Financial Confessional: I Used to *Hire* Escorts

sexy legs

[So here’s a surprise! Two posts on escorts within a month of each other, haha… Had a reader reach out though wanting to share *the other side* of the business (i.e. paying for escorts vs hustling as an escort), and I just couldn’t pass it up… So just like last time, if this stuff offends you go ahead and avert your eyes now! We’ve got tons of other juicy confessionals you can check out instead. Take it away, Mr. Anonymous Man!]

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After reading the post by Lance, “Financial Confessional: I Used to Be An Escort,” I felt compelled to share my point of view as a former client.

It was many years ago when I was in my thirties and unhappy in my marriage. I offer this only as background, and not as an excuse. I take full responsibility for my actions. While I believe men and women should have the freedom to do as they please with their bodies, my sin was lying about what I was doing. If you’re unhappy in your marriage, fix it or leave.

I came across an article by Marc Perkel that was the most influential piece for me. It gave many of the pros and cons for hiring an escort as well as practical advice on how to go about it (link very NSFW). Given the legality of such activities, I can’t share specific details of my hiring, but I can tell you about my personal experiences.

The Escort Industry is Huge

Like anything that’s in demand, someone, somewhere will supply it. Sex is no exception. There’s a reason this is called the oldest profession in the world. For as long as there have been people, there have been those willing to trade resources for sex.

In America, it is currently illegal and generally frowned upon, which only means it is going on behind the scenes. This also means a number of cottage industries have popped up to facilitate the transaction.

Nickie, mentioned in the previous post, chose to post via Backpage. You could find people there, but it was very dangerous and unpredictable. There are better sites where you have to be a member, where they will do a simple background check on you so that women will know if you are who you say you are. They also check that the women are who they say they are, and that their pictures and ads are accurate. The ladies will include pictures, measurements, physical descriptions and a menu of what they are willing to do.

There are review sites that allow men to give whatever details they feel are necessary. As you would expect, many are explicit and some can be a bit rude, but by-in-large, they keep it clean and respectful. If you want to be a part of the community, you have to play by the rules.

The Escort Community is Also Huge

Once you get in, you’ll start to see many of the same players. All have a chosen online name and can be found discussing “the hobby” on message boards. There’s advice for newbies, discussions of who is good to see, what areas have been targeted by law enforcement, which guys have become real d*ck heads and need to be excluded, etc. Like other activities it has its own special terms, so many of the discussions were about definitions. There are even in-person socials if you get in deep enough!

A number of clients and providers meet up at prearranged venues to buy drinks and meet providers face to face. It’s a lot like a sales convention with vendors putting out their best items looking for buyers. There are rules of course like no real names, be respectful, etc.

How Much Have I Spent on Escorts?

Most review and ad sites let you know up front around how much you’ll spend.  Many times, the girls will run specials trying to build up clientele. I learned early on as a novice, do NOT haggle. For most, this is their profession and they know their worth.

During my time, I never paid more than $200 for an hour.  I made appointments about every three months, and this went on for about four years. All totaled I probably spent about $3,200.

I kept this quiet by having a separate bank account where part of my check was direct deposited and I could get to the cash. Appointments were usually in the middle of the day as part of a long lunch. I did have my one and only threesome with a regular and a girl she invited. It was $400 total for the time.

At one of the socials, I met a guy who had over 500 “OKs” from girls. Which meant he had been with at least that many, but probably more. This is over several years, but doing the math, he spent over $100,000 on this “hobby”! I have to assume the guy was single since I find it hard to imagine hiding that amount of money.

Why Did I Do It?

Chances are, you know someone who has paid for sex. I’m a pretty unassuming person. Typical day job as an accountant. If you saw me, you wouldn’t think I had hired someone to have sex. When I was dating, I didn’t have any trouble getting dates or relationships.

But as I mentioned, I was not happy in my marriage. I was deeply depressed, but was raised to believe you stayed married no matter what. This was a way for me to get the intimacy I desired without having to give up the marriage. You’re just exchanging resources. You need human touch, she needs some money. I was able to meet some amazing women that provided a service that came with none of the drawbacks like emotional entanglements. No crazy calls in the middle of the night or showing up at your job. They are professionals and act that way.

It’s an important distinction that you are not actually paying for sex since that’s illegal; you’re paying for her time. She can, at her discretion, decide nothing is going to happen.

My experience was a little different than what Nickie described. I mostly did in-calls (her place), and would make the appointments online and get a general area to meet at. Once there, I had to make a call to get the actual location. When I got inside, I was usually greeted warmly with a hug or light kiss. I was allowed to peak around a bit, just to make me feel safe that we were, in fact, alone.

Money wasn’t ever discussed, and I never actually put it in her hand. If, like Nickie, she brought it up, I would have turned and walked out the door. I was also never “upsold” and was never offered drugs. I brought my own water and I left my valuables in the car. It’s by far more dangerous for them, even with all the precautions, but as a client you still need to be alert.

I was very selective in who I met with, which is the whole point of an escort. My guess is Nickie’s loss of clientele may have been not from competition, but her lack of professionalism.

Independent Business People

Human trafficking is very real and prostitution is an obvious avenue for exploiting people. The fact that giving a person money for sex is illegal is a large part of that. If the industry was legal and somewhat regulated, I feel like women would generally be safer since it is difficult to go to the cops if you are assaulted doing something “illegal”.

