Smart Spending and Investing – Literally FREE MONEY
Whenever I hear someone say only rich people get ahead and there is no way for them to even get started on a path to financial success, my ears perk up. While the rich and established certainly have a leg up there is nothing from stopping ANYONE, regardless of their level of affluence (or lack thereof) to be able to take some very small steps to shore up their financial strategy and start seeing real savings and real returns. Below are three simple ways for anyone to get started. They will make a SIGNIFICANT difference in your annual finances from hundreds, to thousands (even tens of thousands annually).
DISCLOSURE – I have zero relationship with any of these companies below (other than being a customer). This is totally unpaid basically free advertising for them, but I believe in the products so much I can’t help but scream about them from the rooftops whenever I get a chance:
Step 1 provided you have decent credit:
START CHARGING EVERYTHING and apply for and use this card to do it:
https://www.citi.com/credit-cards/credit-card-details/citi.action?ID=citi-double-cash-credit-card
This card will give you 2% back on ALL purchases. No more needing 4 different cards for different places (except Costco, we will get into that in a future installment, and EVERYONE who is near a COSTCO needs to be a member!!) but 2% back on EVERYTHING is in my opinion the best deal out there. For those of you using your debit card STOP:
- You are using your own money at the time of purchase vs 28-30 days later and you always want to use other people’s money (OPM) as long as it does not incur a fee or interest
- If you have a lost or stolen debit card number used fraudulently you are either out of the money or going to have to go through A LOT of drama to get the money back, vs just calling Citibank and having them reverse the charges in just a few moments
- You are paying 2% more for EVERYTHING than you need to. Let’s say you go out to dinner and spend $50. You could have used this card and gotten 2% back effectively saving you a dollar. Extrapolate that out and say you spend $2,500 a month on items that you could have paid for with this card. That is $30,000 a year, 2% of $30k is $600. By paying cash or using your debit card you are missing out on effectively FREE MONEY!
One caveat – You MUST be disciplined enough to pay the balance off in full every month. Do that and you are on your way to free cash that you then use to…………..
STEP 2 – INVEST FOR FREE
For the vast majority of people there is NO NEED to have a financial planner. They will kill you with fees, soak up you time and if they are lucky, maybe they will match the market long term. Most in the long run fail miserable in beating the S&P500. With the competitive landscape of internet banking and investing, large companies have amazing offerings now. My favorite is Fidelity ZERO, found here:
https://fundresearch.fidelity.com/mutual-funds/summary/315911628
Opening an account is free, there is no minimum investment and there are ZERO fees or expense ratios. It tracks with the S&P 500 which is a summation of large American companies and provides a very solid return with ZERO fees, no need for you to manage it, etc. You set it and forget it. Take that $600 from above and roll it in every 5 years and with an 8% avg return and you have at the end of year five $4,683.15 and it was all FREE. You can’t afford not to do this if you aren’t already. Obviously there is no promise stocks will go up every year but in the long run there has never been a period where they have not.
You can also use these free funds to Max out IRA accounts, etc (more on that in a different piece)
Step 3 – Get your savings account working for you – Get it out of your bank and get it online ASAP
Most people are getting literally next to zero in interest right now from their savings accounts. My bank is currently offering 0.10% interest which is less than the rate of inflation. YOU ARE LOSING MONEY by keeping it in a standard savings account. Again the internet is your friend here and my favorite for high yield FDIC insured savings is American Express, found here:
https://www.americanexpress.com/personalsavings/high-yield-savings-account.html
Any of my money that is not invested in the market is parked here where I am enjoying 2.1% APY. That is TWENTY ONE TIMES MORE interest than my traditional bank. It is all still FDIC insured and as safe as your local financial institution. If you are not saving here or at another high yield FDIC insured institution you are literally THROWING MONEY AWAY.
Setting up an account is free and painless and in a matter of days you can have the money electronically moved there, set up direct deposit, etc. Another hack that you cannot afford to not have in your financial strategy
These three simple steps over time will net you thousands, tens of thousands or even hundreds of thousands in additional revenue. Again – I have no relationship with any of them other than being an overjoyed customer. None of them cost you a penny to get going on but they all will pay off big time over time. Hope it helps.
Feel free to share any hacks you have in the comments or email me at info@officialrobertjohn.com
Take care,
Robert John
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