Recently, we learned how lifestyle inflation can be toxic.  In case you’re wondering, there is a time and place to inflate your lifestyle.  However, you can’t just do it whenever you want.  You have to earn it.  Here’s how it works. The basics If your goal is financial independence, I recommend that you live on half your income and save the rest. This means that if you’re making around $50,000 per year, ...

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Personal finance isn’t complicated.  In fact, if you do just six things right, you will become financially successful.  Let’s keep it simple and get started. 1. Earn a decent income. If you don’t make any money, you will never get ahead financially.  Forget about winning the lottery, getting an inheritance, or expecting the government to subsidize your lifestyle.  The only way to build wealth is to work. Jobs with a decent income include computer ...

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In my post, "Use it Or Lose It," I talked about the awesome benefits of the Roth IRA.  You do have to pay taxes on the money now, but it grows tax-free, and you can withdraw the money after age 59.5 without owing any taxes.  It’s the only way to win the tax game.  It is 100% your money, forever! In comparison, money in a traditional IRA, traditional 401k, ...

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Learning to budget is scary.  After all, it means you have to say NO to unnecessary purchases and keep your eye on long-term goals at the expense of short-term pleasure.  There are a variety of ways to budget, ranging from the restrictive and somewhat impractical “envelope system” to the more vague and potentially ineffective “wing it” system.  I’d like to present a balanced approach to budgeting that ...

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