Options for Teacher Student Loan Forgiveness

Loan forgiveness is a trade-off. It’s about incentivizing graduates to work in low paying or otherwise undesirable positions in exchange for erasing or significantly reducing their student loan balance. Without these programs, important community institutions would be severely understaffed.

If you’re a teacher or education student reading this, those criteria probably sound familiar.

Many school districts struggle to fully staff their schools, especially when it comes to certain positions. Loan forgiveness programs are one of the best ways for them to attract job candidates and retain them for long enough to make an impact.

Teachers have several options when it comes to loan forgiveness. Here’s what you should know about each one.

Teacher Loan Forgiveness

The Teacher Loan Forgiveness Program is the only federal loan forgiveness program specifically designed for teachers. Math or science teachers who teach in secondary schools or special education teachers can have up to $17,500 worth of loans forgiven. Any other kind of teacher can only receive up to $5,000 worth of loan forgiveness.

The program has strict requirements. Teachers must hold a license or certification in their state and teach for five consecutive years in a school that primarily serves low-income students. A list of eligible schools is available here.

Teachers qualify even if they work at different schools for each of the five years, but each of those schools must be eligible.

Teacher Loan Forgiveness is only available for Direct Subsidized and Unsubsidized Loans, as well as Subsidized and Unsubsidized Federal Stafford Loans. Perkins loans are not eligible.

If you have a Direct Consolidation Loan or a Federal Consolidation Loan that includes a Perkins loan, that portion won’t be eligible for Teacher Loan Forgiveness. PLUS or graduate school loans are also not eligible for Teacher Loan Forgiveness.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness Program (PSLF) is arguably the best forgiveness option for teachers. Unlike the Teacher Loan Forgiveness program, borrowers don’t have to work consecutive years to qualify. This is especially helpful for teachers who take a year or two off.

Teachers can work for an elementary or secondary school, in either a public or private school setting. They must work at least 30 hours a week to qualify. After 120 qualifying payments, they can apply to have their remaining loan balance forgiven. There is no limit on how much will be discharged, and teachers won’t owe taxes on the forgiven amount.

Only Direct Loans are eligible for PSLF. If you have FFEL or Perkins Loans, you’ll have to consolidate them into a Direct Consolidation Loan to qualify.

Teachers should submit the PSLF employer certification form every year, which will verify the employer and calculate how many qualifying payments have been made.

PSLF can be used with Teacher Loan Forgiveness, but borrowers will only receive credit for one program at a time. If $5,000 of your loans is forgiven after five years through Teacher Loan Forgiveness, those five years’ worth of payments will not count toward PSLF.

While working toward PSLF, teachers will have to choose from one of the income-driven repayment plans. These options will lower your monthly payment.

Perkins Loan Teacher Cancellation

Teachers with Perkins loans can have their loan balance entirely discharged. To be eligible, they must work full-time in a school with low-income children or as a special education teacher. Teachers can also become eligible by teaching a subject that has a shortage of teachers in their state.

Private school teachers and those who have two part-time teaching jobs also qualify. Preschool and kindergarten teachers may only be eligible if their state considers those grades to be part of elementary education.

Unlike PSLF or the Teacher Loan Forgiveness program, teachers can earn partial loan forgiveness. They’ll get 100% forgiveness after five years of service.

Here’s how much will be forgiven each year:

  • 15% forgiven after one year of work
  • 15% forgiven after two years of work
  • 20% forgiven after three years of work
  • 20% forgiven after four years of work
  • 30% forgiven after five years of work

State Forgiveness Programs

Your state may have its own teacher forgiveness program. Go here to see what options are available. You can also try Googling your state and “teacher forgiveness program” and see what comes up. You may have to teach in an underserved area or teach a specific subject to qualify.

Options for Private Student Loans

Teachers with private loans rarely have access to loan forgiveness. Here are some options available to them:

Refinance private loans

If you want to save money on private loans, your best option is to refinance to a lower interest rate.

Private lenders often require a credit score of 650 or higher to qualify for a refinance. Some lenders may also have an income requirement, but this depends on the specific lender. For example, LendKey accepts borrowers with low salaries.

When you refinance private loans, make sure you understand the term you’re signing up for. For example, if you have five years left on your private loans and refinance to a 10-year term, you may end up paying more interest over the life of the loan because the term is doubled.

If you can afford it, keep making the same payments as you were before. Assuming you haven’t significantly changed your budget or lost your source of income, this should be doable. Keeping the same payment rate will let you repay the loan faster and save on interest.

Take out a home equity loan

If you’re a homeowner, you can withdraw extra equity from your house and use it to repay your student loans. Generally, you’ll need to have 80% or more equity in the home to qualify.

Home equity loans may have lower interest rates and longer terms than private student loans. It may also be easier to qualify for a home equity loan because the bank has collateral behind it.

The downside to this strategy is that if you default on a home equity loan, the bank may repossess your house. Comparatively, refinancing your private student loans has much lower stakes.

The post Options for Teacher Student Loan Forgiveness appeared first on MintLife Blog.

Source: mint.intuit.com

5 Key Property Features When House Hunting

5 Key Property Features When House Hunting

When shopping for a home, many of us know our basic focal points, such as identifying the right neighborhood or finding a house with the ideal number of bedrooms and bathrooms. These factors are important, but there are other home features (some very large and some very small) that can greatly contribute to the enjoyment of your new home. Let’s make sure you don’t miss any of them.

Here are five opportunities to maximize the benefits of your purchase that go beyond just the house and why each one deserves your consideration.

click to enlarge

Home Buying Consideration #1: The Garage

Garages are a very important feature for many homebuyers, and can even end up being a dealbreaker for some buyers. More than a parking spot, garages provide valuable storage and project space, as well as a way to protect your vehicles from all types of damage. When you are first shopping for a home, you may know that you want a garage, but you may not have considered all of the variables that go into the garage design, and which choice is right for you.

Garage Design: Why it Matters

When evaluating garage design, it’s important to start by considering what you may want to use the space for, and what external factors (such as weather) might impact your use. Here are several major garage design aspects to keep in mind as you house hunt.

Rental space: Depending on the size and layout of your garage, is there space that could be rented out full time, or used as a short-term rental to generate additional income? That extra income could be directed towards your mortgage payment.

