capital gains tax rate. This rate varies based on your marginal rate – typically between 0% for those making $37,650 and under to 20% for those making $451,051 and over.

Taxable: No (Deposits), Yes (Withdrawals)

The Helium Advantage

A major value at Helium is helping investors start early and receive good advice from the start. They believe in a continuous cycle of getting advice, setting your goals, reaching them, and setting new goals.

Prospective investors can use their intuitive calculator to evaluate just how much money they can save with Helium compared to remaining in a portfolio of higher-fee mutual funds.

For example, I used the calculator to evaluate how much I could save in Helium’s aggressive portfolio based upon an initial $2,000 investment and $750 monthly contributions over 10 years. Based upon a reasonable estimated return of 6.5%, the calculator showed that I could save nearly $10,000.

How to get started with Helium

Registering with Helium is fast, simple, and even fun. It only took me a few minutes to work my way through the process on my laptop when testing it out.

If you prefer, you can also download the mobile app to your device and register that way. It is available on both iOs and Android devices. Users can even begin registration on one device, pause midway, and resume on another platform.

You’ll start by choosing a username and password, then proceed to entering typical identifying information, such as your name, address, and contact information.

Next you’ll be asked a series of interesting questions designed to help the Helium team get to know you better, such as:

  • If you were on a TV game show and could choose from one of the following, which would you choose?
  • If you needed $2,000 tomorrow, what would you do?

After answering approximate questions regarding income, net worth, savings goals, current debt levels, and preferred account types, all that remains is adding a beneficiary, social security numbers, and linking your preferred banking account.

The Helium Investment Dashboard

In order to help me provide maximum insight in this review, the team at Helium built a test account for me. After logging in, I was shown a centralized dashboard which highlighted my overall portfolio composition.

By navigating to the Portfolio tab, I was able to take a quicker look at the composition of each account by date by using the drop down menu. Here is a look at the test Roth IRA account as of February 5, 2017.

The Performance tab provides helpful linear graphs to help investors see performance trends over time. Here is a snapshot of the performance of the Traditional IRA within the test account.

I was pleased to see a tab for users to create and update goals within the dashboard; this is a great example of how Helium strives to live up to its mission of helping their clients achieve their goals. Establishing a goal within the test account was simple. I named the goal, established a monetary figure and target date, selected a corresponding account, and saved the goal.

Why Should I Sign-Up With Helium?

As an investor, you have several viable options when it comes to building for your retirement or other financial goals. It is important to keep in mind that your unique situation, goals, and desired level of involvement will play a big role in determining the best way to manage your investments.

For an investor who is looking for regular access to professional advice without paying high fees, Helium Investments can provide very high value. They offer a rarely seen combination of tailored advice, low fees (or no fees for accounts under $10,000), automated rebalancing, and sophisticated tax loss harvesting. And by all indications, they’ve cracked the code on leveraging technology and low-cost ETFs to maximize portfolio gains and minimize fees.

For investors who embrace the notion that what you keep is more important than how much you make, this is a perfect approach. If you’re interested in actively trading on a daily basis (which I do not recommend), Helium isn’t for you.

I recommend connecting with Helium Investments and giving their team the opportunity to review your portfolio. By simply uploading a statement, Helium can review your portfolio and analyze it for potential savings. They may be able to save you several thousand dollars.

What’s Not to Love?

To be perfectly transparent, I tried very hard to uncover “the catch” with Helium. I thought I might discover hidden fees, high set-up costs, or other red flags.

But I didn’t.

After an in-depth review, it appears that the Helium Investments team has built a client-friendly model that is also profitable for their company. As their website shows, they have a small core team and, therefore, likely have low overhead.  Some may see this is a disadvantage, but I don’t.

Perhaps the biggest question mark is the future direction of Helium Investments. They are a newer company competing in a saturated market. However, no market is too saturated for a new company which provides incredible value when compared to its competitors.

So far, Helium is doing exactly that.

For more information about Helium Investments, click here to visit their website.

Related Reading:

Helium Investments™ and the Helium Investments Balloon are trademarks of Helium Investments Inc, all rights reserved. Helium Investments Inc is a registered Investment Advisor with the Securities and Exchange Commission (SEC) in the jurisdictions of
CA, TX, FL, NY, IL, PA, OH, GA, NC, MI. Investment accounts are free up to $10,000 USD after fees apply. Any historical returns are not indicative of future performance. Investment values will fluctuate over time. SIPC Member, Not FDIC Insured. No Bank Guarantee.

This review is sponsored by Helium Investments; however, all analysis, review, and opinions are the the product and intellectual property of FinanceSuperhero.com.


How often do you pay attention to investment fees? Are you paying high fees and getting little in return?

High investment fees can make or break your retirement and your family's future. In fact, did you know that high fees could rob you of thousands upon thousands of dollars over many years, even if you don't have a million dollar portfolio? Helium Investments is on a mission to change that by minimizing fees and maximizing investors' returns. You can start an account with them today and pay 0% fees on accounts under $10,000. Click to read more of our review!

How to Overcome Your Fear of Investing and Build Your Dream Retirement

I’m going to hit you with the cold, hard truth: You’re probably not investing enough money to be able to afford the future of your dreams, and your fear of investing is to blame. Don’t believe me? Let’s see if any of these statistics describe you:

How many of these statistics describe you?

