Saving money is essential for achieving financial stability and reaching your financial goals. Here are some of the best strategies and tips to help you save more effectively. This comprehensive guide covers various aspects of saving money, from daily habits to long-term planning.

Creating a budget is the foundation of effective money management. It helps you track your income and expenses, identify spending patterns, and allocate funds towards savings and essential expenses.

• Track Your Spending: Use a spreadsheet, app, or a simple notebook to record all your expenses.
• Set Spending Limits: Establish limits for discretionary spending categories like dining out, entertainment, and shopping.
• Adjust as Needed: Regularly review and adjust your budget to reflect changes in income or expenses.

Set up automatic transfers from your checking account to your savings account. Automating savings ensures you consistently save a portion of your income without having to think about it.

• Direct Deposit: Have a portion of your paycheck directly deposited into your savings account.
• Scheduled Transfers: Schedule automatic transfers from your checking to your savings account on payday.

Paying off high-interest debt quickly can save you money on interest payments and free up more funds for savings.

• Snowball Method: Pay off your smallest debts first to gain momentum.
• Avalanche Method: Focus on paying off debts with the highest interest rates first to save more on interest.

Review your subscriptions and memberships to identify services you no longer use or need. Canceling these can save you a significant amount each month.

• Streaming Services: Limit the number of streaming services you subscribe to.
• Gym Memberships: Cancel unused gym memberships and consider home workouts instead.
• Magazines and Apps: Cancel magazine subscriptions and app services you rarely use.

Eating out frequently can drain your budget. Cooking at home is typically much cheaper and allows you to control ingredients and portion sizes.

• Meal Planning: Plan your meals for the week to avoid last-minute takeout.
• Batch Cooking: Cook in bulk and freeze meals for convenient, cost-effective dining.
• Grocery Lists: Make a list before shopping to avoid impulse purchases.

Take advantage of coupons, discount codes, and cashback offers to save money on purchases.

• Digital Coupons: Use apps and websites to find digital coupons and promo codes.
• Loyalty Programs: Join store loyalty programs for exclusive discounts and rewards.
• Cashback Apps: Use cashback apps to earn money back on everyday purchases.

Generic or store-brand products are often just as good as name-brand items but cost significantly less.

• Groceries: Opt for generic brands for pantry staples like pasta, rice, and canned goods.
• Medications: Choose generic medications to save on healthcare costs.
• Household Items: Buy generic cleaning supplies, paper products, and toiletries.

Reducing energy consumption not only helps the environment but also lowers your utility bills.

• LED Bulbs: Replace incandescent bulbs with energy-efficient LED bulbs.
• Thermostat Settings: Adjust your thermostat settings to reduce heating and cooling costs.
• Unplug Devices: Unplug electronics and appliances when not in use to avoid phantom energy consumption.

Impulse purchases can quickly add up and derail your savings goals. Implement strategies to reduce impulsive spending.

• Wait Period: Implement a 24-hour wait period before making non-essential purchases.
• Shopping List: Stick to a shopping list and avoid browsing other items.
• Cash Only: Use cash for discretionary spending to limit how much you can spend.

Doing things yourself can save you money on various services and products.

• Home Repairs: Learn to do basic home repairs and maintenance tasks.
• Gifts and Decorations: Make your own gifts and home decorations instead of buying them.
• Clothing and Accessories: Sew, knit, or craft your own clothing and accessories.

Periodically review your insurance policies to ensure you’re getting the best rates and coverage.

• Comparison Shop: Compare rates from different insurers to find better deals.
• Bundle Policies: Bundle multiple policies (home, auto, etc.) with the same provider for discounts.
• Increase Deductibles: Consider increasing your deductibles to lower your premiums.

Planning and saving for big purchases can prevent the need to use credit and incur debt.

• Set Goals: Identify upcoming big purchases and set savings goals.
• Research: Take time to research the best prices and wait for sales or discounts.
• Save Incrementally: Allocate a portion of your income towards these purchases each month.

Understanding and utilizing tax benefits can save you money on your annual tax bill.

• Tax-Advantaged Accounts: Contribute to retirement accounts (401(k), IRA) and health savings accounts (HSA).
• Deductions and Credits: Take advantage of available tax deductions and credits.
• Professional Help: Consider consulting a tax professional to maximize your tax savings.
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Reducing the size of your living space and decluttering can save money on rent or mortgage payments and maintenance costs.

• Sell Unused Items: Sell items you no longer need for extra cash.
• Smaller Space: Consider moving to a smaller, less expensive home or apartment.
• Minimalism: Adopt a minimalist lifestyle to reduce unnecessary purchases and expenses.

Using public transportation instead of owning a car can save you money on gas, insurance, maintenance, and parking.

• Monthly Passes: Purchase monthly passes for additional savings.
• Carpool: Carpool with coworkers or friends to share transportation costs.
• Bike or Walk: Use a bike or walk for short trips to save on transportation costs.

Addictions, whether to cigarettes, alcohol, gambling, or other costly habits, can drain your finances significantly. Eliminating these addictions can save you a considerable amount of money.

• Quit Smoking: The cost of cigarettes adds up quickly. Seek support to quit smoking and save the money you would have spent.
• Limit Alcohol Consumption: Reduce or eliminate alcohol purchases. Opt for social activities that don't involve drinking.
• Seek Help for Gambling: Gambling can lead to severe financial losses. Seek professional help to overcome gambling addiction.
• Even something simple such as streaming and coffee: Do you need to drink so much coffee or drinks that cost money when water is so abundant and free? Do you need to pay for an addiction to streaming when there are free resources?

Increasing your income through additional work can accelerate your savings goals.

• Part-Time Jobs: Find a part-time job that fits your schedule. Even a few extra hours a week can make a difference.
• Freelancing: Use your skills to freelance. Websites like Upwork and Fiverr offer platforms for various freelance opportunities.
• Seasonal Work: Take advantage of seasonal jobs during holidays or busy seasons in retail, hospitality, or other industries.

Creating sources of passive income can provide financial benefits without requiring ongoing active work.

• Rent Out a Room: Turn part of your home into an Airbnb or rent out a spare room to a roommate. This can help cover mortgage or rent payments.
• Invest in Stocks and Bonds: Invest in dividend-paying stocks or bonds. Reinvest dividends to grow your investment over time.
• Create Digital Products: Write an eBook, create an online course, or develop digital products that can be sold repeatedly.

Saving money involves a combination of smart spending, strategic planning, and disciplined budgeting. By implementing these strategies, you can build your savings, reduce financial stress, and achieve your financial goals. Remember, even small changes can add up to significant savings over time, so start with a few strategies and gradually incorporate more as you become comfortable.

Strategies for Paying Off Your Car Efficiently

Owning a car is often essential for daily life, but it also comes with significant financial responsibilities. Paying off your car loan quickly can save you money on interest and provide financial freedom. Here are some of the best strategies to achieve this goal, starting from before you even purchase your car to considering major decisions if things get tough.

1. 1. Save and Pay Cash for a Used Car

The journey to paying off your car efficiently begins even before you buy it. One of the best strategies is to save enough money to pay cash for a used car. Here’s why this step is crucial:

• Avoiding Interest Payments: By paying cash, you avoid the interest charges associated with car loans, which can add up significantly over time.
• Lower Purchase Price: Used cars are generally less expensive than new cars, meaning you need to save less money and can purchase the car outright sooner.
• Depreciation: New cars depreciate quickly, often losing a significant portion of their value in the first few years. A used car has already undergone this steep depreciation, making it a more financially sound purchase.

To save enough money, consider using public transportation to get to work, the grocery store, or anywhere else you need to go. This can help you save money on transportation costs, which can then be put towards your car fund.

2. 2. Make Extra Payments

If you already have a car loan, making extra payments towards your principal can dramatically shorten the life of your loan. There are several ways to incorporate extra payments into your budget:

• Bi-weekly Payments: Instead of making one monthly payment, split it in half and pay every two weeks. This results in 26 half-payments or 13 full payments per year, effectively making one extra payment annually.
• Round Up Payments: Round up your car payment to the nearest hundred dollars. For example, if your payment is $275, pay $300 instead. The extra amount goes directly towards your principal.
• Lump Sum Payments: Apply bonuses, tax refunds, or any unexpected windfalls directly to your principal.

3. Refinance Your Car Loan

Refinancing your car loan to a lower interest rate can save you a significant amount of money on interest. If rates have dropped since you took out your loan or your credit score has improved, refinancing might be a good option. Be sure to consider the new loan terms and ensure the savings outweigh any fees associated with refinancing.

4. Reduce Expenses and Increase Income

Finding ways to reduce your monthly expenses and increasing your income can provide extra funds to put towards your car loan. Some strategies include:

• Cutting Unnecessary Expenses: Review your budget for non-essential expenses you can eliminate or reduce.
• Side Hustles: Take on a part-time job or freelance work to earn extra income.
• Sell Unused Items: Declutter your home and sell items you no longer need.

5. Automate Your Payments

Setting up automatic payments can help you stay on track and avoid late fees. Many lenders offer a discount on your interest rate if you enroll in auto-pay, providing additional savings over the life of the loan.

6. Apply Windfalls to Your Loan

Whenever you receive unexpected money, such as a tax refund, work bonus, or inheritance, apply it directly to your car loan. This can make a significant dent in your principal and reduce the amount of interest you pay over time.

7. Consider Downsizing if Necessary

If you find yourself struggling with high monthly payments, it might be time to consider a more drastic measure. Selling your current car and downsizing to a more affordable vehicle can help you regain financial stability. Here’s why this can be a smart move:

• Lower Monthly Payments: A smaller, less expensive car will have lower loan payments, insurance costs, and maintenance expenses.
• Reduced Financial Stress: Downsizing can free up cash flow for other financial goals, such as saving for emergencies or paying off other debts.
• Opportunity to Rebuild Savings: Moving to a less expensive car can help you rebuild your savings and create a more sustainable financial situation.

Paying off your car efficiently requires careful planning, disciplined budgeting, and sometimes tough decisions. Starting with saving enough to pay cash for a used car, making extra payments, refinancing for better terms, reducing expenses, increasing income, and even downsizing if necessary are all strategies that can help you achieve the goal of being debt-free. Remember, it’s important to be proactive and not afraid to make difficult choices to secure your financial future.

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1. Understand Your Loan Terms

Before you can effectively pay off your student loans, it’s essential to understand the terms of your loan. This includes knowing your interest rate, the length of your repayment term, and whether your interest is fixed or variable. This knowledge allows you to make informed decisions about your repayment strategy.

2. Make Extra Payments

Making extra payments towards your principal can dramatically shorten the life of your loan. There are several ways to incorporate extra payments into your budget:

• Bi-weekly Payments: Instead of making one monthly payment, split it in half and pay every two weeks. This results in 26 half-payments or 13 full payments per year, effectively making one extra payment annually.
• Round Up Payments: Round up your student loan payment to the nearest hundred dollars. For example, if your payment is $265, pay $300 instead. The extra amount goes directly towards your principal.
• Lump Sum Payments: Apply bonuses, tax refunds, or any unexpected windfalls directly to your principal.

3. Refinance Your Student Loans

Refinancing your student loans to a lower interest rate can save you a significant amount of money on interest. If rates have dropped since you took out your loan or your credit score has improved, refinancing might be a good option. Be sure to consider the new loan terms and ensure the savings outweigh any fees associated with refinancing.

4. Reduce Expenses and Increase Income

Finding ways to reduce your monthly expenses and increasing your income can provide extra funds to put towards your student loans. Some strategies include:

• Cutting Unnecessary Expenses: Review your budget for non-essential expenses you can eliminate or reduce.
• Side Hustles: Take on a part-time job or freelance work to earn extra income.
• Sell Unused Items: Declutter your home and sell items you no longer need.

5. Consider the Degree’s Return on Investment (ROI)

Before taking out a student loan, it’s crucial to consider whether the degree you are pursuing will provide a sufficient return on investment (ROI). Ask yourself if the potential income from your chosen career will be enough to cover the loan payments and support your financial goals. This consideration can help you avoid excessive debt for a degree that may not lead to a high-paying job.

6. Be Aware of Bankruptcy Limitations

It’s important to know that student loan debt is notoriously difficult to discharge in bankruptcy. Unlike other types of debt, student loans typically cannot be wiped out through bankruptcy proceedings. This means you remain responsible for the debt regardless of your financial situation, which underscores the importance of managing and repaying these loans diligently.

7. Understand the Risks of Co-Signing

If you are considering co-signing a student loan for someone else, be aware of the risks involved. If the primary borrower fails to make payments, you will be responsible for the debt. This can negatively impact your credit score and financial standing. It’s crucial to consider whether you can afford to take on this responsibility and to communicate clearly with the borrower about repayment expectations.

Paying off your student loans efficiently requires careful planning, disciplined budgeting, and sometimes tough decisions. Making extra payments, refinancing for better terms, reducing expenses, increasing income, and considering the ROI of your degree are all strategies that can help you achieve the goal of becoming debt-free. Additionally, understanding the limitations of bankruptcy concerning student loans and the risks of co-signing are essential aspects of managing this debt responsibly. By being proactive and making informed choices, you can navigate your student loan repayment journey more effectively.

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The journey to paying off your house efficiently begins even before you buy it. One of the most prudent strategies is to save at least 20% of the home's purchase price for a down payment. Here’s why this step is crucial:

Avoiding Private Mortgage Insurance (PMI): By putting down 20%, you eliminate the need for PMI, which is an additional monthly cost that protects the lender, not you. This can save you hundreds of dollars each month.

Lower Monthly Payments: A larger down payment reduces the principal amount you need to borrow, resulting in lower monthly mortgage payments.

Better Loan Terms: Lenders often offer better interest rates and terms to buyers who can make a substantial down payment, further reducing your long-term costs.

When selecting your mortgage, consider choosing a shorter loan term, such as 15 years instead of the traditional 30 years. While this will increase your monthly payments, it significantly reduces the total interest paid over the life of the loan. The higher monthly payment forces you to budget more rigorously, but the payoff is worth it.

Making extra payments towards your principal can dramatically shorten the life of your loan. There are several ways to incorporate extra payments into your budget:

Bi-weekly Payments: Instead of making one monthly payment, split it in half and pay every two weeks. This results in 26 half-payments or 13 full payments per year, effectively making one extra payment annually.

Round Up Payments: Round up your mortgage payment to the nearest hundred dollars. For example, if your payment is $965, pay $1,000 instead. The extra amount goes directly towards your principal.

Lump Sum Payments: Apply bonuses, tax refunds, or any unexpected windfalls directly to your principal.

If you have a 30-year mortgage, consider doubling up your payments by paying the same amount with each paycheck. Here’s how this works and why it’s beneficial:

Less Interest Accrual: By making payments earlier in the month, you reduce the principal sooner, resulting in less interest accruing daily. Over time, this can lead to significant interest savings.

Pay Off Faster: Doubling up your payments means you effectively make 24 payments per year instead of 12, significantly shortening the loan term and reducing the total interest paid.

Refinancing your mortgage to a lower interest rate can save you a significant amount of money on interest. If rates have dropped since you took out your mortgage or your credit score has improved, refinancing might be a good option. Be sure to consider the closing costs and ensure the savings outweigh the refinancing expenses.

Finding ways to reduce your monthly expenses and increasing your income can provide extra funds to put towards your mortgage. Some strategies include:

Cutting Unnecessary Expenses: Review your budget for non-essential expenses you can eliminate or reduce.

Side Hustles: Take on a part-time job or freelance work to earn extra income.

Sell Unused Items: Declutter your home and sell items you no longer need.

If you find yourself house poor, meaning your housing expenses are consuming too much of your income, it might be time to consider a more drastic measure. Selling your home and downsizing to a more affordable property can help you regain financial stability. Here’s why this can be a smart move:

Lower Monthly Payments: A smaller, less expensive home will have lower mortgage payments, property taxes, and maintenance costs.

Reduced Financial Stress: Downsizing can free up cash flow for other financial goals, such as saving for retirement or paying off other debts.

Opportunity to Rebuild Savings: Moving to a less expensive home can help you rebuild your savings and create a more sustainable financial situation.

Paying off your house efficiently requires careful planning, disciplined budgeting, and sometimes tough decisions. Starting with a substantial down payment to avoid PMI, making extra payments, refinancing for better terms, and even downsizing if necessary are all strategies that can help you achieve the goal of homeownership without being overwhelmed by debt. Remember, it’s important to be proactive and not afraid to make difficult choices to secure your financial future.

A credit score is a number that reports your creditworthiness, ranging typically from 300 to 850. It is used by lenders to determine the risk of lending money to you. The higher your score, the more creditworthy you are considered.

Key Components of a Credit Score:

1. Payment History (35%): Your track record of making payments on time.
2. Amounts Owed (30%): The total amount of debt you owe compared to your available credit (credit utilization ratio).
3. Length of Credit History (15%): How long you’ve had credit accounts.
4. Credit Mix (10%): The variety of credit accounts, including credit cards, mortgages, and auto loans.
5. New Credit (10%): The number of recently opened credit accounts and inquiries.

Paying off debt can have a significant positive impact on your credit score, influencing several key components:

1. Improved Payment History:

• Consistently making debt payments on time builds a strong payment history, which is the most significant factor in your credit score.
• Missed or late payments can severely damage your score, so timely payments are crucial.

2. Reduced Credit Utilization:

• Paying down credit card balances lowers your credit utilization ratio, which is the second most critical factor in your score.
• Aim to keep your credit utilization below 30% of your total available credit to boost your score.

3. Length of Credit History:

• While paying off and closing old accounts might seem beneficial, it can actually shorten your credit history and reduce your score.
• It’s often better to keep old accounts open, especially if they don’t have an annual fee.

4. Credit Mix and New Credit:

• Successfully managing different types of credit (e.g., credit cards, installment loans) can positively affect your score.
• Be cautious with new credit applications, as multiple inquiries can lower your score temporarily.

A good credit score opens many doors and offers numerous financial advantages:

1. Loan Approvals:

• Higher credit scores increase your chances of getting approved for loans and credit cards.
• You’ll have access to larger loan amounts and better terms.

2. Lower Interest Rates:

• A high credit score qualifies you for lower interest rates on loans and credit cards, saving you money over time.
• Lower interest rates mean lower monthly payments and less paid in interest over the life of the loan.

3. Better Credit Card Offers:

• With a good credit score, you can access credit cards with better rewards, higher limits, and lower fees.

4. Housing Opportunities:

• Landlords often check credit scores as part of the rental application process. A good score can make it easier to rent a home or apartment.
• It can also help you qualify for a mortgage with favorable terms.

5. Employment Prospects:

• Some employers check credit scores during the hiring process, particularly for positions that involve financial responsibility.
• A good credit score can enhance your job prospects in these fields.

6. Insurance Premiums:

• Insurers may use your credit score to determine your premiums for auto and home insurance. A higher score can lead to lower premiums.

7. Utility Services:

• Utility companies may require a deposit if you have a low credit score. A good score can help you avoid these extra costs.

1. Pay Bills on Time:

• Set up reminders or automatic payments to ensure you never miss a due date.

2. Monitor Your Credit Utilization:

• Keep your credit card balances low relative to your credit limit.

3. Check Your Credit Report Regularly:

• Obtain a free credit report annually from each of the major credit bureaus (Equifax, Experian, and TransUnion) to check for errors and fraudulent activity.

4. Limit New Credit Applications:

• Only apply for new credit when necessary to avoid multiple hard inquiries on your report.

5. Maintain a Mix of Credit Types:

• Responsibly managing various types of credit can enhance your credit profile.

Understanding and managing your credit score is essential for financial stability and growth. Paying off debt is a critical step in maintaining a healthy credit score, which in turn provides numerous financial benefits. By staying informed and proactive about your credit, you can unlock opportunities and achieve greater financial freedom.

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Strategy: The first step in any debt repayment plan is creating a detailed budget. Track your income and expenses to understand where your money is going and identify areas where you can cut back.

Statistics: According to a 2022 survey by U.S. Bank, only 41% of Americans use a budget, yet those who do are more likely to manage their debt effectively. Budgeting helps you allocate more funds toward debt repayment and reduces unnecessary spending.

Implementation Tips:

• List all sources of income.
• Track every expense for at least one month.
• Categorize expenses into fixed (e.g., rent, utilities) and variable (e.g., dining out, entertainment).
• Adjust your spending to ensure more money goes toward paying off debt.

Strategy: Focus on paying off your smallest debts first while making minimum payments on larger debts. Once a small debt is paid off, move to the next smallest, applying the amount previously used to pay off the first debt.

Statistics: A study by the Harvard Business Review found that the debt snowball method is highly effective because the psychological victories of paying off smaller debts first motivate continued progress.

Implementation Tips:

• List your debts from smallest to largest.
• Focus all extra funds on the smallest debt.
• Once the smallest debt is paid, roll over the payment to the next smallest debt.

Strategy: Prioritize paying off debts with the highest interest rates first while making minimum payments on others. This method saves money on interest over time.

Statistics: The Federal Reserve reports that the average credit card interest rate in 2023 was around 16.30%. By targeting high-interest debts, you can reduce the total amount paid in interest.

Implementation Tips:

• List your debts by interest rate, from highest to lowest.
• Focus all extra funds on the debt with the highest interest rate.
• Once the highest interest debt is paid off, move to the next highest.

Strategy: Consider transferring high-interest debt to a credit card with a lower interest rate or consolidating multiple debts into a single loan with a lower rate.

Statistics: According to the Consumer Financial Protection Bureau, balance transfer offers often provide a 0% introductory rate for 12 to 18 months. This can significantly reduce interest payments if used wisely.

Implementation Tips:

• Compare balance transfer offers and consolidation loan rates.
• Be mindful of transfer fees and the duration of the introductory rate.
• Avoid accumulating new debt on the paid-off accounts.

Strategy: Boost your income through side hustles, freelancing, or seeking higher-paying job opportunities to allocate more funds toward debt repayment.

Statistics: The Bureau of Labor Statistics reported that as of 2023, approximately 16.4 million Americans have a side hustle, contributing an average of $686 per month to their income.

Implementation Tips:

• Identify skills or hobbies that can generate income.
• Use freelance platforms or local opportunities to find side gigs.
• Allocate all additional income specifically for debt repayment.

Strategy: Contact your creditors to negotiate lower interest rates, reduced payment plans, or settlements for a lump sum payment.

Statistics: A study by the National Foundation for Credit Counseling found that 70% of consumers who asked for a lower interest rate on their credit card succeeded.

Implementation Tips:

• Prepare a script and be clear about your financial situation.
• Be polite but persistent in negotiations.
• Keep a record of all communications and agreements.

Strategy: If your debt is overwhelming, consider working with a credit counseling agency or financial advisor to develop a personalized debt management plan.

Statistics: The American Fair Credit Council reports that clients who work with credit counseling agencies can reduce their debts by up to 50% over time.

Implementation Tips:

• Research and select a reputable credit counseling agency.
• Be prepared to share your financial information.
• Follow the debt management plan and make regular progress assessments.

Paying off debt requires a combination of strategic planning, disciplined budgeting, and sometimes professional assistance. By adopting the right approach, you can not only reduce your debt but also improve your overall financial health. Remember, the journey to becoming debt-free is a marathon, not a sprint, and every step forward brings you closer to financial freedom.

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Interest is the amount of money you pay based on a percentage of what you borrowed. This is typically expressed by Annual Percentage Rate (APR) or the annual amount of the loan you pay as an added fee to what you borrowed.

Let me explain this differently. You borrow $1,000, you have to pay back a $1,000 (principle) plus an added fee, a percentage of the $1,000 (interest). Say you rack up $1,000 on a credit card, the interest rate for your card is 20%, that means that annually, you pay an extra $200 extra to paying back your loan. That is $200 that could have gone somewhere else, or been money in your pocket, but you wanted something or things very badly to borrow for them and you have to pay them back (principle) plus a continuous fee (interest). Principle is the other part of the repayment and basically means an amount you pay back of the actual loan each time you make a payment.

Why is interest so bad to your financial survival? Think of it this way.

• The average American owes $6,993 in credit card debt. The average credit card interest rate of repayment is 20% (now 24.8%). Annually, that is an extra $1,238 that goes to that credit card. That’s over $100 a month you could be spending on food, housing, or other necessities. That could also go to so many other things, if you could hold on to it. But it’s even worse. That is just your credit card fees.
• What about all your student loans? The average American also has $$37,850 worth of student loan debt at an average of 6.87%. That is an extra $3,273 you could be spending or almost $300 a month you could be spending on other things that you really want.
• Now how about any additional personal loans you took for purchases (excluding mortgages). The average American has $1,370 in home equity loans, $4,760 in car loans, and $1,520 in other loans. In total that is $11,989 (was $7,650 in 2022), and these interest rates hover around 71%. Annually, you are paying an extra $765 a month that could be going to other things.(21)
• Now, what about the mortgage on your house? The average American, with a mortgage, owes $244,498 (was $172,561 in 2022) and pays about 7% interest more on that debt annually. That’s $6,902.44 in interest, not counting the principle amount you have to pay back.
• In total, the average American has $104,215 (was $92,727 in 2020 – 11% increase) then you pay between $7,295.05-$20,843 annually or translated per month, that’s $607.92-$1,736.92 every month you pay for nothing. Now, that is for the average American. For those who have a mortgage, their average total debt is $241,815, translating to about $$24,181.50 annually or $2,015.13. That is an additional fee you pay just because you wanted to buy things on debt.
• If you didn’t have a mortgage, it’s not much better. The total, average American without a mortgage is $23,000 in debt at 24.8%. So they pay and pays $5,704 towards interest annually. Per month that comes to $475.33 of extra money you may be paying for money you borrowed to buy something before you had the money to buy it. That is a lot of money when you think of how long it will take you to pay be the principle amount and pay off the entire debt.

The truth is that you can spend the money now on debt and pay it back with interest for a very long time, you can work hard beforehand and make that money for the things you want, or you can be patient and wait until you gather the money, working with normal effort, to pay for these purchases instead of putting them on a credit card or making a loan. In an adult lifetime, before retirement, of 30 years, the average American will pay nearly $300,000 to the credit card companies and banks before retirement on the debt that they have. Now tell me that isn’t bondage. You can buy a very nice house in most parts of the United States for that amount of money, free and clear, without any debt.

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Do you like spending money? ___________________ Do you like paying bills after you already received the gain? __________________ Now, do you like paying for something years after you enjoyed it, meaning you no longer are enjoying it but you are still paying it off. That is debt. When you are paying back an amount of money that was lent to you years before. While somethings you are still enjoying like a new car or a house, some debt sticks with you long after you have had your fun, like a credit card.

Debt is an amount of money you borrow from one party to another. Loans are debts, but also, any financial promise you make with another entity where you pay over a longer period of time, instead of right away.

There are three types of acceptable debt in society. These are investments in your growth and include:

Housing: You need a place to stay and sometimes, it is cheaper to buy a house on a loan than to rent an apartment. You have to live somewhere paying monthly towards your agreed upon amount. When you pay rent, part of that money you give your landlord goes towards paying off their property so after a long period of time, they have paid off their property while you are still paying rent. Instead, if you were able to buy a house, each mortgage payment you would be paying off your property (mortgage) and in the end, you have a paid for house..

Education is the surest investment into your future. While most investments, stocks, commodities, and futures, all depend on someone else’s action; education is an investment that mostly depends on you and how serious you take it and how hard you work. Without a high school diploma your income could be $515 per week, with a diploma is increases to $718 per week, and with a bachelor’s degree it increases again to $1,189. So, education is an investment towards better pay and higher quality of life. 

Transportation is necessary these days to survive. We don’t live in small villages or towns anymore. Most of us live in the urban (in the city) or suburban (areas around the city) areas. Some even live far out in the rural (farmland further away from cities). Wherever you live, it is most likely not next door to the grocery store, your work, and most likely not next to family so that you can walk over to their house for a meal. We are  more spread out recently and so transportation is a necessity, which is why most people borrow to buy a car. But the question is, do you need a new car? Do you need a fancy car? Do you need all the accessories? These are not necessities and only hinder you getting out of debt.

Now, even though the world uses debt to purchase these products/services, you do not. This is why you are reading this book. We will show you ways of thinking outside the box and pay off all your debt and begin stockpiling money for a higher quality of your life. Americans especially, they always want the easy way out. Did you know that most millionaires today had to go without necessities for a while as they amassed their wealth? They lived without AC during the heat of the summer to pay for their business. They lived on rice and beans so they could afford something to pay off their debt. They even worked 80-100 hours per week so they could build their business to get out from under the suffocating pillow of debt that we see most Americans suffering month to month under.

Let me explain: Debt is like a pillow. When you buy something, the debt seems okay and maybe even comfortable. Then it grows, and instead of laying your head on it you end up laying it above your head because its to fluffy and makes your neck sore in the morning. It continues to grow until it end up on top of your face, very heavy and very big until it ends up smothering you. What you thought was a pillow was instead a bag of chains, smothering and weighing you down from things you wanted to do in life and you are stuck trying to pay it off.

Monthly or annually expenses are the greatest way for any company to get a lot of money from you. Because they are only drawing a small amount every month, you feel that they are inexpensive. When a piece of software like Microsoft word was $99.99 for an entire suite of software people thought it was too expensive. Now you pay $6.99 a month for it. One year later, you’ve already paid $83.88 and you are still paying on it every month. At least with the $99.99 program, you could keep it for 3-4 years before needing a new version and upgrades came for free.  

Something that also happens with the mind is that when they are smaller amounts asked for, you mind begins to rationalize it. You see a small amount and you feel you can write it off as a small expense, if you get ten $9.99 memberships, that is $100 a month that is disappearing, whether you use it or not. Gym memberships have run off this model for decades. They sign you up and charge you ever month, you feel because you have a membership you are gaining muscle or losing weight yet are you actually going to the gym? Are you getting your money’s worth? If not, why don’t you quit and save the money, because it is easier to rationalize paying such a small amount instead of taking the time to find out how to cancel that membership. If you have those ten memberships sitting around and you aren’t using them, is it really worth stopping payments?

Streaming services are the worse with this. You sign up for Netflix, Prime, Disney, and Hulu and any other streaming service and you are paying for them as you go, but do you really need all those programs? Since the content is always there, do you really need to keep them all around or should you technically watch everything on Disney one month and then when you have seen everything you need to see, can you quit that plan and start up the next? Do you really need to waste the money on all those services and not really use them?

Remember that like income small streams make raging rivers, just like in expenses, small streams of streaming services make raging rivers or, in other words, small payments each month make for large amounts of money leaving your savings every month.

Images came from: https://www.pexel.com Music I Use: Bensound.com/free-music-for-videos License code: AN4MXGI6OALEGJ66 Also read these articles: https://finance.yahoo.com/news/consumers-paying-more-ever-streaming-181821039.html https://www.statsignificant.com/p/the-broken-economics-of-streaming

The only way to lower your expenses is to become intentional and do it with intention and purpose. You must first start with your why and follow it up with how you will keep the momentum. Reducing you spending won’t happen on its own. Let me ask you a few questions first, so you can build your foundation.

What is your why? Why do you want to lower your expenses? _____________________________________

What will you do if you can lower your expense? _______________________________________________

What would you be able to do with that money saved? __________________________________________

What are you willing to do to save this money? ________________________________________________

When would you like to start and would you like an end date? ____________________________________

Why an end date and do you feel you need one? _______________________________________________

What will motivate you to keep your promises/goals? ___________________________________________

What should be the consequences if you don’t keep your promises? ________________________________

Who is going to keep you accountable? _______________________________________________________

What will it mean to you if you hit your goals/keep promises? _____________________________________

How much money do you make monthly? _____________________________________________________

How much would you like to save? __________________________________________________________

Where will you start to cut your expenses? ____________________________________________________

Remember: Some rewards of being intentional: less stress, more freedom, money in your account, etc…

Images came from: https://www.pexel.com Music I Use: Bensound.com/free-music-for-videos License code: AN4MXGI6OALEGJ66

Objective: Students will gain hands-on experience with the job search process, including finding job postings, creating a resume, preparing for interviews, and evaluating job offers.

Materials Needed:

• Computers with internet access
• Sample job descriptions
• Resume templates
• Mock interview questions
• Evaluation criteria for job offers
• Access to word processing software (e.g., Google Docs, Microsoft Word)

Duration: 2-3 hours (can be spread over multiple class periods)

Steps:

Part 1: Job Search

1. Introduction (15 minutes): (If for students, brief students on the importance...)

• Why Job Searching Skills Matter:

1. Foundation for Career Success:
   1. First Steps: Job searching is the initial step in building a successful career. Understanding how to effectively search for jobs can open doors to numerous opportunities.
   2. Right Fit: Finding a job that aligns with your skills, interests, and values is crucial for long-term job satisfaction and growth.
2. Competitive Advantage:
   1. Standing Out: In a competitive job market, knowing how to search for jobs efficiently can help you stand out among other candidates.
   2. Networking: Effective job searching often involves networking, which can lead to discovering job opportunities that aren’t advertised publicly.
3. Skill Development:
   1. Research Skills: Job searching hones your ability to research and gather information about different companies and industries.
   2. Self-Assessment: It encourages self-assessment, helping you understand your strengths, weaknesses, and areas for improvement.
4. Practical Experience:
   1. Real-World Preparation: Practicing job searching techniques gives you real-world experience that can be applied throughout your career.
   2. Adaptability: It teaches you to adapt to different job markets and industries, making you more versatile in your career path.
5. Confidence Building:
   1. Self-Efficacy: Successfully navigating the job search process can boost your confidence and self-efficacy, making you more prepared for future job transitions.
   2. Interview Preparation: Learning how to search for jobs includes preparing for interviews, which can help reduce anxiety and improve performance during actual job interviews.
6. Informed Decision-Making:
   1. Better Choices: Understanding the job market and available prospects enables you to make informed decisions about your future.
   2. Career Planning: It helps in setting realistic career goals and creating a plan to achieve them.

1. Online Job Boards:

1. 1. What They Are: Online job boards are websites where employers post job openings and job seekers can apply directly.
   2. Popular Sites:

1. Indeed (indeed.com): One of the largest job search engines, aggregating listings from various sources.

1. 1. 1. LinkedIn (www.linkedin.com): A professional networking site that also features job listings and allows users to connect with industry professionals.
      2. Monster (www.monster.com): A global employment website offering job listings, resume services, and career advice.
      3. Glassdoor (www.glassdoor.com): Offers job listings along with company reviews and salary information.

2. Company Websites:

1. 1. What They Are: Many companies list job openings directly on their own websites.
   2. How to Use:
      1. Career Pages: Visit the “Careers” or “Jobs” section on company websites to find open positions.
      2. Application Portals: Apply through the company's online application system.
   3. Example Sites:
      1. Google Careers (careers.google.com)
      2. Amazon Jobs (www.amazon.jobs)
      3. Apple Careers (www.apple.com/jobs)

3. Networking:

1. 1. What It Is: Networking involves building relationships with professionals in your field to discover job opportunities.
   2. Methods:
      1. In-Person Networking: Attend industry conferences, job fairs, and meetups.
      2. Online Networking: Use platforms like LinkedIn to connect with professionals, join groups, and participate in discussions.
   3. Tips:
      1. Informational Interviews: Reach out to professionals for advice and insights about their careers and companies.
      2. Referrals: Ask connections for referrals to open positions.

4. Recruitment Agencies:

1. 1. What They Are: Agencies that help match job seekers with employers.
   2. How to Use:
      1. Register with Agencies: Submit your resume to recruitment agencies specializing in your field.
      2. Job Matching: Agencies will contact you with suitable job opportunities.
   3. Example Agencies:
      1. Robert Half (www.roberthalf.com)
      2. Adecco (www.adeccousa.com)
      3. Manpower (www.manpower.com)

5. Social Media:

1. 1. What It Is: Platforms where job seekers can find job postings and connect with potential employers.
   2. How to Use:
      1. LinkedIn: Follow companies, join professional groups, and stay active on your profile.
      2. Twitter: Follow companies and job boards, use hashtags like #JobSearch, #Hiring, and #Jobs.
      3. Facebook: Join job search groups and follow company pages.
   3. Example Sites:
      1. LinkedIn (www.linkedin.com)
      2. Twitter (www.twitter.com)
      3. Facebook (www.facebook.com)

6. University and College Career Centers:

1. 1. What They Are: Resources offered by educational institutions to help students and alumni find jobs.
   2. Services:
      1. Job Listings: Access to exclusive job postings for students and graduates.
      2. Career Counseling: One-on-one guidance and resume assistance.
      3. Career Fairs: Events hosted by the institution to connect students with potential employers.
   3. Example Institutions:
      1. Harvard Career Services (ocs.fas.harvard.edu)
      2. Stanford Career Education (beam.stanford.edu)
      3. University of Michigan Career Center (careercenter.umich.edu)

• Using a computer, search for entry-level job postings in a field of their interest.
• Select 2-3 job postings that they find appealing.
• Take note of the job requirements, qualifications, and responsibilities.

Part 2: Resume Writing

1. Resume Workshop (30 minutes):

• See the Chapter on Making a Resume

• Create a resume tailored to one of the job postings you selected.
• Highlight their skills, education, and any relevant experience (including volunteer work, internships, or part-time jobs).

Part 3: Interview Preparation

1. Interview Basics (15 minutes):

• Interviews are where you meet with a company representative and, through an interview, they will have a good understanding of if you are a good fit to work there.
• Interviews are not for you, but for the company you are trying to join. Allow it to work naturally because if you are not a good fit, this is the best time to find out.
• Common Interview Questions:

1. Tell Me About Yourself:

1. Purpose: To understand your background, experiences, and how they relate to the job.

1. 1. How to Answer: Provide a brief summary of your education, work experience, and relevant skills, focusing on how they align with the job you're applying for.
2. Why Do You Want to Work Here?
   1. Purpose: To gauge your interest in the company and the role.
   2. How to Answer: Research the company beforehand and highlight what excites you about the company’s mission, culture, and the specific role.
3. What Are Your Strengths and Weaknesses?
   1. Purpose: To assess your self-awareness and honesty.
   2. How to Answer: Choose strengths that are relevant to the job and provide examples. For weaknesses, mention an area you’re working to improve and how you're addressing it.
4. Describe a Challenging Situation and How You Handled It:
   1. Purpose: To evaluate your problem-solving skills and resilience.
   2. How to Answer: Use the STAR method (Situation, Task, Action, Result) to structure your response, focusing on what you did and what you learned.
5. Where Do You See Yourself in Five Years?
   1. Purpose: To understand your career goals and see if they align with the company’s direction.
   2. How to Answer: Discuss your professional aspirations and how the role can help you achieve them, showing your commitment to growth.
6. Why Should We Hire You?
   1. Purpose: To determine what sets you apart from other candidates.
   2. How to Answer: Highlight your unique skills, experiences, and achievements that make you a perfect fit for the job.
7. Do You Have Any Questions for Us?
   1. Purpose: To see if you’re genuinely interested in the role and the company.
   2. How to Answer: Prepare thoughtful questions about the company’s culture, team dynamics, or growth opportunities.

1. Demonstrates Professionalism:
   1. First Impressions: Being well-prepared shows that you take the opportunity seriously and respect the interviewer’s time.

1. 1. Confidence: Preparation helps you answer questions confidently and professionally.
2. Reduces Anxiety:
   1. Familiarity: Knowing common questions and having practiced answers can reduce interview anxiety.
   2. Control: Preparation gives you a sense of control over the interview process.

3. Showcases Your Skills and Experience:

1. 1. Highlight Strengths: Preparation allows you to frame your experiences in a way that highlights your strengths and relevance to the job.
   2. Relevant Examples: Being ready with specific examples ensures you can effectively demonstrate your qualifications.

4. Enables Better Responses:

1. 1. Thoughtful Answers: Preparing helps you provide well-thought-out answers rather than stumbling through responses.
   2. STAR Method: Practicing the STAR method for behavioral questions ensures your answers are structured and clear.

2. Improves Interaction Quality:

1. 1. Engagement: Being prepared allows you to engage more effectively with the interviewer, fostering a better connection.
   2. Informed Questions: Researching the company beforehand helps you ask insightful questions, showing your genuine interest.

3. Increases Chances of Success:

1. 1. Competitive Edge: Prepared candidates often stand out in the hiring process.
   2. Positive Impression: Leaving a positive impression increases the likelihood of being selected for the role.

• Research the Company: Understand the company’s mission, values, products, and recent news.
• Review the Job Description: Know the key responsibilities and required skills.
• Practice Common Questions: Use a friend or family member to conduct mock interviews.
• Prepare Your Own Questions: Have a list of thoughtful questions to ask the interviewer.
• Plan Your Attire: Choose professional attire appropriate for the company’s culture.
• Arrive Early: Plan your route and aim to arrive at least 10-15 minutes early.

2. Mock Interviews (30 minutes):

• Pair up with another student and have them take turns being the interviewer and the interviewee. Try also using a teacher or a parent.
• Ask your interviewer(s) for constructive feedback.

Do you want to be paid more, faster? You have two ways of doing so: 1) ask for a raise, 2) get a second job, 3) start a business 4) invest and take the risk, or 5) stop spending money (not increasing your pay but keeping more money. But wait, you probably were just asking about #1. How do I get a raise from work? This is simple as well. Ask for a raise.

When you are asking for an increase in pay, you need to be educated with information that is available:

1. What is the median pay for someone in your position? Median wage is what half of people holding that position are paid this amount or you could say the wage in the middle. Look up the median pays for your position here at debt-free-millionaire.com/medianpay.
2. Know how much the median pay is for someone with your education. You can’t compare yourself to anyone when they spent time and money to get additional education that you don’t have. The median weekly pay for a full-time employee, 25 years and older is $909. $515 without a high school diploma, $718 for high school graduates and no college, $836 with an associate’s degree, $1,189 for those with a bachelor’s degree, $1,404 with a master’s degree, and $1,743 with a doctoral degree. It’s worth to get that degree. The median pay if you went to a vocational school is $9,80 - $1,568. Find out more at debt-free-millionaire.com/degreespay
3. What your history is and highlights you can share since you came to work? You want to show how valuable you are, what you have done to increase productivity and/or revenues. Are you worth the money you want to ask for?
4. You should never snoop but if you overhear your employee mentioning how much they are paid, you should know that as well, but don’t use it as a weapon instead use it for knowledge.
5. Put out your feelers of other positions that are open and hiring. If there is another company that is paying more then set up an interview and see how much they are willing to pay you. You want to show how valuable you are, find out how much your companies own competitor is paying. Again, this is not a weapon but use this as knowledge to present to your manager. If you get a job offer, bring it but don’t use that as a weapon, us it as a bargaining tool, any businessman should appreciate the effort of opposition research.

When you go in to see your manager, make sure they are having a good day. You may want to work your way into it. Here are a few things you may want to do to butter them up or prepare them for your ask:

1. This is the most important, work hard before going to see them. Let them see how valuable you are at work a few days before you ask.
2. Set up a meeting with your manager. Do not jump in at what seems like the right moment. Let them expect you are coming. This gives them time to anticipate why you want to meet and to start looking at you. Remember, days before you have that meeting you should be more productive than you have ever been. You want them to see this.
3. When you meet, be early sitting outside their office only 5-10 minutes beforehand, but don’t come emptyhanded. Come with your current work and continue your work while you wait and bring the information that proves you should be paid more.
4. Go into the meeting very upbeat. Present the information you have found as if stating that you love the position and company and that you are very loyal but these are the facts of why you deserve better pay and then here is the clencher.
5. Ask your manager, that in the next 2-4 months how can you prove that you deserve a raise? You are not asking for it right away but you want to know how to get it and then how much that would be paid. This is a lot more digestible for your manager to accept. If you are in a union, you can’t do this because your pay is set at your position and not how hard you work, so ask for step 6, ask for a promotion. Whether you just want a raise or a promotion, you should be ready to take one of them. A promotion comes with more responsibilities, but also a higher position.
6. The best way to get a raise is to ask for more responsibilities in a promotion. Do not accept more responsibilities without a higher pay. If you do, you are basically accepting lower pay or same pay for more work. You deserve a pay increase with a responsibility increase. Again, if you work under a union, you can’t get a raise unless you take a higher position and if there is no higher position, you will not receive a higher pay.
7. Again, the company does not owe you higher pay unless you are valuable or if you are offering to work harder or take on more responsibilities.
8. Make sure you follow it up with an email, thanking them for the meeting and then double checking that you remember that if you do X then you will be paid Y.

One of the greatest examples of not being paid what you are worth if you are a hard worker is government work. Most governments are unionized, and you are paid what they have negotiated for the median worker (middle effort worker). You are paid from what the person in the middle does. Many government workers have a stereotype of just doing what they are asked, or the minimal amount of work, which is why it takes the government so much time. Those that work harder than the rest cannot be compensated for their effort because you are paid off the collective. Your pay does not increase by how hard you work but instead buy the position you take. Most of the time, if you want a pay raise, you must go through interviews so meeting with your manager for a pay raise is unnecessary. Instead, you should be looking for a new position that may open up in your government field.

If you work for a small business, most owners of these company are just scraping by and a pay raise may be harder for them, unless you start making the company more money. If their revenues increase from your effort, they have two answers to this request, pay you more or lose you entirely. You just made yourself invaluable to the company and they do not want to take the gamble that the next hire will be as good as you. They will pay you well in order to keep you. At the same time, if you don’t show how valuable you are, they have ever right to fire you and find someone else.

Images came from: https://www.pexel.com Music I Use: www.Bensound.com/free-music-for-videos  License code: AN4MXGI6OALEGJ66

Now the issue with workers today is that they believe they need to take what is given to them. This is a fallacy set up to keep them in the jobs they have and not to strive and seek more. If you believe you are worth it, then find the path forward and then make your move. Now these moves may take years and that is okay. You just need to make sure there is a path forward for you, that you understand how to get there, and your manager is open to helping you achieve that level.

What qualities do you have to propel you forward? Before you can ask for a management position, you need to look at yourself, your skills, knowledge, and experience. This all calculates into if you are ready to progress further in a company. No one will hire you if they think you will do a poor job and there is no possibility you will make the company more profitable, so make yourself just that, potential to increase profits. If you can show this, your employers will throw money to entire you to take a higher position.

Do you want to move to another career? This may set you back in this sense. Remember that you need experience to gain a higher position. If you jump to a different career, you may not have the experience that can translate to the next position. Write down in the left column the skills you have towards advancement and in the right column write what you need to advance. Ask your employer or a professional in that field.

Now let’s discuss how you are to obtain those qualities you need. There are many avenues to find experience, skills, and knowledge. They include service work, part-time work, schooling, trade schools, and even picking up a book. All these things will give you wisdom toward advancing in a career.

Remember that you are not entitled to anything, entitlement is slavery for you by the person providing for you. You need to go out and grab these qualities for yourself. In the space below, make yourself a goal of when you will obtain these goals and some sort of penalty you will do if you don’t reach them. For example: penalty for not reaching your goal could be paying $100 to a local charity, giving away something you cherish, or doing something that makes you uncomfortable. It doesn’t stop there, now you must find an accountability partner. This can be a family member, teacher, principal, church leader, but it may not be a friend. You do not want to tell you that it’s okay and you can have the item back. You need to give them the item to hold onto until the goal is met. That way you are motivated to get this done. Images came from: https://www.pexel.com Music I Use: Bensound.com/free-music-for-videos License code: AN4MXGI6OALEGJ66 Also read these articles: https://www.hiringlab.org/2024/02/27/educational-requirements-job-postings/ https://www.bls.gov/emp/chart-unemployment-earnings-education.htm https://www.visualcapitalist.com/major-worst-finding-a-job/ https://www.advisorperspectives.com/dshort/updates/2024/05/06/a-closer-look-at-full-time-and-part-time-employment

Example: If you have three different glasses and you want to fill them all to specific amount, if you pour too much into one glass, there is less water to go into the other glasses, so they will not hit their intended levels.

It you have a budget, you are less likely to overspend and less likely to steel from other opportunities you would have had if you would have keep on your budget. Do you want to go on a trip? What happens if you spend too much money somewhere it wasn’t needed. 

Images came from: https://www.pexel.com Music I Use: Bensound.com/free-music-for-videos License code: AN4MXGI6OALEGJ66 Also read these articles: https://www.reuters.com/world/us/us-household-debt-largely-unchanged-q2-credit-card-balances-jump-ny-fed-says-2023-08-08/ https://awealthofcommonsense.com/2023/08/why-im-not-worried-about-1-trillion-in-credit-card-debt/

Real Life: Generosity produces many great benefits to our life, and when you have the ability to be generous, we hope that you will see the benefit in it. Therefore, we have designed the board to allow you generous donations towards paying off your debt. Then, later in the game, you are asked to be generous, too. 

Now generosity is not only financial, but includes giving your time, helping, or showing concern for others, and doing things for others that you wouldn’t normally do. Generous people report being happier, healthier, and more satisfied with life. When we are generous, we forget about our own needs and wants, and take the time to put others first.

In this life, generosity is a wonderful attribute that you can have, up to the point of where you are enabling someone to do negative things. When you can help someone with a financial burden, there are always two things to think about: 1) will this person accept this gift and be better off because I gave it to them; or 2) will this be wasted, or will it hurt them in different ways. When you give to a person on the street that you don’t know, give generously, but a small amount to help them. If you are dealing with someone you know, though, you may want to think of ways to be generous without being destructive to them. If you worry about them handling money, you can also pay a bill or debt, buy them groceries, or even buy them a financial course. You can also put strings attached such as: I want to help you with this money, but in order to receive it, I want you to read this book or take this class. That way, you are still giving to them generously, but you are making sure they have the understanding to use it wisely. 

Consider making regular donations to organizations and people that can use the funding. Some people tithe, where they donate 10% of their earnings to their local church. There are local organizations in every city and state that need funding, to help others and have the ability to use that money more effectively. Consider how much the President of the organization takes for themself, and how much is paid in other perks, before donating. If they take large amounts of this money for administrative costs and salaries, consider donating to a more worthy, or less wasteful, organization, where your money goes where it was intended.

Here are some other ways you, too, can become more generous to people - some that cost money and some that are free for you to give:

1. Consider the benefits of generosity. It feels good to help others but it can also find internal benefits that would help in your daily life. When you serve others, you begin to see their struggles in life. When you see their struggles you can reduce the stress, depression, and anxiety in yours. Depression is an internal struggle about your own issues but focusing on others takes you out of your head and allows you to see that you are not alone.
2. Hand out smiles freely to those around you. This simple act will train you to think of others.
3. Embrace gratitude, for all that you have been given by others;
4. Start small, giving of your time and concern, or even small donations to others;
5. When you are paid, make sure you give first, from the money you receive; start small;
6. Divert money you spend on something that is unnecessary, to something that is necessary;
7. Fund a cause that is based on your passions;
8. Find a person you believe in that could use your help;
9. Spend time with people that are in need;
10. Spend time with a generous person and allow their generosity to rub off on you; and
11. Live a more minimalist life, where you see how little others have, and how you don’t need all the things you think you do.

Real Life: Since the COVID pandemic, businesses have learned that they do not need to lease large buildings to house their work. Most companies had to move their employees home, for a time. Grocery stores, hospitals, and other essential businesses kept their employees working, to service those in need (most of the time), but those who were not essential, and didn’t require contact with their customers, were pushed to work from home. So, there are really three types of remote workers:

1. Pandemic or Emergency Relocation: During COVID, we worked from home. According to scientists, these types of outbreaks will happen again, and more frequently in the future. In order to stop the spread, the U.S. Government locked down the country, economy, and made everyone who could keep their job work from home. The promise was that if we stayed locked down for 4 months, while we let the hospitals slowly increase their emergency beds, we would then be released “back to normal.” People went home to work. Two years later, some states are just still mandating masks. Businesses are now realizing that, if they could work remotely for a year, why not continue it (since they had to make new procedures that worked remotely, and now their company is as effective as ever, and saving money)?
2. World Travelers: People have desired to travel the world for long periods of time; yet, they had to afford their ventures. For years now, workers have been able to travel to some very remote areas, and continue their work from their laptops, in their hotel rooms, or the local café. These were the remote workers before Pandemic Remote Working became a thing. They did need a few things to make this work. They had to make sure that their companies were okay with this, that they had all the equipment needed to accomplish this work, and be well versed in the laws of the countries they were traveling through. Some have strict laws, that if you are working from their country, you need to pay them taxes. Most traveling workers don’t listen to these rules, though, and most don’t even know about them. They reserve less expensive housing, plan out access to food and other essentials, and find internet connections wherever they travel, so they can always stay connected with their home office. This takes some work, but could be fun. I have never tried this, but you can learn more by searching “Remote World Traveling” on our website Topical Search. 
3. Work convenience: My current business, as I work on this book, teaches history. As I grew my team, during the Pandemic, we decided we didn’t need an office. Instead, we all worked remotely, during the pandemic, and afterwards. We have a goal to become the first Fortune 500 to work completely remotely. It is convenient for all of my employees/contractors, and for myself. For one thing, my employees all work on their own schedule; they work from the convenience of their own home, without having to commute, or even dress in business attire. They even get to eat leftovers in their fridge each day, so less food goes to waste (if they so choose). This is the life of a 9 - 5PM worker.

Now that the world has seen that we can work from home, “the genie is out of the bottle.” In other words, people have experienced increased flexibility, and less stress. 

New types of remote workers are developing, including stay-at-home parents, who are now becoming remote workers while watching their kids; medical needs patients are now able to be remote workers; and even disabled or those with special needs are having an easier time being hired from their homes or co-ops. The future of work has now changed forever, but there are some negatives.

How to overcome the negatives: There are plenty of negatives out there, but for both the employees and employers, this normally has more positives than negatives. The struggle is to overcome the negatives, with preventative measures. Here are some of the negatives, and how to overcome them:

Worker’s health may decrease – Because you don’t need to go into an office, some workers become lazier than before, and less motivated to get out and exercise. Decreased health decreases productivity, and now that they can work from home while they are sick, they are less likely to work to their full potential. When employees get less motivated to workout, they are less effective in the office. It has been proven, that those who are more motivated to workout and eat healthy are more efficient in the office. Statistics show that employees who eat healthy are 25% more likely to have higher job performance. The same survey also found that employees who exercise for at least 30 minutes, three times a week, are 15 percent more likely to have higher job performance.

So how do you combat this? Employers who create healthy living usually have more effective and efficient employees. There are programs that health insurance companies have created or 3rd parties they have teamed up with to incentivize the employees to exercise on their own to keep them healthy. Employers and insurance companies have found that they save more money the healthier their employees are. Music I Use: Bensound.com/free-music-for-videos License code: AN4MXGI6OALEGJ66

Real Life: When trying to get out of debt, it is always a good idea not to put yourself back into debt. When you are in major debt, it is much easier to spend frivolously than when you are out of debt. The psychological reasoning is that you worked so hard to get out of debt, that there is a hesitancy to add any additional debt that may make you struggle to get out of it again. You worked hard and want to be more intentional in your spending. 

Now, you cannot go through life not buying these items. You will pay for them in one way or another. Not to repeat this example, but take a new car, for instance. No one needs a new car. Even if you are trying to impress clients, every time a car drives off the showroom floor, it loses $5,000 to its value, because the value we give to a car that no one else has driven makes that car psychologically worth more. But you can buy a slightly used car, and drive that without much difference. 

A boat, on the other hand, is never an essential item. You may want it, but almost nowhere will it ever be an essential item. There is an old saying: “boat” stands for Bring Out Another Thousand (BOAT), meaning that boats are notoriously expensive, even after you purchase one. You may spend tens of thousands every year to maintain and store your boat. I would shy away from this purchase - unless you were debt free, with plenty of income each year, and a strong retirement portfolio.

Computers are essential these days. When I was 14 years old, in 1996, I asked my dad to go to a computer fair in San Francisco, so I could purchase my first computer. My family had an obsolete computer and I had been working and saving my money. When we got there, my dad asked if the family could use it. I told him no, and that I was buying it for myself. He said, what if he paid for half? I said no, because a family computer would be bought by the parents. He said, “what if we pay half and you can have it in your own room?” I said yes. It was top of the line, in 1996, cost $2,000, and did a small fraction of what a phone can do today. My parents had that computer until about 2006, and I upgraded it multiple times for them. Today, computers cost very little, compared to what they used to cost. Even now, though, they are being replaced by tablets and smartphones, so the need for certain devices are not as essential as we may think they are.

There are other devices you may think you need, such as a gaming console or appliance. You may want to buy them, but are they essential (beyond your entertainment)? Appliances are essential, if you are moving into a rental unit without laundry. You can live the inconvenience of the local laundromat, and the added expense, or you could buy the washer and dryer and have it in your home. What about other needed appliances, such as a dishwasher, oven, or fridge? Each of these are expensive and may be needed for your kitchen. Most of the time, you will want to buy these new, because of the wear and tear of the strain we put them under. You never know what issues you are buying, until you run it in your own house. Consider new but dented or scratched appliances. You can buy these for a fraction of perfectly new appliances.

Not a gadget, per se, but furniture is a side purchase you will need to make, at some point. These you can buy slightly used, on the web, or at a store. Making sure these are good quality will allow them to last longer, so you won’t need to purchase a new piece of furniture to replace it soon afterwards. Much like clothes and most non-essential purchases, you can purchase good quality and use them for a long time, or buy inexpensive, and replace them on a constant basis. You get to choose what suits you best. Please know, big brand names do not indicate high quality. You can buy a pair of jeans at Wal-Mart for $14.99, and replace them every two years; or you could buy a pair of Levis for $29.99, and replace them every five years; or you could buy a pair of stylish jeans for $99.99, and either have to replace them a year later, or, if they go out of style, need to replace them each year, when the style changes. Clothing and furniture are the same - you can find quality without spending a lot of money (finding quality may just take some effort). Look up online reviews on your items before buying them. This includes brands that you have and haven’t seen, depending on how much money they put into it.

Now comes the notorious device that people feel they have to spend $1,000+, because of how they look. Phones may be essential, like a car, but like a car, you don’t have to spend your life savings on them. Most likely, your friends and colleagues won’t even know you spent a ton of money on it. Now you could go to your cellular provider and spend an extra $50 on your phone contract to lease the new phone, but in the end, you will spend more than the originally priced $1,000 on that phone. Instead, you could pay cash for it, so they can’t take it back when you upgrade or change your carrier, or you could go to a discount website that markets slightly used phones, provided by other users. There is a website, called Swappa.com, where you can buy slightly used or new phones for nearly half the price. A cell phone currently selling for $1,200 can be for sale at one of these used sites for $800 (and you would own it outright), spending less money over the life of the phone. Or, you can always wait on the newest phone to be replaced, and buy an older phone at only a fraction of the price. After a cell phone cover, you wouldn’t even know which phone it was. With each new phone that comes out, there are only slight improvements, that would be considered non-essential, and you wouldn’t miss them if you didn’t have them. So, in other words, you may as well buy a slightly used phone for $300, and save nearly $1,000, rather than purchase a new phone.

For less expensive used gadgets: https://swappa.com/ Also read: https://www.picodi.com/us/bargain-hunting/spendings-on-food-2023 https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/food-prices-and-spending/ https://explodingtopics.com/blog/iphone-android-users https://www.cbsnews.com/news/how-to-save-money-in-2024/

Real Life: Think of this, you are opening your mail and it’s a stack of bills. The first one you open is for $40,000 in credit card bills, the next one is $30,000 for a new car, and the third one is $10,000 for a personal loan. The next day you receive more. You begin to call the lenders to explain there must be a mistake, but they tell you everything is legitimate. Then, a knock comes to your door and you are arrested for check fraud. Someone has taken your identity and racked up so much debt against your name. You have no way of controlling it, and what has been done to your name. Even when you try to call the lenders and explain, they don’t believe you. Then, a big one happens, and people show up to take your house, because it was sold out from under you. Now, if something like that happened, how would you feel?

According to a 2019 Identity Fraud Study, by Javelin Strategy & Research, the number of victims of identity fraud fell to 14.4 million in 2018, down from a high of 16.7 million in 2017. But, the financial burden for those in 2018 increased. 3.3 million people were made responsible for paying back part of the debt of the fraud committed against them - three times as many as in 2016, and the victims’ out-of-pocket fraud costs doubled from 2016 to 2018, to $1.7 billion. Criminals are also finding ways to overcome the authentication processes.

A depression is similar, but it’s deeper and longer than a recession. If this were to occur, you would most likely see a decrease in pay, increase in expenses, or loss of a job.

Real Life: In 2008, the United States experienced the largest housing bubble in over 50 years. One of the reasons for this is because President Bush held it off for so many years with certain economic policies. The price of houses increased the most during his administration in the last 50 years, excluding 2022. There were too many houses on the market, at such a high price, that the economy couldn’t sustain the high prices and loans that were too easy to apply for. In 2021, it is different; there are less houses for sale, and the prices keep going up. If the home builders came out and began building houses non-stop, it would still take them 2-3 years, at least, to build enough houses to put too many houses on the market. 

For the past 100 years, we have had a new recession every 8 years. In 2008, we hadn’t experienced a recession in 10 years. Now, in 2021, we have been waiting for the next recession for 13 years and it as of July 29, 2022, it has been reported that we are now back in a recession. When COVID occurred, the media called it a recession, but though there were two quarters of downturn, no prices went down. The market had a small fluctuation, while everyone was under lock down orders, but it quickly came back (because of action the Trump and local administrations took to correct and open the economy). It is also possible that, even if he did nothing, since this wasn’t a true recession, the market would have still returned the same way when the lock down orders were released. Now you can see statistically what the lock down orders did, by looking at the economies of the states that locked down the longest. The economies of California and New York fell, and stayed down while the people were under lock down orders, as no one could do much in the way of commerce and business. Those states that lifted their lock down orders, such as South Dakota, Florida, Georgia, and Missouri, had economies that jumped, even though there were mask mandates in place. These people were able to get out and work, though, and according to the numbers, the rate of deaths from COVID were no different from California (though New York was significantly more than everywhere else, because people lived so close together). Even in lock down, the people couldn’t work as they normally did, and the economy in those areas suffered.

Now there are multiple types of recession, spanning from a housing bubble, to the stock market falling. Here are the different types:

1. Boom and Bust Economy: This may occur after a previous year of an economic boom, or a year the economy went up substantially and inflated itself too high. The recession would be to balance it and cut the price increases. When this happens, banks tighten their lending/spending policy and lend less; the price of most things decrease a little, or stay where they are, which allows the market to catch up; and people’s confidence goes from high, in a boom, to low confidence, during a bust.
2. Balance Sheet recession: This occurs when banks see a decline in their balance sheet, due to falling assets or bad loans, and so they restrict lending policy. During this time, we will see a fall in asset pricing, such as the housing bubble, when the price of houses decreased.
3. A Depression: This is caused by a long and deep recession, where the output falls by over 10%, and includes a very high rate of unemployment.
4. Supply-side shock recession: This is caused by a very rapid rise in a commodity price, that causes a recession, due to a decline in living standards. For example, in 1973, the world’s oil prices tripled, which sent the world into a recession, and a fall in disposable income. There was also a lack of output of oil, because of supply. Another example is after Hurricane Katrina, when the oil rigs were down for months, the price of oil and gas skyrocketed, doubling or tripling for months. The price did eventually drop, but people stopped spending to go on trips or buy more “luxory” goods, because it stayed high for a while, while the prices dropped.
5. Demand shock recession: This is when there is an unexpected event that occurs and shocks the world, which drops confidence in the system, and a short-lived recession occurs. These events include the downturn caused by the 9/11 terrorist attacks, or COVID lockdowns. These normally do not last long, and quickly begin to incline, but the shape or direction of the market is different.

Economists around the world are all considering what will cause the next recession, and how it will look. Many economists believe it will be a mixture of things, such as low confidence in the economy, poor production growth, fall in the stock market, weak investment spending, political turmoil, and/or a war. Note: I wrote this book in 2020 and now in 2022, we are seeing that this has come true. Everything 

Different shaped recessions: The artificial recession due to COVID and the lock downs were forecasted to be many different shapes, but in the end, turned into a V-shape recovery.

As you can see from the chart above, the survey shows CEOs and economists were wrong on the shape of the COVID economy. In the end, it was the least forecasted - the V-shape recovery - and returned quickly (showing it was an artificial recession or Demand Shock Recession).

When a recession does occur, and everyone is reacting or overreacting, stay steady and don’t let the world make you react. Instead, calmly make a decision that you will not react; this is normal, and you will overcome these issues. That is also why you will prepare for a possible recession, by creating an emergency fund and beginning a food storage, so you can live an intentional life. 

Divorce, on the other hand is the legal recognition of the union being dissolved. This is where the financial, emotional, and physical support of the couple is split. This also means that the added stress and finances of the couple is to affect both of them. 

Real Life: Marriage should be the happiest moment in a person’s life, that should - potentially - last until death, but sometimes feelings sour between the two parties. If things can be resolved they should but it takes two to find resolution. Sometimes strength is leaving (with abuse). Sometimes you don't have an option (being left for another person). One person's resolve isn't enough. Like with marriage, keeping a marriage together takes two.