Storage opportunities: Does the garage have room to store what you need to reduce in-home clutter? Is there space for shelves, or even room in the rafters?

Potential property value increase: According to the sales comparison approach (SCA), one of the most recognizable forms of valuing residential real estate, a “finished” garage that feels like an extension of the home’s indoor living space is one of several features that can increase overall home value. You may also want to consider the possibilities of eventually remodeling a bland garage in an otherwise perfect home.

Attached vs. Detached Garages: Pros vs. Cons

One of the biggest distinctions in garage design is whether a garage is attached or detached. Often influenced by lot shape (narrow lots on an alley often have detached garages, wider lots with a driveway often have attached garages) or the age of a home, having a detached or attached garage has both advantages and disadvantages.  

Attached Garages: Pros

  • Convenient access to your cars, storage, and other items, particularly if you live in an area with an extreme climate 
  • Attached garages are often less expensive to build, and can be climate controlled by accessing the electrical and HVAC systems that are part of the home
  • As attached garages are the most popular type of garage, having one typically increases the value of your home

Attached Garages: Cons

  • If you’re thinking of adding one, it may not be possible to fit on a narrow, urban lot
  • Since they offer direct access to the home, they can be a security and fire risk  
  • They can be hard to add onto or expand, and any additions or changes might require more expensive permits and extensive inspections
  • Adding an attached garage, particularly to a vintage home, may look strange or otherwise detract from the exterior look of the home
  • Noisy garage activities may be heard more inside the home

Detached Garages: Pros

  • More flexibility in size, layout and location, lot size and shape permitting
  • It’s easier to add room for cars, storage, and projects, and to add onto if needed
  • Less fire and security risk to your home 
  • Less of an impact to the look or curb appeal of your home
  • Can increase the resale value of your home

Detached Garages: Cons 

  • Particularly in bad weather, less convenient in terms of access 
  • Will require separate utilities, HVAC, and more
  • May not be allowed by your HOA or city permitting office

Now that we’ve examined the garage, let’s take a look at another key feature — what’s going on with the front and backyard?

Home Buying Consideration #2: The Yard

No longer limited to just a lawn, yards have now become an extension of the home. A convenient, well-designed outdoor living space is something that many homeowners desire. Yards can be great spaces for entertaining and are often much less expensive to create than comparable indoor entertaining spaces. Here are some important yard elements to consider. 

Trees and landscaping: Important for both aesthetic and practical reasons, trees and landscaping can increase your yard’s appeal. A mature, well-designed landscape is valuable, as it represents an investment of both time and money. 

Outdoor kitchen: Whether you are grilling for two or entertaining 200, an outdoor kitchen makes cooking fun and convenient. 

Fireplace or fire pit: This stylish focal point makes it easy to keep enjoying your yard, even after dark or in cooler weather. 

Automatic sprinklers, drip system, and misting system: Automatic sprinklers and drip systems can keep your yard looking lush for a low cost, and are particularly valuable in dry climates. Misting systems can also keep you cool on hot days. 

Deck or Patio: A stylish outdoor surface makes it easy to enjoy your yard, and many new construction materials require little to no maintenance. 

Shed: Well-designed sheds can go beyond storage, offering everything from a private workspace to extra space for guests to sleep. 

So, you’re considering the finer points of a yard. But what about adding a body of water to that yard for cooling off on hot days? Here’s the pros and cons of investing in a water element for your next home.

Just starting your home search? Here’s the best time to begin.

Home Buying Consideration #3: The Pool

Pools and hot tubs are perhaps the most controversial of all outdoor home features. Some homebuyers totally avoid them, and some won’t look at a house without them. Which side are you on? Here are some factors to consider. 

Backyard Pool and Hot Tub: Pros 

  • Pools and hot tubs can be aesthetically pleasing
  • Both are also useful for entertaining
  • In warmer climates, pools can provide a way to enjoy the outdoors comfortably
  • If you like to swim, engage in other aquatic exercises regularly for fitness, or use a hot tub for muscle and joint pain, having your own can be convenient
  • In hot climates where pools are common (i.e., Arizona, California, Florida), having a pool can significantly increase the resale value of your home 

Backyard Pool and Hot Tub: Cons

  • Both pools and hot tubs require regular maintenance that includes chemicals, cleaning, and repair
  • Many families with small children do not want a pool at home due to safety concerns
  • Your insurance cost may be higher, and your utility bills may go up as well, particularly for heating a pool 
  • When it is time to sell your home, there are many buyers who will not want a house with a pool

A pool is a big decision that comes with both maintenance and benefits alike. You can always opt for a different kind of water feature, like a backyard stream. But if you’re looking to streamline your life, investing in home tech devices is almost a no-brainer.

Home Buying Consideration #4: The Appliances and Tech Gadgets

As technology improves and designs continually evolve, having up-to-date appliances and other devices in your home has become increasingly important. For example, while attractive kitchens are near the top of many house-hunters’ wish lists, there are items within those kitchens that can help — and items that can hurt — when it comes to increasing a home’s value.

Appliances That Can Help Property Value

Commercial-grade appliances: Particularly in high-end properties, many buyers expect to see appliances from luxury or professional brands. 

Smart devices: Thermostats, fire detectors, carbon monoxide detectors, security cameras, door locks, and doorbells are just a few of the relatively new smart home devices that homebuyers are now beginning to appreciate and even expect.

Appliances That Can Hurt Property Value

Old and energy inefficient: These power-sucking products will cost you in both your utility bill, and the resale value of your home. 

Homes totally lacking certain appliances: Is your property missing a dishwasher, indoor laundry, or other key features? This can be a major turn-off for buyers who don’t want to have to complete a complicated remodeling and installation project. 

Mismatched appliances: Appliances from different eras or in different colors can make your kitchen look unfinished and low-quality, even if your other finishes are fantastic.

Looking to stock up on home amenities? We’ve targeted the seasonal best deals for doing so.

Now that you’ve considered the key interior and exterior components of your dream home, there’s one last important element to contemplate: the driveway.

Home Buying Consideration #5: The Driveway

Walkways and driveways connect your home to the outside world and play a crucial role in the curb appeal of your residence. Although often overlooked, they are important home features that can be messy and expensive to replace or update. 

