Financial Independence
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Financial Independence
celebrating life without having to work or worry about money
Curated by Pol Espanola
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No. 1 financial regret of older Americans, and many other people

No. 1 financial regret of older Americans, and many other people | Financial Independence | Scoop.it

When it comes to their finances, most Americans are filled with regrets. Their biggest regret: Not saving for retirement early or enough.

Pol Espanola's insight:
To maintain dignity and independence in old age, one should save early, enough to build a retirement fund equivalent to the amount of monthly living expenses multiplied by the expected number of months of living in retirement before departure to heaven.
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I’m Not Rich, But I Am Financially Free

I’m Not Rich, But I Am Financially Free | Financial Independence | Scoop.it
"I’m currently in that coveted sweet spot where I can do pretty much whatever the heck I please, whenever I want.  Although a lot of folks would disagree with me, I’m not rich — but I am financially free. It’s important to understand that the two are not synonymous."
Pol Espanola's insight:
So how did I get to this point? Well, there are two big reasons:

I’ve always lived well below my means. Always.

I’ve kept my debt to a minimum; credit card debt only for convenience. I’ve never bought anything unless I’ve had the money already set aside to pay for it in full.
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Things to do to become a multi-millionaire

Things to do to become a multi-millionaire | Financial Independence | Scoop.it
From Yahoo Finance: We can't guarantee millionaire status, but doing these things won't hurt your odds.
Pol Espanola's insight:

1. Focus on earning.  Focus on increasing your income in increments and repeating that.  Follow the money, and it will force you to see opportunities.

 

2. Save to invest, don't save to save.  Put your saved money into investment accounts, such as low-cost index funds, and make it automatic. That way, you'll never even see the money you're setting aside and you'll learn to live without it.

 

3. Ask for help.  Most people won't ask for help because their ego is in the way.  Ask for help and learn from wealthy people.


4. Be decisive.  Rich people have the habit of reaching decisions promptly.  Make easily reversible decisions as quickly as possible, and aggressively plan recurring actions so you can execute simple tasks on autopilot.  


5. Don't show off — show up!  Be known for your work ethic, not the trinkets that you buy.  Need inspiration to save more and spend less? Read up on tips and strategies from wealthy people.


6. Know when to take the right risks — and act on them.  Taking risks requires much faith in yourself and others, but it must be done.  You can't get rich with low expectations — the wealthiest, most successful people think big and play to win.

 

7. Invest in yourself.  You need to be a well-rounded genius capable of talking about any subject whether it is financial, political or sports related.  Read a lot regularly and seek out mentors vigorously.  Successful and wealthy people are voracious readers.


8. Master soft skills and cooperate with others.  Building a fortune takes people skills and charm just as much as it does strategy.  No one can become a millionaire without knowing how to deal with people assertively.  People hate dealing with people who are jerks. It's always easier to be nice.  Don't be a jerk.

 

9. Shoot for $10 million, not $1 million.  The single biggest financial mistake one can make is not thinking big enough.  Go for more than a million. There is no shortage of money on this planet, only a shortage of people thinking big enough.

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Thousands Apply to U.S. to Forgive Their Student Loans, Saying Schools Defrauded Them

Thousands Apply to U.S. to Forgive Their Student Loans, Saying Schools Defrauded Them | Financial Independence | Scoop.it

"Well, I was told this would improve my job prospects.… I don’t have a job, and I’m mad about it, and I think I’m defrauded,”

Pol Espanola's insight:

Schools have the moral obligation to assist graduates in finding jobs that match the degrees they earned.  This should discourage schools from offering academic courses that are outdated, obsolete or not relevant to the needs of the employers or industry.

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Signs You Are OK to Retire

Signs You Are OK to Retire | Financial Independence | Scoop.it
As you approach retirement age, there are a number of factors to consider before deciding on when you want to retire. Here are six signs to look at.
Pol Espanola's insight:

You won't know exactly until you are a couple of years into retirement.

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Facebook's Zuckerberg to give 99 percent of shares to charity

Facebook's Zuckerberg to give 99 percent of shares to charity | Financial Independence | Scoop.it
SAN FRANCISCO/BENGALURU (Reuters) - Facebook Inc (FB.O) Chief Executive Officer Mark Zuckerberg and his wife said on Tuesday they will give away 99 percent of their Facebook shares, currently worth about $45 billion, to a new charity in a letter addressed to their daughter, Max, who was born last week. The plan mirrors a move by other high-profile billionaires like Warren Buffett and Bill and Melinda Gates, who have pledged and set up foundations to give away their fortunes to charity.
Pol Espanola's insight:

For the ultimate purpose of wealth is to love others.

