Category: Make More Money

How My Emergency Fund Helped Me Land My Dream Job

How an Emergency Fund Helped Me Get Dream Job

Posted on by kaitlyntessmer

“Life is like a box of chocolates. You never know what you’re gonna get.” Amen to that, Forrest Gump. Life is crazy, beautiful, and often times unpredictable. Let me tell you how one of the hardest, scariest times of my life turned out to be the biggest blessing in disguise. How having an Emergency Fund helped me land my dream job.

Getting Laid Off

I vividly remember sitting in the CEO’s office and having the difficult conversation: I was going to be laid off, effective immediately. You see, I worked for a Silicon Valley startup. Joining a startup is risky. The company may take off, it may go under, or it may get acquired. While I knew the CEO’s hands were tied, I couldn’t help but feel a sense of panic. I left the office, cashed my final check, and a flood of concerns ran through my mind. What was I going to do? How was I going to survive? When would I find another job? Shocked and scared I drove home.

How Was I Going to Survive?

Once I got home and had some time to digest what had happened, I decided I needed to take control of the situation. My first step was to answer the question: How was I going to survive?

I needed to get my finances in order. So, I sat down, looked at my bank account and felt an immediate sense of relief. Before joining the startup I had built a 6-month Emergency Fund. My Emergency Fund had already come in handy many times over the last few years. When my car was flooded, my MacBook was stolen, and when I got laid off—I was always surprised—but having an Emergency Fund meant I was financially prepared.

I honestly can’t tell you how much of a relief it is during times of crisis and uncertainty to know that you’re going to be okay. In this case having a fully funded Emergency Fund allowed me the freedom to dream. Sure, I didn’t have a job and I had no clue what was next. But having that Emergency Fund meant I didn’t have to take just any job. It allowed me to take the time to figure out the next best step for me.

What Was I Going to Do?

I’m a firm believer that life is what you make of it. Sure, it would have been easy to complain to my friends and family that I was dealt an unfair hand. But what would that accomplish? I decided to take life by the proverbial horns and make the most of my newfound free time. I suddenly had an extra 8 hours a day to do whatever I wanted. I decided to focus most of my energy on doing what I love: providing financial tips to millennials.

Every day during my unemployment I woke up at 8:00 AM, worked out, and headed to the public library. I edited YouTube videos, wrote blog posts, created an ebook, and read countless personal finance books. It would have been easy for me to sleep in, watch reality TV shows, and eat junk food all day. But I knew those habits weren’t going to make me feel good. Doing what I loved, putting all of my energy into something that would help people feel confident and secure, that was how I was going to turn a bad situation into a blessing.

Gaining Momentum

A couple of weeks into my unemployment I received an email from a writer for Grow, the Acorns blog. Taylor had discovered my YouTube channel and wanted to interview me on how I was able to save a large portion of my income. I was ecstatic. After working tirelessly to provide great content, someone had noticed and wanted to learn more. I was channeling my passion and it was well received. I wholeheartedly believe this was the universe rewarding my moxie.

Would I Find Another Job?

A few months after getting laid off I received another intriguing email. Jeff discovered my article on Acorns and wanted to chat about personal finance. We met and had a fantastic conversation. We shared many of the same viewpoints and he mentioned he worked for a company working to help people take control of their finances. I left our meeting feeling invigorated and wanted to learn more about the company. I was excited to talk more about where the company was going, what the culture was like, and ultimately what the company believed in.

It turns out Jeff left the conversation with an equally positive experience. He ended up introducing me to his colleagues, and one meeting led to another. Before I knew it I was in a boardroom presenting to the CEO and getting offered a position at BrightPlan.

Turning Tables

Fast forward a few months and today I can confidently say I have my dream job. Before, when people would talk about how much they loved going to work I would secretly roll my eyes. I didn’t believe that people could honestly enjoy their jobs. I knew you could like your job but to love your job was a bit excessive.

Now I am proud to say that I am one of those people who loves their job. You see, I believe that anyone can be wealthy, it just takes time, planning, and a lot of patience. Today I find myself stepping into the office, lucky enough to work with a talented team who share that same belief. I have the opportunity to work with a group of people who are just as passionate as me about helping others achieve their financial goals.

