“Welcome to the PlanEasy blog! We make personal finance easy.

Thanks for visiting.”

 

– Owen

Debt Payoff Plan: Paying Off $46,000+ Of Student Debt In 2.5 Years

Debt Payoff Plan: Paying Off $46,000+ Of Student Debt In 2.5 Years

I love a good debt payoff story. There is something satisfying about seeing someone pay off a mountain of debt in a short period of time. This story comes from a reader who has a total of $46,174 in student and credit card debt. They used our debt payoff calculator to create a debt payoff plan that kills this mountain of debt in just over 2.5 years! Amazing!

When it comes to paying off debit it can sometimes feel like an endless struggle. It seems like interest is constantly work against you (which it is!). Payments are being made every month but the balance never goes down as fast as you hope.

This blog post isn’t quite a debt payoff story, not yet anyway. This post is about a debt payoff plan. Every debt payoff story starts with a good debt payoff plan. This plan aims to pay off almost $50,000 of debt in just over 2.5 years.

Let’s see how they’ll do it!

read more
What Is Financial Independence Retire Early aka FIRE?

What Is Financial Independence Retire Early aka FIRE?

You may have noticed a new term starting to creep into the mainstream financial media, that term is FIRE, and you might be wondering, “What the heck is FIRE? And how is it related to personal finances?”.

FIRE is an acronym that stands for Financial Independence/Retire Early. The basic idea is that if you pursue FIRE you can eventually stop working for money. You can be financially independent. You can do anything, retire early, keep working, volunteer, basically you can have more freedom.

The idea is that with enough savings/investments you’ll eventually reach the point where you can live off your investment income indefinitely. Once you reach this point you’re considered financially independent, you no longer NEED to work for an income, and can retire to a life of leisure (although you may choose to continue to work, change roles/professions, start a business, or volunteer).

While the concept of early retirement sounds amazing, it does take quite a bit of focus and determination to get there. To reach FIRE it requires a high savings rate, very high. The typical financial advice given to the public is to save and investment approximately 20% of your net income (part of the simple 50/30/20 budget). But to reach financial independence retire early you need to save more, much more. To reach FIRE you need to have a savings rate somewhere in the 30%-70%+ range. The higher your savings rate the faster you can stop working for money.

FIRE is made easier with an above average income. With a high-income basic expenses are covered and it becomes more about managing lifestyle inflation. People who pursue FIRE limit their lifestyle inflation to maintain a high savings rate.

FIRE is also possible with a below average income, but requires a lot of creativity to reduce basic expenses. This may include house hacking, avoiding car ownership, and more extreme lifestyles. To reach financial independence retire early with a low-income you need to live an alternative lifestyle.

Reaching FIRE is one of those extreme personal finance goals, it’s a goal that isn’t for everyone.

Even though the end goal sounds appealing it requires a lot of hard work and dedication along the way. Reaching financial independence retire early means living way below your means for the rest of your life. It’s a lifestyle more than it is an end goal. It’s a lifestyle with a lot of freedom, but it’s also a lifestyle that requires a lot of control.

If you’re able to control your spending, and save a large % of your income, then reaching financial independence might only be a few years away.

To find out roughly how far away from FIRE you are you can download our FIRE calculator. It’ll help you estimate how many years from FIRE you are based on your net-income, current expenses, and existing savings.

We’ve used our FIRE calculator to create four examples of how to reach FIRE.

read more
Are You Saving Too Much For Retirement? Target Retirement Savings By Age

Are You Saving Too Much For Retirement? Target Retirement Savings By Age

You need less for retirement than you think. Numbers are often thrown around for retirement, $1 million comes up often, probably because it’s an nice round number. Now they’re saying $1 million isn’t even enough. Now they’re saying you need more, maybe as much as $2 million.

The truth is…. that’s utterly ridiculous. The average Canadian won’t need $2 million to retire and if you’re targeting that amount (or even $1 million) you might be saving TOO MUCH for retirement.

Where are these lies coming from? My guess is from the financial services industry in general. In general, the financial services industry gets compensated for investments under management, products sold, and debt/mortgages. This leads to quite a bit of biased information coming from the financial services industry.

The sad truth is that the more money you save the more “they” get paid. They don’t want you to settle for $1,000,000 in savings when $2,000,000 could mean more in annual fees. How much more? About $23,500 more in annual fees.

That’s not a typo. You read that right. The average mutual fund fee in Canada is around 2.35%. Annual fees on a $2 million portfolio are $47,00 per year, PER YEAR, when it’s invested in the average mutual fund portfolio.

No wonder they keep telling us to save, the more we save the more they earn.

The crazy thing is that the fees on a $2 million mutual fund portfolio are enough to fund the average retirement. Imagine, the FEES ALONE are enough for the average retirement, and yet they continue to tell us we need to keep saving.

So how much do you actually need for the average retirement? How much should you have saved? What is the target retirement savings by age? It’s less than you think. But first, let’s cover a few assumptions.

read more
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Owen Winkelmolen

Financial planner, personal finance geek and founder of PlanEasy.