If not many, you’re probably in great shape with your investing.

If more than one describes your situation, you have some work to do if you’re going to retire comfortably.

The first step lies in overcoming your fear of investing.

Is fear of investing holding you back from building your dream retirement and threatening your future? These tips will help you overcome and invest wisely! We'll help you look at your current finances and budget, find out how much money you'll need for retirement, and make a solid plan to invest wisely and reach your dream retirement.

9 Stupid Reasons to Put Off Investing for Your Retirement

Life is full of many uncertainties and only a few certainties. One major certainty for nearly all of us is the fact that we will need to retire someday. Trading our time and skills for earned income can only go on for so long.

So why do you so many people live like investing is unnecessary or optional? You guessed it: a combination of the fear of investing and lack of understanding.

Consider the following reasons that may be holding you back from investing in your dreams:

1. You have too much debt

Student loans, car payments, credit cards, home equity lines, and first and second mortgages make it possible to borrow lots of money, but lots of payments come with lots of loans! As a result many people don’t have much money left to invest.

2. You don’t know where to start

Investing seems too nuanced and sophisticated to many people, so they just don’t bother to start learning the ropes.

3. You don’t understand how investments work

Similarly, many people have a desire to invest and know they should be investing, but they are paralyzed by a fear of investing and lack of basic understanding of investment options. Words like bonds, stocks, mutual funds, annual return on investment, IRAs, and index funds are SCARY!

4. You’re planning to live off Social Security 

Like Dave Ramsey sarcastically reminds us, the government is well-known for its ability to take care of money. Still, many people look to Social Security as their only source of retirement income.

5. You’re expecting an inheritance 

Inheritance money can be an incredible blessing, but relying on it instead of investing consistently is a huge risk. Long-term care costs for their elderly are always on the rise, and many nest eggs have been cracked and scrambled by these costs.

6. You’re afraid to lose money on investments 

I get it. Nobody wants to lose money. But losing money from time to time is part of the game of investing. The obvious goal is to win more than you lose, but like hockey great Wayne Gretzky said, “You miss 100% of the shots you don’t take.”

Investing isn’t a spectator sport; you have to play to earn money! If you allow the fear of investing to keep you out of the game, you’re guaranteed to lose.

7. You don’t have the knowledge to choose your own investments 

Many would be investors have excitedly signed up for an online trading account only to realize that they’re not sure what to do next. The options seem limitless and unpredictable. So they put their money away in savings accounts and CDs instead and collect a very predictable but low interest rate.

8. You’re not willing to trust someone else with your money 

Investment professionals are some of the least-trusted people in the financial world. Over the years, scandals and horror stories have legitimized these fears to some degree, though many true professionals are still out there. The sad truth is that many people aren’t willing to trust someone else with managing their investments.

9. You’re not willing to pay someone else to manage your investments

And even for those people who are willing to trust a professional with their money, management fees often scare them off in a hurry.

Is fear of investing holding you back from building your dream retirement and threatening your future? These tips will help you overcome and invest wisely! We'll help you look at your current finances and budget, find out how much money you'll need for retirement, and make a solid plan to invest wisely and reach your dream retirement.Overall, the fear of investing and the above barriers create three types of people:

  • Those who actively invest (Investor) by overcoming their fear and getting the help they need
  • Those who want to invest but fail to act (Aspiring Investor)
  • Those who ignore the importance of investing (Non-Investor)

By the end of this article, my goal is to empower you to move yourself up the top of the pyramid by providing resources and tools to boost your confidence and start investing as soon as possible.

The Best Resources to Overcome Your Fear of Investing 

The first step toward overcoming your fear of investing and getting on track toward your dream retirement is evaluating your current financial situation. You need to create a one page summary of your current debts, investments, and other assets. The best way to do this job only once is to  sign-up for Personal Capital. With Personal Capital, you can monitor all of your financial accounts in one place, analyze your portfolio, and track your net worth all from your mobile device.

You’ll also need to create a budget – think of it as a map that will take you to your retirement dreams by keeping you on track every month – if you don’t have one. Even if you’ve never lived on a budget before, this is the time to start.

Read: Budgeting for People Who Suck With Money

Next, you need to estimate your overall retirement needs. One of my favorite financial writers, Chris Hogan, has created a FREE tool to help you calculate the amount of money you’ll need to save to retire; he calls it your R:IQ. Take a few minutes and get your number – it’s free, and you won’t get bombarded with SPAM.

Now that you have a clear picture of your current situation and what you want to achieve, it’s time to make a plan to get there. Depending upon your knowledge, interest, and available time, you can take on full responsibility of your retirement portfolio, manage only some aspects on your own, or work with a dedicated adviser who can help you reach your goals.

If you want to spend many hours learning the nuances of buying and selling stocks, TradeKing is a good option for you. TradeKing provides a powerful platform for investors to discover, research, and purchase stocks, options, and ETFs.  They also offer access to knowledgeable brokers who will answer questions or even manage your portfolio at a cost to you. If you open a new account and start with a minimum balance of $500, you’ll receive $5,000 in free trades if you sign-up using this link for FinanceSuperhero readers.

Looking for more guidance and support? TD Ameritrade offers the next level in investment services with no investment minimums to open your account. Investors can choose the Build It Yourself option, receive a managed portfolio recommendation from TD Ameritrade Investment Management, LLC, or get connected with an independent Registered Investment Advisor. Check out your options with TD Ameritrade here.

And if you’re looking for a simpler approach that is more hands-off, the popular robo-adviser Betterment is the best choice for you. Why approach investing the Betterment way? The Betterment portfolio is designed to achieve optimal returns at every level of risk. Through diversification, automated rebalancing, better behavior, Tax Loss Harvesting (selling a security that has experienced a loss to offset other gains), and lower fees, the Betterment approach to investing can help generate 2.9% higher returns than a typical DIY investor. And they still offer investors access to a licensed adviser over the phone. You can open a Roth IRA, Traditional IRA, or complete a rollover 7 days per week.

Note: If you have an old 401k from a previous employer still hanging around, Betterment will help you with your rollover and make the process as painless as possible.

As mentioned earlier, Personal Capital is the best FREE resource available for tracking all of your financial accounts, monitoring spending, and tracking your net worth all in one place. But they’re also one of the premier wealth managers today due to their integrated approach built upon a combination of innovative tools and the personal touch of a licensed adviser.

If you already have a sizable portfolio ($100,000 or more), I cannot recommend enough that you take advantage of Personal Capital's free consultation offer to analyze your portfolio. Yes, it’s really free, and if you don’t like the advice you’re given, you can continue to use the Personal Capital Dashboard to monitor your financial picture at no cost. If you’re impressed enough and convinced that Personal Capital will better manage your investment dreams better than they’re currently being managed, it’s also a win, as they will almost undoubtedly reduce your fees and improve your returns.

Get Started Now

Of course, these tools aren’t the only options available to help you overcome your fear of investing. You could visit a local brick-and-mortar adviser, read dozens of investment books for free at the library, or ask one of your connections for his best advice. You could search for the latest robo-adviser to pop up overnight. Any of these options is better than doing nothing, even if they’re incredibly risky.

My point is this: Don’t allow yourself to go another week without taking the steps to crush your fears and start investing in your future. Your family’s future is way too important to allow anything – lack of time, fear of investing, or uncertainty – to stop you from building a secure nest egg. Get started now!

Is fear of investing holding you back from building your dream retirement and threatening your future? These tips will help you overcome and invest wisely! We'll help you overcome 9 reasons you may be delaying investing, look at your current finances and budget, find out how much money you'll need for retirement, and make a solid plan to invest wisely and reach your dream retirement.

Is fear of investing holding you back from building your dream retirement and threatening your future? These tips will help you overcome and invest wisely! We'll help you look at your current finances and budget, find out how much money you'll need for retirement, and make a solid plan to invest wisely and reach your dream retirement.

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?

Retire With Dignity – Reject the Normal Financial Outlook

Everything is relative when it comes to money and determining what is “normal.” At least that is what we have been conditioned to believe over time. The normal financial outlook is very different for blue collar workers and executives, plumbers and CEOs, and teachers and doctors. Unfortunately, a statistical average generated among such a wide variety of professions and incomes does little good in helping us learn what normal looks like today.

Income, of course, is only half the battle. On the flip side, expenses complicate the search for normal even further. Even two doctors with identical incomes and living in $450,000 homes in San Francisco, California and Arlington, Texas, respectively, may have wildly differing expense to income ratios due to property taxes and cost of living discrepancies.

So where does this leave the search? Is a “normal financial outlook” definable?

Is a "normal financial outlook" definable? Everything is relative when it comes to money, yet the desire to be normal could be sabotaging your efforts.

A Normal Financial Outlook is a Fallacy

The other day, I spoke with a friend about the manner in which “normal” people manage their finances. After citing problem after problem, we came to a realization: We won’t want to be normal. Normal is broke, greedy, overconfident, and unfulfilled. 

Following our conversation, I pondered the idea a bit more and came to a conclusion which I believe is tight enough to hold water: the average person’s desire to be normal is to be blame for his pessimistic financial outlook. Furthermore, normal is simply a self-defeating social construct which ultimately holds us back.

Consider the following connections:

*The desire to be normal drives us to take on a 72 month auto loan so we can drive the same car as our colleague; never mind the fact that the vehicle will be worth a fraction of its sticker value when the loan is paid off.

*The desire to be normal motivates us to take on the maximum pre-approved mortgage when looking for a home. It also causes us to spend at an unreasonable clip to furnish the home at high interest rates and rationalize it because “everyone else is doing it.” Many normal people will end up paying nearly twice the value of their home due to 30 years of interest accumulation (or more if they refinance to another 30 year mortgage after several years of paying on an initial 30 year mortgage).

*Because most normal people do not have any idea how much money they will need to live on in retirement, we adopt a normal mindset and rationalize that “it will all work out.”

*The desire to be normal leads us to go out with colleagues each day rather than brown bagging it for lunch. This kind of “normal” comes at a cost of over $100,000 over a working career.

These are only a few examples, but they drive home the truth that normal is bad.

Normal is the Worst

Statistically speaking, normal people are house poor, broke, in debt, and destined to slave away for 40-50 years only to retire in old age and poor health. And this is what most of us strive to become?

I have a different vision for my future. I don’t want it to be anything close to “normal.” As a result, I’m doing the sensible things now to ensure that my family’s future isn’t depressingly bleak.