Marriage: When you find the person you want to spend the rest of your life with, it normally results in spending as much time as possible getting to know each other, over an extended period of time. This is a time to get to know each other and date, experiencing another person through many different seasons of life. You and your loved one go on dates, attend each other’s activities, and become familiar with the person’s good, and not-so good, traits. This is a time of learning and growing together, before getting married. If you get married too quickly, you may not understand all the attributes of your spouse. If you wait too long, your potential spouse may fall out of love. It is the commitment that makes you strive to work through hard times, be each other’s shoulder to cry on, and the desire for each of you to become a better person in the relationship. When you are getting married, these are the things to consider:

1. 1. Children – Most married couples who get married for the first time come into their marriage without children, but you should discuss whether or not you want children, how many and how soon you want them. Some couples have their children as soon as possible, so they can get them out of the house sooner; some wait a few years, while they get to know each other; and others wait until they are financially secure before having children, which normally ends up with older parents with younger kids. FYI, raising children is very tiring, how much more tiring would it be for older parents. Whenever you decide to have them, remember that they bring a great deal of expenses. Reports show that parents spend an average of $13,186 per year raising their child, though the median cost was only $6,000.

• Finances – Make sure that you are both on the same page with finances, before you get married. Don’t marry someone that you can agree with financially. TD Ameritrade, a financial firm, found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money. Make sure you are on the same page before marriage, so you don’t risk disagreeing later on. Ask these questions of your future spouse:

1. 1. 1. What are your goals and aspirations in life? How will you reach them?
      2. Will we use a budget each month, to not just be intentional, but to be in agreement?
      3. When you get your paycheck, do you save, as one of your first priorities or after paying your bills and yourself?
      4. Will we use debt to buy things, or will we try to pay cash and stay out of debt?
      5. (Observe this one, don’t ask it) Are you a frivolous spender and go on shopping sprees?
      6. Do you conserve utilities around the house, or do you do things like leave the lights on?
      7. Will we have children right away or when we are financially secure? Will you treat your children better than your parents treated you, spending more?
      8. How many kids would you like? When do you plan to have them?
      9. Do you plan to pay for their entire college career, partial, or make them work for it?
      10. Should the kids go to public or private school, or homeschool?
      11. How much debt do you have? How much savings do you have? 
      12. Do your parents pay for any of your current bills? Would you accept money from them?
      13. How much will we spend on our parents or relatives if they get sick?
      14. Would you help your siblings or a relative if they needed to borrow money?
      15. Have you ever declared bankruptcy? Would you ever declare bankruptcy, or work to pay off your debt?
      16. What is your income right now, and what will it be in the future?
      17. Will we merge our finances together after we get married? What are our financial goals?
      18. How much can I spend before I need to consult you?
      19. How much will we spend on fertility or adoption, if we can’t have kids? Remember, these prices increase too.
      20. Do you prefer brand name goods or are you okay with generic?
      21. How often will we go on vacation? How much will we spend, on average? 
      22. How do you spend your money? Do you have “fun money” or an allowance? Would we?
      23. Should we save for future vacations, reunions, and other events and only go when we have cash to pay for it?
      24. Do you have an emergency fund? Are you saving for one?
      25. Will you want to go back to school? How long are you thinking?
      26. What are your career (or entrepreneurial) goals? How long will each step take?
      27. Who will be in charge of investing for the future? Who will pick the stocks?
      28. Does your company offer a 401(k) plan, and will they match your investment? 
      29. Do you max out your retirement savings each year?
      30. Will we invest in a house or spend that money on experiences?
      31. Is charitable giving important to you, and how much would we spend?
      32. If you had $1,000,000 and had to give it away, how would you spend it?
      33. Would you seek financial counseling, if needed? Would we seek a marriage counseling, if needed?
      34. And the most important one - who will be in charge of the budget and paying the bills?

• Location – Where are you getting married? Where are you going to live? Where are you going to raise a family? Make sure you are on the same page. This is more than financials, but this will allow you to understand your partner even more and what they see in your future together. Make sure you are on the same page with most of your decisions. You don’t have to be on the same page with all of them, but make sure that you can agree - and that it is the same future you foresee, as well.

Divorce: Rarely does anyone “win” in this scenario. Instead, it causes more strife. And, though everything is split, the obligations may grow, especially if there are kids between the two parties. For example, when a couple dissolves their union, the person that makes more money may be obligated to pay for the livelihood of their ex-spouse. If there are kids, one of the parents will most likely need to pay money to the other spouse in support of the rearing of their children. Retirement, savings accounts, and all financials are split between the two people and a wealthy family becomes poorer, due to supporting two households. In addition, the emotional strife that it causes on both ex-spouses weighs on everyone, because, even though you are separated, if you share children, each parent is potentially to have 50% of the visitation rights, and coordination between the two parties may cause frustration and heartache. I know, because I was an unwilling participant in divorce (though, unlike most relationships that develop between two ex-spouses, we have a good relationship and often agree for both families to gather when it comes to the activities with the children). So, a good resolve can be the product of a divorce, but it is quite rare that cool heads result from a divorce. Normally, ex-spouses feel taken advantage of, angry and bitter, or feel the other is still controlling or trying to manipulate them. This is not my experience, but millions of others experience it.

Here are a few things to consider: 

1. Children – There are so many obligations to consider when you are considering getting divorced. If you thought your life was controlled by your ex-spouse, think of the courts now being behind them, to make sure you (or your ex-spouse) does what is best for the kids. Everything is now going to be in writing between you and your ex-spouse.
   1. Time spent with kids - When you are divorced, if everything is mutual, the best case scenario is that you see them close to 50 % of the time. The other 50% of the time you will be away from them. What days will you have your kids? What is your schedule? The worst case scenario is that you may “lose” your children, and only see them with visitation rights, and maybe even with someone you pay to watch your interaction with them. 
   2. Finances - You will be paying for them more because, as a single parent who has to work, you may need daycare. You may need other financial help taking care of them, or you may need to pay your ex-spouse child support to support the kids. Kids get more expensive when you are divorced.
   3. Transportation – How will you get the children to and from your ex-spouse? Will you pick them up at school or from their home? Will they drop them off? Logistics gets crazy. 
   4. Holidays – You will likely get the kids for half of the holidays. The other half will be with their other parents. You will have Christmas without your children half the time.
   5. College – Who will pay for their college? Will you pay 1/3, 1/2, or the entire thing?
   6. Health Care – Who will put the kids on their insurance? How will you pay for emergencies, and they have a large medical bill? If you don’t agree on this, the court will.
   7. Location – Normally your ex-spouse has no say in what you do with your life after divorce, unless you have kids. If you decide to get married to someone one state away, the kids are most likely not coming with you. You may have to find a local or someone who will move to you in order to stay near the kids. If you go on vacation, you will have to ask the other parent and make sure they know everywhere your child is. There is more control in your life afterwards, by your ex-spouse, than when you were married.
   8. Residential Custodian – You may be their parent, but you may not be their custodian. There needs to be one address that the schools will use to register the kids. All of their mail should go to one address, as well, so they stay organized. Who is on the record as their custodian when it comes to all their activities? This is their residential custodian. This does vary between states. 
   9. Other agreements – There are many other issues that come up, but when kids are involved, it is important to get these in writing because you will need to stick with them, and make sure your ex-spouse is okay with them, as well.
2. Finances – If you have kids, you may have to pay child support. Whether you give or get child support, the cost of raising kids increases, when they go between two households. It does not matter if you are the husband or wife, in this day and age. If your spouse was the stay-at-home spouse, can’t work, or is in a less lucrative career than you, you may have to pay alimony for their livelihood, so it is more equal, according to your established standard of living. This will be settled outside of court, by agreement of the Parties, or through mediation, or through the court, with the judge making the ultimate decision. Make sure you get a good attorney.
3. Location – If you don’t have kids, your ex-spouse has no say on where you live. If you do have kids, though, you may be stuck in one general location - if you want to see your kids on a regular basis (which you should want to do).
4. Relationships – If you believe you will find a better person than the one you already have, or even if you already had someone in mind, don’t be ignorant. Every new relationship has to start over at the beginning. You will need to spend a good amount of time getting to know this person, and them getting to know you, if you think you will overcome some of the issues you had in the previous marriage. The recommended amount of time is generally one year, so you can see that person in each season (think cold of winter, heat of summer, various holidays, etc.) Another good idea is to take a trip with that person, and see how well you travel together. Travel can reveal a lot about a person! If you already have someone in mind before divorce, know this, only 3-5% of these relationships end in marriage, and out of those marriages, 75% of second marriages end in divorce, as well.

 If you meet someone who does not live in the same town as you (or close by), you may want to move to be with that person. Without approval from your ex-spouse and the court, you won’t be able to take your kids with you.

Often, divorce is not the answer, but instead, it is just a band-aid - a quick fix. If you don’t figure out the actual cause of the divorce, it will happen again and again. Out of every first marriage, 40-50% fail; out of every second marriage, 60% fail; out of third marriages, 75% fail; and the statistics get worse each time you remarry. Again, divorce is rarely the answer. Marriages are more likely to succeed when both sides spend more quality time together, listen to each other, and work to understand the other person’s perspective. Honesty is key, too!

Marrying again: Hopefully, you learned some great lessons from the previous marriage. Statistically, these marriages are more likely to fail, but there are some things to do to make sure yours doesn’t. Here are a few suggestions:

1. Start from the beginning as if you were getting married for the first time. Get to know the person more than you have ever known another person. 
2. Merge your ways of living - Make sure your two separate ways of doing things can merge. If either of you have been divorced over a long period of time, it may be hard for one or both of you to be less independent, and allow the other person into your life. 
3. Spend time together – Don’t just spend all day together, but spend quality time together. Realize that, like the dating period of the previous marriage, you shouldn’t just spend every waking moment together, but if you hold back from getting married for at least a year, you can see your future spouse in all seasons of their life, and the year. People change during the winter, in their habits and behaviors. Make sure you know how they will react in as many situations as possible, before you get married. This does not have to be years, but enough time to really get to know them - and not just what they say. Sometimes these two things are deceiving.
4. Reality Check #1– This is one of the hardest pieces to stomach, but like your last marriage, the honeymoon stage will end at some point. There will be arguments, frustrations, and you may not want the other person around as much as you used to. Also remember that if there are kids, they will take up most of your time when they are around. You will have less time getting to know the other person than when you first got married and didn’t have kids.
5. Reality Check #2 – You were probably the cause of, or at least contributed to, your last divorce. As hard as it is to hear, “it takes two to Tango,” which means, things that you did in your last marriage were partially to blame for your divorce, be it small or large actions. The greatest thing you can do to make the next marriage work, is find out what that was, and correct it before the next marriage, so you don’t end up repeating it and setting this marriage up for failure. If you deny you had anything to do with the last marriage ending, you will most likely do it all over again.

Marriage is a wonderful thing that brings the greatest joys to life, but it is always hard, and takes a great deal of work. Do not just jump into marriage because “you think it’s a good thing;” or think you can just figure things out as they come; and please don’t get married because you need to in order to have intimate relationships with someone! Marriage is a sacred trust between you and your spouse and you should treat it that way - treating your spouse very special. So take the time to get to know as much as possible - about yourself and them - beforehand. 

Intimacy before marriage: If you bring intimacy in too early, your mind will be clouded from seeing the truth about your future spouse. Intimacy comes in many different ways, and the further you go, the more likely you are to get divorced. Intimacy includes all sexual relations between two partners. When you are getting to know a person, if you hold back from physical intimacy, you are more likely to see with a more leveled mind. If you are hoping to get married to this person, knowing how they are in private situations is not as important as getting to know who they are inside, if you hope your marriage is to last until death. Here are the facts according to the American Psychological Association:

• Relationships that are not built on a majority of physical intimacy until they get to know the person first are more likely to succeed or fail before they get too deep, which is okay because you were able to see the person for who they are.
• Those who wait for physical intimacy report significantly higher relationship satisfaction (20%), better communication patterns (12%), less consideration of divorce (22%), and better (physical intimacy) quality (15%)
• Those that hold off on sex before marriage are the least likely to get divorced. 
• The more “partners” you have before marriage, the more likely you are to get divorced.
• Those who have side partners, while married, are more likely to get divorced, lose that other person, and get divorced a second or third time.

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Real Life: Getting out of debt is a huge weight off everyone’s shoulders. When you finally get away from debt, you never want to return. Typically, a person will do everything possible to keep themselves away from getting back into debt (aside from the most essential role of financing a home). But when you can get out of that debt, too, you will feel total relief.

Know this: this chapter is filled with suggestions that are based on experience.

Staying out of debt: After getting out of debt, you may feel the relief of not owing anyone financially, and the hope is, that you will feel the desire never to get back into debt. This may be the perfect time to consider ways to stay out of debt, such as cutting up your credit cards and moving to debit cards; buying cars with cash, instead of financing them; and saving for things you would like to buy (and be patient while you’re saving, too). You have worked so hard to either stay out of debt, or pay back your debt, that you have seen the wisdom of never getting back in.

Pandemic or Global Events – When COVID hit the world in 2020, two strategies were taken to stop the spread of the disease. One was to lock down every citizen and business for 3 months (or more), while they got it under control, so the hospital beds that were needed were not overrun. The second was to let everything go forward, and people lived their lives with masks and other protective means, while the virus spread to those who were not protected. In the end, both had the same results with the virus: people died. But the death rates were lower in South Korea and Sweden (who did not lock down) than those of the United States, United Kingdom, Italy, France, Poland, and many other European countries (per million citizens). Also, those who did not lock down continued to thrive in their economies. In the United States, individual states took two different directions with the lockdown. This almost went the way of the political line: blue states (Democrat-run states) continued to lock down. Their number of COVID cases and deaths rose and their economies crashed. The red states (Republican run states) opened up, even just slightly, and their numbers rose at the same amount, but their economies came back quickly. Then, the government, under Trump, first, and then Biden, came out and said, “we will save you by sending you $1,400, then $600, and then another $1,400 dollars.” The government locked the people down for a year in some states, not allowing them to work outside their home, and then gave them $3,400 total, and claimed they saved the people. The problem is, about one-third of people surveyed in the United States lost 10 to 25 percent of their income, not $3,400, while statistics show that a simple 4 months would have solved getting a handle on the pandemic numbers in the hospitals. In the United States, those states and people that thrived were those that locked down for 3-4 months, and then opened up again, such as Georgia, Florida, and Missouri (which is where I lived at the time). Many of the people who lived in the locked down states found themselves to be the answer, and moved out of states, such as New York and California.

Now, after the lockdowns have opened and the masks have gone away, for the most part, because of all the printed money that was injected into the economy, the United States and most of the globe is experiencing inflation. By July of 2022 the United States’ currency had inflated nearly 10%, meaning that you are paying 10% more for a loaf of bread or gallon of gas, on average.

Time to set up an emergency fund: After you have found your way out of debt, the next step is to build an emergency fund of 3-6 months. This is a safety net to prepare you for disasters that may come your way. Don’t be too quick to jump into investing, until you make sure your house is financially secure. This means building a food storage, and creating an emergency fund of 3-6 months to help you through any hard times that may come. For example, if a COVID lock down started up again and you lost your job for any reason, would you be prepared? Most people can’t survive past 3 months without outside assistance. You, on the other hand are prepared for things to come if you’ve followed these steps and have your emergency fund. Or, what if you got into a terrible accident and could not work for 6 months, while you recover? Your health insurance will take care of your medical expenses, for a while, and you will take care of the living expenses. Your car, on the other hand, may need to wait, or you may be able to stretch your emergency fund to take care of the replacement. If an accident is someone elses fault, their insurance should pay the bill. This emergency fund is 3-6 months’ worth of your expenses, in a normal month. Most people, when placed in a hard situation, will do extraordinary things to survive, including cutting their expenses in half sometimes. Knowing this, 3-6 months’ worth of expenses will get you through most of your standard emergencies.

How to you create food storage responsibly and quickly:You are constantly going to the store. Normally, you buy the same things each time you go. For those things that are made to store - such as cans, boxed and bottled items - and those that are made to freeze, buy two, each time you go to the grocery store. It may increase your food budget, but it will allow you to slowly increase your food storage until you have 3-6 months’ worth of food storage. If you set your food budget to a comfortable amount, and don’t use it all in a month, you can always use those funds to buy extra food for storage. 

When you feel like you have a good amount of food storage, make sure you keep track of it, so nothing goes bad. Most cans can last 2 years after their expiration date. Suggestion: If you have certain shelves to hold the cans for 2022 and then another shelf to hold cans for 2023, it is easier to track how old your cans are and by when you should eat them.  This is an easy way to track your food and cycle it though. Each year, at the end, you will go through all that previous year’s shelves and clear them out, eating those foods first. Make sure that you have recipes for all storage items you gather, and make sure you like those meals. This will allow you to buy foods you like and will eat in times of emergencies.

Now it is time to invest: After you are out of debt, have an emergency fund, and have started your food storage, it is now time to put your excess income into investing in your future. Make sure you educate yourself in every investment. 

Here are some articles to read: https://econofact.org/food-inflation-in-the-u-s-and-abroad https://riteeat.com/2024/01/24/the-case-for-food-storage/

Before the Shadowing Appointment:

1. Work around their Schedule – Do everything possible to meet when it is convenient for them.
2. Know the Details - Before you show up, make sure you are clear on the details. 
3. Appropriate attire - Make sure to ask beforehand what clothes you should wear. Do not wear a suit if you are going to dig in the dirt. You can ask for an itinerary, so you know how to prepare.

While Shadowing:

1. Show up early - This is an interview in action, and they want to make sure you will not just show up, but be early - since it’s a better indicator of how you will work if employed.
2. No phones - Put your phone on silent and keep it out of your hands. If you pick up the phone while you are shadowing, you most likely will not get the job. Show them that the job and this opportunity is very important to you.
3. Your best self - Present your best self with your body, non-verbal language, and speech.
4. Be positive and interact nicely with everyone you encounter - while you are with the manager, and while he is away. Others are watching, and the manager will most likely ask for others’ insight on you.
5. Be prepared to stay later than they ask. Managers have a job to accomplish, and this may be longer than the normal workday. Offer to stay to help with things afterwards, until they leave for the day, if they are accepting of this. You don’t have to do this after you are hired, but you are showing them that you work hard.
6. Get out of your comfort zone and ask to help wherever you see a need. They want to make sure you are a good fit, and who could be a better fit than someone who takes initiative. 
7. Take plenty of Notes - Bring a notepad. Remember, the interviewer may have the position you ultimately want. Take notes on what they are doing, so you can work towards that position. 
8. Ask plenty of questions to show your interest, and that you are trying to understand everything.
9. Earn the Position - Remember that you are not entitled to this job. This is how you earn it.
10. Reflect on your Career Path – Prepare to answer more personal career questions, spontaneously, in this interview. Prepare an answer to why you chose this position or job posting. This is a less formal setting, so don’t act like you have all the answers. Be humble and willing to, instead of making up an answer, ask a question to clarify, or gain advice from the interviewer.
11. Be curious, yet discreet – Show your interest in the interviewer and the position. Watch them for reactions, and empathize where possible. Practice active listening. Also, don’t cut them off.

After Shadowing: 

1. Send them a thank you note – Like after any interview, send a personalized note, to stay at the top of their mind, and the list of potential employees.
2. Remember to follow up with an answer you promised, or a task they gave you.
3. Follow up a week later, about the job, by asking a question in a quick, easy-to-respond-to email.

After you have the job offer, if you still feel loyal to the company you work for and think that a promotion would satisfy your disengagement, then go to your current employer and explain the situation. Do not go empty handed (without another job offer) because if this meeting doesn’t go well, you want something ready and solid to fall back on. When speaking to your employer, tell them why you began looking, but tell them that you are loyal to the company, you like your co-workers and that you just need a change. Then, let them know you would like to stay, if they can make it viable to keep you. This then puts the ball in their court, giving them the chance to act; if they don’t want to, or can’t, you must then act on what is best for you. You gave them a chance, though. Remember, most employers do not want to lose someone that shows initiative, by bettering themselves with more education, or going out and experiencing job hunting for a better job.

Union Members - If you are working with a union, tell the union representative what you are doing. Your employer may not be allowed to promote you because of union rules, so asking for a promotion may not be a viable option. Unions are set so everyone is treated equally. Those who work harder cannot have an advantage, unless a different job becomes available - and you will still have to apply for that position. If there is not a job available, the employer is not allowed to offer you more money. This may be the best time to get out of this job and find one with an easier success ladder, where you can work harder to get ahead of the rest. 

If you take the time to become better educated or find a better position, let your current employer know and tell them you will stay if they offer you a better position. They know they would lose a lot by letting you go. They would then have to go through the interview process and potentially pay the new employee more, due to newer and higher salaries for that position. They know that they are in a hard position, because you will save them time and money and you are already educated for the current position. They want you to stay, if that will keep you engaged at work.

Read additional articles, including: https://careers.unl.edu/resources/job-shadowing-a-pathway-to-professional-insight-and-growth/ https://career-advising.ndsu.edu/resources/job-shadowing-preparation-and-tips/ https://hbculifestyle.com/job-shadowing-questions-for-hbcu-success/

Group Interview – This is the going trend right now, because it saves time and weeds out candidates quickly. This is where all the applicants meet together and talk to the manager, all at once. This is where you get to make a name for yourself, by asking and answering questions, speaking up, and being a leader while in the group. You don’t want to be influenced by group-think, but if you want to make a name for yourself in the group, you want to make sure you speak up in front of the group. This shows initiative, that you can be part of an effective team, and that you will go out of the way to understand. Don’t be intimidated in this process; everyone is human, and the interviewer just wants to make sure they get the best person. After it is over, remember to send them a thank you card, so you stay at the top of their mind.

Individual Interview – This would normally happen after the group interview, if there are a lot of potential employees. If there are only a few candidates, then the manager in charge will meet with everyone individually. They may want the best candidate, but they do not want to scare people away with a group interview, which may be intimidating. You will set up a time that works best for both parties and come to the office to meet with your potential boss. Interviews normally happen in a closed office or conference room, but some may happen in a more public area, such as a café. Be flexible and, if you really want this position, willing to step outside of your comfort zone. They will ask you questions, and you will be able to ask them questions. When being interviewed, try these tips:

Before the Interview:

1. Start by researching the company, and talking to your potential coworkers. Research not only the company you are interested in, but their industry, competitors, and recent news. Be prepared.
2. Practice possible answers to questions they may ask. Search our site for “Common Questions.”
3. Reread the job description beforehand. You want to present yourself as the person they need.
4. Find people to role play with. This allows you to practice answering the common questions.
5. Prepare your list of references. Do not give them just anyone, make sure they are relevant to the job and remember to ask each beforehand.
6. Bring a portfolio or list of examples of your work. You want them to see you are prepared.
7. Make a list of Smart Questions you can ask, that show you did your research. Search “Smart Questions,” on our site, for examples.
8. Prepare a response to “behavior-based” questions, such as when they ask you to share an experience where you displayed behaviors that the company prioritizes and wants from you.
9. Plan your interview attire the night before. Make sure you come with the right dress code. Search “Interview Attire.” Make sure your appearance is clean and without blemish, but also matches the company culture. Don’t overdo the attire.
10. Bring many copies of your resume, a notepad, and pen. Take notes to show your attentiveness. 
11. Stay calm, both before the interview and during it. Make sure your actions, answers, questions, and all interactions are intentional.
12. Practice, practice, practice - as much as possible - by yourself and with others.
13. Ask for an interview in the morning. Statistics show that interviewers are more positive early in the day.

During the Interview:

1. Arrive at the interview at least 10-15 minutes early. Be prepared to sit and wait until called.
2. Treat everyone you encounter with respect, from those you encounter in the parking lot to the assistant  that tells you to sit and wait for the interviewer.
3. Show confidence in your appearance, by watching your posture, the look of your clothing, and remembering to smile. You can practice  good posture beforehand, and remember good manners. Search “Body Language,” on our site.
4. Win the interviewer over with your confidence, authenticity, and positivity. Be genuine and truthful in your interaction. Everyone wants to be around people they like.
5. The first question is normally, “Tell me about yourself.” Practice a well thought out response.
6. Try to stay on the side of the interviewer. If they have a concern, make sure you have the same concern, and a way to resolve it.
7. When asked a question, use the STAR method in your response: Situation, Task, Action, and Result. Search our site for “STAR Method.” Basically, it means, give the situation, what your role was, what actions were taken, and what the results were.
8. Don’t blame others or speak negatively against a previous employee or employer. Be assertive and take responsibility. You can make sure you do not look “bad,” but don’t be petty in explaining a situation, by blaming others or speaking ill against those who aren’t there to respond. Always circle these situations back to how they were a positive influence in your development.
9. With every negative, give a resolution and how you overcame or learned from that situation. Take these questions back to skills and accomplishments you received. Be positive.
10. Anticipate your interviewer’s concerns or reservations. Answer and ask indirect questions, when appropriate, to find out what the interviewer is thinking (or assuming) about you.
11. Do not rant. Keep your answers as concise as possible. Focus on the most important issues. If you can, make the answers into conversations, so you can turn the questions back to the interviewer. They get bored of asking questions, and may want some interaction.
12. Clarify why you would be valuable for the company and reasons you want this position.
13. Don’t worry about your answers sounding practiced - everyone is nervous in an interview.
14. This is rare, but be prepared to respond to illegal or inappropriate questions. Sometimes, the interviewer isn’t thinking, or is overly curious. Search “Inappropriate Questions” on our site.
15. Close on a positive note. Make sure they have a good memory of you, so they cannot forget you.

After the interview:

1. Ask the interviewer what the next step is, or how many interviewees there are. Show your interest in the process, and sympathize with the pains they are taking to find the right candidate.
2. Send a personal letter to them thanking them for the opportunity, and mention something positive about the interview, so they can remember which candidate you were. This keeps you at the top of their minds.
3. Follow up with them about a week later, to: 1) stay at the top of their mind; and 2) show that you are still interested.

Last, but not least, don’t give up. Even if you don’t get a job offer, take this as a learning experience. Get back in and try again, with another similar position.

Read other articles about interviews at: https://www.thebalancemoney.com/top-job-interview-tips-for-college-students-2059837 https://www.newyorker.com/humor/daily-shouts/job-interview-questions-theyre-dying-to-ask-you https://www.theforage.com/blog/interview-questions/panel-interview https://www.flexjobs.com/blog/post/body-language-tips-video-interview/ https://www.michaelpage.ca/advice/career-advice/job-interview-tips/group-interviews-how-prepare-and-how-stand-out https://www.ach.edu/2014/09/how-to-stand-out-in-the-group-interview/

Real Life: Everyone in America is able to quit their job and move on to another position that they are qualified for. The job market is very fluid, but if you are not qualified for a certain job or you don’t have the talent or skills, you will need to be trained for it, or continue working where you are. If you are not educated and skilled in the right area to get the job of your dreams, then that is up to you to change. Remember, you want another job and someone else would be happy to fill your position. If you want to change jobs, try these thoughtful questions before making the dive into a new career. The truth is, if you are dissatisfied with the job you have, it may not be the job that is disengaging you; so try this method to see if a potential job change is right for you.

1. What is it about the old/current job that you do not like? Can you/how can you make it more engaging?
2. Are you qualified for another position in the same company, and would that be engaging?
3. Is it the work that dissatisfies or disengages you, or is it something else (like the company culture)?
4. Will you feel joy in the next position - working for that company or another company - or will they all be a drag for you, because you aren’t doing what you want?
5. What is it you want to do? Are you qualified and have the talent to accomplish that job?
6. Would you be more satisfied if you had a side gig to mix things up, or is it that you just don’t want to work?
7. Is it the money you are making, the lack of a cause in the company, or do you just want something new?
8. Again, will you be satisfied with something in the future, or will you always be unhappy?

After you have answered these questions, you will have a better understanding of what is inside of you and why you feel disengaged or dissatisfied with your current job. It may not be the job that dissatisfies you. After answering these questions honestly, if you still want a new job, try asking the following questions. Then take these actions to begin the search for a new position:

1. What would you love to do at work? Remember, if you make your hobby your work, you may become dissatisfied with your hobby, and the thing you used to escape from your stress is now the thing you need to escape from. All that or you may begin to enjoy what you do and you may very much enjoy your new job.
2. Are there positions out there that can satisfy the needs you have? Search the web for job boards that may fulfill the need(s) that you have inside.
3. Did you find one? If they are out there, the next thing you should do is go interview someone that is doing that same job right now. If you can find someone that is dissatisfied and someone that is satisfied with the job, you will get a more well-rounded point of view. You would hate to take another job and then immediately find you are disengaged there as well. Remember that every time you change jobs and then list that in your resume for the next position, your next employer will see that, especially if they check references by calling up your previous work. The more you jump around the more your next boss will wonder if you will do that to them. There is a certain amount of movement that won’t spook an employer, but just make sure you won’t be moving around forever. A company loses thousands on training most employees, and the U.S. Economy loses billions each year on lost production; so do your research beforehand. Remember that if you move up in the company, that is a great sign to your next employer of your potential. If you answer that you were dissatisfied with your last job, in an interview, that can be a sign that you will likely be dissatisfied in this new job or if you are honest and open, giving them reasons why you left, may give them insight on how to keep you engaged and solid in this new position.
4. What requirements will it take to fulfill this job, or even to get past the interview process against others that are equally (or even more) qualified for this position? Will others be more prepared and qualified for this position? What education do you need to have? What job training or experience do you need? Can you/should you get this training and education before applying for this type of job?
5. Are you willing to go back to school to get this job? Is there on-the-job training? Or does the company want a “blank slate,” to train their own way and so doesn’t want you to be trained too much by someone else? You may be able to entice the interviewer that you are not trained or educated for this job but that you are a “blank slate,” ready to be trained their way. Remember that the employer is human, like you, but is looking for the best fit for this position, out of all the applicants. Are you the best person to fill this need?

Now, after doing your research into the new position, do not quit your day job. You want to make a smooth transition from your previous job into a new job. You also do not know if you will find a new job right away. You may start interviewing with these other positions while still working at your day job. This also shows the new employer that they are not hiring someone that was fired or had issues finding work. If they know they have someone that is already wanted by another employer, then you are playing on their jealousy that they want this employee just as much, if not more, and will pay to entice you to come over. So, do not enter an interview with a sense of desperation. When looking for a job, try taking these steps first:

1. Look to see if there are jobs that will satisfy your needs and wants and see what they provide for salary and benefits. Do some research into the company culture and see if you are a good fit.
2. Talk to the employees that would be working with you. There is nothing wrong with you entering the interview knowing anything and everything about the company and their employees. You could even go as far as to invite one of the employees to go out to lunch with you so you can “pick their brain” (ask them every question imaginable so you can determine if it is a good fit before you join). Remember also that just like you want to research the job opportunity, the employer wants you to know as much as possible beforehand. No employer wants you to join their ranks just to leave it after being trained.
3. Find out what type of qualifications you will need to work there and take the time to take the classes and training necessary to obtain those qualifications. Remember that these classes won’t just help you in a future position but may help you in the position you are currently working. They could also line you up for a promotion in your current job, which may end up engaging you. Tell your current boss that you are taking new classes. Don’t tell them that you are looking into getting a new job. Employers love when their workers are getting more education because it will only help with their current position. They see this as an opportunity, and if they are wise, they will offer you a higher position or pay more to keep a well-educated employee working for them.
4. Before going too far with searching out a new job, ask your employer what it would take to get a promotion or higher position in the company. If there is no upward momentum or path you can take, this is a good sign to find new employment. If there is upward momentum, this may be just what you need to satisfy your needs and get you reengaged. Even when you get a job offer, go back to your employer and tell them that you received a job offer but because you are loyal, you would like to stay here (if you do want to stay) if there is a way they can match the job offer or give you a promotion with something that will satisfy you.

Remember that anyone can ask for a promotion, but the ones to receive them are those willing to work for it. Are you willing to work for it? If so, ask your manager what you need to do to be promoted. Take their recommendations to heart. If you take those classes needed, show more initiative, or do what is required to advance, then you deserve that promotion. If they don’t give it to you at that point, then you have every right (and almost an obligation) to leave for a better job. If you are educated and ready for the position that you want, it is time to write a rock-solid resume. A resume is a summary of your work history, education, and even certifications, publications, and organizations you belong to. Here are a few tips when writing a resume:

Resume, in general:

• Keep it all to one page. If it becomes too long, the reviewer will not read it.
• You can use a template to get started, but remember to personalize it to speak more to who you are.
• Resumes are often read by computers these days; templates can help get past the bots. Any system these days that takes resumes normally has a program to sort through viable resumes.
• Keep it simple and uniform. Make sure it looks the same throughout, with font and spacing.
• While simple, you want it to stand out. Make it unique, in your own way, but be careful about being too unique and giving too much information.
• Make your contact information prominent and put it at the top, so they don’t need to search.
• Design it to be skimmable, hitting all the highlights, without lengthy sentences.
• Seek guidance from a professional - the money you may spend will be worth it.
• Use active language, like “accomplished,” “achieved,” and “earned.”
• Choose standard margins and spacing in the format, so it doesn’t look too busy.

