Debt-Free Living Traveling

How to Travel to Bar Harbor, Maine, on a Budget

Last week, we drove down to Maine to visit the Acadia National park. The 7-hour road trip had to be broken down in two days, now that we have a newborn. We stayed in a bed and breakfast halfway. Once we got to our little New England getaway in Southwest Harbor, I quickly saw the beauty, enormous wealth, and charm of the region.


debt-free travelDebt free lifestyledebt-free life


We drove there so we really had the time to take in the breath-taking views or the forests, ocean, and mountains. Coming in the park was astonishing. The views were well worth the $30 entry-fee we had to pay for the week.


Don’t spend it all on hotels

For accommodations, we rented an Airbnb in the harbor. It was a small cabin, off the main road, with an open concept kitchen-dinning room-living room on the first floor with a tiny bathroom beside the staircase leading to a mezzanine bedroom. The living-space must have been no larger than 500sq. ft. but it was plenty for us.  The total cost ended up being around $100 per night.


Frugal travels


Where the expenses can really get out of hand is the restaurants. This area of New England (neighboring Bar Harbour) can quickly get really expensive. People traveling there are mostly wealthy and are not shy to spend. Obviously, most places charge more for their goods and services since people are ready to pay more.


Big pockets, small jackets

how to save on a tripYou know the type, people wearing Polo shirts and S.Perry boat shoes… The ones who just bought everything from the Patagonia or North Face store to go on their first hike… Those are the ones in the fancy restaurants.

We went to one where basically every man had a polo and a half-zip sweater along with loafers or boat shoes.

Aside from that, we mainly ate at small lobster shacks or cooked our own meals at home. We tried to keep it to one restaurant outing per day.


Debt-free living with credit cards

I am taking a wild guess here but I am pretty sure that most people visiting the Acadia park area are not millionaires. My guess is that most of these expensive restaurants and hotels are mainly paid for by credit cards. And most of those expenses stay as debt. Living a life you cannot afford can be disastrous in the long-term but, unfortunately, most people live as such.

For the average American, debt is normal, debt is good; debt is a way of life.

The best way to think of your credit card is a means of payment, not a loan. Debt-free living is not impossible. You just need to see debt for what it is.

If you cannot afford it, don’t buy it. It is a simple as that. Anything that you put on your credit cards needs to be paid back.

We recommend the use of rewards cards for all day-to-day purchases simply to maximize your cashback. However, if you end up spending more than what you can afford and accumulate credit card debt, then you might be better off on a cash-diet.

Talking about diet, check out this delicious lobster dinner we cooked;


Save on a roadtrip


For under $10 per person, we were able to have fresh lobster for dinner. In any restaurant, it would be impossible to get anything under $30 – $40. We simply bought live lobsters from the local grocery store. Stocked up on some butter, garlic, and corn. Boiled the everything for about 12 minutes and it was deliciously easy and tasty!


Know where it is all going

For total financial freedom, you need to know where your money is going. If you are going on a vacation without any idea of how much it will cost you, what are the options, or even how will you pay for it, you definitively need a budget.

Back in the days, you would need to do spreadsheets of every single account you had and compile all of it manually but nowadays, you can let Personal Capital do it all for free! With the money-management tools offered now, it is easy to track all your bank accounts, investment accounts, 401k, credit cards, and mortgages, all in one place. It is important to oversee all your accounts as a whole to properly allocate and budget.


Never pay for a trip twice-over

With a better understanding of exactly how much you are spending and where your dollars are going, you will quickly notice the unnecessary spending that incurs each month. Once you have a budget down, you can plan for your next trip without going into debt to pay for it. Living debt-free is all about planning. Without a plan, you will inevitably fall into debt at one point.

You will quickly see that once you start thinking in years, the small things can get really expensive. Assume you pay 2500$ for a trip. Instead of putting everything on your card without even thinking of repaying it, you actually budget and are able to pay it in full on an outstanding credit card; you will save $525 of interest in a single year! (Assuming the typical interest charge of 21%) If you had kept that debt lingering on a credit card for a bit less than 4 years, you would have paid this trip twice over.

Even on the smaller scale, it can get scary. Letting that hundred dollar restaurant bill accumulate on credit can quickly add up.

Of course, you need to know yourself. If you are the kind of person who sees credit cards as an easy way to track your spending, then use them. However, if you are the kind of person who swipes away without seeing the dollars go, then cash might be better for you.

For some, cash is a way to see that they are spending.


Beach vacation for less


Empty houses and ocean-front sinkholes

Driving down North Harbour, we saw some nice mansions and ocean-front estates. Some are ginormous, on endless pieces of land. There again, I doubt everyone paid for those up front.

Most people go into debt to buy houses they can barely afford. Or even worst, cottages they barely use.


Living below your means


This house above, for example, is not even one of the larger one. It is a 4000sq. ft. home on ocean-front property and is currently listed at $1,000,000. It seems like a bargain if you compare to New York or Vancouver but we are talking about a tiny cottage town 10 hours away from NYC and 3 hours away from the closest large city (Portland).

Buying this million-dollar property will likely require a 20% down payment, or $200,000. The opportunity cost for this alone is huge!

This could be invested for retirement or used towards buying a rental property which would generate income instead of putting so much towards a water-front home.

Your interest rate on a 30-year loan would be about 4.0%, which gives you a monthly mortgage payment of $3,800. Using the rule of thumb which states that you should not spend over 20 to 25% of your gross income on your mortgage, you can theoretically afford the house with an annual income of $182,00 to $228,000.

Again, making that much does not mean you can afford that house. It just means the banks will be happy to finance it for you.


Trip to Maine Acadia Park


All-in-all, we had an amazing trip to Maine. We swam in the ocean, hiked the beautiful trails of Acadia park and really enjoyed our stay there. In the end, we did not get into any debt and did not even spend a lot of money simply because we planned and were thoughtful about our expenses. Not all debt is bad, but living debt-free is just so freeing.


Get out of the hole and Consolidate your debts

Honestly, if you have large balances of student loans or credit card debts, you should shop around for a better rate. Online portals now make shopping for rates much easier and applications more convenient. The best place to start looking would be SoFi. Their online platform is easy to use and they can even help you refinance your mortgage at a lower rate.

Living below your means is not, in any way, living in poverty or eating soup every single day! Live happily, Xyz.



Debt-Free Living

Student Loan Repayment for Live a Better Life

This is a guest post from our friend Millionaire Mob, who paid off $67,000 in student loans in only 3 years and now that his student loan repayment is over, he focuses on investing in dividend growth stocks. He helped thousands of people bettering their financial future through passive income and dividend investing.


Student loans are crushing.