If you are evaluating the driveway at a potential home, or considering an update at your current home, the first choice you will need to make is whether you want asphalt or concrete. Both have benefits and drawbacks that may vary depending on your climate, landscape, and usage needs.

Today, many homeowners and buyers are also looking for something beyond the basics, with driveway design trends including elaborate paving materials, irregular shapes, and additional features like extra parking for guests.

Know the Tricks, Now Land the House

Although these five features may not be your first considerations in the house-hunting process, they are important elements that you will use or interact with nearly every day. Add them to your consideration list, and you will be sure to end up in a customized home that you enjoy and treasure. If you’ve found your ideal home with all the right features, reach out to a PennyMac Loan Officer today or apply online to get pre-approved for the loan that’s right for you.

Source: pennymacusa.com

Holiday Spending Statistics for 2021

Rather than shopping in department stores and visiting Santa at the mall, this year’s holiday season is going to look a little different. You’ll likely be spending more time with your closest loved ones and exchanging gifts you ordered online. With the events of 2020, many have experienced unexpected changes in employment, income, and even health so the holiday budget is top of mind. To figure out what gifting budgets may look like this year, we ran our own holiday survey and collected 26 holiday spending statistics.

In 2019, roughly 729 billion dollars was spent during the holidays. This topped the charts, making it the biggest holiday season. This number may come as no surprise when you account for everyone on your shopping list. From your coworkers to family, holiday budgets can stretch thin to accommodate for everyone.

Wondering what others are spending on holiday gifts? Keep reading for our holiday spending statistics roundup, or jump to our infographic for our budget-friendly gifting etiquette for the workplace.

Average Christmas Spending

Average Christmas Spending

  • The average American planned to spend $942 on holiday gifts in 2019. (Gallup)
  • Last year, Americans spent $227.26 on non-holiday gift purchases such as decorations. (Alliant Credit Union)
  • Americans decide their holiday gift spending based on how close they are to the gift recipient (58 percent) and whether or not they’re family (28 percent). (Mint 2020 Holiday Survey)
  • Over 50 percent of holiday spending goes towards clothing and accessories. (Avant)
  • In 2019, holiday retail sales soared past $700 billion, making it the biggest holiday shopping season. (Statista)

Holiday Spending Statistics and Trends

  • Americans were holiday shopping early in 2019, with 43 percent starting in November. (Black Friday)
  • On average, 64 percent of holiday shoppers waited for a sale before making a purchase in 2019. (American Research Group)
  • In 2019, 59 percent of wish lists included gift cards. (National Retail Federation)
  • More than half of Americans would rather have cash over a gift. (Mint)
  • In 2019, 67 percent of shoppers were spending the most on holiday gifts for their children. (Black Friday)
  • Pet lovers are also big shoppers. In 2019, 77 percent of pet owners planned for their pets to be part of their holiday festivities. (The Dog People)

Holiday Spending 2019 vs. 2020

Holiday Spending 2019 vs. 2020

  • Fifty-one percent of Americans plan to spend the same on holiday gifts in 2020 as they did in 2019. (Mint 2020 Holiday Survey)
  • Roughly 40 percent of holiday shoppers plan to spend less this year, and 8 percent plan to spend more. (Mint 2020 Holiday Survey)
  • Over half of consumers are opting out of retail shopping due to health risks. (Accenture)
  • Seventy-four percent of people agree that events will only include a small get-together. (Morning Consult)
  • In addition, 47 percent of adults agree that holiday events will be canceled. (Morning Consult)

Holiday Retail Sales

  • In 2019, 38 percent of shoppers planned to browse in-store displays for inspiration. (Black Friday)
  • In 2019, holiday ecommerce sales increased by 13 percent with roughly $142 billion dollars spent. (Adobe)
  • Cyber Monday, a special day for holiday ecommerce discounts, totaled $7.4 billion spent in 2019. (Adobe)
  • Sixty-one percent of holiday shoppers in 2019 used a smartphone to complete an online order. (Thinking With Google)
  • On Black Friday in 2019, more than two-thirds of holiday shoppers made impulse purchases. (Bluecore)

Holiday Budget Statistics

  • Ten percent of Americans budget for gifts based on how much the gift receiver spends on them. (Mint: Holiday Survey 2020)
  • Eighteen percent of Americans are trying to pay down debt this holiday season. (Morning Consult)
  • Twenty-one percent of customers say they will be giving out fewer gifts this holiday. (Morning Consult)
  • Thirty-three percent of adults are trying to spend less and save more due to COVID-19. (Morning Consult)
  • People’s 2019 holiday budgets fluctuated based on where they lived. Urban shoppers planned to spend roughly $200 more than rural shoppers last year. (NPD)

Whether you’re planning to spend more or less this holiday season, check in on your budget as you go. Using our app, you can set a specific budget and get notifications when you go over. You can also check in on your financial goals each week using our weekly summary updates.

Planning to shop for your coworkers this season? Check out our visual guide on office gift-giving etiquette below.Download Gift-Giving Etiquette Guide

Sources: GlobeSmart

Methodology: This study was conducted for Mint using Google Surveys. The sample consisted of no fewer than 1,500 completed responses per question. Post-stratification weighting has been applied to ensure an accurate and reliable representation of the total population. Responses were collected October 23 – 27, 2020.

The post Holiday Spending Statistics for 2021 appeared first on MintLife Blog.

Source: mint.intuit.com

75 Personal Finance Rules of Thumb

A “rule of thumb” is a mental shortcut. It’s a heuristic. It’s not always true, but it’s usually true. It saves you time and brainpower. Rather than re-inventing the wheel for every money problem you face, personal finance rules of thumb let you apply wisdom from the past to reach quick solutions.

I’m going to do my best Buzzfeed impression today and give you a list of 75 personal finance rules of thumb. Some are efficient packets of advice while others are mathematical shortcuts to save brain space. Either way, I bet you’ll learn a thing or two—quickly—from this list.

The Basics

These basic personal finance rules of thumb apply to everybody. They’re simple and universal.

1. The Order of Operations (since this is one of the bedrocks of personal finance, I wrote a PDF explaining all the details. Since you’re a reader here, it’s free.)

