My February 2016 Reads

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I have one of the same goals in 2016 as I had in 2015. 

Read one book per month.

It worked well for me last year, though I did miss a few months, and I would like to continue this same goal this year.

In December 2015, I started a book called I Will Teach You To Be Rich.  This book is written by Ramit Sethi and is described as a 6-week personal finance program that works.  I continued this book in January 2016, but still have a few more chapters to finish.  Because it is a book that requires action and I have been reviewing each chapter on my blog, it is taking longer than usual to complete.  Therefore, one of my reads for February 2016 is I Will Teach You To Be Rich by Ramit Sethi.

 

 

​​​​​As part of our Christmas tradition, there are two items that the people in my household receives every Christmas eve.
1) Pajamas
2) A book

This year, I decided to get my husband an adult coloring book with colored pencils.  I brought my daughter a Melissa & Doug coloring book and jumbo triangular crayon set.  My husband gave me two books. 

 

One of which is based on T.D. Jakes #1 New York Times Best Seller entitled, Instinct: The Power to Unleash your Inborn Drive.  This is not the actual book, but rather the Daily Readings version of this book that provides 100 insights that will uncover, sharpen and activate your instincts.  I started this in January 2016 and will continue reading an excerpt each day until I finish.  According to my calculations, the 100^th day of 2016 is April 9^th, so be prepared to hear about INSTINCT Daily Readings: 100 Insights That Will Uncover, Sharpen and Activate Your Instincts for the next few months. Since each reading is only 2-3 pages, I will still be able to add a new book each month, without causing too much of an inconvenience.

 

 

The second book that my husband gave me is entitled, Make It Happen: Surrender Your Fear. Take the Leap. Live on Purpose., by Lara Casey.  I’ve never heard of this book or author, but apparently it got 4 ½ out of 5 stars on Amazon.  Also, a very popular lifestyle blogger (Mattie James of Mattieologie.com) mentioned this on her Periscope about her list of "to read" books for 2016.  Judging by these indications, I think this’ll be a good one to read.  Plus, my husband clearly has an idea of the things I struggle with and is attempting to provide me with assistance in overcoming my fears and taking the leap.  J  I will definitely give a full review once I am done.

 

 

 What books are you reading in February 2016?

I Will Teach You To Be Rich..... Starting With Conscious Spending

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FACT: You cannot become rich wealthy without controlling your spending....consciously. 

I cross out rich because, in my eyes, rich is temporary and is seldom beneficial long term.  Many athletes, celebrities and lottery winners are rich, but if they do not practice conscious spending, then they are not rich for long.

According to a 2010 study by researchers at Vanderbilt University, the University of Kentucky and the University of Pittsburgh, the more money you win in the lottery, the more likely you are to end up bankrupt.  As a matter of fact, according to this study published in The Review of Economics and Statistics, many of them become bankrupt within 5 years of scoring a big win.

The average professional athlete in the United States will make more in one season than most of us earn in our entire lives.  However, according to Wyatt Investment Research, 78% of NFL players, 60% of NBA players and a large percentage of MLB players file bankruptcy within five years of retirement.

Most people's stinking thinking causes them to assume that they are broke because they don't make enough money.  However, according to my research, more money does not fix financial problems.

What does, then? CONSCIOUS SPENDING
Of course I'm oversimplifying things a bit.  However, if you read any of the articles or books about the habits of wealthy people with a net worth over a million (especially those who had modest income levels during their working years), you will find that one of the main ways they were able to save and invest their way into millions was to consciously spend on the money they earned, so that a large portion of it could be used to build their wealth.

In chapter 4 of I Will Teach You To Be Rich, Ramit Sethi focuses on conscious spending.  Although Ramit calls it conscious spending and says that he doesn't use budgets, the bottom line is that he does.....and you need to, as well, if you want to be rich and win with money.  He says that conscious spending is deciding where you want to spend your money up front, instead of spending it on random things here and there.  Deciding what you don't love and are not that important to you, so that you can cut back mercilessly on those things, in order to have money to spend luxuriously on those things that are important to you.

So here are the steps that Ramit suggests to create a Conscious Spending Plan:

Step 1: Create 4 major buckets where your money will go. 

Step 2: List every expense that you can think of that falls under the 'Fixed cost' category and fill in the dollar amounts for each.  A good rule of thumb is that your fixed costs should be 50-60% of your take-home pay. 

Once you've gotten all your expenses filled in, add 15% for unexpected expenditures or items you may have overlooked.  According to Ramit, a flat 15% will cover you for things you haven't figured in and you can get more accurate as time goes on.

Once you've got a fairly accurate number here, subtract it from your take-home pay.  Now you'll know how much you'll have left over to spend in the other categories.  Plus, you'll have an idea of a few targeted expense areas that you can cut down on to give yourself more money to save, invest and do the other things you love (See how this kind of sounds like a budget to me?).

Step 3: A good rule of thumb is to invest 10% of your take-home pay for the long-term.  For the record, long-term investing typically means 401(k), Roth IRA and other retirement-type savings vehicles. 

Calculate the amount and automate it.

Step 4: Short-term savings could be things like Christmas gifts, a vacation, a wedding or a down payment on a house.  This should be no more than 5-10% of your take home pay.

Calculate the amounts for the various accounts and automate a separate savings account for each.

Step 5: Feel free to spend whatever is left on whatever tickles your fancy!  If you want to use that money to invest more, do it.  If you prioritize travel over early retirement, hit up every country in the world.  Sky is the limit!  You can spend guilt free because all of your obligations are already taken care of. (Word to the wise: Just don't overdraft)

I should mention that if you don't make enough to fit in these to categories, you need to do one of two things:

1. Find a way to cut back some of your expenses.
2. Find a way to make more money.

Ramit offers some great ideas in his book on cutting expenses, negotiating higher salaries and freelancing.

Read my previous blogs for more information about Ramit Sethi's, I Will Teach You To Be Rich.  Below is an outline of the topics covered in previous chapters and a link to my blog post about each chapter/topic.

• Week 1: Optimize Your Credit.....Cards
• Week 2: Optimize Your Bank Accounts
• Week 3: Get Ready To Invest

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January 2016 Reads

 

 

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I have one of the same goals in 2016 as I had in 2015. 

Read one book per month.

It worked well for me last year, though I did miss a few months, and I would like to continue this same goal this year.

In December 2015, I started a book called I Will Teach You To Be Rich.  This book is written by Ramit Sethi and is described as a 6-week personal finance program that works.  Needless to say, there are only four weeks in a month, so I still have a few more chapters to finish before I complete this book.  Therefore, one of my reads for January 2016 is I Will Teach You To Be Rich by Ramit Sethi.

BUY HERE

As part of our Christmas tradition, there are two items that the people in my household receives every Christmas eve.
1) Pajamas
2) A book

This year, I decided to get my husband an adult coloring book with colored pencils.  I brought my daughter a Melissa & Doug coloring book and jumbo triangular crayon set.  My husband gave me two books.  One of which is based on T.D. Jakes #1 New York Times Best Seller entitled, Instinct: The Power to Unleash your Inborn Drive.  This is not the actual book, but rather the Daily Readings version of this book that provides 100 insights that will uncover, sharpen and activate your instincts.  Therefore, one of my other reads for January 2016 is INSTINCT Daily Readings: 100 Insights That Will Uncover, Sharpen and Activate Your Instincts. I will be reading this for the first 100 days of 2016, so will not complete this book until mid-April.  Since each reading is only 2-3 pages, I will still be able to add a new book each month, without causing too much of an inconvenience.

BUY HERE

Books Mentioned:

I Will Teach You To Be Rich And Get Ready To Invest

I Will Teach You To Be Rich And Get Ready To Invest

 

Welcome to This is me…..Then!  If you like what you see, subscribe here for free updates, or you can “like” my Facebook page here and receive new posts in your news stream.  Once you like my page, you can choose to see posts in your newsfeed first or receive a notification for each post made.  Thanks for visiting!  This post may contain affiliate links.

