The Best Things In Life Are Free

If it’s too good to be true, it usually is! However in this case, my local library is great! I’ve recently discovered:

  1. I can borrow passes for major local attractions.
  2. Once a month performers such as dancing/singing/magician.
  3. Weekly STEM kits available to borrow.

My family of four includes two kids (3 and 5). We live in the suburbs of New York and any attractions cost a small fortune especially attractions like the Intrepid ($114) and the Children’s museum ($66). I recently discovered that my library allows members to borrow passes to these attractions (just like how one would borrow a book). Here is a list of every attraction in my area I can visit…for Free!


My Library also offers STEM boxes to use for one week durations. These boxes are aimed for kids between 3-10 years old and offers things such as Marble building games, robot mouse programming, electricity grids etc. These games on Amazon range from $30 upwards. They give my kids a learning experience, allows us to work on them together spending quality time with each other and saves us spending money every few weeks on new toys. This was an item we borrowed and I was proud watching my five year old have so much fun.

robot mouseLastly, I keep an eye out for any events. Once a month they put on entertainment for kids. Singing/dancing, playtime, arts and crafts and even magician shows. It’s been great fun and saved us a bunch of cash.

Check our your local library and see what they have to offer. It’s great to interact with your kids and even better when it’s free.

How To Give Yourself A Pay-rise.

2017 was the year I took control of my finances. I feel it has been the turning point in winning with my finances, putting my money to use the way it should.

This year I gave myself a pay-rise. At the time, i made a couple of sacrifices which looking back does not feel like it. Here are the five things I did this year.

  1. Stopped leasing expensive cars. Goodbye $450/month car. Hello $200 a month which I will own in 4 years and hopefully have for the next 10. This also reduced by auto insurance by $300 a year. SAVING $275/month.
  2. Shopped around for cheaper home insurance. The cheeky sods put my insurance up despite no claims. As I pay through escrow, I wouldn’t had known if the bank hadn’t told me. I actually ended up saving $400. Saving $35/month.
  3. Got rid of my expensive AT&T carrier and moved to Cricket Wireless. Saving $100/month.
  4. Switched from Optimum to Roku/Sling. I no longer have a landline but i never used that anyway. I still have my Internet via Optimum but I had no choice. Saving $80/month.
  5. Enrolled into Wageworks program. As i take the train to work, some of my monthly payment is now pre-tax. Saving $80/month.
  6. I work in the middle of a big city. I now take my own breakfast into work each day and bring my own lunch to work three days a week. Saving $160/month
  7. Enrolled into the Dependent Care Spending Account at work saving $165/month.

So, just by organizing my life, making a few adjustments, these were all quick and easy wins. I have saved $735 each month or $8820 a year. This is after tax money. I still have a car, internet, TV, cell phone. I put all these into action over six months ago and I don’t think my quality of life has changed at all. I have been able to start taking control and saving money, upping my 401k contributions and increasing my net wealth.

What wins have you put into place this year? Am i missing any simple wins from the above?

Dear Mom…

I have a lot to thank my mother for. She brought me into this world, provided a safe home, sent me to good schools and spent quality time with me. She taught me the meaning of money and not to live beyond my means.

I remember my parents having a budget, splitting money into different envelopes for different activities each month (groceries, gas, utilities, shopping etc). I wasn’t involved in any discussion but I witnessed two grownups managing their finances responsibly. With every car they purchased, it was a view to last 10-15 years. When I was 17, my parents added me as a user to their credit card. At the end of each month, they would highlight the charges on their statement that belong to me and I would pay them in cash in full. I had a weekend job and this responsibility showed me that they paid off their credit card bill every month. When I was 19, I borrowed $4,000 from them to buy my first property. I had a good job and was able to pay back them within a year.

My mom is one of my closest friends. I go to her for advice, a chat and I enjoy hanging out with her. We live on the other side of the world but still try and communicate daily. She has this dream to drive from East to West in the US, taking her time, taking in all possible sights. She is currently 63 and I’m 34, I promised her that I will take her when she is 70.

She asked me how this is possible and that I need to work. She is in a generation where they have it drilled into their heads that they must work until retirement age. She has never heard of Financial Independence before and I’m sure the sound of it terrifies her. She doesn’t know about my journey to FI or this blog. She will probably think it’s impossible for me to stop working when I am 40. I will send her this link once it’s published.

