Femillionaire: The Movement

By reading this post, you’re ready. Or maybe you don’t know if you’re ready, but your curious.

Either way, you’ve found the right place.

Whether you’re sixteen and just discovered spending money, twenty-two and lost AF with student loans, thirty-five and in debt to your eyeballs from your twenties- you’re here. You’ve done the hardest part, which is just showing up and paying attention.  I want you to know this isn’t complicated and you can take control of your finances and take control of your life.

Welcome to Femillionaire. You’re already on step 2.

What is Femillionaire?

Femillionaire is exactly what it sounds like Female + Millionaire, Femillionaire. Maybe it’s tacky, maybe it’s catchy. Either way, I don’t care. What I do care about it turning you into a financially independent, strong woman.  As you read Femillionaire material I want you to feel empowered and given the tools to be successful right now with your money and successful in ten, twenty, and thirty years into the future. Femillionaire is my way of educating women and girls to actively be involved with their finances.

With the steps, tips, and advice I give, your future millionaire status is set in stone. You’re not going to be selling shakes, teas, or wraps. You’re going to be investing. You’re going to be smart. Your definition of financially independent means you don’t have to work again- ever. Not a hoax work from home job.

Welcome to the Party.

Who is Femillionaire for?

Femillionaire is for every woman who doesn’t know how much they make per pay period, for every woman who doesn’t know how to invest, for every woman that has stayed in a terrible situation due to lack of money. Femillionaire is for eradicating fear in women over money, for educating women on how to handle money. Personal finance isn’t taught in schools, and outside of school usually boys get ‘the talk’ when it comes to finances. We’re breaking down barriers between women and their money.  We’re building the next Buffetts and financially secure women who aren’t afraid of living a life they deserve.

Let’s cut it short- how do I become a Femillionaire?

You need to have passive income. The most typical type of passive income is investments, like ETFs. You invest your money, it earns you more money in the stock market, and eventually you’re at a big, fat $1 million.

It’s a bit more complicated, and it takes patience and diligence. Femillionaire isn’t a diet pill, it’s a life style change. If you want to drink tea that makes you shit, look elsewhere, sis.

Femillionaire will give you the education to understand the brief how to above. Femillionaire will hold your hand and guide you- and hold your hair when you puke.

Wait- but why do you even want to become a Femillionaire?

Maybe your goal isn’t to have a million dollars or more.

That’s okay, but you’re wrong- we’ll get to that later.

Most likely right now you want financial stability and I applaud and cheer your for that! Femillionaire will prove useful for you to decrease your debt, and increase your net worth. Following Femillionaire advice will pull you from living pay check to pay check to thriving in today’s world.

Maybe you already have a 401k, but are unsure of how to set up an IRA, or how to choose a Traditional vs. a Roth. Again, Femillionaire will be valuable to you too!

Maybe you’re already a Femillionaire and you like reading positive shit. Cool, welcome! I would also love to hear your story!

No matter where you’re at with your journey, I want to invite you to Femillionaire. I want you to feel confident that you will become a millionaire and take control of your finances.

Welcome to the Party – Let’s get started!

 

Female Fridays femillionaire

WARNING: Bad Debt Ahead

Helllo!~ Another week, another financial blog post. How has your week been? Mine has been going pretty well, and I am super stoked about today’s topic.

Did you know there are two types of debt? Now, I know if you’re reading this you think debt is most likely bad. That ALL debt is bad. Bad, bad, bad. But, what if I told you there is Good and Bad Debt? I mean… most debt is BAD, but there are some good guys too.

Today I want to focus in on those bad guys – the bad debt, and see what it is and how we can combat getting ourselves into it.

 

Defining Bad Debt

Bad debt, in the Personal Finance sense, is debt that has massive depreciating value or has an extremely high interest rate. A high interest rate I would consider as anything >6%, because that’s definitely worse than long term market gains. But, a mortgage isn’t bad debt and neither is a business loan (for the most part), so if an interest rate is >6% on either of those things, I would not consider them bad debt, except in extreme circumstances.

 

What is Bad Debt? – Common Examples

 

Credit Cards are the most common form of bad debt. Do you know the interest rate on your credit card? Most are >18%! This rate is significantly higher than most consumer loans. The payment schedules are also maximized so the debtor will owe as much money as possible.  Any type of balance on a credit card is never a good idea.

