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5 Keys To Winning With Your Money

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Go Cheap? Yeah, probably not.

Hello, American Debt Project readers! I love what you’ve done with the place. If you don’t mind, I’m going to pop my suitcase in the guest bedroom. While I’ve been instructed by the puppet masters that I’m going to be writing here only once a month (your loss…), it’s still probably important that you know Joe’s rules to this game.

…and before I share them, I’ll mention this: I may not know everything about money, but 16 years in the trenches peeking behind the “money curtain” that hundreds of families hide from others leads me to strongly believe that this is the path to success:

Here Are The 5 Paths To Winning:

1)     The key to winning isn’t in avoiding lattes. I’ve met hundreds of successful investors and have had the privilege of peeking inside their budgets and portfolios. I hate to inform those of you cutting back on lattes that not a-one would credit avoiding Starbucks in the top ten reasons they’ve succeeded in life. In fact, many are avid latte-lovers.

That doesn’t mean that you shouldn’t watch dollars carefully. Clearly, wealthy individuals have a relationship with money that’s different than their non-wealthy counterparts. Wealthy people understand that money isn’t a permanently running faucet. They’ll save a buck on groceries because they won’t find value in spending more on a product.

2)     Whether you pay attention to nickels or not, wealthy individuals focus their time and energy on big problems and big solutions. Rather than cutting coupons to save $20 they create a side income or score more money from their job that nets them $200. Rather than worry about branded vs. unbranded cereal and saving $3, they refinance their mortgage when interest rates are low and save thousands. Even better, they stay away from high interest debt that steals hundreds of dollars from their pockets.

But hey, if you demand making a few bucks here and there off of unwanted stuff, give selling your old games or music a try with MusicMagPie.

I remember Crystal from Budgeting In The Fun Stuff telling me a story recently on our podcast about the name of her site. She said people were complaining on a well-known finance blog about a woman’s displays of wealth. They were ripping her for having a cleaning lady and for hiring someone to take care of some fairly easy tasks.

I’d be like that lady every chance I get. Here’s the deal: unless Shirley Maclean is right and we’re going to be reincarnated, we can only do this merry-go-round life one time, and I like the “merry” part of the go round. “Merry” doesn’t mean washing dishes or sweeping floors. Sure, I can find pleasure in simple tasks, but I’d much rather whine about my day in a hot tub over a foamy beverage than sweating while laying tile in the heat.

3)     That said, it’s easier to become wealthy if you cut out silly expenses. We realized a few months ago that we weren’t watching our Dish Network. I purchased a Roku  to see if we liked it. We did. We travel cross country fairly frequently, so a year ago I invested some money in a one year XM radio contract. Because I’ve found several apps for my phone and podcasts I like, we’ve cancelled that bill. These are silly expenses that we no longer need.  Together they save us nearly $100 per month. That’s money I can spend on a housekeeper, if I choose.

4)     Winning usually means surrounding yourself with great advisors. Sure, I believe in saving money whenever possible, but in unimportant areas. I haven’t met wealthy individuals that didn’t have some prominent advisors helping them. When you ask successful people how they became successful they discuss breaks, mentors and hard work. You have to sometimes hire great coaches to reach the highest heights.

I read “Don’t hire advisors” pieces on the internet and groan. The authors of those articles are missing the point. You should hire the RIGHT advisors, not ditch all advisors. Can’t afford an advisor? Start a mastermind group with people who are headed in the same direction. While you might miss out on the shortest route to solving your problems, you’ll be able to look at issues from multiple points of view and find success more quickly.

5)     You need a basic understanding of investing so that you don’t get robbed. I’ve never met a wealthy individual who said, “I don’t know much about investments.” Sure, you may be afraid of the jargon and semantics of investing, but that’s a hill you must climb if you’re gonna be successful. I’ll put it bluntly: in the financial advising business we could see noobs from a mile away, and there were some pretty predatory individuals working in that industry. It’s okay if you don’t understand the complexity of investments….and don’t let that stop you from hiring good advisors if you feel you need them…..but you need (NEED!) a basic understanding of how this works. Read beginner books on the topic. Suze Orman and Dave Ramsey keep it interesting. Keep reading this blog. Fill your mind with the topic.

Hopefully those help you start down this path to financial success more quickly than you would without this roadmap. Financial success isn’t only profitable: it’s also fun. Once you watch your net worth begin to ascend, you’ll feel like a mountain climber reaching for the next wrung. Instead of prodding yourself to try and cut your budget you’ll be dancing toward your next financial milestone.

…and that’s a fantastic feeling.

Joe Saul-Sehy is the co-host of the popular podcast Stacking Benjamins and also writes at the blog sharing that same name.

Save Money Driving – Fuel Saving Tips 16 – 25

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Gas pump

This is a Guest Post by Todd @ Fearless Dollar — it’s part of his 5 site series on How To Save on Gas Money.

Are you driving to see family this holiday season? Taking a road trip to see the fam can be cheaper and more (or less) convenient than taking a flight.

If you haven’t noticed, in the past 10 days fuel prices have dropped 50 cents in many areas across the country. But don’t be deceived, they’re still a lot higher than they were just 5 years ago.