All the women I knew were doing it as a choice, and from what I could tell, mostly enjoyed it. They set their own schedules, used services to screen out most of the wackos, had a separate location for business, and were usually prompt and courteous. Some are busy enough to even hire personal assistants to help with screening and making appointments. They had families and lives outside of their work that they kept separate. Her time working was just another day at the office.

They always had back-up too. Any smart girl makes sure she has a partner that knows she’s meeting with someone and has signals for when things go sideways. Given the intimacy of the transaction, it’s easy to see why some would get emotional. If she’s good, you’ll forget this is just a transaction. Some guys do and will mistakenly cross the line.

I admit I got close to a couple of regulars myself. I even exchanged real names with them and had long conversations about my wife. They made me feel exceptional, but of course that was their job. We were not in love. We were not even friends. We were close business associates. I even considered offering my services as an accountant to help them out. Being in a cash based, less than legal profession, many just don’t know what to do. They collect the cash, pay their expenses and spend the rest.

It’s important to note that the IRS mostly does not care where your money comes from.

The thing is, this is not very different than a cam girl, selling her time over the internet. You have something the other person is willing to pay for. Audits are fairly rare for the typical taxpayer since they don’t have the personnel to pursue small money.  They’ll spend their time with people who deposit hundreds of thousands of dollars. They didn’t get Al Capone on any criminal charges, they got him on tax evasion. It is easier than ever to keep your cash safe in an online bank. The rules are the same for all entrepreneurs: collect your money, maintain good records of your expenses, and get a good CPA.

If for some reason you’d like a deeper discussion about the mechanics of running an independent sex worker business, I found the following article that spells it out along with links to even more detailed information: You’re A Sex Worker — How Do You Pay Your Taxes?

Final thoughts

I stopped using escort services years ago. I dated and eventually remarried. I get all I need out of my relationship now, but there are times I miss the thrill of meeting a new girl.

The pros of using escorts is that you could reasonably expect to be having sex that day, and you generally knew who you were meeting. You’re both at your very best, most polished, self, and you don’t have to worry about any emotional entanglements. The cons were the need to sneak around, the financial and emotional costs, and of course it’s a poor substitute for meaningful relationships.

All things considered, I think prostitution should be legal and can be fun if done properly.

 – Anonymous

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Missed the original article? Check it out here: Financial Confessional: I Used To Be An Escort

Here’s a list of previous confessionals we’ve done as well, if you’re all escorted out by now 😉

Financial Confessional: I Used to *Hire* Escorts syndicated from http://ift.tt/2rLcJKu

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This Is Why I Own a Home

naughty dishwasher

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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Recently, J. Money wrote an article on why he doesn’t like owning a home.

A naughty dishwasher hose leaked and caused thousands of dollars of damage to the home he was renting. J. Money describes the chaos:

  • Walked into the kitchen and saw air (water?) bubbles on the floor
  • Walked into far corner of the basement and saw water dripping from the ceiling
  • Looked closer and there was mold on the wooden beams – meaning it’s been dripping for a while
  • Mold people come out to inspect and quote a price to our landlord
  • Mold people start work on it and find even more mold under the kitchen floor (those bubbles? they were water)
  • Cost to fix is now doubled – but that’s only for the mold cleanup/restoration
  • To get to the mold they had to rip up the kitchen floor
  • To get to the kitchen floor they had to rip up the cabinets
  • To get the cabinets back in/re-built a cabinet person needed to be hired
  • To get the floor fixed a floor person needed to be hired
  • Then on top of it all the AC overheated, tacking on another $268.50 to the bill

Sounds like a nightmare, right? Since J. was renting, the nightmare mostly belonged to the landlord. J. had to move his family out of the home for a couple days, but was responsible for nothing else.

Despite J.’s tale of woe, I love owning a home. I’ve owned my primary residence ever since I graduated college and I’ll continue to do so until I’m old and grey.

Why I Love Owning a Home

I’ve always enjoyed home ownership. Here’s why:

#1. I make money from my homes: Before I tell you how I profit from home ownership, I’ll tell you what not to do. The recipe for not making money is this:

Buy a new home. Choose a cookie cutter model in a new subdivision where the home is priced at top dollar by a builder who knows how to maximize profit.

Bonus points: throw more money out the window and build a custom home

Don’t buy or build a new home. Ever.

I have two strategies that I use to make money from my primary home:

  • Love the Ugly Duck: I buy homes in need of love and fix them up, earning instant sweat equity. Of course it’s work, but an added bonus is that I get to make the house my own with finishes that I enjoy. Bye-bye vinyl floor, hello slate!
  • Flirtation with Gentrification: I buy homes in up-and-coming places so the gentrification wind is at my back. I look for areas that are experiencing an influx of people and have a solid economy. If the town is still a little rough, that’s OK because it won’t be that way forever.

My current home is the most extreme example of these strategies. In 2013, I bought an ugly foreclosure for about $175,000.

I put a load of work and $100,000 into it. It now looks like this:

At the same time, my town has improved. The shuttered turkey processing plant that was recently torn down will soon be fancy condos. The pawn shops on Main Street are almost all gone. I could easily sell my home for $500,000 today for a profit of about $225,000.

#2. Owning is cheaper than renting: My mortgage (15 years at 3.25%), property insurance and taxes set me back $1264/month on my 4 bedroom, 3 bathroom home. Meanwhile, half of a duplex on my street (2 bedrooms/1 bathroom) rents out at $1400/month. Full disclosure: In addition to the $100,000 and time I spent on improvements, I also put 20% down ($35,200) at the time of purchase. After taking these numbers into account, I strongly believe that I’ll come out ahead over the long term. This brings me to my next point.

