The Big Fat Truth: J.D. Roth Interviews JD Roth

I’m not the only semi-celebrity J.D. Roth. For more than fifteen years, I’ve been receiving email and tweets and Facebook messages intended for the other JD Roth, the former executive producer of The Biggest Loser — and tons of other television shows.

Apparently the other JD Roth has a lot of fans. Actually, I’m one of them. I’ve been watching his shows since 2009, when season seven of The Biggest Loser inspired me to start my own weight-loss journey. When he published his book The Big Fat Truth in the spring of 2016, I read it the day it was released. I thought it was great, and wished that I could interview the author, but Kim and I were in the middle of our 15-month RV trip across the U.S. and I couldn’t make the logistics work.

Earlier this year, when I learned that Roth had created a TV version of The Big Fat Truth, I knew the time had come at last: J.D. Roth was going to interview JD Roth. Last month, we made it happen.

Note: It can be tough to tell the two of us apart. We’re both 5’8″. We both have the same facial hair. We both have beautiful wives/girlfriends. And we both share similar underlying philosophies regarding success and personal development.

That said, there are some subtle differences between the two of us.

• I spell my name J.D. Roth; he spells his name JD Roth.
• I live in Oregon; he lives in California.
• I have one producer credit on IMDB; he has fifty producer credits.
• I have 20,7000 followers on Twitter; he has 666 followers. (You should follow both of us, by the way!)

For the purposes of this article, here’s how to tell us apart: When I write about myself, I won’t do it in the third person. I’ll say “I” and “me”. When I write about the fitness JD Roth, I’ll use proper journalistic form and refer to him by his last name.

The Big Fat Truth

“I’ve been watching your new show [The Big Fat Truth on the Z Living network], and I really like it,” I told JD Roth at the start of our phone conversation. “I like that it’s less of a game show and more about helping participants address not only their health, but the other things they’re struggling with in their lives.”

“Yeah, it’s all interconnected.”

“Plus, The Big Fat Truth feels less produced than The Biggest Loser. There aren’t any weekly weigh-ins and there’s not dramatic music. It’s you sitting down and helping real people living their real lives facing real challenges — but still achieving real results.”

“Thank you.”

“In one episode, for instance, you have a couple analyze how they allow words to hurt them — how they use what others say as an excuse to make bad food choices. Or there’s the mom episode where you go over to Nancy’s house and it’s a mess. Her basement is a disaster, so you ask her to clean it up. I think you say something like, ‘Fix your mind and the body will follow.’ I love that.”

“All of these things in your life — your basement, your bank account, your belly — are a microcosm of what’s going on in your mind. Being ready to assess your inner life is probably the hardest part of losing weight. But it’s also the most important.”

“Here’s an exercise I’ve used in the past,” Roth said. “I tell participants to go home and clean out their bedrooms. If you want to lose weight, empty out your bedroom. Let yourself wake up to peace, organization, and calm. Give yourself this one oasis to escape from the chaos of life. This small step is a great place to start.”

If you’re interested in checking out The Big Fat Truth, you can watch the first full episode in the video embedded above. Or you can catch the show very Sunday at 8pm (Eastern and Pacific) on the Z Living Network. And, as mentioned, I think the book is terrific too.

From Desire to Transformation

“How do you help people move from desire to transformation?” I asked. “Many people want to lose weight, just like many people want to get out of debt. How do you move them from wanting to doing?” Before Roth could answer, I explained my own approach.

“I’m a big fan of the personal mission statement,” I said. “My goal is to get my readers to drill down to the things in life that are most important to them. I believe that if they’ll make decisions based around their core values, they’ll naturally be more motivated to achieve the success that they’re craving.”

“I like that idea,” Roth said. “A mission statement is important, no doubt. But I also think it’s important to celebrate the small stuff. I encourage people to look for three small victories every day. It’s the little steps, it’s the little promises that you keep, it’s the small victories that are game changers.”

He related an anecdote from his excellent TEDx talk about helping people learn to believe in themselves.

“I use this exercise with all of the people that I coach,” Roth told me. “I ask them to send me a list of small victories every day. As you might expect, most of these small victories are mundane. But sometimes they’re game changers.

“One guy, for instance, wrote that his small victory was this: ‘Today I tried, even though my trainer wasn’t looking.’ That might not seem like a big deal to the average person, but it was a big deal to me. It made me wonder where else this person wasn’t trying when nobody was looking. As a father? As a husband? As a co-worker? And here’s how this relates to motivation, to transformation.

“This guy realized the most important thing of all: ‘I’m doing this for me. I deserve it.’ He’s not losing weight for somebody else. His effort isn’t to please others. His effort is for himself. It doesn’t matter what other people see; what matters is what you see. When you try, you’re trying for you, not for anyone else. When you realize that, when you flip that switch, it’s so much easier to make the leap from desire to transformation because the motivation is there. It becomes intrinsic instead of extrinsic.”

“And did this guy lose weight?” I asked.

“He lost over 200 pounds,” Roth said. “But that wasn’t the best part. The external transformation was great, but even better was the internal transformation.”

Related reading: This anecdote is a perfect illustration of moving from an external locus of control to an internal locus of control. For more on this subject, check out my article on becoming proactive.

I Can and I Can’t

Roth believes there are two types of people: I Can people and I Can’t people. “If you don’t think you can do something, you won’t be able to. I Can’t is a self-fulfilling prophecy,” Roth says. “The bigger message is that you really are capable of doing things that seem impossible to you.”

“I agree,” I said. “I’ve seen this not only in other people, but time and again in my own life. When I’ve lost weight in the past, it’s always seemed daunting at the start. But I’ve made it happen. When I decided to get out of debt, that seemed impossible too. But by taking small steps and staying on course, I not only defeated my debt but also achieved financial independence.”

“Yeah,” Roth said, “I’ve seen similar mental shifts in the folks who have been on our shows. They start The Biggest Loser and it’s a struggle to stay on the treadmill for ten minutes, but by the end of the season, they’re able to run a full marathon. They never thought they’d be able to do it, but they can.”

“I love The Biggest Loser marathon,” I said. “Season seven of the show was a huge inspiration for me. It changed my life. I remember watching Tara Costa each week, watching how she went out there and just conquered whatever challenge came her way. So much mental toughness! For me, the most amazing moment was watching her pull the race car around the track. I saw that and decided that I wanted to be that tough too.”

“Yeah, Tara is amazing,” said Roth. “I ran much of that marathon with her, just off camera.”

“Watching her run the marathon in season seven inspired me to complete a marathon myself. It must have been May 2009 when that episode aired. I signed up for the Portland Marathon, and that October I did all 26.2 miles!”

“Congratulations,” said Roth.

Diet vs. Exercise

“What’s more important?” I asked. “Diet or exercise?”

“Well, you can’t outwork three bad meals a day,” Roth told me, echoing some sage advice from financial author Greg Karp: “You can’t outearn dumb spending.”