There is little more demoralizing than graduating school and landing your first gig to be hit with a monthly student loan bill of $758 per month!

Wait, there is something that is more demoralizing.

Imagine looking under the hood and finding out that a few of those student loans were accruing interest while you were in school at a rate of 10.50%… OUCH.

After researching a bit and contacting my family, I found out I had $67,000 of student loans.

I was in shock. How could I graduate college and be stuck with bills that limit my ability to save? Why did I even go to college? I couldn’t go back in time. I had to do something right away to get rid of my past debts.


How did I pay off all of my student loans in 3 years?

Honestly, I had to do a lot of research and use a number of tools to figure out how to repay debt effectively. I was obsessed and determined to pay off my student loans as soon as humanly possible.

To get there faster, I created a plan to know how much I should pay each month and what debt I should attack first. You can create a similar plan yourself including:


  1. Reducing your expenses.

Do not go out to eat.

Live within your boundaries while still enjoying life.

Some simple things that are very effective over time are preparing meals, not wasting items and use what you own.

2. Prepare a spreadsheet of your debts on how to economically attack your debts.

Do you know your personal cost of debt?

Have you looked at refinancing solutions such as SoFi to reduce the interest rate on your student loans?

3. Hustle to increase your income.

We live in a digital age and making money online has never been easier.

I love the idea of building three different solid passive income streams. The average millionaire has 7 different forms of income.

4. Continue to focus on your career.

Don’t bite the hand that feeds you.

This is a majority of your income, so continue to focus on being the best at what you do.

A raise and/or promotion can go a long way.


There are two methods that I like to use when thinking about paying down debt: the snowball method or the avalanche method.

Personally, I like to repay debt with the highest interest rate first. This is the most economically sound way to repay debt and saves you money over time!

Here is a simple example of how I would create a table to understand my personal cost of debt:


Debt Debt Amount Interest Rate Weighting (Debt Amount Divided by Total Debt) Interest Rate x Weighting
Student Loan 1 $10,000 6.0% 40% 2.4%
Student Loan 2 $15,000 4.5% 60% 2.7%
Total $25,000 100% 5.1%


Based on the table above, I would prepay my 6.0% interest rate debt as much as possible while making normal scheduled payments for the 4.5% interest rate debt.

If you are struggling with the income side of things, perhaps moving in with your parents is a prudent move. I was always told to build my own future (must be my Midwestern roots). No one ever likes leeching off of someone else, so this may be the last resort for you.


To pay down debt you must be angry. Think of your debt as an overhang or a hindrance to your freedom.

Do what you can to eliminate it.

Work hard in your early years. Your future self will thank you.


Refinancing student loans with SoFi can save borrowers

$4662f a month—or $30,0692 over the life of the loan.


Student loans repayment


Pay down debt or invest

Once you have paid off your highest interest debts, what should you do next?

I like the idea of paying any debt that is less than 5.25% interest rate as fast as possible. Once your personal cost of debt is below that threshold, start investing as much as possible.

The stock market has averaged around 6-7% annual total return over the long-term, so by investing instead of paying down debt you are in fact earning an incremental profit (or less opportunity cost on your money).


The best time to plant a tree was 20 years ago.

The second-best time is today.


Keep in mind the stock market is volatile. It does not return 6% every year.

Some years the return on the stock market is greater than +15% and others it can be -15%.

You must understand that you are investing for the long haul. Do not invest to get rich quickly. This is a long-term goal.


Successful investing is boring

Once I paid off my student loans, my strategy for investing was to focus on dividend growth stocks that participate in a no-fee DRIP plan for our Roth IRA. I have an excellent list of no-fee DRIP stocks for you to get started.

I like that strategy for my Roth IRA since all of my capital gains are tax-free. My contributions to my Roth IRA are made post-tax. If I can realize the benefits of compound interest over a long period of time through dividend reinvesting, I should have a sizeable nest egg by the time of retirement.

In addition, I seek out to build a dividend portfolio after-tax for consideration of increasing our income.

Should you completely shut off investing while you are paying down debt? It depends on your income flexibility. I always suggest maxing out your 401(k) contributions and Roth IRA. For the current year, it is $18,000 and $5,500, respectively.

After you max out both of those, then think about debt repayment ability and after-tax investing. If you cannot max out these and pay down debt, focus on repaying your debts first. Then, move onto your investment strategy.


Paying off your student loans is an uphill battle. The top of the mountain is always the sweetest (and has the best view). With a prudent strategy and discipline, debt-free living is within reach.

Once you do that, you will be amazed at how much flexibility your life is.

What are your favorite student loan repayment strategies? Do you pay down debt or invest? Leave a comment below. I’d love to hear from you, Millionaire Mob.



Budgeting Debt-Free Living

How to Spend your Tax Return the Smart Way?

Here it is again; tax season!

While some of us, or some companies, do not have anything to pay to the taxman, most people will get a tax return once they file their taxes, although we’re still trying to pinpoint how the tax bill for 2017 is going to pan out. About 75% of American receive refunds or in other words, most American have too much taxes withheld from their paychecks every year. Most people actually plan to receive a refund each year and imagine these grand spending sprees as if it was free money.

Some companies even jump to the occasion to promote stuff like this eBay ad I have noticed last week:


What to do with your tax refund


It argues that it is time to treat yourself and holds the slogan: Turn your tax refund into your next favorite thing. This is absolutely the wrong way to approach all of this.

A tax refund is not free money from the government, it is your money you simply gave, in excess, to the government. Here is how it works:


tax refund tips


The first step is pretty straightforward; you work and earn a wage. From that said wage, your employer then takes off source deductions, in other worlds; withholds your taxes, according to your projected earnings and sends those taxes to the government. Once you file your taxes and made all your deductions, the government then compares the taxes you paid with the taxes you should have paid. If there is an excess, you get a tax refund. If there is a deficit, they ask you to pay that difference.

It is not you who should thank Uncle Sam, he should thank you!

The IRS, for example, gladly takes your money all year long and then, once you file your return, it has 45 days to process the return and issue your refund if you are owed any. All of that without owing you any interest. Tax refunds are just interest-free loans to the government.

Actually, if you are receiving a huge refund, you are probably having too much taxes withheld at source. For Americans, you can check your W-4 form and adjust your federal income tax withholding allowances. For Canadians, you can use this calculator to see the proper payroll deductions you should have.

When eBay is promoting how this is the perfect time of the year to treat yourself, it is completely ignoring the fact that this is just your hard-earned money you overpaid the government which you are getting back.


What should you do with your tax return?

Now that we have established that a tax refund is simply your own money, we can start exploring better ways to use it. Instead of spending on more stuff you do not need from eBay, you should treat this money as extra help to reach financial freedom. Splurging on lavish vacations or gadgets only sets you back and, most likely, would only make you temporarily happy without many long-term benefits.


