Category: Financial Independence

Hiring a financial coach might help you achieve financial independence. Hiring the right financial coach will surely set you on the right path. The only person that can truly achieve your goals is you. A financial coach can be your guide and your accountability partner, but if a financial coach tells you that they will handle it all for you, you are asking for a surprise down the road. Do your due diligence when looking for a financial coach. Just like you might call three plumbers to give you a quote when you have an issue with your sewer, you should talk to a few financial coaches to see which one fits your specific needs. Here are some reasons a financial coach might be right for you.

A Financial Coach Can Help You Identify and Prioritize Your Financial Goals, Co-Creating a Roadmap to Achieve Them

Every generation is dealt with a world and economy different than the one their parents navigated. If you do exactly what your parents did, you might end up with the same results, but what if there are new options for you that did not exist when you parents were navigating their journey. Index funds were created in 1973. Health Savings Accounts (HSAs) were created in 2003. 457 plans are only for the public and non-profit sector. What if your parents were in the private sector and you are in the public sector? They can share their experience, but a financial coach will work with your individual circumstances to share with you the possibilities of financial tools available to you.

The 40 hour work week is less than a century old. Remote work has become a lot more relevant since the COVID 19 pandemic and there are some companies piloting a 32 hour work week (4 days). Leisure time is a fairly new possibility that is available not just to the elite but to the middle class and working class if you play your cards right. As time goes on, it is easier to make more money and work less hours. The internet has been a key factor in providing access to customers around the world instead of in just your local area. Being a social media influencer is a relatively new job. It is much easier for millennials and Gen Z to be influencers than it was for our parents. A financial coach will be able to work with your situation, your job, your income, your expenses and help you identify areas where you can improve, strategies for improving and identify key areas that may have major positive impacts for you down the road.

I am sure you have heard of an emergency fund and that you should have three to six months of expenses in your emergency fund. A financial coach can answer the nitty gritty questions for you like “how do I start an emergency fund” and “where should I keep my money.” Remember, there is not just one answer. It depends on your risk tolerance and your overall financial situation. I cannot provide an answer that will work for everyone but I can work with you individually to create a plan and help hold you accountable.

Maybe you have heard of the debt snowball or debt avalanche. Which one is better? Should you rent or buy a home? What about a condo? Are there hidden expenses? As a financial coach with a mathematics degree, teaching experience, and a background in real estate, I can help you with understanding the pros and cons of all of these and break down the differences in a manner that will make sense to you. It is so much easier to stick to a plan that makes sense and that you believe in.

A Financial Coach Can Provide Personalized Guidance and Support for Your Unique Situation

As a financial coach, I listen more than I talk. I am not a psychologist so yes, I will actually answer your questions without asking you a question. I am also not a doctor who can see bloodwork and diagnose a disease. I am somewhere in between. I can gain information from your income, expenses, assets and liabilities but I also need to know what makes you tick, what are your passions, and what you want your life to look like in an ideal world. My goal is to be the resource that you may not have access to in your family or circle of friends. Maybe you just want a non-biased outlet to get a different perspective.

As a fee-only financial coach, I honestly do not care what your net worth is. My goal is to help you achieve your highest potential. I will never turn down a client for lack of money in the bank. I will turn down a client who is only interested in high level, complex investing strategies as those are often speculative and I follow the advice of the greatest investors of all time who almost always recommend fairly simple investing strategies even for their own money. As a financial coach, my benefit to you is through increasing your income, decreasing your expenses, optimizing and automating your investing, and sharing strategies that you might not have thought about.

Setting up a plan is only part of the work. What if you walked into a college class and the teacher handed you a notes packet and said, good luck. Let me know when you are ready for the exam. Some people would be golden. Others might flee immediately. After we decide to work together and create a plan, great! You have a roadmap. Now what? A financial coach is there to help you stay on track, revisit your goals and progress and hold you accountable to your plan. This could be as simple as quick weekly text check ins, a monthly chat, a quarterly review or an annual plan adjustment. The path is unique to you and what supports you feel would help you achieve the most success. A financial planner will always provide a return on investment if you follow through so don’t waste your money on a plan if you drop the ball and have no accountability.