Objective:

• This is not needed unless you are making a large jump between different career fields; some employers do like it as a summary, but most know what type of job you are looking for, so it’s not needed.
• If you are to write one, make sure that you focus it on each specific position.
• Don’t use “I” or “me.” Make the objective very short - 2 lines - and straight to the point.

Job History:

• The first and most important tip is, don’t put everything on your resume - only relevant items.
• Keep a master list of your jobs; they may not apply to this one job, but maybe it can be used on the next.
• Write it in reverse chronological order, with the newest on top. Make it easier for your reviewer.
• If you don’t have relevant work experience, that is okay. List your previous employment, but focus more space on your education and transferable skills, or go take the needed classes.
• Make sure that under each previous employer you have only 3-5 bullet points, explaining what you did, and only report relevant information... Other articles to read or see these infographics: https://www.campuswell.com/how-start-side-gig/ https://www.yourgreenpal.com/blog/99-side-hustle-gigs-and-apps-to-make-money-during-covid-19 https://www.self.inc/info/side-hustle-statistics/

Real Life: Children are the greatest blessing in your life - better than anything (other than your spouse)! They are the source of some of your greatest joys, and sometimes heartache. With this blessing comes more financial obligations. 

Parenting Financials 101: When you have a child, there are many obligations you will have, in order to care for the child. First off, your monthly expenses increase dramatically, due to buying diapers, formula, diapers, clothes, and many accessories, including diapers. Other items needed include pack-and-play, beds, strollers, car seats, toys, and much more. Also, parenting an infant and toddler is very exhausting, and will take a toll on your workload. You will need to spend more time with them, or pay for daycare, or even a live-in nanny, depending on how much you work. 

Recently, a growing percentage of couples wait until they are financially settled to have children. Sometimes, this moveable target makes a couple never start a family, because the goal is either never met, or always increased, because they do not feel ready. Just know that the longer you wait, the more exhausting your child will pay on you and the more exhausting they are the more you will end up exhausted. Children are exhausting no matter how old you are, but would you rather play on the ground and run after a toddler when you are in your 40s, or when you are younger and more energetic, in your 20s? Also, would you rather have your children out of your house by the time you hit 50, or not until you are in your 60-70s? The older you are when you start, the older you will be when they leave the nest. Either way you choose, just make sure that they are well taken care of, and remember that most things you spend money on, for your child, are reimbursed by the government through child tax credits of $4,000 per year.

You will need to spend most nights waking in the middle and caring for the child. An infant needs to eat multiple times during the night, diapers need to be changed, and they will need comfort if they are scared or uncomfortable. As they get older, you are waking when they are scared or wet the bed. When they become teenagers, you stay up late until they get back from social gatherings, parties, and dates. Then when you are older and the kids move out, you find yourself waking up because of your own bowel movements. Get ready, as you get older, your life doesn’t become easier, even without children. 

Just know, having children while you are younger and more energetic is not a bad thing, but make sure that you can care for their needs - both with time and money.

Read more articles: https://www.statista.com/chart/2633/raising-a-child-today-could-cost-a-quarter-of-a-million/ https://www.kidjunction.com/2023/03/15/10-advantages-of-having-children/ https://www.bellybelly.com.au/parenting/having-kids-young/ https://www.psychreg.org/mental-health-benefits-having-children/ https://freudianmommy.com/benefits-of-having-children/ https://lovinglifeathome.com/2023/09/04/science-proves-having-babies-good-for-you/ https://www.usda.gov/media/blog/2017/01/13/cost-raising-child

Real Life: The first thing you need to know is who the IRS is. The Internal Revenue Service (IRS) is a federal government department that is in charge of collecting taxes throughout the year, reviewing your annual tax return, and auditing you if they think you are hiding something. You cannot hide from them forever.

The first piece of advice, regarding the IRS (and yes, I am about to tell you to spend money), is to pay your taxes every year. The IRS does not care about your hardships; they want to know you are paying your “fair share.” They have created extensions for when something happens, and forgiveness plans if you get into trouble with them, but you will pay your taxes. 

At the same time, you shouldn’t feel obligated to pay more than you are supposed to pay. You should strive to pay as little as possible (while still paying your taxes), starting with your W-9 form. This is the form that tells your employer how much to take from your pay and withhold for federal income tax. If you are the head of your household, they lower your withholdings; if you have children, you pay less, and so on. You are taking less out from your paycheck because they believe you will pay less in your annual tax return. The best way to figure out if you are overpaying is if you receive a tax return at the beginning of the next year. If the IRS writes you a check, it means you sent them too much.

Your taxes are paid at the beginning of each year for the previous year. You pay between January 1st and April 15th, of each year, based on the money you paid to the government the previous year (or should have paid), and any deductions you should have taken out. We will go over each of these. If you own your own business then you pay quarterly, for if you waited until the end of the year, you may have run out of money to pay the taxes.

History of Taxes: Did you know that it used to be unconstitutional to charge a federal income tax? That’s right! Back when the Constitution was written, there was not to be a tax on the people, but instead, the government would claim money in other ways, including import taxes for goods coming into the country. Before the Civil War, the Federal Government found other ways of funding itself. During the war, though, there was a massive amount of debt accumulated, and President Abraham Lincoln decided he needed to pay the debt that was accumulating, and wanted everyone to chip in. Almost a decade after the war, and after the government was flush with taxes coming in, it was repealed. People were about to go back to normal (not paying a tax), but the U.S. Congress got involved again, and in 1894, they enacted a law, demanding the citizens begin paying for the everyday expenses of the government - including their salaries and benefits, once again - with a flat tax. With politics, this began to evolve to what we have today, which basically states, depending on how much you make, you must pay a certain amount. 

Now taxes for United States citizens are based on how much money they make, and where they live. The greatest tax increase was during Franklin Roosevelt’s presidency, and the greatest cut was during the years of President Ronald Reagan, (unless you count the different types of deductibles, meaning ways of using your money in a positive way that can lower the amount you own the federal government - and that came from President Donald Trump). Here is the history of taxes, according to each President, who now has the obligation to collect the right amount of taxes from the people.

Abraham Lincoln (Republican) (1861-1865): Revenue Act - 3% tax on income over $800 (paid off expenses and debt from the U.S. Civil War). This is when the Internal Revenue Service (IRS) was created - July 1, 1862. Repealed in 1871. 

Grover Cleveland (Democrat) (1885-1889, 1893-1897): In 1894, Congress tried to enact a flat rate income tax, and the U.S. Supreme Court ruled it unconstitutional, because there were varying populations in each state.

Woodrow Wilson (Democrat) (1913-1921) – The IRS was reestablished and Form 1040 was designed. The 16th Amendment to the Constitution was enacted, adding 1% tax on income over $3,000, and 6% on income over $500,000. In 1916, he increased it to 2%, to pay for World War I. It was increased again in 1917, to 2% for income over $1,000, and the surtax increased to 63%. In 1920, government revenues were at $6.6 billion, and fell to $1.9 billion during the Great Depression.

Herbert Hoover (Republican) (1929-1933) – Enacted the Revenue Act of 1932 - the largest tax reform of its time. This increased income taxes to 4% over $1,000, up to 63% for the highest earners. This caused the highest earners to find better tax strategies. Corporate taxes increased to 15%.

Franklin Roosevelt (Democrat) (1933-1945) – Roosevelt desired to tax the rich even more, to attack the debt caused by his New Deal plan. In 1944, he raised the top margin to the highest point ever, 94%, for the highest earners, and claimed it was for World War II. In 1945, revenues increased to $45 billion (from $9 billion in 1941). This tax increase affected the lower income earners, as well. Most of this increase was used to pay Social Security, established in 1935 yet the benefit was not fully funded until 1945, with another  tax increase.

Harry Truman (Democrat) (1945-1953) – The U.S. Congress cut rates in 1948, but two years later, Truman raised them again for the Korean War. By now, the lowest earners paid 20%, and the highest paid 91%.

John F. Kennedy (Democrat) (1961-1963)– Though he was assassinated before enacting the Revenue Act of 1964, this act was to lower taxes and increase job growth. He was murdered before it could be passed.

Lyndon B. Johnson (Democrat) (1963-1969) – The Revenue Act of 1964, passed by Congress and Johnson, cut tax rates to 70%, and the standard deduction was set at $300. In 1965, Medicare was enacted and created a larger deficit; so, lowering taxes was not an option without dramatically increasing deficits.

Ronald Reagan (Republican) (1981-1989) – The Economic Recovery Tax Act was passed by the President and Congress, in 1981, greatly reducing the top tax rate, from 70% to 50%, and indexed tax brackets for inflation. He pushed for savings and investments to stimulate the economy. Again, in 1986, he created the Tax Reform Act to cut taxes, and this time simplify the tax code. The top rate was lowered to 28%, and the standard deduction and personal exemptions were increased, which benefited the lower-income earners.

George H.W. Bush (Republican) (1989 – 1993) – The Omnibus Budget Reconciliation Act of 1990 raised the top tax rate to 31%, to reduce the federal deficit (yet, never did).

Bill Clinton (Democrat) (1993-2001) – He increased taxes, including the top tax bracket to 39.6%, in 1993. He also decreased deductions in order to pay for Social Security benefits. He enacted the Taxpayer Relief Act in 1997, introducing more tax breaks for families with dependent children and educational costs. Beyond that, he did lower the capital gains tax to 10-15%, to push people to invest, and created the Roth IRA.

George W. Bush (Republican) (2001-2009) – The Economic Growth and Tax Relief Reconciliation Act of 2001 lowered tax rates and dropped the top tax rate to 35%. It created a 10% tax increase on the first $6,000 of income earned - $12,000 for a joint return (for those married). The Jobs and Growth Tax Reconciliation Act of 2003 cut taxes again, and lowered capital gains taxes.

Barack Obama (Democrat) (2009-2017) – The Obama Affordable Care Act of 2010 was enacted with a penalty for not buying Health Insurance, but then was rewritten as a “tax” by U.S. Supreme Court Justice John Roberts. The Obama American Taxpayer Relief Act of 2012 increased tax rates, with the top bracket increasing again, to 39.6%. The Net Investment Income Tax was imposed to create a 3.8% surtax, intended to tax portfolio income.

Donald Trump (Republican) (2017-2020) – The Tax Cuts and Jobs Act of 2017 brought  dramatic change. It increased deduction for business and personal expenses, to promote spending; the standard deduction nearly doubled; some tax deductions were eliminated for big businesses and high earners; tax loopholes were closed; individual tax rates were lowered (highest earners lowered to 37%); and corporate tax rates dropped to a flat 21%. The Sunset Provision was enacted by Congress to revert taxes to prior law in 2026.

As you can see from the list above, taxes in the United States have fluctuated with almost all presidents since the Federal Income Tax was introduced, during the Civil War, by President Abraham Lincoln. With these new taxes the government was able to pay for an expensive war, and with ever president afterwards, they have used this as a political instrument to stir up excitement.

Currently – Taxes are a very political thing. Conservatives, Libertarians, and the Republican Party want less government control over their lives, and so, want the government to take less of their taxes. Democrats, Green Party, Progressives, Liberals, Socialists, and Communists want more government, in different ways, and so, need to tax the people more, to pay for these programs. 

In the news today (3/20/2021) we are looking at the government charging more taxes on us, including:

• Wealth Tax: A one time or annual fee charge, based on how much you own. This would be for the wealthy at whatever level of ownership the government decides. This is a tax used in Europe with very disappointing results. Most of the time, GDP for the country decreased and many of the wealthy simply moved their wealth to another country. This tax would also be placed on U.S. millionaires and billionaires, but not foreign investors who would move in, buying up the loss of U.S. wealth. These bills were written and promoted by Senators Elizabeth Warren and Bernie Sanders (Progressive Democrats).
• Value Added Tax: Every time you buy a product, you pay a sales tax. This normally is regulated by State, County, and Local governments. A VAT Tax is where the federal government puts together their own sales tax, and adds that to every product you buy. So, when you are paying 10% on goods you buy right now, you would pay an additional 10% to the federal government.
• President Biden’s plan: His plan is a repeat from the past 30 years of taxes: increase the tax rates for those making over $200,000 a year, and remove many of President Trump’s enacted tax deductions (ways of using your money in good ways to decrease your taxes, including donations to nonprofits).
• Gas and Fossil-Fuel Taxes: With the coming possibility of a Green New Deal, taxes on all fossil fuels will increase, to penalize the use of fossil fuels, and pay for the Green New Deal and the money being spent to pay the United Nations, based on the Paris Climate Accords.

How to Pay Less Towards Taxes - It is always important to pay the least amount legally possible to the government. You are only obligated to pay the minimal amount. Here are a few ways to keep your money:

W-4 Form Deductions – When you sign all your new employee paperwork, you will have one form, the W-4, which will ask you questions to estimate how much you need to pay in Federal Income Tax. Pick every deduction point possible. Your company's HR Manager will figure out how much you will have to pay from that number. The more deductions you have, the less the government will withdraw from your pay.

Increase your employee benefits – All fringe benefits, provided by your employer, are tax deductible. The money you pay for your benefits (health insurance, life insurance, retirement) is subtracted from your salary; that reduced payout  is taxed. The more you pay into your benefits, including your retirement savings account, the less you pay to the government.

Expenses Reimbursed as an Accountable Plan – If you pay for business with your own personal money, make sure it is documented; have them expense it as a normal expense, and not in payroll. This will decrease your pay, and so, reduce your taxes.

Again, you are under no obligation to pay higher taxes than you are legally and lawfully required to. That means it is your duty to yourself to find ways to decrease your pay and taxes, so that you take more of the benefits of the money you worked so hard to earn.

Maximize your IRA and HSA Contributions – You can contribute to both of these tax free accounts for retirement (Individual Retirement Account – IRA, maximum contribution is $6,000 in 2021) and Health (Health Savings Account – HSA, maximum contribution is $3,600 in 2021) through your employer - with each paycheck, or by setting up your own account and contributing yearly. 

Rethink your filing status (Married vs. Single): When you are married, you can file your taxes jointly or individually. There are benefits to each, so check which one will allow for a larger tax return collectively.

Child Tax Credit: For each child you have, you can write off a certain amount of taxes. This changes constantly, with new administrations, and should be looked up at www.debt-freemillionaire.com/taxfree/. 

Standard vs Itemized Deductions: There are many deductions you can list (itemize) on your taxes, to pay less taxes, including donations, medical expenses, etc. You may take all the deductions that work in your favor, or take the Standard Deduction - a specific amount of money set by the government - whichever is more. These are good things the government recognizes as ways to reduce your taxes.

Record charitable donations: Every time you donate to a 501(c)(3) non-profit organization, you can deduct that amount from your taxes. You want to keep good records of these for 7 years, so, if you are audited by the IRS, you have full documentation to justify these reductions in taxes. You can list your charitable miles, donations of cash or materials, and anything that financially supports non-profits.

Claim your children, friend, or relatives you have been supporting: all those you support financially can be claimed as a dependent of yours (especially if they aren’t making money and paying taxes - you get a deduction for them to pay for their care).

Track all your medical expenses: If you have a certain amount of medical expenses, these may be deducted from your tax bill. Keep track of: miles, bills, and medical expenses, including medication.

Deduct your state and local sales taxes: When you pay your state and local sales taxes, you can write this off as a deduction because you are not required to pay taxes twice on your money.

Student Loan interest: If you attended school and paid for it with student loans, you can write off a small portion of these fees and interest towards your student loans.

Child and dependent care: If you are paying for the care of children, friends, or relatives during the day, or as a resident in those facilities, you can write these expenses off of your taxes.

Earned Income Tax Credit: These help low- to middle-income workers get a tax break. If you qualify, you can use the credit to reduce the taxes you owe and possibly increase your refund.

State Income Tax: If you are taxed on your money by the state, you can reduce your taxes owed by reporting to the federal government the taxes paid to the state? You get a federal tax break because of income taxes paid to the state? 

Reinvest your investment dividends: If you receive a dividend from your stocks and you withdraw that amount or accept it in cash, you will be taxed on it; but if you reinvest it into the stock, it’s tax free.

Write off mortgage interest payments: Your mortgage interest (not Principle) payment is tax deductible. This is an extra incentive for people to become homeowners. Hint: The more payments you make in a year the more you can deduct. Tax experts advise clients to pay your last payment of the year on December 31st, to claim your tax credit; but remember, you can’t claim that amount the following year.

Start a business and write off your losses (K-1 form): This can be your greatest deduction over a few years. If you start a business, most see a loss of money for the first few years (after salary). All that loss is distributed among owners and deducted in your taxes. This also means that your investors get these same deductions, as well, if they own part of the company. The government supports the startup of new businesses - especially if they create jobs - and wants you to be able to deduct losses from your income (less income to tax and pay).

Energy Savings and Green Initiatives - When you buy green technology, such as solar panels, tankless hot water heaters, insulation, or energy efficient measures for your house (or even your business), you can write these off on your taxes. Find a complete list (including local incentives) online, according to your state.

Take advantage of government programs: The government creates programs to help people financially during hard times; this includes COVID and the financial struggle it pushed most Americans into.

Become Tax Refund Smart: Learn other methods, especially local deductions, that will help you reduce your tax rate; this is how the rich pay less in taxes, and you can, too. Don’t just allow the government to take more from you than you are legally obligated to pay. At the same time, don’t write off things that are not tax deductible, because when the IRS finds out, they will come after you for the difference, and a punitive (punishment) fee on top of that difference (and as they search your records, they won’t make it easy for you).

* Everything in this chapter is for educational purposes and should not be taken as financial advice. Talk to your accountant and/or tax preparer for current and local deductions that are allowed.

Also read: https://taxfoundation.org/data/all/federal/summary-latest-federal-income-tax-data-2023-update/ https://taxedright.com/2024-tax-brackets/ https://engaging-data.com/tax-brackets/ https://wbtphdjd.medium.com/where-90-percent-tax-rate-really-came-from-e3834f0e56b https://www.visualizingeconomics.com/blog/2011/04/14/top-marginal-tax-rates-1916-2010

Real Life: Investments are a must learn for most people but the truth is most Americans should diversify their money into many different funds (such as mutual funds) and sit on it for 10+ years. Most advisors will tell you they can get you a better return, but you have mutual funds available to the public that, over 10 years, will give you a 20% ROI (Return on Investment) every year so moving it around is just adding more risk instead of keeping it in one location. On Week 3, Day 4 (W3: D4) we listed out the most common investments you could invest in but now we will get a little more into investing of individual stocks.

Disclaimer: This is not financial advice on how to invest but information about investing as an educational study. Here are things you may want to know before you start buying stocks:

1. What are investments – Investments are buying ownership in a company or mutual fund. By you buying any investment you are paying for a portion of that company or fund and asking for a return on that investment. Investing in individual stocks is just one way to invest your money. Here are a few ways before we get into more details about each:
   1. Individual stocks - An individual stock represents ownership in a single company, entitling the shareholder to a proportional share of the company's assets and earnings. When an investor purchases shares of an individual stock, they are essentially buying a small piece of that company. The value of the stock can fluctuate based on various factors, including the company's performance, market conditions, and investor sentiment. Individual stocks can be bought and sold on stock exchanges, such as the New York Stock Exchange (NYSE) or the NASDAQ, providing investors with the opportunity to potentially profit from the success of specific companies. However, investing in individual stocks also carries risks, as the value of a stock can decline, leading to potential losses for investors.
   2. Mutual Funds - A mutual fund is a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. Managed by professional portfolio managers, mutual funds offer investors the opportunity to access a diversified portfolio of assets without needing to purchase individual securities themselves. Investors buy shares in the mutual fund, and the fund's value is determined by the performance of the underlying assets it holds. Mutual funds are designed to spread risk across a variety of investments, reducing the impact of any single security's performance on the overall fund. They are commonly used by investors seeking diversification and professional management of their investment portfolios.
   3. Bonds - Investment bonds, also known as bonds or fixed-income securities, are debt instruments issued by governments, municipalities, corporations, or other entities to raise capital. Investors purchase bonds, effectively lending money to the issuer in exchange for periodic interest payments, known as coupon payments, and the eventual repayment of the bond's face value, known as the principal or par value, at maturity. Bonds typically have a fixed interest rate and specified maturity date, offering a predictable stream of income and considered relatively safe investments compared to stocks. However, bond prices can fluctuate based on changes in interest rates, credit ratings, and market conditions. Investors may choose to invest in bonds for income, capital preservation, diversification, or as part of a balanced investment portfolio, with bonds commonly traded on bond markets through brokers or financial institutions.
   4. Private Companies - Ownership in a private company refers to having a stake in a company that is not publicly traded. Unlike publicly traded companies, private company ownership is typically limited to a smaller group of investors, founders, or venture capitalists. It grants individuals or entities rights such as voting privileges and a share of profits, but is less liquid and not easily traded on an open market.
2. Living vs Retirement investing - Some of these options are for monthly living expenses (individual stocks) and some grow over time (mutual funds, bonds, and private companies). Consider how soon you want to use your money and buy accordingly. The sooner you want a return, the more risk you will be taking.
3. Stockbrokers yesterday, today, and tomorrow

In the past people have invested with a stockbroker, recently its been through a stock broker website, now it is being done completely on an app on your phone. The same has changed for fees as well. In the past you paid a broker a good amount of your return for them to invest it, prices dropped as the visual broker went away and online trading became popular, and now there is almost a price war among brokers trying to win you as a client. They have dropped fees to nearly $0 per trade with apps like Robinhood.

1. Broker Strengths and weaknesses - Different brokers have different strengths and weaknesses and fees they charge, look up reviews online and sit down to meet with them before setting up an account. Weigh the pros and the cons.
2. Diversification in your investments - Never invest all your money in one stock or company ever. There is too much risk that something could happen, and it be worth $0. Diversify your portfolio means spread your money out. Investors know this that 10 may fail but if one hits it big, it will eat up all the other loses and you will still make a lot of money if you choose correctly. Most of the time, a diverse selection of stocks and companies won’t all fail at the same time, minus a recession usually makes all prices fall, which is why you need to consider your risk tolerance and ability to get back up and not see yourself as a victim. If you are resilient in life, you are more likely to have a higher risk tolerance.
3. Mutual Fund Diversity - A mutual fund is diversifying because it is usually built as a fund of many individual stocks, bonds, and commodities and if a certain value goes down, others may go up which means less of a loss during a recession.
4. Balanced Portfolio - Diversifying in competing stocks helps balance your portfolio. You should think of having a mixture of recession-friendly sector investments such as staples, utilities, and health care. They don’t have the best returns during boom times in the market, but they also don’t go down because they are essential. Essentials normally stay steady during recessions because they are always needed. Retailers such as Amazon and Wal-Mart stay stead or go up during recessions when people have to shop for cheaper options. Look for stocks that give a reliable dividend, real estate is a good investment after the price settles down low. Precious metals increase during times of recession and slowly decrease as times get easier and people adjust their holdings to go after more lucrative investments. Invest in yourself during a recession; take your money and put it into your education during a recession. Education during a time of high unemployment will get you through any rough economy and make you ready to be hired when the recession ends and businesses are looking for new blood (employees).
5. Dividends - Most stocks pay you dividends, excess money, each year, without you having to sell your stock. Most people invest this money back into the company with more stock or keep it for your living expenses. Though if the economy turns, there will be no dividend that year and this is why you should have other income through a full-time job just to make sure you can feed you and your family. Look also at how a company/stock pays dividends, finding those who show a strong history. Also know that they can hold back on paying dividends in time of recession to give the company more funding. 
6. Recessions Happen - Considering recessions happen every ten years, investment values drop for two to three years afterwards slowly creep back up to before recession levels and higher, then when you get older you are advised to rebalance your portfolio to be less risky, consider this new approach. Most financial planners want you to change your portfolio to be as risk averse as possible in your later years. Instead, try planning out your next 10-12 years between each market adjustments, starting in the middle of each recovery, how much money will you need? Rebalance that amount of your investments into low risk investments while keeping the rest in high risk mutual funds with a history of high returns over 10 years. If you do this, the next 10 years of money you need will not fluctuate too much while the rest will be able to climb to new heights and though it may drop during the next recession, history has shown that it always comes back after the recession and when it comes back it shoots well past its last peak value. This way your investments continue to climb as you grow older and the hope is that you never go without the funds you need to survive.
7. Lookup Their History - All established investments have a history, look at the history of the stock or mutual fund. Make sure that they show a steady incline over the years. Mutual funds will likely give you a 1, 5, and 10 year history of their average ROI interest rate they have returned. Those that are the most steady increase dramatically over the years and even if a few stocks drop in their investment, the rest of the investments will potentially increase keeping the fund portfolio solid and growing.
8. News Affects Values - Consider the news when considering individual stocks. When you buy stock, make sure you are informed about their latest news. If they are hiring, this is a good sign for expansion and increased values, if they are being sued, this will return with a lower value for their stock. If a pandemic happens travel stocks will fall yet retailers who allow for shopping online will likely grow. Learn before you buy what to look for in the news so you can be the first to buy when something good happens and first to sell when something negative happens.
9. Strengths and Weaknesses in Stocks and Investments - Each company and mutual fund have their strengths and weaknesses. For companies they have their strengths in potential for growth while mutual funds have potential in the individual investments in that fund. This is all public knowledge so look at what they are investing in and see if you think those are good investments. Remember though, that they have a 10-20 year history that you can check and they are good at what they do. 

Debt-to-Equity Ratio: One weakness could be their debt-to-equity ratio or those companies that are still in a great deal of debt compared to their equity in their own company. To find this number, divide the total liabilities on the company balance sheet by the total amount of shareholder equity. For those with a lower risk tolerance, that number should be 0.3 or less.

Price-earnings ratio (P/E Ratio) shows how well a stock’s value is doing compared to their earnings. This will tell you if they are undervalued or overvalued. To find this ratio, divide the company's share price by its earnings per share. If a company is trading at $40 per share and the earnings per share are $2.50, the P/E ratio is 16. Use this to investigate similar companies. The lower you the ratio means the more the earnings are increasing. Know that a stock with a 16 ratio can be good when you compare it with other companies. It all depends on how the economy is doing at that time.

Real Life: To buy the house you can take out additional debt or you can pay it off in cash. Know that if you pay it off in cash and you bought it for a low enough amount, you will almost always make more money not having to pay a mortgage and so interest on the mortgage. Also know that you will not have to pay the extra fees that come along with a mortgage or the down payment. To buy it with a mortgage you will need to take out the down payment from your savings, adding the mortgage to your monthly expenses (personal, if you are living in it or business if you are renting it out). The price of the house does not add to your other debt payments, in other words, it is the last debt you pay normally because it has the lowest interest rate, and it is the most acceptable type of debt. Continue to pay the mortgage until you can 1) have excess earnings that you can put towards paying down your debt, 2) pay off the house completely, or 3) sell the house. 

NOTE: You almost always lose money on the house itself, when you have a mortgage and purchased a house at market value; that is, unless the housing market explodes like it did in 2019-2021. 

Like in real life, in the game there are four options you can take when drawing a Real Estate card. Each has its advantages and disadvantage.

• Personal – First off, you need the money for the down payment available in your savings to buy the house. If you are buying the house to live in, decrease your savings by the lost expense of repairs because you are going to make it a little better looking than if you were to rent it out. Then decrease your existing living expenses by $12,000 ($1,000 a month rent) and increase it by your mortgage payment. Now live your life as if you live in this house. You are also able to sell it and move into another house if you would like.
• Business – If you are buying this house to fix up, and sell or rent, you will need to pay for all the repairs. Repair costs are on the card, under Business #1: You must have cash for these repairs, you cannot take a loan out. In the game, it doesn’t matter if you are renting the house or selling it, you have to wait until another card is drawn that says that someone is looking for a house like yours at a certain price. At that point you can sell it if you want. Until you sell it though, you may want to rent it out and make some money off the deal. Add the rent to your business income.
• Sell One – Whether it is being rented out as a business or you are using it for your personal residence, you can sell one of your houses when someone is looking for a house your size. If you are selling a business owned house increase your business revenue by the amount of the sale (price you sold the house, minus the down payment, minus the price you originally bought the house). If it is your personal residence, add the sale of the home to the amount raised by selling it (price you sold the house, minus the down payment, minus the price you originally bought the house). This is the amount you made by selling the house. Then, if you don’t have another house to move into, increase your monthly expenses by $1,000 for a rental, and decrease the money you were paying for the mortgage, if you had one. The game will do this automatically for you but explain it to you also.
• Wholesale the house – If you receive a card (know of a buyer and you don’t have a money to buy/sell it), you can always refer them to an opponent and make some extra money off the sale of a house they are looking for. In other words, you become the middleman. If you find a house that is perfect, but you don’t have the money, you may sell that to an opponent as well for the price listed on the wholesale section of the card. Down below, we will share how to do this.

There are many options while playing the game on how to profit from a real estate card that you or your opponent pulls, much like in life, you may find an opportunity yourself or through a friend and there are ways of making money off that information. So, keep you ears open.

Real Life: Real Estate is a very large subject. So large that we have multiple books being written on the subject: Debt Free Flipper and more. Any of these will give you the experience of one of these avenues of real estate. For this game and book, we are focusing on residential because that is the most used form of real estate investing you will find by the average consumer. Be aware that there are many more avenues you may go.

To start off, allow me to introduce a little of each of these avenues, from least expensive to the very expensive real estate ventures you can go into, then teach you how they works.

Wholesale – This is to acquire land, by contract, from one party and sell it to another party, where you never need to pay your own money, so you don’t need any money in order to begin selling real estate. The process is simple, you find a buyer and what they are looking for, potentially you should be looking for a dozen or more buyers, you then find a property they listed as something they would buy and contract with the owner to sell their property to an agreed upon amount. Then, contact your buyer and, after increasing the price by $5,000 - $10,000, you secure the buyer. You then write a contract to buy the property from the original owner and you assign it to the buyer that you found. In the end, they bought a deal of a house, while you made $10,000 on the side. Everyone wins. Be careful because these contracts are binding and if your buyer doesn’t buy the house, you ended up buying it from the original owner. Again, the benefit is that you can get into real estate without any money to do so. 

Land – This is the least expensive property you can buy because there are no buildings built on it and so raw land can be used for so many different purposes. The buyer will be expected to develop the land themselves. These deals normally take longer to find a buyer because people are normally not looking to build on a property but instead buy something they can move right into.

Rental Cycling (Renting out other’s homes) – Did you know that you don’t need to own a home or apartment in order to make money. You just need to rent out a property that you can sublease to others. Whether you want to stay there or not, you can sub lease a bedroom from the apartment or house and they will help you pay the rent. This takes a smaller amount of money, but includes first and last month rent, and a security deposit, and you can sometimes make money from those you allow to stay in your home. Now, make sure that it is okay with the landlord, and that it is spelled out in the contract that this is allowed, or you may be evicted for breach of contract, and then have to start over again. 

Flipping Houses – To flip a house is to buy a distressed or non-aesthetic house or building and fix it up to be more valuable after your work is complete. You add value to it by fixing it up and then selling the property for a higher price than you bought it. Be warned that you should know what you are doing fixing the property or ask a professional to help you, especially with water, electrical, or heating and air conditioning.

House Hacking – This is a process where you buy a house as a business and fix it up, much like flipping or renting but instead of owning your own home or living in a rental, you live in the house that you are repairing, saving money on your living expense and working on the property at all hours of the day. Normally, you would fix up the areas you would need the most, such as the bedroom, bathroom and kitchen, and then work on the rest of the house while you enjoy the early benefits of your labor. 

Real Estate Investing (Rentals) - When you buy a house, you can live in it, sell it, or rent it out to someone to use for their purposes. You allow them to use your property for a price, which pays your debt on the building and a little profit to increase savings. This type of real estate is what has made the most millionaires in the United States than any other type of work or investments.

Commercial Real Estate – You can buy a home, or you can buy a larger property that will be used for some type of business. You can use it, sell it, or lease it out to someone else who would pay you to use it for their business purposes. These are the most profitable at times but normally take a lot of work, including trying to find the right people to lease it from you. If you find a very desirable property, you will need less help to manage or market your property. If you are buying it with cash, this is a great option to keep stress low.

