Financial Planning: Tax-Free Benefits from a Life Insurance Policy

Financial Planning: Tax-Free Benefits from a Life Insurance Policy

No one wants to think about when “crap happens”, but the universe isn’t fair. It is better to be prepared than to get caught like a deer-in-the-headlights. This topic is a bit morbid, but one that should be contemplated. The purpose of life insurance is to replace your income for the people who depend on it, in the event of your death.

Financial Planning_ Tax-Free Benefits from a Life Insurance Policy

Basically, you are betting that you will die and the insurance company is betting that you will live. You’re gambling with an insurance company about whether or not you’ll die before a certain age.

In fact, most insurance companies send a nurse to examine your health prior to providing a quote.

The result is that If you lose the bet, you will be out thousands of dollars. If you “win,” your spouse and heirs get a handsome 6- or 7-figure payout upon your death.

Additionally, death benefits from all types of life insurance are generally income tax-free. This is one reason some people use it to pass on wealth (read on to learn how).

Life insurance proceeds can be used to replace lost potential income during the deceased’s working years.

The goal of life insurance is to provide a safety net for your beneficiaries (typically your spouse/children). The payout (known as the death benefit) helps to achieve the family’s financial goals. A few examples might be paying the monthly bills, helping with the mortgage balance, supplying support for college tuition, wedding costs, etc.

Typically, the amount of life insurance is based on the needs and goals of the owner. Meaning that the amount of coverage you will need depends on your specific situation.

The more children or out-standing debts (mortgages, car payments, credit card debts, number of kids wanting to go to college, etc.) the more your survivors will need.

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Two Types of Life Insurance

 

 

Permanent (whole and universal) life insurance is generally more expensive than term life insurance.

 

Term Life Insurance:

 

Term life insurance provides protection for a specific period of time. You pay premiums for a specified term (usually 10, 20, or 30 years), and if you die within that term, the insurer pays your survivors a benefit.

The premium payment amount stays the same for the coverage period you select. After that period, you may be able to continue coverage but usually at a substantially higher premium payment rate.

Term insurance is similar to car insurance… If you stop paying the premiums, you will lose the insurance.

Beware, once you have stopped payments and are no longer covered, you may need to take another medical exam. Moreover, your premiums may change because you are now older and your health may have changed from when you first applied.

 

Whole and Universal Life Insurance:

 

Both whole and universal life insurance provide lifetime coverage. Moreover, you earn a guaranteed cash value in exchange or your premium payments. So what is the difference you ask? Read on…

 

 

Using Life Insurance to Transfer Wealth Tax-Free:

 

Universal life insurance is often used as part of an estate planning strategy to help preserve wealth to be transferred to beneficiaries.

This is because universal life insurance policies are flexible and may allow you to raise or lower your premium payment or coverage amounts throughout your lifetime.

Should you need to transfer more tax-free wealth upon your death, you ask your life insurance company to increase your coverage amount. This means that your premium will likely increase as well.

 

 

A Comparison of Life Insurance Policy Types:

 

Here is a great comparison table of how life insurance plans work, provided by Fidelity.

 

Life insurance table comparison

 

 

Term life Insurance to Pay-off Student Debt

 

Over 44 million Americans collectively hold $1.5 trillion in student debt. Nearly 70% of college students graduate with a significant amount in loans. Shockingly, the average student loan borrower has $37,172 in student loans, which is a $20,000 increase from 13 years ago.

If you have graduated with big student loan debts, that a parent cosigned for, you or your parent may want to get a life insurance policy on you to cover the balance of the loans.

A co-signing parent may have helped you take out loans, with the intent that you will be the one to pay them off. Your parents cosigned the loan with your best interest at heart because they wanted you to get an education.

Losing a child is supposed to be one of the worst events a person can live through. To make matters worse, being left with a huge outstanding loan on top of the loss of a child would be tragic.

To prevent this from happening, you can purchase just enough term life insurance to cover the outstanding debt. In your early 20s, this policy should be dirt cheap.

Note that you only need this insurance if your loans have cosigners. If you are the only signer on your loans, your parents cannot legally be held responsible for those debts.

 

 

A Word of Caution: 

 

It’s important to note that: Although life insurance can be used to replace lost potential income, the benefit is paid at the time of death in a lump-sum payment.

Therefore, it is important that the beneficiary carefully reinvest and pay off debts in a strategic way.

A portion of the money should go toward paying off debt that has a higher than 5% interest rate (like credit card debt) and the rest should be reinvested.

The thought behind this method is that the stock market returns an average of 7% per year over any 40 year period, while the average inflation rate is around 2% per year.

In sum, the money would be better off being reinvested in the stock market than paying down any debts with an interest rate of lower than 5%. To create a safety buffer, you may consider paying off any debt with an interest rate of over 4%.

Remember to always set aside 6-12 months in an emergency fund prior to allocating the rest to reinvestment. There are many investment vehicles that produce income, such as dividend stocks, investing in private equity real estate companies, and REITs.

 

 

How Much Life Insurance Do You Need?

 

Here is a great video that explains how much life insurance you should consider purchasing by Investopedia.

 

 

Want to learn more about what you should do to prepare for the life insurance medical exam, how to streamline the process of getting several quotes on insurance to get the best bang for your buck, and how to calculate how much coverage you will need?

The Increase Your Financial IQ Course will take a deeper dive into and explain more about how life insurance plans work.

Additionally, this course will cover other wealth building strategies in more detail. For now, sign up for the FREE Increase Your Financial IQ Email Course for more information on financial planning and wealth creation!

Diversification is one of the most important aspects when deciding how to allocate your investment portfolio. Spreading out your risk amongst many different asset classes will help you weather the many inevitable storms to come. Your investment portfolio should include stocks, ETFs, fixed income assets, real estate, and other investment vehicles.

 

 

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Financial Planning: Why You Need Long Term Care

Financial Planning: Why You Need Long Term Care

Most people aren’t even thinking about it, but the numbers say that you should be. Ask yourself, “Am I saving enough to take care of myself so that I do not become a burden on my children or left dependent on the government?”. Long term care is one expense that can put your mind at ease.

Financial Planning_ Why You Need Long Term Care

 

While the costs to pay for long-term care can be daunting to think about, the earlier you start paying into a program the cheaper the rates will be. This article will help explain what long term care is, why it is important to think about your future needs, and tips on how you can prepare now.

 

Today, Millennials must constantly make difficult trade-off decisions. Our generation has to think about caring for our aging parents, paying for the needs of our children, and saving enough for our retirement. 

According to the U.S. Department of Health and Human Services (HHS), around 70% of people turning age 65 will need long term care services at some point in their lives.

 

 

Why You Should Purchase Long Term Care: The Facts

 

As parents, the last thing you want to do is become a burden on your children. 

According to a 2015 study by AARP and the National Alliance on Caregiving, around 43.5 million people in the US have provided unpaid care in the last 12 months. Typically, an unpaid caregiver is a family member.

On average, caregivers spend 20 hours a week giving care. In relative terms, that is a part-time job! Around 58%  of those caregivers perform intensive personal care activities, such as bathing and feeding.

The average American life expectancy is 78 years. Moreover, the Population Reference Bureau projects that in 2060 nearly 100 million Americans will be 65 or older.

According to the CDC, if you reach the age of 80, you’ll likely live another 8-10 years.

By purchasing long term care, you can feel better knowing that you have taken the proper steps to ensure that your health will be cared for and that you will not run out of finances to do so.

So what is long term care?

 

Long Term Care:

 

Long term care is care that you need if you can no longer perform everyday tasks due to a chronic illness, injury, disability or the inevitable aging process.

We all age, and the statistics show that with modern medicine we are likely to live well into our 80’s. Long term care includes the supervision you might need due to common cognitive impairments such as Alzheimer’s or dementia.

Long term care is not intended to cure you. It is chronic care that you will need for the rest of your life. You can receive long term care in your own home, a nursing home, or an assisted living facility.

According to a Georgetown University study called, “Long-Term Care Financing Policy Options for the Future,” nearly 41% of long term care is provided to people under the age of 65.

This means that a large percentage of people who use long term care have not even reached the age of retirement!

How can this be?

