Post: #51

Would like to give a Special thanks to everybody contributing to this Thread. These Gems will definitely be in use as of right now !

Post: #52

For the guys who say credit cards are useful they are usually only useful for those who own a business or who are big ballers/spenders. For an average person to the points earned on a credit card are a pittance and not worth the hassle and at least in Australia owning a credit card is more likely to hurt than help a loan application. I’ve never used a credit card and that didn’t stop me from getting investment mortgages/loans. For an average person all it takes is one slip up in a year (e.g. forget to pay your credit card bill within the no interest period because you were busy) and the benefit of points and interest free money is more than offset.

As for leverage good luck to Joe Blow trying to retire at 35 without borrowing money. Yes it could blow up in your face. Just don’t be an idiot and do your research.

Post: #53

Telling someone "You can retire at 35 with margin trading, just don't be an idiot and do your research" is irresponsible and silly.

Post: #54

Samuel I said leverage I didn’t necessarily say margin trading. In Australia the classic example would be save some money (20% + transaction costs) then buy an investment property (or owner occupied home) and rent it out. A few years later if the price of the property has gone up you can get the property revalued and get a loan increase/“equity release” on the property. You then take the extra cash and invest it something, e.g. in the stock market, or gold or another property, etc. This way you are not subject to margin calls and you are paying a low interest rate (say around 4% currently).

Another alternative for young guys in Australia is if your parents own some investment properties see if they are willing to go to the bank and get them revalued and lend some money to you (and you pay the interest and principal on that portion of the loan). It’s a way for parents to help their kids without giving direct cash handouts or putting the house on the line. It goes without saying if you are borrowing from your parents make sure if the investment goes south you can still pay them back eventually.

Post: #55

Credit cards are a very useful tool. Especially if you are sensible with your spending. Guys here saying use cash are not understanding the long term benefit a credit card can offer.

I put all my monthly expenses on a credit card and pay the balance off in full each month. They is just another weapon in my arsenal and build and improve my credit rating with. Debt should not be feared but should be used wisely. Credit cards make this easier to do.

Good luck purchasing large assets without using debt to do so. It can be done, sure, but for most folks is not a realistic option. Having a good credit rating will allow you to get a smaller interest on your repayments. The only way your going to get such a favourable interest rate is by having a good credit rating.

Be disciplined though as it easy to think that because you have X amount in credit you should spend it. I have a credit line of about £12k but my balance is below £2500 and that is entirely on 0% interest that don't kick in between 4-18 months depending on the breakdown.

Anyone with spare money each month should invest it at a minimum into stocks which typically return 6% return over long term. That means that for each £1 you invest in 12 months would be worth £1.03 in todays money after deducting inflation. If you keep that £1 in cash in 12 months it would be worth 98p as some got lost. You've retain value and grown some more.

Debt should not be feared and is sometimes crucial for building wealth.

Take for example buy to lets. Lets assume you own a property with no debt. While it will rise in value it is not generating any money. You can leverage the property and obtain 2-3 buy to lets. These additional properties will generate and income and cover their cost of debt. Your using debt to build real wealth. The can only be done by having a good credit rating which credit cards are almost invaluable for.


I would also recommend paying your bills on direct debit that way they get paid every single month automatically and will also help build a good credit rating. If you live in the UK then you should be on the electoral register too.

Post: #56

Just to follow-up on what Ethan Hunt said regarding credit cards:

Credit cards also offer valuable protections with the right cards. I had a TV break down that I bought from Costco. Because I bought it on my Costco Visa, it comes with extended warranty protection. Instead of being out a TV, I got a new TV for no additional out-of-pocket costs. I paid the same amount for the original TV as someone paying cash, only because I used a credit card, I got extra protection.

Credit cards can be helpful when dealing with a scumbag merchant. I've had several large ticket items that I've purchased before that weren't delivered, damaged, or otherwise not up to expectations. I'm a reasonable person, and always try to work with a retailer for a solution. But if the punk on the other end isn't giving me a break, then it isn't that hard to call the toll-free number on the back of my American Express and get a chargeback issued. You can get your money back a lot easier if you ever deal with the bad guys and paid via credit card. A friend of mine paid $7,500 for custom car parts via check, and never saw them. If he had paid with a card, he would have most likely gotten his money back.

Post: #57

I disagree with the <33% rule for rent. I'd rather pay up to live in an excellent location where I don't need a car for work and am within walking distance to the best spots in town. Car costs add up, too.

Post: #58

1. Not all debt is bad
2. Don't overextend your position
3. Dollar cost averaging
4. Always pay your debt
5. Live (just a little bit) below your means
6. Start saving as young as you can

Post: #59

I wouldn't pay more than 1/4 of my gross income for housing. I started saving 10 percent into long term savings, and bumped that to 15 last year. This year I am trying to get to 22 percent, with a goal that by next year I have 30 percent going towards investments/retirement.

