Meet Mr. Millionaire Math! (Plus Three Year-End Smart Money Moves)

Welcome! We hope everyone had a very Merry Christmas! Between the holidays when we are all still digesting all the excess calories there’s probably less demand for heavy-duty safe withdrawal rats simulations, so let’s do something on a lighter note today. I have always been wondering, what is it with MMM? Mr. Money Mustache started it all, of course. Now we have Mad Money Monster, Millenial Money Man, and Miss Millenial MD. Am I forgetting anyone? Even some obscure corporation up North, Minnesota Manafucaturting & Mining, jumped on that same MMM bandwagon, no doubt to leech off Pete’s fame. Obviously their lawyers were smart enough to put the label “3M” instead of “MMM” on their little post-it notes packages, otherwise, they’d probably get a nasty letter from the lawyers in Longmont. OK, just kidding about 3M. But still, it got me thinking, if I hadn’t picked “Early Retirement Now” as the blog name what would I have picked in the MMM universe? Easy!

Mr. Millionaire Math!

That seems to convey the essence of the blog pretty nicely, don’t you think? I also got a nice project for Mr. Millionaire Math: How much (or how little) effort and how much time would it have taken to become a millionaire by now? We’ll do some (light!) number-crunching on that topic today. And I’ll throw in some last-minute, end-of-the-year smart-money moves as well…

Read More »

Advertisements

Good and Bad Reasons to Love the Mortgage Interest Deduction

Welcome back to the Early Retirement Now blog! I hope everybody had a safe and relaxing Fourth of July holiday. And if you don’t live in the U.S. and had to go to work yesterday we hope you had a nice Fourth of July, too! We are currently on vacation in Paris and I am sure even here I smelled some barbecue in the air yesterday, so folks seem to celebrate worldwide!

In any case, as we detailed last week, we plan to rent during early retirement, at least in the beginning. But even if and when we buy a house we’d likely pay cash and forego the mortgage deduction. Won’t we miss the deduction? Probably not! We found a few reasons to really appreciate this tax deduction but also two very bad reasons. Let’s start with the bad reasons!Read More »

The Other Student Loan Crisis: Half of Parent Cosigners Facing a Shaky Retirement

[It’s a pleasure to introduce Laur (Lauren) Davidson today. Laur is a senior at the University of Pennsylvania majoring in English and Communications. She wants to build a portfolio as a freelance writer and agreed to write a guest post for us – perfect timing because the ERN family is on vacation this week! The post is on a very timely topic: student loans and how they threaten even the parents’ finances if they cosigned their kids’ private student loans. Take it over from here, Laur!]

Half of Parent Cosigners Facing a Shaky Retirement

By Laur Davidson, a soon-to-be graduated freelance writer for hire

The sheer magnitude of the mountainous $1.4 trillion of debt weighing down 44 million Americans is rightfully grabbing headlines as a looming financial crisis. The devastating economic and social impact of student loan debt on borrowers, their families, the communities in which they live and the nation is well documented. Less known, but no less devastating is the impact student loan debt is having on well-intentioned parents who are suffering financially for having helped their students by cosigning their private educational loans. With the number of students unable to repay their private loans increasing each year, more and more parents are having to rethink their retirement plans.

Read More »

Five Unfortunate Facts about Student Debt in America

Our first guest post on the ERN blog! Ever! Let me introduce Drew Cloud who runs the fascinating blog studentloans.net. Not too long ago, I remember U.S. student loans surpassing one trillion dollars (a one with 12 zeros!) for the first time. Now we’re at $1.4t and the amount just keeps growing. Make sure you check out Drew’s blog, too, especially the treasure trove of data on the topic. Take over, Drew!

*****************

A quick online search of student loan debt in America reveals the astonishing truth about the widespread, increasing expense of attending a college or university. Currently, more than 44 million borrowers have amassed over $1.4 trillion of student loan debt, and each year, the total continues to climb. While taking out student loans is now firmly embedded in the college experience for the majority of students, the picture remains bleak for borrowers. Here are five unfortunate facts about student loan debt in America to prove that point.

StudentLoanChart
Student Loans Owned and Securitized, Outstanding. Source: Federal Reserve Bank of St. Louis.

Read More »

You want to know our savings rate? Which one?

Last week, I read a nice post on Chief Mom Officer on the challenges of calculating savings rates. Right around that time I was also revisiting our 2017 budget and the projections of how much we are going to save this year. This is the last full calendar year before our planned retirement in early 2018 and it’s imperative that we stay on track and keep a high savings rate on the home stretch. But how high is our savings rate? Is there even a generally accepted way of calculating a savings rate? What are some of the pitfalls? We were surprised about how easy it is to mess up a calculation as seemingly trivial as the savings rate.

Read More »

This place has extreme wealth inequality, yet everybody is happy!

We are taking a short break from our Safe Withdrawal Rate Series (see the latest post here) to look into some pretty fascinating data we came across the other day. There’s a small place on earth with rampant wealth inequality. If you had just one single dollar in your name you’d be worth more than the entire bottom 27% of the wealth distribution combined. The bottom half of the population owns only about 8.6% of all wealth, while the richest 10% own 40% of all wealth, and the richest 20% own about 62% of all wealth.

Despite the wealth inequality, there is surprising harmony. There’s no call for building walls. And no call for redistributing the “ill-gotten” profits of “evil capitalists” either. There is no envy! Folks in the lowest wealth bracket would regularly compliment their richer counterparts and say “Geez, you are rich. Good for you!”

Where on earth is this place? Read More »

Guest Post on Budgets are Sexy: My Top 7 Disagreements With Personal Finance Experts

J. Money, the personal finance blogger who runs Budgets are Sexy and RockstarFinance asked yours truly to write a guest post! Wow, what an honor! And, it turns out, this is actually my first guest post ever (not counting the “Christopher Guest Post” on the Physician on FIRE blog two months ago because that’s actually an interview). What did I write about? Initially, I proposed to go on an all-expenses-paid trip to Tahiti to review some luxury resorts and report back, uhm, some time later this year. But J$ had another brilliant idea: write about my favorite finance pet peeves. And it got published today:

My Top 7 Disagreements With Personal Finance Experts

Of course, to read it all, you’ll have to head over to Budgets are Sexy. But please see below for supplemental material, i.e., some of our blog posts on the seven topics:

  1. Safe Withdrawal Rate:
  2. Robo-Advisers:
  3. Emergency Funds:
  4. Bonds to diversify equity risk:
  5. Bond vs. Stock Risk:
  6. Cash as bear market insurance:
  7. Tax loss harvesting: