From Birch Gold Group
With an uncertain economic outlook in the U.S., it’s important that you obtain as much control over your retirement as possible.
It’s important because the Fed appears to be ignoring big economic red flags, corporations are buried in debt, and the overall “script” seems eerily similar to the Great Recession of 2008.
To help you gain more control over your retirement instead of relying on others, here are 5 “must-develop” financial habits you can adopt.
Habit #1 – Use Credit Cards Cautiously
According to the New York Federal Reserve, consumer credit card debt skyrocketed to a record $870 billion at the end of 2018. This is a big part of the $3.82 trillion in total consumer debt since 2008, another record.
At Motley Fool, they provide a rule of thumb to consider when using credit cards:
As a general rule, you should never charge more on a credit card than you can afford to pay off by month’s end. Furthermore, don’t make the mistake of relying on credit cards to bail yourself out of a financial emergency. You should have dedicated savings so that an unplanned expense doesn’t end up costing you even more in accrued interest.
Accrued interest (which is compounded) can be your enemy. The idea is to minimize this interest as much as possible.
Habit #2 – Compounding
Earning interest on top of your interest paid is a concept that, according to Motley Fool, only one-third of Americans fully understand.
For example, if you put $1,000 in an account that paid 1% compound interest quarterly, your new balance after each quarter becomes the new balance for calculating interest.
After 1Q you would have $1,010. That new balance is used to calculate 2Q payout. (The next balance to calculate interest from would be $1,030.20, and so on).
The same Fool article illuminates how this can work in your favor for retirement if you saved $5,000 a year for 40 years with 8% return:
… when we take compounding into account, what we’re doing is adding that 8% return each year and then reinvesting that return to grow our balance into — wait for it — $1.3 million.
But keep in mind, credit card companies also use this principle to calculate interest on their debt, which is why credit card debt can have more impact than you might think.
Habit #3 – Follow a Budget
According to an AICPA survey, it appears that Americans aren’t following a monthly budget for their expenses (emphasis ours):
The percent of Americans who follow a monthly budget has declined since the recession (39 percent in 2018, compared to 58 percent in 2015), according to an AICPA survey. Further, one in four Americans admit they do not pay all their bills on time and nearly one in ten now have debts in collection, according to the National Foundation for Credit Counseling.
If you’re heading for retirement, it’s a good idea to keep track of your income and expenses each month.
Habit #4 – Think About that Car Loan Carefully
The New York Fed also reveals another shocking stat: a record 7 million Americans are at least 3 months behind on their car loan payments.
Aside from the fact a car is generally the second largest purchase most people make in their lifetime, Dr. Dean Stein Smith provides an idea future retirees could consider:
Before agreeing to any financing arrangement, read the fine print to make sure you understand exactly what you are getting into and make sure it fits into your overall budget. Lastly, if there are viable public transportation options in your local area, it might make sense to explore those as you evaluate your transportation or automobile needs.
Habit #5 – Build Up Your Emergency Savings
An official report titled Report on the Economic Well-Being of American Households issued in May 2018 stated that over 40% of all Americans cannot handle a $400 emergency with savings on hand.
According to Motley Fool, you should “prioritize your emergency fund above all else”. Especially because you never know when the time will come that you need those funds.
The purpose of considering developing financial habits like these is so that you can gain more control when it comes time to retire.
JP Morgan Chase Reveals What You Have Control Over
In their Guide to Retirement 2019, JP Morgan Chase revealed a “30,000 foot overview” of retirement. They boiled it down to focusing on factors you can totally control, while still evaluating other factors that are out of your control (see graphic below):
According to the chart, saving versus spending and allocation of assets (such as physical gold and silver) are the only two factors you have total control over when it comes to planning for retirement. It would be unwise to focus only on the things out of your control while ignoring the ones within.
Some things are simply out of your control when it comes to planning, but not everything. Like the two factors shown here, the 5 habits stated above are things you have control over now to help ensure you have as much control as possible over your retirement in the future.
After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.
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These are as profound as a John Tesh “Intelligence for your Life,” pointer. I don’t remember any, but they were gems like, “Never jump in front of a speeding cement truck.” So obvious as to be useless.
How about: Get in the habit of robbing banks? Become a hedge fund trader?
Don’t you have to be a bank officer to get away with robbing banks?
Habit #6 – Win the lottery regularly.
My retirement is in silver and gold because that’s the only thing I trust. When I retire, I don’t expect Social Security to be there. When I was younger, as generations before me, I thought the Social Security money would be there as the government said so I didn’t save. It was later I learned the truth. And now I don’t trust the money system, hence, my savings in gold and silver. Learning about the Wiemar Republic is a good lesson on money.
I don’t have any credit cards. I figure, if I can’t save the money, then I definitely can’t make the credit card payments.
Kids today don’t learn anything about budgeting, finance, even how to write a check. My son didn’t even learn how to address an envelope in school or long division. I had to teach him both. Another lesson, don’t put your kids in public schools.
And, if you have to put them into public schools for daycare reasons, innoculate them by having them read decent books at home.
I suggest they start with Green Eggs and Ham.
I also recommend Dick, Jane and Sally books.
Even though my kids don’t go to Government Schools I have them do supplemental reading. “Whatever Happened to Penny Candy?” was their introduction to business and finance.
