Jan 7, 2015

How I Saved $105/month On Family Cell Phones...AND Upgraded from a Flip Phone!

So we all know Verizon is expensive.

"Yeah, but... they have great coverage... no dropped calls!!!"

Blah, blah, blah.  They also have costed me over $1270/year in excess cell phone bills for over five years now.

My wife and I have been with Verizon for over five years, and I've been using a "dumb" flip phone, while she had an IPhone.  Our monthly bill for this has been a whopping $142.74/month, and I finally had enough.  With a baby on the way, I decided its time to get real with reducing our monthly expenses.

With help from the Mr. Money Mustache family, I discovered great service providers like Ting, and Republic Wireless which feature affordable "pay as you go" plans which use major networks such as Sprint and AT&T.

The bottom line is I chose to go with Ting, and couldn't be happier.  My bill has now been reduced from $142.74/month to $37.50/month.  That's BIG savings.  Like many cheaper pay as you go companies, you do have to buy your own phone, but with Ting this was a piece of cake.  I purchased a used IPhone 4 for $88, and the rest is history.  For many of you, you may be concerned about the ETF or early termination fee of the dreaded Big V, AT&T or Sprint networks.  Guess what?  I paid it.

My contract wasn't up until November 2015 (Its now January 2015), but the math proved the $110 fee was an easy choice to make.  My wife's plan was already out of contract, so I politely paid my fee and moved on with my life.  If I waited until November to break away from Verizon it would have costed me an additional $942.40 after accounting for the early termination fee.

Ok, so what's the deal with Ting you ask?  Simple.  Take a look at the pay as you go chart below:

So that's the skinny on how I saved $105.24/month for our family.  Is this something that you should consider?  Coverage on Sprint networks is GREAT, and am so glad to be out of that expensive two year revolving contract with Verizon.  You might be concerned with DATA usage, but we weren't.  I have WIFI nearly everywhere I frequent, so I was happy to give up the whopping 2 Gigabytes of Data we had through Verizon (which we used less than 100 MB's of), and trade it in for a pay as you go plan featuring nice savings. 

Jump on the Ting train people!!!

TB Out.

Mar 1, 2014

Guide to Getting Rid of Car Payments Forever!

From time to time, I hear friends and clients complain about bone-crunching car payments.  I'm talking multiple-$500+dollar-payments-that-suck-the-life-right-out-of-you payments.  I notice the grimace in their face as they talk about how it's tough to "keep up" and just wish they could go away for good.

But what if I told you they could?  What if instead taking out a loan ever time you need to buy a car, we put into action a proven plan used by millions of successful Americans to avoid car payments all together?

It goes a little like this.  Depending on where you are in this merry-go-round, skip ahead as needed.

A few simple ground rules first:

1. Never lease a car.  Ever.
2. Sacrifice now so that you can drive a nice, payment-free car later.
3. Don't be lazy.  I know you want a nice car now, but you're going to need to wait for it.

Now that the fundamentals are out of the way, let's assume you just moved to a new town with very little money in your bank account.   You've been offered a job, but you'll need a way to get to and from work, so you begin your search for a vehicle.

I'm going to assume that most of you know not to purchase a NEW car, but to be clear... do NOT buy a new car.  Ever.

There, I said it.

A new car loses approximately 40% of it's value in the 1st four years.  Why not let someone else take that hit?

But if our assumption above that you have little money in your bank account is true, we're going to need to start at the very beginning.  Yes, we're going to buy a "beater" car.

In America, the average car payment is approximately $400.  Because you have little money in your bank account, however, I'm going to assume you can only afford a car payment of $250.  What we're going to do now will be quite contrary to general wisdom, but is probably the most important step in this "payment free" program.

Take the $250 payment and "pay yourself" by setting up a separate checking or savings account at your local bank and creating an "automatic transfer" of $250/month for 4 months until you have $1000.

Now go buy a $1000 used Car.

I know, a $1000 car is a PIECE OF CRAP.  But don't worry, you won't be driving it very long.  Let's say you drive this car for one year, during which time you pay a total of $1000 in car repairs to keep the thing running.  During the year, you also continue saving $250 a month.  After 12 months, you would be left with $3000 saved minus $1000 in repairs plus a car valued at $800.  Go ahead and sell your "crap car," and you are left with $2800.  Not bad for one year!

