Top 10 financial moves to make in your 20s

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I know there are lots of lists like this out there (on the inter-webs) but I thought this was an especially good one, so I decided to summarize and pass along. I will put a hyper-link to the original article at the bottom. Hopefully you can skim this post and pat yourself on the back for having already checked-the-box on these basics. Your 20s are the perfect time to get started going down the right financial path (and avoid paying the stupid tax).  See below a link to a previous post listing the top 10 financial blunders (a.k.a, the stupid tax).

There are many advantages to being young – time and the power of compounding are on your side – but only if you see the big picture and take control of your financial future.


  1. Create a budget – you already know this one, but it’s probably the best tool to ensure you have a road-map to financial success. A budget gives you the freedom to spend on categories that are fully funded. Use to automate this process and don’t be afraid to fail – then make corrections and spend less than you make.  See below a previous post on


  1. Build an emergency fund. Start by putting $1,000 in your savings account, and only use it for emergencies!  (hint: a new iphone isn’t an emergency).  After you have paid off your consumer debt (e.g., credit cards, student loans, etc.) increase your emergency fund to 3-6 months living expenses.


  1. Start saving for retirement – there are many different ways to determine how much to save but if you want a simple rule then start with 15% of your salary (including any company match).  Save early and often!


  1. Pay off costly credit card debt – stop paying so much needless interest – sometimes they compound daily – which could lead to an endless cycle of making credit card payments for years. Set a goal to pay off these balances in 12 to 18 months – put it in your budget and stick to it! If you can’t resist the temptation to use credit cards then cut them up!


  1. Knock out your student loans – I don’t have any great advice here but I will encourage you to stay motivated and do your best to make extra payments to kick sallie-mae to the curb as soon as possible.


  1. save for a home. I really want you to have your dream home, but I also want you to realize your first (a.k.a., starter) home shouldn’t be your “forever” home. Start with a less expensive home – I recommend 2X your household income. For example, if your household income is $100,000 then aim for a max budget of $200,000 for your starter home. Save up 20% for the down-payment (to avoid PMI insurance cost) and then finance via a 15 year mortgage – preferably with a credit union (typically lower closing costs/fees).


  1. create a will. I know this a little morbid – but in some states (North Carolina for example), your estate will automatically go through probate if you don’t have a will. Probate involves going to court and probably means attorney fees – save your loved ones the inconvenience of probate and document how you want your final wishes carried out.
  1. Get health insurance. This is usually a no-brainer because an unexpected medical crisis could wreck your finances. Medical debt is the leading cause of personal bankruptcy.


  1. Decide on graduate school. This is a cost-benefit calculation in my book. How much will a graduate degree increase your salary? How much does graduate school cost? If the increased salary isn’t sufficient to “payback” the cost of graduate school in 3 to 5 years, then I recommend you forego graduate school.   Too many folks attend graduate school without a plan and without knowing if, or how much, this extra degree will increase their salary.


  1. ask for a raise. Know what you are worth. See my previous career advice post (see link below). Do your research and don’t be afraid to have a conversation with your supervisor about your performance and what milestones you need to achieve to get a raise.  Your career is your biggest asset.  Invest in yourself!


The original article is linked below:

time for change


Be Different! (Be weird or be broke)

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Financial decisions are all around us – they happen almost every day.  I created this blog to share my experiences in hope that you might learn from my successes, as well as my failures.     .       .   Life’s hard – do your research and learn from your mistakes – better yet, learn from others’ mistakes and avoid money pitfalls altogether.  Listen, observe, question, learn, change, repeat.    .     .

Helping others, through personal finance education, is a passion for me.  I am intrigued by how people approach financial decisions (especially millennials); some of these decisions turn out great, and some, well, not so much.   .    .   I’m convinced that most (but not all) financial mistakes can be avoided.  Having said that – we are all human and prone to making poor financial decisions.  Let’s take a journey together and find ways to think smarter about our daily decisions and how they impact our finances.  I want to challenge the way you think about your finances  (agreement is not required).


I don’t claim to have all the answers, but hope this blog will help educate folks about money strategies and insights, as we try to think smarter together.



This blog itself is different.   .   . Blogs generally fall into 2 categories, private and commercial. Private blogs are for close friends and family and are not open to the public; a way to share family photos, memories, etc. with loved ones. Most other blogs are written for the purpose of making money; not that there is anything wrong with that .   .     .

The personal finance blogs that I follow are designed to be a part-time, or even a full-time, occupation for their writer(s) (e.g., The way they make their blog a money-maker is through advertising revenue, product endorsements and commissions from purchases (web traffic on their site). I know it’s a little complicated, but these folks get paid to give you advice. The reason I tell you that – is my blog is neither private nor commercial. It’s open to the public (not private) but isn’t a commercial blog either; actually, I pay extra to remove ads from my blog – so my hobby actually costs me money.   .     . I don’t recommend this particular strategy as a sound way to increase your net worth (insert sarcasm).


I tell you that so you might be skeptical when someone gives you advice or suggests you try a product or service – what is their motivation? Are they unbiased? I have suggested several books and services in my blog; I am not being compensated to promote them.  I sincerely believe in them and am passing along this information in a hope that it might help you too.


This philosophy also applies to my views on politics, religion, etc. I want you to see the truth for yourself – nothing I say or do will change the truth. Remember that a rumor is a mile down the road before truth gets his boots on. Remember, nothing ruins the truth like stretching it. Please don’t confuse preferences (Ford, Chevy, Apple, Android, etc.) with the truth.   In the same way don’t confuse wants and needs.

Be skeptical – ask questions, use critical thinking. I quote the Bible not because I want you to be impressed – I want you to read the Bible for yourself and apply the truth to your own life.   If you have never read it, may I humbly suggest you start with Proverbs.    You can probably live without Jesus, but can you die without him? Just sayin’

Please watch the video below – it’s an excellent commencement speech – trust me – you won’t regret investing the time to watch this short video.


Top 10 lessons learned from actual millionaires


I read an excellent book, “the millionaire next door” by Thomas J. Stanley; I highly recommend this book – it will challenge your way of thinking.  I’m actually not endorsing everything millionaires do – some appear to be cheap and stingy.   .       .  Nonetheless, I believe you can learn a great deal from this book.  See below my top ten take-aways:

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1) Most millionaires do not live in fancy houses or drive luxury automobiles – they typically live in middle class neighborhoods and drive non-descript automobiles (i.e., not a foreign luxury car).  They live well below their means and are generally frugal.


2) They intentionally set out to become financially independent – they have a budget and track how well they do against that budget.  They have goals: monthly, annual, and even longer.  They spend a disproportionate amount of time planning their financial future.


3) They strategize to minimize their taxes.


4) They are disproportionately entrepreneurs and self-employed.  They believe being an employee is risky – you only have one source of income.   .     .  This thinking is consistent with their lifestyle – which is definitely counter to conventional wisdom and conspicuous consumption habits.


5) They take risks and are aware of opportunities when they see them.  They enjoy what they do and chose wisely in regards to their occupation.


6) In short, some are good at offense (generating income) and some are good at defense (expense management) but many are good at both.


7) Married only once.


8) Compulsive saver and investor.


9) 80% of millionaires are first generation rich (didn’t inherit their wealth).


10) Becoming a millionaire takes discipline, sacrifice, and hard work.  Are the trade-offs worth the cost?




Q: Will I really get any benefit from social security in retirement?

A: Most likely



Many believe that social security is a retirement benefit that is going bankrupt and simply won’t be there by the time they need it.  25% of people surveyed by bankrate expect to receive no benefits from social security.

Social security is something of an enigma – so I decided to dedicate a post to better understanding this oddity, started by Franklin Roosevelt in 1935.  Social security is both a tax and a benefit.


Let’s start with the tax piece  since most people reading this post are probably still in their working years and have yet to realize any benefits from this safety net for seasoned citizens.


Social security taxes apply to the first $127,200 of your income (2017). The tax rate is a flat 6.2% of your pay, up to a maximum withholding of $7,886 per year. That’s referred to as the employee portion. If you have an employer (self-employed pay the full 12.4%) then your employer pays another 6.2% in addition to your contribution. Many analysts say that you are effectively paying both pieces (employer and employee) because your paycheck would be that much higher, were it not for this “tax”. I am encouraging you to understand this “tax” because it could effectively reduce your salary by up to $15,773 per year – that maximum amount applies to those fortunate enough to be in the top 5% or so of earners.


Now let’s talk about the benefits. If you work for at least 10 years, you should be eligible for monthly benefits in retirement. The average benefit in 2017 is $1,360 per month.  The more income you earn (over a 35 year period), the bigger your benefit at retirement; full retirement is at age 67.  You can receive 70% of your full benefit starting at age 62 and you can increase that benefit by about 8% per year by deferring when you elect to receive benefits; but you can’t defer past age 70.


The benefit formula/calculation can be fairly complex and vary based on your individual work history. There are numerous options and strategies that can be used to maximize your lifetime benefit. I’m not really going to cover any strategies or options, other than to state that it’s essentially means tested/regressive in the following 3 sharply graduated brackets:


  1. 90% replacement of eligible income up to about $9,500 annually


  1. 32% replacement of eligible income up to about $58,500 annually


  1. 15% replacement of remaining eligible income, up to the maximum/ceiling


In 2017, the maximum monthly benefit is $2,687 (full retirement). For very low income seniors, social security replaces up to 90% of eligible earnings. For more average seniors, it is more likely to replace approximately 40% of eligible earnings (i.e. pre-retirement wages); a lower replacement percentage (approximately 28%) if you are a “high” earner.


Up to 85% of social security benefits can be subject to income tax (at a rate of up to 35%).  About 30% of retirees pay some tax on their benefits. I believe these taxes essentially wipe out the 3rd bracket but I’m not a social security benefit expert (I didn’t even stay at a holiday inn express last night). I am a CPA, but not competent enough to do my own taxes, my wife fired me years ago.   .     .


I think I have already told you more than I know about social security taxes and retirement benefits. And remember, knowing is the half the battle – I don’t know what the other half is – but that’s what GI Joe said, so it must be true!


GI Joe


Some projections indicate future funding problems with social security, with the program only being able to pay about 75% of promised benefits, beginning as early as 2033. I believe, through congressional-action (I know that’s an oxymoron, but work with me), that some additional steps will be taken (e.g., raising the full retirement age) to make sure the program continues – its simply too popular (about 43 million retired workers currently) not to.   .     .