#3. 11 Years to Freedom: I have 11 years of payments to go on my mortgage. After that, the home will cost me only property taxes and insurance (currently $250/month). (Editor’s Note: AND MAINTENANCE!!! WHY DOES EVERYONE “FORGET” MAINTENANCE????? ;))

#4. Stability: Moving sucks. Enough said. Well, that’s not quite it. I have children and I want to give them stability. I was fortunate to spend my childhood on the same street with the same friends. I want my children to have the same experience.

#5. Learning Opportunities (more tools): This one is a stretch, but I’m throwing it out there anyway. I like to build and fix stuff. Coming out of college, I didn’t know how to do anything with my hands. Now, I can set tile, plumb a home, wire a home, replace windows, build a custom shower, fix a dishwasher, hang/finish drywall and build a deck (thanks, YouTube!). I can take something ugly and make it beautiful. Bonus: I get to buy more tools!

This type of work isn’t for everyone, but it feels d@mn good once you complete a project. Also, you save loads of money since most of the cost in projects is tied up in labor.

Not for Everyone, But…

I readily admit that owning a home isn’t for everyone:

  • If you live in certain areas like Vancouver, New York City, or San Francisco, forget owning a home. You’ll come out far better financially by renting. Sign a lease and call it a day.
  • If you move frequently, forget home ownership. Be in it for the long game.
  • If you absolutely hate taking care of a home, even mowing a lawn, go find yourself a nice rental. Fixing a broken dishwasher isn’t everyone’s idea of a fun afternoon:

However, if you’re at the right place in life or willing to endure a live-in renovation, maybe, just maybe, home ownership is for you. It’s certainly been worthwhile for me.

Let me know if you need help with your next project. If you live in Hawaii or San Diego, I can be over next week.

This Is Why I Own a Home syndicated from http://ift.tt/2rLcJKu

Adults Can Do Whatever They Want

adulting

Here’s a convo my 5 y/o son and I had the other day:

5 y/o: “What are you eating over there???”

Me: “A chocolate bar – mmm mmm it’s tasty.”

5 y/o: “How come you can have a chocolate bar right now and I can’t?”

Me: “Because I’m an adult – and adults can do whatever they want.”

I probably should have said “Because you’re still eating your dinner” or “you can have one later” or “here’s a little piece of it if you pay attention to the lesson I’m about to teach you,” but instead I played the adult card. And I ain’t gonna lie – it felt good 🙂

Also, scary.

Think about just how FREE all of us really are right now? And how much damage/trouble/awesomeness we can get into at any point of our lives now that we’re on our own? Don’t want to do the dishes? Forgettabout it! Want to sit on your ass and gorge yourself of ice cream and Netflix? Go for it. Want to call in sick and play video games all day long? I get controller #1!

Sure we still have bosses and spouses and police officers keeping us all in check (“I swear officer, I thought it was Halloween! I wasn’t trying to take all the bank’s cash, I was trick-or-treating!”), but at the end of the day we really do get to do whatever the hell we please.

And that’s exactly where the scary part comes in. Because unfortunately, there’s also this thing called “consequences.”

Webster Dictionary defines it as…. Pshh. Y’all know what consequences are! (Why do writers always go down that route btw? As if we’re all so dumb we literally need to go back a couple decades and bring out the dictionary??)

Here was the rest of the convo w/ my 5 y/o:

5 y/o: “But daaaaaaad, that’s not fair!”

Me: “Well, there’s also these things called “consequences” when you do things as an adult. For example, if I eat this chocolate bar I may get fat or get a toothache or upset your mother for taking the last one from the box (psst – don’t tell her!). So while it is cool we get to do whatever we want, we also have to make sure we’re okay with any bad stuff it can bring, especially if it affects someone around us.”

5 y/o:”What does affect mean?”

Me: “Look it up in the dictionary.”

(Just kidding… although this is the right way to bring up a dictionary ;))

Me: “It means everything you do can change something else. If you go and hit your brother right now, he’s going to cry and then you’re going to your room for a time out. Just like if I were to hit our neighbor I’d probably be hauled off somewhere too – called jail. So even if you want to do something sometimes, it’s good to think twice about it unless you really like getting into trouble.”

5 y/o: “Ahh… I can’t wait until I become an adult.”

Me: “So you can eat chocolate bars?”

5 y/o: “No, so I can punch my brother!”

*facepalm*

I started reading this new book called 10% Entrepreneur by Patrick McGinnis, and it reminds me a lot of this adult stuff. Simply for the fact that it helps contain us more, despite our brains thinking other avenues could be better for us.

For example, everyone thinks self-employment is all rainbows and freedom and full of cash money millionaires. And while that’s partially true, there’s also a whole other dark side to the game when things are anything but. I can’t tell you the times I’ve considered shutting it all down or getting a new job or not knowing if I’ll be able to support my entire family from this crazy thing called “a blog.” Yes it’s fun and yes there are advantages up the ying-yang, and technically you don’t ever have to work if you don’t want to and just take off traipsing around the world, but at the end of the day it all rides on your shoulders and your shoulders only because you’re The Boss. It’s a roller coaster of emotions, and you’re not wearing any seat belts.

Without self – and emotional – control, you’re doomed.

Which is the basis of the 10% entrepreneur idea… I’ve only read the first handful of pages so far, but the notion is that it allows you to still dabble in making money on the side and starting your own hustle, but with only 10% of the effects. You’re still tied to your day job and the structure, but you also get to reap the rewards of putting yourself out there. And I’m going out on a limb and will say that the amount of *positive* return on that effort will likely be much greater than 10% too – making the deal even sweeter.