So now you check around and find a clunker for $2800, slightly better than your first car.  While continuing to save your $250/month, you manage to drive this car for an additional year with total repairs costing $800, and a sale price on the car after 12 months of a healthy $2300.

The result: $3000 saved, $800 spent on car repairs, and a $2300 sale price, or $3000 - $800 + $2300 = $4500.

Pretty sweet right?

Ok, since we now have $4,500 we can afford to "step it up" a bit and buy a nicer car that we'll drive for two years now.  After two years, you're left with $6000 saved up, $1400 in car repairs, and a sale price after 24 months of $3000.  You know the drill:


Ecstatic with your progress, you go out and buy a dandy little ride for $7600 and drive it for three years.  The $250/month savings over those three years will have added up to $9000, with $2000 in car repairs, and a sales price of $5000.  $9000-$2000+$5000=$12,000.

You now have the means to pay cash for a $12,000 used car.  This same car two years ago was new, you just let someone else take the hit when it was driven off the lot and you have no payments!  Excited?  You should be!  Especially knowing you achieved all this in only seven years.  Do you know how long most car loans take to get paid off?  

Normally, you would be trading in the car you bought new, rolling the balance into another loan, and buying another new car on which you make another seven year's worth of payments; or worse, be making lease payments all of that time.  But not now.  You are now driving a two year old car and have no car payment at all!  All you do now is drive that car as long as you wish while you keep saving up that $250 per month.  You are now at the point where you could, if you wanted to, go out and buy a two year old car every three years and never have a car payment! 

It's Your Choice

At this point you need to realize that this was all figured with just a $250 per month car payment.  What if you could afford $350/month, or even a $450/month?  What if you were willing to drive that 'crap car' an extra year?  Instead of taking seven years to be paying cash for two year old cars, you could do it in three or four years.  See, if you were willing to sacrifice for three to seven years, you would never have another car payment for the rest of your life and be buying cars that are only two years old.  Plus, you could be buying another car every three years.  Or, you could instead continue to buy or lease new cars, take the big hit in depreciation, have car payments the rest of your life, never be out of debt, never have financial peace-of-mind and always be broke.  Yes, people may laugh at your 'crap car' for a few years, but they won't be laughing when you never have to drive a car that's more than three years old again, and you never have another car payment.  It takes time and effort.  It takes sacrifice and determination.  It's not easy at first; but, it is most certainly worth it! 

Is it hard to discipline yourself to start buying cars this way?  Absolutely.  Is it easy to stick with it?  Nope.  It takes discipline, and a lot of sacrifice--and that's why most people will never do it the way I just taught you.  That's why most people will be broke, financially stressed and making car payments for the rest of their lives!

The method for buying cars I just showed you is how many millionaires do it.  In fact, statistics show that most millionaires buy cars that are at least two years old.  This is one of the things they've done to help them become wealthy in the first place.  Now you know.  As always, the choice is yours:  have payments and debt for the rest of your life, or use what you've learned here to take another huge step toward becoming wealthy.

Feb 22, 2014

How to Retire Early

How to retire early

This isn’t a post on how to accumulate massive amounts of wealth, or to assist with identifying what types of careers or business ventures will allow you to retire well ahead of the commonly accepted “Full Retirement Age” of 65-67.

This is an overview and “food for though” for the individual interested in discovering how to leave their job or business for good to live off their accrued investments for a period of more than 30 years.

An Example

Bert is 47 years old with a wife, and 2 children beginning college this year.  Thanks to a successful career in his 20s and 30s, and a business he sold last year, he has accrued $3,500,000 in a mix of taxable and tax-advantaged retirement accounts held at Vanguard.

Bert would like to consider himself “financially independent” and he and his wife are considering using the “R” word as their newest profession.

(The “R” word is Retired… if you haven’t had your coffee yet).

So… what do you think?

Well, if you’re anything like me, at first glance I think they are good to go.  But lets take a closer look at how they might go about solving this desirable problem.  After all, how many lottery winners lose their fortunes within a few years of winning it!

How long will your retirement be?

We never know when we'll die, but in my financial modeling... the age of 95 looks like a pretty conservative figure to use for our example. 