Well Mom, this next part is for you! I aim to have enough money by the time i’m 40 that I will never have to worry about work ever again. It sounds nice doesn’t it? You’ve always said to me that a small lottery win would mean you can quit work and enjoy life. Well, instead of playing the lottery, Mrs FI and I are saving and investing like we’ve never done before. We’re saving at least $80,000 a year and our aim is to have $1,500,000 in the next six years (we started this journey three years ago). We also want to have our house paid off and will relocate to a cheaper area, buying a house for half the price of our current home ensuring we have a large enough cash buffer for emergencies/market corrections.

Using the 4% withdrawal method, we would be able to live off $60,000 a year. This is more than enough, we have budgeted that we will need just $40,000. The next six years we will continue to work and save hard. We want to have freedom and this is what we’re working towards. I also hope that when you’re reading this, you’ll realize that we do not need or want any inheritance from you. I want you to spend every penny you’ve worked for on enjoying the rest of your life and doing experiences you want (if you leave anything to my brother and sister I won’t mind). If you read the rest of my blog, you will see that I’ve already made plans to look after your grandchildren in the long term (if not, you can read it here).

So, there you have it, don’t worry about us, when we do stop working, we have this day planned. After the summer of travelling with you, we will take the kids on amazing life journeys around the world visiting each continent each summer until they leave us. When the kids do leave for college, Mrs FI and I will travel the world slowly.

I want to thank you , you’ve taught me the basics of Finance and without your lessons early on in life, we wouldn’t be on this amazing journey today. I can’t wait to travel with you and see this amazing country.

How To Stop Living Paycheck To Paycheck.

The first rule is to earn more than you spend, simple right? Not to most Americans. According to a CNBC, almost half of all Americas are living paycheck to paycheck. In order to get yourself out of this mess, you need to track your income and expenses…you need to create a budget. A budget can sound scary to some people but if you really want to become Financially Independent, you need to know where your money is coming and going.


I don’t look at my budget to the penny, If I go over some areas, I don’t cry about it. It happens, I only live once and if i want to eat out I will! However I do have a very good idea on where my money is going and how much I can spend in each category each month. I have allocated $300 a month for new clothes for the whole house and $300 a month for eating out. My budget makes me think twice on where to go for dinner and if I really need that new pair of shoes this month.

To calculate how much you spend on Gas, Food, Insurance etc, take a look at your last three months bank statements and average out your costs. This will give you a good idea. Separate the Income from the Outcome and then total it up. This may even shock you. Once you find your comfort level you will be able to plan your life better.

Job 1 $3,000
Job 2 $2,750
TOTAL IN $5,750
Mortgage -$1,750
Car -$400
Gas -$100
Insurance -$200
Food -$800
Kids Ent -$350
Gym -$150
Cell Phone -$80
Cable/Int -$70
Holidays -$300
Oil -$150
Electricity -$100
Water -$25
Entertainment -$400
TOTAL OUT -$4,875
NET $875

This example gives person A $875 a month left over. What do we do with this extra income? If you want to become Financially Independent you need to invest it. Following the JLCollins approach, I have my extra funds invested in VTSAX . This is a low cost Index Fund which charges 0.04%. You need a minimum of $10k, if you don’t have this do not run away or close this article, you have two options.

Option 1 – Save up enough to open this account (1 year).

Option 2 – Open a different Index Fund (like S&P 500 and once you have over $10k, transfer it).

I prefer option 2 as your money will be invested the whole time. Budgets are boring, but they are important as they set the foundations for taking responsibility. I spent over 50 hours a week at my office, I’m not doing this for nothing. So look at your statements and work it out. This may force you to make some drastic changes.

After I completed my budget, I took a few simple steps to cut back on my cell phone bill, cable, electricity, auto insurance and my house alarm. By doing this I gave myself a $10,000 payrise. I will post more about this shortly.

How To Give Your Kids £1.75 Million: UK

After publishing my article how to give your kids $2million, a reader asked how they would do this in the UK. As I grew up in the UK, I have some understanding of different investment accounts so I can answer his question.


If you want to give your kids a head start in life and can afford £100 a month then follow this simple path to future wealth.

1 – Open up a Junior ISA. This can be done at most major banks. I like the look of the Fidelity Junior ISA which can be found here. The annual 2017/18 allowance is £4128 which can be either cash or investments.

2- Selecting a Fund. I like the North American Equity Fund. It can be found here. The fee’s are higher than I would like (1.2%), but the growth is tax free so these almost net each other out. You can shop around for better fees.

3- Start investing £100 a month, unlike the US version, Fidelity will let you start with as little as £50.