Now, if you choose to go into any of these types of real estate sales, you should know there are two ways to sell houses, one way I agree with, and one way that could start you off on a very hard path to live when the market turns. I tell you these things that you may have the wisdom to find the right path for you.

Buying and selling with credit – There are many gurus that will tell you to start up an LLC and buy a house that needs a lot of work, on credit, fix it up, then go back to your bank and refinance it 100% off the new value after being repaired. Take all the equity (money it is worth) out of the house and buy your next house. Fix that house up and 100% refinance that house on it’s new value and buy another house. Then, pay yourself a large amount, living the life of luxury, as the money starts coming in from rent and pay minimums on the house. Over time the houses values will increase, and the houses will be slowly paid off. Sounds great, right? But, what they don’t tell you is what I told you earlier on. Remember that there is a recession every 8-10 years, or a pandemic, and people can’t pay their rent. If someone can’t pay you their rent, then you can’t pay your bills. During the 2020 pandemic, the U.S. Government tried to help people by saying to Landlord, you can’t evict someone during the pandemic, even if they aren’t paying their rent. What does this do to landlords? The landlords couldn’t pay their mortgages and many of them lost their houses. Same thing happens during an economic recession, if people can’t pay, you have to find other tenants or now, the government has realized they have the power to make you rent to people that aren’t paying the bills and will most likely never be able to catch up, so you are left with a house that is 100% mortgaged, with no equity, and then you can lose your house. But again, you went into real estate investing knowing that the mortgage had to be paid, even if you didn’t have the money. 

So, what do you do? You foreclose on that house, and they go after you for the difference of the house and loan they gave you, which means you need to sell the next property to afford the first and that house has no equity, and so on and so forth they all are sold off until you have little to no houses left and your company has to go bankrupt. Now, because you created an LLC, your personal finances may be safe, right? Well, there are ways of going after your personal money, but more than that, you just promised all these businesses (banks and other lenders) that you would pay them all back, and yet you just sold all your houses and lost off your business savings and you can’t pay them all back. Thinking you personally didn’t lose anything; you actually lost your name. I am not talking about your credit score, that is the least of what is important. You promised you would pay back your debts and you went back on your word because your business couldn’t sell the houses. Your word is now worth nothing. You basically gave up your honor for a sack of cash that you took in your personal life and didn’t pay back your debts. Now there is an alternative where you never have to worry about losing your money or houses and I’ll teach that next.

Debt Free Real Estate - Anyone can get into investing in real estate, and it takes no money to begin. I will teach you a brief overview of how to start your real estate empire with no money at all and walk away with a million dollars of equity, but it will take a good amount of your time and may sending you investing in a way you never would have thought. Start with nothing in your bank account and start at any age. The only limitation is that below 18 years of age you will need help from an adult to co-sign your contracts. 

Real Life: Does it seem strange that I am mentioning animals or pets in a financial book or game? The reason is because animals cost money, some more than others. If you are open to having pets than there are some expenses to think about. Each animal is different, some with more positive things than others. So, consider these things when considering getting an animal. Not just for the money you will spend, but time and emotion as well:

Dogs are more than an animal, they are a bodyguard, comforter, and a companion to some.

1. Food – Like humans, dogs need to eat. Normally, you will feed them a good size meal in the morning, small lunch, and large dinner. You do not want to put all the food out at one time, because they will eat it all immediately. You must space it over time. An automatic feeder is great for a dog. Either way, dogs eat a lot of food, and you may need to have extra.
2. Accessories – You need toys, beds, doggy treats, and more. This does not need to be expensive.
3. Medical Needs – Dogs need to be spayed or neutered when they are young to keep from having unplanned puppies to feed and distribute. They also need check-ups at least once a year. 
4. Shelter – Daily shelter is easy; all you need is a kennel. If you go on a trip, you need to ask someone to walk and feed your dog or pay an establishment to “board” them while you are away.
5. Walks – Dogs, like humans, must use the bathroom, yet theirs is normally outdoors. They have a certain amount of time before they will make a mess on your floor, if you leave them inside. If you work, think of making a walk outside or pay someone.
6. Grooming – You don’t need to pay someone, but you do need to spend the time washing and brushing them, and cutting their nails. This can be time consuming or expensive over time.
7. Time: If time is money, then you will be spending a good amount of it with your dog. They become part of the family and should be treated as such. They are not a trophy or even a guard dog is not just a bodyguard. Dogs are the more expensive pet.

Cats are more than an animal, they are a comforter, companion, and kill off rodents, in and around the home.

1. Food – Like humans, cats need to eat. Normally you will put all their food out at once and they will eat it gradually. An indoor cat eats a lot of food, outdoor cats eat about a quarter, while an indoor/outdoor cat eats about half the amount.
2. Accessories – You don’t need toys, beds, treats, or other things though these are nice to have.
3. Medical Needs – Cats need to be spayed or neutered when they are young to keep from having unplanned puppies to feed and distribute. They also need check-ups at least once a year. 
4. Shelter – Cats again take care of themselves so if you leave them, just make sure they have enough food and watch while you are away. 
5. Walking – Cats don’t normally go on walks with you, except mine, she is a little strange and will take a walk every morning and evening while I walk my dog. People stare at us. Man, dog, and cat, all walking down the street together. It’s quite the site, but not normal.
6. Grooming – You don’t need to pay someone, but you do need to spend the time washing and brushing and cutting their nails if they are indoors at all, otherwise they will take care of it.
7. Time: If time is money, then you will be spending a small amount of it with your cat. They normally stick to themselves until they want attention. They are part of the family and should be treated as such. When time is money, and expenses is money, cats are less expensive than dogs, but still expensive.

Chickens – Chickens are great for eggs, especially if you like cage-free eggs. They are also good at getting rid of bugs around your house, which always means less bugs inside your house.

1. Food – Like humans, chickens need to eat. Normally you will put all their food out at once and they will eat it gradually. If you let them out into the yard, they will eat all your pests and grubs. Food can be expensive but that is when you subsidize it with kitchen scraps. 
2. Accessories – You will only need a feeder, water container, light for winters, and shelter. They take care of their own entertainment and everything else.
3. Medical Needs – In a normal lifespan, you will not need a check-up for the chicken.
4. Shelter – Chickens need a chicken coup when you first buy them so expenses are very low.
5. Walking – You don’t walk a chicken but you could spend time with them.
6. Grooming – You don’t groom a chicken, they take care of that.
7. Time: You don’t spend time with them except feeding, collecting eggs, and cleaning their coup. If time is money and expenses is money, then chickens take care of themselves and you only need to pay for food and give them enough time to take care of them.

Reptiles/Fish – These are more for something to look at instead of spending time with or holding. They don’t like being held, but if you need it, reptiles are great to spend time. Here are the normal responsibilities of having one.

1. Food – Like humans, they need to eat. Normally you will give them enough in the morning and or every other day. Fish and reptiles don’t eat much so they are not too expensive. 
2. Accessories – You need a fish tank or terrarium, bubbler (fish), accessories inside the tank and chemicals to clean the water (fish), beyond that, these are more like upfront costs.
3. Medical Needs – Fish and reptiles, unless very expensive, don’t normally get medical attention.
4. Shelter – Your tank is enough, though they do need lighting to stay healthy.
5. Walking – You do not walk them. They do not even want time with you. They are to observe.
6. Grooming – You do not groom a fish or reptile, though you should clean their tanks routinely.
7. Time: No quality time needed, except feeding, cleaning, or holding them occasionally.

There are many more types of animals you can have as pets: horses, bees, rabbits, hamsters, spiders, frogs, etc, and they all take time and money to take care of them. Don’t go into this blindly but investigate how much each will cost and make sure you can provide for them.

When every expense is important, think about limiting the number of animals you have until the time when you are financially secure and have the time to take care of them. Again, all of them become part of the family and should be treated as such.

Real Life is hard sometimes, maybe even most of the time. You never know what is going to happen. A president may be elected, gas prices will double, and you may lose your job. You may be minding your own business and a car may come flying into your living room and the owner of the car is uninsured. You may win a sweepstakes you were just goofing off when you entered. Things happen and you need to roll with the negative events and celebrate the successes in life.

Most of the time, when you are intentional with life, good things happen. There are two types of mentalities you can change a life for the better or the worse: the victim mentality or the success mentality:

The Victim Mentality – This mindset develops when a person sees themselves a victim in everything bad that happens to them. Everything bad happens in your life because you are a victim. This type of mentality will hold a person down and strangle them without a struggle, because the person is not ready or able to fight back. Negative things come and those individuals will give up, blame others, and fall back on the idea that they can’t do things for themselves. And to many, there is nothing they can do to get out of these scenarios. There is so much more to this than I can write in this section (read more on our site). 

The Success Mentality – This person takes personal responsibility for things that happen in their lives. Not to say things don’t happen to them that they didn’t cause, but instead, they don’t see themselves as a victim when things get hard. Instead, they work on the assumption that “things happen, but I will overcome”. This is the person that sees the glass half full (as opposed to it is half empty). We find opportunities and failures as educational moments where we get right back up and begin by fighting back. The truth is, you can do almost anything in life, but you must do it intentionally and know that you are not a victim, but a mental giant, ready to take on any obstacle that comes your way. Easier said than done, right? Read more about this on our site.

This is not to say they don’t have rocky moments when they faulter, breakdown and even cry because of the pain or struggle, but instead that they allow for a time of even self-pity and then collect themselves, get back up, and try again. A success mentality is what every successful athlete has, they didn’t become successful overnight, they had to fail 1,000 times before getting something right, and yet, they didn’t let those failures end them trying again. They endured to the end because they knew they could do it.

Another example, in this instance, when it comes to being intentional is, if I want to make sure that I never get into a car accident while under the influence, I will not drink alcohol or do drugs. I will intentionally hold back from hanging out with friends that will get me drunk. On the other hand, if I were to drink, I would make sure that I was at my house or took an Uber to and from the restaurant. In that instance, my choices never will get the best of me. If I am to drink and get into a car to drive home, I must expect that I will get into an accident, maybe even kill someone on the street as I drive impaired. Make the choice now if you are going to live intentionally. And as the commercials all say, “buzz driving (single drink) is drunk driving”.

Financially – We cannot plan for everything that will happen in our lives. The best thing we can do is plan for those things that may happen and hope for the best, being intentional in everything we do will save us millions of dollars in our lifetime and could even save ours or someone else’s life. To be financially intentional we must plan for negative things by saving a certain amount of money for non-specific issues that may happen. We call this our emergency fund.

Emergency funds are essential to live an intentional life and not become a victim. You or a family member may need surgery, or your car may break beyond repair. How do you plan for that? You or a family member may get into an accident? How do you plan for that? What about if you lose your job? You can’t always plan on when things happen in your life, but that bad things will happen. An Emergency Fund is a savings account built to withstand normal disasters that happen within your family. But how much do you save depends on where you are financially.

Priority one, after saving a small Emergency Fund of about $1,000, is getting out of debt, then saving for the future. Here are two out of an infinite number of options:

1. Build an emergency fund of $1,000 and then spend every other dime getting yourself out of debt. Once you are out of debt, minus your house, you then save 6 months-worth of expenses as an Emergency Fund. If you spend $4,000 a month, then you should save $24,000 in savings. This is especially needed if you lose your job. Put this emergency fund in the bank and allow it to sit there, even if it has a small interest rate. Investing with that money locks it down for a set amount of time. You need these funds to be liquid, that you can spend within hours if needed. You want it to be liquid, which means you can draw it out any time. This allows you not to become a victim. At the same time, you should always have insurance as well. One of my surgeries cost over a million dollars. One of my surgery bill came out to $485,685.89 and my insurance took care of the entire amount. I took that bill and still have it framed on my wall. Insurance doesn’t cover everything, and I had another $20,000 to pay for other parts of the operation and with a payment plan, I was able to pay that down over a matter of 18 months without going bankrupt or struggles. I couldn’t even work during that time, but being intentional saved me.
2. Someone in my situation, where I have a lot going against me, because of my health, has a higher chance of something happening, so having an Emergency Fund that is large enough to take care of me is essential. I may spend half of my income to pay off bills and debts while saving the other half in this fund. At the same time, mathematically I would grow that larger Emergency Fund faster if I spent my excess on my debts and paid them off quicker, so that I had money to save after my debt was paid off. Think of it this way. If I spend half my excess income towards debt and saved the rest, I will pay back the debt at a slower rate, more money will go towards interest payments and it will take me more time. See the diagram below:

Emergency Fund Scenarios (Paying Back $20,000)

(Excess $2,000)

Savings

Paid to Debt (Interest: 9.8%)

Time to Pay Off

EF after 18 mo.

Option #1

$1,000

$1,000 towards debt

$1,319 (18 mo. interest)

$14,512, no debt

Option #2

$100

$1,900 towards debt

$872 (12 mo. interest)

$15,128, no debt

There is little difference on this small amount of debt, but as the amount of debt increases, the more difference it will make, plus you have 6 months of less stress because your debt was paid off sooner.

Real Life: Payday is not a day to collect your money and spend it in one day. Instead, it is a day to begin spending as your budget demands. You want to be purposeful in the way you spend money, or it will disappear as quickly as it appeared, and you will have nothing left until the next paycheck 2+ weeks later. 

Since you have your budget already written up, you will now need to take the money you acquired through work and pay yourself first. Put money in your savings account. The trend is, when someone sees money in their normal account, they will find ways to spend it. Distributing your money into specific accounts allows you to only see money in your general account, which you can spend. So, pay yourself, donations, mortgage/rent, and all essentials first. Then either distribute the rest into specific accounts or work cautiously to spend what you have appropriately.

Real Life: There are many ways to invest. We have discussed them in an early chapter but let’s quickly go over them again. Look each of these up at debt-freemillionaire.com/search/ (7)

You are looking for high Return on Investment (ROI) and low risk. Normally, you can’t have both, so you take one or the other or find a smaller balance. Normally, while you are younger, you are okay taking higher risk and reaping higher rewards and failures, but as you get older, you want to be more secure with your retirement. 

Single Stocks – Also known as shares or equity. These are partial ownership in individual companies that are traded to the public on platforms such as the New York Stock Exchange or the Dow Jones. These are some of the highest risked investments. These include stock like Ford, Apple, Facebook. These investments have slow increases, but are normally reliable, depending on the investment you choose. Medium risk, medium ROI.

Common Trend – Buy these stocks low and sell high, or hold on to them for longer as they continue to grow. Stock do have a higher risk and may close without any return or losing your investment, if the company goes under.

Privately Traded Business Ownership – Publicly traded stocks are those with a history of making money and are available to the public, while Private Stocks are higher risk to fail, because of the lack of history. Larger buy-ins are normal. If the company closes, then all investments are lost, but if the exceed, you could 20x your money. High risk, high ROI. 

Common Trend – If you have full faith in the company, being the first to invest is the most lucrative, but it also riskier. Be careful which companies you invest in.

Corporate Bonds – These funds are where you are lending money to an entity, usually for one of their projects, for a certain amount of time. They guarantee you a set return when the bond matures and closes. Low risk, low ROI.

Common Trend – These are contracted investments, they guarantee you a set return - normally small, but very secure – secured so it normally does not fail or close without paying you the set amount of money. A company that issues this bond can still default, leaving you with nothing, but, unless the company closes, you’ll be paid. These have a smaller ROI.

Municipal Bonds – When a city or county wants to build a school or anything, they vote to release a bond where different entities invest while they build. On a set date, the bond will mature, and you will be paid. Very low risk, low ROI.

Common Trend – These are highly secure bonds being run by local governments, but it is not out of the possibility that a local government will default, and you won’t get paid, just less likely.

Federal Government Bonds – For government bonds, you are lending the government money over a long period of time. Interest rates are based on the Federal Interest rates instead of what the market rate. Savings Bonds are the most common, which appreciate over many years. Very low risk, low ROI.

Common Trend –These are highly secured debt since it is unlikely that the federal government will default, but it may and then you will receive nothing since you are only paid when you cash them.

Mutual Funds are a pool of many investor’s money to buy a diversified portfolio of investments, including bonds and single stocks. These are stock traders and very well trained on picking those that will make the most ROI. Since it’s very diversified, it is highly unlikely that all the companies will default at the same time. A fund may invest in 100 companies, to spread the risk. Yet, if the market and economy decrease, then the fund will lose money, but not all of it. Medium risk, high ROI.

Common Trend - Mutual funds are highly secure and have some of the best returns you will find. Some years could be 25% ROI. These you will want to stay in for years, not months or days.

Exchange-Traded Funds – Similar to mutual funds, these are a collection of many investments, but these are sold on the stock market directly and their value fluctuates throughout the day, instead of at the end. 

Common Trend – These are recommended to new investors (day-traders) because they are so diversified and more secure than single stocks and if they drop, you can pull out quickly. 

Certificate of Deposit (CD) – A certificate of deposit is a very low risk investment. You give the bank a certain amount of money that they can use paying you a specific interest rate and return you a guaranteed amount of money based on what you invested. Low risk, low ROI.

Common Trend – The longer they can keep the money, the higher the interest rate. Currently, the federal interest rate is low, so they are offering a low rate, yet it’s insured by the government.

Retirement Plan – There are many types of these plans: 401k, 403(b), Roth IRA, Traditional IRS. These are accounts you set up and buy your investments through (usually mutual funds, bonds, and annuities) in order to save them until you retire, at which time you withdraw.

Common Trend – There are great tax benefits by using a retirement account to invest, being taxed now or when you retire and have less income. Taking money out before 65 is awfully expensive.

Options – Options are less direct investments. These are buying the option to buy a stock at a certain, lower or higher price. You can call options to buy assets if an investment increases, or discard if the investment drops. 

Common Trend – The risk comes if the stock price drops and you can buy it for the same amount, then the option is obsolete. These are investor tools and non-trained investors should be cautious. 

Annuities – These are basically insurance policies you buy and receive periodic payments in return. You may buy these by paying one time or periodically. They may also be link to the stock market. Low risk, low ROI.

Common Trend – These are low risk, and not high growth. They may supplement your retirement but will not get you a solid investment plan. Those who sell them get paid a lot to sell them.

Cryptocurrencies or NFTs – This is basically a digital currency, stored on a digital ledger or blockchain. It’s value is just as much as the collective market of investors places it, buying the asset at the value they place on it. So, you buy it at the cost of whatever minute you submit your buy. These are new investments, so their history is still being developed. They are much like a stock, yet have nothing behind their value. There is no company that increases the value, it is all based on how much the market thinks they are worth. They also don’t have the largest following right now so that go up and down very quickly. They could lose 10% in one day and return 10% in one day. The most popular are Bitcoin, Ethereum, and Litcoin, which are more secure because you have more investors insuring their value. NFT or a non-fungible token is a unique unit of data stored on a blockchain, a form of digital ledger for some digital information that can be sold and traded.

Common Trend - If you buy them when they are worth pennies, you could sell them when they are worth thousands. The risk is that they will not grow and since there is nothing behind them, they could easily default. If purchased after their initial growth, their returns are more like stock. Example: I bought Bitcoin, Ethereum, and Litecoin a year ago and in that one year has increased 400%, while an stock would only increase 20% per year. At the same time, that one year investment, in February 2022, dropped 20% in one month, so it is still very volatile. 

Precious Metals and Gems – These include gold, silver, rare metals used in technology, diamonds and rare gems and are purchased retail and sold retail. They are not as much of an investment, but insurance. Gold only has a value if you give it a value. The only reason diamonds are valuable is the sentiment we put on it for jewelry or a wedding ring. The rock itself is not that valuable. Yet, something like silver or platinum is used in computers.

Common Trend – Because they are a physical commodity, their value is not likely to be zero, just that no one would be interested. If they became less rare, their value would decrease. Low risk, low ROI.

Agriculture – Ever wanted to buy a large amount of wheat or corn? Here you don’t have to collect it, you simply buy an Option to buy them at a certain price and sell them for a higher price. Low risk, low ROI.

Common Trend – These are based on a market of how high demand is and how much is supplied at harvest time. If there is too much, the price drops. If the demand is high, the price increases.

Livestock and Meat – Ever wanted to buy livestock, probably don’t have room, right? This too is the option to buy at a certain price and if the demand goes up so does your return. If it was an actual cow and if the price didn’t go up, you could always eat it, but unless you have the room, an option to buy is more valuable. Low risk, medium ROI.

Common Trend – Because people need to eat, the price will never hit zero, but the price all depends on how many people want that commodity and how much supply there is. Less supply or higher demand increases the price. 

Energy – You will probably never buy crude oil or a gigawatt of energy or a cubic yard of natural gas, but like most commodities, you are not buying it retail but the option to buy it at a certain price and then hopefully selling the option higher. Low risk, medium ROI.

Common Trend – Supply and demand, as most people need it and it becomes rarer, the more you get paid. The increase is supply and the less people use it, the less it is worth.

Residential Real Estates – People will always need a place to live and in the U.S., people will always be able to buy a house and either fix it up and sell it, or rent it out to someone else and collect rent from them.

Common Trend – Houses appreciate quickly between recessions (8-10 years). Nearing recession, the price will peak and then the house value will drop dramatically to rebalance the inflated price. If you cannot sell through a recession, but instead rent it out, you shouldn’t lose money, possibly making money. It is more valuable if you can buy a house that is run down and fix it up, if you have the skills.

Commercial Real Estates –Businesses need places to sell their merchandise/food, a location to hold and manage their staff, or a place to manufacture their goods. You can sell or rent it to a company to utilize.

Common Trend – During COVID, companies began working remotely. Realizing they don’t need physical locations, demand for these properties has decreased and building are sitting vacant. 

Industrial Real Estates – Large warehouses and factories are more industrial than just commercial. Companies need large locations to build or assemble their goods before selling them, but as the property becomes older, the less likely you will find someone to buy or rent it and you won’t have the money to fix up the warehouse.

Common Trend – With the increase of manufacturing in China and other countries, these large buildings are sitting vacant and the property owners who rented them out can’t rent or sell them.

Land – Land is the most secure investment to own. Land can always be used for something, whether for hunting grounds, farming, storage, or building. People rent these properties out like a completed building.

Common Trend – Land is normally hard to sell unless it is in a prime area of growth, but if it is zoned agricultural then property tax is low and there is little/no upkeep.

Art – Another commodity that never truly loses its value completely. Paintings, drawings, sculptures are not store like other commodities, instead displayed for visitors to see and appreciate it for the time you own it. Low risk, medium ROI.

Common Trend - When buying art for an investment you take the risk that it will not sell in the future, because no one can afford it or want it. It sells like residential property in comparison to recessions.

Anything We Give Value – You won’t find many financial people remarking on this investment, because they want to make a commission off your investment, but if you and others give any object value, it can be considered an investment and may go up and down in value, including baseball cards, stamps, and coins.

Common Trend – Objects increase between recessions (8-10 years) and rebalance during a downturn. Most objects of value are held on to to increase their price, at least 8-10 years.

But how do you manage your investments? Normally you use professionals to manage stocks, bonds, mutual funds, retirement, and any option, for a fee. At the same time, you may buy most of these on your own, without the training. Recent technology and software have opened the doors to buying almost all of these on your own for a low price or free. Commodities or physical objects of value can and should be obtained with the help of trained professionals (property, cryptocurrency, commodities) but then managed by the owner.

Real Life: The more you save in real life, the more you can put away towards a rainy day. You should always have a small emergency fund, in case something unexpected occurs (and it will). But after you’ve saved about $1,000, all extra money should go to paying off debt, until it is gone. Then, all that money you were spending on debt can go towards living your life, and saving to build a bigger cushion, in case something unexpected was to happen in your life.

Where would you like to save your money? When you budget, save towards a rainy day, or some event in the future. Banks will allow you to have a single account, or  dozens, each based on your priorities. 

Do you want a sports car? Create a sports car account, and start saving towards that sports car every month, with an account titled “Automobile Account.” If something happens to the car you are currently driving, pull from that account and pay off the car repairs; the rest stays in the account until you can buy that sports car. If your old car breaks down and you need another car, take from your car account, and put that towards the newer car; the rest stays in that account until you have enough money to afford that sports car.

Do you want to go on a vacation? Set up a vacation fund and save towards that every month. In your budget, you are giving every dollar an assignment. If you use that money, then it’s spent that month; if any is left over, add it to this account. This allows you to save for a trip in the future. If the trip is a year away, estimate how much it will cost, and then divide that over how many months you must save the money; that is how much you will need to save, monthly, if you really want to go.

What if you have extra money? If your bank account has more than enough money for the event or sports car, then you may want to adjust how much you are putting in that account. You will also want to readjust it when that event is complete. A car account can stay active after you have bought your fancy sports car, but you may want to adjust it and allocate that money to other funds. In the end, all these accounts are considered “Savings Accounts.” 

Savings vs. Spending – When you receive money from your paycheck, or are given money for any reason, the first thing most people want to do is to spend it. It is natural to want to spend when you have money given to you. The harder thing to do is to save it, but it is more enjoyable when you have money to spend in the future. Like one of the gurus I mentioned always say, “If you live like no one else now, later you can live and GIVE like no one else.” So even though you want to spend your money as soon as you receive it, if you want to have money in the future, the best thing to do is to save it. And when you are done with paying off your debt, you’ll have more to spend, and more to save.

Savings vs. Investing – When you have less debt, and more money seems to be collecting in your savings, it is very easy to want to spend more, or even save it in a bank account. But why allow the banks to make money off your money (by allowing others to borrow it)? Why not make more money with your excess money?! After you have accumulated 4-6 months’ worth of expenses in your savings (or however much makes you comfortable for if you lost your job or had an emergency), why not invest in something that may give you the true benefit of money - growth? Investing in mutual funds, an IRA, or a 401(k) is a great start. Most investments have a proven track record with their money, and should return you at least 10% interest every year over a 10-year span. We’ll talk more about this in the next chapter.

Real Life: Debt is a type of modern-day “indentured servitude”. You work just to pay your bills, even before feeding yourself. When you owe someone money, you always worry about your next payment, cautious of them calling the loan early, or if they will ask you to do something that you don’t exactly want to do, including paying on a month you don’t have the money.

It’s much like welfare. When someone is giving you money, then they control your life, because all they have to do is pull the purse strings and pay you less money, and your whole life is turned upside down. When you make your own money or relinquish your debt, you begin to gain control over your life. No one has power over you when you are debt free. 

So, who are the players when you are deep in debt?

1. Credit Card Companies – Credit Cards traditionally have the highest interest rates, around 20%, so their number one task is to get you signed up and spending money. They know that human nature is that you won’t pay that debt on time and will have to pay the high interest rate. They are so determined to get you to sign up for their credit card that they are the #1 producer of spam emails, physical mail, and internet advertising, when you are younger. Go into a Lowes, Home Depot, or most major big box stores and they have someone trying to sell you on their credit card - whether it’s someone walking around the store, or the cashier on the way out, incentivizing you with a discount when you check out. Look at Amazon and Walmart when you check out online; they have these advertisements, too. Then they incentivize you to use their card by giving discounts or flier miles, for your use of the card. They know, at some point, most people won’t pay and instead pay fees and interest. 
2. Banks – Most loans are taken out directly from a bank. They have every type of loan you could need, because their #1 job is to find a need and provide a loan for you. They are incentivized to get you to borrow money. If you go into a bank to talk to a banker, most are tasked with asking you to get a loan. The cycle of your money is not to sit in a vault; people save money in the bank, usually at an extremely low interest rate - maybe 1% - then they take those collective funds and sell it to someone who needs a loan, and charge them 9% interest. They then make a consistent 8% interest off that money. For home loans, they borrow money from the Federal Reserve (Fed) for a certain interest rate (in 2022 it was 0-0.25%), and then let you borrow it for a house, paying about 4% (2022). That doesn’t seem like a good return, 4%, does it? But that low interest is what the market calls for. Bank can’t borrow money from the Fed without a good purpose, they must provide a reason to borrow the money. The market in early ‘22, collectively, said that you can borrow for a house at 3.94%, then the banks have to offer you that money at near that interest rate. The banks can’t charge more than the market, or the customer will go somewhere else. With that being the case, they are still making money from your loan and so will offer you the going market rate. To get more details go to www.debt-freemillionaire.com/howbankswork/ 
3. Credit Bureau – There are three credit bureaus: Equifax, Experian, and Transunion. They are organizations tasked with keeping track of your debt history, and they provide lenders with personal information, credit account history, credit inquiries and public records. Their system provides the history of all your loans, credit cards, and consistent financial activities, when it comes to debt; these also include payment history, from renting, car payments, and even utilities (who can report to them if you don’t pay up). They keep track and report your debt history through a Credit Report, which shows all your loans and their history, the maximum you can borrow, and how much you are borrowing at the time. They track this activity and, through an algorithm (mathematical equation), give you a FICO® credit score, which tells everyone how “responsible” you are with paying back your debt, as well as how much debt you currently have, compared to how much you can draw from. Each bureau has a different way of monitoring your history and scoring it, so their FICO® credit score will be different; but most of the time, they are similar. Different lenders will check different bureaus. 
4. Family – If you can help it, never borrow from family. The reason for this is that you don’t want to damage your relationship. If the borrower is slave to the lender, then any strings attached can hurt your relationship - you don’t want that.
5. Bookies – These are people who make loans on activities that you don’t want people to know about, such as gambling, illegal activity, or if you can’t get money anywhere else. If you do not pay up, they will use enforcers (people that will threaten and intimidate you into doing anything to pay them back). It’s never a good idea to do business with someone who doesn’t want to report all their activity to the government!
6. Title Loans or Paycheck Lenders – You will find these lenders in strip malls, or buildings on the corner of lower income areas. If no one else will lend to you, they will lend money on the title of your car, or other personal property, but will charge you extremely high rates. Be cautious if someone is willing to lend easy money - it’s usually at high interest rates and/or will come back to haunt you, if you can’t pay. If you can’t pay it back, you shouldn’t be borrowing it.

So why is debt so bad to have? Think of it this way, the more you borrow, the more you owe; the more you owe, the more stress you have, and the harder you must work to pay it off. If debt was a set of chains wrapped around you, the more debt you gathered, the more chains you would have burdening you down - much like Jacob Marley in Charles Dickens's novel, A Christmas Carol. Those chains were sins of a man, but the representation works just as well as with debt. You are constantly reminded, by the chains and stress you wear, of how much debt you owe, and how much you are burdened by borrowing. Paying off these debts is like taking off those chains. You want the freedom to work to make yourself money, instead of just paying back your debt.

Here are some things that can happen when in debt:

1. High debt can take away freedom – When you are deep in debt, you must make decisions that will pay back that debt. If you want to go on vacation, you may have to wait, so you can continue to work to pay off your debt. 
2. High debt decreases your credit score – The credit score is the amount of money you can borrow to buy things, such as a house. If you are maxed out on all your accounts, the credit bureaus will know that, and report it to lenders. Not just lenders, but employers can also look at this, if you agree to it in writing.

Debt can land you in prison, or bankrupt – Desperate people do desperate things. These activities of desperation could land them in prison. Or, if they file for Bankruptcy, it will stick with them for the next seven years - not allowing them to get a loan, employment, or other activities they may want to do.

Real Life: Not everyone wants to own a business. It is incredibly stressful at times, and takes extra work; but those who do it can make a lot more money, so much so that they may have to quit their day job. This is always a gamble for business owners/managers and entrepreneurs. 

The difference between these two is that entrepreneurs are those who start businesses or invent products. Business managers are those who take businesses that already exist, and use their skills to make money. There is a greater return on the business if you start from nothing (where an entrepreneur starts), as opposed to someone coming into an already successful business and trying to make it better, or sustaining the success it already has. The entrepreneur definitely takes on more risk, but both are essential for growth. An entrepreneur usually wants to get something started and running successfully, and then pass it off to someone else to manage. This allows them to start something else they are passionate about. They create exit strategies that allow them to exit with a good amount of money, or hand it over to someone to manage, while collecting a paycheck over a long period of time. 

For example, say I own John’s Super Conductors. I know I can get to $1,000,000 worth of sales each year. When I hit that number, I have two options, 1) I sell the company for $8-15 million dollars; or 2) I hand it over to a manager that can do better than I can at this level of revenue, and I collect $500,000 a year for the next 10-20 years, as a constant paycheck. Either way, you make your money. Some would say, why keep it and worry about it?

Read about this in future Debt Free Millionaire Business books.

As stated before, a business is much more than selling a product or providing a service. Successful companies usually have staff, pay rent and utilities, deal with marketing and sales, and R&D (research and development). Information on these products could fill a library of books, so I will break it down to the most important points.

