Dave Ramsey’s Baby Steps (and Why I Ignore Them)

Believe it or not, I have had multiple conversations about Dave Ramsey over the past couple weeks.

Dave Ramsey appears to be the introduction to personal finance for a lot of people out in the real world. While there are hundreds of great personal finance blogs, people are much more likely to stumble across the best selling personal finance book or the radio host that wrote it. Continue reading “Dave Ramsey’s Baby Steps (and Why I Ignore Them)”

One Tax Season Tip to Save $9,000

I spend a good deal of time preparing taxes this time of year.

My own, sure, but also lots of other people’s. I prepare taxes as a side hustle.

As far as side hustles go, it’s pretty good. The money is solid for a side gig. I can work as much or as little as I want. I get to work with numbers, which is something that I miss in my current day job.

And yes, I recognize that that last line may not be a selling point for most people.

I have learned a lot through this job, but there is one lesson in particular that I want to talk about today.

Nobody is putting enough money in their 401(k)! Continue reading “One Tax Season Tip to Save $9,000”

Why We Have Trouble Making a Change

When faced with a tough decision, most people choose to do nothing.

This is the basis of the Status Quo Bias, first proven in a series of experiments in 1988 out of Harvard. The general idea is that people are emotionally attached to the current state of affairs and are skeptical of any change from that baseline.

This means that we tend to need overwhelming proof to make a change, even when that change would be the better option. Continue reading “Why We Have Trouble Making a Change”

Introduction to Financial Independence

So now we understand the 4% rule and we know how to figure out our retirement number. We also know how to invest and use compound interest to help us hit that number.

If you stop and think about this for a moment, you will realize that there is no connection between the numbers above and any sort of age. We’re not saying that you will be able to retire when you hit 62 or 65 or 59.5.

You can retire when you hit your number.

And that could be sooner than you thought possible. Continue reading “Introduction to Financial Independence”

You Need to Be Investing!

Whatever bad things you want to say about them, Millennials are good at saving.

This is assumed to be due to being in their formative years when the 2008 recession happened. One expert noted that prior generations saw “plenty of boom times where the stock market was going up, home prices were going up, so they didn’t feel they had to save.”

Millennials saw that markets can go down and home prices can go down and placed more emphasis on emergency savings and a bit less on consumption.

That’s great news! The bad news is that Millennials aren’t investing the extra cash that they are stowing away. Continue reading “You Need to Be Investing!”

Understanding the 4% Rule

As we’ve already discovered, to retire comfortably you need around 25 times your annual expenses. This number comes from the 4% rule, which I briefly touched on (and which got a lot of attention in the comments because you all are apparently as nerdy as I am). Today we’re going to explore the 4% rule and determine whether it is still a viable retirement guideline. Continue reading “Understanding the 4% Rule”