First and foremost, I am consistently striving to challenge my everyday perception of “normal.” I know that if I surround myself with people and experiences which are “normal,” I will fight the desire to live abnormally. On the other hand, if I surround myself with people who share my view of what is “normal,” I am cultivating a healthier perception of the idea itself. This is vital.

Mrs. Superhero and I have intentionally taken steps to become good friends with others who share this mindset. For example, one couple we frequently spend time with also maintains an entertainment/dining budget. We have no qualms with being transparent about that among our families, which often leads to double dates at our home in lieu of expensive meals out. We look at as iron sharpening iron.

Secondly, Mrs. Superhero and I have worked at minimizing the frequency with which we experience luxury in our lives. We know that once we become accustomed to luxuries it can be very hard to give them up. Once luxuries become the norm, it can become very difficult to grow wealth and develop a favorable financial outlook; raising the bar in this manner is “normal,” but it minimizes satisfaction and happiness while permanently raising one’s bottom line required spending. We aim to make luxurious experiences the exception, not the norm.

Third, we are diligent in taking excellent care of the nice possessions which we have prioritized over the years. We have found that we appreciate these items for their true value, utility, and contribution to our overall happiness simply because we exhibit pride in maintaining what we have worked and sacrificed to gain. For example, I marvel at the fine condition of my 2008 Honda Accord while driving to work each day. Instead of dwelling on the fact that it is nearly nine years old now,  I choose to take pride in its fine condition.

I often think that if we were resigned to a normal financial outlook, we would be far less mindful about these sort of things. In rejecting this kind of thinking, we choose to believe that there is a better way to live. It is a path lined with hard work, sacrifice, and self-control, but we firmly believe it is the best path toward happiness both in the present and in the future.


How do you define “normal” when it comes to money? Do you have a normal financial outlook? In what ways do you reject being “normal” on your path toward happiness both in the present and in retirement?

The Herd Mentality and Retirement – How to Free Yourself and Others

In my last piece, I wrote about my apparent decision that perhaps early retirement just isn’t for me. I outlined several pros and cons of early retirement, all of which I had previously read about or otherwise heard expressed.

Confession time: I was subtly and intentionally trying to stir the pot.

The result? It worked. My faux-criticism of early retirement worked just well enough to spark some lively discussion.

For reference sake, here are the pros and cons I listed.

Pros:

*Opportunity to spend increased time with family and friends
*Freedom to travel
*Reduced stress and improved health
*More time to pursue other interests or even a new career

Cons:

*Possible negative impact upon health (possible loss of health benefits, decreased physical activity)
*Possible boredom and/or depression
*Increased stress (more time to worry; constant fear that your nest egg may be insufficient)
*Limitations due to fixed income

For the record, I don’t necessarily buy into the above cons. They are possible, but as Physician On Fire stated, “if you’re more stressed and less active when retired, resulting in poorer physical and mental health, you’re doing it wrong.”

So why was I intentionally-deceptive?

The herd mentality plays a large role in the formation of the average retirement plan. We may wish to deny it, yet our actions are telling. Learn how to break free and help others do the same.

Testing the Herd

While I don’t mind readers agreeing with me based upon the merits of my arguments, I do have a problem with those who mindlessly agree with others. To the credit of those who left responses in the comments, you all got pretty critical with my shallow analysis. Some of you were kind, even though I could sense that you really wanted to sock it to me. Some of you downright took me to the cleaners, which I fully deserved!

I’ve noticed more and more that this kind of honest dialogue is rare. Heck, if the two top candidates to become the next leader of the free world cannot even participate in a simple debate without displaying an egregious lack of manners and an overall inability to communicate, how can we expect people to be candid yet respectful in a blog or other forum? And how can we expect people to disagree with one another in person and still continue the conversation?

These are tough questions to navigate, so many just don’t bother to try. We pat each other on the back despite the presence of disagreement, stand pat as others share misinformed or half-baked ideas, and keep our mouths shut.

We might not possess a herd mentality ourselves, but we often do very little to discourage its advancement among our friends and loved ones. Think about it. How many of us have said nothing when a friend or family member spoke of his latest voluntary investment in “can’t miss” company stock, the “stable return” of her annuity, or the “deal” he received on a whole life insurance policy?

I know I am often far too nice, and you are, too, in all likelihood.

Understanding the Herd Mentality

The act of discouraging the herd mentality on retirement begins with understanding. If we can grasp the reasons for the perpetuation of this mentality, we may be better equipped to combat against it.

At its heart, the herd mentality may be traced to man’s desire for conformity. Put another way, being different is very often undesirable. Even a majority of the weirdo middle school kids with dreadlocks and trench coats don’t like being different, if they’re being honest. So we often find ourselves following along with others in group-think as a means of gaining a sense of belonging and becoming part of a group.

Similarly, the heard mentality is rooted in the fear of being wrong. Even if we feel we are more likely to be correct in taking a specific course of action, nagging fear may drive us to choose the opposite course out of fear that we could end up isolated by our own wrong doing. After all, it is better to be wrong and with others than to be correct and alone, no?

Intellectually, many of us may wish to shed these notions, yet our behaviors and actions say otherwise.

Discouraging the Herd Mentality

So how exactly can we help others overcome the tendency to conform, fear mistakes, and perpetuate a herd mentality? No two people are alike, but the following guidelines will prove to be helpful in most situations and with most people.

