Monday Night Finance- Volume 29

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15 Smart Tips to Pay Off Your Mortgage Faster

Housing is often the largest monthly expense people have each month. Typically, finance advice states that housing costs should be less than or equal to 30% of your monthly expenses. However, research shows that people spend closer to 40% of their monthly income on housing. For renters, these monthly costs are unavoidable. However, for homeowners, it’s possible to pay off your mortgage and greatly reduce your housing expenses.

For most of us, being mortgage-free seems like the stuff dreams are made of. However, it is possible. Thanks to these top mortgage payoff tips, it’s not only possible, but you may be able to pay off your mortgage faster than you ever imagined. ~Andy Hill, Marriage, Kids, & Money

If you think paying off your mortgage seems impossible, you’re not alone. Nearly 2/3rds of Americans never pay off their mortgage. If you have dreams of becoming mortgage free but aren’t sure how to make it happen, then this article is for you. Andy Hill, of Marriage, Kids, & Money shares an interview with Deacon Hayes where they discuss strategies for paying off your mortgage. Many of the tips involve earning extra money, whether through a side hustle or overtime at your current job. Earmarking this extra money directly for your mortgage can help you accelerate your payments and shrink your balance. Another great tip is trying to live a minimalist lifestyle; not only will you need to spend less money on your home, but you can sell items you no longer need for extra money. Finally, developing a budget and sticking to it is super important (CountAbout is a great tool to help you do that).

How to Evaluate the Best Investments Based On Returns

We all want to find that “home run” investment that nobody else knows about. Can we buy the next Apple or Amazon at the IPO? Or maybe we know a guy who knows a guy who has a guaranteed way to make money with collector coins, stamps, or baseball cards. Remember when the beanie baby bubble popped? While we’re all chasing the best investments, how can we evaluate if we’re doing a good job or not?

The average inflation rate is 3% per year, so any investment you make needs to beat that 3% minimum. Consider 3% like a C grade: it’s the lowest passing grade you can get. You’ll still squeak by with that, you’re just not going to be in the upper echelons of school (or socioeconomic class). ~Darcy of WeWantGuac

In this article, Darcy of, shares some metrics we can use to evaluate the return on various investments. Instead of starting the article with exotic investments, Darcy begins with quite possibly the most boring investment of all time, Series EE US Savings Bonds. She looked up the interest rate on bonds that her grandmother had given her and found that many of them were earning less than the rate of inflation. That means that each year, her bonds are able to buy a bit less than they were the year before. She then compares these returns to that of an index fund that returned 10% per year on average. In both cases the investments were set-it-and-forget-it, but one had a lot higher return than the others. Finally, she explores more hands-on investments like startup companies and real estate. The article provides lots of great ideas about how to measure risk, return, and effort to help you find just the right investment.

FIRE Vs FIAR – Which One Makes Sense For You?

If you’ve been reading these round-up articles, you’re probably well aware of the FIRE movement. FIRE is an acronym that stands for Financial Independence & Retire Early. People within the FIRE movement aggressively save their income early in their life so that they can retire “early”. While there is a stereotype of that the movement is made of of single male Silicon Valley coders who burn out at 30, there are many different FIRE voices. Early retirement could mean anything from ceasing work at age 30 with $500,000 to retiring in your 50s. In this article, Shelley from Beyond Pennies talks about a different flavor of FIRE where one takes a career intermission.

FIAR is an acronym I created that stands for Financial Independence / Abbreviated Retirement. The concept of FIAR is that instead of saving up to retire forever, you save up to retire for a short period of time ~Shelley of Beyond Pennies

Shelley has created the acronym FIAR for this mini-retirement scenario (Financial Independence & Abbreviated Retirement). Shelly is saving up money so that she can take 1-2 years off of work and circumnavigate the world in a sailboat with her family. In contrast to a complete early retirement, where you need to build an endowment to sustain yourself for the remainder of your life, with FIAR, you only need to save enough to fund your abbreviated retirement. In addition to needing less money to achieve FIAR, this concept can also be motivating because you’re saving for a very specific goal rather than an abstract lifestyle change. Finally, FIAR makes the FIRE community more accessible by allowing people who may never be able to achieve FIRE the opportunity to enjoy many of the benefits of FIRE during their mini-retirement.