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The 6 Craziest Ways Millennials Can Save Money To Retire Early

saving, save money, investment, frugal, FIRE movement, Financial independence retire early

Financial independence, retire early.

It sounds like the dream. But it takes a lot of work to be part of the elite group of Americans in the so-called FIRE movement. While their counterparts were splurging at bars, they committed to save money from their corporate jobs…or even take on side hustles to build their income.

Inspired in part by the personal finance tome, “Your Money or Your Life” by Vicki Robin and Joe Dominguez, these millennials are pinching pennies in order to build up big nest eggs. The goal is to then live off their investments.

And while the end sounds nice – who doesn’t want a break from the office – the road there can be tough, with millennials in the FIRE movement saving anywhere from 60% – 90% of their paychecks.

From keeping a car from 2006 to saying no to out-of-state weddings, here are six resolutions for 2020 for some of the leaders in the financial independent, retire early movement. While some ideas might be a bit zany for you – like sharing your personal finance history with a friend – it’s helpful to see what the experts recommend.

Even if your goal isn’t to retire by 40, there’s something to be said about being frugal going into this new decade. Here’s some of the craziest ways FIRE leaders jumpstarted their savings.

Kiersten and Julien Saunders are co-creators of the award-winning blog, rich & REGULAR. On their platform, they document their journey through parenting, work life, entrepreneurship, real estate investing and their pursuit of financial independence. They can also be seen in the 2019 documentary, “Playing With Fire.”

Give yourself an allowance.

We stopped thinking of savings as leftovers. It’s a bit of a brain hack, but the idea is that most people do their budget and then use the leftovers as their baseline savings rate. This approach assumes that everything is savings until you spend it.

This is saving, but in the affirmative. So you’re starting with a 100% savings rate and any time you spend money you subtract a %. It helps you easily identify the areas of life you need to change to meet your goal. If your goal is a 50% savings rate but the moment you pay your car note, your 100% starting point drops to 60%, then you know the car is an impediment to the goal.

Julie Berninger is a 30-year-old new mom, blogger, and Etsy-seller living in Seattle, WA. Julie and her husband paid off over $100,000 of debt and are now saving towards financial independence. She blogs at Millennial Boss, interviews early retirees on her podcast, Fire Drill, and teaches others how to blog and sell printables for profit at Gold City Ventures.

Say no to out-of-state weddings.

I stopped saying ‘yes’ to out-of-state weddings and expensive events associated with weddings such as destination bachelorette parties. We sent a nice note and a gift instead. We prioritized the events where we were closer with the couples but avoided spending hundreds of dollars on weekend trips. We’ve not attended at least three out of state weddings since making this decision and I did not attend a destination bachelorette. I estimate that saved us a few thousand dollars total.

Tanja Hester, author of WORK OPTIONAL: Retire Early the Non-Penny-Pinching Way, is a former political communications consultant. Since retiring early from formal employment at the age of 38 along with her husband Mark Bunge, she devotes all her time to fun and purpose: writing her award-winning financial independence blog Our Next Life, podcasting on The Fairer Cents, gathering women together to talk about financial independence at Cents Positive retreats, volunteering in her community, traveling the world, and skiing, hiking, biking, paddling, and climbing around her home in North Lake Tahoe, California. Basically: living the dream.

Set up your paycheck to auto deposit into savings. 

Back when I was in debt and struggled to save any money at all, I decided to do new payroll paperwork at work so that part of my paycheck went straight to savings instead of checking, so I’d never feel like I had that money to spend. I started with $50 a paycheck, but you can do any amount. Especially if you get a raise at the start of the year, challenge yourself to live on what you earned last year and save as much of your new money as possible.

Sam started Financial Samurai in 2009 to help people achieve financial freedom sooner, rather than later. In 2012, after spending 13 years in investment banking, Sam decided to retire at the age of 34. He spends his free time writing, playing tennis, and taking care of his two young children. 

Talk about your financial habits. 

One of the best ways to learn is to teach. Therefore, of the best ways to elucidate your financial weak spots is explain your financial habits to someone close to you. Not only will you better understand your spending and savings habits, the person listening may also offer some constructive criticism. Get rid of complacency. Seek criticism to improve your financial health!

Mabel A. Nunez is the founder and Chief Investment Officer of Girl$ on The Money – a stock market investing education company targeted to women, minorities, and individuals that are underrepresented in the world of investing. Through courses and resources, she empowers women to take action towards wealth creation and to take control of their lives. 

Live frugally and keep your old car. 

In 2006, as I got started in my career after undergrad, I paid full price (less than $5,000) and bought myself a high quality used car to take me to work and back. My commute totaled more than 1.5 hours both ways, Monday through Friday. I am not ashamed to share that I drive the same car to this day. I am confident that this key decision allowed me to save and invest thousands of dollars over the years.

Kristy is a world-traveling, early retiree. She and her husband Bryce used to live in one of the most expensive cities in Canada, but instead of drowning in debt, they rejected home ownership. What resulted was a 7-figure portfolio, which has allowed them to retire in their 30s and travel the world. They now spend time helping people with their finances and realizing their travel dreams on their blog millennial revolution. Their also wrote a bestselling book “Quit Like a Millionaire.”

Embrace minimalism.

I grew up poor so hoarding was a big problem of mine. I wouldn’t even throw out empty CD cases (remember CDs?) just in case I might need them again. Luckily, before our one bedroom apartment turned into an episode of “Hoarders”, I realized how much money we’d be wasting by moving to a bigger apartment (our rent would have increased by 50%), so I started donating and de-cluttering our belongings, while making a pledge not to buy anything that wasn’t an absolute necessity.