“You don’t lose weight through exercise,” Roth said. “You lose weight through a proper diet. But exercise is important for other reasons. Exercise builds muscle and contributes to mental health. Diet helps you maintain a healthy weight.”

“The mental health aspect is huge,” I said. “I have a tendency toward depression and anxiety. If I don’t exercise, things can get dark and gloomy. But if I make sure to remain active, I’m much happier with myself and others.”

“Exactly,” Roth said. “Nobody is hungry enough to eat themselves to three, four, five hundred pounds. Those hunger pains [sic] are actually other pains. They’re symptoms of something else. People develop these habit loops in which food takes the place of solving the actual problem. The number one thing I try to do is help people break their habit loops.”

Last week, I encouraged readers to “just solve the problem“. I proposed a six-step process to tackle the things you’ve been neglecting. Roth has similar advice, but he takes a simpler approach (which is better, I think). His three steps to solve any problem are:

1. Identify the problem.
2. Make a list of things you need to do.
3. Go do them.

“Do you think some people become addicted to food?” I asked.

“Well, food science is a real thing,” Roth said. “Foods are engineered to produce the perfect amount of dopamine to the back of your throat. Eating junk food makes you feel good in the short term. It makes you want more.

“It’s also interesting to note that the recidivism rate on drugs, alcohol, and food are identical,” Roth said. “A person who loses 100 pounds is just as likely to regain that weight as a recovering alcoholic is to relapse. It’s fascinating.”

Trivia: I’m a life-long Star Trek nerd. And when I was younger, I looked so much like The Next Generation‘s Commander Riker that some of my friends actually called me Riker! Meanwhile, it turns out that the other JD Roth was one of the final candidates for the role of Wesley Crusher.

Finances and Fitness

We wrapped up the call by talking about the similarities between physical fitness and personal finance. Yes, I know this is a topic that’s been beaten into the ground by money bloggers during the past decade, but it remains an endless source of fascination for me — probably because I’ve struggled with both money and diet in the past.

“Several years ago, I asked Suze Orman to be on our show,” Roth told me. “She came on The Biggest Loser to talk with our participants because I believe there is a relationship between fitness and finance. Like I said, it’s all connected.

“Anyhow, Suze said, ‘I’ll bet I can pick the eventual winner. Get me everybody’s FICO scores.’ So, I got her everybody’s FICO scores. Sure enough, those with the higher scores were the ones who had the better results.”

These days, Roth is financially independent. He sold his production company a couple of years ago, and now he’s semi-retired, much like me. “I’m only doing work that I’m passionate about,” he said. “I’m only working on things that are important. I’m in the fortunate position to be able to do a show for a start-up network on a subject that I’m passionate about — encouraging people to pursue a whole-food, plant-based diet.”

He paused for a moment. “I guess it goes back to my mission statement. I want to leave people better off than I found them.”

“That’s awesome,” I said. “That’s my goal too.”

Technical note: For some reason, I couldn’t get Skype to work for my phone call with the other JD Roth, which means I didn’t record the call. I had to take notes by hand instead of go back later to grab actual quotes. As a result, the conversation in this article is a reconstruction rather than a transcript.

The post The Big Fat Truth: J.D. Roth Interviews JD Roth appeared first on Money Boss.

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What to do if you win the lottery

Last week, Mavis Wanczyk, a 53-year-old woman in Massachusetts, won the largest Powerball lottery in history: $758.7 million. She chose the lump-sum option of $480.5 million, or $336 million after taxes.

Awesome!

Now I am going to teach you what to do if you ever win the lottery, a massive inheritance, or any other huge infusion of cash.

1/3 of lottery winners go bankrupt and I’ll be damned if I’m going to let that happen to you. So just listen and do what I say, please.

RULE #1: Shut The Hell Up 

I love you, but please shut your mouth right now. Do not tell anyone. Do not tell your boss, your loud-mouthed cousin with the mustache, or even your kids. You can tell 1 person: your spouse. And then tell them this: Shut The Hell Up. This is your new motto for the next 6 months.

Our friend Mavis decided to tell her boss (“She’s already called her boss and said, ‘I will not be coming back.’”), the press, and therefore the whole world. This means that random people are already coming out of the woodwork and the police have been watching her house.

Here are the scariest people who will try to find you, in descending order:

• Scammy “wealth managers” who will bleed you dry
• Uncle Joe, who wants you to invest in his stupid fucking idea for a themed bar
• Kidnappers who will hold you for ransom

DON’T DO IT. You can always choose to reveal your new wealth later once you have the proper precautions set up. But once the genie is out of the bottle, you can never put it back in. Be quiet and tell no one for now.

RULE #2: You have 2 new best friends: your lawyer and your financial advisor

I get it, you don’t have a lawyer. Now you do. You call up the biggest, most white-collar law firm in the country (just google “highest paid law firm”) and tell them you want a lawyer to help with taxes and trusts. When they ask why, tell them “I’ve recently come into some money and I’d like someone to coordinate my affairs.” They will charge you $500 or $600/hour. Pay it, happily.

This lawyer is now your conduit with the outside world. Who contacts the lottery to tell them about the winning ticket? Not you (see Rule #1). Your lawyer will handle that. Who do they make the check out to? Is it to you? Oh hell no. Your lawyer will set up an anonymous trust for you.

Your other new best friend is your financial advisor. Considering I hate most financial advisors and most of you don’t need one (see page 153 of my book for why), this might seem unusual. However, you just received millions of dollars out of the blue. It’s worth a few thousand bucks to get set up. Go to napfa.org to find a fee-only financial advisor who can guide you through the next few months of setting up your new financial systems.

I have a list of questions to ask financial advisors in my book and signs to watch out for. The one thing you want to look out for — the one sign you’ve chosen a salesperson, not a real advisor — is if they take a percentage of your assets. DO NOT sign up with some nutty wealth advisor who sweet talks you with a beautiful British accent. Just follow my directions from the book and your advisor can help you with the rest.

RULE #3: Do not change anything (with 3 exceptions)

You know all those movies about how a group of criminals gets away with a heist, but one idiot gets the entire crew caught because he goes out the next day and buys a fur coat and a $200,000 car? Do not do that.

For 6 months, don’t change anything. No new car, no extravagant trips, don’t quit your job. Your lawyer and financial advisor will help you get set up. This falls under Advice Everyone Says But Nobody Takes: When someone dies or you get a huge amount of sudden money, do not change anything for 6 months.

If you really need to quit your job, when people ask what you’re doing now, your line is, “I’m doing some consulting.” However, if you were a cashier at 7-11, I’m not sure if people are going to believe you’re a consultant. Anyway, your call.

I know most of you won’t follow this advice, so I came up with a list of acceptable things to spend money on:

1. Extra guac at Chipotle
2. Taco Bell Mexican Pizza
3. I also hereby authorize you to buy every product from http://ift.tt/2vr6gcE

RULE #4: Sign up for the IWT newsletter

Most importantly, sign up for my newsletter at I Will Teach You To Be Rich to learn how to live a Rich Life. Tell your financial advisor it’s free.

What to do if you win the lottery is a post from: I Will Teach You To Be Rich.