Tax refund ideasSource: _AJL


Get a grip on your money

The first thing to do with your refund if you have high-interest loans, credit card balances lingering or old bills due is to pay those off. Put your refund to work and buy yourself some peace-of-mind with some big-time debt repayment.

The same goes for high-interest student loans. You could always refinance at a lower rate with companies like SoFi but the best would be to pay them off completely. The average individual income tax refund was about $3,050 in 2016, according to the IRS. This kind of money could really put a dent in your debts.

The next best thing to do, if you did not already address this, is to have at least 3-months-worth of expenses in an emergency fund.  Most people go up to 6 or 9 months-worth but this would take months and months of diligent savings to get there. Putting your tax refund towards your savings not only builds up a good pillow for you to fall back on in case of emergency but also puts your money to work in a good interest-bearing account.


12% of those receiving tax refunds will spend it on a vacation, and 13% on a major purchase such as a car or television. Meanwhile, 42% say they’ll save at least part of their refund. – National Retail Federation.


Invest in your future

Once your basics are covered, start investing in yourself and try to max-out your tax-sheltered investment accounts like your TFSA (Roth IRA) or your kids RESP (529) plan.  If that is already done, invest in a taxable account with brokers like Vanguard or Ally.

By investing in properly-diversified, low-cost, investments such as exchange-traded funds, you can get your tax refund to work for you and start generating long-term returns for your future self. For example, if we took the average refund of $3,050 and invest it in a simple S&P 500 fund such as Vanguard’s VOO, it would have grown to $7,655 over the last decade. That is a total return of over 151% since 2008 and that is including one of the biggest crash in American history.

If the stock market is not your thing, you could also put some of it towards your mortgage or invest in bonds, even in this low-rate environment. This is a great, secure, way to get your money working for you without taking on as much risk as an equity fund would entail.


Treat yourself

Finally, if you really took the time and steps to improve your financial picture, maybe it is time to treat yourself a little. Instead of spending frivolously on a $1000 phone like this eBay ad suggests, spend on a something that will stay with you and make you happy.

Spend on a memorable experience or something that will change you like books, courses, or adventures. Get a new outfit, get a new haircut, or take your loved one out for a nice lunch. It does not need to be much. It does not need to be expensive. Just do something you do not do too often, something special.

This way, your tax refund will be memorable and you will never forget all that excess money you gave your government interest-free, for a whole year. 🙂



Debt-Free Living

6 Getting Out of Debt Success Stories

Feeling trapped is exhausting, it can drag you down. Keep you in a slump. Once you get out of that slump, once you are free, you can finally live again.

You might feel dragged down by your student loans, car loan, or maybe you went a bit over your means with that credit card and now, you simply do not know how to get out of it. It is hard to see the freedom line, way ahead. But trust me, it is there. Somewhere stands the freedom line.

If you already reached, or are close to reaching, this magical Zero net worth, you are doing amazing!


Debt is the norm

In the United States, debt is embraced, it is normal to carry loans. It is normal to carry a balance on your credit card even if the interest rates are around 20%. It is normal to take out a car loan for 7 years on a depreciating asset that you will want to upgrade after the second year. But that does not mean that it a good idea.


What is your debt stroy


From the chart above, we can see the debt breakdown from people from positive net worth all the way to -$12,400, to -$46,300, and finally, to -$520,000 net worth. It is fascinating to see the breakdown of each. Ok, maybe not fascinating but at least modestly interesting 🙂

Most people with a moderately negative net worth (from $0 to -$12,400) hold 55% of their debts in form of credit card balances and car loans while the lower net worth individuals (anywhere from -$12,500 to -$520,000) are largely dragged down by student loans.

It makes sense; the other large debt most people hold is a mortgage but they are to purchase real estate that increases your net worth.

If you carry large student loans (or even small ones), we highly suggest you check out SoFi. They specialize in student loan refinancing and is one of few lenders that can consolidate and refinance both federal and private loans. You can get started today with SoFi in a few clicks and start inching towards that dream net worth a little faster!


Do you know your net worth?


How to calculate your net worth


Calculating your net worth is quite simple, simply subtract everything you owe from everything you own that could be sold. Here is where it gets simple; you do not need to count all your right and left socks to count your net worth.

You only need to consider what could be sold for a considerable value on a fairly liquid market. Stocks and real estate are obvious but do not include your furniture or your stamp collection in your net worth (unless you are this guy). Another one some include and some others don’t is cars. Since they are a depreciating asset, some people just consider them an expense.

Once you know what you own, take a look at all the outstanding debts you have. Credit cards, personal loans, student loans, mortgages, that $20 your co-worker lent you when you forgot your wallet at home. Then you simply subtract. Another cool way to calculate your net worth is to signup for a free account with Personal Capital and check out all their fun tools.

If you own more than you owe, you are in the green! If you owe more than you own, don’t worry, you are not the first one and plenty has gotten out of it.


People getting out of debt and rocking it!

We reached out to a few of our friends and asked about their own personal debt story. We were particularly interested in knowing how much debt did they carry and what did they do to pay it off. Their stories are inspiring and just go to show how anyone can get out of debt and achieve great financial success once they focus on it.

Our friend Ms. 99 to 1percent had $40,000 in student loans and, extraordinarily, paid it all off before graduating!


I started looking for a job 1 year before graduation just in case it was going to take me a long time to find a job. But I got a job right away and did a lot of overtime while still attending evening classes. I was able to pay off that $40,000 within a year just before graduation.


Her husband also had a $35K car loan/credit line that they paid off right after getting married. Talk about a quick turnaround! Wonder how they are doing nowadays?


Currently, we are trying to pay off our $500K+ mortgage within 5 years by 39 years. We are halfway through and on track. It’s very tough and challenging especially that we just had a baby and we are no longer DINKS, but it helps that we are part of the Dave Ramsey community. We are looking forward to reaching BabyStep7: Build Wealthy and Give. Dave likes to say “Live like no one else so later you can live and give like no one else”


Their advice for paying off so much debt so quickly:

  1. Make sure you are on the same page as your spouse
  2. Make a plan
  3. Pay it off as fast as you can manage (Dave Ramsey calls this Gazelle intensity)
  4. But don’t stress yourself too much, have option A, B, C,…
  5. Cut unnecessary expenses and spend mindfully
  6. Find ways to increase your income.
  7. Find a community to keep yourself motivated and accountable.


Our friend Cody from Femme Cents also shared her personal story with us. She and her husband both graduated college completely debt-free. However, the American Dream caught up to them and they bought two new cars at once because they could “afford” it.