Life Has a Way of Surprising You

Life is funny. One minute you may be living your best life and the next day life decides to knock you over the head with a 2×4, just to see what you’re made of. We can’t always control what happens to us but we can control how we react. We hear financial experts telling us why an Emergency Fund is crucial. We know it’s important but don’t always realize just how valuable an Emergency Fund can be. Take it from someone who has been knocked down once or twice: having an Emergency Fund was one of the best things I could have done for myself.

You never know what tomorrow brings but you can plan and prepare. That way, when something unexpected and scary does happen it doesn’t have to be the end of the world. And who knows? Maybe, it could end up being a blessing in disguise.

This post was originally published on The BrightSide.

Top 5 Millionaire Habits

Top 5 Millionaire Habits

Posted on by kaitlyntessmer

When you think of the word “Millionaire” what comes to mind? Oceanfront mansions, Lamborghinis, personal jets, and a life of luxury? If those things scream Millionaire to you, you’re not alone. In fact, often times when I think of Millionaires I think of celebrities vacationing on private islands and shopping on Rodeo Drive. Recently, my eyes have been opened to the fact that anyone can become a millionaire. You don’t need a six or seven figure salary to join the Millionaire’s club. You can take steps today to prepare your bank account for a nice pile of cash.

The Millionaire Next Door

If you haven’t read Thomas J. Stanley’s, Millionaire Next Door, you have to check it out. I highly recommend renting a copy for free from your Public Library. But if you prefer your own copy, you can grab it from Amazon, too. A few decades ago Stanley and his colleague, William D. Danko, studied the habits of hundreds of millionaires (people with a net worth of at least 1 million dollars). Their findings will likely shock you. Almost everything they found is counterintuitive to what you and I think when we hear the word Millionaire. If you want to become a Millionaire, keep reading.

Top 5 Millionaire Habits

During their multi-year study, Stanley and Danko discovered several millionaire habits. Surprisingly, a large number of Millionaires have a modest salary. Having a high salary isn’t an indicator that you will become a Millionaire, having self-control and developing good habits are bigger indicators of whether or not you will become a Millionaire.

Millionaire Habit #1: Spend Less than You Earn

This first Millionaire Habit is obvious. Of course, you have to spend less than you earn if you want to build wealth! But the fact of the matter is, 60% of Americans consistently spend more than they earn. Don’t believe me? Take a look at one of the richest men in America, Warren Buffett. Known for his love of McDonald’s, Buffett splurges, only when the stock market is doing well. What’s a typical splurge for Buffett? Spending $3.17 on breakfast at McDonald’s on a bacon, egg and cheese biscuit sandwich.

Millionaire Habit 1 : Spend Less Than You Earn

The first step to living off less than you make is to create a budget. A budget is a great way to guide your spending. Creating a budget doesn’t have to be difficult. In fact, once you create your budget you can easily replicate it month after month. To start your budget preparation, begin tracking your monthly expenses, this will give you a baseline for how much you are spending on food, entertainment, and miscellaneous.

Check out my Foolproof 8 Category Budget for more budgeting essentials.

Millionaire Habit #2: Buy Used

One of my guilty pleasures is watching Reality TV. There I said it. I am a recovering Reality TV addict. One of my favorite TV shows used to be 19 Kids and Counting. You may have heard of the Duggar Family, they’re known for their Conservative Christian values and brood of 19 children. While I don’t agree with everything they believe in, they do have a great saying “buy used and save the difference”. Buying something used saves you money in the short and long term

Millionaire Habit 2: Buy a Used Car

If you are morally against buying used clothes or furniture, I get it. But one area of your life that you should ALWAYS buy used is you car. Cars depreciate 20% the second you drive it off the lot. So that $20,000 new Toyota you just bought is only worth $16,000 the second you drive it off the lot. Ouch! Depreciating $4,000 hurts. The average new car payment in America is just under $500 per month. To throw away money at an item that depreciates in value is insane! Most Millionaires see right past the shiny exteriors and updated navigation systems of new BMWs and opt for a more economically sound used Toyota or Honda.

Check out: How to Drive Free cars for LIFE!