2. Insurance protects wealth. It doesn’t build wealth.

3. Cash is good for current expenses and emergencies, but nothing more. Holding too much cash means you’re losing long-term value.

4. Time is money. Wealth is a measure of how much time your money can buy.

5. Set specific financial goals. Specific numbers, specific dates. Don’t put off for tomorrow what you can do today.

6. Keep an eye on your credit score. Check-in at least once a year.

7. Converting wages to salary: $1/per hour = $2000 per year.

8. Don’t mess with City Hall. Don’t cheat on your taxes.

9. You can afford anything. You can’t afford everything.

10. Money saved is money earned. When you look at your bottom line, saving a dollar has the equivalent effect as earning a dollar. Saving and earning are equally important.

Budgeting

I love budgeting, but not everyone is as zealous as me. Still, if you’re looking to budget (or even if you’re not), I think these budgeting rules of thumb are worth following.

11. You need a budget. The key to getting your financial life under control is making a budget and sticking to it. That is the first step for every financial decision.

12. The 50-30-20 rule of budgeting. After taxes, 50% of your money should cover needs, 30% should cover wants, and 20% should repay debts or invest.

13. Use “sinking funds” to save for rainy days. You know it’ll rain eventually.

14. Don’t mix savings and checking. One saves, the other spends.

15. Children cost about $10,000 per kid, per year. Family planning = financial planning.

16. Spend less than you earn. You might say, “Duh!” But if you’re not measuring your spending (e.g. with a budget), are you sure you meet this rule?

Investing & Retirement

Basic investing, in my opinion, is a ‘must know’ for future financial success. The following rules of thumb will help you dip your toe in those waters.

17. Don’t handpick stocks. Choose index funds instead. Very simple, very effective.

18. People who invest full-time are smarter than you. You can’t beat them.

19. The Rule of 72 (it’s doctor-approved). An investment annual growth rate multiplied by its doubling time equals (roughly) 72. A 4% investment will double in 18 years (4*18 = 72). A 12% investment will double in 6 years (12*6 = 72).

20. “Don’t do something, just sit there.” -Jack Bogle, on how bad it is to worry about your investments and act on those emotions.

21. Get the employer match. If your employer has a retirement program (e.g. 401k, pension), make sure you get all the free money you can.

22. Balance pre-tax and post-tax investments. It’s hard to know what tax rates will be like when you retire, so balancing between pre-tax and post-tax investing now will also keep your tax bill balanced later.

23. Keep costs low. Investing fees and expense ratios can eat up your profits. So keep those fees as low as possible.

24. Don’t touch your retirement money. It can be tempting to dip into long-term savings for an important current need. But fight that urge. You’ll thank yourself later.

25. Rebalancing should be part of your investing plan. Portfolios that start diversified can become concentrated some one asset does well and others do poorly. Rebalancing helps you rest your diversification and low er your risk.

26. The 4% Rule for retirement. Save enough money for retirement so that your first year of expenses equals 4% (or less) of your total nest egg.

27. Save for your retirement first, your kids’ college second. Retirees don’t get scholarships.

28. $1 invested in stocks today = $10 in 30 years.

29. Inflation is about 3% per year. If you want to be conservative, use 3.5% in your money math.

30. Stocks earn 7% per year, after adjusting for inflation.

31. Own your age in bonds. Or, own 120 minus your age in bonds. The heuristic used to be that a 30-year old should have a portfolio that’s 30% bonds, 40-year old 40% bonds, etc. More recently, the “120 minus your age” rule has become more prevalent. 30-year old should own 10% bonds, 40-year old 20% bonds, etc.

32. Don’t invest in the unknown. Or as Warren Buffett suggests, “Invest in what you know.”

Home & Auto

For many of you, home and car ownership contribute to your everyday finances. The following personal finance rules of thumb will be especially helpful for you.

33. Your house’s sticker price should be less than 3x your family’s combined income. Being “house poor”—or having too expensive of a house compared to your income—is one of the most common financial pitfalls. Avoid it if you can.

34. Broken appliance? Replace it if 1) the appliance is 8+ years old or 2) the repair would cost more than half of a new appliance.

35. Used car or new car? The cost difference isn’t what it used to be. The choice is even.

36. A car’s total lifetime cost is about 3x its sticker price. Choose wisely!

37. 20-4-10 rule of buying a vehicle. Put 20% of the vehicle down in cash, with a loan of 4 years or less, with a monthly payment that is less than 10% of your monthly income.

38. Re-financing a mortgage makes sense once interest rates drop by 1% (or more) from your current rate.

39. Don’t pre-pay your mortgage (unless your other bases are fully covered). Mortgages interest is deductible, and current interest rates are low. While pre-paying your mortgage saves you that little bit of interest, there’s likely a better use for you extra cash.

40. Set aside 1% of your home’s value each year for future maintenance and repairs.

41. The average car costs about 50 cents per mile over the course of its life.

42. Paying interest on a depreciating asset (e.g. a car) is losing twice.

43. Your main home isn’t an investment. You shouldn’t plan on both living in your house forever and selling it for profit. The logic doesn’t work.

44. Pay cash for cars, if you can. Paying interest on a car is a losing move.

45. If you’re buying a fixer-upper, consider the 70% rule to sort out worthy properties.

46. If you’re buying a rental property, the 1% rule easily evaluates if you’ll get a positive cash flow.

Spending & Debt

Do you spend money? (“What kind of question is that?”) Then these personal finance rules of thumb will apply to you.

47. Pay off your credit card every month.

48. In debt? Use psychology to help yourself. Consider the debt snowball or debt avalanche.

49. When making a purchase, consider cost-per-use.

50. Make your spending tangible with a ‘cash diet.’

51. Never pay full price. Shop around and do your research to get the best deals. You can earn cash back when you shop online, score a discount with a coupon code, or a voucher for free shipping.

52. Buying experiences makes you happier than buying things.

53. Shop by yourself. Peer pressure increases spending.

54. Shop with a list, and stick to it. Stores are designed to pull you into purchases you weren’t expecting.

55. Spend on the person you are, not the person you want to be. I love cooking, but I can’t justify $1000 of professional-grade kitchenware.

56. The bigger the purchase, the more time it deserves. Organic vs. normal peanut butter? Don’t spend 10 minutes thinking about it. $100K on a timeshare? Don’t pull the trigger when you’re three margaritas deep.

