Crucial Decisions

How do you discipline yourself when it comes to your finances? You do so by setting realistic goals and make changes as you go. Create a budget that works for you, don’t get any made up ones online because often they are modified for that specific person.

Paying off your debt is a very important aspect in your finance as everything you owe have an interest of 6% or higher. School loan stick they don’t go anywhere even when you file bankruptcy. If you are thinking of buying a house in the future you better keep your school loan payment on track.

Saving is great but the less debt you have the more you can save by doing that you will have a more steady financial support. This is what I do every month; I increase my savings, I have a high yield saving account where most of my money is besides the stocks market. My goal for this coming year is to pay at least 30% off my school loan hopefully in 3 year I can achieve that debt.

Decisions you are making today will tell how comfortable you are when you’re getting ready to retire.Turning 30 was the tipping point for me from my opinion buying a house when you are 28-33 is a great financial success. Because if you get a 30 years mortgage your house will be paid for by the time you retire. It’s not as easy as it sounds buying a house is one of the biggest financial decisions one have to make. It’s very important to put money aside for that, at least 20% of your down payment. This will make your monthly payment lower and you are more likely to get qualify for a something you can afford.

When planning to buy a house, it’s crucial not to owe money on your credit cards and don’t even think about that brand new car. Debt to Income Ratio will distinguish how much you can get qualify for.

Add up your monthly bills which may include: Monthly rent or house payment.

Divide the total by your gross monthly income, which is your income before taxes.

The result is your DTI, which will be in the form of a percentage. The lower the DTI; the less risky you are to lenders.

Always buy what you can afford, there is nothing more painful than buying a house and don’t get to stay home to enjoy it because you have to look for a part time job to keep up with the payments.

In a year or 2 me and my wife will be in the market for a house to turn into a home. The thought of it gives me mix feelings excitement and anxiety. We are in the process of saving for the down payment. That money is in a high yield saving where every month we get 2% interest.

“Always remember not to spend you working hours money in minutes.” I will publish every step I take on the crucial Decisions so stay tuned for more. 

Crucial Decisions

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The Process#1

To prosper in life you have to work hard and make sacrifices according to my mom. By putting her words in action I’m starting to see great results. But the one thing that’s tearing me apart is that she is not around to get compensate for all she has done and taught me. We are not going to get into that now, may be in the future. But for now let’s get back to that boring conversation that everybody is affraid to talk about.

Finance on paper is very boring and definitely not an easy task to manage. There are lots of books and information on how to manage your hard earnings. But with two kids a full time job and side Hustles it’s a challenge. With my blog you don’t have to be a genius to figure this out as I’m going to show you exactly the pathways and step by step.

It’s a process I’m probably a little bit ahead of you so I’m going to make sure you guys don’t make the same mistake I made. One readers asked me what’s my goals and how do I keep up with the process. My goal is to have one million dollars by the time I turn 50 it’s a big challenge for me to be the first millionaire in my family.

I’m sure you already asking yourself how I plan on doing this. First of all I have to live way below my means and make wise decisions, take all the advantage I can get. Like the savings that’s not clear to the naked eyes, like the money I don’t see and can’t be spend. For instance I get a 3% raise every year on my 9-5 I automatically increase my contribution towards 401(K) to 1% higher than what it was last year I’m planning on doing that until I reach 10%.

One other contribution is my Roth IRA I just opened that account where I’m adding a whooping $5000 a year for the next 20 years that $100,000 With room to grow from 5 to 12%. Second, I get quarderly dividend from my investments which accumulate to be around $2000 a year. From that $2000 I reinvest $1000 and transfer $1000 to my high yield saving which is paying a generous 2% interest insured and safe from stock market turbulence. Diversification gives me a nice little cushion when things are not so green in the market.

So go ahead get yourself started if you don’t have a 401(k) set up yet check my first post. To see what you missing out. But if you do I encourage you to also get a Roth IRA and an emergency saving even if you contribute $100 a month towards them you will be in the right path. “Always remember not to spend you working hours money in minutes.” Stay tuned for more on the #process of becoming a millionaire.

The Ongoing Results

For the past few months I have been showing you ways to save and invest your money. A lot of you started using the information I provided I’m glad things are working out. To motivate you guys more I’m going to provide a monthly report on my investment, income, dividend and interest. I want to show you some of the results I’m getting to prove to you that those tips really work, as I’m letting you guys in my little Bubble.

This process started a little over 4 years ago from my account overdrawing every month to a net worth of $150,000.00 in my net worth, this amount doesn’t include my cars, my watch collection and my guns.
It’s not easy at all to discipline your self specially with spending. The first $25,000.00 was the hardest once you hit that milestone it gets easier. And at that point you also have some type of awareness of where most of your money going besides your monthly bills.

Stocks : $71,865.36 Novem -$6000.54
HYS:      $53,218.64. Novem +$54.07
40(K):      $8,249.34 Novem – $600.10
RothIRA: $4,786.16 Novem – $249
Emerg:     $5,000.00 Novem $0.00

Total $143,119.50

My biggest problem was I couldn’t stick to the budget a lot of time I would spend money I didn’t have. Having a credit card limit over $16,000.00 didn’t makes things easier as I thought it was my money where interest was eating my paychecks
One morning I got up and I was looking online on ways to save, there is a lot of information out there except they don’t really tell you where to start and what to do.

It’s like those people already made it and they just throw everything at you at once, for example without even talking about budget and savings they jump straight into investing. Without building your tolerance first. The most important thing about this is to cut your spending you must cut it until you can feel the pain. You don’t have to eat steak every night for dinner.

Another thing I realized once you start talking about finance everybody Falls asleep because of the idea of living paycheck to paycheck is the new normal. People don’t have time and extra cash to put away plus they spending money they don’t have without thinking about interest.

This is what I did it works for me and the sacrifices really pays off. I locked up my credit cards cancelled my debit card, and only carry 100 bucks in my wallet which wasn’t easy. But over time I overcome the need to spend. I only buy things that I needed, not want. One more thing always remember “not to spend your working hours money in minutes”.