Simple Inspiration Interview featuring Gen Y Finance Guy

Gen Y Guy

 

If you think you have to come from money to learn good money habits or to create wealthy.  Think again.  This week’s Simple Inspiration shows you can achieve the finance goals you want to achieve if you put your mind to it even if you don’t come from money.

This week I have the pleasure of interviewing the Gen Y Finance GuyGEN Y Dominic

Gen Y Finance Guy is a site dedicated to the stated mission to Humanize Finance, Build Wealth, and Reach Financial Freedom. He writes from the perspective of a practitioner and not an academic. He provides a level of transparency that you won’t find on most blogs. Every month he produces a detailed financial report that covers everything from: net worth, gross income, expenses, assets, liabilities, etc. It’s just one way that he aims to humanize finance and provide context around the things he shares on the blog. He puts his money where his mouth is.

He is also offering a free giveaway which runs until the end of July so check it out by clicking below.

Let's hear how the Gen Y Finance Guy has simplified his finance:

What event lead you to decide to pursue financial freedom?

I grew up on welfare and lived in section 8 housing as a kid. Somehow I managed to find awesome mentors that showed me a different path then the one I was on. All the statistics say that I should have ended up in prison like my father or at the very least addicted to drugs like both my parents.

Those early experiences were turned into motivation to reach a level of financial success that would ensure my life looked nothing like that of my parents.

How long had you planned this?

This is what I have been working towards my entire life (probably since I was about 11 years old). When I say my entire life, don’t let me fool you, I am only 28 years old.

Results don’t come over night, but things have really started to compound and snowball for me. It all started when an amazingly altruistic man by the name of Dan entered my life in the 6th grade.

He was the first person to hold me accountable. I went from failing out of the 6th grade to being a 4.0 student. It is amazing what a person can do when they have someone who cares in their life. I learned a lot about business from Dan, since he owned a few pizza places.

It was my experience with Dan that led way to my business studies in college. My parents didn’t graduate high school and I was the first on both sides of my family to get my college education (besides my aunt). If I was going to be financial free one day I knew that I was going to need to understand how money worked. So I got my degree in Corporate Finance.

What steps are you taking to achieve financial freedom?

Well, first, I should start off by telling anyone building wealth in the pursuit of financial freedom only needs to remember this little secret to wealth building:

Spend less than you make and invest the difference wisely.

Don’t let anyone try to tell you that it is anything more complicated than this. It is really a rather simple fundamental to building wealth.

Here is what I am doing to achieve financial freedom:

  1. Saving 50% of my gross income
  2. Maxing out my 401K every year
  3. Maxing out an IRA for my wife every year
  4. Making after tax investments in Prosper and Rich Uncles REIT
  5. Paying off our 30 year mortgage in 7 years
  6. Putting money in short term CD’s
  7. Trading Options
  8. Building an online business

One of the things that make me different than a lot of the financial bloggers out there is that I tend to be more focused on the income side of the equation. Because in order to crack the code of wealth building, to spend less than you make, you need to live below your means.

Now when it comes to living below your means you have 2 options. The first option is to be expense focused, keeping expenses as low as possible. This means no $4 lattes or eating out regularly. It’s too restrictive for me.

So, I choose the alternate way of living below my means by constantly expanding my means. I am constantly looking for ways to increase income in order to indulge in the things that bring me joy, while still saving 50% of gross income.

This tends to keep my in a state of abundance rather than put me into a scarcity mindset. Because in reality there is a natural floor to how much you can cut your expenses. However, there is no limit on how much income you can earn.

What is your biggest challenge or roadblock to achieving financial freedom?

I think that the biggest challenge that everyone suffers from is falling trap to lifestyle inflation. The way I address this is with the 50% savings rule. I am okay with lifestyle inflation as long as it remains proportionate with income.

It is so easy to compare ourselves to our friends and what they have. Don’t get sucked into “keeping up with the Jones.”

Be a non-conformist.

Our friend’s thing we are crazy for paying off our mortgage in 7 years. We think it would be irresponsible if we didn’t. When I did the math, I showed my wife that we would be earning a minimum of $1.4M over the next 7 years and our mortgage was only $352K. We immediately agreed that we would be dumb not to pay it off.

We bought a house that was half of what we could afford. Most of our friends buy a house that is exactly what they can afford.