Assuming either Bert or his Wife live to the ripe old age of 95, that leaves 48 years that they'll need to survive on this nest egg!

Down the line, social security will likely help a bit, but Bert has decided to view SS as more of the "icing on the cake" and will focus instead on his investment portfolio as the primary source of future income.

Enter the Trinity Study

"One scenario backtested in the Trinity study suggests that a retiree with a suitably allocated $1 million portfolio could withdraw $40,000 the first year, give herself a cost-of-living adjustment every year afterwards, and have a 98% chance of the portfolio lasting at least 30 years."

This sentence pretty much sums up one of the most commonly referenced studies of the rate at which retirees should withdraw from their retirement accounts to assure it lasts the standard 30 year retirement window. (Age 65 to 96).

But remember the name of our post?

How to retire, EARLY.

So Bert and Co. have a time horizon of 48 years.  What % of their portfolio can they withdraw each year, and can they adjust for inflation?

It seems that the consensus among forum members over at bogleheads.org, (one of the most widely read and followed investing forums on Earth) is that a withdrawal rate of 2-2.5% should be used for perpetual withdrawals.

For example, if the Rockefeller family creates a charitable trust with $100,000,000, in order to preserve principle and keep up with inflation, these funds should be invested in some form of a 25 to 75% equity allocation, and the annual withdrawal should not exceed 2%, adjusted upward each year at the rate of inflation.  This would (hopefully) ensure that annual gift giving could continue far into the future.

Since Bert and his family have a time horizon of 48 years, hardly FOREVER, it would be a logical assumption that a 2.5% withdrawal rate on $3.5 Million ($87,500) adjusted for inflation would result in a high success rate.

(By the way, one method of adjusting for inflation is to find out how much social security payouts increased each year and increase your withdrawals by this %).

Is It Enough?

How did Bert arrive at this healthy portfolio balance?  Well, a successful career in his 20s and 30s, as well as the sale of his business was the primary source of the wealth he's accumulated.  Do you think $87,500 adjusted each year for inflation would support his family's lifestyle? 

I'd assume so, but what if he didn't save a high percentage of his income?  Or what if his annual expenses were $150,000 throughout his adult years?  Would his family be able to retire and keep their current lifestyle?

Herein lies the question.  If Burt ended up with $3,500,000, he either made a high income, was a very disciplined saver, inherited it, or a combination of the three.  I can almost assure you that the average family earning the median US income will not reach this figure by age 47.

The Allocation Variable

The Trinity Study also took into account the overall mix of an investor's portfolio, and how it may effect success rates.  The short version is, investors in their 50's and 60's should consider having between 40 and 60% of their portfolio in equities (the rest in bonds) to retain buying power.  Here's my asset allocation plan, you're welcome to use this as a starting point:

Stay the Course:

25-50........80 stocks/20bonds



over 75.....35/65.
(Equities divided 70/30 between Domestic and International)
60-65 year old would be in the 65/35 if still working, in the 50/50 if not.
Please refer to the 3 fund portfolio for more information on my allocation.


Now that you have a grasp of what it takes to retire early, do you think you have what it takes?  A retirement age of 60 to 65 may very well allow a safe-withdrawal-rate of 4%.  If you've accumulated $1,000,000 by age 65, this would leave you with $40,000/year.  But if you choose to retire in your 40s or 50s, this may only support an income of $25,000/year.

I hope you have a better understand of what you'll need to do to retire early if that is your desire, be it by increase your savings rate, or MAKING MORE MONEY.  Whatever the case, it would be wise to aspire to have fun along the way, and do you best to not run out of money in your golden years.

With a heart full of love,


Jan 6, 2014

The Simplest Personal Finance Post You’ll Ever Read

This is a no nonsense post, so let's get right to it.