Cars are the second form of bad debt. How many people do you know with $30,000/yr income or $60,000/yr income with cars that are $30,000 or more? Thousands of Americans fall into this trap of having a high car payment. While the interest rate on car loans is often low, transportation costs per month should be <10% of your income. This includes gas, maintenance, registration, and a car payment. Having a car payment you can’t afford on an asset that loses thousands of dollars in value within months is never a good idea.

Consumable Goods America, and many globalized cultures value spending money and the “consumer debt”. Have you ever gone into debt during the holidays, or spent more than you planned? This is consumer debt and most things bought have no or little resell value.

“Transportation costs per month should be <10% of your income. This includes gas, maintenance, registration, and a car payment.”

 

How to Avoid Bad Debt

If you’re familiar with personal finance or the Femillionaire mindset, you know exactly what I’m about to say. If not, that’s okay! Welcome to the club.

Step 1: HAVE AN EMERGENCY FUND. I cannot stress this enough. Seriously, you need to have savings set aside for when shit hits the fan- because it will, and usually it’s a lot of shit all at once.  Just start. saving. now. Even if it’s only $15 a month, having a $100 emergency can compound into $200 very quickly when put on credit cards.

Step 2a: Be smart and have awareness of your financial situation, especially when buying a car! Buy a car that you can afford, has low monthly payments, will be paid off in 36 months, and that you can put a big, cash deposit down on. I know this is a lot and often means you won’t be buying a new car, but there are so many used cars that are only a couple of years old, have low miles and are incredibly reliable.

Step 2b: Buy a reliable car! Research which brand/years are most reliable. Generally, you can never go wrong with a a Honda Civic, Honda Accord, Hyundai Elantra, or Hyundai Sonata.

Step 3: Self Control. This is going to be one of the more challenging steps (if not the most challenging!). You can have an emergency fund and an affordable car, but still lack self control.  If you don’t have self control,  you’ll find yourself in a cycle of gaining bad debt, paying it off, and taking on more bad debt.

 

“You can have an emergency fund and an affordable car, but still lack self control.”

 

The Bottom Line

Bad Debt is, well, bad.  It’s bad for your wallet and your mental state. Avoiding bad debt at all costs should be your primary goal. If you already have bad debt, paying it off before all other debt should be your priority.

 

Have you ever had bad debt and paid it off or are in the process of paying it off? I would love to hear your stories below!

 

Female Fridays Finances financial independence

2019 IRA LIMIT INCREASES by $500!

You heard it here first folks, in 2019 IRAs are increasing their limits from $5,500 to $6,000 per year. The $6,000 contribution is based on the government’s fiscal 2019 calendar, which starts in April 2019, but you should be able to start contributing larger amounts for the Fiscal Year starting in January. Just make sure you’re 2018 IRA account is already maxed!

How Much Should you Contribute per Paycheck to Max Your IRA?

  • If you are paid monthly (12 paychecks/year) and you max it out in 12 months, you need to contribute $500/paycheck to max out a 2019 IRA.
  • If you are paid bi-monthly (24 paycheck a year) and you want to max your IRA, you need to contribute $250/paycheck to max out a 2019 IRA.
  • If you are paid bi-weekly (like me! 26 paychecks a year) You need to contribute $230.76/paycheck to come close to maxing out a 2019 IRA. You’ll need to contribute an additional $0.24 to reach $6,000. Easy peasy.

 

For me, this increases my per-paycheck contribution up from $212 to $230. I’m not quite sure if I’ll be getting a raise this year as I plan to negotiate for more PTO, way more PTO.

But, I also may not be doing the per-paycheck method anyway. I anticipate a bonus of ~$3,000 and if I actually receive it I’ll dump it all into my IRA to already have it half maxed.

 

Do you max an IRA every year? What method do you use to max it out?

 

Finances financial independence

August 2018 – My Road to Financial Independence

My Road to Financial Independence 201808

 

This is the introductory post to my journey to Financial Independence. I’ll probably do these quarterly or even semi-annually, with a large one done every January for a true annual check-up.

My current goal is to fatFIRE between 45 and 50 with $3.5Million in invested assets. This does not include any equity in property or cash. With this fatFIRE amount, I’ll be able to take 3+ international vacations a year, buy whatever I want, and maintain a very fun and social lifestyle. This amount would also mean I no longer have a mortgage or am very close to paying the house off. I assume if I have a partner at this time, they’ll have their own assets or will continue to work.

This number can always change, and who knows, once I’m fully FI I may not want to Retire Early. But this is my goal for now.