 

Week 3: Get Ready To Invest

Open your 401(k) and Roth IRA -- even with just $50

 

I am reading I Will Teach You To Be Rich by Ramit Sethi.  This book provides a 6-week step-by-step guide to getting your finances in order to become rich. 

Week 1 focused on optimizing your credit.
Week 2 focused on opening and optimizing your bank account.
Week 3 focuses on teaching you to get ready to invest.

This chapter will discuss why you should invest and the best way to start investing your money and how to set up the process in a week.

THE WHY
A millionaire is not a person who makes $1 million or more per year.  A millionaire is someone who's net worth is $1 million or more.

On average, millionaires invest 20 percent of their household income each year.  Their wealth isn't measured by the amount they make each year, but by how much they've saved and invested over time. 

Investing is the single most effective way to get rich!

THE HOW
Step 1: If your employer offers a 401(k) match, invest to take full advantage of it and contribute just enough to get 100% of the match.  This is free money and there is, quite simply, no better deal.

Step 2: Pay off your credit card and any other debt (excluding any primary home loans you may have outstanding).  If you can't pay this off immediately, set up a plan to pay off your debt within a specific amount of time.

Step 3: Open up a Roth IRA and contribute as much money as possible to it, up to the maximum allowed by the Internal Revenue Service.

Step 4: If you have money left over, go back to your 401(k) and contribute as much as possible to it, up to the maximum allowed by the Internal Revenue Service.

Step 5: If you still have money left to invest, open a regular nonretirement account and put as much as possible there.  Also, pay extra on any mortgage debt you have, and consider investing in yourself: Whether it's starting a company or getting an additional degree, there's often no better investment than your own career.

*Please note that my philosophy varies slightly from what Ramit suggests in his book.  My how, which takes into account Dave Ramsey's Baby Steps, would be the following.

Step 1: If your employer offers a 401(k) match, invest to take full advantage of it and contribute just enough to get 100% of the match.  This is free money and there is, quite simply, no better deal.

Step 2: Pay off your credit card and any other debt (excluding any primary home loans you may have outstanding).  If you can't pay this off immediately, set up a plan to pay off your debt within a specific amount of time.

Step 3: Open up a Roth IRA and contribute as much money as possible to it, up to the maximum allowed by the Internal Revenue Service, but no more than 15% (minus the % you have already contributed to 401(k)) of your income.

Step 4: If you have money left over, go back to your 401(k) and contribute as much as possible to it, up to the maximum allowed by the Internal Revenue Service, but no more than 15% (minus the % you have already contributed to 401(k) and Roth IRA) of your income.

Step 5: If you still have money left to invest, open a regular nonretirement account  and put as much as possible there.  Also, pay extra on any mortgage debt you have, and consider investing in yourself: Whether it's starting a company or getting an additional degree, there's often no better investment than your own career.
              5a: If you have children, open an ESA or 529 plan to save for their college education.  If not, skip to 5b.
             5b: Use all extra money to pay off your home early.  If you don't have a mortgage, skip to 5c.
             5c: Open a regular nonretirement account and put as much as possible there.  Also, consider investing in yourself: Whether it's starting a company or getting an additional degree, there's often no better investment than your own career.


BUY BOOKS HERE:

I Will Teach You To Be Rich by Ramit Sethi

The Total Money Makeover: A proven plan for financial fitness by Dave Ramsey

I Will Teach You To Be Rich And Beat The Banks

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I Will Teach You To Be Rich

Week 2: Beat The Banks

Open high-interest, low-hassle accounts and negotiate fees like an Indian

-----------------------------

I am reading I Will Teach You To Be Rich by Ramit Sethi.  This book provides a 6-week step-by-step guide to getting your finances in order to become rich. 

Buy Here

 

Last week, I covered the first chapter, which focused on optimizing your credit.  Week 2 promises to teach you how to beat the banks.

