Rebel Finance School Week 4 Homework

 Dear Reader,

Time for Week 4!

1. Make a plan of ATTACK for your debt. 
1. I'm not really in a rush to pay off my family loans (one to my partner and one to my parents).
2. If you have student loans...
1. No student loans.
3. If you have kids or any other younger people in your lives, think about how to help them avoid debt.
1. Explain how quickly credit cards can snowball. Encourage them not to get into high interest debt.
4. Have you done the homework from the first 3 weeks?
   
1. Yes.
5. Come up with ways to increase the gap between your income and your expenses. On the expenses side, one way of doing this is to go through each of your spending categories and see if there’s anything you could cut. Remember, this is not about deprivation this is about conscious expenditure.​
1. I think I'm doing pretty well right now.

Week 4 Discussion Questions

Company strategies for putting you in debt

• How have you fallen for these in the past? Yes. Limited time/quantity, buy now, price will be increasing soon.
• What have you learned? Never buy more than you can afford. Sometimes buy much less than you can afford.
• How aware are you of these tactics? Fairly aware.
• How aware are your family of these tactics? Partner - aware, I think. Children - too little.

Our strategies for putting ourselves into debt

• What are your spending strategies? I spend typically on food, vacations, and my kids. Also on experiences.
• What do you say to yourself before or as you are spending money? Is this expense worth it? Will this expense save me time, money, future grief, or will it help ensure my safety?
• How do you use credit cards? Or are they using you? I think I am using credit cards sensibly. I only have one and I pay it off in full every month.
• How are you going to change your spending strategies starting today? Be a little bit more careful on what I spend on. Examples of things I haven't bought yet: future vacations, future tours, expensive concert tickets, virtual tickets for my mobile game, Kickstarter for Kora Donuts, etc. etc.

Debt recap

• What have you learnt about debt? Only charge what you can afford to pay off.
• How will you share this with the next generation? I want to teach my kids that debt is typically bad. I want to help pay for their college degrees.
• What’s your biggest take away from the debt attack strategy? Focus on paying off debt. Make it more of a priority.

Thank you for reading.

I remain,

Into the FIRE

Rebel Finance School Week 3 Homework

Dear Faithful Reader, 

It's me. Again. Ha ha.

I will continue recording my homework for the Rebel Finance School here. 

Here is Week 3.

They called it "Home-Fun" this week which I thought was funny and cute.

1. Write a letter to money.

Dear Money,

Thank you for being there when I need you. I enjoy all the positive life experiences you bring me. I hope we can continue this beneficial relationship for the rest of my life. By the way - please keep growing!

Warmly,

Into The FIRE

2. Go through the alignment levels. Where are you misaligned? 

Goal/Vision:

Retire by 55 while enjoying life

Identity:

I am a capable person.

I enjoy learning about and discussing personal finance and FIRE.

Values:

Having enough for retirement while enjoying life is important to me.

Beliefs:

I believe it is possible to live the life I want

You can afford anything but not everything (thank you, Paula Pant!)

I can eventually pay back my loans.

Skills:

I am good about not touching my investments

I can try to increase my savings rate.

Behaviors:

Auto-deduct from ny paycheck for my 457.

Environment:

Partner supportive in saving for retirement.

Save money for children in 529.

Save money for children in custodial.

Keen-bean homework:

Money is a tool.

Money isn't evil or good.

Money can help me experience life in a beautiful way.

Money can't solve all my problems.

I can save and invest a lot of money.

I can retire at 55 (or maybe earlier!).

I can't wait to retire.

My money story growing up was that I scrimped and saved growing up. My mother seemed to be having a tough time so I asked how I could help. She asked me to help pay for my college. Poof. All my money was gone. After that I realized there was no point to saving my money since I would just be asked for it by other people. So, I pretty much just spent all the money I had. I guess it's pretty miraculous I have as much as I do saved up. When I was in undergrad, I had an internship with HSBC (this is back when they had interns). My boss told me about a young guy who impressed him by starting a Roth IRA at a young age. I opened one pretty soon after that. My dad always told me a famous story about a group of kindergarteners who beat a bunch of stockbrokers because they chose well-known companies. That stayed with me too and I bought a bunch of well known companies like AmEx, Disney and Coca-Cola and never sold.