Agreed Vixen.
Not sure why you got a down vote there. Maybe someone fat fingered the wrong thumb icon.
It happens.
On the original post, it talks about compounding, a great lesson to impart to someone just entering the working world. Problem is, in the search for yield, in safe, non-risky investments, the offerings these days are few and far between.
What little is out there barely keeps pace with inflation.
And, 95% of platform monkeys know inflation is much higher than reported, so it’s preaching to the choir, I know.
See John Williams & ShadowStats, if thee be a doubting Thomas.
It doesn’t pay very much to save these days, but the wisdom of it still holds true, imho.
The alternative is to be a slave to one’s debts.
Sooner or later, there will be an accounting for that lifestyle. No thanks.
Credit cards are used infrequently, but with a strategy, and paid off each month.
I use a rewards based credit card to reload xxx.00 onto a prepaid gasoline fuel card.
Same, for gift cards offered for the most common grocery and consumer staples stores.
When at the pump, the prepaid fuel card reduces risk of credit card fraud every time I buy gas.
It also avoids having to go in to the counter, to pay with cash, to the cashier.
There’s the rewards for patronizing the same fuel station, too, with their multiple locations; it’s not
much of a hassle to do the loyalty rewards thing.
It is a form of tracking, though, for sign-up, and surely they log visits wherever one swipes the loyalty card.
But, the larger thing at play is, this strategy might be a work-around, if the cash ban accelerates.
With any spare cash savings, using it to buy prepaid gift cards is a more private way to buy the most common monthly budget consumables. Food and fuel.
And yeah, a budget makes sense.
If you don’t know where your earnings are spent each month, it’s very difficult to get a handle on
excessive spending, and determining where you can cut back, and sacrifice, if one must.
It sure isn’t getting easier.
You gave some good advice. I like the prepaid gift card idea.
When my son was born, I started putting all the gifts given him in fiat dollars into the bank. Then, I started saving all change found in the laundry and floor and parking lots in a little glass boot I purchased in Branson, Mo. when I was pregnant and forced to go there to have fun. I shopped instead.
Also? When we entered grocery stores or left them and those little banks of bubblegum machines children are encouraged to drop quarters into to rot their teeth?
Well, my reply was “How about we put that quarter into the boot when we get home and you eat an apple in the car?”
He quit asking by the time he was three or four and we just put an extra dollar in because he walked by them and didn’t ask. He’s a brat, but he’s trainable.
So, when the boot got full, I took it to the bank. I called it Das Boot. Still do.
When my son was old enough, he took it to the bank and got prizes for the deposits. Now, he has a bachelor’s degree in Computer Engineering.
When he had enough cash on hand, we bought single shares of JNJ and PNG and Exxon which had DRIP accounts then. (They no longer do… they forced us to sell the accumulated shares years ago). I kept track for a while… “we” invested about $2000, found in the laundry, parking lots and collected by my using “coupons” and saving all the dimes and quarters and dollars I “saved” at the grocery store.
We pulled out more than $15,000 when the market tanked in 2000 (it didn’t affect JNJ or PG that much, but my husband got nervous. When it was just dimes and quarters, he didn’t pay attention, but when those DRIP accounts started climbing, his aversion to risk kicked in.) That’s how we retired when I was 53 and he was 58. Just saying.
Oh, and the rocket scientist can figure it out on his own. We got him graduated with a degree of his choosing. Up to him what he does with it. And, it is up to US whether he gets any of this land.
Because. Life. Liberty. Property.
Get some.
Great comment.
He forgot # 13 – Avoid marriage. Unless you already have or plan on taking your vows of celibacy and poverty, do not get married. As Nick Cage can tell you, there is no 3 day cooling off period. You play, you pay through the nose. Your lifetime retirement savings will dramatically increase just by following this simple trick.
If you come anywhere near a female, say within 100 yards, run like hell. Your pocketbook is in grave danger. If you must have a GF for some stupid reason, find one online. If she lives in Romania or Hungary you are good to go. Never invite her to visit and never visit her in person. Keep it online, clean and sanitary and if you never send her more than a couple of shekels a month, you will not suffer any significant loss. Make sure to find a gal in a country with a favorable foreign exchange ratio like 10,000 yuan to the dollar. If you want to be rich like Trump, be like Trump; marry a gal from a poor backwards country. All the rich dudes do it. Only fools marry the native (women’s lib) gals.
My German-born mother was a mouse for about thirty years of marriage before she turned into a roaring lion (her words.) They separated after 49 ½ years. For the last 20 years of their marriage, my father told me numerous times never to marry (I didn’t.)
I thank my lucky stars women bore me after about 6 months otherwise I would have ended up like many of my friends; impoverished by divorce, alimony, child support, cleaned out by the lawyer and unable to retire.
By the way, I cook better than most women I know.
Women are the remoras of life, they attach themselves to you and feed off your kills. Properly trained, these suckerfish can earn their keep but don’t count on it. They travel in packs, usually her kids by other male victims who are paying her child support.
Five “Must-Develop” Habits to Gain More Control Over Your Retirement
1) Flee this collapsing shit stain of a country
2) Flee this collapsing shit stain of a country
3) Flee this collapsing shit stain of a country
4) Flee this collapsing shit stain of a country
5) You guessed it! – Flee this collapsing shit stain of a country