Post: #60

I could talk about personal finance all day, lots of good advice on this thread. I’ll share some tidbits that have helped me a lot in building my net worth that haven’t already been talked about.

I think the main reason rich people get/ stay rich, and Poor people stay Poor is their mindset. My two favorite quotes are Below.
“Rich people use their money to buy cash producing assets like stocks and real estate, poor people use their money to buy stuff.”
“View money as a tool to increase your net worth, not as a means of buying more things.”

The poor people I know would get a $10k bonus and immediately blow it on a new watch, new iPhone, new toy. The rich people I know would get that bonus and invest the entire thing which makes them more money. I used to have the consumer mindset when I was younger, but something changed when I hit my late 20’s and now I’m obsessed with increasing my net worth.

Not only diversify investments but diversify your income. I read that the average millionaire has 7 streams of income coming in every month. That’s always been my goal, to have 6-7 streams of income. It doesn’t even have to be a lot of money, but i have a goal of making $100 dollars extra per week doing something: driving for Uber, dividends, random side hustle. I usually make more than this on the side but I just like the extra money coming in.

Also, take advantage of credit card bonuses and rewards. I churn through credit card bonuses and make an extra $3-4K per year in travel rewards from the bonuses. I haven’t paid for a flight or hotel in 3 years.

Post: #61

Another one of my favorite money tips is don’t buy a House until you’re rich or starting a family. It makes zero sense to buy a house if you’re a single Guy. Owning a house is a money pit and doesn’t make sense economically for most people. People shove this idea down our throats that you haven’t truly made it unless you buy a house.

All of my friends that bought houses in their 20’s have regretted it and ended up Selling. The trick is to not overspend on rent. I spend about $1k per month living in a studio in a nice high rise in a major metropolitan city.

Most people’s two major expenses every month will be rent/mortgage and car payment. If you can keep both of these monthly costs down, or pay for the car in cash, then everything else is gravy baby!

Post: #62

What Oilrig said above makes a lot of sense if you live in a big urban area where the purchase price of owning, plus high property taxes make your total cost of ownership very prohibitive relative to renting, especially if you split rent with one or more people. If you live/work in a cheaper suburb or in a rural area, owning can make sense, even at an early age, because the cost barrier to entry and long-term ownership (especially with lower taxes) makes your mortgage payment earn equity over time. This is especially true if you purchase now with lower interest rates in an area you anticipate to grow and appreciate in value in the coming years. Once again, each situation needs to be taken on a case-by-case basis when it comes to buy versus rent. There's an argument to be made for both, depending upon your circumstances.

Post: #63

-cut out eating out / fast food
-cut out drugs and alcohol
For young people these are probably the two biggest money suckers I can think of. Or just use careful moderation if you don't want to cut em completely out

Post: #64

(01-31-2018 06:31 AM)Oilrig Wrote:  Another one of my favorite money tips is don’t buy a House until you’re rich or starting a family. It makes zero sense to buy a house if you’re a single Guy. Owning a house is a money pit and doesn’t make sense economically for most people. People shove this idea down our throats that you haven’t truly made it unless you buy a house.

All of my friends that bought houses in their 20’s have regretted it and ended up Selling. The trick is to not overspend on rent. I spend about $1k per month living in a studio in a nice high rise in a major metropolitan city.

Most people’s two major expenses every month will be rent/mortgage and car payment. If you can keep both of these monthly costs down, or pay for the car in cash, then everything else is gravy baby!

This is only true for buying a principal residence, like a house in the suburbs that's a useless money pit.

If you buy a multiplex you can live in one of the units and rent out the others so that your tenants pay the mortgage for you. Eventually, you can rent out your unit and travel the world and live off your rental income.

It's best to do this as early as possible for the reasons John Michael Kane mentioned.

Being a landlord is one of the oldest professions (after prostitution, of course), so it's pretty much a no-brainer.

I'd never do condos and I'm past my living with roommates years, but for younger guys who can't afford a multiplex yet you can start with a 3 bedroom and rent out the other two bedrooms so your roommates pay your mortgage for you.

Post: #65

I agree with you to a certain extent. But for a guy in his 20’s that can barely afford a down payment on a house, duplex, investment property etc. I think there’s better ways to invest that money. Dealing with tenants and maintenance issues can be costly and like a part time job. I prefer to invest money in stocks where I’ll never have a tenant wake me up in the middle of the night because their AC is out.