Debt storyTurns out, life happened and we couldn’t afford it. We had to sell one within a year (luckily we weren’t underwater). The other we paid off as quickly as possible (and intend to keep as long as possible!). I had planned to cash flow my master’s degree as I went through, but didn’t end up doing it because we had the car payments, so I took out student loans.

I learned that debt limits your opportunities and can exponentiate when you are giving your paycheck to past priorities. My debt problem grew because I couldn’t pursue the things that my life had moved on to without more debt.


The advice she shared with us really resonated. We are all human and we like our routine. Once we start something, we adapt to it, we embrace it, and then it becomes our new normal. The same goes with money.


The silver lining to paying off debt intensely is that when you are used to throwing big chunks of money at debt, it easily translates into large savings contributions if you have the discipline to make that transition once the debt is paid off.


Another positive thing about debt is that it can be used in so many ways for so many things. When used to supercharge your returns, it can be greatly beneficial. Our Twitter buddy Slow Dad shared with us that borrowing to purchase great investment properties or profitable businesses can greatly increase your returns but on the other hand, borrowing to pay for a holiday or a car is generally a bad idea.

This might come up in other articles as good debt or bad debt. Most agree that mortgages are good debt given their low rates, collateral, potential appreciation, and all but not every mortgage is good. For example, if you are taking out a mortgage to buy an oversized house that you can barely afford with a tiny down payment, then that mortgage might not be the best for you.

Debt is merely a tool, it is neither inherently good or bad. As with any tool, it can be used well or poorly. This is when Slow Dad’s explanation comes in handy. However, whether good or bad, paying off debt always feels good.

An amazing advantage of paying off debt is the freedom it brings. Having free cash flow is a massive boon in your personal finances, and debt severely restricts that. Financial coach Sawyer and his wife decided to pay off their non-mortgage debt when, at that point, they owed a grand total of $75,000.


The original plan was to not change our lifestyle much at all and it would take about 6 years. We ended up going to a single car (family of four), banking small windfalls and salary increases, and getting it all paid off in 3.5 years.

The extra cash flow has allowed us to refinance to a 15yr mortgage at 2.75% which will save a ton in interest, and I plan to purchase our next car with cash next year.


Debt is a problem that so many people face. As our buddy Steven Goodwin puts it, there are so many ways to get into debt.


How we paid off debtWe had it all. We had car payments, student loans, personal loans to family members, credit card debt, even debt on our dishes. When we started tracking our debt though, we only had student loan debt left. $27,737 worth of student loans. We had some due to Citibank, Sallie Mae, and even University of Phoenix. My wife ended up with a bachelors in health science. I didn’t finish the requirements to even get my associates, but I racked up my share of the loan debt.

It took us roughly two years of working hard, living frugally and paying off debt as fast as we could to finally knock out the entire amount of loans. But, we did it and we won’t be back. The only thing we still have is our home mortgage that we are working on still.


As for our own story, we started our journey with very little debt. As students, we each ranked up five or six thousand dollars on lines of credit but never really needed to borrow a lot. We both worked part-time jobs, worked during the summers, and saved a lot to pay for our school expenses.

Being from Canada, our costs were drastically less than any university in the United States. In our province, the average undergraduate pays only $2,851 per year in tuition fees. In comparison, it costs $20,090 per year, on average, for in-state universities in the US. We have that to thank our country for!

Later on, when we wanted a car, we bought a used SUV and paid for it cash. By then, I was already working full-time and Mrs. was still in school.

We got into savings quickly and started saving aggressively early on in our careers. At first, I was spending everything I earned, buying nice Italian clothes, going out a lot and buying frivolous things while Mrs. Xyz was always the saver.

I quickly changed once we found a common goal to work towards. We were not thinking about retirement quite yet but wanted to save for a down-payment on a house and wanted to do it fast.

It took us a while but we finally decided to start minimizing our spending and increasing our savings to save up for a down-payment in a single year. Once that was accomplished, we bought our wonderful house but kept saving.

By then, the habit was there and it did not feel like a sacrifice to save over half our salaries. Starting early in life with a clear goal was really the key for us. Once we had our long-term goals set out, we just kept saving and started investing to grow our returns over the long-term.

It is easy to see how starting investing early can be greatly beneficial over the long term. Using the Rule of 72, you can quickly find the number of years required to double your money at any given interest rate. All you need to do is divide the interest rate into 72. To calculate how long it will take to double your money when investing in the stock market (using the average net market returns of 8% for example) divide 8 into 72 and get 9 years. This means that every 9 years, your money doubles!

Starting early gives you that head start to double, triple, or even quadruple your initial dollar. The faster you can get out of debt and reach that freedom line, the faster you can start saving for your future.

Try to minimize interest costs with companies like SoFi and try to minimize any future debt by living a simpler life. Less stuff, less house, less debt.


We would like to thank all of our friends for their wonderful stories.

Mr. and Mrs. Xyz.



Budgeting Debt-Free Living Financial Independence

BMW is Your Secret to Early Retirement

Everyone has to start somewhere. No one is born a financial genius, nor does everyone have an interest in their personal finances. We all have dreams, goals, bills, and expenses. Reaching early retirement might sound impossible but it isn’t. Anyone can retire early if they take the proper steps towards their freedom.

From a young age, children see their parents swipe those magic plastic cards that let you take anything from stores. They then learn how the bank of mom and dad can pay for the movie nights and new shoes.


Financial literacy is an ongoing learning experience. Kids should start learning basics at a young age so they understand that the “Bank of Mom and Dad” has limits. – Justin Thouin


Once kids grow, they quickly learn (usually the hard way) that those magic plastic cards need to be paid back and that bills don’t pay themselves.

Unfortunately, our school system does not teach basic finances and most parents are as lost themselves so young adults start in life with little guidance.

There are so many free resources available online there should not be any excuse to know basic personal finance. We should all know how to set up (and follow) a budget, manage daily finances, invest and make our money work for us, and live under our means. Starting on the right path from a young age will get you far.


You might get 85 years on this planet—don’t spend 65 paying off a lifestyle you can’t afford. – Cait Flanders


This year, since my sister is now in her twenties and will start her career soon, I wrote her guide to start off on the right foot and maybe, one day, retire early if she wishes to.

I thought this would be a great guide for anyone who needs a small introduction to the subject. This was written for my little sister but it is for all of you to learn, enjoy, and prosper.


Since you are a big girl now, and you will soon make a ton of money, it is time to talk finance. Here is my easy guide to freedom and financial bliss.


Step 1: Aggregate and create a budget

You cannot start saving until you track your money so let’s break the fear of looking at your monthly statements and get rolling!