57. Use less than 30% of your available credit. Credit usage plays a major role in your credit score. Consistently maxing out your credit hurts your credit score. Aim to keep your usage low (paying off every month, preferably).

58. Unexpected windfall? Use 5% or less to treat yourself, but use the rest wisely (e.g. invest for later).

59. Aim to keep your student loans less than one year’s salary in your field.

The Mental Side of Personal Finance

At the end of the day, you are what you do. Psychology and behavior play an essential role in personal finance. That’s why these behavioral rules of thumb are vital.

60. Consider peace of mind. Paying off your mortgage isn’t always the optimum use of extra money. But the peace of mind that comes with eliminating debt—it’s huge.

61. Small habits build up to big impacts. It feels like a baby step now, but give yourself time.

62. Give your brain some time. Humans might rule the animal kingdom, but it doesn’t mean we aren’t impulsive. Give your brain some time to think before making big financial decisions.

63. The 30 Day Rule. Wait 30 days before you make a purchase of a “want” above a certain dollar amount. If you still want it after waiting and you can afford it, then buy it.  

64. Pay yourself first. Put money away (into savings or investment accounts) before you ever have a chance to spend it.

65. As a family, don’t fall into the two-income trap. If you can, try to support your lifestyle off of only one income. Should one spouse lose their job, the family finances will still be stable.

66. Every dollar counts. Money is fungible. There are plenty of ways to supplement your income stream.

67. Savor what you have before buying new stuff. Consider the fulfillment curve.

68. Negotiating your salary can be one of the most important financial moves you make. Increasing your income might be more important than anything else on this list.

69. Direct deposit is the nudge you need. If you don’t see your paycheck, you’re less likely to spend it.

70. Don’t let comparison steal your joy. Instead, use comparisons to set goals. (net worth).

71. Learning is earning. Education is 5x more impactful to work-life earnings than other demographics.

72. If you wouldn’t pay in cash, then don’t pay in credit. Swiping a credit card feels so easy compared to handing over a stack of cash. Don’t let your brain fool itself.

73. Envision a leaky bucket. Water leaking from the bottom is just as consequential as water entering the top. We often ignore financial leaks (e.g. fees), since they’re not as glamorous—but we shouldn’t.

74. Forget the Joneses. Use comparisons to motivate healthier habits, not useless spending.

75. Talk about money! I know it’s sometimes frowned upon (like politics or religion), but you can learn a ton from talking to your peers about money. Unsure where to start? You can talk to me!

The Last Personal Finance Rule of Thumb

Last but not least, an investment in knowledge pays the best interest.

Boom! Got ’em again! Ben Franklin streaks in for another meta appearance. Thanks Ben!

If you enjoyed this article and want to read more, I’d suggest checking out my Archive or Subscribing to get future articles emailed to your inbox.

This article—just like every other—is supported by readers like you.

Source: bestinterest.blog

Let the Roaring 2020s Begin

First some great news: because of your support in reading and sharing this blog, it has been able to earn quite a lot of income and give away over $300,000 so far.

The latest $100k of that happens at the end of this article. Please check it out if you want to feel good, learn more, and even join me in helping out the world a bit.

As I type this, there are only a few days left in the 2010s, and holy shit what a decade it has been.

Ten years ago, a 35 year old MMM and the former Mrs. MM were four years into retirement, but not feeling very retired yet. We stumbled out of 2009 with a precious but very high strung three-year-old, a house building business that was way more stressful than it should have been, and a much more rudimentary set of life skills. It was a time of great promise, but a lot of this promise was yet to be claimed.

Ten years later, despite the fact that I have one less marriage, one less surviving parent, and ten years less remaining youth, I am in an even better place in life right now, and would never want to trade places with the 2009 version of me. And on that measure alone, I can tell it has been a successful decade.

This is a great sign and it bodes well for early retirees everywhere. Compared to the start of the decade, I am healthier and stronger physically, wealthier financially, and (hopefully) at least a bit wiser emotionally. I’ve been through so much, learned so much in so many new interesting fields, and packed so much living into these 3653 days. A big part of that just flowed from the act of retiring from my career in 2005, which freed me up to do so many other things, including starting this blog.

It has not always been easy, in fact the hard times of this decade have been some of the hardest of my life. But by coming through it all I have learned that super difficult experiences only serve to enrich your life even more, by widening your range of feelings and allowing you to savor the normal moments and the great ones even more.

Ten Years of Learning in Three Points

I think the real meaning of “Wisdom” is just “I’ve seen a lot of shit go down in my lifetime and over time you start to notice everything just boils down to a few principles.

The books all say it, and the wise older people in real life all say it too. And for me, it’s probably the following few things that stand out the most:

1) This Too Shall Pass: nothing is as big a deal as you think it is at the time. Angry or sad emotions from life traumas will fade remarkably quickly, but so will the positive surprises from one-time life upgrades through the sometimes-bummer magic of Hedonic Adaptation. What’s left is just you – no matter where you go, there you are.

2) But You Are Really Just a Bundle of Habits: most of your day (and therefore your life) is comprised of repeating the same set of behaviors over and over. The way you get up, the things you focus your mind on. Your job. The way you interact with other people. The way you eat and exercise. Unless you give all of this a lot of mindful attention and work to tweak it, it stays the same, which means your life barely changes, which means your level of happiness barely changes.

3) Change Your Habits, Change your Life: Because of all this, the easiest and best way to have a happier and more satisfying life is to figure out what ingredients go into a good day, and start adding those things while subtracting the things that create bad days. For me (and quite possibly you, whether you realize it or not), the good things include positive social interactions, helping people, outdoor physical activity, creative expression and problem solving, and just good old-fashioned hard work. The bad things mostly revolve around stress due to over-scheduling one’s life, emotional negativity and interpersonal conflict – all things I am especially sensitive to.

So while I can’t control everything, I have found that the more I work to design those happiness creators into my life and step away from things that consistently cause bad days, the happier and richer life can become.

Speaking of Richer:

I recently read two very different books, which still ended up pointing me in the same direction:

This Could Be Our Future, by former Kickstarter cofounder and CEO Yancey Strickler, is a concise manifesto that makes a great case for running our lives, businesses, and even giant corporations, according to a much more generous and person-centric set of rules.