1. Listen more than you speak

When helping another person by seeking to change their opinion or behavior, it is most important to fully understand their position. This understanding can only be achieved through careful listening.

Billionaire Richard Branson articulated the importance of listening very well in sharing a lesson learned from his father:

When I grew up our house was always a hive of activity, with Mum dreaming up new entrepreneurial schemes left, right and centre, and me and my sisters running wild. You were as likely to find me helping Mum with a new project as outside climbing a tree. Amidst all the fun and chaos, Dad was always a supportive, calming influence on us all. He wasn’t quiet, but he was not often as talkative as the rest of us. It made for a wonderful balance, and we always knew we could rely on him no matter what.

Within this discreet support lay one of his best and most simple pieces of advice for me: listen more than you talk. Nobody learned anything by hearing themselves speak. Wherever I go, I try to spend as much time as possible listening to the people I meet. I am fortunate to travel widely and come across fascinating characters from all walks of life. While I am always happy to share my own experiences with them, it would be foolish if I didn’t listen back.

2. Ask questions with care and humility

Aside from listening, it is equally important to engage with others by asking thoughtful questions and remaining humble. These steps go hand-in-hand, and they are the keys to earning others’ trust.

Remember, most people do not care what you know until they know that you care.

3. Acknowledge your own mistakes and imperfections

In order to continue building a foundation of trust and credibility, seek to admit your own mistakes and imperfections. It is very difficult to shatter the herd mentality if you skip this step.

Yesterday, I was listening to the Dave Ramsey show podcast when Dave took a call from a confused caller. The wife and mother of four shared that she and her husband were considering following the advice of friends and family by moving in with her parents and selling their house to save money. Dave took this caller to task in a manner that made me wince a bit. He was critical of the caller’s lack of planning, overblown spending, and knee-jerk reactions. Dave also pointed out the this woman was attempting to implement a plan which treated only the symptoms of the problem rather than the problem itself.

Naturally, this caller became a bit distressed and defensive. In a moment of swift timing, Dave pointed out that he himself had made “far dumber” mistakes with money than even the mistake that this woman and her husband were about to make. As he outlined several of them in crystal clear detail, he displayed empathy and earned credibility with the caller. Little by little, the caller warmed up to Dave and become more and more interested in what he had to say. By admitting his own mistakes, Dave broke down the herd mentality barrier which had driven this caller.

Final Word

I apologize for any genuine concern I may have caused over my views on early retirement. Despite my deception, my true vision for early retirement is simple:

I desire to reach financial independence and gain the option to work, if I so choose, for purposes other than monetary rewards.

Despite experiencing some guilt over my slight deception in my previous piece, I am glad that the outcome was as I had expected. Collectively, the tight-nit community listened to my ideas, posed relevant questions and counter-examples, shared personal anecdotes, and tapped into long-established trust and credibility in an attempt to show me the error of my ways.

I am proud to be running with the right herd.


Have you had experience breaking others free from the herd mentality surrounding retirement? 

 

 

 

Early Retirement Musings – Is It Worth It?

I have been thinking about early retirement a lot lately. Upon first glance, you might read that sentence as an indication that I am looking for an escape from my current day-to-day grind. On the contrary, I feel that Mrs. Superhero and I are in a good place at the moment. We enjoy our full-time careers in the classroom, and we feel invigorated by our side businesses in real estate and the music studio, respectively.

My thoughts on early retirement are admittedly impacted by a variety of influences. First and foremost, everyone in our family trees has opted for traditional retirements. On the other hand, nearly everything I read on a regular basis, from books and magazines to blog articles, touts the benefits of early retirement and financial independence.

What are my current thoughts about early retirement? I’m seriously pondering whether I am even interested at this point.

Retirement Basics

Any discussion of the pros and cons of early retirement should begin with a look at the purposes behind retirement at a basic level. Quite obviously, the cultural phenomenon of retirement exists because humans are not physically and mentally equipped to work forever. As a result, we work and save for four to five decades, on average, in order to survive when we are no longer able to support our basic needs through earned income.

To recap, the most basic life plan is as follows:

WORK 40-50 YEARS + SAVE MONEY = BASIC SURVIVAL AT AGE 65-70 

The above plan is a reality for an alarming cluster of the population. Yes, you can and probably should aim higher with your retirement goals. For example, you could save and invest more than is required to meet your basic retirement needs, allowing yourself to live a little in retirement. However, tomorrow is promised to nobody. Or you could save more and retire a bit earlier, say in your late 50s or early 60s.

So, we might describe the intermediate plan as follows:

WORK 30-40 YEARS + SAVE MORE MONEY = COMFORTABLE RETIREMENT AT 55-60

For a small number of renegades with their hearts and minds set on early retirement, even this sensible plan is insufficient. Thanks to mathematical breakdowns by Mr. Money Mustache and countless other bloggers, waves of people are targeting a much earlier retirement. How? They are aiming to increase their savings rate, as a percentage of net income, to figures which exceed 40 percent and approach 85 or even 90 percent!

