Category: Finance

Frankly, money is considered to be the root of all evil. Anyone who has a lot of money is capable of taking over the world – and ultimate destruction. This must be right. Or at least this is the perception of many. Without proper education and habit forming, money can leave your pockets faster than it’s created. How can you differentiate money as a useful tool, or a curse? Or will you get lost in the ever-flowing pursuit of money?

If you weren’t aware, we had a world-shattering pandemic break out in the unsuspecting year of 2020. Because of this, I looked around to many people losing their jobs, their income, and thus their livelihoods. Over the course of the last year, I have made it my mission to educate myself with every bit of financial knowledge I can uncover. Why you may ask? So that I can share this knowledge to as many people that are willing to listen to an insane person such as myself. Let me give you a quick run down of money and its infinite possibilities.

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One of the golden rules of money is that you have to be intentional when utilizing it. The reality is that the moment most of us receive a paycheck, we have the urges to run out and spend it. We get this overwhelming dopamine rush from newly found money in our pocket – and instantly forget that bills and responsibilities are a thing. “I’ll pay those later,” you think as you quickly run out to the mall to grab the new Apple AirPod Pros (not a sponsor, although I will for some free earbuds) that just came out. I know we all work hard for our money, and you’re allowed to buy whatever you want. But let’s be real; you’ve already got wired earbuds and another cheap Bluetooth set of earbuds. Why do you need a third pair of audio listening devices?! You don’t. They’re just brand new – and heavily marketed to you in every way that you can possibly consume media. Blame the corporations. Marketing slammed in your face the entire day, until you can’t stop thinking about them. Oh, and every cool kid has them and you have to fit in.

Now, I know you think I’m just a grumpy old man sitting behind his computer complaining that you shouldn’t be spending your hard-earned money. Well no, not completely true. I’m only 25, and only considered old by the TikTok generation of kids. I’m arguing that you need to understand money. You’re working hard at your job for a paycheck, that you then want to turn around and put into the pockets of already-rich corporate jackpots. You need to educate yourself in the ways of money, so that you can start paying yourself back. Life Hack Logic here, ready to educate and inform – nice to meet you!

Next time you go to make a purchase on a consumer item (that you probably don’t need) consider something else. Why not put that $100 back into your savings account for the next time that you might have an emergency? Check your bank account – I bet you have monthly subscriptions that you don’t really use on a consistent basis. We all do, admit it that you can’t possibly keep up with Netflix, Disney, Hulu, and Amazon Prime all at once. Cancel a few of them – add this money together and now you have a nice contribution to your 401k or retirement account. Instead of handing your hard-earned paycheck away to greedy corporations, meet with an investing professional and educate yourself on the stock market, retirement, and finances. You work extremely hard for your money, so it’s finally time to pay yourself back! You deserve to have money on the side in the case of an emergency. You ought to be able to retire when you get into your elderly years. Also PSA, if you’re one of those people who thinks “Oh, I won’t make it to retirement age anyway… why invest?” Well, I’d ask you to make some healthier life decisions, and go read my other blog “Let’s Compound Some Interest (ASAP)” found here:

https://lifehacklogic.com/2021/11/22/lets-compound-some-interest-asap/

You’d be surprised how much money you can end up with when you put your money to work and let the immense power of compound interest takes effect. Right now, the banks and credit card companies are earning consistent income from your interest payments every month. Why not flip the script and let yourself use this money in the terms of the stock market, or 401k? The future can be determined by what’s in your pocket.

It’s mid-November and you probably just heard me drive by you jamming a sick electronic mix of “Just hear those sleigh bells jingling, ring-ting tingling too”. Yeah, I’m that guy. It’s November and I’ve gotten all of my Christmas shopping done a month before the big day. We already have Christmas lights up on the house. We’re ready for capitalism’s biggest holiday.

There’s a sale everywhere you look. Target, Amazon, Wal-Mart, book stores, doctor’s offices, etc. Wait – what…? A doctor’s office has a sale? Yes, I literally got a phone call the other day from the chiropractor saying they were running Black Friday sales. The best part is, I’ve never been to the chiropractor in my life – but surely I need to act now to take advantage of this sale! Right?

It’s just that time of year, Christmas is right around the corner and companies are racing to push their sales down your throat. Ruthlessly worshipping the gods of capitalism. Companies simply have no chill (winter pun intended). But there’s hope – let’s discuss some ways that you can suit up to avoid the financial frostbite this winter.

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1. Make a Christmas Shopping List AND Budget

If you’re an impulsive shopper like me, then it’s nice to meet you. We should go on a shopping spree sometime! Kidding aside, it’s very easy to overspend on gifts for the loved ones in your life. Significant others, kids, in-laws, pets, friends, extended family, work colleagues, the mailman; the list never ends.