  • Create a free account on Mint or Personal Capital and add all of your accounts (Banks, Loans, Credit Cards, Assets, and Investments). This will give you a snapshot of your current net worth and track all your transactions for you. Net worth is like your current financial health. Any credit and debt will pull it down and any assets will pull it up. Once you see where all your money is going, you can start optimizing your finances.
  • If you have too many accounts, try to consolidate them and close extra accounts to simplify your cash management. It can be practical to have one savings account per goal (Vacation Fund, Car Fund, Education Fund…) but it can also get complicated to optimize your finances that way. Open a high-interest savings account (we use Alterna Bank at 1.90%) and start saving!
  • Use credit cards for their good side, not their dark side. Always pay the full balance every month and use cash-back or travel reward cards to enjoy the best perks. That minimum payment they print on your bill is NOT the amount you need to pay. You will not pay a dime in interest if you pay the balance in full but you will definitively pay a ton if you only pay the minimum.
  • Once you are ready to write up a budget (or type it up), you can start with your fixed and variable expenses. In one section, write down all your recurring costs such as rent, internet, phone, electricity, and other bills. You can always cut these down but it will be harder than cutting down your variable expenses. Then write down all the other stuff; shopping, food, entertainment, gas… The best tip I can give you about budgeting is to include savings in there somewhere. Set aside money first and live on the rest.


Step 2: Lower expenses

Marketing is everywhere and companies are constantly coming up with new schemes to get you to spend your hard-earned dollars. It is important to revise and be very strict about your monthly reoccurring expenses. Now that you will see them all on your budget, you can revise each item one by one and see if 1; you really need that and 2; is there a way to lower that expense. Here are some tips arranged by budget category:


Bills & Utilities

  • Drop your cable plan and just have the internet. We cut the cable long time ago and now only use Netflix. It has better content, no ads, and is about 8 times cheaper than cable.
  • The single best thing a person can do to keep costs down is to reduce how much they spend on housing. Your home will be a huge expense throughout your life so only buy what you need. If you take the biggest mortgage the bank is ready to give you, you will end up spending half your pay on your house and you will be stuck to live paycheck to paycheck like everyone else.
  • You will find that many people in expensive neighborhoods are strapped in debt to the neck and stuck trying to keep up with the Joneses. Living in a low cost of living area not only costs less but also has much less competition and incentives to get all those fancy things. You will see once you start working that most people give in to lifestyle inflation; once they get a new raise or a bonus, their spending goes up. Instead, try living on what you need and saving the raises.


Auto & Transport

  • I have one word for this: BMW. Yeah, that’s right, Bike, Metro, and Walk everywhere you can. The less car-dependent your life is, the easiest it will be for you to control this expense. Cars are a huge expense for average Americans ($720 per month on average) but you do not need to spend nearly as much to get from point A to B.
  • If you do get a car, get one that suits you need and nothing more. Having a car bigger than you need or new than you need is just a hole in your pockets. Buying 5-years-old cars will literally save you thousands. Let the others take the depreciation loss and keep your dollars for something else more interesting.


Food & Groceries

  • Limit eating out to social activities and do not eat out just out of laziness. Meal planning and a good cookbook can easily cut down your restaurant outing to once per week and save you thousands per year.
  • Find the right mix of online stores, grocery stores, and bulk stores. We found that most household items are cheaper on Amazon and ethnic supermarkets offer the best produce at the lowest prices. Due to the home-cooking customs of the non-westernized world, their customers buy a lot more fresh produce so stores waste less of it and can buy in bulk. Those savings are going right in your pockets and you will eat a much healthier diet including more fresh produce in your meals. Their meats are also very cheap and they offer more variety than most chain supermarkets.



  • There are so many fun things to do outdoors if you let yourself wander.
  • Find local festivals and tastings in town.
  • Have house/dinner parties instead of going out with friends.
  • Go out with only a 20$ bill and leave the cards at home.
  • Eat at home. The more you get cooking, the better it gets.
  • Stop those impulse buys, always shop around and wait a few days before making any purchases.
  • Always compare on Amazon and craigslist before buying larger items. You can also apply the previous point by leaving items in your Amazon cart a day or two before checkout.
  • Do not think about the great sales stores are always advertising. Everything is 100% off when you are not buying it.


Step 3: One month of expenses + $1,000 buffer

It is important to have some breathing room and not live paycheck to paycheck. The first step is to have enough in your checking account (or savings) for 1 month of expenses + a 1,000$ buffer for unexpected emergency expenses. You will have a budget now so you know exactly how much you spend per month.

Once you are comfortable with this, you can even upgrade to a 3-month emergency fund.


Step 4: Eliminate debt

Your credit score is a number the credit bureaus (Equifax, TransUnion…) come up with to help lenders judge risk. Having a good score will make you save thousands over time. Not only do some lenders use your score to determine your interest rate but even some non-lenders also use your credit score to determine prices like insurance companies, landlords, utilities, etc… We have lower insurance premiums because of our score, get access to super cheap credit easily, and gained access to premium travel cards.

Scores are calculated based mainly on payment history, available credit limits, and age of accounts.

Basically, keep high limits but do not use them (try to use less than 20% of your credit card limits month-by-month), pay back your balances in full each month, and keep older credit products open. To eliminate debt as quickly as possible, start paying off the highest interest rates first (Credit Cards, Personal Loans, Lines of Credit).


Step 5: Get your money working for you

After you saved enough for emergencies (roughly 3 months of expenses) you can start investing to get your money working for you. Throughout the last century, stocks have outperformed other investment types and our tax system also encourages investors to partake in the equity market.

You could always try to pick stocks and hope to pick the winners but just think about it; out of all actively managed mutual funds, a whopping 82% of them did not constantly beat the index over the last decade. If even professionals cannot guess the next winners, I do not recommend you try to.

Since good stock picking is so hard and actively-managed funds the banks promote have large fees. An easy solution is index investing. This refers to simply buying all publically traded companies to benefits from the winners and average out the losers. You can start indexing through mutual funds or exchange-traded funds that track the index for very little fees.

Over the last 20 years, $10,000 invested in an S&P 500 index fund would have grown to $65,225 after a 0.05% annual expense ratio.

One quick tip; control your emotions! When your portfolio value goes down, you can keep investing and buy things at a discount. The market will go up and down and eventually, you will collect high returns on the upswing from the cheap shares you obtained when everyone else ran away.

On average you will hopefully get more than 5-6% per year from your investments and if you are saving enough, this will grow to a small fortune. All you need is a balance of a US Market Fund, International Markets Fund, and a Bond Fund.

