Showing posts from February, 2021

Importance of insurance: Sixth in a series of financial tools to master

  Getting insurance is part of being financially secure! Welcome back!  This is a sixth installment in the series of financial tools to master.  In the previous installments, we covered checking accounts, savings accounts, budgeting, retirement accounts, and brokerage accounts.  I’ll put links to all of these posts at the bottom of the page for those who have missed any of them. Insurance, as weird as it sounds, is one of the most important tools to master for financial well-being.  Without it, all the money you have will no longer be with you.  If you have a medical emergency or a car accident, insurance is what you need so you won’t have to pay out of your retirement accounts, brokerage accounts, or your emergency fund. It’s not one of the more sexier topics for financial independence but I believe it warrants a closer look as it does require everyone to deal with and to understand it.   Let’s first define the term: Insurance is a means of protection from financial loss.  It’s a form

First few months after reaching early retirement (FIRE-financial independence retire early): My thoughts and observations...

Sunset at the beach, Atlantic Beach, North Carolina  I have been retired since August of 2020, at age 48.  In this post, I’d like to share with you my personal experiences after my last day at my job. August 17th would be Day One of my early retirement.  I had dropped off my company equipment and signed my papers, then had come home after saying goodbye to my supervisor / mentor (with a box of Sam Adams in my hand, courtesy of my mentor!) That day and subsequent few days until closing of our home (August 24) would be spent not on enjoying our early retirement, but rather on preparing for our home sale and on downsizing.  * Click here to read about selling our home during the pandemic here . Our typical day would include dropping off donations, throwing out/recycling stuff, shredding old documents (why in the world did we have documents from high school!?!), painting, and cleaning each room.   August 24th came.  We loaded up remainder of our belongings (we were loading our belongings in

Importance of a brokerage account: Fifth in a series of financial tools to master

  Looking up stocks! Welcome back!  This post will cover brokerage accounts, which is the fifth topic in a series of financial tools to master.  Brokerage accounts are used by many early retirees of the FIRE (financial independence retire early) movement to get them by until the official retirement age of 59 1/2.  Sometimes it’s used exclusively as their only retirement vehicle.  If you’ve missed any of the previous posts on ‘financial tools to master’ series, please see the links at the bottom of this page. What are brokerage accounts? A brokerage account is an investment account that allows you to buy and sell things like stocks, bonds, mutual funds, money market funds, etc.  There are many brokerages like Charles Schwab, Fidelity, TD Ameritrade, Vanguard, E-Trade, Robinhood, etc., that you can choose. You can’t go wrong with any of them, but I would recommend researching these to figure out what works for you.  I recommend ‘discount brokerage firms’ like Charles Schwab, Fidelity, e

The magic of compounding interest: Sure path to FIRE (financial independence retire early)

  Money growing over time Albert Einstein: “Compound interest is the eighth wonder of the world.  He who understands it, earns it...he who doesn’t...pays it. This quote is one of my favorites of all time.  It sums up the basic tenet of investing which allows early retirement to work by growing money over time.  It also underscores an important lesson which is also important to grasp, which is, don’t owe money to anyone , as compounding interest will make your life absolutely miserable, as money you borrow will get bigger over time! I, along with my wife, are one of many adherents of FIRE (financial independence retire early) movement, and we can proudly say we’ve seen the power of compounding interest first hand.  What is compounding interest? Compounding interest is the addition of interest to the principal sum (loan or deposit), basically adding interest on interest.  This happens when interest is reinvested rather than paid out, thereby the interest earned next pay period is the su

Top 3 natural attractions in Las Vegas, NV: For when you’ve had enough gambling!

Valley of Fire State Park, near Las Vegas, NV I’ve been to Las Vegas a total of six times so far, and my wife, a total of four times.  During the days of COMDEX that was held at the Las Vegas Convention Center, I had the pleasure of visiting the desert oasis twice on business, and four times on pleasure! The first time I went there, I was totally blown away at how busy the Strip (Las Vegas Boulevard) was.  There’d be tons of people walking around, with street vendors and performers of all creeds and nationalities.  There were high rise hotels and casinos that built Las Vegas, glittering at night and luring souls to hand over their hard earned money.  All that glittering at night was similar to where I grew up (New York City), in that the desert city never sleeps! Las Vegas is a transient city and is constantly evolving.  It seems each time I visited Las Vegas, things would change dramatically.  There’d be more buildings, more restaurants, and more people on the Strip.  Unfortunately, t

What is the FIRE (financial independence retire early) movement and how did it help a recent early retiree towards the path to retirement?

  Cedar Island Boating Access Area, North Carolina  My wife and I’s early retirement is all thanks to the FIRE (financial independence retire early) movement.  My first encounter with FIRE movement was around 2010 when I was browsing the internet with search topics like   ‘how to retire early’, ‘done with rat race’, and ‘retiring on $200000’.   Let me first set the scene back in 2010... I had neither $200k nor any real ability to retire early back then.  My retirement account balance was under $10000 and I honestly didn’t understand how early retirement could even be within reach.  In my hopeless state, I was just hoping to find something out there that can lead me on the right path to financial independence. I first encountered Jacob Lund Fisker of ‘Early Retirement Extreme’.  I read his story of his early retirement in which he lived on $7000! per year, which means he needed about $175k total net worth (value of all assets minus liabilities). This was my eureka moment!  This was what