How to manage your money like the rich

This is a must watch video by Tom Ferry.

This concept is extremely effective at helping to manage income for both home and business.

How much is my Miltary Retirement worth now?

It's easy for Military Members to feel like their Net Worth is always undervalued because their retirement benefits are not calculated like civilians.


Well now you can. It's a pretty easy financial calculation. Here's how its done.

• You calculate how much you will most likely receive during the course of your retirement
• Then you find the present value of that total number as it's valued today
• This is a good rough estimate

The steps are as follows:

1. Calculate the future value of your retirement:
1. Retirement Monthly Payment X Number of Years in Retirement X 12 Months = the Future Value of your retirement
2. Calculate the Present Value of your retirement using the Present Value Calculator provided:
1. http://www.investopedia.com/calculator/pvcal.aspx
2. Use .58 for the interest rate (this is 7% return divided by 12 months)
• 7% is the typical return for a low risk investment
• This is what someone would value this investment over several years
3. Number of Periods = (Years in Retirement + Years till Retirement) X 12 months
3. The number this calculator spits out is the Present Value of Your Retirement

Why this works:

• You would never sell your Retirement benefits but theoretically you could
• This enables us to place a basic value on the retirement as a whole
• Once you have a good idea of a monetary value you can figure out present value

Why this is still a big estimate:

• This still doesn't account for your healthcare and other military benefits, you could theoretically add those into the calculation
• The value of this get's significantly less the further out you are from retirement
• This also doesn't take into account that your retirement is not guaranteed as well

It's important to understand your retirement has a present value so you can see that you have built net worth over time even though that net worth is not available right now.  Well, neither is any retirement savings so it shouldn't keep you from using it as a value.


Tony D.

How to make 100,000 dollars in 5 min

Making money make money is not nearly as difficult as it's made out to be.  This is because a of a magical little secret called compounding interest. Let's look at a simple example.

 

• Does this sound a little too easy?
• It's really not. This is based off of only 7% annual interest. The stock market and most low risk investments make around 10-13% per year.
• I use 7% because it's really a worst case scenario and very conservative. Even with 7%, getting to 100k is relatively easy.

• The reason this works is due to the compounding effect of interest.
• So at 7% interest and contributing 100$ a paycheck, you easily get to 100k in 25.5 years.
• So let's get started.

• My #1 recommendation is to start with a big reputable company like Schwab, Fidelity, or USAA.
• If you're in the military, use the Thrift Savings Plan.

Make sure to subscribe for more info and tips.

Tony D.

 

Start saving now, don't wait to pay off your debt - save now or pay later

By far one the hardest decisions people have to make is whether to start saving money now or wait. The easy answer is to wait.

"I'll get around to it."


"I need to pay off some debt first."


"I need to work some stuff out first."

Wrong, wrong, wrong... super wrong.

Start saving now. I'll show you why.

Money grows in investments. It's this magical thing called compounding interest. Debt also grows if you don't get a handle on it but it actually is limited to a fixed rate.


Money grows faster than debt because of compounding interest.

• This is what a basic savings plan looks like with compounding interest.

• If you wait to start your investment plan. Like in this example it pushes your whole timeline to the right.
• Since investments grow faster later, the effect is toward the end.

• As you can see waiting to start your investment plan has a huge effect later on. This is the part that most financial planners leave out when they tell you to pay off your credit cards first then invest.
• The real answer is to start investing first and start to pay down your debt as you can.
• Investing is more important in the long run.

• The name for this is Opportunity Cost.
• Opportunity Cost is the cost of doing one thing over the other.
• So what happens to your debt?
• As long as you don't make it worse, it just turns in to a regular expense.
• Compared to your investments which continue to grow.

This is not magic or voodoo, but it is important to know what the best course is.

So what do I do?

1. Start saving money now.

2. Start to pay down your debt, slowly and responsibly.

3. The big thing is to not make your debt any worse. Just get it under control and start saving.

Subscribe for more articles.

