Financial Freedom – what it means to me

ST. CROIX INSIGHTS

Financial Freedom – what it means to me.

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Everyone’s definition of financial freedom varies based on their background, upbringing and life experiences. It seems today on TV, social media and movies, we have all types of expectations set forth for us to live up to. Yet, what is real life these days? From what I see – most of it isn’t real.

Almost every day, I ask someone what financial freedom means to them. Most reply with a dollar amount so they don’t have to worry about money or expenses and they can financially handle whatever life brings their way.

I’m no different. I believe financial freedom is being debt free and having an asset base provide enough monthly cash to support my lifestyle. That’s it. Basic. What that framework, it’s easy to understand and figure out what your number should be.

There are three steps to help achieve this type of financial freedom:

1. Don’t purchase what you can’t afford. Sounds easy but it’s not. For example, do you purchase a new car at 100,000 miles or do you drive it in the ground? Drive it in the ground. At 100,000 miles you’ve barely went through two sets of tires. And that dream home you desire – “right size” it. Don’t over buy.

2. Pay yourself first. Sounds easy but it’s not. For those in your working years, target 15 – 20 percent of your gross Income. Yes it’s a lot, but that is what’s required to achieve financial freedom. Numbers don’t lie.

3. Pay attention to the tax man. Remember that our money belongs to the government and if we don’t understand the rules, they keep more of it. That’s not ideal if they keep more of your hard earned money.

Financial Freedom doesn’t happen overnight. You and I have to work for it. You know that saying, “Freedom isn’t free.”

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Renting watches, robot lawn mowers to monthly car rental clubs

ST. CROIX INSIGHTS

Renting watches, robot lawn mowers to monthly car rental clubs

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Photo courtesy ‘Watch Collection Lifestyle’

It’s not often I’m surprised, but this one really caught me off guard. People actually rent watches. Seriously!

Eleven James, an online company based in Detroit, is off to the races. They rent men and women’s watches by the month. When looking at their website it isn’t your Timex watch you’re renting (maybe I’ve just showed my age). Sure they are nice watches but if you can afford to rent a high-end watch, you probably already have a phone, correct? So I wonder how many people check their phones vs. their wrist for the time? I stopped wearing a watch years ago and now wear a Fitbit to track my steps. Yet, these are nice watches.

Robin, a robot lawn cutting service. You can rent an electric mower. Sure it can manicure your lawn each and every day. They just install cable so the robot knows where to go and a home base to recharge. You’ll still have to trim, weed, etc. So it’s not 100% done for yourself.

Car rental clubs. Gone are those two or three-year car leases. Now for the car connoisseur, there are clubs to enjoy a new car each week or month. It’s call Clutch. You pick the car you want to drive each month or each week. They have a fleet of high end vehicles to choose from. Not to mention you can change the cars out if you don’t like it. I leased my Honda for 3 years. Like it or not I’m stuck so I guess I better like it. With Clutch I wouldn’t not stuck.

So all these rental ideas got we wondering……as a society; we’ve changed on how we perceive or look at “stuff”. Our parents and grandparents believed in owing. Owning is powerful and you’ve paid for it vs. having to give it back. Today, it seems our society is shifting and wants the newest and latest models. I blame it on Apple and McDonald’s. We want things now (and waiting for two minutes for “fast” food isn’t acceptable) and you have to have the latest iPhone because the version before just isn’t the same nor does it do the same things. But it does if we are honest with ourselves.

“Watch the pennies and the dollars will take care of themselves.”

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Year-end Financial Challenge

ST. CROIX INSIGHTS

Year-end Financial Challenge

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

Can you do it? Yes you can!

I don’t know about you, but when you look through your monthly expenses doesn’t it surprise you how much it costs to live?

Each year, l look to cut 5% to 10% of my monthly expenses.

For example that darn Comcast bill. They enjoy increasing your monthly payment and now you have to call them to decrease it by threating to cancel it. That’s about a $100 a month each time you call.