1.     Pay off all non-mortgage debt.  Period.
2.     Save 6 months of emergency expenses in an FDIC insured savings account (I like CapitalOne 360 or Ally for this).
3.     Invest enough of your paycheck to earn your employer’s 401k “Match.”
4.     Max out your Roth IRA annual limit.
a.     This equates to $458.33/month.  Set up an auto-investment from your checking to your investment account, preferably at Vanguard.  Treat this as an expense.
5.     Steps 1-4 are a great foundation.  Take a moment to pat yourself on the back, because you’ll likely end up wealthier than 90% of the world by doing these.
6.     Max out your 401k.
a.     This takes either a high income, a high savings rate, or a combination of both.
                                               i.     Maxing your 401k in 2014 (if you’re under 50 years old) will take $1458.33/month.  Any “excess income” you have should be directed here.
7.     If you STILL have excess income or available cash, you have 2 options.
a.     I recommend investing in a taxable investment account.  Simply open one at Vanguard, type "boglehead 3 fund portfolio" into google, and follow the instructions.
b.     Pay down your mortgage.  I’d only do this if you have a relatively high mortgage rate. 
#7 is a source of constant debate with finance pros, but you’ll be able to make a choice for yourself quickly.
8.     Maximize your savings rate. Target saving at least 25% of your gross income.

That’s it!  I can promise you that these are truly the best pieces of advice I have for the aspiring millionaire, and hope that you can appreciate the simplicity and lack of sales solicitation that has become so rare on the internet these days.

Kindest regards,


Tortoise Banker Archives

Thank you Maria over at The Money Principle for including this post in your weekly roundup, @J.Money for featuring me on your homepage at Rockstar Finance, and Stacy Johnson at Money Talks News for putting us at #1 on your roundup!

Jan 4, 2014

How Do I Get Rich?

What is your definition of rich?  

One of the first steps you'll need to take to become rich, is to define what the term means to you.  For many people, myself including, being rich is another way of say one is "financially independent."  In other words, the individual does not need to rely on an employer or outside source for the funds to live their desired lifestyle.

But your definition may be different.  Maybe its a big house, fancy car, and a whole lot of nice possessions!

Whatever the case, visualizing exactly what "getting rich" means to you is a vitally important first step.

Why do you want it?

Now, what is it about being rich that you are truly after?  Is it because you expect people to think better of you?  This can be done in other ways, some of which I've previously recommended here.  Or is it because you believe this will bring you happiness?

Wealth can bring happiness, but most successful clients I've met, some with net worth's well into the 9 figures say it can often be lonely.  Studies have proven that incomes in excess of $75,000/year have diminishing returns with regards to happiness.  Something to think about.

What are you willing to give in exchange? 

If you expect a get rich quick idea here, you may as well leave the page.  The truth is, you're going to have to work very hard to become wealthy.  A good way to begin answering this question, is determining a future date and financial amount you'd like to accumulate by this date.  You may then create a vision for what you'll plan to give in exchange for this future wealth, such as:

"I will become Senior Vice President of XYZ company, saving half of all future raises, and retire at age 58 in the year 2035 with $1,250,000."

Setting Realistic Goals

The above goal is an actual goal I helped a client with in 2011, and so far he is making tremendous strides.  He has paid off his auto-loan, fully funded his ROTH IRA for both 2012 and 2013, and is nearly maxing his 401k.  I would venture to say that he would not be anywhere near fully funding his  ROTH IRA and 401k if he had not set this clear and measurable goal for himself.

Slow and Steady Wins the Race

As you can probably guess by the title of the site, my 16 principles to getting rich will not get you what you desire overnight.  The method I suggest is easy to understand, but not easy.  It will take a daily commitment, and you'll need to remain aware of these principles each and every day.

Your Personal Situation

Now that you understand the framework, its time to diagnose your personal financial situation.

Ask yourself the following questions, and write the answers down.

Do I have any "non-mortgage" debt?

What is my gross monthly income?

What are my monthly expenses.

Now, a quick mantra I'd like you to memorize:

"Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery."

My Crystal Ball

An easy assessment that will indicate your chances of success will be whether you are happy by the above definition, or miserable.  You will not be able to reach your goal of getting rich if you do not have discretionary income left over after your expenses.  Even if your monthly expenses do not exceed your income, I recommend you use this budget template I have my clients fill out to identify what "excess funds" you have each month for investing, and to help identify any "fat" to cut from your monthly expenses.

 With a clear understanding of where you stand, take a look at the 16 elements to my winning strategy here, and begin wherever you see fit.  If you answered yes to question One above, Step One, "Liquidate All Debt" is where I'd like you to start.

If you do not have any non-mortgage debt, steps three through seven are critically important for beginning your path to becoming rich.