Post: #66

(02-02-2018 04:52 PM)Oilrig Wrote:  I agree with you to a certain extent. But for a guy in his 20’s that can barely afford a down payment on a house, duplex, investment property etc. I think there’s better ways to invest that money. Dealing with tenants and maintenance issues can be costly and like a part time job. I prefer to invest money in stocks where I’ll never have a tenant wake me up in the middle of the night because their AC is out.

A lot of it depends upon the timing of when you have significant investable cash. If the stock marketing is booming, you risk buying at a peak and overpaying, just like if you were to have bought properties in 2007 at historically high prices, especially in markets like California, Florida and greater Las Vegas. As with all investing, no matter the asset class, it is important to take everything in from a historical perspective before placing your stake.

Post: #67

I've only one as everything else is pretty much covered. Organise lines of credit, even credit cards etc. when you are travelling OK. As long as you are disciplined and don't spend up on them that is. When you are in a tough situation it can be very difficult to borrow. This applies to both business and personal. The banks here in Aus don't care how much you have in assets or equity its the ability to service the payments that counts. So if you have a line of credit and things turn sour, at least you have funds available to see you through until things get better. I cannot stress enough this is only for that, not normal spending.

Post: #68

I have a personal finance spreadsheet that tracks two things: how much money I currently have and how much money I spend.

Weekly tracking: how much I currently have

This tab of the sheet is simply a weekly snapshot of my current financial situation. It's a very simple spreadsheet with columns for each location I have money in: one for each bank account, one for cash, one for PayPal, etc.

For my own reference, I also add any expected income and expenses into separate columns, but I am most interested in what I currently have at my disposal.

Over time, the value in the "Total" column should be going up or, at the very least, not be going down. If it does go down, it means I need to make more money or spend less money, it's that simple.

Daily tracking: how much I spend

For the past 3 years, I've also been tracking every single expense I've made in a spreadsheet and split it up into categories. This may sound like a bit of a pain in the ass, but it's not that hard if you make a habit out of it. I take two minutes every night to update the spreadsheet with any expenses I've made that day.

As a result, I can now pull up all kinds of data instantly. I can see how much I've spent on average per year, per month, per week, per day and per category. I even track which country and city I was in so the more time I spend in a location, the more data I have about it. When I plan to return to a country, I simply pull up my previous spending data about it and use that to determine if it would be a wise decision to go back there, given my current financial situation.

As a side note, having my own personal data for each location also made me realize that every single article you find on the internet about how much it costs to live in Country X or City Y is complete horse shit. It all depends on the individual.

Now the point of this is not to try and spend as little as possible on every damn thing in your life, because what fun is that? The point is simply to track things and become aware.

The key here is being honest with yourself and to avoid putting too many costs into the "Misc" category. I used to put things like my morning coffee into this category, for example. It's one thing to see how much you've spent on "Misc" but it's another thing to be confronted with the amount of money you've spent on coffee.

These little things add up and when money does get tight, you can easily see in which ares of your life you could save some.

There's apps for this, but I like to maintain a spreadsheet as it allows me to tweak things more. It also forces me to be more conscious about it instead of mindlessly putting everything in an app.

These habits started when I was on a much tighter budget than I am currently, and to be fair, that's probably when they are more useful. Nonetheless, I have kept them ever since.

This system probably sounds nerdy, but for me it's been incredibly helpful over time. I am completely aware of my financial situation at all times and all it costs me now is a few minutes of updating sheets every day.

Post: #69

I do something similar.

I have a cash flow projection spreadsheet to make sure all my payments are covered.

I have a cash spend spreadsheet to see how much I'm spending and on what. I separate out all business expenses, as well as medical, clothes, and tech, which I track separately.

I like to know my cost of living in different countries, including travel and accommodation.

In some places, New York, Moscow, London, etc, I spend more; in some, SEA, Ukraine, Colombia, etc, I spend less.

3 year average is about $2700 CAD per month on living costs, which don't include medical, clothing, tech, or business expenses.

Post: #70

(02-11-2018 11:22 PM)Winston Wolfe Wrote:  <SNIP>

The key here is being honest with yourself and to avoid putting too many costs into the "Misc" category. I used to put things like my morning coffee into this category, for example. It's one thing to see how much you've spent on "Misc" but it's another thing to be confronted with the amount of money you've spent on coffee.

These little things add up and when money does get tight, you can easily see in which ares of your life you could save some.

<SNIP>

This system probably sounds nerdy, but for me it's been incredibly helpful over time. I am completely aware of my financial situation at all times and all it costs me now is a few minutes of updating sheets every day.