Early retirement
The Shockingly Simple Math Behind Early Retirement (Credit: Mr. Money Mustache)

 

 

 

 

 

 

 

 

 

 

 

 

 

In order to reduce this table to a formula, we might proceed as follows:

WORK 3-20 YEARS + SAVE LIKE THE DICKENS = RETIRE EARLIER THAN EVERYONE ELSE

The most beautiful thing about the chart above is that it is not income sensitive in any way, shape or form. It applies to you whether you earn $40,000 per year or $4 million per year. Of course, it should be much easier to save when you have an inflated income. Yet, that pesky thing called “lifestyle” tends to get in the way.

In essence, we might say that early retirement is a largely a choice.

Early Retirement Pros and Cons

Now that it is apparent that early retirement is mathematically accessible for virtually everyone, let us examine the merits of such a plan.

Among many pros of early retirement, the following stand out:

*Opportunity to spend increased time with family and friends
*Freedom to travel
*Reduced stress and improved health
*More time to pursue other interests or even a new career

Obviously, early retirement is not without its cons, which include:

*Possible negative impact upon health (possible loss of health benefits, decreased physical activity)
*Possible boredom and/or depression
*Increased stress (more time to worry; constant fear that your nest egg may be insufficient)
*Limitations due to fixed income

As with virtually all matters of personal finance, the pros and cons are largely situation-dependent. For example, my Grandpa retired only a few years early and came out ahead in nearly every manner possible: he increased his earnings and kept busy by working side jobs, gained the freedom to spend time with his children and grandchildren, and took several vacations each year with my Grandma.

On the other hand, I know a person (who shall remain nameless) who would quite likely suffer an early death if he were to retire early. He would spend his days and nights wasting away in a recliner watching television, despite being of able mind and body. Quite likely, early retirement would be an early death sentence for this person.

Our Current Plan

Back in June, I established 30 goals as I approached my 30th birthday. Goal 5 stated, “Set a target date for early retirement and formulate a plan to get there.” I have been dragging my feet on this one ever since; as I said, I’m just not sure what I want to do at this point.

Strictly based upon Money Mustache’s chart above, Mrs. Superhero and I could likely retire somewhere in the neighborhood of 15-17 years, or 2031, given our current assets and savings rate. Since I am a proponent of stealth wealth, that’s about as specific as I’d like to get at this point in time. However, we could make some changes in current spending and investing plans and possibly retire in approximately 10 years. This would not be achievable without significant sacrifice and postponement of other significant goals.

All of which has led me to an important conclusion: I simply desire to achieve other goals more than I desire early retirement at this point in time. Among other goals that I feel will bring me and Mrs. Superhero greater joy than early retirement, starting a family ranks at the top of the list. Additional goals include:

*Fund college for our future children
*Travel with moderate frequency
*Give and support missionary work beyond our current ability to do so
*Finish our basement (which is currently unfinished)
*Possibly own a second home

If our pursuit of these goals brings us increased happiness and slightly slows our pursuit of early retirement by 5-10 years, I feel I am OK with that. I would rather retire slightly later than mathematically possible and achieve more in life rather than retire with unfinished business.

In closing, let us consider one of the oldest retirement clichés, which says, it is better to retire to something than to retire from something.


What are your current retirement plans? Do you aspire to retire early? If so, how do you hope to achieve early retirement?

 

Investing is a Marathon – A Personal Training Guide to Win

Investing is a marathon, not a sprint.

Aesop’s parable of the tortoise and the hare is a timeless, yet somewhat ambiguous tale. It chronicles a race between the slow-and-steady tortoise and the overconfident-and-lazy hare. The tortoise paces himself appropriately, while the hare opts to enjoy a mid-race nap. When the hare awakens, he discovers that his competitor has already won the race.

Investing is a marathon, not a sprint.

I appreciate this wise lesson, but an alternative version of Aesop’s tale provides deeper wisdom.

In this iteration, the hare decides to provide the tortoise a head start. Throughout the race, the tortoise grows stronger and faster, a development which was unforeseen by the hare. Despite the hare’s eventual efforts to work harder and run at much faster speeds than the tortoise could ever imagine, the tortoise wins the race handily. In fact, the result is far from a photo finish.

As investors, many people are like the hare. They are always waiting and preparing for tomorrow. Others are like the tortoise. They invest slowly and boringly over time and maintain remarkable consistency.

When it comes to investing, the average investor would be wise to learn from both the slow-and-steady approach of the tortoise and the speed and intensity of the hare.

Investing is a marathon, not a sprint.

Investing is a marathon, not a sprint. Unlike running, you only get one chance to live and save. Will you be more like the tortoise or the hare?

Marathon Training

Following my first half marathon in 2010, I began training for my first full marathon in January 2011. The days are cold and nights even colder during Illinois winters, which made the beginning of my training extremely brutal, both physically and mentally. To make matters worse, I was still trying to master the fundamentals of distance running: proper form, hydration, nutrition, and the all-important techniques to avoid chafing.

However, I established a regimented schedule for both training and rest, learned to listen to the signs and signals of my body, and improved as a runner. Despite many mistakes and a few minor aches and pains, I pressed onward and completed my training.

Exploring the Parallels – Investing IS a Marathon!

Race day arrived much faster than I ever thought possible. Though I had prepared as well as I could have expected, as I stood at the start line with hundreds of other people, a thought played over and over in mind:

What did you just get yourself into?!

Getting Started is Hard

The race director fired his gun, and we were off and running.  The first mile was absolutely awful. I dodged slower runners left and right, expounding a lot of wasted energy in the process, and experienced my first doubts. I’m so far from the finish line, I thought.

