Monday Night Finance- Volume 80

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The 3 Main Levers for Achieving Financial Independence

Financial independence means freedom from money worries and the power to make your own choices. Imagine never having to work for someone else again, being able to travel and enjoy life on your own terms, and being able to give back to the causes you care about. It’s not just about having more money, it’s about having the freedom to live life on your own terms. While everyone wants financial independence, getting there isn’t as easy as closing your eyes and clicking your heals. Instead, you need to make smart choices. Luckily, Matt from the Financial Imagineer has given us a perfect roadmap.

It’s pretty self-explanatory, but it’s important to remember that earning more and spending less should be done in balance. If you focus solely on one or the other, there won’t be much progress made towards financial independence.

Matt- the Financial Imagineer

In this article, the Financial Imagineer outlines the various “levers” that can be pulled in order to achieve financial independence, which he defines as having enough passive income to cover one’s living expenses without having to work. The levers include increasing income, decreasing expenses, and increasing savings rate. He suggests finding ways to increase income through starting a side business, negotiating a higher salary, or finding ways to earn passive income. Decreasing expenses can be done through budgeting, reducing housing costs, and cutting unnecessary expenses. Increasing savings rate can be achieved by automating savings, living below one’s means, and investing in low-cost index funds. The article stresses the importance of finding a balance between the three levers in order to achieve financial independence.

Retirement Catch-Up Contributions — It’s Not Too Late

Are you on track for a healthy retirement? Perhaps you got a late start to the game and aren’t where you want to be. If you’re over 50 and still behind, the IRS has created a ay for you to save more for retirement through “catch-up contributions”. Catch-up contributions for 401(k) plans can be beneficial for individuals who are behind on their retirement savings or who want to boost their nest egg. These contributions allow people over age 50 to make additional contributions to their 401(k) beyond the regular contribution limit, helping them to make up for missed savings opportunities and increase their retirement savings more quickly. But can they really help you get back on track? In this article Dr. James M. Dahle explains how physicians, who often get a late start saving for retirement because of med school, can use catch-up contributions as part of their savings strategy.

A lot of the personal finance blogosphere and social media is focused on supersavers, getting started early, and the benefits of compound interest. I don’t deny that starting to save at 18, saving the majority of your income, and investing it wisely so decades of compound interest can work on it are an incredibly great way to build wealth.

Dr. James M. Dahle, White Coat Investor

This article discusses “catch-up contributions,” which are additional contributions that people over a certain age can make to their retirement accounts, such as 401(k)s and IRAs, in order to help make up for missed savings opportunities or to boost their nest egg. The author explains that catch-up contributions can be made to both traditional and Roth retirement accounts and provides details on the specific catch-up contribution limits for each type of account. The article also provides tips for maximizing the benefits of catch-up contributions, such as contributing the maximum amount allowed each year and considering the tax implications of using a traditional versus a Roth account. The author concludes that catch-up contributions can be a valuable tool for people who are behind on their retirement savings and are looking for ways to increase their savings.

The What, Why & How of Portugal’s Non-Habitual Resident (NHR) Regime

Have you heard of geographic arbitrage? Geographic arbitrage is the concept of exploiting differences in cost of living and/or income between two or more locations to save money and boost your financial situation. By living in a place with a lower cost of living and/or earning income in a high-income location, you can maximize your savings and investments, which can ultimately lead to early retirement. For example, you could live in a smaller town in the US, but work remotely for a company based in a big city with a higher salary. The difference in cost of living could allow you to save more money, invest in your future, and work towards financial independence and early retirement. While costs of living can vary within the US, you can supercharge your geographic arbitrage to moving to a foreign country with a much lower cost of living. Many US expat’s are now moving to Portgugal, and the MoneyMiniBlog explains why in this article.

Compared to many other European countries, Portugal is fairly affordable. Typically expenses can be expected to be somewhere around $2800 per month. Additional people often cost much less than this per month, as the initial estimate contains $1300 for a furnished two-bedroom apartment. Please note: these prices are anticipating living in one of the major metropolitan areas; this can cost a lot less in smaller cities and villages.


The MoneyMiniBlog expalins Portugal’s Non-Habitual Resident (NHR) regime, which is a tax program that allows individuals to become tax residents in Portugal while paying a reduced tax rate on their foreign-sourced income. This allows you to not only take advantage of Portugal’s low cost of living, but tax advantages as well. The NHR regime is designed to attract high net worth individuals and skilled professionals to Portugal by offering a flat 20% tax rate on their foreign-sourced income for a period of ten years. The article details the eligibility criteria for the NHR regime, including being a tax resident in Portugal for at least 183 days per year and not being a tax resident in Portugal in the five years prior to becoming an NHR. The article concludes by noting that the NHR regime can be an attractive option for individuals looking to reduce their tax bill while enjoying the benefits of living in Portugal.