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4 steps to negotiating lower car insurance — with scripts

My first car was a rickety 12-year-old van that belonged to my parents. Actually, to call it “rickety” is being overly generous. That thing was a death trap. I remember having to drive in the right lane so when it broke down (not if) I could pull over without hassle.

In my last year of college, while I was driving to a bunch of business meetings, I decided enough was enough — I was going to buy a new car. When I decided to buy, I contacted over a dozen dealerships, told them exactly what I was looking for in a car and said I’d go with the lowest price offered to me…

…and the offers poured in. It resulted in a bidding war that led to a downward spiral of amazing deals on new cars and me landing one $2,000 under invoice. And that’s when I learned about the powerful combination of negotiation and cars.

But the fun doesn’t stop when you buy your car. You can use the same power of negotiation to get amazing deals on your car insurance. And because you pay insurance monthly, the gains only compound over time. I’ll show you how.

The importance of good car insurance

When I first purchased car insurance, I ended up getting it from a company with fantastic insurance rates because I wanted to save money each year. But it was also the worst insurance company in the world.

The company lost my paperwork, “accidentally” overcharged me, and spammed my mailbox every week with letters. Eventually, I got fed up and decided to switch. After calling a bunch of places and negotiating with different insurers, I found a company that saved me nearly $200 every six months (almost $400 a year).

If I would have compared and negotiated from the start, I would have saved hundreds of dollars and lots of headaches.

My point? Insurance is not a commodity. If you go with the cheapest insurer and it turns out that they “accidentally” overcharge you — and worst case scenario — can’t even fulfill your claim, then it’s your fault.

That’s why you want to pick a reputable company even if that means paying $50 or so more each year. And negotiating a great rate with these companies isn’t that complicated either — as long as you follow the steps I outline below and use the right scripts.

How to negotiate car insurance

Step 1: Set a goal of how much coverage you need

Most US states — besides New Hampshire and Virginia — require you to get car insurance as well as a certain amount of liability coverage you need.

When it comes to the amount of liability that’s required, you’ll typically need to find coverage in three areas:

1. Bodily injury (per person). This is the amount that is covered for each person who gets hurt during an accident.
2. Bodily injury (total). The most an insurance company will cover for bodily injury per accident.
3. Property damage (total). This does not include your own property. This amount only covers the damage sustained to the property of others.

Though every state requires you to get a certain amount of liability coverage, the full amount of the coverage varies.

Here’s a comprehensive list of car insurance coverage requirements for each state (ex: Alabama requires $25,000 for bodily injury per person).

STATE	BODILY INJURY (PER PERSON)	BODILY INJURY (TOTAL)	PROPERTY DAMAGE (TOTAL)
Alabama	$25,000	$50,000	$25,000
Alaska	$50,000	$100,000	$25,000
Arizona	$15,000	$30,000	$10,000
Arkansas	$25,000	$50,000	$25,000
California	$15,000	$30,000	$5,000
Colorado	$25,000	$50,000	$15,000
Connecticut	$20,000	$40,000	$10,000
Delaware	$15,000	$30,000	$10,000
Florida	$10,000	$10,000	Not required
Georgia	$25,000	$50,000	$25,000
Hawaii	$20,000	$40,000	$10,000
Idaho	$25,000	$50,000	$15,000
Illinois	$25,000	$50,000	$20,000
Indiana	$25,000	$50,000	$10,000
Iowa	$20,000	$40,000	$15,000
Kansas	$25,000	$50,000	$25,000
Kentucky	$25,000	$50,000	$10,000
Louisiana	$15,000	$30,000	$25,000
Maine	$50,000	$100,000	$25,000
Maryland	$30,000	$60,000	$15,000
Massachusetts	$20,000	$40,000	$5,000
Michigan	$20,000	$40,000	$10,000
Minnesota	$30,000	$60,000	$10,000
Mississippi	$25,000	$50,000	$25,000
Missouri	$25,000	$50,000	$10,000
Montana	$25,000	$50,000	$20,000
Nebraska	$25,000	$50,000	$25,000
Nevada	$15,000	$30,000	$10,000
New Hampshire (Coverage is optional but this is the minimum if you purchase it)	$25,000	$50,000	$25,000
New Jersey	$15,000	$30,000	$5,000
New Mexico	$25,000	$50,000	$10,000
New York	$25,000	$50,000	$50,000
North Carolina	$30,000	$60,000	$25,000
North Dakota	$25,000	$50,000	$25,000
Ohio	$25,000	$50,000	$25,000
Oklahoma	$25,000	$50,000	$25,000
Oregon	$25,000	$50,000	$20,000
Pennsylvania	$15,000	$30,000	$5,000
Rhode Island	$25,000	$50,000	$25,000
South Carolina	$25,000	$50,000	$25,000
South Dakota	$25,000	$50,000	$25,000
Tennessee	$25,000	$50,000	$15,000
Texas	$30,000	$60,000	$25,000
Utah	$25,000	$65,000	$15,000
Vermont	$25,000	$50,000	$10,000
Virginia (Required if you choose to purchase coverage. If not, you must pay a $500 uninsured motorists fee)	$25,000	$50,000	$20,000
Washington	$25,000	$50,000	$10,000
Washington, D.C.	$25,000	$50,000	$10,000
West Virginia	$25,000	$50,000	$25,000
Wisconsin	$25,000	$50,000	$10,000
Wyoming	$25,000	$50,000	$20,000

For an even more comprehensive look at what your state might require for car insurance, be sure to check out your state’s department of transportation website.

Other coverage options

Aside from state requirements regarding liability, most car insurers will provide 5 other coverage options. Deciding which ones you want is a matter of personal preference and factors like how old your car is.

The coverages are:

1. Uninsured motorists. Some states require you to be insured to protect against uninsured motorists. This coverage helps you in the event that you get into an accident with someone who isn’t insured and can’t pay for your car repair and/or medical bills.
2. Medical costs. If you’re injured in an accident, the insurance company will pay some or all of your medical bills (depending on the coverage and how much the bill is).
3. Personal injury protection. Like uninsured motorists coverage, some states require you to get this as a minimum. This pays for any medical expenses or lost wages you might encounter due to a collision.
4. Collision. This coverage typically protects your vehicle against collisions with other motorists or objects. Good if you’re prone to accidentally backing up into the mailbox.
5. Comprehensive. This coverage tends to cover the whole gamut of things that might happen to your car such as hail, water, and fire damage; if it gets stolen; vandalism; or total destruction. I wouldn’t suggest getting this coverage if your car is already pretty old or isn’t worth much.

Consider your options and decide what you want out of your insurance coverage. Once you do that, you’ll be ready for step 2.

Step 2: Figure out your current plan

If you don’t have your current plan in front of you, how can you hope to save?

That’s why you need to find out what your current policy looks like. Go digging through the glove compartment for it, check your files, or call your insurance company. This is important information you can leverage when negotiating with your current insurance provider.

At a very least, you need to know how much you’re paying and for what services.