Long term care assists those who need help taking care of themselves due to:

  • Accidents (from a car crash or a sports injury)
  • Diseases (such as multiple sclerosis and Parkinson’s)
  • Disabling events (such as strokes, brain tumors, and spinal cord injuries)
  • Disabling chronic conditions
  • Developmental disabilities
  • Severe mental illnesses

These are examples of injuries and ailments that can happen to anyone, at any age.

Recently, the National Council on Aging has found that 75% of seniors have at least one chronic health condition and that most have two or more. Conditions range from mild arthritis to advanced Alzheimer’s disease.

The National Investment Center (in their 2010 Investment Guide) cited that the average length of stay in an assisted living facility was 29 months.

The point is, it’s not a question of whether you are likely to need assisted care in your life… But will you be financially prepared for when it happens?

 

How Much Will You Need?

 

Below are some of the national average costs for long-term care in the United States (from 2016).

  • $225 a day or $6,844 per month for a semi-private room in a nursing home
  • $253 a day or $7,698 per month for a private room in a nursing home
  • $119 a day or $3,628 per month for care in an assisted living facility (for a one-bedroom unit)

 

You can check the average costs for specific states here.

Daily health care is expensive, so properly planning for the future is critical.

 

Ask Yourself:
  • Can my retirement nest egg afford $80,000-$90,000 for 2.5 years?
  • Can my children pay for this additional cost?

 

Why Waiting Doesn’t Pay:

 

According to the American Association for Long Term Carethe best time to apply is in your 40’s-50’s.

Note, the younger you apply the cheaper the rates. This is because insurers offer discounts to applicants who are in good health. These discounts are locked in, meaning that you won’t lose them if your health changes.

 

 

Government Assistance and Programs:

 

Relying on the government should never be your first choice. Due to strict standards, you may not end up qualifying for government assistance. You could get stuck in a position where you don’t have enough to adequately care for your health, yet make too much to qualify for government assistance.

Medicare does not pay for non-skilled assistance with Activities of Daily Living (which make up the majority of long-term care services).

Approximately 47 million seniors live in the United States, and the senior population will soon double.

What’s more, women are having fewer children. This means that there will be fewer working-age people to provide for each elderly person.

Social security, Medicaid, and Medicare are already strained as it is. With the aging population and low birth rate trends, there will be fewer dollars to go around.

The question is, do you want to leave your health care up to chance? Many people get stuck in the middle where they have too much income to qualify for benefits, but not enough income to pay for adequate assistance.

In sum, you must plan for your own future because relying on the government will leave you under cared for.

Here is a quick video that summarizes what we have talked about (provided by Life Happens).

 

 

The Take Away:

 

Different kinds of insurance help you have confidence in your future and mitigate the risk that is sure to come.

Putting money aside, automatically, through a workplace or individual insurance plan is one of the simplest ways to make sure you’re continuously adding to your nest egg. What may seem like a nagging expense now, may cost you more later.

Having the proper amounts of insurance and planning for your retirement are two key components of creating a financially secure future.

Interested in learning more about when a long term plan will kick in? The Increase Your Financial IQ Course will take a deeper dive into and explain more about how long term care plans work.

Additionally, this course will cover other wealth building strategies in more detail. For now, sign up for the FREE Increase Your Financial IQ Email Course for more information on financial planning and wealth creation!

Diversification is one of the most important aspects when deciding how to allocate your investment portfolio. Spreading out your risk amongst many different asset classes will help you weather the many inevitable storms to come. Your investment portfolio should include stocks, ETFs, fixed income assets, real estate, and other investment vehicles.

 

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Tax Free Money: What is an Opportunity Zone?

Tax Free Money: What is an Opportunity Zone?

Who doesn’t love tax-free money? I know I do! If you are looking for an investment vehicle that has great tax advantages, look no further. The creation of Opportunity Zones is one of the greatest ways to generate wealth and shelter your income from taxes ever created. In this article, I will explain what an Opportunity Zone Fund is and how it works. I will break down some of the details so you can decide if it’s a good investment opportunity for your current financial situation.

opportunity zone

 

What is an Opportunity Zone?

 

The Opportunity Zone investment vehicle was created by the Tax Cuts and Jobs Act (passed on December 22, 2017). An Opportunity Zone is an economically-distressed community where new investments may be eligible for preferential tax treatment.

Essentially, the government wants people, like you, to invest in low-income areas. The government uses tax-incentives to push its social agenda. The goal is to get people to save money, reinvest it, and rebuild dilapidated communities.

Moreover, the Opportunity Zone is a tool which spurs economic development by providing tax benefits to investors who rebuild and create jobs in distressed communities.

In total, there are 8,700 qualified Opportunity Zone tracts in the US and within its territories.

What Tax Benefits Do Opportunity Zones Provide?

 

Investors can defer taxes on any prior gains when they roll the invested amount into a Qualified Opportunity Fund (QOF). If you hold on to a property within a QOF for 10 years, you will receive a step-up in value.

This means that the cost basis will become equal to its fair market value on the date that the qualified opportunity fund investment is sold or exchanged. You can learn about how a step-up in value works by reading How to Defer Taxes Forever with a 1031 Exchange.

Therefore, if you sell a property after owning it for 10 years within a QOF, you won’t owe any taxes!!!

Should you decide to sell the property before the 10-year mark:
  • If the investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain
  • more than 7 years, the 10% becomes 15%

 

What Qualifies as Eligible Capital Gains for Investment into an Opportunity Zone?

 

Capital Gains coming from any of the following investments can be contributed to an Opportunity Zone Fund and receive tax-benefits:

  • The sale of stocks or bonds
  • Income from the sale of a property
  • The sale of an interest in a partnership

 

An added benefit is that you and other investors can pool funds to invest in multiple assets.

 

 

Where Are These Opportunity Zones Located?

 

The U.S. Treasury Secretary certifies certain zones that qualify for Opportunity Zone investment. For an area to qualify, the poverty rate must be > 20%. In fact, many of the zones have an average poverty rate of nearly 31%.

A list of Opportunity Zones can be found on the US Department of the Treasury’s website (CDFI Fund page).

Here is a quick visual of where Opportunity Zones can be found.

Opportunity zone map

Photo credit: impactalpha.com

 

The Qualifications:

 

In order to qualify, the fund must intend to engage in ground-up development. Meaning that you have to “substantially improve” an existing property.

Equity over Debt: Capital gains that are invested in a Qualified Opportunity Fund must be equity and not debt. What this means is that you cannot use loans or leverage.

Additionally, you will need to invest your capital gains into a Qualified Opportunity Fund within 180 days of realizing your capital gains from a prior investment. Remember to coordinate with your accountant because you are solely responsible for ensuring your eligibility.

 

 

How to Tackle Low-Income Tenant Problems Before they Occur: 

 

One cautionary mention is that you should be familiar with how to rehab properties (work with contractors) and manage rental properties.  One way to reduce late or missed rent payments is to become a section 8 landlord.

Section 8 tenants get assistance from the government, meaning that a portion of their rent will always get paid. What’s more, is that if a tenant fails to pay their rent on time or is consistently late on payments it will jeopardize their status to continue to receive a Section 8 voucher.

Here is a quick video provided by Shelter Press on how to become a Section 8 landlord.

 

 

The Take Away: 

 

Diversification is one of the most important aspects when deciding how to allocate your investment portfolio. Spreading out your risk amongst many different asset classes will help you weather the many inevitable storms to come. Your investment portfolio should include stocks, ETFs, fixed income assets, real estate, and other investment vehicles.

To learn more about Ray Dalio’s All Season’s stock portfolio, read Stocks: A Diversified Portfolio.

Want to know more about the 1031 exchange and how to create your own opportunity zone fund?

The Increase Your Financial IQ Course will take a deeper dive and explain these and other wealth building strategies in more detail. For now, sign up for the FREE Increase Your Financial IQ Email Course for more information on financial planning and wealth creation!

 

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How to Defer Taxes Forever with a 1031 Exchange

How to Defer Taxes Forever with a 1031 Exchange

In this article, you will learn about tax-free money, how to tax-defer capital gains taxes, and how to keep rolling your profits over and over forever! A 1031 exchange allows the owner of an investment property to sell it and buy another property while deferring the capital gains tax. 