4- Don’t market time, set it and forget it. Teach your kids what you are doing once they are at an age they can understand. Let’s see what happens at five year intervals.

Year Start balance Invested per year Annual Return End balance
1 £0 £1,200 £0 £1,200
5 £5,368 £1,200 £403 £6,970
10 £14,676 £1,200 £1,101 £16,977
15 £28,039 £1,200 £2,103 £31,342
20 £47,224 £1,200 £3,542 £51,966
25 £74,766 £1,200 £5,607 £81,573
30 £114,306 £1,200 £8,573 £124,079
35 £171,072 £1,200 £12,830 £185,102
40 £252,565 £1,200 £18,942 £272,708
45 £369,560 £1,200 £27,717 £398,477
50 £537,522 £1,200 £40,314 £579,036
55 £778,652 £1,200 £58,399 £838,251
60 £1,124,826 £1,200 £84,362 £1,210,388
65 £1,621,803 £1,200 £121,635 £1,744,638

This is assuming a 7.5% return adjusted for inflation. I used 7.5% as this is the average 30 year return adjusted for inflation between 1980 and 2009 (found here).

So, start your journey with your kids today, they will appreciate it when they hit retirement. Look at the growth in the last 10 years, the earlier you start the more powerful the magic of compounding is. Doing something like this also means YOU don’t need to worry about inheritance and you can enjoy your very own, worry free retirement.

If it’s too late to do this for your kids, then start this for your grandkids! Enjoy the journey of watching it grow.

Good luck!

How to give your kids $2 million: US

I wish I had known the power of compounding at a younger age. I want to better my parents in this life and I want my kids to better me. I opened up a UMTA  (investment) account at Vanguard for both of my kids, set them up with an initial $3000 each and have been giving them $100 each per month.

Let’s see how much they’ll be receiving on their 18th birthday with a 7.5% average return. I used 7.5% as this is the average 30 year return adjusted for inflation between 1980 and 2009:

Found here:

9-26-2017 1-51-58 PM

Year Start Invested Return End
1 $3,000 $1,200 $225 $4,425
2 $4,425 $1,200 $332 $5,957
3 $5,957 $1,200 $447 $7,604
4 $7,604 $1,200 $570 $9,374
5 $9,374 $1,200 $703 $11,277
6 $11,277 $1,200 $846 $13,323
7 $13,323 $1,200 $999 $15,522
8 $15,522 $1,200 $1,164 $17,886
9 $17,886 $1,200 $1,341 $20,428
10 $20,428 $1,200 $1,532 $23,160
11 $23,160 $1,200 $1,737 $26,097
12 $26,097 $1,200 $1,957 $29,254
13 $29,254 $1,200 $2,194 $32,648
14 $32,648 $1,200 $2,449 $36,296
15 $36,296 $1,200 $2,722 $40,219
16 $40,219 $1,200 $3,016 $44,435
17 $44,435 $1,200 $3,333 $48,968
18 $48,968 $1,200 $3,673 $53,840

Yes, that’s right…$53,840. Of course I don’t plan on just handing this over without a discussion. Once I feel they can calculate and understand the power of compounding, I’ll spend some time with them to show them this. They’ll be further ahead at 18 than I was at 30. Hopefully they’ll continue to work and invest then they can be F.I early in life.

If they continue to invest just $100 a month until 65, they will accumulate $2 million. I think it’s fairly safe to conclude they will be set for retirement. The power of compounding is amazing the more time you give it, so start early and track it.

If you don’t have the initial $3000, open a betterment account which has no minimum investment amount. This has a slightly higher expense ratio so when you have your first $3000 (after 2.5 years) transfer this to Vangaurd/Schwab/Fidelity. I have my kids invested in the S&P 500 Index fund, it has a tiny fee around 0.04%. If Warren Buffet can recommend this fund to his wife then this is good enough for my kids.