As the tagline of the book goes: live your startup dream without quitting your day job. Check it out if you’ve always wanted to dip your toes into business – it could be a good solution for ya!

10 percent entrepreneur

The 10% Entrepreneur: Live Your Startup Dream Without Quitting Your Day Job

With everything in life, there’s things we WANT or THINK we want to do, and then there’s the realities of what could happen if we act on them. Eating a chocolate bar won’t cause much of problem alone, but if you’ve already eaten 87 of them or have high sugar levels or they cost $7.00 a pop, then yeah – you’re probably going to have issues.

Just like if we sit on our asses watching TV all day or quit our jobs on a whim to start a new venture or anything else we desire in our lives. Moderation: good. Extremity: usually not so much.

We all need some structure in our lives, or at least a set of rules to follow – even if we make them ourselves. This is the basis of personal finance, after all.

  • Spend less than you make – RULE
  • Save/invest the difference – RULE (and an important one!)
  • Pay off your credit cards at the end of every month – RULE (this counts even if you’re a hacker gobbling up all the free points and miles and cash back, btw. The second you leave balances on those cards the benefits start diminishing!)
  • Protect your wealth/stuff/family with insurance – RULE. A boring rule, but a rule nonetheless
  • Always be learning and reading Budgets Are Sexy – RULE. The best rule 😉

Our lives are riddled with rules and for good measure. But that’s another benefit of being an adult – WE GET TO MAKE THE RULES NOW!! How sweet is that?? We may not enjoy following them all, but if you want the life of your dreams – both now and in the future – the rules are a necessary part of making it happen.

My son now goes around the house telling people whether they can, or cannot, do things based upon their adultness – even visitors. The lesson’s sunk in, but only if he knew how good he really has it. Free food, toys, and shelter, without any care or responsibility in the world?

I don’t know about you, but I’d gladly trade my chocolate bar for that!

Adults Can Do Whatever They Want syndicated from http://ift.tt/2rLcJKu

Ten Moves That Will Skyrocket Your Net Worth

skyrocket your wealth

[My man ESI makes a return today to share his tips on what to REALLY focus on in order to grow our wealth exponentially. You might remember him from his previous post that went viral on the 10 things he didn’t expect in early retirement, which he’s still very much in and still very much enjoying 🙂 Thanks for taking the time, good sir!]

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We all have money tips coming out our ears. Do this. Don’t do that. Do this or that. And on and on… The advice seems endless. So much so that if you try to follow them all you’d end up with no time to actually live your life.

At the same time, all money tips are not created equal. While many are valuable, there are some that are exponentially better. These are the tips that will make you wealthy.

So let’s get to the good stuff and cast the rest aside for now. Based on the experience of managing my own money — allowing me to accumulate a few million dollars and retire at 52 — here are my recommended ten big financial moves that will propel your wealth skyward!

#1. Get an advanced education in a valuable field

College degrees can add significant wealth. There’s no debate that (on average) the more education you have, the more you’ll earn and the less likely you are to be unemployed.

And if you can keep debt low while getting the degree (and there are reliable ways of doing this), then it’s almost guaranteed that getting a college degree is a good deal.

Even better is getting a degree in the right field. It’s well-known that certain careers pay more than others. Pick one that is closer to the top than the bottom and you’re finances will thank you for it.

Consider this finding:

College graduates earn $1 million more than high school graduates over their lifetime, and the income gap between the highest-paid college majors and the lowest-paid is more than $3 million dollars.

To make even more, get an advanced degree in a high-paying field. This is where the big money can kick in.

I got an MBA by spending a grand total of $5k for six years of college (because I was willing to work during school and got good grades). My MBA was worth an extra $1 million to $2 million, even though I only worked until I was 52. If I had stayed employed into my sixties you could take on a few more million.

Of course, you have to factor in abilities and interests when picking a career. But most people have at least a handful of fields that would work for them. If they select one which pays a bit more, they will be making a solid financial decision which can help them become quite wealthy over time.

#2. Focus on growing your career

Even if you don’t pick a vocation in the highest-earning field, your career is a multi-million dollar asset. If you don’t believe me, take a starting salary of $40k, add in 3% annual raises over 45 years, and look at the result. You’ll have earned $3.7 million.

Even better, you can manage your career to get those 3% average raises even higher. Doing so will help you earn millions more throughout your career.

Take the same numbers from above and instead of 3% raises use 8.16% raises. The difference is over $10 million!

Think it can’t be done? I averaged 8.16% increases for 28 years using seven steps that grow any career. Plus, it took me years to figure out the seven steps. You don’t have to go through that trouble, so you have the potential to do much better than I did.

Of course, 8.16% could be considered on the high side. So let’s go low. Let’s say you average 4% annual raises. That extra 1% will allow you to earn an extra $1.1 million more than what 3% raises would.

Any way you look at it, managing your career for income growth will have a huge impact on your finances.

#3. Control spending

No matter how much you make, you can spend it all. We don’t have to look far to find examples. It’s almost a cliche that high-income actors and sports stars go bankrupt. People who have made millions somehow spend it all and then some. As a result, they are often left with nothing (or less).

A bit closer to home, you can see this principle play out across our country.

The median American household annual income is $51,939. U.S. households median net worth is $80,039. This means that over a 40-year period at an 8% return rate, the average American is saving a paltry $310 a year. What are they doing with all the rest? They are spending it!

On the other hand, those who control their spending do much better.

