Going Smartphone for $12

After holding out for many years, I got my first smartphone last month. The decision to make the switch was one I didn’t take lightly, but the plan I was on ended and I had to get a new phone. Up in till the switch I was still using my very first ever and only cell phone, a no name Samsung flip phone which I had gotten back in 2008. Prior to that I had no phone, but in 08′ I started going to college and working part time on an ambulance, and after a brief stint with a land line it became apparent that I needed to get a cell. So I joined my uncle’s family  cell phone plan and got a flip phone that was tough as nails and lasted me 8 years. The thing is still working, though now it’s turned off and put to rest in the bottom of my sock dower. 

phone crpoed2
But seriously, how am I supposed to fit this thing in my pocket? (The first thing a flip phoner thinks when they get a smartphone)

The old flip phone was costing me 15$ a month with unlimited texting because it’s really important to have unlimited texting on a flip phone (joking). But here’s the deal, my new smartphone COST LESS THAN THE OLD FLIP PHONE!  Yes, you heard me right, last months bill for the smartphone was 12.77$ beating my old plan by a solid 2 bucks a month. I have a theory as to why this is. My smartphone bill is low because I used almost no data, except when on wifi. But smartphone plans are made to make money off of data usage, calling and texting is not where they make their money. Dumb phone plans like my old one can only make money off of calling and texting, so they really charge you for it. Of course, there is always the potential that I might decide to stream a movie with data on my smartphone and then it’s not so cheap anymore. But for someone like myself who has never had a smartphone before and doesn’t even know how to watch a movie on a phone, that’s hardly an issue. I turned all the apps data usage off under settings, with the exception of Google maps, and have not found any hardship in not using data. I even got an Instagram account with the new phone, but I wait to upload photos till there is wifi, so I use almost no data on it.

Continue reading “Going Smartphone for $12”

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You should have a Mint.com account

What is Mint.com you ask? It’s a free service that, simply put, tracks your money. Mint links to your bank, credit cards, and other money related accounts and puts together a comprehensive overview of your finances. It shows you how much you spend, how much you make, total assets and debts and puts all the numbers in one place where you can see them. This is good information to have, even if you don’t know what to do with it right now, and the longer you have the account the better you can appreciate your financial trends in the long run.

There are Four main things that a Mint account will do for you.

Continue reading “You should have a Mint.com account”

About Lending Club (Updated)

There are lots of great reviews of Lending Club out there. To name a few, Mr. Money Mustash has a series, and Lend Academy has a great YouTub as well, see below. What I’d like to touch on is why peer to peer lending is cool, and how to buy notes that are in high demand.

According to Wikipedia “peer to peer lending is the practice of lending money to unrelated individuals, or “peers”, without going through a traditional financial intermediary such as a bank or other traditional financial institution. This lending takes place online on peer-to-peer lending companies websites using various different lending platforms.”

In short, instead of the banks giving you a loan and collecting the interest, you get a loan lenidng clbwhich is funded by other individuals who then get to collect your interest. This is more egalitarian and keeps your money in the hands of your “peers” instead of funneling it up into the big banks and the “1%”. There are several other peer-to-peer companies out there, but I prefer Lending club. They’ve been around for about a decade and have proved to be a valuable resource for both investors and bowers. Continue reading “About Lending Club (Updated)”

How to save 375$ a month

Financial independence is about how much you save, not how much you make. Make it happen, and put those dollars to work.

  1. Get a free hot tub. No really the benefits of having a hot tub at your house is invaluable. First your friends come to you, and they often bring beer. This saves you the expense of going downtown, to a trendy bar, and buying expensive drinks. Instead social hour happens while soaking in the hot tub. which is really nicer than a noisy bar downtown anyway and is more conducive for earnest conversations and meaning full discussions. (see how to get a free hot tub).  Saving one trip to bar a week = 15$ x 1 month = 60$
  2. Hang your clothes out. There is rarely a good reason for using a dryer. Put up a clothesline, and in winter make an indoor rack.  One large load = about 50 cents. 2 loads a week x 1 month = 4$   
  3. Get a cheaper phone plan. My flip phone cost 14$ a month, and my new smartphone is 25$ (though Republic Wireless)  = 50$  (based on an average US call bill of 75$)
  4. Ride your bike.  Gas saved =3 gallons a week x 1 month 24$

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    Bike your way to financial independence
  5. Cook more at home. One less meal eaten out a week = 12.50$ x 1 month =50$
  6. Spend less on internet service by changing providers for a new promotional rate, or getting on the phone and telling them you are going to leave, which usually ends with them extending a lower rate.  =15$
  7. Drive an old, faded, slightly rusty, but still going strong small car. Ditch the car payments.
  8. Go dumpster diving and cut your grocery bill. Only buy what’s on sale. 

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    A nice box of dumpstered food
  9. Bring your own bags to the grocery store 3 bags =15 cents x 1 month = 60 cents!
  10. Don’t pay for digital entertainment, all that stuff can be had for free and most of it is garbage anyway.  10$ a month
  11. Make your own coffee. It’s fun and they are lots of inexpensive ways to make a really good cup of joe at home. Just 2 cups at home/ 8 cups a month at 2.50$ = 20$ 
  12. Get a roommate, if you have not do so already. Living with other people is fun and splitting the bills saves you lots of money.
  13. Track your expenses on Mint.com and look for more ways to save!

Point being there are lots of ways to save money, and unless you are truly living hand to mouth, there is likely a way for you to save 375$ dollars a month.

Small Cars Rule! How to Buy One

35 MPG on the highway, that’s the estimated fuel usage for a 1996 Toyota Corolla. I bought one of these for 1550$ on Craigslist about two years ago and it has been nothing but good to me since then.  At that price with 124,000 miles, it was a great Craigslist score, not quite as good as the free hot tub, though.  Sure it had a busted grill, dented hood, broken door handles, and the upholstery had a “vintage” look with a unique mix of sun damage, stains, and dog fur stuck to it. But the engine was perfect and there was a well-kept stack of maintenance receipts from a local mechanic. So far the only maintenance I’ve done is change the front brake pads, which really did only take about 10 minutes and cost a mere 20$.

How to change Corolla brake pads in 10 minutes, narrated by an adorable little Japanese man.

 

Continue reading “Small Cars Rule! How to Buy One”

HEADLINE: Useful things found in trash can

I just made a fantastic cup of espresso with steamed milk from an espresso maker I just pulled out of an NAU dumpster, along with many other useful and neat things retrieved. Although I’m enjoying my cup of espresso, the amount of student created waste is appalling. There are enough food and clothing thrown away at the end of each semester to meet the needs of many who are in need, not to mention fancy coffee makers. An entitled generation that is going to get a big reality check when school ends, loan payments start and jobs are few. Might be wishing they kept that old espresso maker after all…..

HOW TO BUILD 5000 DOLLARS IN A YEAR WHILE LIVING IN YOUR CAR, OR ANYWHERE


Work it, work the system, work the numbers and work your ass off so that you own your time, your finances and your life.

On that note. Wealth is made by putting dollars to work, but even better is putting someone ease’s dollars to work. Enter the 0% APR credit card and the Credit Union Money Market account. It works like this:
STEP 1: Open a 12 month 0% APR cash rewards credit card. You do need decent credit for this to work *
STEP 2: Open a Credit Union account. 

STEP 3: Use the credit card to fund a Money Market account at the Credit Union for 2500$….. then do it again 2500$ + 2500$ = 5000$. (they have more than one type of Money Market account, so pick two different ones)
STEP 4: Transfer the 5000$ from the Credit Union into an investment account, for this example I’ll use Lending Club. Invest in quality high yield notes (using a filter, more on that here). A Vanguard or Mango Money account would be a better choice if you need access to the funds, like to pay down the credit card. lenidng clb
STEP 5: Pay off the credit card at the end of the 12 month 0% APR and pay no interest, or you’ll be the sucker making the banks rich. STEP 6: Set up a Mint.com account and stay organized! 

What does this all add up to you ask? Well here is the math:

  • 100$ = 2% cash back on the 5000$ you “spent” with your new cash rewards credit card at the credit union.
  • 325$ What you will make at 6.5% interest on 5000$ at Lending Club in 12 months (below average, I’m shooting for 9% return)

Plus all possible referral bonuses 

  • 25$ Lending Club referral (must put 5000$ for this)
  • 25$ Capital One checking/savings interest account referral
  • 50-25$ referral (by me or someone else with a suitable credit card). Discover card is generous with offering higher limits (greater than 5000$) and is an easier card to get approved for if you are new to the credit game. City Double cash card would also work well, but is harder to get. (update they may no longer be offering 0% apr.)

All that =500$ !!!! 10% ROI (return on investment) but remember, it was not your money in the first place, so that term does not even apply!

The one caveat is that Lending Clubs loans are 36 months, so you can’t cash it out to pay off the credit card, but your making 500$ to put toward it.

That means you need to save 4,500$ in 12 months. To do this Set up a 375$ a month auto transfer into a savings/checking account  375 x 12= 4500$ + your 500$ ROI. Open a savings/checking account that earns interest and put your dollars to work.

Part two: See How to save 375$ a month If you can do this then in a year you will have a 5000$ start on your financial Independence! Of course, you could just save the money on your own, and skip all this complicated stuff with opening accounts, this is just a way to accelerate the process. For me there is also extra motivation to keep saving every month, because I need to pay off the credit card, which helps me keep on track.  Another cool thing is that you get to see first hand the income generating power of having a large sum of money invested, without spending a year working to build that sum.

10-year outlook:

Keep reinvesting the 5000$ and at a compounding interest rate of 6.5% in about ten years your 5000$ will have doubled to 10,000 !!!! Without you doing anything. 

Keep saving 375$ a month and reinvesting  the 5000$ and in ten years you will have about 75,000$. Play a little with the numbers on this  Compound interest calculator

Or you could also use the money and go bike tour around New Zealand next winter…

 

* One potential issue is not getting approved for a suitable credit card or that the line of credit you are approved for is inadequate for the large sum needed for these transactions. In this case, do what you can with what you get approved for and wait for your credit to improve. In say 3 to 6 months try again. Note that carrying a large balance on your card may not be the best for your credit, but as long as you make the minimin payments and don’t default, it should be pretty minor. 

 

Disclaimer: Your on you own, these are just suggestions, don’t F it up.