We have cars that are free and clear. Our friends have monthly car payments.

We don’t carry any credit card debt. We do use credit cards and take advantage of reward programs, but we pay those suckers off every month.

We automate our savings and investing. Many of our friends have not even started saving or investing yet.

So, like I said be a non-conformist.

What are your current financial goals?

We have two major goals that we are working towards right now:

1 – Pay off the house in 7 years (before our 35 birthday)

2 – Achieve a $10M net worth by the time we are 48 (which is only about $5.5M in today’s dollars with a 3% inflation rate)

We will actually reach financial freedom sometime in our 30’s, but we have bigger goals, and that’s why we have the 20 year plan.

How will you feel once you reached your financial goal you have?

Stoked!

I truly believe that it is not a matter of if, but rather when we reach our financial goals.

What I love about the way we have structured our plan is that we don’t have to delay gratification for 40 years and then at 65 retire and try to do the things that we wanted to do when we are younger.

We plan to balance living in the present while preparing for the future. A high and high savings rate is the linchpin to our plan.

What one thing have you done to enable you to live your current lifestyle?

I have aggressively worked to increase my income since graduating college. Over the last 7 years I have averaged annual raises of almost 21%.

What's your best savings tip?

Automate your savings. When you automate your savings and “pay yourself first”, the expenses will work themselves out. And then you can have no guilt spending what is left over.

Do you have an emergency fund established, if so how did you determine the amount needed to fund it?

We do have an emergency fund, but we honestly don’t call it that. Over time the wife and I have become comfortable with a certain balance in our bank account. We have never lived paycheck to paycheck, so the bank has always retained a surplus. When we first got married we didn’t like to see our bank balance dip below $20K. These days we feel a lot of comfort maintaining a balance around $40K.

Although we spend about $10K/month, our bare minimum living expenses are around $4K/month. In the event that something did happen and we both lost our incomes this would give us about 10 months of runway before we had to tap any of our investments.

What book, blog, or podcast would you suggest to someone who is looking to simplify or improve their finances?

The book that has been the most influential in my life is the “The Slight Edge”, by Jeff Olson. This is the only book that I re-read every year.

What advice or thoughts you would like to share with others who are looking to achieve financial freedom or just improve their financial life?

Yes, it’s a quote from Jim Rohn:

"If you don't design your own life plan, chances are you'll fall into someone else's plan. And guess what they have planned for you? Not much."

As complicated as people try to make wealthy building it is actually as simple as spending less than you make and investing the difference. Once you realize that, you need to decide whether the extreme frugality path fits your goals and personality or if the income expansion method fits you.

From experience, expanding your income is way more fun.

 If money was not a concern, what would you do for fun?

First, I would like to reiterate that I am not a big fan of suppressing all of the activities you enjoy in the pursuit of financial freedom. None of us are guaranteed another day, so I strongly encourage each and every person reading this post to make sure they do something they enjoy every single day.

With that said I personally would spend more time doing the things I currently enjoy doing on a regular basis: reading, working out, traveling with my wife, trying new restaurants, cooking, blogging, investing, spending time with family and friends, and playing with my dogs. These are all things that for the most part I do on a daily basis, if not weekly. The only exception to that is the travel piece. Our current schedules really only allow us to travel a few times a year, but we are working on that. Once our house is paid off, our goal is to live in a foreign country or somewhere by the beach for 3-6 months at a time (first up is Italy).

Thanks Dominic.  Your journey is amazing and I hope it inspires others to simplify their finances.  If you would like to read more about his journey check out the blog Gen Y Finance Guy or follow his journey on twitter @genyfinanceguy.

P.S. Gen Y Finance Guy  has a special giveaway that he would like to extend to everyone reading this. He is giving away 11 books that will not only change you money mindset, but will set you well on your path to financial freedom. Enter the giveaway and then earn an additional 3 entries every time you share it with others that sign up. The giveaway is only running through 7/31/15, so don’t delay!

To read previous interviews in the series click below


If you are interested in sharing how you have simplified your financial life, send me an email and I will follow up with you.  Enjoy the rest of your week.

Til next time, take one step at a time to simplify.

6 Ways To Get Financially Organized So You Can Simplify and Gain Control of Your Finances

Financially Organized

 

Are you financially organized? By having financial organization it will help you simplify your finances and get things under control.

