When I was a kid back in the 1980s and 1990s, I remember watching “Lifestyles of the Rich and Famous.” That show is how I generated my first impression of how all millionaires live. Robin Leach, the host, employed his fancy British accent to lend an extra layer of gilding to every mansion, yacht and luxury car featured in each episode. “Wow, so that’s how rich people live!” I thought.
No one likes to make sacrifices. This is especially true when it comes to shopping or buying something you want. But making sacrifices in the short term can have big long-term gains that can make the sacrifices you made totally worth it. Want to know how you can build wealth for the future?
I managed to check out of the full-time working world with a seven-figure portfolio at age 33. It wasn’t through some crazy get-rich-quick scheme, insider trading, or blackmailing the right politician. I made a few smart but simple financial moves during my decade of work that greatly accelerated my journey to financial independence.
We talk about investing, budgeting, finances and taxes a lot here at Investor Junkie. We focus on these topics in order to make our lives more comfortable in the future, and to provide ourselves with the freedom to pursue anything that our wallets can afford. As an early retiree, I enjoy the ultimate freedom of not having to work at a traditional job.
Retirement means something different for everyone. It can be a very active time of life or one filled with relaxing activities that fell along the wayside during a hectic career. Once freed from the time constraints imposed by a full-time job, it’s up to you to define what you want to get out of the rest of your life.
“I never want to retire. I love my job and can’t imagine quitting just to enter a retirement full of isolation and boredom like my grandparents did.” Ever heard anyone say this? This sentiment makes perfect sense on the surface. No one wants to grow old, obsolete, isolated and bored. But is this the best approach to your life and how you run your finances? No!
Want to take away the pain of paying medical bills? A health savings account may be able to do that. A health savings account, or HSA, is a tax-advantaged way to reimburse yourself for medical expenses, similar to a flexible spending account (or FSA). But unlike the flexible spending account, the balance in an HSA accrues year after year and is never forfeited if it goes unspent in a given year.
Retirement is a huge step for everyone, one that’s full of potential hurdles and pitfalls. With a little planning up-front, your transition into retirement will be a lot smoother. Here’s how to prepare for retirement, whether it’s coming early or not.
Every once in a while the stock market suffers a schizophrenic break from its normal humdrum up a bit,down a bit daily routine. In late August and early September of 2015 we observed one of those psychotic episodes. Stock market investors were dizzy with vertigo from the wild daily fluctuations (mostly negative) of hundreds of points in the Dow Jones Industrial Average.
I want to introduce you to some friends of mine. They are comfortable, middle-class professionals with a decent income, yet they pay zero federal income tax. There’s no need to call the IRS, though. What they’re doing is completely legitimate because they take advantage of enough tax deductions and credits to get their income to a level that results in zero taxes. Love them or hate them, here’s how they do it.