This saved us a lot of rent – probably about $550 a month or around $6,600 by not upgrading to a two bedroom.

Follow me on Twitter. Check out my website.

Based in Lebanon, I cover travel and personal finance topics for millennials. I’m committed to a life of adventure and have lived in four countries before turning 30. My work appears regularly in Playboy Magazine, Outside Magazine and AFAR Magazine, among others. Before becoming a full-time writer, I was the founding Editor-in-Chief of StepFeed in the Middle East.

Source: The 6 Craziest Ways Millennials Can Save Money To Retire Early

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When Employers Ask About Your Salary Range, Try This

A client recently remarked on that weird moment when a potential employer asks for your salary range. She wondered, “Should it be X% over what I’m making now? Based entirely on salary calculators?”

For my money, the employer should tell you what the range is since they actually know specifics of what the job entails, their budget, and the market value/going rate. Or as Vu Le says, when you don’t disclose salary range on a job posting, a unicorn loses its wings.

But, for my client and the purposes of this article, let’s assume they’re expecting you to say the number first. Figuring out an appropriate salary range for a new position can feel like a ridiculous high stakes guessing game. Ask for too little, they won’t take you seriously and you’ll end up underpaid forever. Ask for too much, you’ll cut yourself out of the running for the job. No pressure.

It doesn’t have to be so fraught. Here are four tools to help you determine an appropriate range:

1. Many professional associations do an audit of salaries in the industry. Ask around to find out what membership groups or professional associations aggregate that data in your industry. Even if there’s not a formal study, there are likely people who you can chat with about industry trends.

Your email could say something like, “I’m seeking ___ type of position at ___ kinds of organizations. Based on my experience and the region, I’m looking to get a sense of the industry standards surrounding compensation. Are there any resources you recommend or individuals I could speak with on the subject?”

2. Networking can be a huge value, but studies show that people tend to network in single sex groups – basically, men network with men, women with women.  If you’re only talking salaries with other women, odds are decent you’re not getting good fair wage data. Remember that thanks to the wretched wage gap, there’s a good chance your lady friends are getting paid less than their male peers. Be sure you’re talking with both men and women so you’re getting the most fair and accurate wage information.

3. You can ask someone who was in the role previously or is familiar with the position, “Would you be comfortable sharing the salary range that’s appropriate for this role based on your experience?”  This way, you’re not asking them to disclose what they made but asking for their perspective.

4. Online salary calculators like payscale.com and glassdoor.com can be invaluable resources in determining your market value, but note that searching for salary info based only on a job title and your city won’t give you accurate results. Would you trust OKCupid’s suggested matches if all you’d entered was your gender?  You want data that’s specific to your region, level of experience, and the size of the company you’re considering, so be sure you’re putting in as much info as possible about yourself and the role to get the most accurate info.

Tools in Action

You probably won’t be able to use each of these tools for every job offer. Salary calculators couldn’t even generate a report for my client because of the specific context of the international job she’s considering. She did better interpersonally.

She told me, “I tend to confide in my closest friends and colleagues, most of whom happen to be female, but I reached out to a [male] former colleague tonight who’s held similar positions and that was helpful.”

The conversation also evoked additional questions for her hiring manager about compensation more broadly including:

  • Does the offer include housing? A driver?
  • What’s the tax situation in the posting country?
  • Will I be paid in USD or will my paycheck be subject to currency fluctuations?

The answers to these sorts of industry or job-specific questions should of course inform your salary expectations, and it’s appropriate to say as much. I recommended she send a warm, enthusiastic note to the person who interviewed her to the effect of,

“I’ve done a lot of thinking about the salary range and have a few questions before I’m able to share the salary range I’d be seeking in this position.” or

“Do you have an outline of the benefits the organization provides to team members overseas? I know these vary considerably among organizations.”

While we wait for the unicorn job offers that include the salary range in the job description, these strategies will position you to learn more about compensation for the role and determine a salary range that accurately reflects your market value.

Follow me on Twitter or LinkedIn. Check out my website.

I use a strengths-based approach to encourage women to navigate and negotiate work on their terms. A New Orleans native and enthusiast, I use a playful, approachable style when consulting nationally with businesses and professional associations that want to attract, retain, and support female talent. Women have been coming to me for years for help in workplace negotiations, so I launched my business to help women negotiate a raise, a promotion, a new position, and maternity leave. Cosmopolitan and Marie Claire recently profiled me for my unique approach, and I am regularly asked to speak at national conferences about negotiations, work-life balance, and leading as a female executive. Learn more at gowlandllc.com.

Source: When Employers Ask About Your Salary Range, Try This

How a Gang of Hedge Funders Strip-Mined Kentucky’s Public Pensions – Gary Rivlin

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Kentucky’s willingness to gamble massively on high-risk alternative investments for its pensions has made the state an easy mark for Wall Street hucksters. In April 2008, a longtime investment adviser named Chris Tobe was appointed to the board of trustees that oversees the Kentucky Retirement Systems, the pension fund that provides for the state’s firefighters, police, and other government employees. Within a year, his fellow trustees named Tobe to the six-person committee that oversees its investments……

Read more: https://theintercept.com/2018/10/21/kentucky-pensions-crisis-hedge-funds/

 

 

 

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