 

EARLY RETIREMENT

 

You will spend about one-third of your life working to pay for your taxes. It is by far one of your biggest expenses. By learning the tax rules, you can legally reduce your tax bill and keep more of your hard earned money! 

Over the last two centuries, 90 percent of the world’s millionaires have been created by investing in real estate. Clearly, if you want to attain financial freedom real estate needs to be part of your portfolio. Your investment strategy should include a diverse set of investment vehicles which will create a wealth strategy that can weather any storm.

 

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A Quick Definition of a 1031 Exchange:

 

1031 exchange gets its name from Section 1031 of the U.S. Internal Revenue Code. It allows you to avoid paying capital gains taxes when you sell an investment property. The proceeds from the sale must be immediately reinvested into another property or properties of like-kind and equal or greater value.

 

What does that mean?:

 

As long as one property is being exchanged for another real estate holding, it doesn’t matter whether you are selling a home to buy a duplex, an apartment, a piece of land, or a 4 plex. You can even sell one rental home and split the proceeds to purchase two rental homes!

In fact, you can defer taxes on the portion that is being rolled over or the entire gain. The point is that you can defer taxes as long as that money is being immediately reinvested into another piece of property.

Should you decide to purchase a smaller property, resulting in a leftover gain, you will need to pay taxes on that amount. Remember to consult your tax accountant.

If you own a property for a long time, then you will need to recapture the depreciation, which can affect how much you need to pay in taxes. 

If a property sells for more than its depreciated value, you will likely have to recapture the depreciation. That means the amount of depreciation will be included in your taxable income from the sale of the property.

As long as you continue to roll the invested amount into another property, you can defer the taxes on the gain until the last sale.

 

Tax-Free Money Tip: 

 

Properties that have gone through a like-kind exchange are particularly well suited for inheritance gifts.

When you die, your heirs won’t have to pay ANY income tax should they decide to sell the property shortly after your death. This is because the property receives a step-up in value, and the gain goes away upon the death of the owner. 

What is a step-up in value you ask?

A step-up is the readjustment of the value of an appreciated asset for tax purposes (upon inheritance). The new value is the market value of the asset at the time of inheritance. Thus, the asset receives a step-up in basis so that the beneficiary’s (i.e. the receiver’s) capital gains tax is minimized.

So if you died, and your heirs sold the property upon your death, the property would receive a step-up cost basis (market value). Therefore, your heirs would not have to pay the deferred taxes on the increase in value.

I love Tax-Free Money!!! 

 

 

The 1031 Exchange Timeline: 

 

 

(Photo credit: cwscapital.com)

 

 

A Qualified Intermediary:

 

To qualify for a 1031 exchange, you must use a qualified intermediary. This means that all proceeds from the sale must be transferred to an unrelated party to the transaction.

Typically, an escrow company is used to hold the funds from the sale, while you find and purchase a new (replacement) property.

 

What if I Need Cash?

 

If you own an investment property and need to pull out cash, you can always refinance or pull a home equity line of credit (HELOC). Instead of selling your investment property, you can use it as collateral for a loan. 

Moreover, the money you receive when you refinance or pull out a HELOC is that it is tax-free! If you were to sell the property, then you would owe taxes on the proceeds of the sale! 

Even if you refinance, you can always perform a 1031 exchange at a later date and tax-defer the gains. Just remember to keep the original invested amount in the real estate holding and within the rollover.

The 10,000 Foot Overview:

 

Through a like-kind exchange, you can keep buying more and more properties as your properties go up in value (all without paying taxes).

You can continue to reinvest the principal amount while benefiting from the monthly rental income (cash flow). The rental income is reduced by the depreciation of the property and is only taxed at capital gains rate

Real estate really is a miracle investment vehicle!

Make sure to talk to your tax advisor before engaging in a 1031 exchange. This will allow them to guide you through one because the 1031 exchange guidelines are very specific. Additionally, talk to an escrow agent who has experience with 1031 exchanges to get the specific time guidelines.

Tax-free exchanges have very detailed rules that need to be followed to the letter. 

 

Learn the Rules of the Game:

 

Knowing the tax law and wealth building concepts are critical to navigating your way through the game of finance.

There are many ways to diversify your portfolio, and it is important to use of as many tax-advantaged strategies e.g. the 1031 exchange, Roth IRA, 529 plan, etc. as possible.

Want to learn other tax tips that will save you a ton of money and help you retire early? Take the FREE Increase Your Financial IQ Email Course for more information on financial planning and wealth creation!

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Tax-Free Money: The Secret of Buying Gold Inside of a Roth IRA

Tax-Free Money: The Secret of Buying Gold Inside of a Roth IRA

Who doesn’t love tax-free money? One of the benefits of using a Roth IRA is that all of the growth inside of this tax-advantaged account can be pulled out tax-free! In this article, I am going to share how you can grow your retirement account through the investment of commodities and skip paying the 28% capital gains tax legally!

Tax Free Money

 

Roth IRA vs. Regular IRA:

 

The difference between a Roth versus a regular IRA is “when” you pay taxes on the money. With a regular IRA, you take the tax deduction now but have to pay taxes on the amount you withdraw later.

The downside is that when you elect to pay taxes later, you have to pay taxes on the interest AND the gains that your money has made over your lifetime of saving and investing.

Moreover, you won’t know which tax bracket your future you will be in. Not to mention, tax rates are always fluctuating and the government keeps passing spending bills.

I love a sure thing, which is why I really like the Roth versions of 401ks and IRAs. I know that when I look at my account, every penny is MINE!

In a Roth IRA, your money grows and so does the compound interest. These two parts grow tax-free because you funded the account with post-tax dollars.

Another benefit that comes with a Roth IRA is that since you have already paid taxes on the money in the account, there is no RDM (required minimum distribution). Meaning that you can decide to withdraw at any time after age 59.5. 

With a traditional IRA, you are required by the government to start pulling a minimum distribution from your retirement account at age 70.5. This is because the government want’s it’s cut (taxes). Here is an easy RDM calculator by Schwab.

The goal of this blog is to show you how you can save money by going green and then reinvesting that money to gain your financial freedom! A Roth IRA is just one of the financial vehicles you should use to make sure you are ready for a worry-free retirement. 

So how much do you need to retire? Well, that depends on what kind of lifestyle you plan on living when you are retired. Let’s take care of the bare minimum, and then work on using other investment vehicles to cultivate play-money!

 

Save Thousands by Going Green!

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How to Take Care of the Bare Minimum with a Roth IRA:

 

If you spend $40,000 per year during retirement, you will need around $1,000,000 to reach financial freedom based on the 4% rule. The 4% rule basically states that you can consistently withdraw $40,000 every year without touching the principle.

The result is that you can live off of the interest and appreciation of your portfolio. You are pretty much guaranteed to be able to live off your investments for 30+ years by following this rule. This is especially the case if you hold 75% stocks and 25% bonds.

In a prior post, I show you how you can fully fund a Roth IRA and become a millionaire by saving $15 a day!

In case you missed it, here is a quick summary.

 

How to Fully Fund A Roth IRA:

 

The maximum that the US government allows you to contribute to a Roth IRA is $5,500 or $15 a day ($458 per month). If you do this, you will end up with over $1.2 million in the bank.

Bang! You are a millionaire and are guaranteed to retire!

With the 4% rule, you will be able to retire at the age of 65. That is if you started investing when you were 25 (or over any 40 year period).

To learn more about the benefits of a Roth IRA you can read Roth IRA: How to Become a Millionaire by the Time You Retire! Can’t find $15 a day to save? Read “8 Ways to Save for a Down Payment on a Home and a Roth IRA“.

The image below shows the math, but if you want to play with the numbers yourself you can head over to Bankrate.com.

bank rate Roth IRA

 

 

The Secret of Owning Gold and Silver:

 

Tip 1:

Diversification is critical to lowering your risk while owning enough of the market to maximize your gain. Should you decide to own commodities in paper form (stock), you should trade them within your Roth IRA.

By owning paper gold and silver (stock) in a Roth IRA, you won’t have to pay taxes on the increase in the value of the gold and silver!

The capital gains rate tax on gold and silver is 28%, which is almost twice as high as the normal capital gains rate (15% for most).

