Introducing “The Friday Five”

Friday Five

The Friday Five

The Friday Five is a new series were I share what I consider are the week’s top-five money related articles from around the web.  There are a lot of great personal finance websites publishing amazing content daily.  I hope you enjoy my five favorite articles of the week.

If you haven’t, please read my latest post on Ten Simple Ways To Save Money and please follow me on Twitter and like Million Dollar Ninja on Facebook.

In no particular order here are The Friday Five

Ten Simple Ways To Save Money

Ways to Save Money

Source: Taxcredits.net

I’ve been writing about saving for an emergency fund and towards retirement, but what if we don’t have any extra money leftover after paying for expenses?

Having a written budget is a great way to find leaks in our finances – by finding where our money is going, we can eliminate unnecessary spending and hopefully save money.  If you have a written budget and still can’t find where to cut some expenses or if you simply want to save more, here are a few simple ideas that will help you save money.

These are obviously not going to work for everybody and I’m not saying you HAVE to do them all – these are just a few suggestions on ways I save money.  You can pick and choose from these easy and simple ways to save money.

7 Must Read Personal Finance Books

must read personal finance books graphic

This list of personal finance books are a must read for anybody wanting to take control of their financial future.

It is unfortunate that personal finance is not taught in schools. But lucky for us, there are a ton of good books out there for us to learn from.

Read below for my top 7 must read personal finance books.

must read personal finance books graphic

I am the type of person that likes to read as much as possible about a topic that interests me, so when I finally decided to take charge of my finances I started reading everything I could get my hands on. 

I started reading articles, blogs, and news stories but they didn’t provide the information or satisfaction I get from reading a great book.

The following is a list of personal finance books I have read and highly recommend – these are must read for anyone looking to take control of their financial future.  

I organized them in order of different stages of financial situations – from getting out of debt to saving to investing.  

Asset Allocation – Where Do I Invest My Money?

Asset Allocation

What’s The Right Asset Allocation?

When I started my first job out of college, they told me I was automatically enrolled in the company’s 401(k) plan.  I just had to decide what percentage of my salary I wanted to contribute and where I wanted my contributions to be invested.  I then received a package from the company handling my retirement plan. There were pie charts and graphs and numbers that I didn’t understand explaining the different options I had to invest my money.  I looked at all that information and started to panic a little bit.  Where do I invest my money? I don’t want to invest in the stock market.  I’ll lose all my money.  The package also explained that if I didn’t choose anything then my funds will be placed in what looked like a savings account.  So I chose the default because I didn’t know what to do.

I now know that picking the right fund is really not that difficult when you know what to look for.  Here I am going to share with you what I have learned so we can have a better understanding of the choices available to us and about how to diversify our funds to lower our risk.  I will mostly touch on investing in our 401(k) but the information applies for investing outside of your retirement account as well.

Retirement Plan Options

I don’t know about you, but I can’t wait until I don’t have to work anymore.  I get to wake up every day and do whatever I want.  No more rushing to get to work on time.  No more going to sleep early because I have work the next day.  No more only taking one to two-week vacations because I have to go back to work.  No more having  to work because I need money.  Oh wait, money.  I will still need money to pay for my Senior Citizen Water Aerobics class and for my month-long vacations.  Where am I going to get that money?

Water Aerobics

Jump in. The water is warm!!!

This is when retirement planning pays off.

We already know about compound interest, and our retirement accounts are the best places to take advantage of compounding.  I didn’t start investing as much as I should when I started working because I didn’t understand how retirement plans worked, and I missed out on eight years of compounding.  Start as soon as possible so you can get the most out of it.

There are different types of retirement accounts but we will only cover a few that everybody should know about.

The Powerful Force of Compound Interest

“Compound interest is the greatest mathematical discovery of all time” – Albert Einstein.

  albert-einstein-about-his-quotes

 

He probably didn’t say that but I’m going to say it because to me, it was.  And this is how I plan to have a Million Dollars in savings one day.  Now, if you are looking for a way to get rich quick then this site is not for you.  Our plan is to slowly build our savings and not touch it to let compounding do its magic.  All we need is discipline and time… lots of time.  So be patient.  Just start saving early, often, and for a long time.

This is the one of the ways we normal working people become rich.

I decided to write about compound interest first because once we understand its power then all of our saving strategies will make more sense. 

Where I am now – Part 2

In part one I mentioned the steps I took to get out of debt.  Part two concentrates in building an emergency fund and laying a foundation for a comfortable retirement.  I never really thought about retirement before because it is so far away.  Now I realize I was just wasting time and money.  You might not be thinking about retirement either but you’d be surprised how fast time flies.  I mean look at me, I know I look good and all but I AM 33 years old already!

Three to six months emergency fund

Paying off your debts might take time depending on how much you owe and how much you are able to pay each month.  It took me less than six months but I put every single extra penny that I had into my debt.  Hopefully you will too.  How ever long it takes doesn’t really matter, the point is that now you should have zero debt, except for the mortgage if you have a house.

Where I am now – Part 1

My post is a little long so I decided to break it into two parts so I don’t bore you to death.  This is Part 1.

If you haven’t, please read my story so you can see where I was financially only a year ago.

Things have changed a lot since then.  Ever since I started a budget and kept track of my spending I have been able to save way more money than I thought possible.  I paid off my car and all my credit card debts.  I only have my student loans left but I have paid half of what I owed and have under $10,000 left to pay.  I no longer live with my mother.  My girlfriend and I moved into an apartment together.  I have a three-month emergency fund, which I will continue to grow, I increased my 401(k) to get the full match from my employer, I started contributing to a Roth-IRA, which I maxed out for 2013, and I was able to save extra money to buy my girlfriend an engagement ring, I now get to call her fancy girl – I mean, Fiancée.  Did you know that a Fiancé is a male that is engaged to be married and a Fiancée is a female that is engaged to be married?  Well, I didn’t.  And if you didn’t either then you just learned something today…you’re welcome.

My Story

I thought about starting a personal finance blog about a year ago but never got around to making it happen.  I didn’t know anything about blogging or how to start a blog so I just put it aside.  I did however write my story just in case I decided to start blogging one day.  Well I finally decided to start this website because I needed to document the progress I have made with my finances and to keep myself motivated to achieve early retirement.

Here is my story.