If you are disciplined and focused on attaining the wealth you desire, you will succeed.  Revisit these principles at least annually and remember that getting rich is incredibly simple, but not easy.  

A closing "tip" I have for you is to write down your "vision" identified above in a place you'll see it both morning and evening.  I put mine on my car's center console.  Others have theirs on their fridge, or written on their bathroom mirror.  

You CAN succeed.  Begin now.

Dec 19, 2013

Why I'm Petrified of CNBC

Mike Piper over at The Oblivious Investor has an incredible logo.  It's a picture of a smiley face with earmuffs... a clear homage paid to the wise investor that tunes out the "noise" and focuses instead on staying the course, boosting their savings rate, and rebalancing their portfolio once a year.  In today's world, we eat, sleep, and breathe the news.  I won't deny it.  I watch CNN every morning!

One network I used to watch, but thankfully do not anymore is CNBC.  I'd go out on a limb to say that investors who habitually watch this network greatly damage their chances of success as the constant "sky is falling" or "extreme bull" mentality will cause them to act not on their pre-planned investment policy statement, but on an emotional news-driven decision that is based on nothing more than a few talking heads making crystal ball predictions on how a report with a colorful name will effect the Dow Jones Industrial Average.

Paid to Dramatize

For novice investors and the everyday retirement saver, the first few times tuning into CNBC can be exhilerating.  All of a sudden, you know exactly what is happening with the economy and have heard several predictions on what will happen with the stock market.  With that, you log into whatever discount brokerage you use and place several orders to buy stocks based on a recommendation by, DOH, Jim Cramer. 

Oh boy, you're in for it. 

Hey, I did it too!

As a college student in 2007, I took basically all the money I had at the time (a whopping $3,000) and bought several stocks on Jim Cramer's magical predictions, and I'll let you imagine what happened. 

Everything he said was a "BUY BUY BUY!!!"

Not long after, there weren't many people in the world that were willing to "BUY BUY BUY!!!" the stock I had. 

Lesson learned. In total including the $105 in $7 trades in my taxable account I lost $975.  A healthy 28% loss.  Why was I using a taxable account and not an IRA? 

I didn't properly educate myself, and instead relied on CNBC.

Could have been worse, and I fear that for many people the stakes are far greater.  I was lucky to have learned this lesson at such a young age and discovered the outstanding forum over at Bogleheads.org which set me straight. 

No Matter Who You Are, CNBC Will Eventually Get You to Act Irrationally

I almost feel as if drinking and watching CNBC should be illegal, just as drinking and driving is.  That "hot stock tip" that you see on Fast Money will draw you in, and even if you've read The Coffeehouse Investor, understand the Bogleheads Wiki like the back of your hand, and have read The Four Pillars of Investingtwice, you will pull the trigger and do something dumb.

Do Yourself a Favor and Turn it Off

Let me bring you in on a little Tortoise Banker secret. 

You can't beat those Wall Street guys sitting in front of 15 screens in the short-term trading world. 

Warren Buffet told us this.  Benjamin Graham, Warren's teacher, even told us this in The Intelligent Investor

Get it through your head.  You can't beat those guys in the short-term trading world.

However...I have some outstanding news.

You CAN beat 80% of all investors in the world by forgeting about what you see on CNBC and "staying the course" via index fund investing with Vanguard in tax-advantaged accounts.

Write an Investment Policy Statement

Check out my post on Stay the Course Investing for tips on creating an IPS to refer back to when you're tempted to act on that stock tip you saw on Cramer, or when your co-workers are all telling you the market is going to crash and you should sell all your stocks.

It'll probably be the most important investing move you'll ever make.

Rest Easy

Once you've set up your IPS, check your accounts once a year to rebalance.  I like having an excel spreadsheet that shows my total portfolio and how it's allocated, and over time I like to track progress as a motivator.

The peace of mind I've had since deleting CNBC from my channel lineup has been wonderful.  Speaking as a true recovering addict, I now kindly avoid water cooler discussions about the stock market and try my best to get friends and family to do the same.

So, friend, let me know if you have any questions... and take care until the next time!