Here are the numbers of the most popular car insurance providers that you can use to call to find out your policy now.

Geico	1-800-861-8380
AAA	1-866-539-8033
Allstate	1-866-704-9900
Progressive	1-800-776-4737
State Farm	1-800-STATE-FARM (1-800-782-8332)

By now you should have your policy in front of you. This includes what type of coverage you have as well as your deductibles and how much you’re paying in premiums.

You’re now ready to begin comparing it with other car insurers.

Step 3: Shop around

To start, you can use a rate comparer tool such as this one to compare quotes from different insurers.

I prefer talking to a rep on the phone, though, because they always tell me about other deals that the websites don’t offer.

When consulting with a rep or looking up quotes online, be sure to find out how much exactly you’ll be paying in these two areas:

• Premiums. This is the price you’ll pay for your plan. Typically, insurers offer 6-month and 12-month policies, and provide options for payment plans including paying for coverage all at once, quarterly, or month-by-month.
• Deductibles. This is the portion you’ll pay out of pocket before your insurer pays the rest.

Not many people know this but you can actually lower your premiums by opting for higher deductibles. According to a report from InsuranceQuotes.com, you can lower premiums by 9% by raising deductibles from $500 to $1,000.

This is all a matter of personal preference though. If you’re a good driver and/or don’t typically drive your car often, opt for higher deductibles for lower premiums.

If you’re accident prone, drive a lot, or have kids that plan to learn how to drive soon, definitely opt for the lower deductible.

No matter the case, you should know exactly the coverage you want along with the limits for each. That way it makes everything much simpler to compare.  

To help keep everything organized, you can use an Excel or Google Spreadsheet. Here’s a good template to leverage during your search.

Once you get a few solid quotes, compare them to what you’re currently paying. You’re going to be able to make a sound argument with your insurance rep as to why you should get a lower rate once you do.

Which brings us to…

Step 4: Lower your rates with this car insurance negotiation script

Now it’s finally time to call up insurance reps — including the one you currently have — and negotiate an awesome deal with scripts.

Before you do that, though, there are two things to keep in mind when speaking to a representative.

1. Stay polite — but firm. Don’t just call up the rep and scream, “GIVE ME LOWER CAR INSURANCE!!!!” (I’ve tried, it doesn’t end well.) You need to handle the negotiation with finesse and civility — even if the representative is short with you. Nothing throws a wrench into negotiations quite like pissing off the one person who can help you.
2. This is not a win/lose situation. You can’t just make a demand and expect the person to give it to you. However, insurance companies are willing to offer discounts to make or keep high-value customers. Prepare to make your case as to why you’re such a good customer and you’ll see results.

Keep those two things in mind when you call up the representative and I promise you, you’ll find a great deal.

Calling to renegotiate your current policy

If you already have a car insurance policy but just want to negotiate for better rates, use the following script.

ACME INSURANCE: Hello, Acme Insurance. How may I help you today?

YOU: I’d like to negotiate a policy. [Other insurance company] is offering to insure me for $XXX less for [coverage]. I’d like to know if there’s a better deal from you, please.

Wait for their response. Negotiating with this technique is much harder to do with car insurance companies than banks — but it is possible. If they’re stubborn and try to shoot you down, keep pressing at it. Don’t make it easy for them to say no.

ACME INSURANCE: Sorry, but our rates are fixed at this time and we can’t change it due to [some BS excuse about why they can’t give you a lower rate].

YOU: Well, I’ve been a good driver for X years now and would love a lower rate. What else can you do to help me?

ACME INSURANCE: Hmm, one second sir. I see that you’re a really good customer. I’m going to check with my supervisor. Can you hold for a second?

[hold]

I was able to check with my supervisor and can lower that policy by X%. Does that work?

Getting a response like that is the best case scenario. However, there might be the chance that they deny you a discount based on this tactic alone. If this happens, I suggest you do the following:

1. Don’t stop until you get a yes. Persistence is integral in negotiations. If you keep at it and make a strong case, they’ll be backed into a position where they’ll want to give you what you want.
2. Try again later. Like the Magic 8 Ball says, sometimes you just have to try again later. If the first car insurance rep keeps shutting you down, thank them for their time, hang up, and dial again for a new rep. This one might be a little more amenable to your suggestions.  
3. Refocus your negotiations. If they won’t give you a discount because their competitors are offering better rates, don’t worry. There are still other ways to get fantastic deals — which I’ll go into in the next section.

This isn’t the only way to get a lower car insurance rate, though. By asking certain questions, you’ll be able to unlock deals you didn’t even know existed.

Calling to negotiate a new policy

You might be searching for your first car insurance policy ever. Or you might be looking to see what’s better than your current one.

No matter the case, it’s time to start digging deep and asking detailed questions to uncover the saving these companies have hidden from you. The majority of people won’t even ask questions like these, so reps will be caught off guard — giving you the advantage.

First, you’re going to want to start the same as above. Here it is again.

ACME INSURANCE: Hello, Acme Insurance. How may I help you today?

YOU: I’d like to negotiate a policy. [Other insurance company] is offering to insure me for $XXX less for [coverage]. I’d like to know if there’s a better deal from you, please.

If they shoot you down, remember you can always:

1. Reiterate the fact that you want a better deal and keep persisting.
2. Hang up the phone and call back to negotiate with a different rep.

If you get the lower rate — or even if you don’t — you can refocus the negotiations and start asking for the hidden deals that many car insurers don’t tell you about.

Here are a few good questions to ask to uncover those gems:

“How much would I save if I insure my car and house with you?” Some insurers will discount if you insure your house through them as well as your car.

“What about renewal discounts? What can you offer me as a discount for long-term membership?” Reminding them of the fact that you’re looking to be a longtime customer goes a long way in ingratiating yourself to them.

“Can I save money by prepaying my entire year up front?” Many insurers will offer huge policy discounts if you prepay for an entire year.

“Let’s check my car. I know other firms offer discounts for features like anti-lock brakes. What about you?” Not many people realize this, but many car insurance companies will offer better premiums if your car has safety features such as anti-lock brakes, airbags, and four wheel drive.

“What kind of low-mileage discounts do you offer?” If you find yourself taking the bus or biking to work more than you ever drive, you might qualify for a low-mileage discount with car insurance companies.

“If I enrolled in a defensive-driving course, what kind of discount would you offer? Oh, really? Which courses qualify?” Car insurance companies want you to be a safe driver. That’s why some are willing to discount you if you take a course aimed at making you one.

“What about discounts for my employer? (Tell them the specific name of your employer.)” Some employers partner with car insurance companies in order to get great rates for their employees. Check to see if your company does this.

“Some insurance companies offer discounts for low-risk occupations (engineers). What kind of competitive rates do you offer?” Insurance companies take a look at many things when it comes to determining your rate — including your employment. After all, a NASCAR driver is probably going to have higher rates than a CPA.

“Am I paying for roadside assistance? What other additional benefits am I paying for?” Many times, you don’t need certain benefits such as roadside assistance (if you’re in AAA, you already have it). In fact, many credit cards offer roadside assistance as well. Getting rid of these “benefits” could give you a good discount.  