Verizon – it’s worth revisiting your overall data usage to see if you can save any money. You can usually find $20-$50 a month.

Car and home insurance – You need to work with an independent agent. If you need a referral, let me know. This is an area we neglect not only in coverage levels but premium creep happens. Shop around every couple of years.

Cars, Cars & Cars – We don’t really think about it but these are depreciating assets that just cost us money each month. To help control the cost of my vehicles I’m a big fan of preventive maintenance. That’s how I get my cars to last so long. Plus, in the winters I wash them 3-4 times a week to keep all that crud off them to help prevent rusting. Just sign up for the unlimited car washes. They can be a great value.

Eating & drinking out – This is an easy one to overlook. It’s extremely expensive to drink out these days. Not to mention eating quality food at a good restaurant and I’m not talking about McDonald’s. Keep a close tab on this one.

Day to day – I didn’t notice I spent it but I did. Have you ever looked at your Visa or American Express bill and you spent $5,000 for the month and can’t remember where all that money went until you look at the details? Head to the bank once a week and use cash. I know I spend more when paying with a credit card and using cash helps control my spending throughout the week. I set a weekly amount to live on.

Your tracking software. Our clients can use our iAdvise software, a financial dashboard so they know where they stand every day. You can monitor everything financial aspect of your life and we build that right into your planning. That’s cool! Another good online system is mint.com.

Take an hour and see where you can save a few dollars.

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Men – Three ways to improve your sex life!

ST. CROIX INSIGHTS

Men – Three ways to improve your sex life!

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

As a man, I’ve been a lifelong learner and by my side is my wife who continually educates me along with way. I’m thankful she’s helped me become a better man. Sure, it’s taken over 26 years and the fact is her job will never be done.

So what are the three ways to improve your sex life? First, do not discuss your finances before bed. I suspect you know that nothing ruins the mood more than discussing money and maybe how much you (or rather your spouse) may have overspent in the last few weeks.

The second way to improve your sex life is to be realistic when it comes to budgeting each other’s financial needs. Our needs and wants can vary greatly. Sure, my hair cut costs me $14 and I’ve been told it looks like it. But when I add a tip it’s an entire $20 bill to look this good. Now let’s say Mrs. Anderson haircuts cost $125 and by the time you add the highlights and tip it can really add up. BTW – she looks great! So how can one fairly compare a $20 haircut to a $125 haircut? It’s impossible and I will state that I am not qualified and will never do it again.

The third and final way to improve your sex life is to have some mad money. Its money that neither one of you can complain about that you spent. You know what I’m talking about. It’s that verbal performance review on how you spend your family’s hard-earned money with a couple of questions and observations – i.e. How long have you had that? How much did that cost? I can’t believe you spent much money on that. I hear this all the time with couples I work with.

The great thing about Mrs. Anderson and myself is we always agree on the who, what, where, when and why about money which is why I’m so qualified to write about. Just ask me! I’m looking to reach the one percent of individuals reading this that just can’t help themselves and money is always on their mind. Surprisingly, as a financial advisor, money is not always on my mind. Money is not always an easy subject brining up all kinds of positive and negative emotions. There is always time to bring up this topic, but you need to ask when is the best and appropriate time to discuss. And that time is never, ever bedtime.

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Business Owners – The other number you need to focus on!

ST. CROIX INSIGHTS

Business Owners – The other number you need to focus on!

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

$100, $500 or $1,000 or more, per month per employee?

It’s a great question. As a business owner, how much per month do you personally save per employee into your own retirement/savings accounts? Let’s say you own a successful law firm, maybe your number should be $1,000 per month. Or if you own a smaller company your number should be $250 per month. Now start multiplying that and it becomes a really big number because it should be!