So here’s what to do – sit down today and write down everyone’s name that you would like to get a Christmas present for this year. Whether it’s on iPhone notes, a physical piece of paper, or in an Excel sheet – pick your poison, the flavor doesn’t matter. Next to their name, write down an estimated budget for the gift you want to get them. Don’t worry; assigning a present value to this person doesn’t make you a terrible human being. The last column you should leave open is a space for the gift idea that you’d like to buy for them. The beauty of this system that I’ve outlined, is that you now have a game plan for each person, the budget, and potential gift ideas for them. It’s also OK if you don’t know what to buy them. Just look for things while shopping in stores, or online shopping within the price range you set.

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2. Black Friday Can Be the Worst Time to Shop

Sure, it’s true that you can get great deals on plenty of consumer products during Black Friday. Almost everything can be marked down during this time. The problem with this is when you are seeking one or two presents it’s impossible to avoid the other hundred sales going on simultaneously. Sure, maybe it’s worth buying a big ticket item like a television during Black Friday because of the immense savings you can get. Although, you better have the willpower to avoid all of the other unnecessary sales in your face.

Refer back to your shopping list and budget above as a great reference manual to help you with this process. If you do end up Black Friday shopping, remember the purchases must be within the budget you wrote down for each person. Just because there’s a sale, does not mean that you MUST buy this product. Companies will try to force you into thinking this, but don’t give in. Your money, your decision.

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3. Get Crafty!

Use your skills in woodworking, painting, writing, origami; I know that you’re talented in some way. Find a way to utilize your talent, or your everyday skills to make gifts for those in your life. This is a wonderful way to save money. A common example here is to DIY those pre-made gift baskets that have chocolate, coffee, or beauty supplies sold for ridiculous mark ups. These are typically priced higher than you could make the basket bundle yourself, with just a little bit of effort.

Huge pro tip: Go to your local dollar store. There’s a lot of these. Dollar Tree, Family Dollar, Dollar General, Five Below, etc. My personal favorite is Dollar Tree, as each item in the store is $1.

For a pre-made hot chocolate and snack basket you saw in Wal-Mart for $20, you could make it at Dollar Tree for less than $10. There’s tons of DIY and Dollar Tree crafts videos on YouTube that can help you get creative

Gift basket DIY trip to Dollar Tree:

• Coffee mug – $1
• Hot chocolate/instant coffee packs – $1
• Hershey Chocolate Bar – $1
• Twix Bar – $1
• Crackers – $1
• Gift basket – $1
• Confetti to fill in the gift basket – $1
• Ribbon to wrap around gift basket – $1
  • Grand total: $8 (even with tax, we’re well under $10)

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4. Re-Gift Something

Chances are that you probably have something lying around the house that would make a great gift for someone on your list. It could be from a recent birthday party of yours left unopened in the box. It could be a gift card given to you last Christmas that you never used. It could be an awesome home decor piece that you’re ready to get rid of. You could even take something you currently own and modify it into something new!

Re-gifting is always an easy, cheap way to pass on an item you don’t need. The great thing is, they don’t have to know that you re-gifted if you never tell them. They will never know the difference! If you have any creativity (and we all do) you can easily put together a great re-giftable surprise that will light up someone’s day on Christmas!

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5. Do a Gift Exchange (a.k.a. Secret Santa)

Many families and work groups have adopted the concept of a gift exchange. This is a great concept, that can also create a fun and interactive Christmas day ritual for years to come.

How Secret Santa Works:

• Get a group of people together
• Each person writes their name down on a slip of paper
• Throw all of the names into a box
• At random, each person draws a slip of paper out of the box and keeps it as long as it isn’t your own name
• Set a maximum gift value. Gifts can’t exceed $25, for example.
• Buy a gift for your participant under the assigned amount (you don’t have to buy for anyone else in the group!)
• Exchange gifts on designated gift day
• Each participant tries to guess their Secret Santa (who purchased the gift for them)
• Holiday cheer for all! Ho-ho-ho!

This simplifies buying 10 different individual presents for potentially $250, down to one present for $25. Another great benefit is that this entire gift-giving process can be done together on Christmas as a large group. Each person can go around giving each other their specified present, and at the end of the game each person has an incredibly unique gift. “Wow, thanks Sheri! I love my toilet paper, I haven’t been able to find this since the pandemic broke out!” There’s also room for having a round afterwards to barter gifts with each other, after you know what everyone has if you want to. We know your eye is on that bathroom golf putting set.