“Can you walk me through the deductible changes I could make to save money?” Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 – 30%. Going to a $1,000 deductible can save you more than 40%. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

It seems like a lot of work — and it is. But this is the work that 99.9999% of people out there won’t do, which means your returns can be substantial if you do them.

Check out this graph I made of different rates that insurance companies were offering me.

The difference between the lowest quote (USAA) and the highest (Liberty Mutual) is $602 per year. That’s a 50% savings for a few phone calls.

You can earn similarly low rates with just a few phone calls and scripts. Try some of these tactics out this week and let me know what you find in the comments.

Beyond car insurance negotiations

If you couldn’t tell already, I LOVE negotiations — mostly because I got it from my parents.

I remember my dad once dragged me with him as he spent an entire week negotiating at a dealership on the price of a car.

After many days of back and forth with our salesperson, they finally reached a price they could agree on. BUT as he was literally about to sign the contract, he asked the dealership to throw in some extra floor mats.

They said no.

And he walked away.

An entire week’s worth of bargaining them down to an incredibly fair price, only to walk away when they didn’t give him something he could have bought for less than 50 bucks at Target.

What’s my point? Two things:

1. My mom and dad are incredibly Indian.
2. You have to be stubborn to be a good negotiator.

I’m a big believer that negotiations can open up HUGE savings for you.

That’s why I want to give you something that’ll help you save and earn more money through negotiations and other proven systems: The Ultimate Guide to Personal Finance.

The money you save on lowering your car insurance is great, but it’s small compared to everything you can save when you optimize your personal finances.

That’s why I’ve outlined my entire system in this no-BS guide on how to make your personal finances work for you.

And it’s all for FREE.

4 steps to negotiating lower car insurance — with scripts is a post from: I Will Teach You To Be Rich.

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How To Pay Yourself When You’re Self-Employed

In 2015, I left my full-time job to devote all of my efforts to building Money After Graduation. I’d like to say I was organized and top of things right from the get go, but in reality it took me more than 12 months to really get my business working, particularly my business finances. Believe it or not, one of the things I struggled with most was paying myself. How much should you pay yourself when you’re self-employed? A good rule of thumb that I wish I learned in my first year of business is: For up to $250,000 in gross revenue, you should pay yourself 50% of what your online business earns. So if your business is earning $3,000 per month, $1,500 should be going straight into your pocket as net personal income, and $1,500 should remain in the business to help it grow. This suggestion comes from the […]

The post How To Pay Yourself When You’re Self-Employed appeared first on Money After Graduation.

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Just Solve the Problem!

I have a splinter in my foot. It’s been there for the past ten days, and boy let me tell you: It hurts!

While the contractors were working to replace the siding on our new home, they discovered a termite infestation outside the bathroom.

Further investigation revealed that the floor under the tub was not only wet and damp, but had actually completely rotted. So, we hired somebody to repair the damage. On the first day he was here, I went into the bathroom barefoot. Oops. I stepped on a shard of glass tile, and it’s been in my foot ever since.

This sliver doesn’t really affect normal activity. If I wear sneakers and socks, I barely feel it. But if I wear sandals, I get a sharp stabbing pain in the side of my left foot. If I try to run, the same thing happens. And forget about going to the gym!

Now, the obvious response here is, “Why haven’t you taken the sliver out of your foot?” Great question!

That very first night, Kim did try to remove the sliver, and we thought she got it. But the next morning when I took Tally for a walk, I realized the sliver was still there. It’s been there ever since.

This, my friends, is a perfect example of a couple of things.

• First, it’s my family’s mentality in action. For some stupid stupid reason, we Roths don’t like dealing with medical issues. When we’re sick, we suffer for days (or weeks) before going to a doctor. When we’re hurt, we just suck it up. When I was young, my mother sprained her ankle. She limped around for months before seeking medical attention. In college, I broke a finger playing touch football over Thanksgiving. I dealt with the intense pain until Christmas break, at which time I finally decided to see a doctor.
• Second, this a perfect example of putting up with a problem instead of finding a solution. Most people — myself included — are willing to tolerate a great deal of dissatisfaction and discomfort before deciding to remedy whatever is wrong in their lives. I’m not sure why this is the case, but it’s true.

During this morning’s walk with the dog, the pain was especially bad. Every time I planted my left foot, it felt like somebody was stabbing me with a needle. “I just need to solve the problem,” I thought to myself — and that reminded me of some wise advice I once received.

Just Solve the Problem

About a decade ago, I worked with a life coach. Each week, we’d have an hour-long phone conversation about the ways I was trying to become a better person. I made great progress in some areas, but little progress in others.

One day, we were talking about my inability to eat a healthy breakfast. I’ve always been the sort of guy who knows he should eat a nutritious breakfast but doesn’t actually do so. My coach had been encouraging me to make this a habit in my life, but I kept complaining about all the reasons it wasn’t possible. Eventually, she’d had enough.

“J.D., you’re being ridiculous,” my coach said, exasperated. “This isn’t rocket science. Millions of people eat a healthy breakfast every day. You can too. You need to stop making excuses. You need to identify the problem and solve the problem. Just solve the problem!”

This advice hit me hard: “Just solve the problem.” Obvious, I know, but that doesn’t mean it’s not powerful. I began to recognize that, in so many ways, I deliberately lived in the problem instead of living in the solution. I realized that maybe I could fix the things that were broken in my life if I’d only take the time to do so. (After all, I’d already made the resolution to become a money boss — and that had worked wonders with my financial situation!)

With breakfast, for instance, the solution was to make it easy to have healthy choices. For me, that meant stocking the fridge with egg whites and chicken sausage. It meant learning to like yogurt. It also meant giving myself permission to spend a little extra on pre-packaged fruit and — not kidding — breakfast steaks. (I was eating paleo at the time, so a piece of filet mignon was perfectly acceptable…if somewhat expensive.)

Related reading: There was a recent thread on Reddit discussing why people choose long-term inconvenience over short-term inconvenience: “I just spent at least 10 minutes undoing several screws using the end of a butter knife that was already in the same room, rather than go upstairs and get a proper screw driver for the job that would have made the job a lot easier and quicker.” And I have spent ten days limping around with a sliver in my foot rather than have Kim spend five minutes taking it out.

How Do You Solve the Problem?

“Just solve the problem” is terrific advice that can be applied to all aspects of life. For almost a decade now, it’s been a mantra of mine. Admittedly, it’s a mantra that I sometimes forget to repeat to myself. But when I do remember to heed these words, they help me get a hell of a lot done.