Assume a family can save $5k per year (less than 10% of their income). In 40 years at 8% they will have a net worth of $1.3 million. See what even a little bit of saving can do over a lifetime?

And this doesn’t mean you have to save on EVERYTHING, just some things. Enjoy your life by spending on what you want here and there, just keep it in line so you have excess to save and invest. Even 10% will make you wealthy over time.

Personally, I wanted to do better than average and was able to save 36% of my income. Others have saved much more. If we can do it, so can you. (See: Proof You Can Live off 50% of Your Income)

There are two major areas to control spending: on the big things, and on the little things.

Big things like homes, cars, extravagant vacations, and the like can bust your budget in a single move. Little things like eating out for lunch regularly, smoking a pack of cigarettes daily, and, dare I say, drinking $5 cups of coffee several times a day don’t seem like much, but they can add up to big dollars over time.

#4. Eliminate debt

Debt is a financial killer, especially consumer debt. And yes, even “good debt” like a mortgage and student loan debt can be bad in many situations. Look no further than 2008 for housing debt and the current issues with student loan debt.

The average American will spend hundreds of thousands of dollars in interest over the course of his/her lifetime. Imagine if this expense was eliminated or even cut in half and invested? This move alone would make anyone’s net worth sky-high.

We eliminated all debt over 20 years ago when we paid off our mortgage. We had already retired our car loans and a personal loan. Then we focused everything on paying off the mortgage. It started with buying a house we could afford — one half the price the bank wanted to lend to us. We then took all extra cash — bonuses, financial gifts, etc. — and put them against the mortgage. We cut spending as well and made extra payment after extra payment.

Less than a decade later, we were completely debt free.

Not having debt for two decades allowed us to dramatically increase the amount we saved, which in turn super-charged our net worth.

#5. Invest early and often

You’ve probably heard that time is your greatest investing asset. It’s true. The more investments earn and grow on their own, the greater they become.

Investment value is also greatly impacted by the amount invested.

These two factors are why you want to put away as much as you can as soon as you can. Fortunately, both of these decisions are within your control.

Return rate is the third variable in the investment growth equation and gets most of the press. However it’s actually the least important of the three in determining your overall results. Furthermore, beating the averages in return rate is virtually impossible.

You can spend hours and hours trying to find the right investments, only to not pick a winner. Or you can just invest in low-cost index funds and let them do the work — and beat 95+% of investments over time! This is what I’ve done and what I recommend.

Finally, you have to stick with it, which may be the hardest investing choice of all.

I remember back in 2008-2010 when things were really dicey. My portfolio was down big-time. I had put money in all the way down and there was no sign it was going to come back.

But I kept at it and even found extra cash to invest.

Seven years later I’m so glad I did. That money is now worth a small fortune!

Many think the stock market is due for a drop soon. No one knows when it will happen, but if it does, keep the faith. Market drops are often the time to buy if you have at least a 10-year time horizon.

#6. Marry well

You can make all the great money moves in the world, but if you’re married to someone who makes all the wrong moves you’re in trouble.

You don’t have to marry Suze Orman or Dave Ramsey, but you do need a spouse who shares your financial goals and general outlook on money.

This was a VERY big part of our financial success.

I was good at tips #1, #2, and #5 above, but my wife was great at #3 and #4. In words from The Millionaire Next Door, I was good at offense and she was good at defense.

Together we had a winning combination. We knew what we wanted to accomplish, divided up the responsibilities, and climbed up the money mountain together.

#7. Have goals and a plan to reach them

First of all, having a goal is key to being financially successful. It sets the bar and allows you to work towards what you want to achieve.

It doesn’t need to be a 100-page treatise comparable to the federal budget, but you must have at least a general goal like “retire at 40 with $2 million in the bank.” It’s better yet to have SMART goals.

Another key is to write them down. Research has shown that “people become 42% more likely to achieve their goals and dreams, simply by writing them down on a regular basis.”

Second, simply having a goal does little good if you don’t then take action on reaching these goals.

You need to break each goal into bite-sized tasks that allow you to grow your career and control your spending if you want to accumulate wealth.

I know this can seem daunting, but it doesn’t need to be. Simply write down what you want to accomplish and what you’re going to do to get you there. Then just make a small bit of progress every day. Over time, those seemingly little advances will add up to something big.

This was the tip that I missed when I was young. I went several years without a specific money plan and I lost five years of investing. Do you know what those five years would be worth now? Thousands.

But hopefully my bad planning demonstrates that even if you’ve made a few mistakes along the way, there’s hope for you if you take action now.

#8. Track net worth and cash flow

Net worth and cash flow statements are financial success scorecards. Net worth (assets less liabilities) tells you how you are growing your wealth over time, and is of course something that J$ likes to drill into our heads.

Cash flow statements (aka “budgets” listing income less expenses) tell you how much you are making and how it’s being spent. From there, you can make decisions that allow you to do more of the former and less of the latter, freeing up more money for investing.

We have tracked our net worth monthly for over 20 years. We use Quicken, but you can also use Mint, Personal Capital, a spreadsheet, or even paper. The key is that you track it on a regular basis (probably at least quarterly) to see how you’re doing at growing your wealth. It lets you know if what you’re doing is working or not. (Editor’s Note: I’m on month #114 in a row – best thing I ever did for my money!!!)

We have had a budget for years as well. We use a spreadsheet that I update monthly. It’s very useful at showing where our money is spent which allows us to make adjustments sooner rather than later.