“Welcome to the PlanEasy blog! We make personal finance easy.

Thanks for visiting.”

 

– Owen

Join our online community!

Community members get (free!) access to our budgeting spreadsheet.

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Debt Payoff Plan: Paying Off $46,000+ Of Student Debt In 2.5 Years

Debt Payoff Plan: Paying Off $46,000+ Of Student Debt In 2.5 Years

I love a good debt payoff story. There is something satisfying about seeing someone pay off a mountain of debt in a short period of time. This story comes from a reader who has a total of $46,174 in student and credit card debt. They used our debt payoff calculator to create a debt payoff plan that kills this mountain of debt in just over 2.5 years! Amazing!

When it comes to paying off debit it can sometimes feel like an endless struggle. It seems like interest is constantly work against you (which it is!). Payments are being made every month but the balance never goes down as fast as you hope.

This blog post isn’t quite a debt payoff story, not yet anyway. This post is about a debt payoff plan. Every debt payoff story starts with a good debt payoff plan. This plan aims to pay off almost $50,000 of debt in just over 2.5 years.

Let’s see how they’ll do it!

read more
What Is Financial Independence Retire Early aka FIRE?

What Is Financial Independence Retire Early aka FIRE?

You may have noticed a new term starting to creep into the mainstream financial media, that term is FIRE, and you might be wondering, “What the heck is FIRE? And how is it related to personal finances?”.

FIRE is an acronym that stands for Financial Independence/Retire Early. The basic idea is that if you pursue FIRE you can eventually stop working for money. You can be financially independent. You can do anything, retire early, keep working, volunteer, basically you can have more freedom.

The idea is that with enough savings/investments you’ll eventually reach the point where you can live off your investment income indefinitely. Once you reach this point you’re considered financially independent, you no longer NEED to work for an income, and can retire to a life of leisure (although you may choose to continue to work, change roles/professions, start a business, or volunteer).

While the concept of early retirement sounds amazing, it does take quite a bit of focus and determination to get there. To reach FIRE it requires a high savings rate, very high. The typical financial advice given to the public is to save and investment approximately 20% of your net income (part of the simple 50/30/20 budget). But to reach financial independence retire early you need to save more, much more. To reach FIRE you need to have a savings rate somewhere in the 30%-70%+ range. The higher your savings rate the faster you can stop working for money.

FIRE is made easier with an above average income. With a high-income basic expenses are covered and it becomes more about managing lifestyle inflation. People who pursue FIRE limit their lifestyle inflation to maintain a high savings rate.

FIRE is also possible with a below average income, but requires a lot of creativity to reduce basic expenses. This may include house hacking, avoiding car ownership, and more extreme lifestyles. To reach financial independence retire early with a low-income you need to live an alternative lifestyle.

Reaching FIRE is one of those extreme personal finance goals, it’s a goal that isn’t for everyone.

Even though the end goal sounds appealing it requires a lot of hard work and dedication along the way. Reaching financial independence retire early means living way below your means for the rest of your life. It’s a lifestyle more than it is an end goal. It’s a lifestyle with a lot of freedom, but it’s also a lifestyle that requires a lot of control.

If you’re able to control your spending, and save a large % of your income, then reaching financial independence might only be a few years away.

To find out roughly how far away from FIRE you are you can download our FIRE calculator. It’ll help you estimate how many years from FIRE you are based on your net-income, current expenses, and existing savings.

We’ve used our FIRE calculator to create four examples of how to reach FIRE.

read more
Are You Saving Too Much For Retirement? Target Retirement Savings By Age

Are You Saving Too Much For Retirement? Target Retirement Savings By Age

You need less for retirement than you think. Numbers are often thrown around for retirement, $1 million comes up often, probably because it’s an nice round number. Now they’re saying $1 million isn’t even enough. Now they’re saying you need more, maybe as much as $2 million.

The truth is…. that’s utterly ridiculous. The average Canadian won’t need $2 million to retire and if you’re targeting that amount (or even $1 million) you might be saving TOO MUCH for retirement.

Where are these lies coming from? My guess is from the financial services industry in general. In general, the financial services industry gets compensated for investments under management, products sold, and debt/mortgages. This leads to quite a bit of biased information coming from the financial services industry.

The sad truth is that the more money you save the more “they” get paid. They don’t want you to settle for $1,000,000 in savings when $2,000,000 could mean more in annual fees. How much more? About $23,500 more in annual fees.

That’s not a typo. You read that right. The average mutual fund fee in Canada is around 2.35%. Annual fees on a $2 million portfolio are $47,00 per year, PER YEAR, when it’s invested in the average mutual fund portfolio.

No wonder they keep telling us to save, the more we save the more they earn.

The crazy thing is that the fees on a $2 million mutual fund portfolio are enough to fund the average retirement. Imagine, the FEES ALONE are enough for the average retirement, and yet they continue to tell us we need to keep saving.

So how much do you actually need for the average retirement? How much should you have saved? What is the target retirement savings by age? It’s less than you think. But first, let’s cover a few assumptions.

read more
Page 1 of 3012345...

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