If you were to trade gold and silver in your regular brokerage account, you would owe 28% of the gains in taxes. Say you made $100 in profit, well you owe Uncle Sam $28.

 

Chart provided by TLBJ a CPA firm.

The benefit of trading gold and silver commodities within your Roth IRA is that you don’t own ANY taxes on the gain! Meaning that you get to keep all of your profit! 

This is because you pay your taxes on the money you put into the Roth IRA before it goes into the tax-advantaged account. When you decide to pull the money out, you can do so without paying taxes on the withdraw, which includes the interest and gains!!

I love TAX-FREE MONEY!

 

Tip 2:

Should you invest in gold and silver bullion (meaning that you actually take possession of coins or bricks), the dealer is only required to report to the IRS if you buy/sell more than $10,000 in a year.

Be sure to keep your receipt so you know how much you paid for the bullion (your cost basis). When you sell the bullion you need to report any gains or losses to the IRS. Should you have made money, you will owe a 28% capital gains tax on the increase. The increase is the amount you made above your cost basis.

**Gold and silver is a favorite of many investors due to the privacy it provides its owners.**

Remember, the goal is to get as much of your money from passive and investment income streams as possible. This is because they are taxed at a lower rate than regular income, and your money works for you while you sleep.

Here is a quick video that explains the IRS regulations on buying and selling bullion by SDBullion.com

 

 

 

How Much You Should Have Saved at Every Age:

 

 

Chart source: Fidelity

The chart above shows how much you should have put away in savings for your age.

The formula is based on the assumption that a person saves 15% of their income annually beginning at age 25, invests more than 50% of their savings in stocks over their lifetime, retires at age 67, and plans to maintain their pre-retirement lifestyle in retirement.

 

Here’s the breakdown of Fidelity’s “How Much to Have Saved at Each Age” formula:

30: Have the equivalent of your starting salary saved
35: Have two times your salary saved
40: Have three times your salary saved
45: Have four times your salary saved
50: Have six times your salary saved
55: Have seven times your salary saved
60: Have eight times your salary saved
67: Have 10 times your salary saved

 

Being a Life-Long Learner: 

 

I complete a book every week and a half because I know that knowledge is the key to success. Often times authors spend years writing a book that contains all of the secrets that they have learned over decades of experience.

Want to learn other tax tips that will save you a ton of money and help you retire quicker? Take the FREE Increase Your Financial IQ Email Course for more information on financial planning and wealth creation!

Where did I learn about Gold Tip #1?  From an awesome book called Tax-Free Wealth by Tom Wheelwright CPA. I can’t say enough about this book and highly recommend reading it! You can get it on Audibles by clicking the photo below.

 

 

 

Like what you see? Stay a while!

 

If you have learned anything new here, please remember to share so that I can continue to provide you with more content!

Feedback is always welcome! Do you know any tax-free tips that you use or want to share? Please comment below!

 

How to Reduce Climate Change by Acting and Buying Green

How to Reduce Climate Change by Acting and Buying Green

How to reduce or eliminate your climate change impact by acting and buying green. Living a sustainable lifestyle means something slightly different to everyone. The end goal is that everyone becomes a little more conscious of how they are using the earth’s resources and takes small but meaningful steps to reduce their impact.

reduce climate change

It doesn’t matter where you are in your sustainable living journey.

Start by taking a mental inventory of where you are currently. Then, make changes towards a more sustainable lifestyle so that we can move toward a greener future together 🙂

Even politicians are having to come around to the fact global warming and climate change are issues that we are going to have to deal with in the near future.

If we know that global warming and climate change is a major problem, then why not tackle it today…Rather than put it off, and let it grow into a larger issue that we still have to face tomorrow.

There are two ways for us to tackle this problem.

The answer is to act in ways that prevent global warming, and purchase products from companies that consciously manufacture goods with social and environmental integrity.

 

What Does it Mean to Live Sustainably?

Sustainable living is not just about reducing your carbon output. Here is a quick list of meanings that come to my mind when someone says the word sustainability:

Acting and Buying Green:

Acting green means to change your habits, whereas buying green means to consciously purchasing products that are manufactured in a socially and environmentally responsible way.

One way to both act and purchase green is to start your own carbon sequestering organic garden!

A Carbon Sequestering Organic Garden Helps Reverse Global Warming and Climate Change:

 

Planting a fruit, vegetable, and herb garden helps take carbon dioxide from the atmosphere and turns it back into clean oxygen!

Let’s take it a step further, and talk about why you should take the organic garden route.

Then later in the article, I’ll talk about how you can use an all natural pesticide and fertilizer (worm casting) to keep your garden from being eaten alive by bugs.

When I say all-natural, I really do mean 100% (no-chemicals involved) natural fertilizer that doubles as a pesticide!

Home gardening accounts for nearly 80 million pounds of pesticides used per year in North America.

Most of these chemicals are used to control those annoying insects that eat your fruits and vegetables.

Unfortunately, these chemicals find their way into streams or rivers as runoff, and from there into the oceans.

In sum, these pollutants and chemicals are not confined to our oceans and drinking water resources. We end up consuming them through the food web too.

Much of our food livestock eats pounds of grain that have soaked up these chemicals through the soil. This is called bioaccumulation.

Biomagnification is when we consume meat that has eaten lots of polluted corn meal or grain, and the pollutants travel up the food chain and into our bodies.

When you eat contaminated food, you absorb those chemicals and over time they build up in your body.

 

Starting an organic garden is a great way to:
  • Reverse climate change (when you carbon sequester, you turn carbon dioxide back into oxygen which reverses global warming)!!
  • Reduces your weekly grocery bill.
  • Be healthier (and the food tastes better!).

Worm Casting: 

 

Worm casting is a natural fertilizer that is also a pesticide!worm casting

Instead of growing grass, grow edible organic fruits and vegetables!

Before you ask about the additional water costs, ill point you to this awesome rainwater collector!

Rainwater collector

 

 

Eco Economics is all about showing you how you can save money by going green and then reinvesting that money to gain your financial freedom!

If you would like to learn more, you can take the Free Sustainability Mini-Email Course by clicking here.

Starting a carbon sequestering garden will save you money, your health, and the environment.

To read about the 14 benefits of starting your own carbon sequestering organic garden click here! You will also learn more about the 8 benefits of worm casting and composting!

Now that we have covered ‘how to reduce the number of chemicals that you put into your body’, let’s take a look at how to reduce the number of chemicals inside of your home.

 

 

Buying Green Cleaners:

 

Another way that your body comes into contact with chemicals is through the many cleaning agents that you use to “sanitize” your home.

By using zero-waste or minimally packaged concentrated natural cleaners, you can cut down on your resource consumption and limit the toxins in your home.

I personally love the zero-waste Provence de Marseille Soap.

You can use it to remove tough stains on clothes, grease from dishes, or to shower off with at the end of the day.

This soap is primarily composed of Olive Oil and is made of 100% vegetable ingredients.

Of course, it is cruelty-free and does not contain colorants or artificial ingredients!

 

Buying Concentrates:

 

Branch Basics bottleMy favorite all-natural concentrate cleaner is by Branch Basics.

The concentrate is a powerful plant and mineral based cleaner.

The Benefits of Using a Concentrate are:
  • Less packaging means more eco-friendly (liquids condense into smaller bottles and fewer bottles need to be purchased on an annual basis).
  • Less transportation fuel (why ship diluted cleaners to the store or to your home? That’s just silly).
  • Save money (buying a cleaner in a concentrated formula is cheaper than purchasing a diluted version + save money on packaging).
  • Re-fill and reuse the plastic squirt bottles that you already own.

Moreover, you can save as much as half of your yearly cleaning budget by buying your cleaners in a concentrated formula!

The average cost of a 32 oz “green” cleaner is $6.18 (or $0.20 per ounce).

Instead, a 32 oz. bottle of Branch Basics Concentrate can make 16 All-Purpose bottles (24 oz), at $3.06 each ($0.12 per oz)!

This all-purpose cleaner is so natural and healthy that you can basically use it everywhere.