But just how do you go about solving the problems in your life? I believe there’s a six-step process that you can use to tackle the things you’ve been neglecting for too long:

1. Recognize a problem exists. You need to be conscious that a problem is present before you can figure out what that problem is. Sometimes this is easier said than done. It’s easy to get complacent, to just accept that this is “the way things are”. For instance, you might be unhappy with your financial situation; you might realize that something with the way you’re handling money isn’t working.
2. Identify the problem. After you’ve recognized that things aren’t right, ask yourself why. What is the specific problem that’s leading to your unhappiness? Is there more than one problem? Using the previous example, once you’ve realized you need to do something different with your dollars, you might find that debt is dragging you down.
3. Diagnose the source of the problem. Next, try to figure out why your problem exists. How did it start? Why does it continue? Why does it make you unhappy? With our financial example, you’d quickly discover that your debt exists because you spend more than you earn. But why do you spend more than you earn? When did you start doing this? Why do you continue to do so?
4. Brainstorm solutions. Now that you’ve identified the problem (and its source), it’s time to figure out how to fix things. This is the fun part. Come up with a list of ways you can overcome the problem that’s been holding you back. To get out of debt, for instance, you might take a two-pronged approach: boost your income by taking a second job while also cutting back temporarily on some non-essentials.
5. Formulate a plan. Once you’ve come up with a solution to your problem, make a plan to turn these dreams into reality. How specifically are you going to implement your solution? What steps can you take today and tomorrow to solve the problem? If you’re trying to trim your budget, you might draft a prioritized list of places you can cut your spending. Then you can write down concrete steps to take toward each of these goals.
6. Take action. The last step is the most important. To solve any problem, you must take action. It doesn’t do any good to identify the problem, to brainstorm solutions, and to formulate a plan if you’re not going to do the work necessary to make things right. You’ll never get out of debt if all you do is tell yourself you ought to spend less. You must truly spend less in order to eliminate the problem.

Here’s one way I’m currently using this “just solve the problem” methodology in my own life.

As you may recall, Kim and I both packed on the pounds during our 15-month trip around the U.S. We’ve been home a year now, but we haven’t lost any weight. We’re both aware that a problem exists: We’re uncomfortable with how we feel.

Why are we fat? Why aren’t we fit? What’s the source of the problem? Well, alcohol is a big culprit. We drink far too much beer and wine. In fact, I’d go so far as to say that all the extra weight that each of us is carrying comes from booze. The lack of fitness, however, is because we got out of the habit of exercising. When we first met, we both went to the gym five times a week. Recently, that’s dropped to zero times a week. Yikes.

So, how can we solve the problem(s)? First, we can drink less. Second, we can choose healthier foods. (Our diets aren’t terrible, but they aren’t great either.) Third, we can look for ways to make exercise happen instead of coming up with reasons that it can’t.

Now that we have some solutions, we can develop a plan to put them into action. And we have. We’ve agreed to have a “sober September”. Meanwhile, Kim is going to pursue a specific eating plan while I return to my trusty “paleo-ish diet”. Finally, we’ve committed to going to the gym at least twice a week.

None of this matters if we don’t actually do it, right? Fortunately, we’ve already begun to follow through on some of these things. We joined Orange Theory last month, for instance, and have enjoyed rediscovering the power of an intense workout. We’re out of beer here at home, and we don’t plan to buy any until October. And when we get back from our upcoming roadtrip to California, we’ll stock up on healthy fruits and vegetables.

The Bottom Line

I have a terrible tendency to overthink things. I make them more complicated than they have to be. That was certainly the case back when my life coach was trying to teach me how to eat a healthy breakfast. I mean, how hard is it to pull a yogurt from the fridge?

I get frustrated when people come up with reasons that something can’t be done instead of thinking of ways it can be done. Yet I’m guilty of the same thing when I fall into the trap of overthinking the problems in my life.

Taking my foot as an example, I’ve used all of the following as reasons not to remove the sliver during the past ten days:

• “Oh, the contractors are still here. We should wait until they leave before we remove the splinter.” (But, of course, by the time they leave I’ve forgotten about it.)
• “Oh, my feet are dirty right now. We should wait until I’ve had a chance to clean them.”
• “Oh, Kim just got home from work. I should give her a chance to rest before I ask her to remove the splinter.” (But, of course, I end up forgetting to ask her to help me later.)
• “Oh, we’re about to leave. It’d be inconvenient to take the time to get the splinter out now. We should do it when we get home.”
• “Oh, I’m tired. We should just go to bed. We can always remove the splinter in the morning.”

Looking back, it’s clear to me that these are lame excuses. I’ve been coming up with reasons not to remove the sliver of glass instead of looking for an opportunity to get it done.

Tonight when Kim gets home, I’m going to have her help me remove this god-damn splinter.

Related reading: For more on this subject, check out my article about how to use barriers and pre-commitment to automatically do the right thing.

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How to get your overdraft fees waived

We’ve all been there before: You just bought something with your debit card — maybe a latte or dinner with a friend — only to find out later that you didn’t have enough money in the account.

No big deal. You can just move some funds from your savings to your checking account (some banks might even automatically do this for you). BUT you soon get a notification from your bank telling you that you’ve been hit with an overdraft fee for the trouble.

Now, you have two options:

1. Pay the overdraft fee and cry about how the bank is unfair.
2. Call your bank and negotiate the fee away.

If you want to take option one, you can stop reading now and grab a box of tissues on your way out the door.

However, if you want to beat the banks at their own game — while picking up some great skills along the way — I’ll show you the systems how.

But first, let’s take a look at what overdraft fees are exactly as well as what a few banks are going to charge you.

What is an overdraft fee?

Overdraft fees occur when you take more money out of your checking account than is currently in there. When this happens, your bank will charge you a fee to facilitate the transaction. For some reason.

Though the fee will vary from bank to bank, here are overdraft fees from a few of the most popular banks as of July 2017:

BANK	OVERDRAFT FEE
Chase	$34
Bank of America	$35
Wells Fargo	$35
US Bank	$36
PNC Bank	$36
Citibank	$34

(For a full list of overdraft fees, be sure to check out this article from NerdWallet.)

Though $34 – $36 here and there might not seem like a lot, you could find yourself saddled with hundreds of dollars in fees if you overdraft multiple times.

Luckily, you can negotiate to get them waived if you have the right scripts. That’s why I want to show you exactly how you can get your overdraft fees waived with a simple phone call with your bank.

The exact script to get overdraft fees waived

A while back, I got hit with an overdraft fee.

I know, I know. I literally run a personal finance website. But hey, we all make mistakes. And when they happen, the best thing you can do is be proactive about it.

So I saw the fee, sighed, and picked up the phone.

The conversation went like this:

RAMIT: Hi, I just saw this bank charge for overdrafting and I’d like to have it waived.

BANK: I see that fee. Unfortunately, we’re not able to waive that fee. It was [some BS excuse about how it’s not waivable].

RAMIT: Well, I’ve been a good customer with the bank for X years now and would still like to get it waived since this is a rare occurrence. What else can you do to help me?

BANK: Hmm, one second sir. I see that you’re a really good customer. I’m going to check with my supervisor. Can you hold for a second?

[hold]

I was able to check with my supervisor and waive the fee. Is there anything else I can help you with today?