My Road Map to My Current Status

September 2014

-$25k Networth

May 2015

-$16k Networth

January 2016

$0 Networth!

  • $4,500 in a 401(k)
  • $4,500 in student loans left

March 2016

  • Debt Free!
  • Salary increase to $70k, still contributing 10% to 401(k)

January 2017

  • $18k Networth
  • Emergency fund funded!

January 2018

  • $50k Networth

August 2018

  • $93k Networth
    • $18k Cash Savings
    •  $7k Checking/Savings that will be used eventually
    • $68k Invested in RothIRA, 401(k), HSA, and brokerage
    • $2K in Crypto, going to HODL this
    • Currently have 2k on my credit card (this gets paid monthly)

Current and Future Goals

I turn 25 this October and my goal by January 2019 is to be worth >$100k. Right now I’m on track to be there, I just need to be careful with holiday spending. I’m also throwing a large birthday party in October and I’ll need to monitor those costs.

My current job does not have a 401(k) and maxes my HSA for me. So I have no pre-tax savings on my income.  Of my take home pay, I invest 47% and save 19% for a total savings of 66%. I do save other monies, but it’s all earmarked to be spent (i.e. I save money to travel, but don’t include it in the 19% savings above). The cash savings above is for various things, a new car, getting my teeth done, maybe a boob job, maybe for a one-day wedding, a house down payment, etc.  This is also my emergency fund (although that is currently fully funded).

If I want to buy myself something nice and “save” for it, that money also come from elsewhere, not from my cash savings.

In 2019 my goal is to invest $45k and save $6,000 cash.  Ideally, if the markets stay stable my net worth at the end of 2019 will be slightly over $150k. But the faster my NW grows, the better. I’d love to push for $200k. I also don’t make “Net worth” goals in the short term, the market crashing is out of  my control. Most of the money from my 2019 goal can come from my main income. But, I strive to diversify my income as well. Follow those pursuits in my Extra Income category!

financial independence My Finances

How I Paid off $25k in Student Loans in 18 months while Making $50k a year

High dollar student loans are the struggle that the majority of millennials understand- 63% have >$10,000 in student loan debt. Pair that with the poor financial decisions often made in their twenties *cough* credit cards  *cough* and a lot of millenials are in rough shape

I took out a little over $25,000 in student loans, $5,500 through Sallie Mae with a floating interest rate of 9 – 12% (yikes!) and the rest were all federal subsidized/unsubsidized loans with the highest interest rate being 4.65%.

My plan, when I went to an in-state college, was to minimize my debt. How did I do that? I graduated in three years, applied for every scholarship I could (I went to China for free!), and was extremely frugal.

For me there was no Plan B if I graduated and couldn’t find a job. My parents were out of the picture and I wasn’t sure about living with my boyfriend at the time. I was 100% on my own, both in college and out of college.

While I was in school, I worked different jobs, mainly in the campus offices. I wanted to get some relevant office work on my resume to help me find a job. I worked anywhere from 15 – 40 hours a week while taking 18 credits every semester.

A very Frugal College Experience

My life wasn’t fun in college. Looking back, I wouldn’t go back to those years at all. I was depressed and stressed for three straight years. But future me is appreciative of how past me treated loans. I considered them as not my money . And the thing is, student loans are not your money for booze, parties, and eating out every meal. Student loans are so you can afford to be a student- the bare necessities like tuition, housing, food, and basic transportation.

My Freshman year, I did live on campus, which is where most of my debt came from. I think it was somewhere in the neighborhood of $6,000. The next set of debt came from a Chinese Summer program I did in Indiana, that was another $5,500. The rest of the debt, comes from federal loans, both subsidized and unsubsidized.

My tuition was covered (for the most part) through an academic scholarship and covered four years of education. All I really had to cover were living expenses.

I started getting into personal finance at the end of my Freshman year. I loved reddit’s personal finance  and started using different programs to track my expenses. After realizing I didn’t want to graduate $40,000 in debt, if I were to go to college all four years and live on campus, I grabbed a friend and moved into an apartment right off campus. I could still walk/ride my bike everywhere.

My monthly budget for living expenses in my Sophomore and Junior years were pretty similar and break down as follows:

  • Rent  (utilities included) – $310/$400
  • Groceries – $150
  • Phone – $45
  • Internet $17/35
  • Misc. $50

The max total I ever spent in a month on non-school related items was $680, and that would only have been in my junior year if I spent all my grocery money and all of my Misc. money, which never happened.