In order to beat the banks, you must first learn about the different types of accounts available at banks and what they are used for.  In this chapter, Ramit discusses checking and savings accounts.

Checking accounts are transactional and mainly used to hold money that will not be touched for a time period between 1 month and 5 years.  It is suggested that you should invest money (to be discussed at a later time) that you do not plan to touch for 5 or more years, instead of having it stashed in a savings account.

Ramit outlines three different ways that you can set-up and optimize your bank accounts.
- MOST BASIC OPTION: A checking and savings account at any local bank (or credit union).
- BASIC + SMALL OPTIMIZATION OPTION: A no-fee checking account at your local bank and a high-yield online savings account.
- ADVANCED + FULL OPTIMIZATION OPTION: Several checking and savings accounts at different banks.

I currently have an advanced set-up, but am working towards simplifying my account process.  I have a checking and savings account at a large local bank (Citi).  My account is free because I keep a minimum balance ($1,500) in my savings account.  This is considered to be my emergency fund.  I also have a joint checking and savings account (with my husband) at a large local bank (Bank of America).  This account is free for us because this is where we both direct deposit our paychecks.  On top of this, I have a checking, multiple savings and ROTH IRA account through Capital One 360, an online account.  In addition, I have a few savings goals set-up through SmartyPig, another online savings account.

The steps to beat the banks are as follows:
1) Assess your current checking account(s)
Make sure that you are not paying any fees and determine under what circumstances your would be charged a fee at that bank.  If there are fees that you cannot avoid under normal circumstances, find another bank.  No one should be paying monthly fees at banks, ever.  Most local banks and credit unions will waive the monthly fee if you use direct deposit (I would suggest that you set-up direct deposit into your main checking account.) or maintain a minimum balance.  Most online banks (such as Capital One 360) do not charge a monthly fee under any circumstance.  Ramit also mentions Charles Schwab as a viable online checking option.

2) Open an online savings account.
I have a couple of online savings accounts and find them to be extremely beneficial.  The interest rate is higher than any traditional savings account and the requirement that you transfer the money into your checking account in order to access it (which can often take up to 3 business days) discourages you from spending your savings on impulse buys.  However, I do think a portion of your savings should be available immediately.  If you have an online checking and savings account, you can easily transfer the money to your online checking account and use/withdraw the money immediately.  If you have a traditional checking account only, I would encourage you to open a traditional savings account at that same bank and save approximately $1,000 in that account to cover urgent emergencies.  Amounts over the $1,000 can be saved in your online savings account.

3) Fund your accounts.
Leave one and a half months of expenses in your checking account.  The extra half month of expenses are left in your account to prevent any overdraft fees, as you are getting used to paying bills and transferring money between your various accounts.
Any remaining monies should be transferred to savings.  The first $1,000 should go into an easily accessible savings, while any leftover funds in excess of that amount should go into a high-yield online savings account.

 

 

*If you are interested in purchasing a copy of I Will Teach you to Be Rich, you can pick up a copy by clicking on the link below. 

PURCHASE HERE: I Will Teach You To Be Rich

**Ramit Sethi has a blog of the same name.  If interested, you can check it out here.
*** If your interested in opening an online account with Capital One 360 (formerly ING Direct), click here.

I WILL TEACH YOU TO BE RICH…..Starting Today!

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I WILL TEACH YOU TO BE RICH…..Starting Today!

 

Okay, okay!  WE will teach you to be rich….starting today!

My co-partner in crime is Ramit Sethi, the author of the New York Times bestseller, I Will Teach You To Be Rich.  While he has authored the book, I will be doing the reading.  I will be breaking down theories and steps in the book, as well as providing real life examples and cute little antidotes.

 

SPOILER ALERT:

The key to being rich (according to Ramit) is to set up accounts at a reliable no-fee bank and then automate savings and bill payment, then know a few things to invest in and let your money grow for 30 years.

 

MY TAKE:

It takes a bit (lot) more than that and I will make sure to bring up any areas that Ramit tries to tip toe over.