It may be harder to think of places where it can’t be used…

The Branch Basics Concentrate is great for:

  • All-Purpose: Appliances, Dishes, Granite, Grills, Highchairs, Jewelry, Marble, Natural Stone, Pacifiers, Pots & Pans, Stains, Stovetops, Sticky Spills, Yoga Mats
  • Bathroom: Tile, Grout, Countertops, Sinks, Showers, Tubs, Toilets, Fixtures, Shower Liners, Soap Scum
  • Streak-Free: Windows, Mirrors, Glass Surfaces, Computer Screens, Phones and Tablets, Fixtures, Aquariums, Shower Doors, and Picture Frames
  • Foaming Wash: Hands, Face, Body, Baby, Hair, Pets, Removing Make-Up, Shaving, Dishes, Fruits & Vegetables
  • Misc: Laundry (192 loads), Stainless Steel, Wood, and Vinyl Floors, Carpet

 

What’s more is that all Branch Basic products are:

Branch Basics product description

 

The money you save can be put toward any number of uses, but since Eco Economics is about sustainability and increasing your financial IQ…

I would say that the highest and best use of this money is to devoted it to a tax-advantaged account that helps you achieve financial freedom!

As a result, you receive the same service (a clean home) at a fraction of the cost and impact to the Earth!

The Take Away: 

 

Yes, ideally we would love to live in a world where plastic doesn’t exist.

Especially since we now know all of the health and environmental problems that plastic causes.

Being aware of a problem is one thing, but doing something about that problem is a completely different scenario.

We may not be able to rid ourselves of plastic entirely, but we can do the following things to reduce our plastic usage:

  1. Decline single-use plastic items
  2. Buy zero-waste, biodegradable, and all-natural products
  3. Re-use the plastic bottles you already own (use an empty sriracha bottle as a squirt bottle for your all-natural cleaning solutions. You hide your cleaning solutions in a cabinet where no one sees them anyway!)

Take action today, and remember to visit the Sustainability Shop to start using zero-waste, plastic alternative, and biodegradable products.

If global warming, climate change, and resource depletion are important to you, then pre-enroll for the free Sustainability Mini-Email Course. You will learn about other money-saving sustainability swaps and actions that you can take to save the world!

Articles that may interest you:

 

I sincerely only hope to provide helpful information. If you are curious about a specific topic or have a question about anything that I have written, please feel free to comment or contact me.

Keep in mind, it only takes 25% of a population to start a major social movement.

Become a Sustainability Hero by helping me spread the world! Please re-pin and share, so that I can continue to provide you with free content.

 

How to Save for Retirement by Going Green: Insulation

How to Save for Retirement by Going Green: Insulation

Sometimes it may seem like it is impossible to find money at the end of the month to put towards your retirement account. This is why it is critical to making the most of every dollar! Insulating your home is one of the most effective ways to decrease your energy bill by going green. Another benefit is that many energy efficiency updates qualify for tax credits and utility company rebates!

How to Save for Retirement by Going Green Insulation (1)

You can double or even triple up on your savings! Consequently, you can put all of these savings towards your tax-advantaged retirement account!

 

Save Thousands by Going Green!

A FREE Checklist on How to Fund Your Retirement Account by Going Green.

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How Much Can You Save by Properly Insulating Your Home?

 

In short, by adding insulation to your home you can reduce heating and cooling costs anywhere from 10% to 50%.

Of course, the amount you save depends on where you live and how much insulation you already have.

For instance, a homeowner in the Northeast with an uninsulated attic can save around $600 a year by adding about 15 inches of insulation (R-38- ill go over R-values later in this article).

In fact, just 6 inches can net annual savings of around $200.

According to the Lawrence Berkeley National Laboratory, by simply reducing your home’s air leakage by 25%, you can lower your annual energy costs by around $300.  

The money you save can be put toward any number of uses, but since Eco Economics is about sustainability and increasing your financial IQ…

I would say that the highest and best use of this money is to devoted it to a tax-advantaged account that helps you achieve financial freedom!

Depending on the type of materials you use, you will pay an average of $1,500 to insulate an 800-square-foot attic. If you do this, you can expect to have a payback period on your investment in three years.

You’ll spend about half that if you do the job yourself!

So if you are nifty and have a spare weekend, add it to your list of DIY projects and save a cool $800. This also means that your payback period is also cut in half!

Visit the Sustainability Shop and under the tab called Energy Efficient Home you will find many insulation products to start saving money today!

 

 

The Nonbusiness Energy Property Tax Credit:

 

As of the 2018 tax year, the federal government offers the Nonbusiness Energy Property Tax Credit. These credits are good through 2019 and then are reduced each year through the end of 2021.

This means that if you are interested in taking advantage of the biggest federal renewable energy tax credit, you will need to take action within the next year!

The Nonbusiness Energy Property Tax Credit allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes. On the same tax form, there is an area that allows you to deduct a portion of the cost to increase the insulation in your home.  

The link to the tax form is included in a later portion of this article for your convenience.

If you are interested in learning how you can DIY your own solar panel system, visit Renewable Energy Tax Credit: How to Install DIY Solar Panels. You can build your own solar energy system for 60%-70% cheaper than if you were to get one installed!

The credit is equal to 30% of the cost, including installation. Moreover, there is no upper limit on the amount of the credit for solar, wind, and geothermal equipment.

The Increase Your Financial IQ Course will be released soon and will cover how to write-off solar energy improvements to your investment properties.

You can sign up for the Free Increase Your Financial IQ Mini-Email Course to get notified when the full-blown Increase Your Financial IQ Course becomes available. The mini-email course is designed to show you how easily you can save for retirement, and how to use a tax-advantaged account to reach over $1,000,000 in savings. 

To find utility company rebates offered in your zip code read, “Renewable Energy Tax Credits, Incentives, and Rebates“.

Equipment that Qualifies for the Residential Renewable Energy Tax Credit:

 

The credit includes costs to install solar, wind, geothermal and fuel-cell technology updates to your home.

  • Solar panels for generating electricity
  • Solar-powered water heaters. The water heated by the system must be used inside the home, and at least half of the home’s water-heating capacity must be solar. (Solar heaters for swimming pools and hot tubs do not qualify.)
  • Wind turbines that generate up to 100 kilowatts of electricity that must also be used in the home.
  • Geothermal heat pumps that meet federal Energy Star guidelines.
  • Fuel cells that rely on a renewable resource (usually hydrogen) to generate power for a home. The equipment must generate at least 0.5 kilowatts of power.

 

For the average person, the solar panel and wind turbine options are going to be the easiest to install, with the fewest regulations to get past.

 

 

Nonbusiness Energy Property Tax Credit:

 

Equipment and materials must meet technical efficiency standards that have been set by the Department of Energy.

Manufacturers typically advertise that their item meets this standard. In short, if a product does not advertise that it meets the standard, be sure to ask prior to purchasing.

Turbo tax does a great job explaining the two kinds of energy efficiency improvements that you can write off. I have listed them here for your convenience…

For this credit, the IRS distinguishes between two kinds of upgrades:

1. Qualified Energy Efficiency Improvements:

  • Exterior windows and skylights
  • Home insulation (Just about all types: fiberglass, cellulose, mineral wool, spray foam, foam board, and cotton batting qualify for the energy tax credit)
  • Exterior doors
  • Certain roofing materials

2. Residential Energy Property Costs:

  • Electric heat pumps
  • Electric heat pump water heaters
  • Central air conditioning systems
  • Natural gas, propane or oil water heaters
  • Stoves that use biomass fuel
  • Natural gas, propane or oil furnaces
  • Natural gas, propane or oil hot water boilers
  • Advanced circulating fans for natural gas, propane or oil furnaces

 

There are a few credit restrictions, like a maximum of a $200 credit for windows. For a full list be sure to consult your tax accountant. You can review Turbo Tax’s exceptions list here.

Remember it is critically important to save your receipts and labels for Uncle Sam.

 

 

Which Tax Form to Use:

 

The form to use to claim your solar or wind credit is called The Residential Energy Credit  Form 5695, which is filed with your tax return.

On this same form, you can add any write-offs you have made to insulate your home.

For insulation updates, you can write off 10% of expenditures, up to $500 for the year. This amount is for all energy improvements combined.

 

 

R-Value:

 

The R-value measures the home’s resistance to air flow, which means less heated or cooled air escapes. The higher the number value, the better the insulating power.