Human Resources (staff or team): Every successful company has more than just the creator. If that person is to be successful, then they need to delegate their responsibilities to people who are better at a task than they are. This is called the 80/20 rule. 20% of what you do makes 80% of your company's revenue. If you can locate your 20%, then the creator needs to do that, while his team takes care of the other 80% of what he does. Then each of them should find their 80/20 breakdown. To manage all these people, you will need a Human Resources (HR) manager, or a third-party software to take care of it. As your company grows, you will need someone to focus on just this task.

Accounting: With all these new people, you will also need to pay your employees. You can hire an accountant/bookkeeper to do this, or a third-party software company to track all your Payroll and HR needs. This is less expensive for a small company, but when you get large enough, you will need to hire people to do this, as well.

Rent and Utilities: How do you house all these people during the workday? You can buy or rent a large facility, but recently, businesses have found out how easy it is to work remotely (where everyone works from home). The difficult part in this, is to make sure they are working; the benefit is that most people will find additional time at home to complete their work, if you give them specific tasks they have to complete, and make them accountable. If you rent a facility/office, you will need to pay rent, utilities, and the cost of other goods, such as furniture. Since most people already have this at home, you can save money when employees work from home, by them using their own furniture, and even computers to save money – though most companies want employees to use their computers because of the intellectual property that is stored on them.

Marketing: Now, most times, your product won’t sell itself. Instead, you need to tell people about it. Most of the time, this takes money - to buy advertising or attend conventions. Check out www.debt-freemillionaire.com/freemarketing/ to learn how to save money on marketing, starting off. Most people believe social media is the best way to get your name out, but most of the time, it is also the most expensive, with very little return for a long time. Instead, emails are free and a direct connection between you and your customer. Check out the link above. Other options you have are tv/radio advertising, billboards, or print marketing. The greatest marketing tool you can acquire is ‘word of mouth’(WOM). WOM is the greatest advertising you can find, and starts with making a great product and then selling it. When someone buys this product and they like it, they won’t stop telling people about it. If you can create a campaign where people are making these contacts for you, and recommending your product, then you will pay nothing for hundreds, thousands, or even millions of sales. Marketing is not just advertising; check your reviews, as well. People these days base their purchases (products or services) off the suggestions of others.

Sales: Beyond marketing, sales are essential. This is where you are directly contacting the customer, and sharing why buying your product or service is so important. You can do this yourself, or hire professionals who have a network of people who would like to sell the product. Again, if you don’t find your 20% effectiveness in sales, then you need to give that task to someone else. Your company cannot thrive without revenue from sales. Sales people should be tasked with contacting customers directly, or searching out the right people to sell to. They need to be excited about your product, and open to selling it to everyone and anyone. If they hesitate about normal sales tasks, it may be time to find someone else.

Research and Development (R&D): You may have a product already, but could it be better? You may have a product already, but could someone duplicate or make it better, before you do? For this reason, your company should always be innovating, and advancing - whether it’s improving your product, service, or even your business. Money that you spend in R&D is an investment into the company’s future (if you have the money to spend on it already, without taking out debt). This was one of my past mistakes: going into debt to find out the product doesn’t sell, and it was not that popular of an idea. 

Products: You have a product to sell. What if your competition starts selling it for less? Do you lower prices? Think of diversifying within yours, or a similar niche. If you are selling maps, why not educational books? Since your customers are close enough, you may want to find something else to sell that your customers are looking for. 

Services: If you do not sell products, then you are most likely selling a service. Is it the same service as your competition? If so, why would a customer use your company? These two are essential questions. Survey your customers and see what they really want in your service. Don’t just assume you know. Send a survey out to your customers and see how you can make your service better, or how you could get them to refer you to their friends. If you find these two answers, you will outsell your opponent every time, because you are addressing the needs and wants of your customers, and not just following the example of what was done in the past.

Multiple Streams of Income: Every strong river is fed by many smaller streams; it is the same with successful income. Where does your money come from? Is it from one activity you do, or many? Do you have a sales season, and if so, what do you do during the offseason? The most important way to make a company secure and successful is to find as many income sources as possible to feed your business river. If your streams dry up, so does your company. You can have conventions, online sales, work with retailers, use software as a service (SAAS), offer subscriptions or memberships, and so much more. Find each way you can make money, and see if it is worth putting the time and money into it, to sustain that activity.

Real Life: How does the government figure out how much you owe? It all depends on your earnings, minus your deductions. Earnings are how much you make from taxable income (salary, side jobs, investments, etc.).

Deductions are things you can write off in your taxes that will be forgiven, if spent a certain way (donations, volunteering, having kids, energy efficient purchases). To figure this amount, you have a form that is given to you by your employer, called the W-4 (provided by the IRS). This will calculate how much you will likely owe the government at the end of the year and your employer will withhold that amount, divided over 12 months, and send it to the IRS each quarter (every three months). In addition to federal taxes, you will owe your state income tax, as well, but this comes out as a flat percentage of what you make (in most states). On the W-4, you will count your potential deductions, including dependents (children), if you are the head of the household, and other deductions the government allows.

IRS Form W-2: At the end of the year your employer will send you a copy of your W-2, which will report to the IRS how much you made, and how much was withheld from your paycheck and sent to the IRS each quarter. This is not the end of reporting your taxes. Everyone in America, whose income exceeds their standard deduction (2020: $12,400), must pay taxes.

IRS Form 1040: You will report your income and W-2 information on a Form 1040 Individual Income Tax Form. Here it will ask you for your personal information, so they can look you up, how many dependents (children) you have, how much you made, and how much you owe them, or they owe you. To decrease how much you owe them and possibly receive a return of what you overpaid, you want to add special deductions, if you have them. If you did not donate much, or make government backed purchases (investments, insurance, etc.) then you will simply take the standardized deduction and decrease your income by that amount, now owing the government less than was originally estimated. For this reason, money would be returned. This money is called a Tax Refund. If you get one, it means you overpaid the government when they originally withdrew it from your paycheck. If this is the case, talk to your HR (Human Resources) manager for your employer, and see if you can adjust your W-4.

First, before you buy a car, think about where you live. Do you need to buy a car, or would public transportation be more economical for you, at this time? Not everyone needs a car. Is your business far away from the subway? Most people in New York either walk or take the train to work each day. Is it crammed and an inconvenience? Yes, but a car costs at least a few thousand dollars, and places like New York have taxes on your vehicles and high parking spot rates. It’s not worth having a car for 95% of New Yorkers, and many large cities in the United States. Now, if your work is far enough away from public transportation, or you have special reasons to get a car, then only get what you need in a car. 

No one needs a new car off the lot, though people get into debt to buy them everyday. Most new cars lose about $5,000 in value the moment they drive off the car lot (and when the return policy does not apply anymore). Then they drive them until the next newer car, with fancier features, comes out, and they buy those, putting their slightly used cars back on the market. Those slightly used cars lost over half their value in the two years that person drove them. Now, they are just right for you to buy. After they lose their greatest depreciation, driving off the Car Dealership Lot, they are priced right where they should be. Give them a few more years, and they are right where a person in debt should be looking. A car for someone in debt, needs only to cost $1,000-3,000. Unless there is something specific that you need, you can find one for very little investment. 

Prices are different if you buy them at a new car dealer, used car dealer, or private individual (for sale by owner). 

New car dealers use the offer to trade in the old car to entice people to buy a new car for less. They take those cars and either sell them at auction to a used car dealer or, if they are in good condition, sell them on their lot. When they buy them directly from a seller, they pay or trade it for $2,000-3,000 less than if you were to put in the effort and sell it to the next user. Then, they take that car and sell it for $2,000 more than you would have paid for it from a private individual.

Now, how do you find out how much you can sell it for? Kelly Blue Book or www.kbb.com. This site takes the age and condition of the car and prices according to the market around them. If you are selling in San Francisco, CA, your car will most likely go for more than Kansas City, MO. It takes into consideration the make, model, condition, mileage, and options found in your car, and allows not only the car dealerships to see the price, but all customers. They want to be an open book, as to the true price of a car. They break the value down into three categories: Buying from a private seller (largest return); buying from a dealership (medium pricing); and trade-in value (least amount). 

Sports Car - No one needs a sports car for everyday driving. They don’t handle well on the road, they carry less, and can be expensive to fix. At the same time, I wouldn’t give up a inexpensive used one, if you find it. 

European made - These are the most expensive cars you can buy, and also cost the most to repair (and require frequent repairs). European cars are normally sold for top dollar, based on the pricing in Europe - including all their taxes, and then when you need to repair them, their parts are mostly imported from Europe, and need a European car specialist to repair them. Either way, they are very expensive to own. These days, wherever a car sells the most, that is usually where it is built. Volkswagen has moved its production to the United States, which has lowered its high prices, though some of its parts are still imported. BMW is also building in the U.S., but their price tag has never been known for being economical.

American cars, on the other hand, are more affordable in price, and more reliable in repairs. They are considered the middle ground between sporty, appearance, and reliability. An American made car is always a safe bet and moderately expensive to fix. The top brands include Ford, GM, Chevrolet, Jeep, and Oldsmobile (though many of their cars have been exported to Canada, Mexico, and even Europe, so their price comparably has gone up faster with some models). 

Asian cars - On the other hand, Asian cars are the least expensive, yet the longest lasting cars, on average. Both Toyota, Honda, and Subaru are brands that are known to last a long time. Their cars and parts are all made here in America, and so are priced for the United States. In 2021, Toyota now tops GM as the number one maker in the United States and yet it originated in Japan.

So, when you are buying a car:

1. Don’t buy new, you lose $5,000 driving it off the lot.
2. Don’t buy a sports car or European; they’re normally gas guzzlers and can be expensive to fix. Right now with fuel prices high, these are not a good idea.
3. Buy used, after researching them on Kelly Blue Book, for price and reliability.
4. Buy a car that will last you a long time; when you are debt free, then save up and buy your dream car.

1. Buy in an area that is just about to take off. We bought our fourth house in an area that, unbeknownst to us, was about to take off. The city had just passed a bill that paid the business storefront owners to renovate their building exteriors, and had new construction. A large box store complex was built less than a mile outside our residential area, and a new movie theater moved in. Our house doubled in price in 5 years. 
2. If you are handy with a hammer, try buying a distressed home, one that someone moved out of and may have not kept clean, or taken good care of. Only buy a house with good bones, that mostly needs cosmetic repairs. If you put in the sweat equity, you may get much more out of it, then buying a house for full price. I’ve made over $100,000 on the last two houses I’ve lived in, after living in each for 5 years.
3. Buy small and grow into larger homes. Our first and second houses taught us a lot. We made money on the first, and lost money on the second. The third and fourth house is where we really learned. We bought a distressed home, in Alaska, for $180,000, yet it was worth $280,000 after some repairs and cosmetic work. We took the $100,000 and bought another foreclosure in Missouri, for $98,000 and our house was paid off. We sold the fourth house for $210,000, and bought another foreclosure, worth $300,000, with cash. We will never get another mortgage.
4. Don’t buy at peak market – The housing market goes up and down in value. If you buy a house at top value, just before the price adjusts, you are looking at owning a house, but owing more than it is worth. I have done that before. Watch the housing market. The rule of thumb is, take the last recession and add 10 years to it. If you are near, or after, 10 years from the last recession, do not buy. Rent for the next year or two, until the next price adjustment, and then buy. Housing prices always go up over time, and come down during a recession. Before President Bush, all recessions were within 8 years; his policies pushed it to 10 years. Trump’s policies now pushed it to 12 years. I predict President Biden will have a recession in the next 2 years, partially in part because of his policies, and partially because of the time that has elapsed since the last recession. We are due for a correction. Some would say that the COVID “recession” was our next recession, but as you can see from prices, there was no adjustment (minus a quick one, due to the stock market). Then it rebounded back to where it was before and kept going; so, no real recession happened.
5. Buy a house with newer appliances – Most of the time, you can find houses with newer appliances, within 10 years of age, but know that old appliances may be more reliable. Buy a house with that, or negotiate the price during inspections, and ask them to drop it $10,000 for a furnace, or $1,000 for a hot water heater, and change it out yourself. If you know what you are doing, you can save a pretty penny. Check out our Debt-Free Millionaire: Home Ownership book, before you buy a house.
6. Before you get a mortgage, save enough for a down payment. If you want a $100,000 home, save 20% ($20,000 - did you use the decimal trick I taught you, here?). If you want a $500,000 house, save $100,000. If you do not, you will pay much more. When you owe the bank more than 80% of the home’s value, you have to pay PMI – Private Mortgage Insurance - and that could cost you up to $100 a month, or more. That is basically free money to the bank, because you are at risk to not pay on your mortgage and that money will help make up the difference if you don’t pay. There are two ways out of it: 1) pay the 20% down payment at time of purchase; or 2) bring the value of the house up. Those are your two options. As soon as your house value is higher than 80% of the mortgage, call your banker and let them know you want to remove the PMI; they will not do this unless you tell them. They will call for a new home appraisal to find out if your house is now worth 20% more than your mortgage.
7. The greatest way to make your house an investment, instead of a savings account, is to pay off your mortgage. That’s right - either way, you will need to pay it back within 30 years, or sell it. Paying it off relieves stress, and creates an investment that will always be worth something.

If you want to pay off your house quicker, there are multiple ways to do so, including:

1. Pay your mortgage faster – If you pay more than is asked of you, by your mortgage lender, you will pay off the house faster. Try bi-weekly mortgage payments; when you get paid, you pay your mortgage. Each time you pay, it lowers how much you owe. Since interest is accumulated daily, when the monthly mortgage is counted, the amount you owe in interest is also less. The future interest payment decreases, because it’s less interest in the loan. You can also try paying an extra payment each quarter.  Just this will cut a 30-year mortgage down by 11 years, saving you more than $60,000. If you have a 30-year loan and the interest rates are lower, refinance it to a 15-year loan. If the interest rates are equal or higher than your current one, act like you have a 15-year mortgage, and pay that amount each month. If you pay like a 15-year loan, you will only pay on a house for 15 years. 
2. Buy a distressed house – This is my specialty. I flip houses on the side. Before you think you can do this, you need either of these two things: 1) the ability to swing a hammer, and experience doing the work; and 2) a good, trustworthy contractor who won’t charge you an arm and a leg. You need to know what you are doing, and if the house you are buying is a good deal, if you do the work. Check out the book Debt Free Flipper, and learn what you need to do to find the right opportunity.

Buy at the bottom of the market and then sell at the peaks - The easiest way to make a return is by playing the market, but be careful; if the market drops while you still own a house, rent it out until the market returns, and then sell it after it increases above the purchase price. I said it was easy, but that is only in the sense of what to do; you do not control the market and...

Renting vs. Buying a House ($200,000 house)

Own a Home

Rent

Closing Costs:

$2000 Closing Costs

$1,000 Deposit

Mortgage vs Rent

$1,315/month

$1,315/month

Homeowners/Renter’s Insurance

$104/month

$75/month

Replace parts of the house

Min. $50,000 over 30 years

$0, Owner pays

Total Spent over 30 years

$562,840

$501,400

Selling the House

After Inflation, house is worth

$384, 115

$0

Lost Owning vs Renting (Spent-Worth)

$-178,000

$-501,400

Difference in Owning vs Renting

$+323,400

Now this assumes what the average American would do when buying a house. Later, I will go through ways you can save money on your home purchases, so you lose $0 when you sell your house. Before we do that, let me explain renting vs. buying a home.

Here are things to consider when buying or renting:

Number of Rooms – How many rooms do you need? Are you single? Do you need more than a studio apartment? Are you married, with no kids? Do you need more than two bedrooms? Are you married with kids? Do your kids need their own room? There are some occasions, but nearly no child needs a bedroom of their own, unless they are the odd number child. When being intentional, you do not need a very large house, unless you find the perfect deal. It is nice, though, to have a spare bedroom for guests, or to use as an office.

Square Footage – Everyone wants the biggest house, but do you need it? Will it hurt you financially? One way to look at it is the price per square foot. Take the price of the house and divide it by the square footage of the house. Most houses in Missouri are $142 per square foot, while California is much higher, at about $286 a square foot for a 1400 sq. ft. house. Buy what you need, or look for a great deal.

Backyard – Do you have kids? Will you or your kids enjoy the backyard? Part of the expense of owning a house is the upkeep around the house. Do you have someone to take care of it? Do you enjoy mowing the lawn? Consider this when it comes to buying. Do you need a yard, or will a condo (much like an apartment, with no land) suffice?

Bathrooms – Do you have enough bathrooms for all the people living there? Do you have certain people in your family that will take the bathroom for long periods of time, especially when you are on a schedule? Does this place have a master bathroom for you and your spouse, so your kids don’t have to use it? These are all things to consider. Only buy a house with enough bathrooms to provide for your family. One is a necessity while any more is more of convenience and increases the price.

Age of House/Apartment – Will it need a lot of upkeep, because of its age? Buying an older house is much more expensive than the purchase price. It also means you will pay for upkeep, since its functions and features will be failing over time.

Rent or Buy – When you are just leaving your family’s home, you do not take that level of house with you. You do not even have to own a house to get started. Your parents lived their whole life to get the good sized home that you just left. What do you need? If you are single, then you just need a place to lay your head, like a studio apartment (where you technically have two rooms: your bathroom and everything else - kitchen included). If you have a small income and no credit, then you will want to start renting, first. As your income increases, you can get into a house.

At the same time, right now, you will pay more in rent than you will pay on a mortgage, with the interest rates so low. You can get into a house for $800 a month, while you would be paying $1,000-1,200 a month in rent. As the interest rates increase, though, so will monthly payments when purchasing  a house. If you close the account the payments will stay the same.

• A $100,000 home, at a 3% interest rate, will cost $709 a month, or $255,240 over the life of the loan.
• A $100,000 home at 8% interest, will cost $1,021 a month, or $367,560 over the life of the loan.

Taking that into mind, right now is a smart time to buy, if/when you are ready. As interest rates increase, you will want to pay cash or rent, because of the increase in monthly payments. At this point, rent and mortgage expenses equalize. But your expenses don’t end with mortgage payments, when you own a house. Repairs are expensive; you may have to add in those expenses and stresses on top of the mortgage payment. 

The way the average American buys a house, shows that we are not the greatest at investments. That is, unless you are intentional. We mentioned that repairs can be expensive. These are some of the repairs that are necessary, may happen while you live there, and you will need to pay for (which is also why we will teach you to set up a rainy-day fund). Here is the average price for specific repairs:

1. You pay a mortgage: $800
2. Your furnace goes out: $5,500-$20,000
3. Your hot water heater goes out: $1,000-$3,000
4. Your AC unit goes out: $3,200-$10,000
5. Your plumbing breaks: $1,200
6. Cosmetic damages: $1,000-$5,000
7. Roof replacement: $10,000-$40,000 

So, your house could be a money pit, and you could spend a lot of money on its upkeep. Keep this in mind before purchasing a house, and be sure to get thorough inspections!

Let's try some vocabulary today. Do you know these words?

Before we teach you about homeownership, let’s talk about a few vocabulary words having to do with real estate, both for personal and commercial use:

Closing – This is the day that you sign the contract to buy the house, the previous owners are paid by the lender, and around that date, you will receive the keys. 

Commission – When you close on your house, your agent receives a percentage of the asking price (1-6%). They then share that amount with the other agent.

DOM - Days on Market – This is a calculation of how many days a house was on the market, starting the day they listed it, until the day the contract is signed.

Deed – When you close on a house, and you were the seller, this document is passed over to the new owners, giving them ownership, free and clear of anyone else.

Disclosures – When you list your house for sale, you are legally obligated to report any issues you have had with the house. Potential buyers get to see it before making an offer.

Distressed – When a house is in disrepair, or the previous owners were not able to pay the mortgage, it is given this distinction; these normally sell for less than their value.

Due Diligence – This is your obligation, when you buy a house, to do your due diligence by looking at and inspecting everything, with the help of professionals. The seller also promises to complete their due diligence, by disclosing issues with the house.  

Easement - When you own a piece of property, you should know that, although you own up to the property line, government and semi-government organizations have access to a portion of the land to make modifications. This is an easement.

Foreclosed – When someone buys a house, owes money on it, and doesn’t pay, the owner is removed and the house is given to the lender, who will try to sell it. While sad for those who lost their home, it is an opportunity to get a less expensive home. It may be distressed.

FSBO (For Sale By Owner) – Normally, a seller will use a professional real estate agent to handle the transaction. Some people try to sell the house on their own, to remove commission. The owner has the responsibility of doing all the paperwork on their own, though.

Investment Property – When you make money by selling or renting your properties, the real estate is considered an investment, and you will be taxed on that income.

Landscaping – Outside your house, all flowers, plants, and materials that organize the exterior are collectively called landscaping. It is made to beautify and increase value.

Lease – When you do not own a house, but instead pay a monthly fee to stay in it, this is considered a lease. You sign a contract for a specific time, and the owner allows you to live in it, until the contract is complete.

Listings – When an agent promotes your house, the first thing they do is to list it on the MLS, which allows all agents in the area to set up appointments to see it.

MLS – Multi-Listing Service – This is a program online that allows real estate agents to share information about houses they have for sale, and the commission offered. 

Offer / Counter-Offer – When you sign a contract to buy a house, you offer an amount of money. The owner will accept or counter with a new offer; you can then counter that counter-offer with a new one of your own.

Purchase – This is the process of selling or buying a home. When it is all done - all the contracts are signed and funds transferred - it is considered purchased, or sold.

Remodel/Renovate – When you own a house, or when you buy a distressed house and it needs work, a remodel or renovation is when you or your contractor put in the effort to fix that house. It’s basically when you fix up a house.

Utilities – These are what make the house work properly, as a dwelling for you. These include power (electricity), gas, water, sewer, and internet. You pay for these each month.

Zoning – A city is broken into certain areas: housing areas, retail, industrial, agricultural, and mixed use. These are set up by the government to keep certain real estate in specific areas, for effectiveness and beauty. 

Because graphs are impossible to see on a podcast, also check out our YouTube channel with Xogos Gaming: https://www.youtube.com/watch?v=Lbv7aCOkba4  Get these numbers from Zero Hedge ( https://www.zerohedge.com/political/millions-new-illegal-immigrants-mask-true-state-us-economy) For the last few years, the headline employment figure has been impressive. The country has recovered the lost jobs from the government-imposed shutdowns during the pandemic and added a few million more, despite a climate of high inflation and rising interest rates.

In 2023, the economy added approximately 3 million new positions. To kick off 2024, more than 800,000 new jobs have been added.

The labor market data is critical as it helps determine the Federal Reserve’s interest rate policy.

Federal Reserve chairman Jerome Powell said on March 20 that the central bank is monitoring the labor market “very carefully” and isn’t observing any “cracks.”

“We follow all the possible stories that are out there about there being cracks, but the overall picture, really, is a strong labor market,” he noted. “Things are returning more to their state in 2019.”

However, a closer look at the household survey of the employment report reveals a more gloomy picture. Employment for native-born Americans has been in decline over the past four years. This means that all of the job gains have gone to foreign-born workers, including both legal and illegal immigrants.

According to the Bureau of Labor Statistics (BLS), the number of immigrants—legal and illegal—working in the United States grew by 3.4 million between February 2020, shortly before the onset of COVID-19, and February 2024. The number of U.S.-born workers, however, declined by 78,000 during the same period.

In addition, during the Biden administration, there have been approximately twice as many illegal immigrants as legal immigrants entering the country, according to a study by the Brookings Institution.

“That’s a big problem,” says economist Stephen Moore.

“What we’re interested in is how the economy is working for American citizens. So, we’re distorting the jobs market with all of the illegal immigrants,” he told The Epoch Times.... Read More at (https://www.zerohedge.com/political/millions-new-illegal-immigrants-mask-true-state-us-economy)

Real Life: There is an old saying: “Cash is King” well what about debt? Previously, I mentioned how debt is bondage. Another saying is that “you become a slave to the lender.” This is not just hyperbole; this is completely true. When you live your life with high debt, it controls you. It keeps you working for it, until you rise up and say, “no more,” and start taking back control of your life, by getting rid of it. Debt is one of the greatest burdens and sources of stress that will ever enter your life. Some would say, even more than medical issues. More people die from financial stress (including medical issues caused by stress, starvation, and suicide) than any other single source of death. It is like a ball and chain around your leg, and should be seen for what it is. 

BUT, you have a way out. You are learning about it early on, so you can avoid the pitfalls caused by this burden. Here are some of the most “acceptable” debts in life, that most people undertake because of necessity. These debts are College, Home, and Transportation.

NEW DEBT (COLLEGE YEARS) (W4:D4)

College – The greatest way out of financial strife is education. Statistically, you will make more during your life by going to college or trade school, because you will be able to get a better job (though, is it worth how much you pay to go to college?). Here are the statistics for how much you’ll earn, compared to the cost of college.

Level of Education

Average Annual Income

Difference in pay over 20 years

Public College Debt (on campus)

Private College Debt (on campus)

Less than HS diploma

$25,636

-

$0

(Minimum) HS diploma

$35,256

$0

$0

Some College

$38,376

$62,400 ($3,120) 

$16,000

$34,000

Associate’s Degree

$41,496

$124,800 ($6,240)

$32,074

$69,112

Bachelor’s Degree

$59,124

$477,360 ($23,868)

$103,456

$215,796

Master’s Degree

$69,732

$689,520 ($34,476)

$288,000

$369,600

Professional Degree

$89,960

$1,094,080 ($54,704) 

$435,200

$652,800

The big question is, is your higher degree worth the amount of money you will have to spend (tuition, living expenses, and interest on your loan)? Let’s look at the final part of that equation. 

Cost of college after interest (over 20 years) - If you put all these expenses in a student loan (say $100,000), at the average interest rate (5.8%), and pay the minimum over 20 years, as is most student loans, you will end up paying an extra $69,185.83 more on your loan. The chart below shows the breakdown for each of these.

Level of Education

Public College

Difference in pay over 20 years

Public College Cost (w/ interest)

Private College Cost (w/ interest)

Less than HS diploma

$25,636

-

$0

(Minimum) HS diploma

$35,256

$0

$0

Some College

$38,376

$62,400 

$27,070

$57,523

Associate’s Degree

$41,496

$124,800

$54,265

$116,928

Bachelor’s Degree

$59,124

$477,360

$175,033

$365,097

Master’s Degree

$69,732

$689,520

$487,255

$625,311

Professional Degree

$89,960

$1,094,080

$736,297

$1,104,445

As you can see, if you paid for these degrees through only student loans, and then paid minimum payments for the entire 20 years after college, college is definitely not worth the money you are paying for it, especially if you go to a private school. That is why there are grants and scholarships. But just as you should be intentional in the way you spend money, you must be intentional and work towards what you want regarding education, as well. To learn more, you need to read Debt-Free Millionaire – Free College. To give you a taste, here are some of the chapters to save money on your higher education.

Search out each of these on our website www.debt-free-millionaire.com/freecollege/(16)

#1 – Hands Down – Get a Job while attending school 

The best way to pay for college, and not be burdened with debt, is to save money before attending college. If you are too close, work while attending. According to FLSA (Fair Labor Standards Act), you can begin working at 14 years old (with limitations to the number of hours worked as a minor, under the age of 16).

Note: _____________________________________________

Save Money in a 529 account – The Federal Government has a program you can find at your bank, called a 529 Savings Accounts. All money deposited is tax free. You and your parents can add to it.

Note: _____________________________________________

Dual Enrollment – This is when you enroll in both high school and college, at the same time. You can attend college while in your high school and claim college credits at a discounted rate, while living at home. This is a great way to shorten the amount of time you’re in school, since you are attending both at the same time.

Note: _____________________________________________

Test Out of Some Classes – If you’re thinking ahead, and you learn/know a subject well enough, you could take a test to skip these classes in college. This could also include AP tests in high school.

Note: _____________________________________________

State Grants – Your state wants you to go to college before working, because they know you will be paid more, and then they can reap more income tax after you attend school; but you will need to prove yourself by graduating from a college, university, or trade school.

Note: _____________________________________________

FAFSA Student Aid – If you are an independent and your parents don’t file you as their dependent on their income tax, there is financial assistance for you. There are consequences to not being a dependent, though, such as you can’t use their health insurance.

Note: _____________________________________________

Federal Grants – The U.S. Government also wants the increased income tax, and so will invest in you. These are typically small amounts, but remember the analogy of the small streams of revenue into a raging river of success.

Note: _____________________________________________

College Grants – Colleges want to entice you to attend, because they know the more students they have, the more revenue they make. Remember also, they are not paying money for you, as much as reducing their rates of money asked from you. 

Note: _____________________________________________

Ask the college for money – Even if the college does not have grants available, when you find the college you want to attend, meet with their financial counselor and ask for money. They have small amounts to give.

Note: _____________________________________________

Work Study Jobs – Federal Work-Study is part-time work for undergraduate and graduate students with financial need, earning money to pay their education expenses through community volunteering services. 

Note: _____________________________________________

Private Scholarships – There are for-profit and not-for-profit companies that have scholarships all around the world, based on different themes and requirements. These are paid straight to you direclty or the schools.

Note: _____________________________________________

Claim a Tax Credit – There is a $2,500 tax credit that you can receive in a tax return every year, for going to school. You or your parents may claim this benefit, depending on if you file your own taxes, or your parents claim you as a Dependent.

Note: _____________________________________________

Community College – If you can’t afford the college of choice, you can always attend a community college, and put the money you saved toward your graduate work, later, at the University of your choice.

Note: _____________________________________________

Cut down on expenses while at school – Use a strict budget while attending school. Only buy what you need, and save money that way. Living off campus is much cheaper, and gives you more flexibility.

Note: _____________________________________________

Invest in your schooling – While attending school, make investments that pay you during this time. Some ideas include, buy a house and rent it out, or find an apartment and sublease it to friends and classmates.

Note: _____________________________________________

Tuition Reimbursement – Work for a good company who has a program to pay your school fees. Work with them for the initial number of years, and then agree to work for a set additional time after graduation. Win-win.

Note: _____________________________________________

Student Research Assistant/Work for the College – If you work for the college or university, they may offer a reimbursement for your tuition, while you are in your position, and you gain work valuable experience.  

Note: _____________________________________________

Work Colleges – There are institutions set up so you can earn money by working for the institute while they teach you, like in a normal school setting. They will pay for your schooling, and some living expenses.

Note: _____________________________________________

Colleges with free tuition – There are 18 colleges in the United States that are tuition free. Some of these colleges only pay for classes - not room, board, and supplies, but that dramatically reduces the cost.(17)

Note: _____________________________________________

Sublease your Space – Have you ever desired to do something in real estate? Well, this little hack may make you money while attending college. Rent a house with quite a few rooms, and rent out each room to 1-2 reliable tenants. Let them pay your bills. Make sure you have their parents co-sign on the lease, though, and also be sure your Lease Agreement doesn’t prohibit subleasing. 

Note: _____________________________________________

Asking for gifts – When it’s your birthday, ask for college money or savings bonds, to save for your college. Almost anyone is willing to spend more on a gift if it goes towards college, than if it was a normal gift.

Note: _____________________________________________

Now that you have a list of options, which ones would you like to use (while you are going to school, just before enrollment, while transitioning, during college, and working between semesters)? List the ones you choose to follow, and then meet with your parents, or in class, to discuss these options. Together you can help each other with the best options. There may be some options not listed here, as well, so bring your ideas.

Real Life: How much do you spend each year? How much do you save? Would you like to save more? And lastly, why would you like to save more money? These are questions everyone should ask. Then comes the bigger question: how are you going to live your life?

BUDGET: Here is a word everyone loves to hear: budget. This is where you become intentional with your money. A budget is basically giving every dollar a job and telling it where you want it to be spent. Write out this budget right now - give every dollar you earn a place to be spent or saved. If you have any money coming in each month, you should create a budget. If you receive extra money, have a place for that to go, as well (so you don’t just think “extra money” and then go spend it anywhere). You can even say, “this is spending money,” but make sure you allocate it as such beforehand.

BUDGET ITEM

WANT TO SPEND?

WHAT DO YOU SPEND?

Essentials

Rental/Mortgage

Debt Payments

Utilities (Gas, Electric, Phone)

Less Essentials

Food (Groceries, Home Goods) 

Donations

Savings

Medical

Transportation

Non-Essentials

Entertainment:

Dining Out:

Streaming Services:

Gifts: 

Toys:

Other:

ESSENTIALS: Start with your essential items, when figuring out how to spend your money. After you list those items, and how much you want to spend on each, calculate how much of your income goes to essentials. Is it more or less than your income? If it is more, then you will need to scale back and shrink some of your other categories. This should also worry you, because you cannot spend more than you make; even a credit card will come due at some point, and you will need to repay. If your total is less than your income, this extra money can be paid towards debt or non-essentials. Remember, the less debt you have, the more you can spend on non-essentials.