A Financial Coach Can Help You Develop Healthy Financial Habits

Budgeting, saving, investing. A financial coach will explain each, provide examples, and help you set yourself up to be financially literate and in control of your money. A financial coach can help you automate your finances so you can set it and forget it knowing that you are setting yourself up for a comfortable lifestyle throughout your lifetime. Some people want to think about money all the time. Some people know money is a means to freedom but do not want to have to think about it constantly. A financial coach will work with your desires and help to set up the systems to make your life easier and less stressful.

A financial coach will help you understand credit. What is a credit score, how to improve your credit score, and why a credit score matters. They will help with debt reduction and understanding healthy debt. If you have a solid understanding of debt, you can use it to your advantage through real estate, even if you decide to rent and not own your own primary residence. A financial coach will work with you on your plans and check in with you to ensure you are on track.

A Financial Coach Can Help You Navigate Complex Financial Decisions

Not sure if you should buy a home? Start a business? Plan for retirement? As a homeowner, past renter, real estate investor, business owner, and early retirement planner, I have seen the benefits and challenges of current economic situations. I can explain ideas such as savings rate and help you set a goal for retirement age (guess what, all the articles saying you won’t retire until your 60 or older are BS). Of course, if you follow the average advice, you’ll probably work until your at least 67. If you work with me, I can help you identify ways to get back years of your life and either retire early, have a gap year, or multiple gap years, spend some years at home with your kids when they are young, work less hours, literally whatever your desires are, we can create a plan to get you there. The world looks very different today than it did at any time in the past. Let’s make the most of it!

A Financial Coach Can Hold You Accountable

Money can’t buy you happiness but it sure can buy you freedom to pursue what truly makes you happy. Whatever your “why” is, money can help you achieve those goals. A financial coach can help hold you accountable so that you can take the guess work out of finances. I am sure you have heard of people trying a diet and not being able to stick to it. Weight Watchers is actually a fairly successful program because they have an accountability factor. It is so critical that you have a way to stay financially accountable to your goals because it could truly mean the difference between retiring at 67 years old or retiring at 47 years old (or younger). It could mean the difference between helping your kids attend college to hoping your kids make enough money to support you because you didn’t save any money. It could mean you can choose to say “no” when your boss asks you for the millionth time to work outside of working hours or work the night/weekend shift rather than need to please your boss to keep your job because you live paycheck to paycheck. I want to work with you because I am confident that you can achieve financial independence and live a rich and wealthy life regardless of your income level.

If you have any questions, comments, concerns or complaints, please feel free to comment, send me a message on the “Contact Me” page, or if you think you may be interested in working with me as your financial coach, please feel free to schedule a free, no obligation 20 minute consultation.

Open up a credit card. Let me explain!

Big expenses can be crushing to the average family. Of course it would be great to have a large stash of money to get you through whenever you needed it. The reality is that most families do not have a large emergency fund, if at all. I would certainly encourage you to always have an emergency fund and work to set aside at least 3 months of expenses and up to a year of expenses.

I know, I know, Dave Ramsey would probably yell at you if this thought even crossed your mind. However, I am in the business of not only helping you achieve financial independence, but to also learn the game of money and wealth transfer. There is a reason that credit cards exist and you need to learn how to be on the right side of the equation.

Sign up bonus (money or points)

If a large expense comes up or you think it will come up, you can sign up for a credit card that provides you with a bonus for spending “x” amount of dollars in “x” amount of months. For example, I had some plumbing issues at my rental property. I had a plumber come out to snake my sewer drain. He discovered some issues that I need to address, not surprising when you own a building built in 1913. The work that needed to be down will cost about $10,500 (yay sewer work is the best). I am currently waiting for my new Chase Business card to come in the mail. At the time of writing, the sign up bonus is $750 if I spend $6,000 in the first 3 months. Here is the trick. DO NOT sign up for a card and then spend money you would not have spent anyways. I knew I was going to have to spend more than $6,000 so I will definitely get the bonus. On top of that, a $750 bonus on $6,000 is a 12.5% return which is more than the stock market returns. You can also think of it as that $6,000 of work/stuff only costs you $5,250. Yes, they might charge a credit card fee of around 2-3% so your return might only be 9.5%-10.5% but that is still better than the stock market average return and you (hopefully) were going to spend that money anyways. You can also usually pay the rest of the work in cash or check to avoid the credit card fee.