The Department of Energy (DOE) recommends an R-value between 30 to 60, depending on where you live.

According to the EnergyStar website, the recommended level for most attics is to insulate to R-38 or about 10 to 14 inches, depending on insulation type.

I have inserted a photo of a map of the US and a chart with the recommended values provided by the DOE.

 

 

 

Eco Economics will be Offering Two kinds of Courses:

 

  1. The Sustainability Course: How to live a sustainable lifestyle and save money by going green.
  2. The Increase your Financial IQ Course: How to achieve financial freedom by using tax-advantaged accounts, understanding proper financial planning, and wealth creation through real estate.

 

The two courses are designed to be taken together so that one shows you how to save money, while the other shows you how to reinvest that money to help you achieve financial freedom.

 

Increase your Financial IQ

A Few of the Topics That are Covered Are:

 

  • Money-saving green swaps and actions that you can take to save our planet
  • How to maximize the energy efficiency of your home (reduce your utility bills)
  • Find the right renewable energy solution to give you energy independence (reduce or eliminate the impact of utility rate increases).
  • How to reduce your carbon output
  • How to start your own carbon sequestering organic garden
  • Much more!

 

Click on either or both of these two links to sign up for the Free Sustainability Mini-Email Course or the Free Increase your Financial IQ Course.

 

Articles that may interest you:

 

If you have enjoyed this content, please remember to share!

By sharing we can help others save money by going green, all the while saving the planet together! Remember, it is our own lives and futures at stake.

8 Ways to Save for a Down Payment on a Home and a Roth IRA

8 Ways to Save for a Down Payment on a Home and a Roth IRA

Saving for retirement and a down payment for a home may seem like it is an impossible task, especially with all of the other bills you have coming in.  I am going to share 8 easy ways to save for a down payment on a home and a Roth IRA retirement account. Retirement and home ownership are possible, you just have to rework some of your daily habits.

 

8 Ways to Save for a Down payment on a home and a Roth IRA

 

To fully fund a Roth IRA account you must save $15 a day (that’s $458 per month or $5,500 per year).

To save $5,000 a year, you must save $13.50 a day. Over 4 years you will have saved $20,000 for a down payment on a house.

Thus, with $29 a day you can you can fully fund a Roth IRA (that will grow to over $1,000,000 in 40 years) and save for a down payment on a home.

If you want to know how I came up with these numbers, click here. In the article “How to Save for a Down Payment on a Home and Fund a Roth IRA” I break down the numbers and make it really simple to understand.

So now that you know that all you have to do is save $29 a day, let’s look at 8 ways to find this money.

If you already own a home, these saving principles can be used to save for an investment property. If you are in debt, then these same saving principles can help you pay off that debt.

There are a number of ways that you can use this information.

My goal is to break down the process of saving so that it does not seem like a task that is impossible to overcome.

Saving for retirement and a home can be easy. All it takes is a bit of re-working on your end to find $29 a day!

 

Increase Your Financial IQ Mini Course:

Learn How to Create and Save $1,000,000 by Going Green!

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How To Save $29 a Day:

 

So how do we accomplish this $29 a day?

Visit the Sustainability Shop to find a ton of ways to save by Going Green! For many of the products, I break down how much you can save per year by making the switch!

 

1. Eat at Home:

 

I meal prep 95% of the food I eat.

You can read “Increase the Velocity at Which Your Money Grows: Ways to Save” to learn how you can save $500 to $600 every month by meal prepping.

If you want to learn how easy it is to meal prep and how much time it saves, you can read “How to Increase Efficiency: Time Management Hacks”.

Let’s do a bit of quick math:

Assume a breakfast would cost you $7, lunch costs $12, and dinner costs $16 (I am being conservative here. I am sure many of you have eaten a $20+ dinner).

Let’s add all of that up and then multiply by 30 days per month. That is $1,050 per month on eating out!

If you were to meal prep, you would end up spending around $100 per week on groceries or $400 per month.

That is less than half of what you would spend on eating out!!! Or $600 in savings!

Bang! You just found the $458 per month to fund your Roth IRA retirement account.

An added benefit is that you can portion control your meals, and eat healthier (you know exactly what is going in your food).

To help you with your meal prepping, eco-friendly glass Tupperware,  bento boxes, and reusable food wrap are the go-to necessities:

 

Sustainable Tupperware overviewSustainable bento box 2reusable food wrap

You can find other reusable containers and silicon bags at the Sustainability Shop.

 

 

2. Cut Back on the $5 Cups of Coffee:

 

You will never see me with a Starbucks coffee. In fact, a small Starbucks coffee costs more than $5 a cup!

But, we will go with $5 for easy math.

If you buy a Starbucks coffee every morning before work, that would be $5 x 5 days x 4 weeks x 12 months=1,200 each year!

The point here is that you can save $1,200 per year, per $5 increment…

 

 

3. Carry a Bottle of Water:

 

Did you know that 50 billion water bottles are used every year?!?

Let’s save the planet, its animals, the oceans, and our money by using a reusable water bottle.

Soda and flavored drinks are terrible for you anyway…  The bottles say “natural and artificial flavors”, but what does this really mean?

Most water bottle companies use regular municipal water in their products, so you are really paying for the packaging and the convenience.

It is the $2-$3 increments that we tend to overlook that add up over time.crystal water bottle

Click here to check out this cool refillable gemstone water bottle!

If you believe in the power of crystals, this is a great way to give your water an awesome energy boost!

For thousands of years, ancient civilizations have utilized the power of crystals to release mental, physical and spiritual blockages, thus facilitating the free flow of energy throughout our bodies.

Click here to read more about the healing power of crystals.

 

 

4. Bring a Flask and Pre-Game!

 

The average mixed drink is probably between $10 and $12.

What really drove home the concept of how expensive drinks are, was that I lived in the land of $20 vodka Redbull‘s for 5 years (Vegas).

So I found that I could save a ton of money by bringing a flask and pre-gaming before I went out.

Yes, I have had a few friends give me a questioning look when I bust the flask out… But halfway through the night, they are asking for a swig…

Moreover, now that I am in my 30’s I find that I don’t really go to clubs and bars anymore. Instead, I find myself at friend’s houses having a cocktail or a glass of wine.

The point is that one cocktail is about the same price as the cost of a meal!

Plus, you tend to drink more than one cocktail when you are out.

 

5. Enjoy the Great Outdoors! 

 

I love going outside to play. Outdoor activities (like hiking) are free or have a relatively small start-up equipment cost.

A really fun indoor activity is salsa dancing.

What’s really great is that many places offer free salsa lessons!

Another benefit is that salsa is an awesome cardio workout.

In fact, it is a great way to meet new people if you are single, and an even better way to work on non-verbal communication and team building skills if you have a significant other.

Not to mention, Latin dance is very sexy and can help spice up your romantic life.

I used to go to the gym quite often, but now I find that I do all of my exercises outdoors and for free. An added bonus is that you get to experience the outdoors, re-connect with nature, and breath fresh air.

I typically walk 2.5 miles a day, salsa 2x per week, and in the winter I go skiing.

When I worked in an office, I would eat at my desk and walk for my 1-hour lunch. I was able to walk 2.5 miles in that 1-hour lunch break.

 

6. Cut the Cable:

 

I haven’t owned a TV since high school. I do have Netflix, and it is so much cheaper!

Additionally, I don’t have to watch advertisements.

On the other hand, I love listening to audiobooks. I mostly read nonfiction, but for fun, I listen to high fantasy and sci-fi books.

In the Increase your Financial IQ Course I teach you the secret of how I crush a book every 1.5 weeks!

You can sign up for the Mini Increase your Financial IQ email Course for Free. 

 

 

7. DIY: 

 

It is super easy to make your own lotions with shea butter, olive oil, almond oil, and coconut oil.

Instead of cleaning with harsh chemicals like Clorox, use vinegar.

Imagine all of the chemicals being put out into the environment to manufacture Clorox bleach (wipes, sprays, etc.). Now imagine that you are wiping your entire home down with these harsh chemicals.

You can find all natural cleaners that are non-toxic at the Sustainability Shop.

 

 

8. Eat Less Meat:

Sustainable living Reducetarian Solution

Reducetarians are committed to eating less meat, regardless of the degree or motivation.