DEBT PAYMENTS: How much do you spend each month on debt payments? When you are finding the initial numbers, just take from the payments of the past. After you have written up your budget, if there is any money that is not allotted to something, focus that extra on your debt. Whatever the amount, try to double it, or at least increase it as much as you can afford, to pay off these debts as fast as possible. Look at tomorrow’s section (W4:D4) titled ‘New Debt’ and see how you can get out of debt faster.

UTILITIES: How much do you normally spend each month in utilities? During the year, this may fluctuate by the type of utility, but most households that use gas and electric spend nearly the same amount every month. During the winter, your furnace uses more gas, but less electric, while during the summer, your AC uses more electric and little gas. For this reason, list the amount of utilities as one, including water, trash, gas, electric, phone/internet. How much do you spend in the winter and summer, and which one is more? Take the higher number and put that in your budget. If this money isn’t spent each month, then put it in the savings account.

LESS ESSENTIALS: While these are still essential, you do not need to spend money on these to survive. That is why they are essential, just less essential.

FOOD: Take a month or two and watch how much you spend on food. Track every dollar spent on food and other goods (toiletries and household disposable goods) that you buy each month. How much do you spend each month? Add that to your budget, above.

Did you know that you do not need to spend much on food if things are very tight. There are food banks around the United States that will provide you with the essentials of life while you get out of a bad situation. If you need to, never think you are ever above help. If you feel better about it, ask if you can volunteer there and get first picks of the food that is available.

DONATIONS: Do you donate to a local church or non-profit organization? If so, how much do you donate, and how much do you want to donate each month? List this in each column. 

SAVINGS: Unlike the game, in life you do not just have excess money at the end of the year, unless you are intentional. You must be intentional if you are to pay off debt or save money. Throughout the year, pay yourself first, and place it in a savings account. If you have your paycheck directly deposited into your bank account, automatically put a certain amount into a separate savings account.

CONSTRUCTION: If you own a house, you should always plan for a possible emergency. You buy insurance, but every time you make a claim or call to inquire on making a claim, your premium will increase. Start putting money in a bank account for a rainy-day fund. After it hits a certain amount, say $1,000, then you can hold back. You can always change this fund into money saved specifically to buy a house, and put away a certain amount for your down payment. Or, if you have a home improvement in mind, start saving for it, with this fund. Put away $100 a month and keep it growing until you need it.

MEDICAL: Everyone will have a medical need sometime in your life. If your health insurance provides the ability to have a HSA, Health Savings Account, then start sending money to that account every year. When you put money into that account, through your paycheck, or after you are paid, allot the max contribution (which is somewhere between $3,500-$4,000, tax free). Even if you spend that money when you are very old, you will most likely need it at some point, and should save money by doing it tax-free.

TRANSPORTATION: Transportation includes bus, train, and maintaining, or buying, a car. There is a certain amount you will need each month for public transportation fees, or gas. Allot a certain amount to pay for these items, and then put whatever is left into another savings account. Like your construction fund, begin saving specific money in this account. If you don’t spend it on maintenance, then, after it has grown, spend it on your next car. The longer you save, the nicer your next car can be (if you even want a nice car).

NON-ESSENTIALS This category is last for a reason. At this point, add up your expenses and the money you have already allotted in your budget; is there anything left over? If not, and you have over-allotted funds, adjust them, so you only spend/save money you already make. If you don’t make enough, then look into starting a side gig. Non-essentials on the other hand, are for when you want to relax and do things with your money. After you’ve given every dollar an assignment in the essential categories, if you have extra money, think of paying off more debt first. The less debt you have, the more money you can spend on the non-essentials in the future. Start off with a small amount for the non-essentials. You really do not need that much.

ENTERTAINMENT: We want you to be as intentional as possible, but we also want you to have some fun - especially if you have kids. Give yourself a specific amount to spend each month on being entertained. Most of the time you will allot these together into the category of entertainment, but for this chapter we want you to break it down into how much you spend for each and how much you want to spend for them. How much do you spend on entertainment, not in those other categories below? How much do you want to spend? Write it down.

DINING OUT: How much do you spend each month on fast food or going to restaurants? Do you really have the money, or do you simply hope to have the money? Do you buy food when at work? Can you bring a packed lunch, instead? Can you brew your coffee at home? Consider where you can cut, to save money. Remember that the more you save, the more you can spend somewhere else. 

STREAMING SERVICES: The average household has 3.8 televised streaming services at an average of $10 a month. That’s an extra $40 a month or $480 a year, which can add up. How many streaming services do you have? Do you have Netflix, Prime, Disney Plus, Apple TV, Hulu, ESPN, and some other monthly service? Do you watch all of them, all the time? Think of doing this. Cancel all your streaming services except for the one you will focus on. After 3 months, cancel that subscription for a new one you want to focus on. Watch everything available on that service over those three months and then cancel it. The great thing about streaming is that everything is recorded. After a few months, when you return, there will be more new programs you will want to watch. Try this strategy if you do not have enough money in your budget to pay for so many services. You aren’t just saving money, but you are also saving your time; if there is nothing to watch, go outside or find something more energetic to accomplish.

GIFTS: We want you to be generous with your money, but not as much while you are getting out of debt, and/or reaching a comfortable position financially. The more you donate while you are doing these two goals, the slower it will be to get out of debt, or become sustainable. Think of doing your monthly donations to your church or your local organization, and then spend the rest on getting out of your own hole. This will free up more money to go towards being generous when you are ready. What would you rather do with your money: pay more of your money to interest, while donating a lot, or getting out of debt, and spending those funds that would be paid as interest to banks, instead of the local organizations that need your help. At the same time, you can have very little and still share. Always be generous with what you have and when you have more, give more.

TOYS: This is the biggest struggle for most people, they want, and yet, they are not willing to wait. You can afford it faster, when you get out of debt and place yourself in a financially secure place.

When you reach these milestones, then you are ready to splurge on toys and other activities that are less important towards your survival and comfort. Learn to save first, and then, when you have a comfortable buffer, spend money on the things that are less important in moderation.

Real-Life Explanation: There are many more ways to save on your expenses than we’ve mentioned, but as we talked about in this unit - you must be intentional in life to save money! It is not always easy or enjoyable, but it will save you in the end, and every penny matters. 

Example: When I was young, I was told of a woman of great wealth. She loved having parties and entertaining - the very wealthy and influential, as well as the average person. One day, after attending one of these parties, a young man was running errands and ran into this same woman at the recycling center, turning in her cans and bottles for money. The young man shyly approached this lady, not wanting to embarrass her, and asked, “with such great wealth, why are you here at the recycling center?” She turned to him and looked deep into his eyes and gave this remarkably simple reply, “how do you expect I obtained such great wealth?” This man was so touched by this, that he began living his life more intentionally. And as he did, he found himself running into this woman more and more. They became friends, and she taught him these same principles we are teaching in this book; though, instead of back in the 1970s, now its 50 years later and the principles still apply.

Where in your life do you struggle? Is it with an addiction, a worry or fear, and/or a lack for something? If you are to overcome that struggle, you must be intentional - doing things that will help yourself overcome it - and thrive past it. If you aren’t intentional, you may only overcome because of chance. Who wants to put their livelihood in the hands of chance?! This next exercise will help you become more intentional with your spending.

Real Life: Now, what happens when you have so many expenses that what goes into your wallet is the same amount as what leaves your wallet, or restated, when your expenses are just as much - or more - than your income? What needs to happen? This is when a purge is needed. Here are some ways to purge your spending and bring down your expenses.

• Create a shopping list and stick to it – All grocery stores are designed to make you pay more. Everything from where the necessities are positioned in the grocery store, to what is on the shelf at kid or adult eye levels. Make a list at home of your necessities, and even your wants. Then go to the store, and strive to only buy what’s on your list. Even if you have an impulse to buy something more, don’t. Try this out a few times in a row, and you will begin to break the habit of “must-have” retail. Or, even more effective, make your list and order it online, and pick it up outside the store, so you aren’t driven to buy more.

1. 1. Use coupons, discounts, and rebates – If you are going to stores like Michaels, grab their coupon online. There is an active 20-40% discount on everything they sell, so don’t forget to look it up at home, or on your phone while you are in line. Though coupons are not as common these days, there are usually discounts online for most products to get you to try their brand. But, be sure to compare the discounted price to the store brand price. Pick the less expensive one. If you are on the computer, install a program like Honey, which finds active discount codes to try (which they found online).
   2. Shop Online – You can buy nearly everything on your list on Amazon or a grocery store, and they will either deliver it to your house, or pop it in your back seat (when you order beforehand and pick it up from the store). Use online discounts as well. There are normally no differences in price when you are buying in the store or online, if you go to the store’s website directly. Be careful of services like Instacart, whose prices are actually higher than the prices in the store, or on the store’s online ordering system. You may want to compare the pricing though. Since the online price is the same around the U.S. (on Amazon, for example), if your groceries cost less  than somewhere in CA, you will most likely pay less in your local store. If you buy online, you can always price compare, or use the discount codes provided online.

• Buy in Bulk – One big issue in overspending is constantly buying smaller packages of groceries. Almost any grocery item is more expensive, per ounce, when you buy the smaller quantities. Buy larger packages of things you use all the time, such as rice, flour, oil, and even spaghetti sauce. Buy the canned sauce and pour what’s left into smaller containers, or freeze it in ziploc bags.

1. Buy Off Brands – You don’t need to buy a brand-named product. They are priced to cover their marketing expenses, as well as the product they are selling. Most grocery stores have store-named products, which are always cheaper – or they would not be selling them – and they usually taste the same.
2. Kill the Monthly Subscription - Streaming Service – Everyone will agree that $5.99 a month is not a lot of money, and $20 is okay with some products, but $100 a month is very expensive. Well, how many $5.99 subscriptions does it take to make $20? And how many $20 does it take to make $100 a month, however you look at it? They are expensive over time. $100 a month is $1,200 a year. Do you have that just lying around? The big question is, do you need all these monthly services? To this day, I pay for one service, outside of utilities, and that is the one streaming service I want that month, or 5 months. I will watch everything they have on there, and then change to another one while they fill up. For example, Disney has The Mandalorian. I like this show, but they aren’t set to release another episode for more than a year, which means, I don’t need - or want - to hang around until they put that back up. This is living life intentionally.
3. Kill the Yearly Subscriptions – Maybe once a year you will want to purge your expenses, but most of the time those yearly subscriptions are not visible, since you paid for them 6 months ago, and you only pay once a year. For example, Amazon Prime charges you once a year. These are accounts that charge you once a year so you don’t realize you are paying for them each month. This takes a little extra effort, but go through all your expenses and find any that renew yearly. Cut those out. Most of the time, these are monthly expenses, paid at one time. If they are not 100% necessary, cut them out as well.
4. Be Smart with Utilities – Turn off your utilities when you aren’t using them. When the sun outside is enough to fill your room with light, turn off the unnecessary lights. Turn your hot water heater to the temperature that is perfect to shower in, and not something that will boil you alive. Don’t crank up your heater above 70 degrees during the winter or below 72 in the summer. Sounds reasonable right? Buy LED bulbs. Also, find out if your local utilities use Peak Usage Hours. Some utilities charge more if you run your appliances during the day, during peak electrical usage, instead of at night. If they do, run your appliances outside of peak times.
5. Purchase new appliances – Most older appliances are utility hogs - everything from your old toilet using way too much water, to your washing machine using too much water, and electricity to move this abundance of water. Newer appliances do more, with less amounts of energy or utilities. At the same time, most older appliances are better built and last longer.
6. Cell phone’s stranglehold – Find out exactly how much you are spending on your cell phone. Do you need that amount of data? Do your kids all need lines? Why? Compare it to when you were a kid, did you have a phone and do you feel they need one? At what age do they actually need a phone?  Go to debt-freemillionaire.com/cellphone/ to find more ways to save on a phone plan. If you have to, buy a landline at home; it costs $20, instead of $40 per line.
7. Do things at home – Do you need a membership to a gym? Most things you can do from home, if you are intentional enough. Some will buy a membership and rarely go. Exercise needs to be intentional and consistent. If you buy a membership, will you go every day, or at least several times a week? That is the only way to lose weight, or get/stay healthy. The same goes with getting your morning coffee. Even if you need to rush out the door, wake up a little earlier and brew your own coffee. If you need to, splurge on a good coffee maker, because in the long run, you will still save thousands of dollars every year, if you brew coffee at home. You don’t need to eat out; often, you can make better food at home. If you have to eat out, cut it down by half. Every time you stay home you could save $30-50 - that could be a savings of a few hundred dollars a month. If you are going out with others, think of sharing entrees.
8. Shop Used or Refurbished – Thrift stores, like Goodwill and Savers, are great when it comes to buying used items, while stores like Ross are great for refurbished or marked down household products. Frequent these stores for necessities, such as clothes.
9. Shop at Warehouse stores – Nearly every warehouse store (Costco, Sam’s Club, etc.) has a gas station attached. These gas stations are normally priced $0.05-$0.15 lower than all competitors. One tank of gas (20 gallons) will save you $3 per fillup. Fillup 4 times a month and you just saved yourself $144 a year, just by paying the membership to this store, which is usually around $45. You can also save by using these stores to buy in bulk. Watch out though, it is not always cheaper to buy bulk in these stores, compared to normal grocery stores. Look at the price per ounce, or item, typically located somewhere on the price tag.

Real Life: Just because you work a 9AM–5PM job does not mean you are bringing in that amount of money you need. Every time you make money from a full-time or part-time job, that employer is mandated, by law, to take out taxes, and not a small amount even. They are mandated to take from your paycheck these items: social security tax, unemployment tax, federal taxes, and state taxes. Everyone gets paid before you do. Then, depending on the benefits you accepted from your employer, you also reduce your paycheck by that amount as well. This is okay, though, remember what we said, we will teach you how to pay as little as possible from your paycheck, and what you do pay, you can tell yourself that your taxes go to paying for those in need.

Just FYI, your employer pays many of these taxes as well, so you are costing them more than just your salary, so don’t blame your employer. Taxes are government mandated and the benefits that come from being a full-time employee benefit you.

Full Time Work – When you work full time there are certain allotments of money that are paid before you. There is a reason why you may have made $1,000, but only walked away with $600 in your paycheck. Check your paystub (attached to your check or if direct deposited, ask for a statement) to see what was removed:

• Federal Government - FICA - Federal Insurance Contributions Act. This includes Social Security and Medicare Tax –
  1. Federal Income Taxes – The U.S. government takes a percentage of your pay to pay taxes at the end of the year. This is based on a W-9 form you fill out when hired.
  2. Social Security - In retirement years, senior citizens will be able to draw from money the government has taken from them in their younger years to pay for their living afterwards.
  3. Medicare - Is a government program that you pay when you are younger and then it guarantees to pay you when you are older and need medical insurance.
  4. Chip – Is a program that provides health care to youth, which everyone pays.
• State Taxes – Just like the federal government, your state and local government also takes their cut of your paycheck every month.
  1. Unemployment Tax – If you are laid off, at no fault of your own, you are paid Unemployment Benefits, which is a set amount of money that you can claim, for a certain amount of time until you find future employment.
  2. State Income Taxes – Your state government takes a certain percentage to pay potential taxes for the year.
  3. Some states do not withdraw state income taxes and some states like California have additional taxes such as short-term disability insurance, which they mandate you to pay
• Union Dues – If you are part of a union, whether they are doing anything for you at the time, they are pulling a monthly fee, depending on the union, to fund their activities. If you don’t like exactly how your union is being run, then become more active in your union by attending meetings and try to get in a leadership role. Normally, a union worker can become leadership, though it may be difficult to achieve. It is at these meetings where they discuss these fees. If you don’t like your union, the U.S. Supreme Court has ruled that you can’t be mandated to join one or pay your dues. More on unions later.
• Benefits – Some benefits that you receive for working full time are not paid completely by your employer and so the rest is taken from your paycheck, including health insurance and retirement.

Part Time Work – In part-time work, you are still being paid by an employer who is mandated by the government to hold a certain amount of money. Normally there are no benefits as a part time worker.

• Social Security Tax – In retirement years, senior citizens will be able to draw from money the government has taken from them - during their working years - to pay for their living after 65.
• Unemployment Tax – If you are laid off, at no fault of your own, you are paid Unemployment Benefits, which is a set amount of money that you can claim, for a certain amount of time until you find future employment.
• Federal Taxes – The US government takes a certain percentage to pay potential yearly taxes.
• State Taxes – Your state government takes a certain percentage to pay potential yearly taxes.

Contract Work – In a gig economy, where you can have many side jobs, working with different companies to perform many services as a non-employed independent contractor, taxes or payment for benefits are not withdrawn from your paycheck; instead, you are to pay those bills quarterly to the government or in one lump sum at the end of the year. This may seem great, not having your taxes withdrawn from each paycheck, but at the end of the year, when you pay taxes, the taxes become due, and you may be writing a large check to your federal government at the end of the year. The amount increases as your total income increases. But, from your client, you receive what you were promised in full. These taxes, you eventually have to pay, can be reduced with each of expense you spend on your side gig, such as miles driven to or during your side gig or personal tax deductions, including having kids or donating to non-profit organizations.

Owning a Business – When you own your own business - we will get into this later in the book - you pay yourself a guaranteed payment as an owner, depending on your state you may not have to pay taxes on this money, or you can pay yourself as an employee. You never want to buy anything with your business credit card that can be seen as personal purchases or paying yourself right out of your business bank account. You want to create a barrier, between your personal money and business money, from the very beginning. This separation will allow you to say to the Internal Revenue Service, a government entity that makes you pay your taxes correctly, that you keep your personal and private money separate, so if they come after your company, you don’t have the liability of losing your personal money to the government. If you pay yourself as an employee then the same taxes are taken out of your regular paychecks as would be if you were a normal full-time employee.

If you are taking the money as a guaranteed payment, for services as an owner, you have to pay both the employer’s side and your personal side of FICA and all employment taxes. This makes it so Social Security and Medicare tax still gets their full amount. But because you are an owner and you would have to fire yourself, you may not have to pay Unemployment Tax. Check with your individual state.

Investing – Just because you sell a stock, commodity like gold, or cryptocurrency, does not mean you get out of taxes and fees. Before we tell you which ones, let’s talk about the five main types of investing:

• Retirement – In retirement there are many programs you can fund: a 401k (through your employer), Roth IRA (Investment program where you get taxed when you move it into the program), Traditional IRA (Investment program where you get taxed when you withdraw the funds for personal use), Pension (an investment fund your employer or union controls), etc.
  1. Capital Gains – In all of these, except Roth IRA, you must pay capital gains taxes on any increase in the value of the investment when you are withdrawing the amount.
  2. Early Withdrawal Tax – If you decide to pull from any of these early, except Pensions (your employer or union controls it), you will be taxed with a very high tax penalty because these programs were created, tax deferred, to benefit you in retirement at age 65.
• Day Trading (Short Term Trading of Stocks, Bonds, and Mutual Funds) – These are short term trades where you buy stocks - partial ownership in a company - and sell them for a profit/loss. The stock market can fluctuate quite sporadically at time increasing or decreasing the value of your stocks, making you make or lose money quickly.
  1. Capital Gains – All increases in value created by fluctuations in the market are taxed.
• Commodities – Physical items that you can buy and sell, like a stock, metals like gold, oil, or crops.
  1. Capital Gains - All increases in value created by fluctuations in the market are taxed.
• Cryptocurrency – Most currencies around the world are not backed by anything of value, beyond the trust of that country who supports it. Now there are digital currencies that are only backed by an idea. They fluctuate like the stock market due to things that happen in the U.S. economy or international events. Because some question the value of foreign and domestic currency, independent programmers designed currency that are controlled by supply and demand. The more the public wants and buys the currency, the more it increases, the less they want it or sell it, the less it is worth. For example, when the value of the US Dollar goes down Cryptocurrency increases dramatically. When Joe Biden was named President-elect, Bitcoin increased by nearly 400% in the matter of a weeks.
  1. Capital Gains - When you have it for less than one year, you pay short term capital gains, after that time, you pay long-term capital gains tax, similar to a stock or commodity.
• Real Estate – This is when you, as a private citizen, buy a building, residential or commercial, and sell it for a profit or hold on to it and rent it to another person or entity. A piece of advice though, if you are renting the property and someone gets hurt or has some sort of lose that they can sue you over, they may come after your personal property. It may be smart to start a business and put that property under that company’s name so the lawsuit could not come after your personal property.
  1. Capital Gains – If you were to sell it in less than two years or rent it out and then sell it later, you would have to pay capital gains tax to the federal government.
  2. Repairs and Maintenance – If you buy a house that is “distressed” - foreclosed or in poor repair - then you will need to fix up the property before selling it if you would like to make a profit. If you are to rent it out after fixing it there are routine maintenance that is needed in addition to your initial investment. You can add repairs and maintenance to the agreement of the person renting but be careful of poor-quality work being done in your property.
  3. Utilities – If you rent the house to someone, your tenants or you can pay these bills. Make sure this is spelled out in your contract.
  4. Management – You may not want to deal with your rental’s day-to-day activities and may pay someone else to manage your property or many.

Overview - Income is very important, but you should know beforehand that you rarely ever get away from taxes and if you don’t pay your taxes, the IRS can come after you and it is not pleasant.

The federal government is going to take from you to fund their existence, the best thing is to be informed about the taxes and, if possible, only pay the minimal amounts possible within the law. You are under no obligation to pay the federal or state government more than they require.

You are the best arbiter and distributor of your money. Make sure you have control over each part. The best way to do that is with a budget, which is a form you put together that gives every dollar you receive a chore and every chore a spending limit. This is so that when you have your money deposited in your bank account, you know exactly where it goes and how you can spend it. More on this in a future chapter.

Real Life: In Europe, it is said that they work to live, but Americans live to work. This is not always true, but we need to limit how much we work, so we can focus on the most important part of our lives: our friends and family and reducing stress in our lives. Debt is rampant around the world and the only way to pay your debt, if not get out of it, is to work it off. People have to work all hours of the day just to pay their bills and their debt. If you can limit the amount of debt you accrue, you won’t have to pay as much, and so you won’t have to work as much. Consider this next time you think of making a purchase on your credit card or even getting a student loan. Debt is the modern-day slave owner, but you don’t have to be the slave to debt. You can get out of debt.

Countries by household debt, as % of 2021 GDP:

1. 1. Switzerland – 132% - $908,085 per house
   2. Australia – 120% - $168,600
   3. Norway – 111%
   4. Canada – 109%
   5. Denmark – 108%  
   6. South Korea – 106%
   7. Netherlands – 103%
   8. New Zealand – 97.6%
   9. Sweden – 94.8%
   10. Hong Kong – 91.8%
   11. United Kingdom – 86.9%

• United States – 79% - $145,000 per house

        20.  China – 61.2%

How much should you work? When considering this question, consider how much you need to survive and pay off your debts. Then consider how much extra you want to work (and can work), to pay off your debts faster. As soon as your debt is paid off, you can think of the extra amount you work as how much extra you want to work, in order to pay for your lifestyle and retirement. These are things to consider when thinking about how many hours you want/need to work.

Here are two activities to find out how much you want/need to work. This will help you plan. 

National Debt – 9% of the country’s revenue pays the debt we have racked up (which was racked up by spending what we cannot afford). To find out how much we currently owe to the minute, look at usdebtclock.org. This will also show you how much we pay towards the National Debt, Medicaid/Medicare, Social Security, Defense. This payment increases/decreases depending on how much we owe, based on the current interest rates. On Nov 16, 2021- 5:36AM CST (while I edit this book) the U.S. owed $28,967,266,775,881 to other countries, those who owned U.S. Savings Bonds, and in other forms of debt. Within a minute, that debt increased by over $1,000,000. This is all debt you, the younger generation, will have to pay.

Mandatory Spending: This is Entitlement Spending, and is not based on yearly budget review. This started with Social Security, but climbs dramatically with every new program the government creates in this category (including Medicare, Medicaid, Earned Income Tax Credit, and the Child Tax Credit). Then there are also the benefits we provide our military veterans. In total, this accounts for around 61% of our federal budget. 

1. Social Security (Mandatory) – Started in 1935, this program was designed to be a supplemental income for retired workers, after age 65, being paid an average of $1,503 a month. This now includes disabled workers and survivors of those workers. It is also called OASDI, Old-Age, Survivor, and Disability Insurance and is run by the Social Security Administration (SSA). It was made to be a safety deposit box of funding, taken from the younger working generation to pay for the older generation. Sadly, the U.S. Government couldn’t keep their hands off it and spent that money on other programs outside of Social Security. Now, they spend straight from those funds in the overall budget. It accounts for 39% of mandatory spending. In 2019, 64 million Americans received over $1 trillion in benefits, which is why you are charged an extra 6.2% of your paycheck (but a maximum of $8,537.40 (2020).

2. Medicare/Medicaid (Mandatory) – Health insurance was developed in the U.S., in 1850. Since insurance became mainstream in the 1920s, and then with Medicare/Medicaid established in 1965, health care costs have climbed dramatically. 

• Medicare is to care for people over 65, people with certain disabilities and people with some health disorders. There are four plans: Medicare Part A – general coverage or nursing facilities; Part B – doctors’ visits, outpatient services, preventive care and supplies; Part C – All parts combined; and Part D – prescription drugs. Medicare accounts for 28% of Mandatory spending. You pay this through a 1.45% payroll tax, on all income. The Affordable Care (ObamaCare) act added 0.9% for any income over $200k.
• Medicaid is to care for low-income adults, children, pregnant women, elderly adults, and people with disabilities. The costs are provided by both federal and local governments. In 2018, the U.S. spent nearly $600 billion (75%) on Medicaid spending. Most of the time, states pay the other 25% of the bill.

3. VA Benefits (Mandatory & Discretionary) – These include disabled compensation, burial benefits, rehabilitation, insurance, housing, pensions, job training and education. These are paid for by both your paycheck and other taxes, including Capital Gains (more on this later, with investing).

Discretionary Spending: Congress decides on this in Washington D.C each year. They are mandated to create a budget, like at home, to map out where the money that they take in is to be spent. At home, you need to balance your budget, spending only what you make. The U.S. Government has not balanced a budget since 1998, under a Republican Congress and Democratic President, Bill Clinton. The last time they passed a budget on time was 24 years ago (1996). Over the past 19 years, they have only adopted 7 budgets. This spending includes National Defense, Homeland Security, Energy, HUD, Foreign Affairs, Transportation/ Infrastructure, Education, Veterans Benefits, Health, NASA, National Parks, General Services, etc. 

1. National Defense (Discretionary) – Depending on who controls the budget (Republicans generally increase, while Democrats normally decrease this budget), this accounts for nearly 48% of discretionary spending. This mainly funds the Department of Defense, and pays for all operations, equipment, personnel, and even military engagements, such as any foreign conflict we assist in. The highest discretionary spending on National Defense was under George W. Bush and least by Donald Trump. (14)  
2. Health – This mainly funds three agencies: Centers for Disease Control (CDC), Food and Drug Administration (FDA), and National Institute of Health (NIH), and accounts for 5% of discretionary spending and 23% of Non-Defense Discretionary spending (NDD). These are the agencies that oversee disease, pharmaceuticals, therapies, food safety, and medical research. (15)
3. Transportation and Infrastructure (Discretionary) – This mainly funds the Department of Transportation and Federal Highway Administration. This accounts for 7% of discretionary spending and 19% of NDD. These funds pay for roads, bridges, airports, highways, and the administration. 
4. National Parks – This funds the Department of the Interior (including Bureau of Indian Affairs), and accounts for 7% of discretionary spending, and 18% of NDD spending. This pays for the conservation of natural resources (National Parks, energy, mineral, grazing, forestry activities, Indian affairs). (16)
5. Education (Discretionary) – This mainly funds the Department of Education and accounts for 7% of discretionary and 14% of NDD. This includes teacher’s salaries (partially funded by states), funding research, grants, and student loans towards college for K-12 (43% of spending), higher education (29%), and employment services.
6. Economic Security – This mainly includes programs such as WIC (Special Supplemental Nutrition Program for Women, Infants, and Children), Housing and Urban Development (HUD), Home Energy Assistance, Child Care, and Development Block Grants, and takes care of primary needs for those with low income. 
7. Law Enforcement and Governance – This mainly funds Homeland Security, Federal Bureau of Investigations (FBI), Border Patrol, and assistance to state law enforcement and domestic violence prevention. The rest of these funds pay for the Internal Revenue Service (IRS), Congress, Federal courts, the Government Accountability Office, General Administration, and other basic government operations. 
8. Science, Environment, and Energy – These fund agencies from NASA to the Environmental Protection Agency (EPA), and National Science Foundation (NSF) to the Department of Energy (DOE), and accounts for 11% of all NDD. This is mostly used for the research behind these topics and natural resources.
9. Foreign Affairs – This mainly funds the Department of Foreign Affairs and accounts for 1-2% of discretionary spending. This is used for diplomacy and international affairs, which take up 8% of NDD. Half of these funds go to international development and humanitarian assistance (disaster relief, HIV/AIDS prevention, Peace Corps, and foreign organizations, such as the United Nations [UN] and World Health Organization [WHO]). The remainder goes to peacekeeping operations (Embassies, etc.).

Real Life: Here is how you find out how much you pay in taxes. This may be hard to stomach…

Where do your taxes go? – There are many types of taxes you pay each day, ranging from the taxes taken from your paycheck, to taxes taken from your credit card (such as gas and sales taxes). Here is a breakdown:

Taxes

Percent

Income

Depending on…

Federal Income Tax

17%

$17,000

Varies by income

Social Security

7.65%

$7,650

Varies by income

State Income Tax (This varies by state)

10.1%

$10,100

Varies by income

Property Tax 

1.3%

$1,300

Varies by property value

Sales Tax (This varies by city)

9.75%

$9,750

Varies by purchase

State Gas Tax

Based on how much you buy, not income ($0.15 in Alaska- $0.67/gallon in California)

Federal Gas Tax

Nationwide, Americans pay $0.1742 per gallon

Cell Phone Tax

Based on your service plan, but costs an average of $270 per year

Utilities Tax

Varies by cities – Washington State charges 6%

You may not like taxes, but remember: most European countries pay 60-70% of their income to the government; the United Arab Emirates pay 55%, and the Netherlands pay 52% of their income - just in income tax, not including other taxes! Also, these taxes go to services that you and others use, and some projects you won’t agree with, all signed into law by your elected officials. If you want to pay less in taxes, you would elect those who want to reduce them or stop frivolous spending.

Activity - Part #1: First, calculate your taxes, drawn from how much you will most likely make out of high school, or even college ($30k). Look up these numbers online. This information you may have to research:

Taxes

Percent

Dollar 

Totals

Federal Personal Income Tax

17%

$30,000

FICA (Social Security, etc)

7.65%

$30,000

State Personal Income Tax

%

$30,000

Local Property 

Tax (Car, House)

Car:                  

House:             

-

-

State Gas Tax

What is your State Tax Rate:              

_____________%

Drive 20,000 miles, Car gets 20 MPG, 

Buy 1,000 gallons

Federal Gas Tax What is your State Tax Rate:              

_____________%

Drive 20,000 miles, Car gets 20 MPG, 

Buy 1,000 gallons

Cell Phone Tax

%

$1,200 service plan

Utilities Tax

%

Use $3,600 per year

Total Tax: How much do you pay and the total percentage?

Total ($______/ $30,000)

%

Total:

$

According to the U.S. Department of Agriculture (3), the average cost of raising a child from birth to 17 years is $233,610. That number was calculated from 2015 numbers; now, it would cost around $284,570, or more with inflation. They calculated childcare costs alone to be around $37,378 per child. You will spend roughly 9-22% of your income on childcare.

Raising a Child (Location)

Expenses Include

Cost per year (married)

1. Urban North east - $264,090 

2. Urban South      - $232,050

3. Urban Midwest - $227,400

4. Urban West       - $245,460

5. Rural Areas       - $193,020

1. Housing – 29%

2. Food – 18%

3. Education/

Childcare – 16%

4. Transportation – 15%

5. Health Care – 9% 

1. Birth to 2 years - $12,680 2. 3-5 years old     - $12,730

3. 6-9 years old     - $13,180

4. 10-15 years old - $13,500

5. 15-17 years old - $13,900

Now children are even more expensive to you if you have them without being married. There are five statistical options that come in this scenario: 1) you marry the other parent, or raise the child together, 2) your partner takes the child and you pay child support, 3) your partner leaves and makes you the sole caretaker, and 4) you put the child up for adoption because you don’t believe you two can raise the child, or 5) you share the child with equal time sharing and each of you have time with your child. According to the Brookings Institute, 70% of cohabiting parents who are not married will break up, and one of the other four options will happen. Are you ready to have a child? If not, you may not want to do the things that make babies. (We refer this talk, where babies come from, to your parents). 