Here is a chart for the full 65 years:

Year Start Invested Return End
19 $53,840 $1,200 $4,038 $59,078
20 $59,078 $1,200 $4,431 $64,709
21 $64,709 $1,200 $4,853 $70,762
22 $70,762 $1,200 $5,307 $77,270
23 $77,270 $1,200 $5,795 $84,265
24 $84,265 $1,200 $6,320 $91,785
25 $91,785 $1,200 $6,884 $99,868
26 $99,868 $1,200 $7,490 $108,559
27 $108,559 $1,200 $8,142 $117,900
28 $117,900 $1,200 $8,843 $127,943
29 $127,943 $1,200 $9,596 $138,739
30 $138,739 $1,200 $10,405 $150,344
31 $150,344 $1,200 $11,276 $162,820
32 $162,820 $1,200 $12,211 $176,231
33 $176,231 $1,200 $13,217 $190,649
34 $190,649 $1,200 $14,299 $206,147
35 $206,147 $1,200 $15,461 $222,809
36 $222,809 $1,200 $16,711 $240,719
37 $240,719 $1,200 $18,054 $259,973
38 $259,973 $1,200 $19,498 $280,671
39 $280,671 $1,200 $21,050 $302,921
40 $302,921 $1,200 $22,719 $326,841
41 $326,841 $1,200 $24,513 $352,554
42 $352,554 $1,200 $26,442 $380,195
43 $380,195 $1,200 $28,515 $409,910
44 $409,910 $1,200 $30,743 $441,853
45 $441,853 $1,200 $33,139 $476,192
46 $476,192 $1,200 $35,714 $513,106
47 $513,106 $1,200 $38,483 $552,789
48 $552,789 $1,200 $41,459 $595,449
49 $595,449 $1,200 $44,659 $641,307
50 $641,307 $1,200 $48,098 $690,605
51 $690,605 $1,200 $51,795 $743,601
52 $743,601 $1,200 $55,770 $800,571
53 $800,571 $1,200 $60,043 $861,813
54 $861,813 $1,200 $64,636 $927,649
55 $927,649 $1,200 $69,574 $998,423
56 $998,423 $1,200 $74,882 $1,074,505
57 $1,074,505 $1,200 $80,588 $1,156,293
58 $1,156,293 $1,200 $86,722 $1,244,215
59 $1,244,215 $1,200 $93,316 $1,338,731
60 $1,338,731 $1,200 $100,405 $1,440,336
61 $1,440,336 $1,200 $108,025 $1,549,561
62 $1,549,561 $1,200 $116,217 $1,666,978
63 $1,666,978 $1,200 $125,023 $1,793,201
64 $1,793,201 $1,200 $134,490 $1,928,891
65 $1,928,891 $1,200 $144,667 $2,074,758

Just look at those last fifteen years. Time is so powerful in the market. The one thing I haven’t done is adjust the contributions, I hope my kids will increase their contributions once they start working.

What are other readers doing for their children? Click here to leave a comment

Never Time the Stock Market

“Don’t trust anybody who thinks they know more than the markets. Instead, trust the markets themselves. Invest whenever you have available funds, stay invested, and, most important, ignore the dire warnings of the so-called experts” – Larry Swedroe


Each year we have access to the annual Investor Behavior Study where they compare Investor performances to the S&P performance (the main benchmark). In 2016, the average Equity fund investor returned 7.26% vs the S&P 500 Index 11.96%. Over a 30 year time frame the average Equity investor returned just 3.96% compared to the S&P 10.16%. That’s a huge difference.

Investors need to remember one simple rule : SET IT AND FORGET IT. It’s natural human behavior to freak out when the market declines, automatically fear losing everything. Historically it has always recovered. We lose when we freak out and sell low. For my five year plan to work, I actually need a market correction in the next couple of years, this will give me an opportunity to buy more at a lower price. When the market recovers, my portfolio will be worth even more.

Over the past two years we’ve had BREXIT, TRUMP,  CHINA and now North Korea. The market stumbled and then quickly recovered. I made a mistake last year, freaked out before the election and sold my mutual funds. I was laughing the night of the election when the futures market was down 5%. The following days trading session ended up unchanged. I bought back two weeks later, losing a potential 2% growth. I learnt at that time to NEVER time the market.

Here is the S&P 500 chart since 1993, this is the chart through the dot com bubble, banking crisis, 9/11, Afghanistan, Iraq, Brexit, Trump etc. Whatever is coming in the future, do not worry and see it as an opportunity to buy more at a lower price.


Today we are trading at the all time highs in the 2500 region. The sooner a market correction happens the better, during my accumulation phase I would much rather be purchasing mutual fund shares at a lower price. Invest for the long term and you’ll be fine.

Warren Buffet recently said that when he passes away, he would like his wife to invest in the S&P 500 index. Well, if this is good enough for Mrs Buffet, it’s good enough for me and my kids. The US economy is already globally diversified and I do not like owning single stocks (look at Enron and Lehman), I would rather own all 500 companies in a low cost Index Fund. Vanguard charges 0.04% and I invest in this each month.

Here is a link to the Vanguard fund I have selected for my kids