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100% of your investment portfolio should be in stocks

100% of your investment portfolio should be in stocks | Financial Independence | Scoop.it

Here’s why — and how — a 100% stock portfolio can work for you, writes Jeff Reeves.

Pol Espanola's insight:

Stocks are your best and most meaningful investment!

Now Jeff Reeves agrees with me.


Ignore standard advice of building portfolio allocation.  As I have been saying all along, as long as you have regular income, or enough money set aside for your living expenses for the next 5 years, invest the rest of your money in stocks.  Yes, including your emergency fund!

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The 60/40 stock-and-bond portfolio mix is dead

The 60/40 stock-and-bond portfolio mix is dead | Financial Independence | Scoop.it
So what’s the best portfolio mix for 2016? Lots more stocks than you might think.
Pol Espanola's insight:

Why these percentages?

 

As long as you have enough money to cover your living expenses for 5 years, put the rest of your money in stocks.  Equities is the best and most meaningful investment.

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Money lessons for students

THE DEPARTMENT of Education (DepEd) on Tuesday said entrepreneurship and financial literacy will be taught to students as early as those in Grade 2 level.
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70% of Income is Not Enough to Retire On

70% of Income is Not Enough to Retire On | Financial Independence | Scoop.it
Many people think 70% will be enough to support them in retirement, but they forget a few significant expenses that could lurk in the future.
Pol Espanola's insight:

Listen up young people!

 

Five years into retirement, my wife and I are spending much more than what we used to spend when I was still employed.  We now have different expenses associated with life activities that replaced my job.  We now spend on healthcare that was previously shouldered by my employer, and it is increasing as we grow older.  And one thing we cannot avoid is inflation.

 

So, here's my advice:

 

Save and invest in equities as much as you currently spend for your living expenses, or at least 50% of your income.  This will enable you to maintain your independence and dignity, not degrading your lifestyle before and in retirement, for as long as the period that you made the savings.

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Childcare Costs Even More Than Rent

Childcare Costs Even More Than Rent | Financial Independence | Scoop.it
Just when you thought rent was too damn high, more evidence now shows that childcare costs are too damn higher. Among families with two children, the price of care exceeds rent in 500 of 618 areas, according to data compiled by the Washington-based Economic Policy Institute, a resource group that advocates for workers. Families in Binghamton, New York, are the worst off.
Pol Espanola's insight:

Save and invest for childcare and college education of your future children, even before you find your spouse.

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Right, invest your emergency fund!

Right, invest your emergency fund! | Financial Independence | Scoop.it
In a low-rate world, more financial advisors recommend putting money needed for unexpected expenses in something other than a savings account.
Pol Espanola's insight:

The enlightened advisor Tom Anderson at long last has appeared to corroborate what I have been saying all along that keeping your emergency fund in savings or low-yielding account does not make sense.  Yes, I recommend for you to invest your emergency fund in equities or stocks!

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Making your money last a lifetime

Making your money last a lifetime | Financial Independence | Scoop.it
Take the right steps to put your finances on a path to a secure retirement.
Pol Espanola's insight:

At the start of retirement and every month thereafter, simply divide your money by the remaining number of months you expect to live.  The result is the limit amount you should spend during the month.

 

It is really simple arithmetic we learned in grade school.  Financial planners and retirement experts just love to make it complicated. 

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Reasons Life Is Good When You're Debt Free

Reasons Life Is Good When You're Debt Free | Financial Independence | Scoop.it

"Take charge of your spending, enact a plan to get rid of your debt, and reap the rewards of a debt-free life."

Pol Espanola's insight:
Here are a few of them:

1. You're Happier
2. You Have a 'Real' Savings Account
3. You Have Cash Flow
4. You Have Better Financial Health
5. You Have the Opportunity To Do More
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The Godfather Sends You A Message: Maintaining Financial Independence In Retirement

The Godfather Sends You A Message: Maintaining Financial Independence In Retirement | Financial Independence | Scoop.it

One virtually universal retirement goal that is often taken for granted and perhaps not fleshed out long before retirement is maintaining financial independence. And, while it may not sound as flashy at first glance, it’s incredibly sexy.

Pol Espanola's insight:
"Wealth and possessions don't define the value of a life. Keep your sights on what's important. Live within your means. Worry enough about tomorrow in the present so that when it becomes the present, you can simply live this beautiful life."