Millionaire Habit #3: Choose a Modest Home

Three times more Millionaires live in homes valued at less than $300,000 than more than $1 million. Why do Millionaires live in modest homes? Housing or rent is going to be the biggest expense in your budget, accounting for 25-30% of the money you spend every month. So, the more expensive your home, the more money you will spend every month to pay for that home. Big houses come with big mortgages, big utility bills, and even more property taxes. The more money you spend every month on your home, the less money you can save and invest every month.

Millionaire Habit 3: Buy a Modest House

Most Millionaires live in modest homes that they’ve owned for decades. Take the richest man in Mexico, Carlos Slim Helú, he’s lived in the same 6 bedroom house that he’s owned for the past 30 years.

Millionaire Habit #4: Stop Keeping Up with the Joneses

You know the Joneses, they’re the people who always seem to have the newest car, newest iPhone, coolest vacation. Stop trying to one-up them. One thing you’ll never know about the Joneses is how they paid for their luxury items. For all you know, the Joneses are in debt up to their eyeballs and have no savings or investment accounts. When you try to keep up with the Joneses you overspend. The comparison trap is real. It’s easy to get sucked into having the latest and greatest and showing it off. But remember, the more you spend on things the less you spend on long-term investments.

Millionaire Habit #4: Stop Keeping Up with the Joneses

The Everyday Millionaire knows how destructive keeping up with the Joneses can be. That’s why they mind their own business. Millionaires create a monthly budget and stick to it. They don’t care what others think about them and they aren’t in the business of showing off. The Everyday Millionaire knows that having a full bank account is going to give him more happiness and fulfillment than the latest and greatest iPhone.

Millionaire Habit #5: Pay Yourself First

I’ve saved the best for last. The #1 Millionaire Habit is to pay yourself first. What do I mean by that? Most people say they don’t save enough money for retirement, invest enough, or have a big enough emergency fund, because they don’t have the money to save more. That’s why most Millionaires pay into those accounts FIRST. They treat saving like a bill.

Millionaire Habit #5: Pay Yourself First

When you pay yourself first you prevent your future self from buying a round of drinks for your coworkers at the next Happy Hour event. If you’re worried that you won’t have enough money to pay the rest of your bills, worry not! Research shows that when people pay themselves first they are more likely to find ways to meet the rest of their expenses. You’ll be more motivated to find a side hustle, sell unused items, or trim the fat off your budget.

Millionaire Habits Summarized

The Millionaire Next Door is a great weekend read. I highly recommend picking up a copy to read in more detail about the habits of the average Millionaire. As counterintuitive as it is, many Millionaires don’t spend on lavish vacations, buy luxury items, or drive the newest sports car. The Average Millionaire understands the importance of Compound Interest. When you create a budget, live within your means, and save at least 20% of your income, you can become the next Millionaire Next Door.

 

 

Compound Interest Explained

Posted on by kaitlyntessmer

The other day I was taking a look at my retirement accounts and was shocked at what I had found. The amount of money I had in my retirement accounts was way more than what I had originally invested. This got me to thinking about the power of compound interest and why it is so important for Millennials. If you work hard to invest when you’re in your early 20s, the payback will be tenfold.

Simple Interest

To understand compound interest you must first understand simple interest. Let me give you an example of simple interest to help me explain.

Simple Interest

Let’s say you deposit $10,000 into a savings account. First of all, good for you! You’ve worked hard and saved $10,000, that’s a big step right there! If you chose a credit union or online bank, like Ally, you are probably earning 1% interest on that account each year. That means every year your $10,000 will earn 1% or $100. After 3 years your initial $10,000 investment has turned into $10,300. Pretty good, right? Let’s take a look at what would happen if you had invested that $10,000 into a mutual fund with compound interest.

Compound Interest

Compound interest is the interest an investor earns on her original investment plus all the interest earned on the interest that has accumulated over time. Woah! What does that even mean? You can think of compound interest as interest on interest. It creates a mathematical explosion.

Let’s say you take your same $10,000 investment and instead of parking it in a bank you decide it into a low performing mutual fund that earns 1% interest compounded annually. Side note: most mutual finds earn way more than 1%. In fact, you have to look really hard to find such a low performing mutual fund. I digress…You still earn 1% interest but that interest is compounded annually. How does that change your total at the end of 3 years?