Many people have these same doubts when they begin investing. They know they are beginning a long journey which requires patience and diligence, yet it is not uncommon for many beginning investors to experience waves of discouragement and doubt. So they work harder, save more, do more research, and re-read investment prospectuses. At first, their efforts barely move the needle.

As I approached the first aid station near mile 4, I felt satisfied. My body had finally warmed up, my doubts had dissipated, and my confidence was restored.

Achieving a positive net worth is much like a marathon’s first aid station. It is a milestone worth celebrating. This checkpoint is not achieved without hard work and sacrifice, yet it is only the beginning of a long journey.

Setting the Pace, Focusing on Your Goals

I settled down even more after the first aid station and found a comfortable pace. At times, running felt effortless during this stretch. Around mile 10, I passed by family and friends who were out to support me. They cheered me on and said I looked “very fresh.”

Investing is a marathon, not a sprint. Unlike running, you only get one chance to live and save. Will you be more like the tortoise or the hare?
Feeling great at Mile 10 of the 2011 Wisconsin Marathon

As I approached the midway point of the race, I noticed that many other runners were picking up their pace. I joined them for a moment, but wisely pulled back after a few minutes, as the pace felt unsustainable.

Moments later, I witnessed the jubilation of those same runners as they crossed the half marathon finish line. Unbeknownst to me, they had selected a different goal and adjusted their pace accordingly. As they crossed their finish line and celebrated the fruits of their labor, I began to feel sorry for myself. I still had 13.1 miles to go.

It is tempting for an investor to lose sight of the plan and pace and adopt someone else’s approach. However, their pace and goals don’t matter! Your pace and goals are important. Investing is a marathon, so be sure to run the race at your pace and aim for your goals.

Stay Strong, Finish Well

During the long stretch from mile 13 to mile 20, I found myself running alone much of the time. I was fatigued, yet I felt OK. I had experienced my fair share of emotional ups and downs by this point, but I trusted myself. I trusted my training. I continued to take one step at a time.

At the same time, I felt oddly apathetic. I didn’t feel much like drinking or eating gels, so I skipped an aid station. Instinctively, I knew this was a bad idea, but I just didn’t care anymore. I stopped thinking about the successful things I had done to get to this point.

The average investor is similarly susceptible to ups and downs, doubts, and apathy. When you have made sizeable progress toward achieving your goals yet still remain far from your nest egg target figure, it can be tempting to stop caring. It can be easy to rely on feelings and allow them to guide your choices and actions. You must remain consistent and continue to take the steps which helped your investments grow to this point! Investing is a marathon!

My experience from miles 20-26 was in direct contrast to the earlier stretches of the marathon. Up until this point, I was on pace to finish the race in 3 hours and 30 minutes. Everything changed at mile 20. While others whom I had passed earlier seemed to grow stronger, I was battling crippling nausea. I shouldn’t have skipped that aid station, I ruminated.

While this stretch was a slow crawl toward the finish line, it was a victory lap for one elderly gentleman. As this man who was old enough to be my grandfather passed me, he shared some sagely advice:

Just keep going. Keep your eyes on the finish line. Don’t give up.

For many investors, we experience the true ramifications of our mistakes during the home stretch. We wish we had started saving early, experienced more years of the wonder that is compound interest, and maintained greater consistency over the years. Yet the finish line of retirement is visible on the horizon.

As I passed the 26th mile marker and rounded a bend in the road, I saw the finish line for the first time in nearly two hours. I forgot about my nausea and soreness and began sprinting. I’m quite certain I must have looked like a geriatric patient gallivanting down the road, but I felt as quick as Usain Bolt as I crossed the finish line and received my medal.

Like an idiot, I awoke early the morning after the race and crawled out of bed to go for a short run. As I lumbered along under the light of the morning sun, I reflected on my training and race mistakes. Naturally, I was grateful to have learned many lessons. I was also eager to do better next time.

Recommendations to Win the Investment Marathon

However, there is no next time for investors. We all have only a single life to live, so it is important to act with wisdom the first time if we are to achieve the retirement of our dreams. Win the investment marathon by following these four recommendations.

  1. Start early! If you foolishly begin later, as did the hare, and think you can catch up, you are mistaken. Compound interest functions at its finest over long periods of time. Remember, as Warren Buffet said, “You can’t produce a baby in one month by getting nine different women pregnant.”
  2. Follow a plan. Remember, if you fail to plan, you should plan to fail.
  3. Keep it SIMPLE.
  4. Invest based upon your goals and desires, not those of anyone else. Your keys to happiness are not the same as those of others.

If you are looking to begin your investment race toward retirement, a number of routes can help you get started.

Disclosure: FinanceSuperhero recommends the following services and maintains an affiliate relationship with each. However, we only recommend services which we have reviewed and deemed helpful to readers.

I recommend opening an IRA (Roth, if eligible) with Betterment. At the time of publication of this article, over 175,000 investors have contributed more than $5 billion into their Betterment accounts and taken advantage of tax-efficient investing in low-cost index funds. You can even roll over an existing 401k. Open an IRA with Betterment today!