  • TD Canadian Bond Index Mutual Fund (TDB909)

        or Vanguard Total Bond Market ETF (BND)

  • TD U.S. Index Mutual Fund (TDB902)

        or Vanguard Total Market ETF (VTI)

  • TD International Index Mutual Fund (TDB911)

        or Vanguard Total International Stock ETF (VXUS)


If all of this sounds too complicated, we suggest Wealthsimple.

Start your automatic investment account today!


Long-Term Retirement

Pre-Tax accounts like RRSPs (401k) are great to save on taxes once you make good money. There are also great advantages to use a TFSA (Roth IRA) to minimize your future tax bill.

Using this strategy early should set you up pretty well to retire. You can always access those funds if you wish to retire early as long as your income drops once you take it out, you will not be taxed much.

This may sound crazy but saving at least 50% of your monthly income is not impossible. It would be a huge step towards reaching early retirement. You do not need to work until you are 65 years old and simple, small tweaks in your spending habits could make a huge difference over your lifetime. Keep at it and you will get there while increasing income and decreasing expenses.

If you have been in the same job for a while, consider looking for new opportunities while you are employed. Yearly raises in your current job are usually very small compared to the salary bumps you can get from changing companies.

Once you have accumulated roughly 25 times your yearly spending, your investments can now sustain your monthly expenses. Congrats, you can now retire! You can then have the freedom of doing whatever you want with your own time. If you still enjoy your job by then great, if not, you can stop.


Step 6: Enjoy the journey

It may get rough at some point, especially if you have a lot of debt to pay back, but your finances can be kept simple. Have fun talking about money and reward yourselves when you reach certain milestones. The first big one is net worth zero and from then on, freedom is in your hands.

Live a life of abundance and luxuries but know that there is always a frugal way to do so. Approaching the big 3; Housing, Transport, and Food with frugality will drastically cut your expenses and make the difference between working until 65 or 45. You do not need to be cheap, just be conscious about your purchases.

As the American Dream thought us, we always need the bigger, newer, shinier thing. However, this is just a path down Forever Debt Road. Be mindful of your purchases and buy the things that make you happier but you do not need to keep up with anyone. Enjoy the present and enjoy life, most of the best things in life are free.

This is my road map to freedom and I wish you the best of luck in your wonderful career little sister.



Debt-Free Living

Living a Simple Life with Less

We live a conscious life.

We consciously choose our purchases, our investments, and our lifestyle.


When we face a choice, we try to think of alternatives and try to pick the optimal option that will maximize our happiness while minimizing costs. Using the utilitarianism ethical theory, for example, “Happiness” here is defined as the maximization of pleasure and the minimization of pain. Pain here being; departing from our hard-earned dollars.


Jeremy Bentham, the founder of utilitarianism, described utility as the sum of all pleasure that results from an action, minus the suffering of anyone involved in the action. – Jeremy Bentham


There are greater consequences behind consumerism; everything we buy or choose not to buy is affecting someone else. The conspicuous consumption North Americans have become used to is affecting the lives of many around the globe. Production of so many goods is exhausting our planet’s recourses and exhausting workers across the globe. Factory workers in China, for example, often work over 16h a day, six days a week to produce all this stuff.


Choosing happiness through minimalist living

We chose the path of voluntary simplicity for our own and the greater good. Some live extremely frugally by refraining from luxury and indulgence but we are not ascetics. We still enjoy some material possessions and luxuries but we consciously choose where we splurge. Our decisions tend to balance value rather than completely depriving us of some things.

We restrain ourselves from unnecessary purchases and impulse buys and when we do want something, we see if anything we already own could accomplish the same utility or we try to find it used for less than half the retail price.

Companies like Amazon try to make effortless to spend your precious dollars. They offer Daily Deals, Lightning Deals, 1-Click Ordering and algorithms will always show you a product that you might want but the only function we like to use is the Wish List. Saving everything you want there, before completing your orders, will allow you to see if you actually need it. Wait a few days and come back to it. Half of the time, we forget stuff was actually saved there.


How to save money on AmazonSource: ABC (Youtube)


Not only is consumption costly but it does not always make us happier. The diminishing marginal utility implies that your happiness and wellness level will increase when you first start buying things but after a certain level, any extra consumption will not make you happier.

How to be happy

We like having a 60’ TV, nice modern furniture, and staying in luxury hotels when we travel but we have a balance and live a life of luxuries without going into debt. Most of our furniture was bought second-hand, we never paid retail price for clothes, and we travel like kings for a fraction of the price using rewards points.


Choosing a stress-free life

Because we do not have any debts other than our mortgage, we enjoy a significant level of freedom. Our cars were paid cash, our furniture was never bought on payment plans, and we never carried any credit card debt. Living within our means increases our happiness and well-being considerably.

We are consistently bombarded with messages trying to convince us to consume more and it is all easily available through credit but living within our means allows us freedom. The freedom to live a stress-free, happy, life.


Live debt-freeOwn your stuff, do not let them own you.


Adopting a minimalist living made us happier. Decluttering our home has been a great exercise to make us rethink the things we actually like. This past year, we sold or gave away a lot of dust-collectors and clothes.

  • We sold a TV and with a stand for $100. Who needs more than one television anyway. It was untouched for months.
  • Gave away about 3 bags of clothing to our local charity. If we did not wear a certain article of clothing in the past three months, there probably is someone else who needs it more than us.
  • Finally sold an extra pair of skis for $80.
  • After staying unused for years, we sold an old iPod for $100.
  • Sold four PlayStation games for $15 each.
  • Looked through our garage and sold a ceiling lamp for $20.

At the end of the day, we now have a cleaner, decluttered home. We gave a new life to our old stuff, passing along the joy it used to provide us, and we made $360 along the way!


Choosing our way out

By consuming less, we can also save a lot more. We are currently saving over half our incomes and at that rate, we are right on track to retire 10 short years after committing to this journey. Once we reach financial independence, (a bit more than 8 years left!) we will have the freedom to work, or not, on whatever we want. The projects, the hustles, the hobbies… Anything is possible once money is out of the equation.

Meanwhile, we enjoy every moment we can throughout our journey towards financial freedom. We opted for a good work-life balance. Each working less than 40 hours a week with semi-flexible schedules and traveling the world a few weeks a year. We can enjoy our weekends together, both finish work around the same time, and follow each other’s schedule.

  • On the work side, we do want to perform and grow our careers but we do limit the hours we are devoting to it just to keep our sanity.
  • On the life side, we try to fill our lives with priceless experiences rather than pricey materialistic stuff.

We hope you are enjoying your journey as much as your destination.

Mr. and Mrs. Xyz.



Debt-Free Living

Housing Costs are Too High? A DIY Tiny Home Might be your Answer!