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6. Negotiate With Easy-Goers

Do you have that one family member who you absolutely dread buying a present for? Maybe they already have everything, or they don’t like gifts, or tell you not to buy them something every year. Talk to them, and negotiate the fact that you won’t buy them something if they don’t buy for you. If they’re cool with that, BOOM, cross them off the list!

In my experience, I have plenty of family that are fine with not buying the adults presents. Typically the kids are the focus for Christmas, and they get the biggest piles of joy. As an adult, most of us probably have what we need. Talk it over with some of your friends and family, and let the kids be the focus this year so that everyone can save money!

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BONUS: Honorable Mentions

1. Shop secondhand – thrift stores rule!
2. Credit card points – cash back for purchases
3. Reward apps (Ibotta, Fetch, RetailMeNot)
4. Use coupons/discount apps (Rakuten, Groupon, Honey)
5. Group gifting – combine your money with other people to spend less overall on a present for someone else

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These are just a few creative ways to avoid the financial frostbite this winter – I’d love to hear yours. Remember – don’t go in debt this year trying to show someone how much you love them – sometimes just saying so is enough. Merry Christmas and Happy Holidays to all!

If you’ve ever heard of compound interest, it was probably in the context of a mortgage or student loan (Two terrifying concepts, I’ll admit.). The funny thing is that you’ve probably subconsciously allowed compound interest to have a negative connotation because of the aforementioned loan types. However, if you are willing to change this mindset, you could one day use compound interest to become rich yourself. Yes, this is THE secret of the rich (no, I’m not kidding – read on to find out!)

Compound interest was once defined by the great innovator, Albert Einstein, as being the “eighth wonder of the world”. He also went on to say that “He who understands it, earns it… he who doesn’t, pays it.” I would argue this is one of the most impactful quotes ever said in regards to finance, and life in general. Are you ready to stop paying this interest to the banks, car companies, consumer loans, etc. and to start using this powerful tool for yourself? Let’s dive in!

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Take a beautiful glance at the chart above, and then check out my explanation below. You can literally become a millionaire by investing just $5,000 a year. Over the course of 40 years, you would end up with $1,398,905 if your money compounded at just 8% per year (approximately the average rate of return for the stock market). Does this sound crazy, and like magic? Possibly the “eighth wonder of the world”? Hah, maybe that crazy old man was right. We’re on to something!

So let me use myself as an example here. I’m currently 25 years old, and the typical retirement age is around 65. So let’s assume that I continue to work for the next 40 years, fair assessment? I’m well versed to know that the social security program in America is not what it once was, and the majority of retirees may end up working well after retirement age to continue to make ends meet. In my own life, I know a few men over the age of 70 still working. Sure, it gives them something to do so that they don’t grow incessantly bored, but it helps pay bills too. Knowing this, I decided to put away a little over $400 a month (or around $5,000 a year) into my retirement accounts (401k, Roth IRA, etc.) At the end of these 40 years of working, once I’m 65, I will have contributed a minimum of $200,000 (assuming I don’t contribute more as my income grows – the average person’s income grows between 3-5% a year). At compounding interest rates of 8% per year, the money will end up growing into a magnificent investment portfolio of over $1 million USD.

Another magical thing, is if I invest this money all into a Roth IRA (post-tax retirement account) then I would owe a flat $0 on taxes for all of this beautiful money. “What? You’re joking right? Okay… I believed the magic show before, but now you’re definitely getting unrealistic. You better have another Einstein quote for this one, or I’m not listening.” Wait, but I’m serious! With a Roth IRA, you pay taxes on your earned income, then invest it post-tax into the account so that it is tax-free once it matures later in life! You’ve already paid the tax once, and that money will go to work for you and grow into a fortune that you won’t owe taxes on in its maturity! You’re welcome for the life saving hack here.

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In closing, instead of letting those greedy banks and corporations get rich from charging you compound interest, let’s flip the narrative. Together, through learning and diligent saving, let’s create better versions of ourselves. Oh, and of course becoming a millionaire by the age of retirement is a wonderful outcome as well.

I think we all “want” to be rich. However, money isn’t always the best motivating factor. In my case, I honestly believe I suffer from ADHD (need to get this checked out). This leads to me wanting to work 24/7 instead of entertaining the thought of relaxation. The outline below helps exemplify my goals, and what I want to do to help build my future livelihood.

Active Income Sources:

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1. My day job (full-time): Project manager at an engineering consultant firm. I’ve been in this field of expertise for over 4 years now. It whole-heartedly pays the bills, but clearly isn’t enough for my ADHD mind!

2. My nights and weekend job (part-time): Real-estate agent. Learning the business of real estate, helping clients select their future dream home. Currently just finished with courses, and will be taking the final exams soon. After that, all that’s left is that I need to partner with a real estate brokerage and start networking to find clients!