If you want to save money on driving, here’s our 5 site series on saving fuel. I’m posting across five websites, so make sure to check out all the tips!

Fuel Saving Driving Tips

Tips 1 – 5 Fearless Men

Tips 6 – 10 Fearless Dollar

Tips 11 – 15 AllThingsFinance.net

Tips 16 – 25 American Debt Project

Tips 25 – 30 Daily Tips Blog

SAVE GAS BY PLANNING YOUR TRIP

Thinking ahead to save fuel

16. Set your course

Organize activities and perform as many errands as possible in one trip. Plan a route by driving to your further distance first, and then make your way back home by hitting your other planned spots along the way.

17. Skip the rush hour

If possible, avoid driving during rush-hour & other peak traffic periods. Plus, doing so is proven to extend your life! (Well maybe not, but at least you’ll have a little less stress and frustration!)

18. Better planning

Better planning reduces the need for speeding to get there in time. The biggest waste of fuel is accelerating hard and fast!

19. Gas station shopping

Shop around for service stations with the lowest gasoline prices. – also use GASBUDDY!!

If you’re like me, you have a routine gas station you go to. If you’ve been going there for several months or over a year, it’s possible another gas station has overtaken your usual spot with better gas prices.

20. Traffic reports

Keep tuned to radio traffic reports & avoid traffic jams and other delays.

21. Public transpo

Public transportation may be cheaper, especially when you are traveling alone.

22. Eliminate dead weight in your car.

If you’ve got a trunk full of stuff that could be cleared out, you should do it right now. You’re spending gas lugging the extra stuff around.

23. Take the path of least resistance

Avoid rough roads whenever possible, because dirt or gravel can rob you of up to 30% of your gas mileage. Potholes and rough patches require you to speed up and slow down frequently. This oft acceleration will burn through your gas.

24. The shortest path isn’t always the fastest.

Avoid heavy traffic and lots of traffic lights. The shortest route is not always the most fuel efficient if you have to stop a lot.

25. Consider alternate routes

Use alternate roads when safer, shorter, straighter. Compare traveling distance differences – remember that corners, curves and lane jumping requires extra gas. The shortest distance between two points is always straight.

Checkout gas saving tips 26 – 30 on Daily Tips Blog!

[Featured image courtesy of http://www.flickr.com/photos/cmogle/]

5 Ways to Make Your Commute Less Painful

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Sometimes I divide people up into just two categories: those who live close to their work and do little to no commuting, and those who have to commute.

Way too often in life, I have fallen in the latter category. At its worst, my commute has been 33 miles each way. At its best, it was a walk down a hill (and up on the way home).

Since moving back to California, I was lucky enough to live just 5 miles from a couple of different project offices, and with my new job, I live 18 miles from my office.  An 18-mile commute is not the end of the world for me: I know it’s popular to lament how gray and dull it is to get in your car and drive to work everyday, but frankly, I love my work and I love where I live, and the two happen to be 18 miles apart. I simply cannot zipline across 18 miles of Southern California suburbs, and so I make the best of my commute. Here are a few tips that have helped me enjoy the ride:

1. Carpool.

I have made a few great friends through carpooling to work. There’s nothing like a car ride to make people open up to each other- and luckily that’s always been a good thing. Carpooling is tricky since you don’t always know when you need to stay late, and there have been times when I have walked out to the parking lot for lunch only to remember I didn’t drive that day-but the benefits are immense. You spend less on gas or share the cost, you make the drive interesting, and you reduce your carbon footprint. Win/win/win.

2. Borrow Books on Tape from the Library.

Here are the books I have “read” on tape: Brideshead Revisited (an all-time favorite), A Heartbreaking Work of Staggering Genius by Dave Eggers, and The Power of Habit by Charles Duhigg. I’ve also got “Learning Chinese” although I will admit that I can only do a few lessons at a time since Chinese requires a lot of mental effort on my part.

3. Download an online course or series.

If you don’t feel like listening to one book, try a course, from MIT OpenCourseware or other free platforms, and download the lectures for listening on your drive.

4. Beat the morning rush.

If you’re lucky enough to have a gym on-site or on your way to the office, try getting up early to work out before work. You can avoid the morning traffic and get your heart pumping. I admit that I used to think this was impossible because everyone knows the best sleep is achieved from 5:45 to 6:30 in the morning. But after a couple weeks of morning workouts, I now love the morning routine. It’s great knowing my workout is done and going home in the evening without feeling like I have to exercise and can just take the dogs for a long walk.

5. Get a wireless headset and make your daily calls.

I love my Bluetooth, even if it makes me feel like a cheesy mortgage broker sometimes. I can make all my calls on the drive home, some obligatory and some to just catch up with friends and family.

If you can take public transportation or ride a vanpool, even better. These options also allow you to catch up on emails, read or listen to music. I like the transition period from home to work, and while short commutes are better, there are always to make a longer commute more enjoyable and sustainable. 

Tipping Etiquette | How much do you leave?