Instead of the narrow minded perspective of “Profit Maximization” that drives so many of the world’s shittier companies and gives capitalism a bad reputation, he points out that even small changes in the attitude of company (and world) leaders, can lead to huge changes in the way our economy runs.

The end result is more total wealth and happier lives for all of us – like Mustachianism itself, it really is a win/win proposition rather than any form of compromise or tradeoff. In fact, Strickler specifically mentions you and me in this book, using the FIRE movement as an example of a group of people who have adopted different values in order to lead better lives.

Die with Zero*, by former hedge fund manager and thrill seeking poker champion Bill Perkins sounds like a completely different book on the surface: Perkins’ point is that many people work too long and defer too much gratification for far too long in their lives.

Instead, he encourages you to map out your life decade by decade and make sure that you maximize your experiences in each stage, while you are still young enough to enjoy each phase. For example, do your time in the skate park and the black diamond ski slopes in your 20s and 30s, rather than saving every dollar in the hopes that you can do more snowboarding after you retire in your 60s.

Obviously, as Mr. Money Mustache I disagree on a few of the finer points: Life is not an experiences contest, you can get just as much joy from simpler local experiences as from exotic ones in foreign lands, and spending more money on yourself does not create more happiness, so if you die with millions in the bank you have not necessarily left anything on the table. But it does take skill to put these truths into practice, and for an untrained consumer with no imagination, buying experiences can still be an upgrade over sitting at home watching TV.

However, he does make one great point: one thing you can spend money on is helping other people – whether they are your own children, family, friends, or people with much more serious needs like famine and preventable disease.

And if you are going to give away this money, it’s better to do it now, while you are alive, rather than just leaving it behind in your estate, when your beneficiaries may be too old to benefit from your gift anyway.

So with this in mind, I made a point of making another round of donations to effective causes this year – a further $100,000 which was made possible by some unexpected successes with this blog this year, combined with finding that my own lifestyle continues to cost less than $20k to sustain, even in “luxury bachelor” mode.

And here’s where it all went!

$80,000 to GiveWell, who will automatically deliver it to their top recommended charities. This is always my top donation, because it is the most serious and research-backed choice. This means you are very likely doing the most good with each dollar, if your goal is the wellbeing of fellow human beings. GiveWell does constant research on effective charities and keeps an updated list on their results – which makes it a great shortcut for me. Further info in my The Life You Can Save post.

Strategic Note: I made this donation from my Betterment account where I keep a pretty big portion of my investments. This is because of tax advantages which multiply my giving/saving power – details here at Betterment and in my own article about the first time I used this trick.

$5000 to the Choose FI Foundation – this was an unexpected donation for me, based on my respect for the major work the ChooseFI gang are doing with their blog and podcast and meetups, and their hard-charging ally Edmund Tee who I met on a recent trip. They are creating a curriculum and teaching kids and young adults how to manage their money with valuable but free courses.

$2000 to the True Potential Scholarship Fund, set up by my inspiring and badass Omaha lawyer friend Ross Pesek. Ross first inspired me years ago by going through law school using an extremely frugal combination of community and state colleges, then rising to the top of the pack and starting his own firm anyway. Then he immediately turned around and started using some of the profits to help often-exploited immigrant workers in his own community with both legal needs and education.

$1000 to plant one thousand trees, via the #teamtrees effort via the National Arbor Day Foundation. I credit some prominent YouTubers and Elon Musk for promoting this effort – so far it has resulted in over 20 million trees being funded, which is a lot (roughly equal to creating a dense forest as big as New York City)

$5000 to Bicycle Colorado – a force for change (and sometimes leading the entire United States) in encouraging Colorado leaders and lawmakers to shift our spending and our laws just slightly away from “all cars all the time” and towards the vastly more effective direction of accommodating bikes and feet as transportation options. Partly because of their work, I have seen incredible changes in Denver, which is rapidly becoming a bike utopia. Boulder is not far behind, and while Longmont is still partially stuck in the 1980s as we widen car roads and build even more empty parking lots, these changes slowly trickle down from leaders to followers, so I want to fund the leaders.

$5000 (tripled to $15,000 due to a matching program that runs until Dec. 31) to Planned Parenthood. Although US-centric, this is an incredibly useful medical resource for our people in the greatest need. Due to emotional manipulation by politicians who use religion as a wedge to divide public opinion, this general healthcare organization is under constant attack because they also support women’s reproductive rights. But if you have a loved one or family member who has ever been helped during a difficult time by Planned Parenthood, you know exactly why they are such an incredible force for good – affecting millions of lives for the better.

And finally, just for reasons of personal and local appreciation, $1000 to the orchestra program of little MM’s public middle school. I have been amazed at the transformation in my own son and the hundreds of other kids who have benefited from this program. They operate a world-class program on a shoestring (violin-string?) budget which they try to boost by painstakingly fundraising with poinsettia plants and chocolate bars. So I could see that even a little boost like this could make a difference. (He plays the upright bass.)

You could definitely argue that there are places that need money more than a successful school in a wealthy and peaceful area like Colorado, and I would agree with you. Because of this, I always encourage people not to do the bulk of their giving to local organizations. Sure, it may feel more gratifying and you may see the results personally, but you can make a much bigger difference by sending your dollars to where they are needed the most. So as a compromise, I try to split things up and send the lion’s share of my donations to GiveWell where they will make the biggest difference, and do a few smaller local things here as a reward mostly for myself.

So those are the donations that are complete – $99,000 of my own cash plus an additional $10,000 in matching funds for Planned Parenthood. But because environment and energy are such big things to me, I wanted to do one more fun thing:

$5000 to build or expand a local solar farm.

This one is more of an investment than a donation, but it still does a lot of good. Because if you recall, last year I built a solar array for the MMM Headquarters coworking space, which has been pumping out free energy ever since. My initial setup only cost me $3800 and it has already delivered about $1000 in free energy, more than the total amount used to run the HQ and charge a bunch of electric cars on the side.

So, I plan to invest another $5000, to expand the array at HQ if possible, or to build a similar one on the roof of my own house, possibly with the help of Tesla Energy, which is surprisingly one of the most cost-effective ways to get solar panels installed these days. These will generate decades of clean energy, displacing fossil fuels in my local area while paying me dividends the whole time, which I can reinvest into even more philanthropy in the future.

