Money Tips Network

The July 2018 issue of the AAII Journal — the monthly publication of the American Association of Individual Investors — includes an intersting article about how to “increase your retirement resources”. This plain English piece summarizes some of the findings from the authors’ research paper “The Power of Working Longer“.

According to the article, there are three primary factors that determine “the adequacy of retirement resources”. Those are:

More often than I’d like to admit, I find myself working on a task, but not really working on the task. For instance, I’ll start a writing project on my computer, but I’ll have my Twitter feed open in a separate tab. I’ll write a bit, check Twitter, write a bit, read another tweet, write, then see an update that I absolutely have to read, and jump back to my feed.

It’s not that either activity I’m engaging in is bad — it’s just that they’re bad when mixed. I’m not being very productive with my work, and I’m not getting maximum enjoyment out of casually reading through Twitter (which is possibly my favorite leisure activity).

I call this getting stuck in the halfway zone. It’s like trying to think through a complex math problem while doing a challenging yoga pose. Both activities have benefits, but if you try to do them at the same time your performance and enjoyment will suffer across both activities.

When you're prepping for hurricane season, it's easy to get caught up in protecting your house and making sure you're stocked with basic supplies. You may totally forget about your car.

It’s almost a running joke that personal finance writers like to bring up the idea of cutting out that ol’ daily trip to Starbucks as a way to save money. I do it sometimes myself.

“If you cut out a daily visit to Starbucks on your way to work, where you’d spend $5 a visit, you’d save $1,250 a year!”

So, why does that strategy come up all the time?

First of all, it’s a true statement with really easy math behind it. If a person goes to Starbucks every workday and spends $5 there, that’s $5 per visit times 5 visits per week, or $25 per week. If that person works 50 weeks a year, that’s $25 per week times 50 weeks per year, or $1,250 per year. If you’re spending $1,250 per year at Starbucks right now and you stop doing that, that’s $1,250 in your pocket. It’s absolutely true and the math is really easy and obvious.

There are many factors that determine whether or not you'll be successful at managing money throughout your life.

This is the fourth entry in an eight part weekly series that provides a detailed look at the book The Wisdom of Frugality by Emrys Westacott. If you’re new to the series, feel free to hop back to the first entry.

When you work for a company, you soon get to know its culture. Sometimes it's fantastic; everyone gets along great, and you pinch yourself to see if you're dreaming.

Last week, Ben Carlson from A Wealth of Common Sense published an interesting article about how staying rich is harder than getting rich. He writes:

Research shows over 50% of Americans will find themselves in the top 10% of earners for at least one year of their lives. More than 11% will find themselves in the top 1% of income-earners at some point. And close to 99% of those who make it into the top 1% of earners will find themselves on the outside looking in within a decade.

I am proud to call myself a wary consumer. I do my best to combat manipulative marketing, I recognize the value of repairing and maintaining my things, and I focus on long-term goals rather than short-term gratification.

That being said, there are certain products I buy without guilt, even when I know an alternative can be had for less. That’s because I have honed in on what matters to me. Everyone will have their own version of this list, and that’s great. We shouldn’t feel guilty about small (and sometimes large!) splurges that lead to a dramatically increased quality of life.