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Tipping Jars confuse me the most. Do I give all of my change? Plus bills? How about just the nickels and pennies that I don’t like? This is starting to sound like calculus and makes my head hurt. There’s no law on how much to tip. No cop is going to hunt you done because you tipped too little. But don’t you get that guilty feeling or you did something wrong when you really are trying to tip properly?

The Barista made my coffee just the way I like it, so do I tip 20%? This steak is cooked well-done but I asked for medium rare, so do I tip 10% or maybe nothing even though it’s the cooks fault?

How about my hairdresser or stylist? I’ve heard anywhere from 20% to nothing. The post man? He walked all the way here and hand delivered my goods. Ha! That ones a bit extreme. No one tips the mail man. But why do we tip at Star Bucks? The price is already outrageous and they get paid well with benefits.

I don’t know the right or wrong answers for tipping. And I don’t think there is a right or wrong percentage or number. I have a basic rule of thumb that I follow and I actually under most circumstances apply it across the board. Whether you’re the plumber, detailing my car, waiting on me at a restaurant, or cutting my hair.

15% – Starts Here

20% Good Service

10% Bare Minimum Service

0%  Bad Service

I’ve never had to do 0% because I usually try to give them the benefit of the doubt or a way to make it up to me through out the course of the meal or service being performed. I would classify myself as a generous tipper since I’m usually giving 20%. But I don’t feel cheated, disrespected, or as if I missed out on something. If I leave happy then they did a good job. Can I ask for more?

I don’t tip Tipping Jars 90% of the time. I don’t see the point. You’re already paying the expected amount. Now if they go above and beyond for me then I tip. How do you know what’s above-and-beyond? I compare it to service I’ve received at other places. If you notice when you’ve received bad service then you’ll be able to point out extra good service.

What about tipping for services that aren’t paid for?

This one is tricky because you can’t calculate 20% when the bell boy helps you with your bags or when your hotel room is cleaned. Not room service (15% to 20% of the bill is already included).

House keeping it’s generally expected to tips $1 to $5 per cleaning occurrence/day. Depends on how messy your room is. I normally only ask for cleaning on the day I checkout so I leave one tip. But if you have a cleaner each day don’t leave it all at the end of your stay because it’s a different cleaner each day. I’ve never received help carrying my luggage so I can’t tell you how much to tip. But I’d probably do a couple bucks.

Maid or House Cleaner I think deserves a 20% tip for a above and beyond job. Did they get behind the furniture and between the corners? Or did they sweep everything under the carpet?

Valets you should also give a couple bucks or $5 depending on the level of establishment you just went to.

This list could go on much longer. But I think tipping etiquette doesn’t stray too much between all of us. Although the other day I did hear the radio host say that’s she’s never left a tip for her hotel stay and didn’t think she needed too. It did make me wonder if the service would really be that different. Is the pillow fluffed a few extra times if I leave $5? Probably not. I’ll still leave a tip though because I’m thankful.

I love reading stories of generous tippers and then seeing them on social media. I know there’s speculation that it’s all staged or fake. But I still love hearing about it. If you can afford to this all the more power to you.

Sometimes tipping etiquette is simply common decency and showing appreciation. You can’t put an exact dollar amount on that but you can leave a little something. What do you think?

This is a guest post by John @ Fearless Dollar and Fearless Men. If you’re interested in guest posting please contact us.

Featured image by http://dribbble.com/BradEllis

Dipping My Pinky Toe in Investing: I Bought My First ETF

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So, I feel like for the two-plus years I blogged while still in debt I talked a big game on investing but never actually did anything. I was reading some, but not enough. But since August, I had some funds that I had marked for investing, which was just sitting as cash in my brokerage account. I own three individual stocks in my retirement account as well as a few mutual funds, but I wanted to look at buying shares of a lower-cost ETF. A lot of personal investors have raved about ETFs, and although I prefer holding a few stocks I have valued and understand deeply, I think the ETFs are good holdings as well.

I had my eye on the Vanguard Small Cap Value Index Fund (VISVX), but realized that the Vanguard Small-Cap Value ETF (VBR) was the same set of holdings and had a lower expense ratio (0.10% vs. 0.24%). I didn’t realize that ETFs and Index Funds were different (that’s how amateur I am) and Investopedia has a helpful reference page on the two.

Also, the ETF was offered through my brokerage account commission free, and since I wasn’t buying that many shares, it was nice to remove that $9.95 commission. As far as the index fund vs. ETF, they shared many similarities, but I liked the ETF’s pricing, which trades throughout the day, while the index fund is like a mutual fund and is only priced once per day when the market closes. So, while the government shutdown was sending shares all over the market tumbling, I decided to purchase the shares I had been thinking about for over a month that day at a respectable price, and VBR shares have climbed since. Of course, the market is pretty highly valued at the moment, and we may all see a correction soon. I have to decide whether I want to take my profit on these shares and then look for the next opportunity or hold on tight because I think the holdings in the ETF are still values. At the moment, I am comfortable holding.

My next venture into investing is choosing a stock or ETF for my Roth IRA. That account also has some commission free ETFs, but I may wait until the next downward cycle to make my purchases.

What do you think of this market? Are we headed for an ugly correction?