Being honest with yourself is definitely important. Coffee is actually a great example because while the cost may not be THAT much over a year, it is more significant than people realize and on top of that the percentage markup you're paying is HUGE vs buying coffee supplies and brewing it yourself. Most people who drink coffee regularly could make a significant car payment or go on a small vacation just in the cost savings alone switching to making it yourself. That's crazy for what is likely a tiny budget line item for most people with a good job. Apply this mentality to another line item with far less significant markup but with far more dollars spent and you can start to really see some rather large gains in terms of keeping your income and being able to spend it on assets or experiences.

That reminds me, I need to go buy some more coffee, I bought one at the drive through today

I'm sure some forum members would appreciate it if you posted some spreadsheets (sans data/identifying information of course).

Post: #71

(02-12-2018 03:13 PM)AneroidOcean Wrote:  I'm sure some forum members would appreciate it if you posted some spreadsheets (sans data/identifying information of course).

Sent via PM.

If anyone else would like to have it, please PM me and I'll send it to you. I'm using a WeTransfer link so it would be no point posting that in here as they automatically get deleted after X days.

Post: #72

Another tip that I forgot to mention earlier:

For those of you gents who are W-2 employees, make sure you speak with your payroll department and adjust your withholding to ensure you get the smallest tax refund possible at the end of the year. Doing so will give you several extra months to invest and save money that is rightfully your's, or even more importantly, pay off high-interest rate debt even faster.

Here's a few simple explanations of how to do so:









Getting a huge tax refund makes zero sense, as that is lost opportunity cost on your ability to stick that cash into savings, investments or paying off debt. Giving the government a 14-month interest-free loan (12 months of the year, plus 2 more usually to file and get a tax "refund") makes zero financial sense.

Don't look forward to a big tax refund at the end of the year, only to waste it on things you don't need. Make sure all your money is working for you throughout the year. This is an easy financial leak that you should plug ASAP.

Post: #73

1. Aim for ~90% of meals to be home cooked. Healthy, easier to track macros, ridiculously cheaper than eating out. I eat about 28 meals/week (4/day), so that allows me about 2 meals/week out, which are usually lunch or dinner with friends or girls.

2. If living in a big city, ditch the car, invest a bit more money in housing location and walk/bike everywhere. Uber if raining a lot or if out at night. It's good for the body and the mind, plus you get huge savings.

3. Get rid of stuff. The less stuff I have, the less I want to buy. Sell everything you can, donate the rest, and keep just the comfortable minimum. At this point, every item I buy, unless necessary, sticks out at home and bothers me. My house is easier to clean (no need for a maid), there's ample room for the circulation of air, closets and shelves are no longer cluttered. Save time and money.

4. Ignore most trends, and whenever possible/reasonable, invest in QUALITY. For example, I'd rather have one pair of US$250 boots that will last me 5+ years, than multiple pairs of cheaper boots that fall apart sooner. Or just one winter coat that is more expensive than average, but is versatile and warm. Quality items tend to last longer and look better as they age.

Post: #74

The official Richard "Dick" Johnson guide to making and saving stacks.

1. You cannot SAVE your way to real wealth, if you do you will most likely be 70 and have a limp dick by the time that happens
2. Have multiple hustles
3. Have an emergency fund (15% of every paycheck is good)
4. Be a big time haggler, it is not cheap it is smart
5. Do not get married, who has time for that shit

Richard "Dick" Johnson

Post: #75

(02-15-2018 09:00 AM)Ringo Wrote:  1. Aim for ~90% of meals to be home cooked. Healthy, easier to track macros, ridiculously cheaper than eating out. I eat about 28 meals/week (4/day), so that allows me about 2 meals/week out, which are usually lunch or dinner with friends or girls.

2. If living in a big city, ditch the car, invest a bit more money in housing location and walk/bike everywhere. Uber if raining a lot or if out at night. It's good for the body and the mind, plus you get huge savings.

3. Get rid of stuff. The less stuff I have, the less I want to buy. Sell everything you can, donate the rest, and keep just the comfortable minimum. At this point, every item I buy, unless necessary, sticks out at home and bothers me. My house is easier to clean (no need for a maid), there's ample room for the circulation of air, closets and shelves are no longer cluttered. Save time and money.

4. Ignore most trends, and whenever possible/reasonable, invest in QUALITY. For example, I'd rather have one pair of US$250 boots that will last me 5+ years, than multiple pairs of cheaper boots that fall apart sooner. Or just one winter coat that is more expensive than average, but is versatile and warm. Quality items tend to last longer and look better as they age.

Great advice. Another option if you're in the city is a monthly/quarterly/yearly bus or rail pass. Much cheaper than owning a car, and without the hassle of parking in a big city.

Also strongly agree about investing in quality. Part of why buying cheap crap doesn't work is because you waste more time doing research and re-purchasing things that you could have maintained if they were quality in the first place. Going to Wal-Mart to buy more cheap boots involves more gas, more time, more wear and tear on the car and most importantly, more time!