One thing I often hear from people is where do I begin to get my finances under control? The first place to start is to get some financial organization in your life. If you have just gone with the flow and never got things under control I can see why you may feel a little overwhelmed with your finances.

Having organization in your life will improve almost all areas of your life. So why not get financially organized who does not want to

• Spend less time looking for things or remembering important dates
• Get more done in less time
• Reduce stress and anxiety
• Save more money

It’s not very difficult to get financially organized. Build systems to help you get financially organized.

Here are a few ways you can get financially organized so you can reduce financial stress and spend more time doing the things you enjoy without worrying as well as save more money at the same time.

Organize your bill paying

Not remembering your bill due dates can cause some financial stress as well as cost you some additional money due to late fee charges. So organizing your bills will reduce stress and help you save some money at the same time. If you implement a bill paying system it will help you with this. Here are a few tips:

• Place your bills in one location. It can be a physical file or electronic file since many bills are now sent electronically.

• Set a specific time to review all of bills to make sure there are no errors. This way you can review all bills at the same time and even make sure you have received all of them.

Organize your savings

Having money saved will help reduce financial stress. But in order to have savings in place you must get your savings plans in order. You cannot save without a system. If you have an automated saving plan in placed the more likely you will save as well as save more money for an emergency, retirement or future purchases.

Organize your goals

Have you organized your financial goals? What are your short term and long term financial goals. Organize or even just writing them down will help you achieve them. Not have organization around your goals will make it a bit more challenging to achieve the things you desire. So take some time to organize your financial goals.

Organize your financial documents

One of my pet peeves is not being able to find something when I need it. Especially important financial documents. You know you placed it in a file somewhere but cannot seem find it when you need it. By have some organization around your documents will save you time and a little stress.

Organize your debt reduction

Reducing or completely eliminate your debt will help you simplify your finances. It will provide a better cash flow situation and allow you to allocate previous debt payments to savings or other appreciating assets. In order to reduce or eliminate debt you must develop a debt reduction plan. Having a organized plan around debt reduce will enable you to focus on it and eliminate your debt faster. The longer you wait the more interest you will pay.

Know your numbers

Knowing your numbers will help you get financially organized. These numbers will tell you what areas of your financial life you need to work on. Focusing on improving these numbers will force you to get organized. You will not be able to improve these numbers unless you get financial organized.

So what will you organize to get your finances under control and begin to simplify your finances?

Take one step at a time to simplify your finances.

If You Don’t Do This You Will Probably Not Gain Control of Your Personal Finances

Financial Assessment

Have you ever wondered how you can gain control of your finances?

Have you ever wondered whether or not you will ever find the time to manage your finances?

I have seen many individuals who make a good income and struggle with managing their finances.

It’s unfortunate when a few small changes can help them save time and get their finances under control.

I know you want to have control of your finances so you can have a financial peace of mind as quickly as possible.

And that’s why I am going to show you what you must do first to begin gaining control of your finances so you can have the financial peace of mind you desire.

In fact it’s the same place everyone who wants to achieve financial peace must begin.

This one simple thing is:

Understand where you currently stand financially

The fastest and easiest place to start helping you get your financials under control is to know where you currently stand financially.  To gain control of your finances you need to only look at your current financial situation. It will help you know what changes need to be made.

The best way to do this is to perform a financial assessment.  It’s the first step in your journey to simplify and to have an understanding of your current finances. Doing a financial assessment answers the questions you need to ask in order to simplify your finances.

To begin your financial assessment take a few minutes to think about what your current financial situation looks and then write it down. Your entire financial picture can be seen on your monthly statements. To help you have better picture of what your current finances looks like gather all of your bank statements, debt statements (credit cards, mortgage, student loans, or other debt),and investment accounts (retirement and non-retirement).

Also gathering the statement will show you how many accounts you have and what is paperless and what is not paperless.

Now that you have gathered your statements write down your thoughts on what your finances look like. Many times we believe our finances are better than or worse than we thought but the only way to determine this is to actually take a look at them instead of just guessing. I have assumed things were better than they were but once I took a look at the situation it was worse than I thought so the best way to do this is to look for yourself.

Additionally while you have all of your statements in front of you why not construction a personal financial to determine your current net worth. Is it positive or negative? There you go. You have seen just one of the 9 steps to simplify your finances so you can begin to have the financial peace of mind you desire.

So the secret is to know where you stand first.