3. My passion job (extremely part-time): YouTube video creator. It’s a passion of mine to educate others in the world of finance, psychology, and general life advice. I also truly believe that videos are the best form of media to consume. This comes in the form of a video or two a week, that will forever compound down the road.

4. What you’re reading (extremely part-time): Blogging and book writing. A great way to put my anxieties down onto paper, and to unwind at the end of the day. I spend so much of my time learning, so it’s great to write and help communicate this knowledge to others.

Passive Income Sources:

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5. Retirement and investments: Stock market investing through the forms of 401k account, Roth IRA, and also a personal investing account from time to time. Adding small chunks of money into these after every month’s paycheck. These accounts will continue to expand due to stock market growth, which and also dividend income in some cases.

6. Real estate: Purchase my first rental property soon, and utilize a property manager to help deal with any issues that come up. This property will continue to return monthly and yearly income. This will also allow me to pay down the mortgage over time. The goal is obviously to buy more than one property down the road!

7. Drop shipping and product sales: Establish an online business, that allows me to be the middle-man between a manufacturer and a customer. I would keep certain items in stock, that would have long shipping and wait times from their manufacturer’s. I would then provide them with quick shipping and convenience to my customers through Amazon Prime.

The world around us will tell you that money IS happiness. Watching celebrities and rich people alike, the average person’s mind will think that they have something better than them. The status, the wealth, the happiness, hell… what more COULD they want? The truth may be shocking to the majority of you reading this blog. Let’s dive in!

Would you rather cry your sorrows away in a 30 year old Honda Civic (basically worth less than a pack of gum), or a brand new Lamborghini Aventador (half a million dollars)? Let me try out my expertise here… mind-reading psychic. I can almost bet that you clearly picked the Honda Civic, because it’s a reliable car that will last you as long as you inevitably need to cry for. Comedy aside – clearly the Lamborghini sounds more appealing, right? But why is that?

Princeton University conducted a study in 2010, which observed the correlation between money and happiness. This study found that day-to-day happiness increases with the more money you make. However, this is only up until a capping point of $75,000. After this point, it was found that there are no additional benefits found for happiness. This brings us back to the question – Can Money Truly Buy Happiness? According to this study, happiness actually reduced in the participants with anything over the cap of $75,000. There’s a wide range of reasons why this could be happening, but let’s start with the obvious.

Money in essence, is best described as a tool. When you think of a tool, this typically means an object, or instrument, that is capable of performing a task, or action. Side note: I’m actually writing a book called The Money Formula – which directly describes the phenomenon I’m explaining. Look out for the upcoming release date if you want a deep dive into money. Money, when used as a tool, can provide infinite opportunities. However, just because you can purchase a new car or house, does not mean that you will be happier in your overall life just because you own more possessions.

What research has found is that if you have an extremely low income, you may struggle to afford the basic necessities that you need in every day life. This would not even allow you the opportunity to have fun, or buy nice things when your primary goal is to simply survive; let alone be healthy enough to get through each day. So what ends up happening? The study found that at it’s $75,000 “happiness cap” you will have reached a solid level of income to not only survive but to thrive. This can allow you to now afford some nice things, and will even allow you to spend money freely on material things, in most cases. Now that you’re here, further happiness is dependent on you. Oh, and also what it is that you actually want out of life. For example, it doesn’t matter whether you drive a brand new Honda or a brand new BMW; you will get from Point A to Point B in the same way: driving. Do you feel happier? Do you feel like a cooler person in the more expensive BMW? Does your mind care that you’re a narcissist and want to focus on trying to impress others in your fancy car? The reality is: NO!

However, let’s take a similar scenario but on the opposite spectrum. If you are struggling to pay bills, and have a 30-year old car that likes to have a temper tantrum worse than your two-year old, you end up in a different scenario. It might be a miracle if this thing starts the first, or even the tenth time. Would you feel happier if you didn’t have to fight with this car every day – hoping to get to work on time for once in your life? Imagine not having to make a dramatic excuse for why you are late for the eighth time this month. Maybe you have to call out because you’re late, and have to take the car to the mechanic every few weeks… this truly is a problem. Operating in a life of scarcity does allow money to have a profound impact on your happiness; but, once your needs are met and we your car is operational, further happiness depends on you.

Again – money is a tool, which allows for more opportunities to be happy, but money itself is not capable of making you happy (especially after the “happiness cap”). Once your basic needs are met, the money becomes opportunity towards other things. Many people would love to have more money, because they see all of the things they could buy in their head. In reality, you will not be this beaming ray of sunshine with any number of material possessions you own. You have to dig deep – and search what it is that would make you happy… because, shocker, it’s not money.