This concept is appealing because not everyone is willing to follow an “all-or-nothing” diet.

This way you can decide when and how much meat you eat. The nice thing about being a reductarian is that it allows for a flexible intake of meat.

A fantastic book that explains how this diet works can be found on Audibles and by clicking this link. The Reducetarian Solution: How the Surprisingly Simple Act of Reducing the Amount of Meat in Your Diet Can Transform Your Health and the Planet“.

Reasons to reduce your meat intake:

  • Meat, and especially beef is more expensive than eating fruits, grains, and vegetables.
  • There are a number of studies about how red meat increases inflammation in your body.
  • Animals are treated with antibiotics and hormones, which we ingest.
  • Biomagnification of pesticides. The grain and corn that cows are fed have tons of pesticides, and cows eat tons of it.
  • Increase in greenhouse gasses (cows produce a lot of methane)
  • Cruelty to animals

 

Cowspiracy is an environmental documentary that explains how animal agriculture is the leading cause of deforestation, water consumption, pollution, and is responsible for more greenhouse gases than the transportation industry.

Methane is 84 times more potent than carbon dioxide and is far more devastating to the climate than carbon emissions. 

 

 

The 10,000 Foot Over View:

 

There are many ways to go about finding $29 a day to accomplish this goal. Homeownership and retirement are within reach and can become a reality.

In an era marked by immediate gratification, saving for the future is a task that you must consciously work on.

Make it easy for yourself and make saving automatic by having your retirement account auto-deduct the $458 per month from your checking account.

Everyone has a financial report card. Make it a priority to constantly check and work on yours.

Take time and money to re-invest in yourself. Re-investing in your financial education is critical.

How are you going to master your financial report card, if you don’t know the rules of the game?

Every dollar has an opportunity cost.

Curious, throughout high school did you learn about how to navigate your personal finances? Or about the importance of living a sustainable lifestyle?

Did they teach you about FICO scores and how much to have in revolving debt? Or what goes into calculating your credit score?

 

Increase your Financial IQ

 

Enroll for the FREE Increase Your Financial IQ Mini Email Course for more information on financial planning and wealth creation.

You can download a FREE Checklist (which will be sent to your email) on How to Fund Your Retirement Account by Going Green (below this article).

 

Articles that may interest you:

 

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Interested in a particular topic? Comment below!

How to Save for a Down Payment on a Home and Fund a Roth IRA

How to Save for a Down Payment on a Home and Fund a Roth IRA

Saving for the future is something that you probably know that you need to do, but may not be sure how to go about or where to find the funds to invest. The good news is that I am going to show you exactly how you can save for a down payment on a home and fully fund a Roth IRA! It is as simple as finding and saving $29 a day!

 

How to save for a down payment and a roth IRA

 

One key thing to keep in mind is that every dollar has an opportunity cost.

An opportunity cost is the benefit that you miss out on when choosing one option over another.

 

 

Saving is the Core of Investing:

 

The government gives you incentives for reinvesting your money… because you have to sacrifice some of the things that you like today, in order to save so that you can have funds to invest with.

Saving money can be hard, but it can also be easy…

My personal goal is to achieve financial freedom. I’m not interested in a huge house with a lavish car.

That’s how you get stuck in the rat race.

If you are renting a large home, just remember that your rent payment is someone else’s investment cash flow and mortgage payment.

Remember, the more house you have, the more cleaning you have to do.

The larger the house, the more stuff can fit in it (and the more stuff you need to buy to furnish it).

The bigger the house, the bigger the mortgage. Which equates to fewer savings you can devote towards investing into an asset that actually provides you additional income.

My biggest recommendation for you is to live below your means.

If you earn $1 million and you spend $1 million, you’re still living month-to-month!

Interested in tax-advantaged wealth creation? Pre-enroll for the FREE Increase Your Financial IQ Mini-Course for more information on financial planning.

 

 

The Math: Why $29 Per Day?

 

In order to max out your Roth IRA, you need $5,500 to invest each year. If you break that down by 365 days a year, it comes out to $15 a day.

If you save $5,000 a year, over four years, you will have $20,000 for a down payment on a home.

$5,000 a day divided by 365 days is $13.50.

The average price of a home in the United States, as of this writing, is approximately $220,000 (photo provided by zillow.com).

zillow median home price You can get an FHA loan with 3.5% down.

$220,000 x 3.5%= $7,700

You will need closing costs, plus a cushion so that you aren’t sleeping on the floor of your new home. Thus, $20,000 is a safe number to have if you want to purchase a home.

You could get by with less, but I am a huge advocate of having a rainy day savings fund. We can’t predict the future and it is always good to have a cushion to fall back on.

So the moral of the story is, “if you can save $29 a day, every day, you can purchase a home and fund your retirement account.”

 

 

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Starting as Soon as Possible and Consistently Saving:

 

The sooner you start the more time your account will have to grow. This is because you have compounded interest working on your side!

Compounded interest is the interest calculated on the initial principal and includes all of the accumulated interest of the previous periods.

The maximum amount that you can contribute to a Roth IRA account per year is $5,500, which is $458 per month.

Experts say that over any 40 year period, the stock market has an average return of 7%. This includes down years. 

If you start with $5,500 and contribute $5,500 each year for 40 years (with a 7% average market increase), your total contribution will be $220,000.

That $220,000 over 40 years will grow to 1,257,212!!!

And Bang! You have over $1,000,000 for retirement!

 

bank rate Roth IRA

You can play with the numbers on any retirement account calculator (I used Bankrate.com, which is where I sourced the image above).

I am originally from the Los Angeles area, and homes in more expensive parts of the country will require you to save much more than $29 per day.

The good news is that if you live in an area where home prices are higher, then you are likely making more money.

The saving and re-investing principles in this email course and the Increase your Financial IQ Course still hold true.

The point is that you can save $5,000 each year by setting aside $13.50 every day.

Whether you use that money to pay off student debt, a credit card balance or accelerate paying off your mortgage is up to you.

 

The 10,000 Foot Over View:

 

There are many ways to go about finding $29 a day to accomplish this goal.

You can download a FREE Checklist (which will be sent to your email) on How to Fund Your Retirement Account by Going Green (below this article).

Just remember, every dollar has an opportunity cost.

Curious, throughout high school did you learn about how to navigate your personal finances? Or about the importance of living a sustainable lifestyle?

Did they teach you about FICO scores and how much to have in revolving debt? Or what goes into calculating your credit score?

 

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Gardening Tips and Tricks to Prevent Global Warming

Gardening Tips and Tricks to Prevent Global Warming

Growing your own garden has many health benefits, not to mention it reduces your carbon footprint.  I have created this handy Gardening Tips and Tricks to Prevent Global Warming Starter Guide to encourage you to consider the benefits of growing your own organic fruits and vegetables. The goal of this article is to point out the main benefits of starting an organic garden, and how to plant a diverse vegetable mixture to give you a healthy and well-balanced diet.

 

Gardening Tips and Tricks to prevent global warming

 

Benefits of Planting Your Own Organic Garden:

 

Here is a list of benefits that gardening can bring to your life:

  1. Reduces the amount that you spend at the grocery store each week. Consequently, the money you save can be used to fund your Roth IRA (Roth IRA: How to Become a Millionaire by the Time You Retire!)
  2. Reduces the transportation fuel (carbon output) used to ship vegetables across oceans and highways to get to your local store.
  3. UN scientists have released a warning stating that the world has less than 15 years to reduce the carbon output to nearly 0 or else face serious climate change consequences. Planting a garden is a way you can make a difference by helping sequester carbon from the atmosphere! 
  4. Organic food tastes better because it is fresher and is able to ripen on the vine (instead of a gas chamber).
  5. It is an outdoor activity. Certainly, you can replace one of your indoor electricity using (TV, video games, social media time) hobbies with gardening. Keep in mind, Fossil fuels and coal make up nearly 62% of how we generate electricity in the U.S
  6. Many people live in cities, which are cement jungles surrounded by black asphalt (roads and parking lots). That being said, dark materials absorb heat which is why cities tend to be hotter than their surrounding areas. Adding vegetation provides shade and breaks up all off of that dark material.
  7. Grow fresh vegetables forever! Fruits and vegetables have seeds that you can harvest at the end of the year. Meaning that you can use the seeds to start your garden next year!!!
  8. A fun and family-friendly activity that can inspire you to take an interest in the origins of your food and make better choices about what you put on your plate.

