Jonathan and Brad discuss life hacks and take another look at whether you should pay off your mortgage or invest.
Spam Caller Life Hack
Jonathan gave a quick shout out to an Andriod life hack that blocks spam callers. Basically, Google has the option for a call screening service. When you see a call, you have the option to screen the call. An automated Google voice will ask the caller to state why they are calling and you will see the transcript immediately. At that point, you will have the option to either report the call as spam, block the call or take the call.
If you are inundated with spam phone calls, then this could be a huge win!
Frugal Win Of The Week
Brad’s solar panels are up an running! Not only will that have a huge impact on his electricity bill, but it also allowed him to gain some travel rewards.
He paid for the solar panels with the Barclaycard Arrival Plus and hit the minimum spend in one swipe. The bonus was around $1,000 in free travel.
Unfortunately, the Barclaycard Arrival Plus is no longer an option. However, you still have many ways to achieve similar travel rewards results. One of the best options is the Capital One Venture Card. With this card, you can
- Earn 50,000 bonus miles if you spend $3,000 within the first three months from account opening.
- Earn double miles on every dollar spent.
- Earns 10 miles per dollar spent on hotels.com/venture
- Check out our full review of the Capital One Venture Rewards Credit Card here.
If you are looking for more ways to maximize your travel rewards, then check out our free travel rewards course here.
Life Hack For Small Business Owners
With the end of quarter two, many small business owners are preparing for tax time. If you are a small business owner then you may be able to save time by sending in your quarterly tax payment electronically.
EFTPS is an easy way to pay your federal taxes online. Depending on your state, you may be able to pay both federal and state taxes through this site.
Net Worth Check-In
If you think in terms of quarters, then you may think it is time for a net worth check in. Jonathan checks his net worth once a year on Personal Capital which he likes because he can use the software to look back and see his net worth at any point in time. You can get started with Personal Capital here.
Brad checks his on a quarterly basis. Brad uses a spreadsheet to track his net worth and can look back at his historical data easily.
How do you track your net worth?
Achieving FI On A Modest Income
Joel shows us that it is completely possible to create a solid financial future with FI in sight on a modest income. It is unrealistic to think that everyone will have the same path to FI. The amount of income you earn will have an impact on your path. However, Joel showed us that with a willingness to hustle, anyone can make FI happen.
He had a plan. And in order to reach that goal and succeed with that plan, he had to hustle.
It is not easy to hustle. Joel was working full-time, commuting, and power washing houses in the mornings. It takes determination to hustle.
With his lower income, Joel had to be creative. He needed to find ways to create some financial space in his life to achieve his goals. For example, he found a reliable car to buy in cash and searched for a house that would serve as a home for his family and an investment property.
If you put your due diligence in, if you do your research, this will transform the trajectory of your financial life regardless of what your income looks like.
Joel found ways to put money into things that he understood. Real estate was one of those things, but he had to learn from somewhere. Perhaps he learned from Bigger Pockets BRRRR strategy or another source. Either way, he learned what he needed to build a better financial future for himself and his family.
How To Prepare For The Road Ahead
Joel made a great point about taking action to be prepared for whatever life throws your way. Wherever you are at now, you have the option to prepare for your future.
You have to be prepared that even if you are the best worker in your entire department, you could lose your job tomorrow.
Be realistic about the future and prepare yourself. If you prepare for a change, then you will thrive when it happens.
Should You Invest Or Pay Off Your Mortgage?
As a hotly debated question in the FI community, Brad and Jonathan share some feedback from the listeners. Many readers pointed out other considerations that were discussed on today’s episode.
It is correct to mention this in the debate. However, most people just take the standard deductible of $24,000 for married couples and $12,000 for individuals. Unless you are able to improve on the standard deductible, then you would likely not make this a line item.
For most middle-class home, the mortgage deduction will not be a big player in this equation.
Depending on how long you left your investments in the market, you would be required to pay differing amounts of capital gains.
If you sold the stock after owning it for less than a year, then you would pay regular income tax on the gains. If you sold the stock after owning it for more than a year, then you would receive preferential tax treatment.
The capital gains should be factored into your individual equation. Listen to the Capital Gains Harvesting episode if you would like to learn more.
Guaranteed Vs Speculative Return
As Sean Mullaney, the FI Tax Guy points out the question boils down to your risk tolerance. If you prepay your mortgage you are guaranteed a rate of return of the mortgage rate interest. However, if you take the speculative approach through investing the money then you cannot guarantee the return.
If you are younger with a long path to FI, then you may prefer the growth over a guaranteed return. If you are older and close to FI, then the guaranteed return may be more worthwhile to you.
Resource From Glenn
If you are interested in solar panels, then Glenn has the perfect resource for you. He has recently installed solar panels and documented the whole experience. The resource will be coming in the newsletter soon. Make sure to subscribe to the newsletter to receive this resource from our community member.
- Should You Invest or Pay Off Your Mortgage?
- Go Curry Cracker- Capital Gains, Losses, and the Roth Conversion Ladder
- The Milestones of FI
New to FI? Be sure to check out Episode 100: Welcome To The FI Community!