I have created a cheat sheet and checklist to help you begin to simplify your finances within 30 days.

To gain access to the checklist and cheat sheet click below to get your hands on this which can help you get control of your finances within the next month.

Til next time, remember to take one step at a time to simplify.

How to Get Your Finances Beach Ready in 6 Easy Steps

 

Beach Ready Pinterest

The summer is almost here. It is likely you have looked at yourself in the mirror. You have probably said to yourself I have to get this body into shape and ready for the beach. Who doesn’t want to look good while they are walking on the beach or relaxing poolside.

So in order to get your body beach ready you have to put in some work to lose a few pound or firm up your body.

The same is true regarding your personal finances. When the summer is here we will only have six months remaining in the year.  While you are getting your body in beach shape why not work on getting your finances into shape as well.  To get your finances beach ready is similar to getting your body into beach shape.

Here are 6 easy steps to take now to firm up your finances so your body and finances are ready for the beach.

Identify what you want to improve

Just like you would look in the mirror to determine what area of your body you want to improve.  Do the exact same thing with your finances. Take a look at your finances and determine what area of your financial life you want to improve upon or look better.  Are you overweight because you are carrying to much debt or maybe you are a little skinny and need to build up your savings.  Which ever area needs improving the first to is to identify that area first.

Take your current measurements

Once you determine the area or areas you would like to improve you need to see where you currently stand.  For example, you want to lose 10 pounds how will you know you lost 10 pounds without measuring your current weight by standing on a scale.  These few measurements can help you determine where you stand currently.

Net Worth

Your financial net worth is simply your financial assets minus your financial liabilities. Knowing your net worth is an excellent way to measure your financial health. Calculating your net worth will help you track your financial progress from year to year or from month to month. When you calculate your net worth you want this number to be positive not negative.

Debt to Income

Debt to income measures the amount of income you earn versus the amount of debt you have outstanding. It’s another good indicator of your financial health.

You calculate it by totaling up all of your monthly debts then dividing it by your income. Using your net income is a more accurate calculation because it is the actual amount you take home which is available to service your debt.

Credit Score

Your credit score determines your credit worthiness which is based on your history of managing to payment of your bills in a timely manner.

Credit score can range from low 400s to mid 800s. Maintaining a good to high credit score has its financial benefits because you will usually receive better interest rate as well as financing terms when you are financing a purchase.

Saving Percentage

Having a healthy savings has significant benefits and is another indication of your financial health. Calculating your saving percentage is simply dividing your gross income by your savings amount. When calculating your total saving take into consideration the amount you saving for retirement, emergency fund and any other general savings.

By improving these numbers you will improve your finances.

What numbers do you want to achieve?

You have calculated your numbers to access where you currently stand.  Were the numbers better or worse than expected?  Improving just one of these numbers will help your finances.  Just like you want to lose 5 or 10 pounds, you want to improve your numbers so you can look financially better.  So set a goal to either increase your savings percentage, reduce your debt to income, increase your net worth or improve your credit score.

Get Financially Lean

One way to get your body to look great is to get lean.  You can apply this same concept to your personal finances.  By making your finances lean you will improve your financial situation.  Here are several ways you can make your finances lean:

Reduce the amount of debt you have outstanding

Reduce the number of credit cards you have open or carry in your wallet

Reduce the number investment accounts

Reduce the number of bank account you have open.  Try to use one bank if possible

Eliminate paper statements

All of these will help you improve your finances.

Reduce Calorie Intake

If you are looking to tone up or lose some weight you usually will reduce the amount of food you are eating as well as monitor what you are eating.  You can apply the same to your finances.  Consider reducing the amount of money you are spending as well as keep track of where you are spending money.  This will enable you to save more and see where you are spending your money to determine what can be eliminated.

Make Small Lifestyle Changes

Now you have make some changes to your finances don’t let all of your hard work go to waste. Why not make a few lifestyle changes to help you maintain this financial beach body all year long. So you ask what do I need change? Start with your financial habits. Identity your good financial habits and look to eliminate your bad financial habits. These small habits can have an impact on your financial life year round.

So now use these 6 simple steps to take action to get your finances in beach shape.  Start now so you are not looking back wondering where did my summer go.

Do it now.

It will not only help your finances to look good but will help you simplify your finances as well.

Til next time, take one step at a time to simplify.