Zero Interest

You can also usually find a card that has a 0% interest rate for 12 months, maybe 18 months. Again, most people would say do not buy anything you cannot afford. I partially agree with this. First, some things you have to do regardless. If you live in an area with no public transportation and your car breaks down, you need it fixed. You won’t receive your credit card right away but most banks still allow you to use your card right away. You can often add the card to your apple wallet or google pay account before you receive the physical card (call the bank before you apply for the card if you need to do this). One of the benefits of 0% interest is very apparent right now when inflation is high. With 5% or more annual inflation, money next year is worth less than it is right now. So, if you buy something right now but pay for it slowly and finish paying next year, you are actually saving money. Here is an extreme example. Inflation in Venezuela is very volatile but it has been recently around 200%. What this means is that an item that costs $1,000 today will cost $3,000 next year. So if you bought something with a 0% interest card, you get something worth $1,000 today but you can pay maybe $45 a month and then pay the balance in a year before the special ends and even though the item a year from now costs $3,000 you paid much less for it.

Fraud Protection

This is sometimes a forgotten benefit of credit cards. Credit cards do not take money directly from your bank account like a debit card does. Credit cards are essentially loans from the bank. If there is fraud on your credit card, the bank deals with re-issuing a new card and making sure you do not have to pay the fraudulent amount. You always want a written and signed agreement when working with a contractor but you also never want to pay with cash. Where’s the proof of payment? What is stopping them from just walking away with the money? A credit card is more secure. Even a debit card can allow someone to clean out your bank account and cause a huge headache for you.

Personalized (don’t just blindly follow my advice)

Anytime you see advice, you should always question whether that advice applies to your situation. Some people love tiny homes, some people love RVs, some people want a modest home, and some people want McMansions among many other things. I have laid out a few benefits of using a credit card. Should everyone open a credit card? Probably not. If you currently have credit cards that you cannot pay or only pay the minimum, I would not suggest opening another credit card. If you don’t have any money in a savings account or emergency fund, I probably would not open a credit card. There are certainly things that you should have in order before you take advantage of what credit cards have to offer because you don’t want to find yourself on the other side of the equation.

The Other Side of the Equation (oh no!)

The other side of the credit card equation is the reason that banks have credit cards. They want to make money off of you! They want you to pay 20% or more in interest. They want you to make the minimum payment so that you pay them more and more. They take a portion of the money they make off of you and they offer those sign-up bonuses and 0% interest offers hoping that people open more cards and get stuck in more debt. You can play the game if you know the rules and can abide by them. You want to make sure that you do pay your credit card in full every month. If you are using the 0% interest option, make sure you read the fine print. Some cards require that you make the minimum payment every month and then pay the full amount before the 12 months (or whatever term) is up. Others don’t require you to make any payments. Knowing the rules can save you big time and help you reap the benefits of being financially savvy. I earn over $2,000 per year, often times more, in credit card bonuses and rewards. This is almost two weeks of my W2 income pay just for spending what I would already be spending and being smart about my relationship with credit cards. If you blindly follow advice like Dave Ramsey, you will never own a credit card and you will be missing out on many potential benefits.

Your Strategy May Change Over Time

When I first began utilizing credit cards for the purpose of sign up bonuses and rewards, I was a little over ambitious. I never went into credit card debt, but I was following advice blindly. I opened cards, got the sign-up bonuses, but then kept the cards open and was sometimes paying an annual fee when I was no longer even using the card. When you open a new card, make sure you have an exit plan. I now only have one card with annual fees and I use it regularly. It pays me great benefits (my Costco credit card). My cards with annual fees have either been closed by me or I have requested them to be downgraded to a no annual fee version of the card, often times with less benefits, but who cares if I am no longer using it.

If you have any questions, comments, concerns or complaints, please feel free to comment, send me a message on the “Contact Me” page, or if you think you may be interested in working with me as your financial coach, please feel free to schedule a free, no obligation 20 minute consultation.