The cost difference in rent and Internet is that my Sophomore year, there were three of us in a two bedroom apartment and my Junior year, just two of use.

The apartment we lived in wasn’t new. In fact, it was about 60 years old and besides carpet and 50 layers of paint, had never been renovated. The oven was so small it could only fit the smallest cookie sheet in our pack of  cooking sheets. Everything in the apartment smelled kind musty and old. The tub would flood whenever it rained. And, we got bed bugs.  BUT the money that that apartment saved me was real. Thousands of other students were flocking to the new high rise apartments that cost $750/month for one room in a four bedroom apartment, plus utilities. No, I didn’t have stainless steel appliances, but I did shave off time on my student loan debt sentence.

A note on the Misc. category. This money was rarely spent. This money was for deodorant, shampoo, necessary personal care products, and the very, very rare meal out. My sophomore year, my parents got divorced and amid the divorce I was able to hoard all the shampoo, conditioner, deodorant, and clothes detergent that was built up. I didn’t have to buy shampoo or conditioner the entire time I was in college.

But everything else, I rationed. I allowed myself to use 1 razor for every 2 weeks, and did I take care of that mid-priced three blade razor. I would stretch out my body wash by adding water, cut lotion bottles and toothpaste in half to get out every last drop. Living frugally in college was absolutely utilizing and using everything until you were forced to replace it.

And for my food budget, I ate a lot of rice and beans, beans and rice, just beans, and just rice. But I also ate a rainbow of eggs, spinach, apples, strawberries, frozen veggies, and Trader Joes’ mini pizzas. I had lost 50lbs and wanted to keep it off, so no, I didn’t eat Ramen every day.

What I didn’t splurge on in college defines my frugality just as much. I didn’t buy new clothes for three years (even after losing weight), I didn’t get my hair cut, I didn’t own a car, I didn’t buy booze, I didn’t have time to party. I took care of myself mentally and physically and hoped for the best in my future.

Starting in my Junior year I was re-paying my Sallie Mae loan from my paychecks (literally, my whole paycheck), and living on my other loans.

Finding a Job and Paying off My Loans

I knew I could graduate at the end of my junior year if I wanted to with a major and two minors. That was the goal, but I would need a job first. Plan B was to stay at university and take a minimum amount of classes, and earn enough money to pay for my expenses until I found a full time job. Or multiple full time jobs.

I applied to over 50 positions in the Fall of 2014, I was set to graduate in May of 2015.

I heard back from two. One was a denial letter. One was an interview offer. I interviewed in mid-January and accepted my first full time job two weeks later, earning $50,000 a year.

This was the most money I had ever seen in my life. I set up my 401(k) to take 10% of my base. I had $6,000 of unused loan money in my bank account and while I became comfortable at my new job (while also taking 18 credits my last semester), I slowly started paying back the $6,000 as well.

I graduated with about $16,000 left in student debt.

I think my paychecks were something like $1,345.00, and I felt like I had made it- that everything would be okay.

Hunkering Down

Due to a problem with our apartment, my friend and I split ways. My ex-boyfriend helped me buy a car on craigslist for $2,500 and I got my own place. My rent has skyrocketed up to $975/month and utilities for an additional $140 (Arizona is HOT). And while I wish I could have stayed at that apartment longer to save money, living on my own after all those years was fantastic.

I had a car, which was freedom. A gym membership. And I even spoiled myself with the occasional makeup product.

But at this time I never had more than $1,200 in my account – which scared me shitless and I was paying down my debt as fast as possible. If an emergency did happen, I could just not make a loan payment.

I got a kitten during this time too.

My 22nd birthday went by and I bought myself Kat Von D’s Shade and Light Palette. I cried. I was so excited.

And for the next 5 months I would get paid and immediately pay what I could uncomfortably afford to pay for my student loans.

The End

March of 2016 was when I made my last student loan payment. I went to work and told coworkers double my age about it. Most were proud of me, and many mentioned their own student loans that they were still paying off. It was one of the happiest days of my life, no longer being debt free, being able to hold more than $1,000 in my account because there is no debt for it to go to.

I had also just gotten a $20k raise. My next check, the very first check where no student loan needed to be paid, was all mine. I had a really, really fun shopping trip to Sephora, upped my 401(k) contribution, and never looked back.

Finances My Finances student debt