And just like that, I got my overdraft fee waived. This script works so well for a number of reasons:

1. I repeated my complaint and asked the bank rep how they could constructively help me.
2. I’ve been a loyal customer to the bank for many years, which you should always use to your advantage when calling to negotiate.
3. I was polite but firm. Nothing can force a negotiation to go sour faster than a bad attitude.

You can use this exact script in order to get yours waived too.

(For more tactics on negotiations, make sure you check out my article on how to negotiate anything.)

What to do if they say no?

But there is always the chance they still say no to your request — and that’s okay. When that happens, there are three options you can take:

1. Persist. Banks pay hundreds of dollars in customer-acquisition costs and don’t want to lose you. If you’re persistent enough and make it hard for them to say no, you’ll have the upper hand if they try to shoot you down.
2. Hang up and call again. Sometimes getting your fee waived is a matter of hitting the right bank rep. If the first bank rep keeps shutting you out, politely thank them for their time, hang up, and dial the number again.
3. Pay the fee. You’re not going to win all negotiations. Sometimes you’re going to have to just pay the fee. BUT if you have the right scripts and prepare, you can be infinitely more ready than you were before.

When it comes to overdraft fees though, the best system is the one where you don’t have to worry about them at all. That’s why I suggest learning how to avoid getting overdraft fees entirely so you don’t have to concern yourself with negotiating the rate away.

How to avoid getting overdraft fees

When it comes down to it though, the best way to approach overdraft fees is to avoid them entirely — which is why I suggest having a system in place to do exactly that.

When it comes to my system, I suggest doing two things:

1. Opt out of overdraft protection
2. Create a conscious spending plan

Opt out of overdraft protection

When you sign up for a checking account, many banks try to convince you to sign up for something called overdraft protection. It’s the policy in which the bank will cover you when you overcharge on your debit card, but charge you the overdraft fee for the trouble.

However, if you choose to opt out of overdraft protection, your card will simply get declined every time you attempt to charge more money than you currently have in the account.

Sure, it might be embarrassing if you’re on a date and it turns out you can’t pay for dinner because your card got declined — but it can go a long way in saving you money on overdraft fees. But if you want to avoid that situation entirely, you need to make sure you have one system in place: A conscious spending plan.

Create a conscious spending plan

Conscious spending is the practice of deciding exactly where you’re going to spend your money — going out, saving, investing, rent — and freeing yourself from feeling guilty about how you spend it. I’ve written about this before, but I’ll give a quick run down here because it’s important to know.

In order to be able to consciously spend your money, you need to automate your finances so you can invest and save money passively instead of constantly wondering if you have enough to spend.

And it’s simple: At the beginning of the month, when you receive your paycheck, the money is immediately sent to where it needs to go through automatic systems that you have set up already.

Some spending recommendations for your system:

• 50%-60% Fixed Costs: This includes things like utilities, rent, internet, and debt.
• 10% Investments: This includes your Roth IRA and 401k plan.
• 5%-10% Savings: This is money that goes towards things like vacations, weddings, home down payments, and unexpected expenses.
• 20%-35% Guilt-Free Spending: Fun money! Spend this on anything you want from nice dinners to movies.

If you want to find out more on how to automate your finances, check out my 12-minute video explaining it here:

This system is the exact same one that my friend uses to spend over $5,000 a year on shoes.

Seriously. She’ll typically buy around 10 – 15 shoes each year, and each of them cost about $300 – $500 a pair.

“THAT’S RIDICULOUS!!!! Why would anyone buy that many expensive shoes a year?”

Look, if you’re reading this, then you’re probably a Top Performer — which means you can look a little deeper.

This girl makes a healthy six-figure salary. She has a roommate, eats for free at work, and doesn’t spend much on other things.

She also automated her finances so she can consciously spend her money without worrying if she has enough money to pay for everything.

After funding her 401k and other investment accounts, she has money left over to spend on things she loves (i.e. shoes). Why wouldn’t she use her money to buy things she loves?

So instead of passing judgment, you should:

1. Put this system in place
2. Know exactly how much money you can spend each month
3. Avoid those messy overdraft fees for good

Master your personal finances

Once you automate your finances, you’ll be well on your way to living a Rich Life and avoiding overdraft fees, debt, and embarrassment when your card gets declined during a date.

And you don’t need any fancy get rich quick schemes or snake oil. All you need is determination and the right systems put in place to help you get the most out of your financial situation and not have to worry about living “frugally” (aka sacrificing the things you love).

That’s why I’m excited to offer you something for free: My Ultimate Guide to Personal Finance.

In it, you’ll learn how to:

• Master your 401k: Take advantage of free money offered to you by your company…and get rich while doing it.
• Manage Roth IRAs: Start saving for retirement in a worthwhile long-term investment account.
• Automate your expenses: Take advantage of the wonderful magic of automation and make investing pain-free.

Enter your info below and get on your way to living a Rich Life today — and avoid overdraft fees forever.

How to get your overdraft fees waived is a post from: I Will Teach You To Be Rich.

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Retiring early: The 2 accounts that make it possible

I’ve talked about invisible scripts before. They’re the things we tell ourselves that are so deeply embedded that we don’t even realize they guide our attitudes and behaviors.

For example:

• “I need to go to college to get a degree if I want a good job.”
• “After I graduate, I need to get married and settle down.”
• “Having more Twitter followers means more people like me.”

And early retirement is no exception.

Our society has mistakenly idolized the idea of retiring. So much so that people are willing to slave away for decades at a job they don’t enjoy with the singular goal of living ultra-frugally so they can retire in their 30s.

Take a look at this thread on a subreddit dedicated to early retirement. The original poster posits a provocative question: Do you all hate your jobs?

And the answers were equal parts interesting and sad.

• “I really enjoy the work that I do and the people that I work with. I just don’t want to have to do it 40hrs/wk and I don’t want to have to depend on doing it to get by financially.”
• “It’s not my job itself that I dislike. I dislike the general structure and rigidness of corporate work life.”
• “I don’t hate my job, but it is very, very boring. What’s worse is that I accidentally got too good at it, which means I’ve been put in the position of managing other people, and that part of the job I do not care for at all.”

If you dislike your job, I have one question for you: Why aren’t you working to enjoy yourself right now? Why put it off to some magical date in the future?

Top Performers aren’t thinking about how awful their jobs are. Instead, they aim to do work they truly love AND live a great life.

I’m not anti-retirement. I have my own retirement accounts and have been investing money in them since slap bracelets were fashionable. But I’m against the idea that you need to seek out early retirement in order to start enjoying life.

Instead, I suggest you start investing money for retirement early instead.

(See what I did there?)

Because for many of us — even the Top Performers — knowing you have a growing nest egg for retirement enables you to be aggressive in other areas of your life. (And maybe there’s going to come a time when we’re going to just want to hit up the links all day or sit on a beach with a drink in our hands.) 

Today, I want to show you the exact system you can use to get started saving for retirement now.

The best retirement accounts to invest your money

Before we get into the tactics on how to invest money, let’s talk about the two best investment tools you’ll ever have:

1. 401k
2. Roth IRA

With retirement accounts, you’ll be able to accrue gains with big tax advantages with one caveat: you promise to save and invest long term. That means you can buy and sell shares of almost anything as often as you want as long as you leave the money in your account until you get near retirement age.