Many people hate budgets because they think they are too restrictive. I’ve found them to be the opposite. They allow me to know exactly what I’m earning and spending, which then frees me to make the lifestyle decisions I want to make.

My guess is that our budget alone was responsible for half of our spending control success.

#9. Develop side hustles

In addition to growing your career, a side hustle/business is a great way to #1) do something you enjoy and #2) bring in some extra income to grow your net worth much faster. Also something J$ loves to share here. (See: 71 Ways to Make Money On The Side)

I’ve had several side hustles over the years including:

  • Freelance writing for magazines — This was a major contributor to paying off our mortgage
  • Blogging — I had a blog before my current one which was quite successful
  • Refereeing — Mostly done because my son needed the money and we did it together, but a few extra thousand dollars a year never hurts
  • Real estate — My biggest side business of all (though some could call it an investment) which allowed me to retire without having to draw down any assets

The great thing about a side hustle is that it speeds up early retirement dramatically.

Assume you can retire when you are able to generate $40k in income per year. At a 4% asset withdrawal rate, this means you’d need $1 million saved. Also assume you can invest $10,000 a year towards that goal at an 8% return.

If you have no side hustle, it would take you 29 years to reach your goal.

If you have a side hustle that took four years to build up to $20k per year, and you invested that money, in 12 years you’d have $503k (which would generate just over $20k at 4% withdrawal) plus a business that generated $20k. Bam! You’re at your $40k annual goal.

So the side hustle is probably worth it to save 17 years of working, right?

#10. Learn about money and manage it yourself

No one cares more about you than you do, but there are plenty of people who care about your money. Many of them want to turn it into their money and they are quite good at it.

Others have good intentions but simply don’t understand how money works. And yes, this includes many, if not most, financial advisors. The only way to avoid being taken (one way or the other) is to know the basics of managing money yourself.

Fortunately, the money principles you need to be successful are simple to learn and few in number. With a handful of books and regular reading of some good money blogs you will develop the knowledge and skill not only to protect yourself, but to thrive financially.

We were fortunate to take a Dave Ramsey-like class at our church soon after we were married. It set up a good foundation for us. I continued by reading several personal finance books and applying the key principles that I learned. Finally, I began to write about money and became even more educated along the way.

I started from ground zero, and if I can learn how to manage my money, you certainly can too.

Everything you need to know

Yes, there are a ton of other financial guidelines you could implement — probably thousands. But if you want the biggest financial bang for the time spent, focus on these ten wins above.

If you get these right, there’s no way for you not to become financially free yourself.

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This post comes to you from from ESI Money, a blog about achieving financial independence through earning, saving, and investing (ESI). It’s written by an early 50’s retiree who achieved financial independence, shares what’s worked for him, and details how others can implement those successes in their lives. He is also the author of a free ebook titled Three Steps to Financial Independence.

Ten Moves That Will Skyrocket Your Net Worth syndicated from http://ift.tt/2rLcJKu

What is the Millennial Age Range And What Does That Mean Financially?

What is the Millennial Age Range And How Does That Affect Your Debt and Spending Habits?

There are so many opinions about millennials and how they are either shaping or destroying our economy.

Recent news headlines suggest millennials are being too thrifty, and thereby killing consumerism. Others say millennials are ruining their chances of buying a home and incur more debt by overspending on luxuries, lattes and avocado toast.

While overgeneralizing a select group is rarely accurate, in order to understand millennial spending habits and risks, we have to examine the actual age range and economic climate surrounding the individuals called “millennials.”

Who Qualifies As a Millennial? / Who Are The Millennials?

There are conflicting opinions about the actual age range of millennials. Some say that people born between the early 1980s – early 2000s are categorized as millennials, while the majority agrees that those born between the 1980s- mid 1990s are millennials.

Census bureau results provide that that the millennial generation is the generation of children born between 1982 and 2002, some 81 million children who have taken over K-12, have already entered college and the workforce. This generation will replace the Baby-boomers as they retire. Other sources suggest that the cutoff date for millennial is 2000.

We put the exact date range of millennials as those who are 18-35 today – basically today’s high school graduates to 35 year olds. That’s a big, big range.​

Although there is no consensus on the exact years the actual generations begin and end, millennials are usually born between 1980 through 1998. They were born before computers and cell phones became widespread. But it’s important to note that there are really three groups of millennials: those that graduated before the Great Recession, those that graduated during the Great Recession, and post-recession graduates. This has directly impacted the average millennial net worth.

Aside from technology and the recession of 2008, the events of September 11, 2001, also known as “9/11” was the most generation defining moment for millennials in the United States. The reasoning for the cut off date of millennials stems from the theory that individuals born after 2000 were not old enough to understand or be impacted by 9/11.

Millennials have a tendency to spend money on experiences rather than material possessions. These “experience” centered spending habits have allowed for the creation and growth of businesses such as Airbnb, which are centered around avoiding high hotel costs.

Also, millennials are willing to forego some of the basic luxuries in order to stretch their dollar for spending on experiences by using ride share services such as Uber. Aside from ensuring safety while enjoying the nightlife, rideshare services help reduce transportation costs while being mindful of deceasing the carbon footprint.