"To be wealthy and free is glorious!"  -  Freedom Father
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An absurd number of jobs around the world are going unfilled

An absurd number of jobs around the world are going unfilled | Financial Independence | Scoop.it
From Yahoo Finance: There’s an abundance of job seekers around the globe right now, eager to land steady employment. Yet job vacancies in dozens of countries are also plentiful: In the US, for instance, there were 5.4 million open jobs in 2015—the highest in 15 years. Other countries like Germany and Canada are also experiencing high unfilled-job rates.…
Pol Espanola's insight:

"... companies’ across-the-board hiring difficulties also indicate the existence of a clear mismatch between employers and job seekers... report attributes this mismatch to several factors, including lack of qualified applicants; overabundance of some positions and undersupply of others; and uneven employer demand for certain talents, especially technology-related ones"


This indicates the failure of schools in preparing students for meeting the needs of the employers or industry.

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Signs You Are OK to Retire

As you approach retirement age, there are a number of factors to consider before deciding on when you want to retire. Here are six signs to look at.
Pol Espanola's insight:

You won't know exactly until you are a couple of years into retirement.

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8 Colleges That Just Launched Big Tuition Discount Programs

8 Colleges That Just Launched Big Tuition Discount Programs | Financial Independence | Scoop.it
From Yahoo Finance: Simple price breaks for a wide range of students.
Pol Espanola's insight:

Are colleges in trouble, if not dying?

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Questions to Answer Before You Retire

It's an achievement to make it to retirement. Years of hard work pay off once you have saved enough and get to hand over a resignation letter to your boss. You say farewell, and there may be a few tears ...
Pol Espanola's insight:

Do you plan to reduce stock exposure?

You don't have to.  Don't be afraid of volatility.  Just make sure you have adequate cash and fixed-income investments to meet your living expenses for the next 5 years.


What is your strategy to withdraw money to meet daily expenses?

Make it simple.  To calculate provision for monthly expenses, divide all your money by the number of months you expect remaining before you go to heaven.


What do you plan to do with your assets?

Dispose of all your real properties.  You cannot take them with you to heaven.  Liquefy all your assets and plan to spend them all or give some away while you are still alive and able.  Die broke!


What do you plan to do every day?

Unless you haven't saved enough for your living expenses, quit chasing any more money.  Life is not all about building wealth.  You were created and blessed with gifts and talents for a divine purpose.  Live the rest of your life in service of others.  You will be welcome in heaven. 

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The 4% rule is imminently safe?

The 4% rule is imminently safe? | Financial Independence | Scoop.it
Here's the data to back it up.
Pol Espanola's insight:

Why such complicated question?

 

Simply divide your retirement money by the number of months you expect remaining before going to heaven.

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signs you're ready to move in together

How do you know you’re financially ready to move in with your partner?

Pol Espanola's insight:

You know who's paying for what

You've had "the numbers talk"

You've gotten clear about your goals

 

Great! and how about getting married first?

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The Ten Commandments of Personal Finance

The Ten Commandments of Personal Finance | Financial Independence | Scoop.it
Here are the simple financial Ten Commandments that, when faithfully followed, can lead to a secure economic future.
Pol Espanola's insight:
I. THOU SHALT PLAN AND THEN ACTII. THOU SHALT SAVE AND INVEST WISELYIII. THOU SHALT NOT OVERSPENDIV. THOU SHALT PAY BILLS ON TIMEV. THOU SHALT LIMIT DEBTVI. THOU SHALT TEACH THY CHILDREN ABOUT MONEYVII. THOU SHALT BUY INSURANCE

 

VIII. THOU SHALT PLAN FOR RETIREMENT

 

IX. THOU SHALT HAVE A WILL

 

X. THOU SHALT DONATE
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Should we stay or should we say goodbye?

Pol Espanola's insight:

Great practical advice from my good friend FQmom Rose Fres Fausto for families living with in-laws.

 

I just would like to add that if your dream is to have your own home with your family in the future, save and invest for it even before you find your spouse.

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Things to know about your spouse's finances before marriage

Things to know about your spouse's finances before marriage | Financial Independence | Scoop.it
Before tying the knot, there are certain things people need to know about their spouse's finances.
Pol Espanola's insight:

Marital troubles are mostly about money.

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You Do Not Need That Emergency Fund

You Do Not Need That Emergency Fund | Financial Independence | Scoop.it
Emergency funds are considered mandatory by most financial-planning experts, but they can be expensive to hold and ultimately unnecessary.
Pol Espanola's insight:

At long last! One sensible lady Vanessa Page supports my view that this "very important, priority financial requirement" Emergency Fund, recommended, copied and restated by financial planning experts all over the world in many personal finance books, is mostly nonsense!

 

As I have been preaching all along, there no is emergency if one clearly anticipates and appropriately provides for adverse life events. There are more effective means of dealing with these events other than keeping a big amount of cash in low-yielding savings accounts.

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