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Managing Our Finances with Mint

A guide to using Mint – Our Approach

Knowing how much you make and what you spend your money on is Personal Finance 101. This is the fundamental building blocks of wealth building. If you income is greater than your spending, your net worth will go up. If income is less than spending, your net worth will go down. It is that simple.

Before you dive into new and exciting ways to grow your income, reduce your spending, and find ways to grow your savings, it is important to know where you’re starting from. Only one you know where you are can you know the best way to get to where you want to go (in our case, financial independence and early retirement!). read more

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Is it Better to be a Rockstar Saver or a Rockstar Investor

I want to present you with a simple question. If you could cut your spending in half and have no impact on your life and happiness, or if you could find a way to double your investment returns for the next 20 years, which option would you choose? Which option would get you to financial independence and early retirement faster?

Sally the Saver and Ivan the Investor read more

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The Power of Small Wins and Financial Independence

A couple of weeks ago, I was talking with a coworker of mine who is training for the Marine Corps Marathon that happens in Washington, DC every year. Our conversation went a little something like this:

Me: “How do you stay focused for so long? The reason I don’t run long distances is because I find training really boring. I would never be able to build up to that kind of distance.” read more

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Index Funds: The Gold Standard of Stock Market Investing

In 2008, Warren Buffet, the most successful investor in history, made a bet with Protégé Partners LLC, a hedge fund, that pitted the world of active and passive investing against each other. It was a simple bet; both parties would invest and whoever had the most money after 10 years, net of fees, won. (The winner got to choose the charity that the combined $1M+ would go to.) Protégé Partners LLC invested the money in their own hedge fund. Contrary to what most people thought Buffet would do, he didn’t invest in his own Berkshire Hathaway. Instead, he invested in an Index Fund, specifically Vanguard’s S&P 500 Admiral fund (VFIAX).

What is an Index Fund? read more

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Net Worth Tracker: July 2017

On the last day of every month, I take an assessment of all of my financial accounts and calculate my net worth. It allows me to get a detailed look of how my savings accounts are growing, my investment accounts are changing, and how much longer I have until I hit each of my financial goals.

July 2017 was a great month for the New Father Finance family. Our net worth increased by 10% this month, growing by $39,467! A large part of this is owing to my wife’s grandmother, who generously contributed $25,000 for NFF Jr.’s college education. However, even without the gift, we still were able to grow our net worth by over $14,000, putting July as one of our best month’s ever. Here is a breakdown of he we did in each savings category. read more

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The 4% Rule: What Is It and Why It Matters

A popular rule of thumb for financial planners and bloggers is the 4% rule. This rule states that a diversified portfolio of stocks and bonds will allow investors to withdraw 4% of their portfolio every year without any risk of running out of money. For people trying to find out what their target retirement number is, this can be a very simple, valuable tool. Simply take the amount of income you would need annually to retire (before taxes), and divide it by 4% (or multiply by 25, they equal the same thing).

Spending in Year 1 of Retirement / 4% = My Portfolio Retirement Number read more

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Your Savings Rate and Your Net Worth

Your savings rate, or how much of your income goes into savings and investing, is an incredibly powerful barometer for how well you are doing at growing your net worth and achieving your early retirement goals. In The Basic Equation that Governs Your Financial Life, I wrote out the formula I use to assess how I am doing on my journey towards financial independence and early retirement. In this article, I am going to look at the savings portion of the formula, and evaluate my own performance.

The first part of the equation is known as your savings rate, and it can have a HUGE impact on your journey towards financial independence. To find your savings rate, subtract your taxes and expenses from your income, and divide that by your pre-tax income. read more

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The Basic Equation that Governs Your Financial Life

Building your net worth has a lot of moving parts. Savings, earning, investing, taxes. Sometimes it’s hard to know where to start and how all the pieces work together. To help, I developed a simplified equation to provide a framework for thinking about your personal finances. Thinking about your finances in this way can provide a powerful starting point for jumpstarting your journey to financial independence and early retirement.

Net Worth Equation: read more

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The Emergency Fund: Insurance for your Financial Life

I don’t think any personal finance blog, advice column, or book is complete without a post on the emergency fund. Articles and advice can range dramatically, from $400 to 12-months of spending. It is amazing how many people in the US couldn’t cover an unexpected $400 expense.

It can be difficult to know what the “right” amount to have in an emergency fund is (or if you need one at all), but there are several factors that you should consider when setting your savings target. read more

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