Millennials are also big side hustlers. They embrace the work from where ever, when ever mentality, and are great at using the online economy to their benefit.​

Common Stereotypes About Millennial Financial Habits

There are numerous conflicting stereotypes surrounding the financial habits of millennials, as this continues to be a hot topic:

  • Millennials are big spenders. Historically, the “younger” generation has always been seen as frivolous and spending too much. This is not the first time that the older generation points the finger at the younger generation. Some experts suggest that high spending and debt combined is causing millennials to move in with their parents. 
  •  Millennials don’t save enough. Millenials are actually good savers, saving over 5% of their salary for various reasons such as emergencies, big purchases, as well as retirement. The recession is probably a huge motivating factor in saving for the future. Recent studies from Transamerica Center show that 75% of millennials save for retirement. 
  • Millennials don’t spend enough. Many retailers complain that millennials are responsible for the decline of the retail industry and closure of department stores. The majority of millennials came of age during the great recession of 2008 and as a result, frugal habits have ingrained in their psyche out of fear and unrest faced during this financial crisis.
  • Millennials are drowning in debt. Americans owe more than $1.4 trillion in student loans and the majority of that debt belongs to millennials, according to a survey of 1,000 Millennials by ORC International. While millennials may be saving their money, the majority of their income is spent on repaying debt, resulting in depleted savings and lower disposable income. 
  • Millennials are financially unable to purchase a home. While millennials are saving their money for retirement and their first home, debt makes it difficult for millennials to buy their first home right away. Aside from that, many millennials are waiting to buy their first home until they are financially stable, even before they get married. While the rise of debt is one factor in the delay to buy property, many millennials have a desire to discover one’s true self and search for identity and meaning before settling down.

Millennials and Student Loan Debt

This relates directly to whether most millennials go to college, and more importantly, whether or not they complete their college education. 

The risk for accumulating debt at an alarming rate is especially high for those who do not complete college because traditional jobs in the higher pay range generally require some college education. At the same time, many millennials regret their pursuit of a college education.

While some studies suggest that most millennials have a good handle on student loan debt, the majority of millennials have some of the highest student loan debt rates in history, according to a study conducted by the American Student Assistance — a nonprofit dedicated to eliminating financial barriers to attending college recently released the Young Workers and Student Debt survey. Its data shows that employees aged 22–33 stress about their student debt so often that it affects their health.

​When it comes to money, millennials do have some of the highest student loan debt rates of any generation in history. The average millennial has over $30,000 in student loans. Millennial student loan debt affects all of us because it has a direct impact on our economy.

Ultimately, these students in debt will see slower growth in their savings, causing further delays in starting a business, starting a family, or buying a home. Also, because the majority of these loans are federal loans, they will add to the overall national debt.

Some millennials have resorted to desperate measures, accepting jobs with low pay in hopes of student loan forgiveness, including seeking employment at Red Lobster in mistaken hopes of eliminating student debt. There are a wide variety of volunteer programs that offer student loan debt reduction, such as AmeriCorps, the Peace Corps, and career specific loan forgiveness programs. If you are serious about resolving your student loans and have aspirations for a public service career, then public service loan forgiveness training will be a huge asset to helping you get and maintain eligibility while you take control of your debt.

Final Word

Whether you believe millennials are financially responsible or not, the economic climate has created fertile ground for increasing amount of debt of all types, including student loan debt. While coming of age during a recession undoubtedly affects your spending habits, we have seen enough evidence on both sides to suggest that millennials are financially responsible and yet still encumbered by significant debt.

Also, share your experiences and questions in the comments section below.

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Why Entrepreneurs Love Food Trucks

Food TruckIt seems that food trucks are everywhere you look these days. They’re parked at playgrounds, set up at factories, and situated under downtown trees for the office lunch crowd. Their popularity is skyrocketing, and many budding entrepreneurs like you are thinking hard about starting one.

The potential is legitimate, but there are some caveats–as is always the case. It’s important to note that food trucks differ from restaurants only in their mobility. It still takes a good work ethic and sound strategy for success to make it work. And all the laws and regulations that apply to the storefront bistro will still apply to the street-side eatery. Food preparation is dangerous work. There are very hot items, sharp utensils, and powerful machines that can inflict serious injuries.

So whether your restaurant is on a foundation or on six wheels, your employees will need proper training and a State Food Safety food handler’s license, and you’ll need a solid business plan that can keep you on the road. Oversights in this area can sicken customers and injure workers, getting your truck impounded in a big hurry.

With that said, there are some other distinct advantages that food trucks hold over stationary restaurants, and they make the business a good opportunity for the right person.

Location, Location, Location? Not Anymore

It’s conventional wisdom that where a business or home is located is the most important thing. For budding restaurateurs, it can be maddening to weigh the benefits and disadvantages of one site versus two or three others. Which is most visible? Which will draw the most customers, cost less, or be cheaper to maintain?

Food trucks have ended that struggle. Entrepreneurs who choose to go that route have a much simpler process: they choose a reliable vehicle, get it set up, and then decide where to park it at meal times. If a particular site doesn’t do well, they can go somewhere else next time–a level of responsiveness that is impossible with restaurants.

They Self-Market

One of the best things about getting involved in something trendy is that the national conversation sort of picks you up and carries you with it. Consumers turn on the TV and see reality shows and news stories about food trucks, and when they realize what’s so great about them, they seek you out. You’ve essentially gotten free commercial time just through your involvement in a particular industry.

And the truck helps market you too. Even though your base of operations is at point A and you sell at points B, C, and D, you also drive past thousands of potential customers at countless other points. If your truck is properly designed, they’ll take an interest in you and recognize you when you set up. In other words, the business is its own mobile billboard.

They’re Versatile

The most important thing your food truck can be is adaptive. You may make a fortune with summertime frozen yogurt, but sales will disappear as the temperature drops. If you can retrofit from fro-yo to hot cider or other wintertime delicacies, you’ll keep the revenue coming in no matter the season.