Child Support is not cheap. It differs according to your location, how much you make, how much time you have with the child, etc. The more you make over the lifespan of the child, the more you will pay. The idea is that child support is to be the equalizer between what both parents make or have the ability to make: if you make a lot of money and the other parent does not, you will pay the difference, to some extent. There is also something called alimony where the courts could also increase the support, to the other spouse, based on the standard of living they experienced before the divorce. The U.S. average is $430-$1,000 a month. Times that by 12 months, times that by 17 years, and you come to $87,720 in child support alone - on the low end. Again, this payment goes up as your revenue increases and time with your child decreases. 

Savings: There are some ways to save money and plan for the child’s future. Think of these options when considering having children. First, there is a great write-off on your taxes for each child you have (Child Tax Credit). Next, when thinking of a college fund, try a 529 College Savings Plan (make sure you control how it’s invested). Then also be sure to check into the Uniform Gift to Minor Act and Uniform Transfer to Minors Act.

Note: CDC reports that as of 2017, the U.S. birthrate has declined to its lowest amount in 30 years and continues to decline. Think about it from this point of view: without increased birth rates, total tax revenue will decrease, social security won’t be funded, and tax rates will increase dramatically, to make up the difference, because the U.S. Government won’t stop spending, even with less revenue being generated. Note: The statistic on birthrate per woman is found here at: https://www.aaastateofplay.com/which-world-countries-have-the-most-and-least-children-per-family/#:~:text=Based%20on%20the%20data%20from,Middle%20East%20%26%20North%20Africa%3A%202.6

1. Food – You need to buy groceries to survive, right? But do you have to buy so many groceries, or such expensive groceries? Try this:  when you go to the grocery store, bring a list of only the things you need. Make this list during the week, since your last visit to the store, while you are planning out the next week in advance. If you stick to the list, it will be much harder to overspend on your budget. 
2. Food – Every trip you take to the grocery store costs time and money. Try only shopping once a week, or every other week. To survive during this time, try doubling your purchases. If you are there to buy one jar of peanut butter, buy two. Buy in bulk: if you need a dozen eggs, buy the 18, 24, or 48 pack, since they are normally priced lower when you buy in bulk. Instead of buying one gallon of milk, buy two, even if you must freeze it (whole milk freezes best). Buy everything in one trip, so you don’t have to waste your time, money, and  especially gas. Or, you can buy online and have it delivered (although, watch out for higher prices and hidden fees).
3. Gas – Plan out all your trips on a list. If you don’t have to go on Monday, then don’t. Go on Tuesday, when you already need to go out  to go to  the post office and pick up the kids from school. Make your trips meaningful, and try to go in a loop,  so you aren’t going back and forth - spending more time and money. Try to make it one line, to do everything on your way, while  looping home. 
4. Toiletries and other Household Items – This is hard to conserve on, but remember that you don’t need the most expensive brands, just because of their names. Most of the time, you are only paying for their marketing. Many of the generic brands do just as well as branded products. And be careful of buying them for the extra things they do. Like toothpaste, for example. You don’t always have to buy the one with the most claims, like teeth whitening, hydrogen peroxide, etc.
5. Mortgage/Rent – This is a fixed rate expense, so there isn’t much you can do after you have already found your home, except to take care of your home. Houses that are not maintained cost more in expenses. Keep your house clean and maintained, and less damage will occur on the home itself. Less damage, means less maintenance, and less money spent.
6. Mortgage/Rent – If you haven’t found your home yet, search harder. Don’t just take the first deal that falls in your lap. Most times, if you give it more time to find the right place, you’re  more likely to find a better deal, in cost. At the same time, don’t wait forever because a place you really want could be purchased by someone else and you could miss out on an opportunity.
7. Mortgage - When you buy, consider your ability to repair the house. To save money when you are initially buying, find a place that may not be aesthetically pleasing. If the house looks good structurally (you will need an inspection to make sure), then you can always paint and tear up the carpet. Even if there are a lot of pet messes, you can use Kilz to seal the floor and then carpet, and the evidence that they were ever there disappears, (and you purchased a house for $10,000-$20,000 under its value). A house is not always a good investment, so buy low - sell high. As the dollar loses value, the price of things increase, such as in 2021-2022. You may be able to buy a house and as the value of the dollar shrinks, the value of the house increases. So, also keep in mind that if you are on the edge with a house, thinking of being able to sell it, you may make more money as things get more expensive over time.
8. Mortgage - When you buy a house without putting 20% down (paying cash for 20%), your mortgage is based on nearly 100% of the house’s value. The lender, then, will add a fee, called PMI (Principle Mortgage Insurance), which could cost a few hundred dollars. It’s an insurance policy that guarantees them that you will pay your mortgage. If you owe less than 80% of the value of the house, that PMI can be dropped from your mortgage payment, saving hundreds, or even thousands, every year from your payments.
9. Utilities: Electric– Most of these are very simple, and your parents have probably been telling you to do them for a long time. Turn off the lights when you leave a room, use LED bulbs, and as much natural light as possible (sunlight) throughout your house. Turn off appliances when not in use.  Install power strips, and when you aren’t using the appliances, turn off the entire power strip. You may also want to consider portable devices, such as laptops instead of desktops, because they use less power to run.
10. Utilities: Gas/Water – Take shorter showers, with less hot water. Turn down your hot water heater, to a temperature that is more like what you would shower in. Use a smart thermostat for your heat, and schedule times you need your house to be heated. For energy efficiency, you may even want to replace your hot water heater and furnace, with a high efficiency furnace and tankless water heater.
11. Utilities: Water – Turn off water when you are not using it, such as while shaving, washing dishes, and brushing your teeth. Take shorter showers. Only run the dishwasher and laundry when it's a full load, and fix any dripping faucets or running toilets. For energy efficiency, you may want to buy a new washer, and toilets that need less water. 
12. Utilities: Phone – Surprising as it may be, you don’t need the most expensive phone plan. Take a look at how much data you normally use, and buy a plan that provides for that. You may want to consider pre-paid plans; sometimes, they’re even more cost efficient, they give you incentives for automatic pay, and when you don’t need a line, you can shut it off. Not everyone needs a cell phone. It is not as convenient, but you may want to buy a landline for those who don’t need a cell phone.
13. Insurance: Auto, Health, Home, Life – Each cost the same every month, so the best thing you can do is shop around, before you buy your plan. Get quotes from 10 providers (if possible), and look at what they give you. You don’t need all the bells and whistles (Platinum plan) but you also don’t want to be under covered. Note: if you use your auto or home insurance for any reason, the price of the plan usually goes up, so don’t call on the small repairs. 
14. Property Tax – There is not much you can do about this, either. The city or county will charge you, based on the value of the house. What you can do is look to see how much they have it valued for. If it is too much, visit the assessor’s office and discuss what it takes to drop the value. 
15. Out-of-pocket medical costs – Medical debt is the most used reasoning for going bankrupt. You had no idea you would be sent to the hospital, and then one day you had to have major surgery. First off, make sure you never go without health insurance, if you are high risk. If you are very healthy, look into high deductible plans, meaning you pay little month to month, but pay more if you do go to the hospital. Also, make sure you exercise and eat healthy;  you are less likely to be sent to the hospital if you are keeping yourself healthy and fit. Start today!
16. Gasoline – Only drive to places you need to go. With the increasing gas prices, you need to conserve energy wherever you can.  Gas is getting expensive! Plan trips with multiple errands. Do not go to places that aren’t a necessity, and maintain your vehicle.
17. Public transportation – If you can’t afford a car, take public transportation. The subway or bus is the most affordable (way more than Uber!),  and Taxis are much higher priced these days.
18. Child Support or Alimony payments – If you are ever considering divorce, think about it carefully. Financially, divorce will hurt most people. One party will often pay Child Support, Alimony, or both (and it can be the husband or the wife). Except for times of a toxic relationship, If you can work it out with your spouse, do all you can to keep your marriage.
19. Childcare – Children are expensive, but even more expensive if you have kids and both parents work.

Conflicting Statistics: Experts say that, according to the U.S. Department of Labor, people change their job at an average of three to seven times in their lifetime. But, they also have these very interesting statistics, as well: 

1. Older generation was looking for:
   1. Increased pay – good paying job for a family;
   2. Career Stepping Stone – They wanted to find ladders to success, and were willing to work;
   3. Benefits – Wanted health insurance and retirement; 
   4. Solid Business to Employ Them – They wanted to have a stable job for 25 years, and then retire.   
2. Millennials want these things, but if it’s a risk and unstable, that is okay, at a younger age:
   1. Feel like they belong – Emotion and belonging; 
   2. A Movement - They want to make change;
   3. Influence/Popularity – They want to be known by their peers and complete strangers;
   4. Studies – A job based around their interests;
   5. Feel good – They want to enjoy their work hours;
   6. Make money – They want to make more money to buy new things, to advance their status.

BONUS: Your Spouse's Income:

Real Life: Along your path, you may gain a spouse or partner - which can be great! You can’t always assume you will get married, or sadly, that you will stay married. The sad truth is that you don’t always control this. As it has been said in the past, “it takes two to tango.” It’s not all your decision, but is based on your partner’s, as well.

When you do get married, it is an incredibly happy occasion, where you join two lives. There are many positive things that come with it. One benefit, is that you get to spend more time with someone you love and are best friends with. Another, is that you can join two incomes. You may even add children. 

The great thing about the financial aspect  is, though you can add two incomes  together (2+2=4), for an increase, your expenses don’t increase  the same percentage. When you get married, it’s more like joining two households, and paying less (2+2=3). Does that math make sense? Think of it more like this: when you get married, you add your expenses (food, shelter, needs, wants) to their expenses (food, shelter, needs, wants), and you pay for one rent/mortgage, almost double the food, utilities are one - plus a little more, needs are decreased, and wants are decided on by both of you. For most, your date money decreases, because you aren’t trying to impress as much, but instead, sustain. So you don’t have to be as fancy -  pizza and a movie will do just fine for a date.

Spousal income is great, because it comes with little strings attached. In society today, some married couples keep their income separate, but financially it makes more sense to add them together and pay expenses out of one account. Some married couples have their own accounts on the side for spending money not monitored by the other spouse and this is okay also.  If you choose to have one account, you simply add them together as you become one. It is no longer “my money” and “your money,” it’s “our money.” This is how the law sees it, and this is how to see it if you want your finances to be easier to monitor.. No longer can you say, I can do with my money how I see fit, it’s more of talking together as a married couple and finding the best way to move forward with how you manage your money. 

Like a raging river, it is fed by hundreds of small streams that, together, make up a raging river. So, are your financial streams making you a raging success?

The Four-Legged Stool

In business, it is essential that you map out, and focus on, your different revenue streams into your company. Much like your personal income, you must figure out how many streams (legs) of income you have, and see how you can increase each, or add more, since you have limited amounts of time. 

Just like a stool you sit on, a four-legged stool is strong. Take away a leg, and it becomes wobbly;  take away any more, and it is near impossible to sit on. If you take away one of your legs of income, you still have three others to support you - you always want something to fall back on, if you lose your job.

How do you want to live your life? Would you like to have multiple streams of income, or one solid stream? I’ll give you a second to think that over…

The allure of real estate investment has long captivated the imaginations of aspiring entrepreneurs and investors alike. Among the myriad strategies available, house flipping stands out as a particularly appealing entry point for many. This process, which involves purchasing properties, renovating them, and selling them at a profit, can indeed be a path to success for those looking to start investing in real estate. Here’s how flipping houses can turn into a lucrative venture and what potential investors need to know to make it a triumph.

Understanding the Market

The foundation of a successful house flipping strategy lies in a deep understanding of the real estate market. Successful flippers are adept at identifying undervalued properties in neighborhoods with high growth potential. They keep a pulse on market trends, including which home features are in demand and the average time properties spend on the market. Knowledge is power, and in the context of house flipping, it translates to the ability to make informed purchasing decisions that are likely to result in significant returns.

Renovation and Value Addition

At the heart of flipping is the concept of adding value through renovations. The most successful flippers are those who can see beyond a property's current state and envision what it could become. However, the key is to balance the cost of renovations with the potential increase in property value. This requires a keen eye for design, a thorough understanding of renovation costs, and an ability to manage contractors efficiently. By focusing on renovations that offer the highest return on investment, such as kitchen and bathroom updates, flippers can significantly increase a property's market value.

Financial Acumen

Flipping houses is as much about finance as it is about real estate. Successful flippers excel in budgeting, forecasting, and financial planning. They understand how to secure financing for their projects, manage cash flow during renovations, and price their properties for sale to maximize profits. Additionally, they are skilled at navigating the tax implications of flipping properties and optimizing their investment structure to minimize liabilities.

Time Management and Efficiency

The adage "time is money" is particularly true in the context of house flipping. The longer a property takes to renovate and sell, the lower the return on investment, due to holding costs such as mortgage payments, utilities, and property taxes. Successful flippers are masters of efficiency, streamlining the renovation process to reduce the time between purchase and sale. This often involves having a reliable team of contractors and suppliers and the ability to manage multiple projects simultaneously without compromising quality.

Risk Mitigation

While flipping houses can be profitable, it also comes with its share of risks, including unexpected renovation costs, changes in market conditions, and extended selling periods. Successful flippers mitigate these risks by conducting thorough due diligence before purchasing properties, setting aside contingency funds for unforeseen expenses, and adopting a flexible approach to selling, which may include renting out properties if the market takes a downturn.

The Path to Success

For those looking to start investing in real estate, flipping houses can indeed be a path to success. It offers the potential for significant profits, provides a hands-on learning experience in real estate investment, and can be an exhilarating entrepreneurial endeavor. However, success in flipping requires more than just capital; it demands market knowledge, renovation savvy, financial acumen, efficiency, and risk management skills. For those willing to invest the time and effort to develop these competencies, flipping houses can be not just a successful investment strategy, but a rewarding career in real estate.

Money to Retire On – Do you have enough money to survive on for the rest of your life? If you stopped working at age 60, and then lived for another 30 years, would you have enough money? Do you have a plan? 

There are special savings accounts you can deposit into, that you can’t touch until a certain age (in 2021, it was 59 ½ years old). These include: IRAs, 401(k), 403(b), or other alternative retirement accounts. Are you secure  financially, and will that money last you until you die? Here are some important statistics to know, about people who retire:

1. According to Schwab Retirement, in 2021, the average American needs $1.9 million saved or invested, at the time of retirement;
2. Only 58% of Americans are actively saving towards retirement;
3. 48% of Americans have less than $10,000 saved in retirement;
4. 50% of older Americans, nearing retirement, think they will live off Social Security;
5. Only 36% of Americans know how much money they need to retire;
6. 30% of women, and 15% of men, have no retirement whatsoever;
7. Average debt per household is $31,000 at the time of retirement, while average income is $55,200;
8. The average American dies at 77 ½ years, but the potential is that you may live longer.

Remember that cost of living is not your only concern when deciding when to retire, it is also the debt you are paying. If you still have a high amount of debt, you will need more money. If you remove your debt, you need much less. With debt, you could need $3,000 to $4,000 a month, depending on the amount of debt. With no debt (and a paid for house), you could do well with $2,000 - $3,000 a month.

As you get closer to retirement, most people want to play it safe in their investments, but you may not need to. If you do play it safe, you would need a higher amount saved. If you play it smart, you may only need half of  that, and it will continue to grow. But again, the main question is, do you have enough to survive the rest of your life? Here is how you figure this out.

This is the amount you should have in your investment, growing by these ages (according to Synchrony Bank):

• Americans in their 30s: 1–2 times their annual salary
• Americans in their 40s: 3–4 times their annual salary
• Americans in their 50s: 6–7 times their annual salary
• Americans in their 60s: 8–10 times their annual salary

Think of it this way: how much do you want, or need, to spend each year, once you have retired? $50,000 a year? Then you need to figure out how many years you may survive past retirement. If you retire at 50, you could live 50 years - ‘til you are 100. 50 x $50,000 = $2,500,000. At the same time, if it is invested, whatever amount you have will continue to grow over the years, so you will need maybe ¾ of that amount, at $1.9 million in your retirement account. The government may also pay you $1,514 a month from social security, to help pay your monthly expenses. Can you survive on that, if you don’t have a retirement account? Someone without debt, who has a paid for house, could.

Social Security

Social security is what the government pays to the older generation, to take care of their needs. The problem is that it was supposed to take your money while you were working, and save it for you when you were older. Then it became, “take from the young and give to the old.” Now it’s, “put the money in the general fund and pay for Social Security by borrowing from general government revenue.” The question is, will it still be there when you retire? Should you rely on it? If it’s there, it’s more money for you; if not, then you have a backup plan, through your retirement account.

Things to Consider in Planning Retirement: Here is what you will need to do to plan for retirement: 

1. Are your kids out of the house? You may not want to retire until they are living completely on their own.
2. What will you do afterwards? What do you want to do when you aren’t working anymore? Do you have the money to achieve these dreams? Do you want to travel, or stay home? You may want to have an idea and/or plan.
3. Look forward to the longest vacation you'll ever have? If you think retirement is a long vacation, most Americans work after retirement either because they don’t have the money they need, or they are bored sitting around at home. According to US News, if you retire at 65, you have a 76% chance of living 10 more years, 38% chance of living 20 more years, and 5% chance of living another 30 years.
4. Building relationships with those you can trust. Being alone, not having a purpose, impacts your health in retirement and can lead to early death. University of Berkeley found that, when you have a partner that makes you happy, you have a 13% lower chance of dying sooner. 
5. If you are within 3-5 years of retirement, you may need to start planning your tax strategy before your retirement. 
6. Remember that Social Security, if it is still around, doesn’t start until age 66(if you were born from 1943 to 1954). The full retirement age increases gradually, if you were born from 1955 to 1960, until it reaches 67. For anyone born 1960 or later, retirement benefits are payable at age 67. So, do you have enough money to retire early?
7. Will you stay home, travel the world, or end up in a nursing home or assisted living facility? For these questions, when you get closer, you may want to think of an End of Life insurance policy, to pay for your expenses.

Compound Interest: In the last chapter, you learned about interest being paid on your Savings Account; you are also paid on your Retirement Accounts. The amount of interest depends on where you invest your retirement funds. It is not deposited into a bank, but instead, an Investment Broker will buy investments on your behalf , and give you all the interest acquired, when the value of what they bought goes up. You can invest in investment funds that are established by another group, business or government bonds, gold, cryptocurrency, and much more. When the investments you bought into go up, your retirement account value increases as well. 

Now, compound interest plays a very large role, when your retirement sits over a very long time, acquiring interest every year; then, what you deposited, plus the amount you earned in interest grows together for additional interest. For example, if I put in $1,000, and it grew in interest by 10% (or an additional $100), I would have $1,100 in my account by the end of year one. Year two, I now have $1,100, depositing an additional $2,000, and it increases another 10% (an additional $310). Now I have $3,410. So, I have earned an additional $410, that I didn’t have in my account before. By year three, I would have an additional $851, in addition to what I deposited directly. This is the great power of interest. By year ten, you have an additional $10,000, above what you deposited, and by 30 years, you are literally earning $100,000+ a year on your retirement.

If you start depositing into your 401(k) or 403(b) ($20,500, as of 2022), or IRA ($6,000, as of 2022) the maximum amount possible, you will have nearly $2M by 50 years old. Then you can retire on your own schedule.

Most people think of their savings as an emergency fund. You want to build your savings, over time, to equal  about 3-6 times your monthly expenses; so, if you spend $3,000 a month, you would want to save $9,000, just in case you lose your job, become disabled, or something drastic happens, because you would still need to pay your bills. This is what a savings account is really for. 

History: The first banks are reported to have been started in Mesopotamia, where the people would store grains, precious metals, and even weapons, for a time. More recently, savings banks and savings accounts were established in England, in 1799, and postal savings accounts started in 1861. In the United States, the first savings bank was established on December 13, 1816, as Provident Institution for Savings, in the town of Boston. After the Great Depression (1929-1933), the U.S. Government wanted to reestablish faith in the banking system, and so established the Federal Deposit Insurance Corp. (FDIC) which, in 1934, insured bank accounts up to $5,000. Banking institutions began to flourish, with the emphasis made by the government to save money, and people began saving more and more. Banks began to compete to store this money and first introduced the savings account interest rate - a payment you receive  to your account every month, for saving your money in the bank. Beginning at 3% in 1957, it increased to 5% interest by 1986. They offered new customers incentives, like free toasters and wall clocks, to entice them to open a Savings Account in their bank. Banks would use money deposited into savings accounts, to loan to other customers at a higher interest rate, to make money for the bank. 

Lately, as the government began allowing banks to borrow money at a low interest rate from the Federal Reserve, and other larger corporate banks, the interest rate in a savings account went from 5% down to around 0.2%, as of 2021. This has caused less people to decide to save in these traditional banks, and instead invest their money (which we will talk about in further chapters). In the past, you would have to visit the local bank to deposit or withdraw your money.  Only recently has the internet made electronic transfers and direct deposits available to their clients. Now, with smartphones, money can be transferred in mere seconds, and without the use of a traditional bank.

Vocabulary: Allow me to now introduce some of the words I just mentioned in the history.

Bank – These are businesses that are established to store, loan, exchange, and issue money, as transactions for those depositing or borrowing money.

Deposit – If you have money that you want to keep safe, yet available you would place it in a bank account..

Savings Account – an account that you establish with a bank to store your money and gain interest, while the bank has it. You also give the bank permission to loan this money to someone in need of money.

Withdrawal – When you want your money back, you remove a portion or all of it from your account.

Federal Deposit Insurance Corp. (FDIC) – The U.S. Government’s insurance policy guarantees that these bank accounts will have money if something happens to the economy, up to a certain amount ($250,000 in 2021).

Savings Interest Rate – If you deposit money into a Savings Account, the value will increase at a set amount, each month. This is based on the rate the Fed (definition below) is lending money to banks. 

Depositors – Those who deposit money in the bank.

Borrowers – Those who borrow money from the bank.

Lenders - Banks that give money, in the form of a loan.

Federal Reserve Bank (Fed) – This is a central banking system in the U.S. It is both private – it was started with private banks – and government regulated, with rulings from many boards and government officials.

Clarification: The flow of money in banks is rather easy to understand. When you deposit money into your bank account, the bank gives you a little extra money (in the form of interest), depending on how much you deposit, in exchange for your permission to allow them to lend that money to someone who needs to borrow money. They then offer that money to a borrower, and get paid back more than they are giving you to borrow that money. The more people that deposit money, the more money the bank has to loan, or pay back customers that deposited their money in the bank; so, at any time, if you wanted your money back, they would take from the money given to them by another depositor, and give it back to you, in cash. In the past, banks were only able to lend the amount of money that has been deposited by a customer.

In the last 20 years, the U.S. Government has allowed the Federal Reserve (Fed), which is a group of the largest banks and the U.S. Government, to lend money at very low interest rates (so the banks wouldn’t need to borrow from you, but instead, the Fed). And if the Fed is giving out this money for 1%, then the banks wouldn’t offer you 5% anymore for depositing; instead, they would offer you less than 1%, which is why the interest you earn from a savings account is so small. The Fed is allowing banks to borrow at less than 1%.

Needs (Necessity Expenses):  

1. Food
2. Toiletries and Household Items
3. Mortgage/Rent
4. Utilities: Electric, Gas, Water, etc.
5. Insurance: Auto, Health, Home
6. Property Tax
7. Medical Expenses
8. Gasoline
9. Transportation
10. Child support/care
11. Savings

Wants

1. Personal Loans
2. Car Loans
3. Student Loans
4. Clothing, etc.
5. Dining Out
6. Junk Food, Coffee, Alcohol 
7. Entertainment, Toys
8. Gym Membership
9. Travel Expenses 
10. TV Services
11. Personal Grooming
12. Home Décor

Activity – How much do I spend? Now that you have a good list, go through your bank and credit card statements and write down how much you spend on theses items each month. If you don’t have this, ask your parents what they spend. Would you like to increase, or decrease, your expenses in each category?

How could you lower these expenses? Where are you overspending? Are you willing to spend less?

____________________________________________ ____________________________________________

FIXED VS. VARIABLE EXPENSES: (Also W1:D3)

Now that you have a list of expenses (the money you spend), you may want to understand the difference between those that are Fixed or Variable Expenses?

Fixed Cost (Expense): Is a cost that does not change month to month. It does not increase or decrease because of something you do or buy. This can be for goods or services you purchase. There is less that you can do to reduce these types of payments each month. These include: mortgages, cell phone, internet, and insurance.

Variable Cost (Expense): Is a cost that goes up or down, depending on choices you make and desires you have. These may increase and decrease month to month, depending on how much you spend. For most of these, you get to decide how much you will spend.

Though some bills are a fixed amount every week/month/year, and others vary day to day, this does not mean that one is more important than the other. Instead, you need to make a list of your priorities. Those that are less of a priority, you should think about eliminating. As you will find, when looking through your expenses, you have more Variable Costs than Fixed, because most of these expenses increase as we want them more, and are willing to spend more on them. The United States is a consumer nation, meaning we spend what we want to spend on most items. There is nothing wrong with this, but also know that while some people are spending more on these items, some wiser individuals are finding ways of spending less. They are realizing that they don’t need as much as everyone else. The old saying is, “Keeping up with the Jones',” which means that you have to spend more to look like your neighbor, because they look so happy or rich. The truth is, most people who spend more to look good are majorly in debt.

Fixed Cost (Expense):  

1. Mortgage/Rent (Need)
2. Utilities: Cell or Internet (Need)
3. Property Tax (Need)
4. Insurance: Car, Health, Home, Rental, Life, Medical (Need)
5. Transportation: Public (Need)
6. Child Support or Alimony (Need)
7. Childcare (Need)
8. TV Streaming (Want)
9. Car Loans (Want)
10. Student Loans (Want)

Variable Cost (Expense):

1. Food (Need)
2. Toiletries and Household (Need)
3. Utilities: Electric, Gas, Water/Sewer Bill (Need)
4. Medical Bills (Need)
5. Transportation: Gasoline (Need)
6. Home or Car Repairs (Need)
7. Loans/Credit Cards  (Want)
8. Clothing, Jewelry, etc. (Want)
9. Eating Out/Junk Food (Want)
10. Alcohol, Coffee Cigarettes (Want)
11. Entertainment: TV, Movies (Want)
12. Memberships: Gyms (Want)
13. Professional Services (Want)
14. Games and Toys (Want)
15. Self-Care and Grooming (Want)

Game View: In the game, you set your goals. This about this: what would make you feel like a winner? This is to track your sheet and analyze later. Will your goal be to make a high, medium, or low income, when you are older? Perhaps yearly income of $1 million? Place a dollar amount or just state high or low income.

Personal Game View: What is your goal, annually? Tell us if it is High or Low, and give us an amount.

Real Life: The best way to understand finances is to understand where you want to be, not just where you are today. You want to know what will get you where you want to be, from where you are right now. Do you want to make a little, or a lot of money? Will money solve your issues? To make a lot of money, what do you have to do to increase your income? We will go into each of these more in upcoming chapters, but until then, here is a brief overview with three basic ways to make money.

Full-Time Job (Job/Career): Consider: Full-time employment takes a significant part of your day with opportunities for promotion. Statistics: Only 69.8% of Americans work for someone else full-time. Who’s In Charge: In a full-time job, you are working for someone else. Time Commitment: Normally, working hours are 9:00 a.m. to 5:00 p.m. - outside of that timeframe, the hours are yours. Paychecks: You receive a steady paycheck, on a consistent basis, called “Pay Day”. How to Lose this Position: If you do not perform your tasks, to a level of your employer’s satisfaction, you may be fired. If your company is doing poorly, you may be laid off and go without work.

Part-Time Job (also be known as a “Side Gig”): Consider: Employment that takes fewer hours per week than full-time, commonly less than 30 hours per week. Statistics: 43% of Americans have a side gig as their sole employment, or in addition to their full-time job. Who’s In charge: In a part-time job, you are working for someone else. Time Commitment: You work when you can and/or your employer needs you, and less than 30 hours per week. Paychecks and Pay Days: You receive a steady paycheck, on a consistent basis, when you work. How to Lose this Position: These jobs are not usually  secure, and you are normally the first to be fired or laid off. Such as if you make significant mistakes or they decide they don’t need your help anymore.

Small Business Owner: Consider: Privately or solely owned, partnerships, or corporations, use fewer employees than larger corporations and have less revenue. Statistics: In the United States, 44% of GDP (revenue) is from small businesses (in 1998 it was 48%), and 99.9% of businesses are small businesses. 20% of small businesses fail in their first year, and 50% within their first 5 years. Who’s In charge: If you own it, you are in charge; if you use others’ money to fund it, you may lose control. Time Commitment: You set your own times and work as much as you want, though not working consistently may cause your business to fail. Often, you are still working after normal business hours. Paychecks and Pay Days: This may not provide you with a consistent paycheck. You make money after your business makes money, and pays all expenses and employees, first. You are the last to be paid. How to Lose this Position: You are not fired by your employer, but instead your clients (those who pay you, or use your services). 

Investment: Definition: You buy something (stocks, real estate, metals, cryptocurrency, etc.) and it increases or decreases in value, depending on  how others see the value of that commodity. If people want it, the value goes up; if they do not want it, the value goes down. This is also known as Supply and Demand. Statistics: According to Newsweek, in 2021, 52% of Americans have money in a 401(k) or 403(b) plan; 37% have an individual retirement account (IRA); 22% have a pension (retirement provided by your employer); 14% buy individual stocks; 65.1% own a house, and 15% own precious metals. 25% of Americans have no retirement savings for when they are older. Who’s In charge: The market is in full control over the value of these investments. Time Commitment: These work when you do not. Little commitment is needed after purchase. Except for keeping rentals, which take maintenance, paying taxes, etc. Paychecks and Pay Days: You normally receive revenue when you sell your commodity. How to Lose this Position: You can’t lose this investment unless you sell it, or your investment loses all value. Typically, the longer you hold the investment, the more its value increases. 

Do you know the most basic terms in finance: Income, Debt, and Expense? These are the three most fundamental terms in the financial dictionary, and are essential to learn in order to be successful. We will teach you more about each of these, but let’s give you the basics before we go further:

Income means the amount of money you receive in a given amount of time, through work or investments; Debt means how much you owe another person or institution(s); Expense means how much you spend in a given amount of time;

So, what comes in (income), what you owe (debt), and what goes out (expense).

Part #1 – Normal Life: Allow me to simplify your potential financial situation in the future. Think of your ideal financial life. Which of these scenarios would you prefer? Choose and highlight the one you want:

1. Low income, no debt, few expenses; Get our book to find out more...

That’s right, this is the first podcast for the Debt Free Millionaire brand.

This is not just a podcast… It is a brand... That means we have everything from two books being published… to a video game that every youth and their parents will be playing in the future… It is going to be amazing. We are producing that with Xogos Gaming (https://www.xogosgaming.com), and with a little help from the ASA. But more about that in some future podcast.

Going back to the books…

One of those books is a general Debt Free Millionaire personal finance course. That is right, we will be teaching you classes about personal finance right from the book.

The second book is about house flipping, and do I have some great stories for you. I once bought a house that was built in 1913 that I had to nearly rebuild, I made so many changes. It was in Fort Leavenworth, in Kansas, and man was that an adventure.

Another house I flipped and in the middle of it I had open heart surgery, which I woke up on Christmas day and the a few months later, while still remodeling, the whole country shut down due to COVID lockdowns. That too is a story for another time.

Now… that was for my house flipping business.

Or I could tell you about me first house I lived in and flipped and that is how I became completely debt free, without a care in the world financially… and then I took on debt again.

Dang, you got me off on a rant.

Well, no worries, there will be plenty more of those as we go through my debt free millionaire journey. It’s not just about finances, though a lot of it is, its about life lessons learned and failures that became successes or knowledge that I have written into my book of life.

Being debt free and having a paid off house and financial peace was amazing then I had to go into debt for my business, another story for another time. Please support our fundraiser to finish our game development: https://www.kickstarter.com/projects/xogosgaming/xogos-gaming-education-meets-entertainment-and-enlightenment