What a great way to begin the decade. Let’s get on it!

* Die With Zero is not yet released, but I read a pre-release copy that his publisher sent me. The real book comes out on May 5th

** Also, if you find the scientific pursuit of helping the world as fascinating as I do, you should definitely watch the new Bill Gates documentary called Inside Bill’s Brain, which is available on Netflix.

Source: mrmoneymustache.com

‘Perfection in Every Way’: $18M Modern Mansion in San Francisco

San Francisco Modernrealtor.com

A new listing in San Francisco’s Cow Hollow neighborhood has turned heads for its unique design, both inside and out.

The 4,185-square-foot home with four bedrooms and 4.5 bathrooms was built in 2016, is on the market for $18 million. It has an top-notch design pedigree that includes Aidlin Darling Design (architecture) and Andrea Cochran Landscape Architecture (landscape), who were honored with National Design Awards for the project.

Neal Ward and Rick Teed of Compass are handling the listing. Built in 2016 for the current seller, it’s available for the first time.

“The architecture of this property is so striking, and the detail, from top to bottom, is perfection in every way,” says Ward.

Cello & Maudru Construction built the home, and Allyn Davis’ interior design is showcased in the home’s staging.

While natural light is prominent in the interiors, so is privacy, thanks to exterior walls designed with wood slats. In addition, a walnut and stainless-steel kitchen can be easily separated by five frosted-glass panel walls that are designed to retract if the cook prefers privacy. The home also has a green roof.

Inside, 20-foot ceilings in the living room and a 13-foot-tall light sculpture above the dining room table add elegance. Pivot-hinge doors on the north end of the living room lead to a cantilevered deck offering views of the Palace of Fine Arts, Angel Island, Alcatraz Island, and San Francisco Bay.

Ward calls out the deck’s “bird’s-eye view of the Golden Gate Bridge” as another huge highlight. The home is at the north end of a tree-lined block of single-family homes on Filbert Street, which means that it has some of the neighborhood’s best views. It also has a green roof.

This home is built for entertaining. On the lower level—excavated into the home and beneath a rock—are a media room and DJ booth, as well as a wet bar. That area connects directly with the outdoors, where you’ll find a dining and grilling area, as well as a lanai, bamboo leaves, an outdoor TV, in-ground fire pit, and spa.

Exterior of home in Cow Hollow, San Francisco

Matthew Millman

Entrance

Matthew Millman

Dining room

Matthew Millman

Living room

Matthew Millman

Interior

Matthew Millman

Backyard

Matthew Millman

Media room

Matthew Millman

Interior

Matthew Millman

“The person that owns the house is into music, technology, and high-tech, and was able to have all of this done custom,” says Ward.

Another selling point is the location.

“The Cow Hollow neighborhood is highly sought after because of its proximity to the Presidio and all the wonderful shops on Union Street, and Chestnut Street in the Marina,” says Ward.

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Watch: You Can Take In Seattle’s Entire Skyline From This Historic Home

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And while San Francisco is often linked with fog and cool temps, this neighborhood does get its fair share of sunlight.

“It’s nice and sunny,” says Ward. “Cow Hollow is known for its good weather.”

Ward believes that a young couple or single person—particularly a tech employee drawn to the custom features who is looking in this price range—will snap up the property.

“It’s not a typical young family with younger children that can’t have the separation from their parents,” he says, alluding to the master bedroom’s location on the top floor, with other bedrooms below. “I’ve also shown it to people looking for a pied-à-terre, couples from New York City,” he says.

The post ‘Perfection in Every Way’: $18M Modern Mansion in San Francisco appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com

The Sweet Spot


“Success can get you to the top of a beautiful cliff,

but then propel you right over the edge of it.”

As a Mustachian, there’s a good chance that you are a bit of an overachiever. 

Maybe you fought hard to get exceptional grades in school, or perhaps you have always dominated in your career or your Ultramarathon habit or your hobbies – or maybe all of the above. 

In the big picture, this usually leads to having a “successful” life, because of this basic math:

Traditional Success
 =
How much work you do
x
How much society happens to value your work

The Nitty Gritty of Traditional Success

Now, lest the Internet Privilege Police head straight to Twitter to start writing out citations, Traditional Success is not a measure of your worthiness as a human being. We’re just talking about the old-fashioned, Smiling 1950s Man definition of success.

 And since we’re all scientists here, we could break the “Work” side of it down a bit further:

And thus, you could say that on average, doing more stuff produces more traditional success. 

But then what?

This is the point where a lot of  smart, driven, born-lucky people drive themselves up the Winding Road of Challenge and then right off the edge of the Cliff of Success. 

If you’re still on the way up, or stuck at the bottom, it is difficult to even imagine the idea of “too much success”. But it’s a real thing, and it happens much more quickly than the modern overachiever would like to admit. Observe the following cautionary tale:

Diana is the director of engineering in a Silicon Valley tech startup. The work is intense, but they are almost over the hump – the company went public last month, and she owns shares that are worth over $10 million at today’s share price. They will vest over the next five years, so she just needs to grind this out and then she will be set for life.

Sounds great, right?

Except this is Diana’s third smashing success. She was already set for life after the second company was acquired, and even before that, her first decade as a rising star at a large company had already left her with over $2 million of investments and a paid-off house in hella expensive Cupertino, California. She had more than enough to retire, twenty years ago!

To many people who are less fortunate, the present situation would still sound like great fortune, and in some ways, it is. Becoming a Director of Engineering is (usually) far better than a punch in the face.

But Diana is now 52 years old, with a collection of increasingly severe back and neck problems and a few medical prescriptions piling up. She has two grown children in their twenties, but wishes she had been able to spend more time with them as they grew up. She has all the money in the world, but still almost no free time, and this next five years is starting to look like an eternity.

What happened here?

Diana is in good company, because many of our hardest-working people fall into this same trap. They have the talent and the great work habits figured out, but they are still missing one last concept – the idea of the sweet spot.

Fig. 1: What is the ideal length of a high-end career?

Diana could have stopped after the first company, or the second, but her career success took on a momentum of its own, so she kept doubling down without stopping to consider why she was doing it – and what she was giving up in exchange.