In some cities across America and in most of Canada, our generation is having a really hard time finding affordable housing. Rents have gone up faster than wages and housing prices have risen even faster with the advent of low-interest rates and the overflow of foreign buyers. Maybe the answer to all this lies into a simpler lifestyle, a tiny home, or a smaller apartment.

In Canada, for example, the average house price has not dropped in the housing crash that the U.S. saw after 2007 and our housing market kept growing. Home prices have risen far from the long-term averages such as portrayed in the graph below:


house prices to average incomes in canada and the us


In major urban centers such as the Greater Toronto Area (GTA), house prices have parted far from the median hourly wage. Back in the 90s, salaries were on par with home prices but since, residential real estate prices have grown to almost twice the adjusted median hourly wage.


median home price vs median hourly wage in toronto adjusted for inflation


No wonder almost half of millennials choose to stay with family longer than ever! Home ownership can feel like a distant dream for some.


Almost 40% of young Americans were living with their parents, siblings or other relatives in 2015, the largest percentage since 1940 – The Wall Street Journal


Many chose to delay home ownership or simply cannot even imagine ever affording a house in the near future. Sometimes I think back at my grandparents who were able to, not only afford a house early in their careers but could afford to live on only one salary. They even have a second home, by the water and all of this on a middle-class salary. Single-earner households were the norm.

The solution might be to live even further out in the suburbs, where prices might still be within reach, but then you need to drive hours in traffic to get to work. Others might just bite the bullet and rent a luxury apartment downtown at exorbitant prices but then have nothing left to save for retirement or other goals.

What if there was another solution. A solution right at the crossroads of nature and tiny downtown apartments. What if you could afford to live in a brand new, custom designed, luxury house and own it outright. No need for an exorbitant mortgage and you will never have a rent check to write out. You might think this is impossible to own a house outright in 2016, but you could own a whole house for only $30,000.


Meet Robert, Samantha, and their tiny home

Samantha and Robert, are tiny house dwellers. They have designed and built a 204 square foot tiny home on wheels. It is 24′-0″ long, 8′-6″ wide, 13′-5″ tall for a total of 204 square feet. It weighs only 9,930 lbs and all materials added up to an economical $30,000.

Seeing the possibilities was an eye-opener for me. Robert & Samantha’s website offers the resources to build your own house on wheels including plans, processes, and material lists. I had seen some tiny homes in the past but the technicalities of them always escaped me. I like how Robert & Samantha are so open and are showing the world how practical a tiny house can be.

Just like us, they are outdoor adventurers and own all the equipment you could ever need. We stuff all of our toys in our garage (which alone is 12′ by 20′!!!) but they have designed their tiny house to stuff and hide all of their things in an elegant manner.


How will a Tiny House help you reach financial independenceHow to live in a Cool Tiny House How to live in a Tiny House How to live in a Tiny House


Reduce your housing costs

Being able to live in smaller quarters allows for more mobility. Building a house on a trailer base allowed Robert & Samantha to become neighbors with their friends months at the time, travel around the country, and live a free life.

Tiny house dwelling lowered their expenses and saved the rent payments they previously had. This meant the house practically paid for itself after the first year. Financially, it makes sense. Why own more than you need? It’s not like we need our 5 bedroom house.

Having a bunch of space can be comforting but, actually, it is only more space for more stuff. Aiming to lower your spending is much easier when you do not have rooms to fill and garages to pack full of stuff. Robert & Samantha have everything they need, from the basic necessities to the outdooring equipment. Just like us, they value nature and the great outdoors and living right in it enables them to fully embrace it.

How will a Tiny House help you reach financial independence

Cool Tiny House

Living where you want, in a space you fully use, is a not only better for you but also for your wallet. This option allows practically anyone the joy of home ownership. Even if you were to take out a loan for the build, this would only add up to $157.81 per month in payments, even if considering a high 4.00% interest rate.


Learn how you could live mortgage-free


Meet the Gada family and their simpler lifestyle

Most of the world’s population can only afford small living spaces and unfortunately, don’t always have access to all the luxuries we can afford. The Gada family, for example, lives in Mumbai, India. Bavesh works as a shopkeeper and lives with his wife and his 2 & -year-old son in a 2-bedroom house they rent. They have been living there for 3 years on a total budget of $466 per month. The following pictures and story come from the Gap Minder, an amazing site that compares families across the globe, across all path of life and income levels.


Learn how people live around the world

Low budget living

Live cheap

Cheap homes


The Gada’, and most of the world’s population are living in minimal quarters because of necessity. We (by we, I mean most of us in highly developed countries) have the choice to limit our real estate consumption and should consider living with just what we need.

Maybe it is time to rethink the American Dream since it has now turned into a nightmare of debt. According to Statistics Canada, the debt-to-income ratio rose to an astonishing 165.4 percent in the last quarter of 2016. With historically low interest rates and easy access to credit, most millennials jump on the idea of home ownership, often buying the biggest house they can afford.


Most of the growth was in mortgage credit, up 6.3 per cent, which has accelerated considerably since 2014 and is now increasing at the fastest pace since late 2012, – TD Bank economist Diana Petramala.


Is your mortgage too high


The tiny house movement is great for anyone aiming to save more for other things like travel, hobbies, or early retirement!

We have talked about our own living situation in the past and we are definitively living in way more space than we need. We bought a 5-bedroom house with a yard, a garage, and a pool but the more I read about and discover the tiny house movement, the more I think we could adapt to such a lifestyle.

We got a large home thinking about our future. I don’t see the benefits of the “starter homes” mentality and we did not want to move again in the near future. Why spend hundreds of thousands of dollars on a house you can’t grow in and upgrade after just a few years? The moving fees alone are a killer but the biggest hit would come from the mortgage penalty for selling your property early and the closing fees.

Since we are planning to have kids in the future, we opted for a house that would suit our needs at all stages of life. We also got a great purchase price by selecting an up and coming neighborhood and finding an eager seller.

For now, we found a way to fully utilize our space by renting out our spare bedrooms on Airbnb, it generates a good side income and allows us to meet a lot of new people. 🙂

What about you, what are your living arrangements and what do you think about tiny houses?






Debt-Free Living

From $75,000 in Debt to Millionaire Success Story

I read a lot of personal finance blogs and publications but one thing strikes me; there are so many writers that are telling their heroic stories about how they got out of debt. Guys like Grayson Bell from Debt Roundup is seen as a superhero when he gets out of $75,000  of consumer debt in 4 years. Going from debt to millionaire would be even more impressive.