 

I WillTeach You To Be Rich is broken up into 6 weeks of topics, followed by a set of action steps.  At the end of the 6 weeks, if you follow all of the action steps, Ramit promises that you will be well on your way to being rich…..if you are consistent and faint not.  :-)

 

By the way, this is my November/December read and I will be going through and completing all 6 weeks of action steps by the end of the year.  Feel free to join me each week while I discuss the topic and action steps towards richness, indeed.

 

WEEK 1: OPTIMIZE YOUR CREDIT……CARDS

While there are experts out there (Ahem…..Dave Ramsey) that believe that debt is against the bad and that you avoid it and a credit score at all costs.  My beliefs are more in-line with what is taught by Ramit.

If you do not know how to responsibly use debt, avoid it like a plague (or get some discipline).  However, if you are have the discipline to use your card prudently and to pay off your credit card every month, it can actually be a benefit. 

Even if you have the money in your account, who wants to have that ridiculous hold that hotels put on your account when you use your debit card to reserve your room?  When you rent a car, who wants to pay that ridiculous insurance, when there are really good credit cards out there with exceptional coverage?  When you buy an expensive product and something goes wrong, who wants to wait for the bank to put the money back into your bank account?  Who wants to pay for an extended warranty, when there are credit cards out there who will give you an extra year or two, just for making the purchase on their card?  If I can save major money by utilizing the benefits that only credit (not debit) cards provide and I know that I am going to pay the full balance off that month, I choose credit.

To optimize your credit you must do the following…..THIS WEEK!

1.    Know what is on your credit report and know your FICO score.

a.    Go to http://www.annualcreditreport.com and receive a copy of 1 (or all three) of your credit reports for free.  Make sure that they are accurate.  Work to remove all negative credit history over time.

b.    Get your credit score.  You can purchase it from MyFICO and other websites for a nominal fee, but I would suggest getting it for free.  I monitor my credit score through Credit Sesame, Credit Karma and one of my credit cards.

2.    Set up your credit cards

a.    Do you have an active credit card?  If not, do your research and get one (unless, of course, you fall into that undisciplined category).  If no one will have you, find a good provider of secured credit cards that will report your payment history to the credit agencies to help you build credit.  Otherwise, find a card with the most benefits that will fit your lifestyle.

3.    Make sure you are handling cards effectively

a.    Set up auto pay to pay off the full balance each month.  Split the payments to match your paycheck schedule, if necessary.

b.    Get fees waived and negotiate a lower APR, where relevant.

 

c.    Become familiar with the benefits offered by your card and make good use for them, when needed.

4.    Make a plan and start paying down debt (if applicable)

a.    I am a fan of the Snowball Method (as suggested by Dave Ramsey).  List all of your debts from smallest to largest.  Pay the minimum on all the debts, except the smallest debt.  Based on your budget, pay an additional amount on this debt each month.  Once that debt is paid off, move to the next smallest debt.  In addition to the minimum due that you had already been paying, roll the amount that you were previously paying on the smallest debt over to the next smallest debt, and so on and so on, until all of your debts are paid off.

b.    In addition to the snowball method, I am also a proponent of the Snowflake Method.  If you get a side hustle, if you find a penny on the ground, if you get a bonus check or tax refund, etc., etc……apply that extra money to the lowest debt.

*   Personally, we have paid off all of our credit card debt and are currently working on obliterating some rather stubborn student loans (long story…..don’t want to talk about it).  Once that is complete, I fully plan to work Dave Ramsey’s Baby Steps as outlined in his Total Money Makeover book.  We never stopped our 401k contributions, as he suggests, but that is because I did not think it was the best plan of action.  However, that’s another story for another day.

 

I encourage you to go through the 4 steps listed above with me.  Let’s try to get rich together and if it doesn’t work for us, we can all blame Ramit Sethi.