Once you learn to see the phenomenon of the sweet spot, you will start noticing it everywhere. And it is an amazingly useful thing to start watching and fine-tuning to get the most out of your own life.

Fig.2: What is the ideal amount of Anything?

The Sweet Spot of Physical Training

When a non-runner starts running, they will see immediate benefits. In the process of going from being unable to jog across a parking lot, to being able to easily jog a brisk mile, your entire body will transform for the better. Muscles and bones get stronger, heart and lungs expand and reach out to give your body a healthy embrace, brain functioning and mood and hormones smooth out and normalize. 

Training your way up to become a two mile runner still brings great benefits – just slightly smaller. The fifth through twentieth mile turn you into a hyper efficient machine, but some people start seeing joint injuries as they rise through the ranks.

And by the time you reach the fringe world of 100-mile runners, serious injuries and surgeries are completely normal – as well as unexpected organ failures in otherwise young, healthy people. The sweet spot for daily running for maximum health is somewhere the middle.

All around us, seemingly unrelated things follow this same pattern, from career work to physical exertion to parenting strategy.

Fame and Fortune – be careful what you wish for

Fame definitely has a sweet spot. Building up a good reputation in your community can open the door to better friendships, jobs, relationships, and more fun in general.

But as that reputation expands outwards to become fame, you get the “reward” of constant coverage in gossip magazines and waking up to find photographers and news reporters on your front lawn. At the extreme end, you need to mobilize a team of armored vehicles and line your route with snipers every time you leave your well-guarded compound.

Even money, our humble and ever-willing servant is subject to this phenomenon. It certainly helps us meet our basic needs, but there is a certain point at which Mo Money can become Mo Problems. 

The first bit of monetary surplus can be fun as you can afford a nice house and good food. Then the next chunk seems fun but also causes distractions as you rack up second and third houses and ever-more elaborate possessions and vacations that take a lot of energy to keep track of.

And from there it goes downhill as tabloids start keeping track of your wealth and scrutinizing your choices, hundreds of people mail in pleas for your generosity, and you end up with a full-time job just making sure that the surplus goes to good use. This life arrangement can still be enjoyable for some people, but I would definitely not wish it upon myself.

On and on this pattern goes. A curve with a sweet spot in the middle. The optimal amount of calories to consume in a day. The volume at which you will enjoy your music most. The right brightness of light to illuminate a room. The number of friends with whom you can have a meaningful relationship.

 Why does it occur in so many places? I believe it is because this is how our brains are wired in the first place. 

Humans are a ridiculously adaptable creature, but we do still come with limits.

And when you respect those limits and fine-tune your life within the sweet spot for all of the main pillars for happy living, you end up with the best possible chance at living a happy, prosperous life.

The Curse Of the Overachievers – Revisited

So now you see the problem – overachievers like us tend to get really good at a few things like a career or an athletic pursuit, often specializing so much that we neglect other things like overall health or personal relationships.

And our society notices and rewards us for the success, which just reinforces the behavior, so we take things to even higher extremes, often without stopping to think about the reason behind it.

Okay, So What Now?

Once you see the pattern of the sweet spot,  it is impossible to un-see it. So it becomes pretty easy to float up and look at your entire life from above, like an outside observer.

And from up there, you can see the areas where you have enough, and places where you may have already gone overboard, and the corresponding things that you have left neglected as the price of that success. 

Over the past year I’ve been looking at my own life from this perspective, coming up with quite a few of my own diagnoses:

Money: enough. Additional windfalls don’t seem to bring me any lasting joy, but I also don’t have so much money that it makes me nervous. It’s enough to feel safe and empowered, and that’s all I need. Meanwhile, giving away money has brought me lasting happiness, without creating a feeling of shortage or regret.

Career Success (blog): It Varies. When I was really working on this MMM job in the mid-2010s, it started to take over too much of my life. Emails, opportunities, travel and public attention all reached levels where I actually started to have less fun. So I tried dialing it back, as any long-term readers will have noticed. And sure enough, life improved. But then I went too far and started feeling a loss from letting this valued hobby slip away. I’ve been trying to get back into the groove, which revealed another problem – detailed at the end of this list.

Friendships: Not Enough. I have found myself not being able to keep up with close friends, and had difficulty making or keeping plans, partly out of  feeling overwhelmed with life details in general. Still, the opportunities abound here in my local community, and the people are wonderful. So I have the opportunity to keep working at this.

Health and Fitness: Enough. Since I was about fourteen years old, eating well and getting a lot of varied exercise has always been a kind of non-negotiable pillar for me. Nothing extreme, but just very consistent. I think this has been paying off as I feel healthy every day and have never had any physical or health problems in these 30+ years since.

Parenting and Kids: Enough (an A+!) Since 2005 I made “being a Dad” my primary goal in life, quitting my career to do so. It’s the only thing I can truly say I have done the best I could at, and I’m really proud of that. But part of this success came from only having one kid – both of us parents knew we couldn’t handle any more, given the overall conditions of life back then. So for us, the sweet spot was One Child – and absolutely no regrets in that department.

Personal Projects and Daily Habits: Not Enough. I get great satisfaction from working on challenging things and making progress. But far too often, I just can’t get it together and I squander entire days on accidental distractions. Planning to go out for a day of work can lead to searching for lost sunglasses which can lead to finding a lost to-do list which can lead to opening the computer to look something up and several hours disappearing. On and on these tangents can go, often leading to me not getting my primary, happiness-creating goals for the day accomplished. 

I discovered that I have a pretty severe and textbook case of Adult Attention Deficit Disorder, which gets magnified if there are any sources of stress in my life. So I’m working on that (keeping stress down and also targeting habits, diet, exercise and even trying some medication), which will hopefully improve all other areas of life as well.

What am I missing? I’m still working on thinking it all through, so this list will surely grow.

Your Turn

Your life surely has a completely different array of surpluses, shortages and sweet spots than mine. Your assignment is therefore to write them all out tonight, and see where you stand in each area, and decide what to change. Many of the changes are quite easy to make, and yet the results are nothing short of life-changing.

In the comments: what are your own areas of surplus and shortage? And what’s your plan to help restore balance to your life?

Source: mrmoneymustache.com