 

 

Health Benefits of Gardening:

 

  1. Eliminates the addition of chemical pesticides that you are currently putting into your body.
  2. No chemical fertilizers. In short, worm casting is nature’s Miracle Grow and is an all natural organic fertilizer! Read on to learn about worm casting.
  3. It helps you eat more fresh fruits and vegetables.
  4. Adds a bit of exercise to your life.
  5. Breath fresher air by being outside. People are often stuck inside an office all day. Taking the time to tend to your garden will give you an opportunity to enjoy the outdoors.
  6. Plants increase oxygen production. The air around your home will be fresher (less carbon dioxide).

 

 

Help Prevent Global Warming by Starting an Organic Garden:

 

 

Now that I have your attention with this serious list of benefits. Let’s get you started on your money saving, healthy, better for the environment path to an organic garden!

I have put together a gardening kit that will get you started on your journey. For additional resources, visit the Sustainability Shop 🙂

 

 

 

The Survival Garden Seed Kit by Open Seed Vault:

 

 

Inside the Survival Garden Seed Pack are carefully selected vegetables to provide a well balanced and healthy diet.

This seed pack comes with 32 varieties of all-natural vegetable seeds that are non-hybrid, non-GMO, 100% naturally grown, and open pollinated. Plus, a 14-page growing and seed saving guide.

 

Each pack contains the following 32 seed packets:  Seeds

  1. Kale Vates Blue Scotch
  2. Eggplant Black Beauty
  3. Green Bean Tendergreen Improved
  4. Zucchini Dark Green
  5.  Lettuce Buttercrunch Butterhead
  6. Brussels Sprouts Long Island
  7. Lettuce Ruby Leaf
  8. Lettuce Black Seeded Simpson
  9. Bell Pepper California Wonder
  10.  Radish Cherry Belle
  11. Okra Clemson Spineless
  12. Beet Detroit Dark Red
  13. Onion Evergreen Bunching
  14. Cabbage Golden Acre
  15. Corn Golden Bantam
  16. Cantaloupe Hales Best Jumbo
  17. Winter Squash Jumbo Pink Banana
  18. Tomato Beef Steak
  19. Lima Henderson
  20. Swiss Chard Giant Fordhook
  21. Cucumber Marketmore
  22. Spinach Bloomsdale
  23. Carrot Scarlet Nantes
  24. Turnip Purple Top
  25. Pumpkin Sugar Pie
  26. Cauliflower Snowball
  27. Pea Sugar Daddy
  28. Broccoli Waltham
  29. Winter Squash Waltham Butternut
  30. Sunflower Mammoth
  31. Parsnips Harris Model
  32. Celery Tall Utah Improved

 

The packets are USA Seed Stored in an airtight and moisture proof resealable bag for safer, long-term storage. Plus, the seeds have been tested for maximum germination and vegetable yield.

The Survival Garden Seed Pack is the perfect seed starter kit to bringing fresh vegetables to your kitchen table!

 

 

 

Epica’s Stainless Steel Compost Bin:

 

You can reduce the amount of waste that is headed to a landfill by composting your food scraps.

Another benefit is that composting recycles nutrients, which can be used to start your own organic vegetable garden.

Nutrients from a compost pile is better for your health and cheaper than purchasing chemical fertilizers.

This stainless steel bin controls odors naturally with an airtight lid and a replaceable activated-charcoal filter.

It holds 1.3-gallons of compost. It is big enough to hold several days’ worth of kitchen waste like vegetable peels, fruits, and coffee grounds, yet still small enough to fit on your countertop. 

Dimensions: 7.16” in diameter x 11” high.

The compost bin is molded from one piece of metal, so it resists rust and leaks. Moreover, it does not leak toxic chemicals into your compost pile.

 

 

 

Benefits of Worm Casting:

 

 

I am sure you are aware of how healthy bacteria (probiotics) help us digest food. Well, worm poop (worm casting) combines enzymes and positive bacteria to provide plants with optimal nutrition content.

Many of the nutrients that plants need to thrive can be found in large quantities within earthworm castings. Nutrients include magnesium, calcium, potassium, phosphorus, copper, zinc, iron, cobalt, borax, manganese, nitrogen, and carbon.

High levels of microbial activity have the following benefits:

  1. Helps plants grow faster.
  2. Increases soil aeration, which helps plants absorb nutrients and allows their roots to breath properly.
  3. Increases water retention, which makes it possible to use 50-75% less water in some situations. Money Saved! 
  4. Is all-natural! The consumption of fewer chemicals is vital to a healthier lifestyle. Worm casting allows you to grow “organic” vegetables!
  5. No heavy metals. Worms actually have the ability to absorb heavy metals like copper, lead, and cadmium from the soil. This means that the castings are heavy metal-free. This reduces the likelihood that those metals will end up in your vegetables and on your plate! 
  6. Burn-proof. Often times fertilizers are too high in nitrogen, which burns your plants. Casting will never burn the roots of your plants 🙂
  7. It is a natural pesticide! Save money on pesticides while avoiding the need to spray chemicals.
  8. Increases your crop yield :). In 2014, Nature Research published a study that showed that crops grown in worm castings produce 25% more yield.

 

 

Worm Casting Kit:

 

 

The nice thing about producing your own casting is that you will continuously produce natural fertilizer for your garden every month.

Producing your own casting will save you money over time, as opposed to purchasing casting from the store (which is typically packaged in a plastic bag).  

I have included a video to shows how the worm factory produces approximately 6 quarts of worm casting per month.

What’s more, the cost of worm casting bought from a store can be as much as $25 for 8 quarts.

In sum, if you are serious about wanting to grow organic vegetables, making the investment in a worm casting kit is totally worth it!

Moreover, you get to collect worm casting tea (to be clear, this is not the kind of tea you drink) that your plants love!! You should mix the tea with water and water your plants for an extra boost. worm casting

The Worm Factory comes with a bonus “What Can Red Wigglers Eat?” infographic refrigerator magnet.

This allows you to quickly determine which foods are perfect for your worms, and which you should avoid. 

Plus, the Worm Factory is odor free and included a 38-page instruction manual that is a step-by-step guide to managing your Worm Factory.

This worm casting kit has a built-in “worm tea” collector tray and spigot for easy draining.

I have included this instructional video to help you set up your worm casting kit by Growyourgreens.com.

 

 

 

Red Worms:

 

To get your organic garden rocking-and-rolling with the worm casting kit, grab 300 hundred live Red Worms and you will be all set!Red worms

These red worms turn organic waste into nutrient-rich soil!

The manufacturer even guarantees live delivery!

 

 

 

The 10,000 Foot Overview:

 

Often times we feel helpless because global warming can feel like such a big problem to tackle.

But, know that you can make a difference by making small changes to your daily actions. We all got ourselves into this climate change dilemma, and we all have to pitch in together to get ourselves out.

Let’s look to ourselves before we look to judge how others act. We can make a paradigm shift towards a sustainable planet if we make it the new “cool thing to do”.

Followers will always follow the trend, so be a leader and make sustainability the “new trend”.

Planting a garden is a way you can make a difference and help sequester carbon from the atmosphere!

I have listed a few of the benefits of planting your own organic garden. With some creativity, you can think of many other reasons how gardening can benefit your health and the planet.

Of course, I encourage you to add additional gardening benefits or tips to growing a successful garden by commenting at the bottom of this article.

If global warming, climate change, and resource depletion are important to you, then pre-enroll for a free mini-course to learn about other money-saving sustainability swaps and actions that you can take to save the world!

Moreover, becoming a Sustainability Hero has health, environment, and budget benefits.

Click here to visit the Sustainability Shop to start using zero-waste, plastic alternative, and biodegradable products today.

The shop includes energy efficiency and water conservation conversion kits, solar products, zero-waste, and minimally packaged home goods.

 

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If you have enjoyed this content, please remember to spread the word by sharing so that we can help others become Sustainability Heros too!

I encourage interaction, so please feel free to comment below!