Tony D.











How to create a simple budget: Budgeting 101

Learning to budget seems a bit overwhelming but it's actually really easy. Let's get started.

 

• Building a budget is simply splitting your income into categories.
• A simple way to look at these categories is wants and needs.

 

 

• You need to just adjust your categories by what's really most important.
• Once you change your categories, lock down the saving and debt payoff category.
• You should strive to save 15%
• You should be paying off debt with about 10%
• This is a good place to start. Doesn't have to be perfect yet, just get started...

 

• This is a fairly typically good conservative template to get you started.
• Save 15%
• Pay Down Debt 10%
• Normal Expenses 65%
• Housing 30%
• Normal Reoccurring expenses 35%
• Car
• Food
• Groceries
• etc...
• I like to have a junk category 10%
• Do whatever with this...

 

• Now let's look at why you should budget.
• Your Net Worth is your Assets minus your Liabilities. Yes... this can be a negative number and usually is in most cases.
• My net worth was always negative up until about halfway through my career.
• Don't confuse Net Worth with Self Worth... Seriously, don't let this get you down, this is just a place to get started.

 



• Assets are those things that make you money or pay you.
• Liabilities are those things that take money away from you or cost you money.
• One of the best ways to think about it is your net worth is a bucket. Water going in is your assets, liabilities are holes in the bucket.

 

 

• The most important thing to understand is the difference between rich people and poor people.
• Rich people grow their assets and shrink their liabilities. This hits a tipping point where your assets begin to produce much more than your liabilities and your wealth grows very quick

 

• This is where most people get discouraged.  But this is the big secret. All you have to do is begin to shrink your liabilities and begin to grow your assets.
• You don't have to fix everything overnight. Just start the process by chipping away at your debt and liabilities and start to slowly build your assets.

 

• Getting started is always the hardest part. Here's the best way to get started.

1. Start saving. Before you do anything else. Start to save 10-15% of your income. You can learn what to do with it later. It's important to start now.
2. Take a real look at  your budget and see where your money is going. Start to think of ideas how to get your budget under control.
3. Begin the process of isolating your expenses and liabilities. Identify and start chipping away at your liabilities and expenses.
4. Learn, learn, learn... There are a ton of great resources out there. The most important thing is to start to learn.
5. Start to grow your assets.  Remember, your assets pay you. Rich people make money from money. Even the money they do earn they put to work and it makes more money.

 

This is only the beginning but a great place to start. Subscribe to Commando Systems for more guides like this.

Good luck. You're on your way to being wealthy. One baby step at a time.

Tony D.

Rich Dad Poor Dad - honest review

Rich Dad Poor Dad is a book by Robert T. Kiyosaki

Get it now. 

It has a a 4 out of 5 star rating on Amazon with around 5000 reviews. This gives it some serious street cred.

I listened to the unabridged version on Audible.  First of all, unabridged means the whole book read just as it's written. I'm not a fan of unabridged versions but it's usually the only type available.

The Good:

• The initial story about his 2 dads is priceless and awesome. 
• The concept that the rich get richer and the poor get poorer is dead on.
• The fact that real financial education is not taught in schools is 100% accurate.
• The rich get richer because they make money, not just earn it. The money they do earn is just used to make more money. 

The Bad:

• I'm not that interested in hearing about his shady real estate investments that made thousands in a day. He's been studying real estate his whole adult life.
• He should be a little more up front that his largest income is from writing these books.
• Most of the middle of the book is vague and anecdotal to the point of wandering a bit. 

The Awesome:

• The concept of being good a bunch of stuff, especially selling, rather than awesome at one thing is profound. 
• The concept of creating money from thin air is actually really good. Poor people earn a living, rich people make money from the money they earn. You don't need a high paying job to be rich. You need the correct mindset.  
• Pay yourself first, then taxes, then your bills. Good stuff. 

In summary, this book get's a thumbs up from me. The 5$ invested in the book will pay you millions years from now.

Get it now. 

Tony D.