Nov 15, 2013

6 Critical Steps to Unlimited Friendships

One of the best ways to guarantee success in your career or small business is to master the art of communication.  One book that has resonated with me over and over again throughout the last decade is Dale Carnegie's How to Win Friends and Influence People.  As far as self help books go, this is one of the absolute best all time reads.

Broken into sections, it highlights critical steps to becoming a great communicator and will leave the reader with a set of tools to build exceptional relationships.  As the title suggests, ("How to Win Friends...") the following 6 critical steps will allow you to get anyone you desire to like you and are a great resource to refer back to often.

1. Become genuinely interested in other people

One of the easiest ways to improve your communication skills is to develop an insatiable desire to learn about others and their experiences.  This simple step can do more for you than any of the others, and deserves some meaningful reflection and thought. 

In the conversations you have throughout the remainder of your day, focus on finding a solid interest in other people, and convince yourself that the person you are speaking to is your greatest idol or someone of extreme importance, such as the President, or the CEO of your company.  View whoever you are speaking to as the holder of a secret that will lead to your absolute success, and seek it out.  Undoubtedly, you will begin to see a change in the positive way people respond to you.

2. Smile

It may seem overly simple, but the first feeling I get when I see an honest smile is a sense of calm.  I feel relieved and know that the person I'm speaking to isn't hostile and likes communicating with me.  The smile is missed by a large percentage of people as we all have a tendency to think and fret about how we look and how we are perceived.  This sense of worry can prohibit our bodies from feeling relaxed and full of joy. 

Take some time each day to ask yourself, "Am I smiling when I speak to others?"

3. Remember that a man's name is to him the sweetest and most important sound in the English language

I think this one is a little confusing for some. 

Look at it this way, one of the best ways to really implement this step is when you are already in a conversation with the other individual.

"Steve!  Come here!  I need to ask you something!"

This is not nearly as pleasing as:

"You know, Steve... you bring up an excellent point.  I hadn't thought about it that way."


"Let me tell you, Steve, the Luau was spectacular and I highly recommend it for you and Lucy."

It makes a conversation much more personal, and as the heading suggests, a person's name is the sweetest, most important sound in the English language.

4. Be a good listener, encourage others to talk about themselves

If this step seems difficult for you at first, you are on the cusp of a revolution in your social and professional life.  Watch as those around you suddenly light up as they emphatically respond to your question about their child's soccer match, or of their recent trip to a painter's convention.  

My rule of thumb is the more obscure the interest, the more excited they'll become.  Some common areas of excitement for people include family, hobbies, trips, their small business, or their favorite sports team.  I can assure you that by encouraging others to talk about themselves, you will have abundant and fulfilling friendships that will last many years.

5. Talk in terms of the other man's interests

No, this isn't a typo.  I know it's very similar to the last step, but it is so vitally important it needs to be re-emphasized and re-stated.

As soon as you catch yourself bringing up that recent trip to see your Grandmother, or how much fun you had surfing the other day, remind yourself that the person you're speaking to is ready to explode with their own stories, and hidden within one of them may be that secret I was referring to up in #1. 

Let them carry on about their dogs, or how much they made in Las Vegas.  You will be rewarded with a fantastic friendship, or a tight relationship with a co-worker that will pay dividends again and again.

6. Make people feel important, and do it sincerely

Lastly, I have a very simple tip to remember each and every day.  This is so important, it's worth writing on your bathroom mirror in permanent marker so you can see it and rehearse it aloud each morning.

Every one in the world may as well have a sign around their neck that reads, "Make me feel important."

Studies of psych ward patients have again and again pointed to an odd reason for their illness.  It seems that, more often than not, the patients found a sense of importance in the world they have created for themselves.  It's almost as if in their own head, they finally recieved that sense of importance they had always desired in the real world. 

This is why patients tended to believe they are billionaire businessmen, or very important diplomats from powerful nations.  One woman referenced in Mr. Carnegie's book even went mad and left her husband, because as a stay at home wife and mother, she never recieved the recognition and admiration she always desired. 

So remember that if people end up going insane seeking the feeling of importance they had never been able to find in the real world, can you imagine their excitement and elation with a simple, honest statement about their importance from you?  It will blow your mind!

I hope you find these tips to be helpful in your personal and professional relationships, and as always I welcome you to browse the archives for other helpful posts.

Kindest regards,