 

BUY BOOKS HERE:

I Will Teach You To Be Rich by Ramit Sethi

The Total Money Makeover: A proven plan for financial fitness by Dave Ramsey

 

 

 

Love & Respect

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During the month of July, we attended a 4-week marriage conference at Fellowship Alliance Chapel (FAC) in Medford, NJ.

There were many takeaways that we got from the conference. The most tangible were:

1) Matching T-Shirts (mine not shown)

 

 

2) A book entitled, "Love & Respect"

 

 

The philosophy of this book is based on Ephesians 5:33, which reads: 

 

“However, each one of you also must love his wife as he loves himself, and the wife must respect her husband.” (NIV)

 

According to the author, this is the secret (and God given instructions) to a happy marriage.....or at least a marriage that is pleasing in God's eyes. 

 

RULES OF THE GAME:

 

- Women have an innate need to have someone love them, to make them special and to make them the most important one in their life. Men have the need to feel respected and admired by the woman in his life. 

 

- When women do not feel love from their spouse, they tend to be disrespectful towards them. When the man feels disrespected, he tends to withdraw his love. This is called the "Crazy Cycle" because it goes on an on in a downward spiral, unless someone decides to make a change. 

 

- Who should make the first move?  The one who sees himself or herself as the most mature. 

Taking the role of the mature mate and moving first may be risky, but it is very powerful. The fear, of course, is that you will show love or respect to your spouse and get a bad response.    However, holding back your love or respect will just keep the Crazy Cycle spinning away. Being mature and making the first move could slow it down or even stop the crazy cycle.....and take you to the "Energizing Cycle. "

 

The basic principle of the Energizing Cycle is as follows:

HIS LOVE MOTIVATES HER RESPECT; HER RESPECT MOTIVATES HIS LOVE

 

What if your spouse is unmotivated, no matter how you act towards them?

 

A HUSBAND IS TO OBEY THE COMMAND TO LOVE EVEN IF HIS WIFE DOES NOT OBEY THE COMMAND TO RESPECT, AND A WIFE IS TO OBEY THE OMMAND TO RESPECT EVEN IF THE HUSBAND DOES NOT OBEY THE COMMAND TO LOVE, UNCONDITIONALLY.

 

This brings us to the "Rewarded Cycle." 

 

HIS LOVE BLESSES REGARDLESS OF HER RESPECT; HER RESPECT BLESSES REGARDLESS OF HIS LOVE. 

 

Throughout the book, the author emphasizes that if the husband and wife are both people of basic good will, they can use Love and Respect principles to make a bad marriage into a good one and a good marriage into a great one.  However, even if your wife does not show you respect or your husband does not show you love, God commanded men to love their wives and women to respect their husbands.......unconditionally!

 

Unconditional love and unconditional respect will be rewarded. 

 

If you love those who love you, what reward will you get? Are not even the tax collectors doing that?  (Matthew 5:46 NIV)

 

Serve wholeheartedly, as if you were serving the Lord, not people, because you know that the Lord will reward each one for whatever good they do, whether they are slave or free.  (Ephesians 6:7-8 NIV)

 

Submit to one another out of reverence for Christ.  Wives, submit yourselves to your own husbands as you do to the Lord.  For the husband is the head of the wife as Christ is the head of the church, his body, of which he is the Savior.  Now as the church submits to Christ, so also wives should submit to their husbands in everything.  Husbands, love your wives, just as Christ loved the church and gave himself up for her to make her holy, cleansing her by the washing with water through the word, and to present her to himself as a radiant church, without stain or wrinkle or any other blemish, but holy and blameless.  In the same way, husbands ought to love their wives as their own bodies.  He who loves his wife loves himself.  After all, no one ever hated their own body, but they feed and care for their body, just as Christ does the church--for we are members of his body.  "For this reason a man will leave his father and mother and be united to his wife, and the two will become one flesh."  This is a profound mystery--but I am talking about Christ and the church.  However, each one of you also must love his wife as he loves himself, and the wife must respect her husband.  (Ephesians 5:21-33 NIV)

 

What you do matters to God. Nothing is wasted. 

 

*This book can be purchased on Amazon.com