I am all for getting out of debt and sites like Grayson’s does help thousands of people get out of the debt trap but there is nothing heroic about getting into debt in the first place. This guy racked up $50,000 of credit card debts on top of his $25,000 car loan and Jet-ski loan!!! Wish more people would save $75,000 in 4 years and avoid debt all together but I guess that is not a compelling news story…

I do not understand why someone that got out of debt quickly is more admired than someone who saved and invested quickly, but that’s just my opinion. However, these blogs still offer a lot of value to its readers and can greatly help you out of debt if you feel trapped and powerless facing mountains of debt. Today, I comment on two articles to go through the two extremes; from debt to millionaire.


The snowball is famously accredited to Dave Ramsey.  This famous financial guru has figured out the method that works toward a person’s emotions.  The reason this method works is due to how it keep you motivated during a long debt payoff. You’re looking for the emotional wins. – Grayson Bell


The snowball can really work for someone that is currently clueless about his finances and has no intentions to ever dig into it. If you do not want to understand the math behind interest and the actual cost of borrowing, then this method could work for you. It is a sub-optimal method to pay off debt but it is better than simply doing the minimum payments.


To start the snowball, you must work on paying off the smallest balance first, while still paying the minimum monthly payment on the other debts. – Grayson Bell


This method pays off one lender after the other, starting from the smallest balance to the largest, regardless of the interest rates. This is mathematically incoherent but personal finance needs to be personal and some might not be inclined to think logically.


The Avalanche method is more about math than emotions.  It does not deal with your psychological mindset, but pure math. – Grayson Bell

When you list your debts by interest rate, descending, you are effectively taking the shortest amount of time to pay off your debt.  You are also going to save the most money in interest.  – Grayson Bell


This is the only method I would consider if I ever had consumer debt. The avalanche method seems, to me, to be more of the obvious method since I am math inclined but again, I prefer the don’t-get-in-debt method. 😛

I appreciate the fact that someone is taking the time to write these methods down since it definitively helps some people. However, I much prefer avoiding consumer debt all together! I use credit cards for all my purchase to maximize my rewards but I pay my balance in full each month. I much prefer living below my means (half way below actually) and investing towards my future goals. Now to jump to the other end of the spectrum, let’s look at a few methods average millionaires live by.


Tricks and Tips from Millionaires - You deserve financial freedom. #debtfree #investing #money


On the other end of the spectrum, there are the millionaires that (mostly) live very normal lives in middle-class-America. In this article from U.S. News or the book by Dr. Thomas J. Stanley.  and Dr. William D. Danko The Millionaire Next Door, you can notice common traits of millionaires and see how frugal they actually are.

I think this is a cool way to compare your own habits and learn from ones who achieved a high accumulation of wealth without necessarily being the CEO of a huge multi-national or receiving a large inheritance.


By retirement age, married people have nearly 10 times the financial assets of singles, according to a study by the National Bureau of Economic Research. – Liz Weston

[…] people who split up experience an average wealth drop of 77 percent. – Liz Weston


The first point made is about long-standing marriages and long-term homeownership. Choosing the right partner can be crucial, not only to accumulate wealth but to keep it. 🙂 I am very fortunate to have someone with the same values and beliefs by my side.

We both share the common goal of financial independence and early retirement and work together towards our first million. Having a common goal with your spouse can accelerate your accumulation phase and if you are both frugal, ensure that you spend less than you earn. Staying out of consumer debt and saving aggressively together will greatly increase your net worth over time.

Of course, a divorce can be very costly in legal fees and the division of goods can greatly lower your net worth. In addition, there is a lot of costs to being in a single household. Having your own personal apartment or house, appliances, bills… All these expenses will not cost twice as much if you are living together. You can see it for yourself by tracking all your expenses with Personal Capital, you will quickly see where your money goes.

To continue with long-term house ownership, choosing to stay in a home for decades instead of consistently moving every 4 or 5 years will save you thousands in commissions and moving costs. In addition, you may owe capital gains taxes if you are selling your residence rather than passing it to your heirs.

Mobility could be a great advantage to your earning potential but it has its downsides too. If you are in a field where moving and job hopping can greatly increase your income, then renting might be a better option. You need to consider so many factors to see if moving will be advantageous such as the cost of living, municipal taxes, and income taxes but that’s a whole new post by itself.


Millionaire portfolios tend to be widely diversified, with investments in stock funds, bonds, cash and real estate. – Liz Weston


Now it’s time to see where those millionaires invest their millions. It turns out that you cannot grow massive wealth with guaranteed investments that don’t even keep up with inflation (Shocker!)  Millionaires invest in diversified investments and do not need to take massive risks in penny stocks or private equity deals to strike it rich. In fact, they mainly invest in the exact same investments I suggest. Guessed it yet? 🙂


The most popular investment choice? Low-cost Vanguard index funds, according to the 2014 CNBC Millionaire Survey. – CNBC


That’s right, millionaires in America invest mostly in Vanguard index funds, just how I do with my own portfolio and just how you should do too.


Nine out of 10 millionaires surveyed by BMO Private Bank in 2013 had a college degree and over half had a professional or graduate degree. (For comparison, just 36 percent of people ages 25 to 29 had college degrees in 2015 and only 9 percent had graduate degrees, according to the National Center for Education Statistics.) – Liz Weston


The next point mentioned is education. A vast majority (90%) of millionaires surveyed holds a college degree. I think this is a great point to make to encourage higher education but I would be curious to see the percentage of them that finished school with massive student loans.

Education can be a great tool to get you ahead in your career and accelerate your earning potential, however, there are only a few cases where I would suggest taking on massive debt. Shop around colleges and grants available to you to minimize your debt load.

The last point I want to focus on today is financial advisers.


Seven out of 10 millionaires surveyed by the Spectrem Group in 2014 used financial advisers. Many said the primary benefits were improving their knowledge of investing, having access to a wider range of investment opportunities and boosting their returns. – Liz Weston


I agree with the fact that advisers can definitively bring something to the table. Investing in a simple three-fund portfolio with Vanguard can be very effective and hyper-low cost for a DIY investor but it is not for everyone.

Behavior could be a huge detriment to your returns and DIY investors might get wiped out by their own weaknesses. You really need to be able to handle the ups and downs of the market and stay on course when it hits the fan to succeed as a DIY investor.

With a proper asset allocation, you can reduce your portfolio’s volatility and increase your chances of success but it can be hard to get to that perfect asset allocation without lengthy research. If you need help, you can try Personal Capital’s advisory services. They are slightly more expensive than the do-it-yourself method but considerably cheaper than traditional financial advisers. I like their service since they will work with you to optimize your portfolio and advise you on the next steps to take.

Through diversification, automated rebalancing, better behavior, and lower fees, you can optimize your returns to achieve your goals earlier than expected!

To resume, try to stay out of consumer debt and follow millionaire habits by taking the right financial decisions throughout your life. I hope you the best in your investment journey and never forget to stay happy along the way! Xyz.