Posts Tagged ‘ retirement ’

Get Rich By Thirty

Jun 7th, 2008 | By Career Snob | Category: Sustainable Living
Rating 3.00 out of 5

chairsI am 24 years old, and my net worth isn’t much. In fact, it’s near zero. I just got out of debt, so all I have saved up is a small savings account, a new 401K and a Roth IRA, both of which have not been maxed out. Since I can’t even touch my retirement accounts until I’m 60, I technically have nothing. Your net worth should be your age, multiplied by your current gross annual income, divided by 10. I am FAR from that number– like eons away. I haven’t even saved for long term purposes, just for vacations and splurges.

Lesley Scorgie, the writer of Rich by Thirty, is a millionaire at my age. She started saving money in her teens and hasn’t looked back since. She lived simply and developed her own business with teaching other young adults the power of managing money for financial freedom. She owns a home and is comfortable with where and who she is.

The book discusses our current generation of young adults who are sucked into a world of consumption, and guides us to get out of debt and to start saving for bigger and grander things. Scorgie outlines debt, savings and investments in a simple format and breaks it all down where it is not too overwhelming. She uses language that is easy to understand, but not groundbreaking. A lot of her information is logical, but it was good to read it in such a matter of fact fashion. Here are some tips I got most out of it.

Get organized Start filing your receipts and documents in folders and boxes. Here is a link that tells you what to keep and for how long.

Budget Understand how you need to spend and save the rest. Allow room for some fun, but keep the future in focus so you have the finances ready for when you truly need it, such as fixing your car.

Invest Join your company’s 401K if you haven’t done so already. If you can’t max it out, then contribute up to what your company matches. It’s essentially free money. If there is no 401K, you can do a Traditional IRA, which are pre-tax contributions, or a Roth IRA, which are post-tax contributions. I have both the 401K as well as the Roth IRA.

Emergency fund Contribute a small percentage into an emergency fund that you will not touch. This is for major emergencies, such as losing a job or a medical payment. You should aim for three months’ worth of living expenses for your emergency fund, if not six months, which is more optimum.

The book has a lot of great info and facts that talk about credit cards, types of investments as well as tips to purchase a home. You can purchase a copy here.

I don’t know about you, but I am truly reformed. Now that I am out of debt, I am so focused on saving and learning to invest. I am fascinated by the world of finances and am ready to be rich by thirty.


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How I Got Out of Debt

May 9th, 2008 | By Wise Snob | Category: Sustainable Living
Rating 3.00 out of 5

How I Got Out of Debt

If I can find the strength to pay off my loans and credit card debts in less than half a year, so can anybody. Here is how.

In January 2008 I looked at my school loans and credit cards: I had a debt of about $21,000. After I stopped freaking out, I decided to set a plan to be debt-free ASAP. I had a full-time position that paid well, and I had a lot of beautiful things that I never wore and decided to sell. It was imperative that I look at myself closely and figure out how I got myself into this situation and how I can get myself out. If I kept buying everything my heart desired, I would not only be in major financial trouble, but I would not be able to truly value everything I had. Self-restraint is the most powerful human act. It’s easy to indulge, but true strength comes from discipline.

Budget I created a budget on Excel that listed all the things I spent money on and tracked it every day, week and month. I created a program similar to Pear Budget’s, and I calculated my rent, utilities, phone, groceries, and medical payments to be a set amount each month. Going out to eat, theater tickets, Christian Louboutins, and expensive facials were not necessary, so I limited those activities. I did not starve myself of these things, however. I still allowed myself a set amount to spend, but no more. I cannot just buy a $100 top frivolously. No. Now I really thought about what I wanted. And I stuck to it diligently. By March, I was so used to frugal living that I stopped budgeting.

Educate Self I started to read a ton of financial books. From Orman to Kiyosaki, I found out about savings, investments, and smart shopping. Of course, I went to the library. I learned about good credit, bad credit, and soaked in a ton of information about how to be financially savvy for the future. This is not just about saving enough money to retire while working until I’m age 65. Hell no. This is about learning to manage my finances and invest smartly so I am financially free any time of my life.

Clean Up I went through (my rather huge) two closets and put a lot of things into piles and piles. I listed accessories and clothes I did not want on ebay and took my clothes to resellers such as Buffalo Exchange or Crossroads, and within the first week, I made $500. I sent some purses to a luxury reseller, and snagged $4,000 in a few months from Luxury Shops.

So in about four and a half months, I paid off my debt. I still contributed to my 401K to the maximum match my company offered, and I contributed a fair amount to my Roth IRA. I even had a $1,000 emergency fund in my checkings while contributing a measly extra $50 a month into savings. And in these four months, I still had monthly massages, some new makeup, and a few really beautiful articles of clothing. But instead of buying everything I wanted, I purchased consciously.

Not everyone has the luxury of having a well-paid job and a lot of beautiful things to sell. However, anyone is able to incorporate everything I have mentioned above regarding smart planning and self-restraint to reduce their debt and create a fiscally fabulous future.

Image credit: www.freeimages.co.uk

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