One of the best ways to build wealth is having other people work for you which you’ve known for years as a business owner. EBITDA is important, yet I want our clients to seek TWO meaningful buckets of money when they sell their company. You have to ask yourself this… What problems would it create for you to save an extra $500,000, $1 million or $2 million before you retire? BTW, that doesn’t include the value of your business. You already know the typical response I receive… i.e. “It wouldn’t create a problem.” So why aren’t more business owners doing this? The biggest reason is that they aren’t working with me.

Seriously, I find business owners are not always focused on diversifying outside of their business. Sure, your greatest ROI should be your business and if it’s not, it’s time to sell. Yet once we have an in-depth conversation about goals, business owners see the possibilities of two buckets: a personal financial bucket and a business owner bucket. These options my business owner clients the possibility for the most flexibility when it comes time to transition.

A business owner has no idea what their business will ultimately sell for, correct? You may have an idea, but we really have no concrete numbers to count on until someone writes that check out and it clears the bank! EBITDA, taxes, technology, markets and competition all change and it is truly out of our control. So I come back to my philosophy for business owners – build two buckets of money so you have more options and flexibility down the road.

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Vacation in a bottle

ST. CROIX INSIGHTS

Vacation in a bottle

BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC

I call it “vacation in a bottle.” Now I’m not proud of it, but I’m also not ashamed. The fact is that I always take the shampoo and soaps from my hotel stays. And sometimes I ask for a few extra before I leave. Sure one could argue I’m cheap – and you’d be correct – but it isn’t about saving money. It is all about the “vacation in a bottle.”

It started a few years ago while I was on Marco Island. We were staying at a Marriott property and I was showering (hide your eyes) and smelled the shampoo and thought “Wow. This smells like a vacation in a bottle.” So I snatched up as many bottles as I could before we went home. I didn’t want to vacation to end but we know that it would and the Monday blues would soon set in. Yet, when I returned home, I wanted to be reminded of the beach, shelling and sun versus living in the cold tundra we call the Midwest.

So I named this experience “vacation in a bottle.” Every day after we returned home I used “vacation in a bottle” and the aromas and lather brought me back to that beautiful beach on Marco Island. Just the scent of the shampoo would transform me to that vacation mindset and I didn’t have to spend all that money.

So the following year, we stayed at a different Marriott property and guess what they didn’t have – “vacation in a bottle.” What the Hell! Sure it’s a nice place, but I wanted “vacation in a bottle.”

I suspect most families don’t track their spending on a daily or monthly basis. St. Croix Advisors clients have access to iAdvise- the most advanced financial planning software. It allows us to track their spending and help establish a monthly budget.

I was determined that this wasn’t going to ruin my vacation, so I walked down to the other Marriott property and asked if I could purchase some of their shampoo. The lady at front desk thought I was nuts, maybe even more so after I shared my story with her. She probably was right, but darn it, I worked hard and I wanted “vacation in a bottle” to use during my stay and bring home. She just thought I was nuts and found some shampoo for me and just gave it to me and probably hoping I’d find a white padded room far away.

Now that I had my “vacation in a bottle” I could thoroughly enjoy my stay. Recently, I was in Arizona and Utah and since there with no Marriott properties, we stayed at a Hampton Inn and Holiday Inn Express (I did feel a little smarter and ready to take on my day). Not surprised, they didn’t have “vacation in bottle.” I must confess I didn’t take any shampoo and soap knowing our final hotel was going to be a Marriott that did have “vacation in bottle.” I wasn’t the first to notice, my wife was. And as I took that first shower, all those great ocean memories came back even while we were traveling in the desert. And you know what – I asked if I could have a few extra bottles to take home to keep my supply up. Now, I’m not that cheap to take the notepaper, towels, robe, etc. I do have some standards and a little pride, but not much.

For many of us, the ability to enjoy 365 Saturdays every day (retirement) is years away and we have to settle for a vacation or two a year. For me, my “vacation in a bottle” lets me keep that experience going on for a while longer.

That’s how I combine the frugal and dreamer sides of me.

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