 

If you’re just getting started and desire a method to keep better track of your finances and investments in general, I recommend opening a free Personal Capital account. I trust Personal Capital to monitor all of my financial accounts in a central location, which allows me to see the big picture with a few simple clicks. Their instant calculations help me to ensure that I am on pace to meet my goals. If you desire, Personal Capital also offers advisory services should you wish to adopt a hands-off approach toward investing.


Do you believe that investing is a marathon? On a lighter note, have you ever ran a half marathon, marathon, or ultra-marathon? What other parallels do you see?

 

 

 

My Motivation to Achieve Financial Success – Legacy

Before today’s post, I wanted to share that I recently took part in the Behind the Screen Interview Series at FamilyMoneyPlan. You can check out my interview with Andrew here.


My Motivation to Achieve Financial Success – Legacy

A brand-new home with every amenity.

Freedom from stress and the day-to-day rat race.

Full control over your life and your finances.

When it comes to money, we all are motivated by different factors. Those motivating factors can also change over time based upon our formative life experiences.

However, for as long as I can remember, my motivation to achieve financial success has always been about one primary factor:

Legacy.

My motivation to achieve financial success has always been about one thing: legacy.

My Model of Motivation

I have written extensively in the past about the impact my Grandpa had on my life and my outlook on work ethic, success, and money. Since he passed away just over three years ago, a day has not passed in which I fail to think about him and the incredible legacy he left behind.

While many people do not aspire to leave a legacy or make a profound impact upon their loved ones, my Grandpa knew exactly what he and my Grandma were doing. I learned this at a very early age.

As a young child, I vividly recall the long walk to the lake one warm July 4th evening. As was customary, the entire extended family – Grandpa and Grandma, several aunts and uncles, and far too many cousins to count – had set out well before dusk to stake out our seats for the evening firework show.

To be clear, I cannot recall if my memories of what happened next are firsthand or simply recollections of the story; strangely, time has a way of clouding memories. Regardless, I will always remember the words my Grandpa spoke to my Grandma and as they walked side-by-side and lead the way to our usual seats.

“Look what we did, Mother,” he said, glancing over his shoulder at our entire family.

We were Grandpa’s proudest accomplishment. We were his legacy.

With my Grandpa in 2012
With my Grandpa in 2012

I think back on that story often. In many ways, it ranks as one of the most formative experiences of my childhood. In that moment, I learned a valuable lesson on what is truly important in life.

In my eyes, my Grandpa had it all: a long, relatively-healthy life; a beautiful home; considerable, though undeclared, wealth; and the freedom to do as he pleased. Yet, his family meant far more to him than all earthly possessions.

Yes, my Grandpa loved money. In fact, when I spoke at his funeral, I shared the true story of the time he opened his wallet and a moth flew out. Like a typical, hard-working Dutch man, he was not in any hurry to spend his hard-earned money. But he had his priorities in order. He was generous and kind when it mattered most, especially to family and friends.

I often wonder if my priorities, too, will stand the test of time.


On the surface, I have no doubt that many of my friends and loved ones completely misunderstand my money motivations. To many of them, I am sure I appear to be greedy, miserly, or a workaholic. Some may even think I must be self-obsessed and vain.

However, I believe short-term sacrifice is worth the long-term gains waiting to be realized. Over my lifetime, I have learned that it is the motivation behind one’s actions, not the actions alone, which deserves scrutiny.

My wife and I aren’t working hard to inflate our current lifestyle, live it up in the present, and run the risk of burn-out. No, we are sacrificing in the short-term in order to build our ability to focus on what is truly important to us five, ten, and twenty years from now. In a culture which places the highest value on instant gratification, we are embracing the opposite.

Once in a while,  when it feels like I’m burning the wick at both ends, I like to hit the streets for an evening run and clear my head. Invariably, my thoughts drift and I begin to form visions of the future: our future kids playing in the yard, sending them off to college without any debt, walking my daughters down the aisle on their wedding days, and taking the entire family, grandchildren included, on a two-week getaway to Disney World. Those thoughts are the magical panacea for my weariness.

In the present, those visions represent a future worthy of current sacrifice and hard work.

Those thoughts – my future family and the experiences I hope to provide for them – will be a significant part of my legacy.


What motivates you to achieve financial success?

 

The Two Most Important Numbers to Achieving Financial Success

My family is soft-spoken. Though members of my extended family tend to be people of very few words, when someone speaks it is a certain sign that those words are important and have been carefully crafted. My uncle, a wise man of few words, unexpectedly told me a surprising story during one of our trips to Michigan this summer.

One of his very elderly friends at church had passed away a few months ago, and shortly after this gentleman’s passing, his wife died. As described, they were a very sweet old couple. They had been married for more than 50 years and still lived in the tiny home which they had purchased shortly after getting married. The man’s wife never held a job, as they felt it would be more valuable for her to remain home and raise their children. The man 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.

My uncle’s friend and his wife were a model of frugality. They owned only one vehicle at a given time and chose to drive well-maintained used vehicles. According to my uncle, he couldn’t recall a time in which the couple owned a vehicle fewer than five years old.

You probably know a similar couple. Though I did not know this pair myself, I know many other older couples who fit this billing. My grandfather was similarly frugal, though a bit less extreme.

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.

Head over to ApathyEnds and read the remainder of this article, as it is the featured guest post for today. Be sure to check back here on Friday for an offbeat piece on lessons learned from an unusual football star.