It doesn’t even have to be seasonal changes that you address. A restaurant would require a lot of work to try to implement air frying technology, but the smaller equipment in a food truck can more easily and affordably be switched out. The trend emerges, you make the change, you publicize it, and the customers pour in. Pretty simple, and definitely simpler than in a permanent restaurant location.

Food trucks are the hot item right now. Customers love a break from the routine and the opportunity to eat outdoors. The business can be very lucrative, but like any other enterprise, you need to have a good understanding of what it will entail. Only then can your cargo include a full cash register.

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This Is Why I Own a Home

naughty dishwasher

[As part of our new weekly column by Mr. 1500 of 1500Days.com]

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Recently, J. Money wrote an article on why he doesn’t like owning a home.

A naughty dishwasher hose leaked and caused thousands of dollars of damage to the home he was renting. J. Money describes the chaos:

  • Walked into the kitchen and saw air (water?) bubbles on the floor
  • Walked into far corner of the basement and saw water dripping from the ceiling
  • Looked closer and there was mold on the wooden beams – meaning it’s been dripping for a while
  • Mold people come out to inspect and quote a price to our landlord
  • Mold people start work on it and find even more mold under the kitchen floor (those bubbles? they were water)
  • Cost to fix is now doubled – but that’s only for the mold cleanup/restoration
  • To get to the mold they had to rip up the kitchen floor
  • To get to the kitchen floor they had to rip up the cabinets
  • To get the cabinets back in/re-built a cabinet person needed to be hired
  • To get the floor fixed a floor person needed to be hired
  • Then on top of it all the AC overheated, tacking on another $268.50 to the bill

Sounds like a nightmare, right? Since J. was renting, the nightmare mostly belonged to the landlord. J. had to move his family out of the home for a couple days, but was responsible for nothing else.

Despite J.’s tale of woe, I love owning a home. I’ve owned my primary residence ever since I graduated college and I’ll continue to do so until I’m old and grey.

Why I Love Owning a Home

I’ve always enjoyed home ownership. Here’s why:

#1. I make money from my homes: Before I tell you how I profit from home ownership, I’ll tell you what not to do. The recipe for not making money is this:

Buy a new home. Choose a cookie cutter model in a new subdivision where the home is priced at top dollar by a builder who knows how to maximize profit.

Bonus points: throw more money out the window and build a custom home

Don’t buy or build a new home. Ever.

I have two strategies that I use to make money from my primary home:

  • Love the Ugly Duck: I buy homes in need of love and fix them up, earning instant sweat equity. Of course it’s work, but an added bonus is that I get to make the house my own with finishes that I enjoy. Bye-bye vinyl floor, hello slate!
  • Flirtation with Gentrification: I buy homes in up-and-coming places so the gentrification wind is at my back. I look for areas that are experiencing an influx of people and have a solid economy. If the town is still a little rough, that’s OK because it won’t be that way forever.

My current home is the most extreme example of these strategies. In 2013, I bought an ugly foreclosure for about $175,000.

I put a load of work and $100,000 into it. It now looks like this:

At the same time, my town has improved. The shuttered turkey processing plant that was recently torn down will soon be fancy condos. The pawn shops on Main Street are almost all gone. I could easily sell my home for $500,000 today for a profit of about $225,000.

#2. Owning is cheaper than renting: My mortgage (15 years at 3.25%), property insurance and taxes set me back $1264/month on my 4 bedroom, 3 bathroom home. Meanwhile, half of a duplex on my street (2 bedrooms/1 bathroom) rents out at $1400/month. Full disclosure: In addition to the $100,000 and time I spent on improvements, I also put 20% down ($35,200) at the time of purchase. After taking these numbers into account, I strongly believe that I’ll come out ahead over the long term. This brings me to my next point.

#3. 11 Years to Freedom: I have 11 years of payments to go on my mortgage. After that, the home will cost me only property taxes and insurance (currently $250/month). (Editor’s Note: AND MAINTENANCE!!! WHY DOES EVERYONE “FORGET” MAINTENANCE????? ;))

#4. Stability: Moving sucks. Enough said. Well, that’s not quite it. I have children and I want to give them stability. I was fortunate to spend my childhood on the same street with the same friends. I want my children to have the same experience.

#5. Learning Opportunities (more tools): This one is a stretch, but I’m throwing it out there anyway. I like to build and fix stuff. Coming out of college, I didn’t know how to do anything with my hands. Now, I can set tile, plumb a home, wire a home, replace windows, build a custom shower, fix a dishwasher, hang/finish drywall and build a deck (thanks, YouTube!). I can take something ugly and make it beautiful. Bonus: I get to buy more tools!

This type of work isn’t for everyone, but it feels d@mn good once you complete a project. Also, you save loads of money since most of the cost in projects is tied up in labor.

Not for Everyone, But…

I readily admit that owning a home isn’t for everyone:

  • If you live in certain areas like Vancouver, New York City, or San Francisco, forget owning a home. You’ll come out far better financially by renting. Sign a lease and call it a day.
  • If you move frequently, forget home ownership. Be in it for the long game.
  • If you absolutely hate taking care of a home, even mowing a lawn, go find yourself a nice rental. Fixing a broken dishwasher isn’t everyone’s idea of a fun afternoon:

However, if you’re at the right place in life or willing to endure a live-in renovation, maybe, just maybe, home ownership is for you. It’s certainly been worthwhile for me.

Let me know if you need help with your next project. If you live in Hawaii or San Diego, I can be over next week.

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