Compound Interest

After the first year, you earn the same $100 which brings your total investment to $10,100 at the end of year one. The second year you don’t just earn 1% on your original $10,000 investment, instead, you earn 1% on your new $10,100 total. At the end of year two, your total is $10,201. The third year your total investment compounds again. Your $10,201 earns another 1% and your new total is $10,303.01.
I get it, in this basic example, the difference in money at the end of 3 years isn’t very much. With compound interest, you would have earned an extra $3.01. Not a huge deal. But what if we look at the effects of compound interest in terms of retirement?

How Compound Interest Affects Retirement

The longer your money has the opportunity to compound, the greater the effect will be. If you start contributing to your retirement at the age of 25 keep that money invested until the age of 65 you will be blown away at the results.

Simple vs Compound Interest

Simple Interest and Retirement

Let’s say on your 25th birthday your parents gift you $10,000. My, what generous parents you have! You decide to plop that $10,000 gift into an account that earns 10% interest. Unfortunately, you didn’t do your research and the interest isn’t compounded, womp womp. After 40 years you decide to take a look at that account to see the value of your investment. Your initial $10,000 investment has turned into $50,000. That’s a pretty nice birthday gift, mom and dad.

Compound Interest and Retirement

But what would happen if you invested that $10,000 gift into an account with compound interest? Good question, I’m glad you asked! Let’s take the $10,000 your parents gave you and invest it into an account with compound interest. Hold on tight, I promise you will be blown away by the results. Your original $10,000 investment at the age of 25 will have turned into $452,592.56 by the time you are 65.

That is the magic of compound interest, my friends. Even if you never invested another penny into your retirement account you will still retire with nearly half a million dollars. You did nothing except leave that money in a well-chosen account. You never touched the money for 40 years and it has rewarded you by growing exponentially.

The Importance of Investing Consistently

If you have a large pile of cash laying around or you have generous parents who are able to gift you large piles of money, the example above is perfect for you. You are fortunate enough to take your large sum of money, put it in a good investment account and watch it grow.

The rest of us need to invest consistently. If you invest $200 per month between the age of 25 and 65 you will retire a millionaire. You read that right. If you invest $200 per month over the course of 40 years, you will end up with $1.16 million dollars. 

Don’t Have Extra Money to Invest?

If you’re strapped for cash and don’t have an extra $200 per month lying around, let’s take a step back. In fact, let’s break down the numbers. $200 per month is $6.67 a day. How often do you go out to lunch? Do you stop by Starbucks every day? What about Happy Hour, how many days a week do you meet your friends for half priced drinks and appetizers? Somewhere in your budget, you can find a place to squeeze $6.67 a day into your retirement account.

If you’re looking for a way to invest $200 per month into your retirement account and just can’t find a way to make the numbers work, adjust your budget. I use a 7 category budget to help me stay on track. By using tools like Mint and EveryDollar, I am able to easily track my spending and keep it in check.

 

Mystery Shopping 101

Posted on by kaitlyntessmer

Getting a second job, or a side hustle is a great way to put a little extra cash in your wallet. One of the easiest side hustles out there is mystery shopping. Yes, mystery shopping is a real thing and yes you can earn upwards of $100/month. Sounds like a great deal, right? Before you get started there are a few things you should know to make sure you don't get ripped off because there are people who will try to scam you.

Anyone can become a mystery shopper

Yes, that's right, to sign up with most companies you just need to be at least 18 and provide a Social Security number (for tax purposes). That's it. For each company you sign up with, you will answer a few questions about your demographic and lifestyle. Key questions include: where you live, how far you are willing to travel, how old you are, if you have kids, and if you have a club membership (like Costco or Sams Club). The way you answer these questions will help determine the types of shops you are offered. For example, if you are in your 20s you will likely be offered a lot of shops in which companies want to make sure their employees are checking your ID before they serve you alcohol. If you are a parent, your shops will likely revolve around shopping for kids items. You get the idea.

Choose a reputable company

There are a lot of mystery shopping companies out there. Some are better than others when it comes to customer service, payments, and the variety of shops. Keep in mind that while many of these companies are nation-wide some of them have a stronger influence in the northeast while others have a strong presence on the west coast. Do your research. Sign up with and try a few companies out to see which one you prefer. A few that we have tried are Confero and Intelli-shop.

