Overcome Fear by Asking One Simple Question

Fear-Mindset

Overcoming Fear

I have struggled with fear my whole life. I’m not sure where I picked it up. Maybe it’s something that is hard wired in me. If fact, I think fear is hard wired in many of us. Those who have overcome fear have had to work really hard at it. Up until my mid to late 20s I believed that failure under any circumstances was unacceptable. This limited my willingness to take reasonable risks in life, weather personal or professional.

One of the great things about reading books and blogs is you get to learn from the life experiences of others. A common theme emerged once I started reading about successful individuals. Almost all had gone through at least one significant failure in their lives. While this is common knowledge to me now, I was mind blown at the time. How did I not realize this?

Famous Failures

There are so many famous failure examples. Thomas Edison was once told by a teacher that he was “too stupid to learn”. Oprah was fired from her first TV job. Michael Jordan was cut from his high school basketball team. Imagine if these individuals would have given up and quit. How many people destined for greatness actually have given up and quit in the face of failure?

My change in attitude towards failure occurred right around the time I started taking an interest in personal finance in 2011. Coincidence? Probably not. I’m sure there was overlap as I started reading more books and listening to podcasts on related topics. Continue reading “Overcome Fear by Asking One Simple Question”

2018 Goals: Saying Goodbye to the Mortgage

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2018 Goals: Saying Goodbye to the Mortgage

If we are able to achieve our 2018 goals it will be a very exciting year for the Financial Pilgrimage household. Our goals range from personal to professional, with an emphasis on getting the remaining balance on our mortgage paid down ($31,000 remaining as of December 31, 2017).

I’ll save the lecture on the importance of goal setting for another day. If you’re interested in my thoughts, you can read the recap of our 2017 goals. Now let’s jump right into our list of goals.

Goal 1: Pay off the Mortgage on our Personal Residence

This is the big one. We’ve been paying down debt since 2011 and it’s surreal to think that we should be able to pay off our mortgage in the next few months. All of our extra money is going towards the mortgage at this point. By minimizing lifestyle inflation and paying down all other debt, we have been able to make a huge dent in our mortgage that started out at $123,000. Continue reading “2018 Goals: Saying Goodbye to the Mortgage”

Who Are You to Give Personal Finance Advice?

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Who Are You to Give Personal Finance Advice?

After three months of blogging, I have been asking myself the following question. Who are you to give personal finance adviceMy negative inner voice likes to whisper these sweet nothings into my ear. The more I think about it, my inner voice is asking a good question. Besides living below my means and saving some money in retirement funds, I haven’t done anything special.

On the flip side, my inner voice occasionally asks rational questions such as the following. Who is the primary audience for this personal finance blog?

Well, I’m glad my inner voice asked this one. For years my inner voice has been encouraging me to find an outlet to discuss personal finance topics. Let’s face it, talking about money is taboo in our culture right along side politics and religion. Opportunities to discuss money in the real world are limited, so why not take it to the digital world? When you’ve found the secret to financial prosperity that so many others are blind to, how can I not want to share it? Live below your means, pay off debt, and invest. Simple, right?

Losing Focus

Just because it’s simple doesn’t mean it’s easy. As recently as 2015 we spent more than $30,000 in vehicles in one year. We even took out loans to finance the vehicles. After the feeling of guilt washed over us, we then started paying the cars off aggressively. Continue reading “Who Are You to Give Personal Finance Advice?”

If I Received a $1 Million Dollar Windfall I would…

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A $1 Million Dollar Windfall

How many of us have thought to ourselves, “if I only had a $1 million dollar windfall all of my financial problems would go away”?

I know I have.

A million dollars is a tricky amount of money to think about. While it can be life changing money, it’s probably not life changing enough to live off the rest of our lives without some work. The reality is that if most people received $1 million dollars, half of the money would be gone to taxes, a few hundred thousand dollars to pay off debt, and the rest spent on expensive cars, vacations, etc.

When I was five years old $5 seemed like a million dollars. As little as $1,000 seemed like a million dollars when I was a teenager. Now that I’m older, a million dollars doesn’t quite seem like a million dollars (if that makes sense).

For the sake of simplicity, we’re going to assume this $1 million dollar windfall is tax-free. Now the question.  What would I do with the money? Continue reading “If I Received a $1 Million Dollar Windfall I would…”

What if You Started Investing in Retirement as a Baby? The Power of Compound Interest

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The Power of Compound Interest

Typical advice in the personal finance space is to start investing as early as possible. Let the power of compound interest, also known as the 8th wonder of the world, go to work. This advice usually applies to recent college graduates to encourage them to get money into retirement accounts as soon as possible. However, what if this was taken to an extreme? Let’s see what happens when little Johnny starts investing as a baby.

The Story of Bill, Susan, and Chris

For simplicity, let’s say this window opens at the age of 25 and closes at the retirement age of 65. This would allow 40 years for your money to grow. Using the visual below as an example, you can see the power of compound interest on display. The main takeaway from the chart is Susan ends up with more money than Bill even though she only invests for a period of 10 years while he invests for 30 years. They invest the same amount of money every year and the only difference is Susan starts investing at the age of 25 (and then stops after 10 years) and Bill starts at the age of 35 and invests until retirement. Continue reading “What if You Started Investing in Retirement as a Baby? The Power of Compound Interest”