When I came back to the US and was working my first real job, a colleague had some book on their shelf. I don't remember exactly what it was, I think maybe some Suze Orman book. I read it and wanted to stop living paycheck to paycheck. I remember looking for other good books to read and read Your Money or Your Life, The Simple Path to Wealth and The Bogleheads' Guide to Investing, as well as The Millionaire Next Door.

Not having enough money is stressful. It's like having a gigantic sword hanging over your head held by a tiny thread.

I don't think I can ever have too much money. I can always leave it to our kids.

The purpose of money is safety, security and to enjoy life.

I feel pretty good about money so far.

My biggest money fear is that I'll be penniless and alone and a million dollars or more in debt.

Money brings me joy when I buy gifts for others, or use it for delicious food or for shared experiences.

A good amount to earn is enough to cover your expenses, contingencies, allow you to save for retirement and have some left over for fun.

If I ran out of money tomorrow I'd start to save again from scratch.

Best advice about money: invest in SWPPX at a young age.

Worst advice about money: YOLO so spend it all and get into tons of debt.

I love talking about money with friends and family and telling them about FIRE.

3. Values exercise:

I value family.

I value security.

I value safety.

I value friends.

I value mentors.

I value colleagues.

I value delicious food.

I value fun.

I value travel.

What beliefs did your parents (or whoever raised you) give you?

• What expressions did they repeat? - There is no maid in the house.
• What lessons did they give you about money? - My mom fell for scams and did some MLMs. She is quite optimistic about people. She had me help write checks to pay the bills from a young age.
• Did they give you pocket money/allowance? - My grandma gave me 75 cents or something for bus fare Monday through Friday for a year until I got a free student train pass.
• Did you have to work for your money? - I got my first job at a young age. I worked a lot throughout high school.
• Did they argue about money? - My parents argued about a lot of stuff. When I was a kid my oldest sister ran up tens of thousands of dollars of credit card debt. I always thought credit cards were evil. My first card was a charge card with no APR.
• Helpful or unhelpful beliefs, doesn’t matter. Just what programming did you receive? - I learned money is tool which can get you great experiences. My mother instilled in me that women should always have their own money. My mother also instilled in me that maxing out your Roth IRA is a great thing to do. Now I believe in Traditional thanks to the MadFIentist.

Examining your beliefs

• Have you ever taken the time to examine and discuss your beliefs? - Not sure.
• What are some of your strongest money beliefs? - Money is a tool, not good or evil.
• If there was one belief you could change, what would it be? - No one will take my money away.
• What things happened to me that created some of my strongest beliefs? - Mom taking my savings. Oldest sister running up credit card debt. Parents helping pay off college. Paying off (my very small) student loan. Reading The Simple Path to Wealth, and The Bogleheads' Guide to Investing. My old HSBC boss telling me about the Roth IRA.
• What do I repeat to others about money / investing / how to be successful in life? - teaching others about FIRE.

Choosing new beliefs 

• What beliefs are strongest for you? Which do you want to tackle? See below for a list of common money beliefs. People will take my money. I control who receives my money.
• What is the impact of believing this? What are the long term consequences? How might the opposite be true? I may be stingy or try to hoard money, or alternatively, spend it all.
• What are the alternative beliefs you want to foster and try out?​ I can control my money.
• Is there anyone you admire or has the results you want to have? What do they believe and how could you borrow their beliefs? My partner and my HS best friend are quite wealthy. They are frugal with their money.

Reversing limiting beliefs:

1. Money is a tool to be used for good or bad.
2. Money has no upper limit.
3. Getting rich takes some work
4. I can track where the money goes each month
5. More money means more possibilities
6. It is never too late for me to get rich
7. Having a lot of money is wonderful
8. I am already rich
9. Getting rich is a matter of executing known tasks ( aka, "saving the gap" )
10. I can strive for wealth AND enjoy my life.
11. You can get rich while helping others.
12. If I get rich some people will want something from me. It is up to me to set boundaries.
13. If I get rich there will be certain people in my life who won’t like it or me, and that's okay.
14. If I have a lot of money, I can use it to help others if I choose to.
15. Having excess money does not mean you are greedy
16. I’m great with money
17. I am great with numbers
18. If I strive for wealth and don’t succeed then I can keep trying until I succeed.
19. This is the perfect time for me to start going for it financially
20. Money is a tool.
21. Money can buy things and experiences to make my life easier and better.
22. You can have money, do good and be happy, all at the same time
23. Money can cause a huge amount of happiness.
24. It takes money to make money, but you can also make money even beginning with a negative net worth. Many other people have done it and you can too.
25. People can have as much money as they want.
26. No matter your past, anyone can get rich
27. I am smart. I am intelligent. I, too, can be wealthy.
28. It's much easier to get rich when you are young.
29. No one is too old to get rich
30. As a woman it’s more difficult to get rich, but it still can be done. I will not let this stop me.
31. I enjoy dealing with money
32. I enjoy managing money
33. I will make or find the time to manage money
34. Even if I don't have money right now, I will learn and utilize the skills to make and manage my money.
35. Money can assist artistic and creative endeavors
36. By being rich, I can help those in need, if I choose to.
37. The rich get richer the poor get poorer. This may be, but rich people can become poor and poor people can become rich. You are the master of your own destiny!
38. Rich people can be happy
39. I can pay someone else to manage my money. Or, I can save that money and manage it myself. Sometimes it makes sense to pay a professional. Sometimes it doesn't.
40. If I earn more money I will have to pay more taxes. But consider this: If you earn $50 and pay $25 in taxes, you have $25 left over. If you earn $100 and pay $50 in taxes, you now are twice as rich as when you were earning $50. Typically earning more money (all else being equal) is usually a better deal, taxes or not.
41. Getting rich is a skill you can learn
42. I am meant to be rich
43. Investing can be simple. Stay away from options.
44. Investing is for anyone.
45. Investing can be risky, but I can learn about the risks and do what is right for me.

Disclaimer: I am not an investing professional, none of the above is investing advice.

Thank you again for reading.

I remain,

Into the FIRE

Rebel Finance School Week 2 Homework

 Dear Faithful Reader, 

Back so soon? I'm surprised as well.

I will continue recording my homework for the Rebel Finance School here. 

Here is Week 2: 

Open a savings account. I have a HYSA open already so I'll be using that. I recommend keeping your money there since rates are quite good right now for HYSAs compared to regular accounts.

Calculate your net worth: Luckily I have just done this for July 1st. $739,859.16

Keen-bean homework: 

Work out how much you've earned over your lifetime: I have done this as well with PsyFIRE's cool template. So the total give or take some money is $685,628. Not bad. Technically these are Social Security earnings so it's missing the three years I spent in Japan at about $30k each so you would add maybe about $90k to that total. So we could say $775,628.

Compare lifetime earnings with net worth: Not too shabby. I would say the net worth is due in large part to investments growing. I've been quite lucky. Also thanks to my partner, as well as our owning a home together.

Discuss with your partner: My partner is currently sleeping (due to the new child and him taking the night shift) but I look forward to discussing this with him when he wakes up. I think he'll be excited to compare his lifetime earnings with his net worth as well (we calculate our net worths separately).

More discussion questions:

Direction and tracking net-worth

• What direction are your finances heading? Do you know with certainty if they are improving or not? - I think they are heading in a positive albeit slow upward trend. I think they are improving.
• How do you feel about your financial direction? Are you positive and happy? Are you feeling apprehensive? How do you feel about the direction of your finances? - I feel relaxed. I'm just clocking in my hours until I reach 55, which should be in about 17 years or so.
• Where will this direction leave you at retirement age? - Everything looks quite positive at the moment. I'd love to max out my 457 but it's all a delicate balance.
• What do you think the main benefit of tracking net-worth is for you? - I like tracking net-worth since it gives me a positive feeling.

Gap between earning and spending

• Do you have an emergency fund? - Not really. I started saving a bit but I think I've spent most if not all of it.
• Have you had times where the car/washing machine broke down and you were scrambling for money? - No, I haven't but there have been times when I spent a bit too much and was depositing change into my account to pay my credit card off in full.
• Do you have a gap between your income and expenditure? - Right now it's a bit of a negative gap but I had money saved up to cover it. I'm trying to watch my spending so I can keep paying off my credit card in full.
• Is there money left over at the end of the month? If so, what do you do with it? - I leave it in my HYSA. I'm trying to pay back loans that my partner and my parents have lent me.

Thank you again for reading.

I remain,

Into the FIRE