Learn to spot a scam

You will need to pay for items upfront and be reimbursed when you are paid for the shop (typically within 1-2 months). So keep that upfront cost in mind when you're signing up for mystery shops. With that in mind, here are a few things red flags that scream SCAM:

  • Don't pay to become a mystery shopper. Any reputable mystery shopping company will allow you to join for free. Any company that is asking you to pay before they allow you to complete a shop is a red flag.
  • Don't wire money. Ever. You've probably heard about people who sign up to become mystery shoppers and their first assignment is to evaluate Western Union. They receive a check with instructions to deposit the money in their account and then withdraw that amount in cash and transfer it to a third party. The check ends up being fake and the mystery shopper loses a lot of money.
  • Don't get certified. This isn't a scam, per say, but it isn't necessary and is often a waste of money. Anyone can become a mystery shopper and you don't need a certification. Save your $100 and do a few easy mystery shops. This will boost your shopper rating which will open up more lucrative shops (the same thing a certification will do).

Brace your inbox

You are going to get a lot of emails. When we say a lot, we mean between 50-100 per day depending on how many companies you register with. You'll want to create a separate email account just for your mystery shopping emails. You could also turn off your notification settings in your mystery shopping accounts to reduce the number of emails you receive.

Be honest and don't exaggerate

Companies are paying you for your honest review. They're not paying for you to lie or stretch the truth. Make sure you read the instructions about the shop before you complete it. This will help you to know what to look for. It helps to type out notes on your smartphone before the shop and review them before you go into the store. As you notice the cleanliness of the store and the name of the person you interacted with, take notes on your phone, it will look like you're texting but will help you when you're filling out your report.

Final thoughts

Mystery shopping is a great way to bring in extra cash. It doesn't require a lot of money upfront and anyone can get started. Be safe and only shop with companies that have a good reputation. Let us know what your mystery shopping experience has been like in the comments below.

Reading Every Day

Posted on by kaitlyntessmer

Investing in yourself is a surefire way to help you boost your income and job security. This habit will put you in the top 1% of earners in your field within 3 years. Within 5 years you’ll be one of the most influential authorities in the nation. And in 7 years? You’ll be one of the best in the world in your field of study.

Why Read

The fact of the matter is that most Americans, just don’t read. When was the last time you picked up a book and just sat down and flipped through the pages, can you even remember that far back? Most people stop reading when it ceases to be required, i.e. after they finish school. Because of this 25% of people have not read a single book in the last year. And 46% of adults score in the lowest 2 levels of literacy.

What to Read

You can read anything, read books, e-books, newsletters, scholarly articles, journals, magazines, you name it. Naturally, the more you read the faster you will become, but the real purpose is to gain knowledge. That’s why it doesn’t matter whether you read books or e-books, the more important thing is if you’re reading quality content.

Read 500 books a Decade

Let that sink in. Right now, could you even name 500 books? Reading an hour a day equates to about 1 book per week which translates to just under 50 books a year, a decade later you will have read 500 books. That’s a lot of knowledge on a specific topic.

How to Read 1 Book per Week

The average commute time in America is just under 30 minutes each way. If you spent your commute listening to an audio book instead of the morning recap of celebrity gossip, how much smarter do you think you would be after 2 months?

According to the Wall Street Journal, the average American spends over 5 hours a day on “leisure” activities which include watching TV, working out, socializing, spending time browsing your smartphone. What if you spent your lunch hour reading a book to better your career? You would probably be less self-conscience since you’re not spending that hour looking at photoshopped images of unrealistic expectations. But how much faster do you think you would get a promotion?

 Be Exceptional

The average American reads 5 books a year. That’s less than a book every 2 months. If you start by reading 1 book every month you will be an exceptional minority. In fact, reading correlates to wealth, just look at how many books Warren Buffett, Bill Gates, and Mark Zuckerberg read every year.

Get Started Now

Get started now, go to your local library, or check out Amazon’s great Kindle selection (which offers affordable and often free eBooks), pick up a nonfiction book of interest and read. Take an hour out of your busy day to just sit and read. As with anything new, the practice will likely be difficult to begin. However, after the first month or two, it will probably become second nature and you will begin reading faster which means absorbing more knowledge.