We’ll talk about those exceptions a little later, but for now just know that retirement accounts give you a HUGE advantage over regular investment accounts but can tie up your money in the short term, penalizing you for withdrawing before a certain date.

But what is a 401k and Roth IRA? Do you have to jump through a lot of hoops to get them? How much do you have to invest each month?

Let’s take a look at each one.

401k: Free money from your employer

A 401k is a powerful retirement account offered to you by your employer. With each pay period, you put a portion of your pre-tax paycheck into the account. That means you’re able to invest more money into a 401k than you would a regular investment account.

But here’s the best part: Your company will match you 1:1 up to a certain percentage of your paycheck.

Say your company offers 3% matching. If your yearly salary is $150,000 and you invest 3% of your yearly salary (~$5,000) into your 401k, your company would match you that amount — doubling your investment.

Check out the graph below that illustrates this.

This is free money!!! If your company offers a match, you should ABSOLUTELY take part in their 401k plan.  

Where’s my money going?

When you invest in a 401k, your money goes into an investment account where a professional investing company manages it. Typically, your employer gives you different investment options to choose from (aggressive, international, mixed, etc).

Your company does most of the work when you set up the 401k and you’ll often be able to instruct them to automatically withdraw a certain amount from every paycheck. And don’t worry about switching jobs. If you should ever decide to leave your company, you can take your 401k with you.

When can I take my money out?

The money you invest in your 401k must stay in the account until you are 59 ½ years old. If you take the money out before then, you’ll get slapped with a 10% federal tax penalty on your funds.

If you want to maximize your returns for your 401k, make sure you leave it in there until you’re ready to retire. When you do take it out, you are going to have to pay income tax so it’s not completely tax-free. However, the money you’re earning is incredibly lucrative.

For more on 401k’s, be sure to check out my article on how the account is the best way to grow your money.

But 401k’s are only one part of the equation when you want to start saving for retirement. The other account you should get is a Roth IRA. And ideally, you have both.

Roth IRA: The best long–term investment

A Roth IRA is simply the best deal I’ve found for long-term investing.

Remember how your 401k uses pre-tax dollars and you pay income tax when you take the money out at retirement? Well, a Roth IRA uses after-tax dollars to give you an even better deal.

With a Roth, you put in already taxed income into stocks, bonds, or index funds and pay no taxes when you withdraw it.

For example, if Roth IRAs had been around in 1970 and you’d invested $10,000 in Southwest Airlines, you’d only have had to pay taxes on the initial $10,000 income. When you withdrew the money 30 years later, you wouldn’t have had to pay any taxes on it.

Oh, and by the way, your $10,000 would have turned into $10 million.

That’s an exceptional example, but when saving for retirement, your greatest advantage is time. You have time to weather the bumps in the market. And over years, those tax-free gains are an amazing deal.

How to open a Roth IRA account

To open up a Roth IRA, find a brokerage account. There are many out there so I highly suggest shopping around and taking a look at the options out there.

Certain factors you want to consider when looking at brokers can be:

• Minimum investment fees
• Customer service
• Investment options
• Transaction fees

A few brokers I suggest, though, are Charles Schwab, Vanguard, and E*TRADE.

These brokers offer fantastic customer service and are well-known in the investment community for their great stock options.

Special note: Most brokers typically have minimum amounts for opening a Roth IRA, usually $3,000. Sometimes they’ll waive the minimums if you set up an automatic payment plan depositing, say, $100/month.

Also, it’s worth noting that there’s currently a yearly maximum investment of $5,500 to a Roth. (This amount changes often so be sure to check out the IRS contribution limits page to keep updated).

Once your account is set up, your money will just be sitting there. You need to do things then:

1. First, set up an automatic payment plan (which we’ll explain how to do later) so you’re automatically depositing money into your Roth.
2. Second, decide where to invest your Roth money; technically you can be in stocks, index funds, mutual funds, whatever. But I suggest investing your money in a low-cost, diversified portfolio that includes index funds such as the S&P 500. The S&P 500 averages a return of 10% and is managed with barely any fees.

For more read my introductory articles on stocks and bonds to gain a better understanding of your options. I also created a video that’ll show you exactly how to choose a Roth IRA.

When can I take my money out?

Like your 401k, you’re expected to treat this as a long-term investment vehicle. You are penalized if you withdraw your earnings before you’re 59 ½ years old.

You can, however, withdraw your principal, or the amount you actually invested from your pocket, at any time, penalty-free (most people don’t know this).

There are also exceptions for down payments on a home, funding education for you/partner/children/grandchildren, and some other emergency reasons.

But it’s still a fantastic investment to make — especially when you do it early. After all, the sooner you can invest, the more money your investment will accrue.

Automate your finances for pain-free investments

Once you have your accounts set up, it’s time to start investing — and there’s no better way to do this than with an automated system.

I’ve written about this before, but I’ll give a quick run down here because it’s important to know.

Automating your finances is a system that allows you to invest passively instead of you constantly wondering if you have enough money to spend.

And it’s simple: At the beginning of the month, when you receive your paycheck, the money is immediately sent to where it needs to go through automatic systems that you have set up already.

Some spending recommendations for your system:

• 50%-60% Fixed Costs: This includes things like utilities, rent, internet, and debt.
• 10% Investments: This includes your Roth IRA and 401k plan.
• 5%-10% Savings: This is money that goes towards things like vacations, weddings, home down payments, and unexpected expenses.
• 20%-35% Guilt-Free Spending: Fun money! Spend this on anything you want from nice dinners to movies.

If you want to find out more on how to automate your finances, check out my 12-minute video explaining it here:

Forget early retirement — make money and have fun doing it

Once you have your system automated and you’re investing consistently into your Roth IRA and 401k, then congrats! You’re already ahead of 99.99999% of the population when it comes to taking control of your personal finances.

You’re well on your way to wealth and living a Rich Life — but it shouldn’t stop there.

I go into even more detail in Chapter 7 of my New York Times best-selling book, I Will Teach You To Be Rich.

You can get the entire chapter, free, below. In it, I cover the nitty-gritty of maintaining your investment accounts, asset allocation, and rebalancing your portfolio to maximize returns.

I know: There’s a ton to cover here about making the most out of these accounts, but if you’re a weirdo like me, you’ll love learning about it.

Check it out now.

Retiring early: The 2 accounts that make it possible is a post from: I Will Teach You To Be Rich.

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Should You Start Investing If You Have Debt?

Many people are eager to get started in the stock market, but other financial obligations are holding them back. You can (and should) start investing even if you have debt Paying off debt and building wealth doesn’t have to be an either-or decision. You can do both at the same time, and will likely come out further ahead with this strategy rather than focusing on one above the other. However, there are circumstances in which investing while you have debt is not a good idea. Namely, when your debt balance is very large or at a high interest rate. Likewise, the savings side of your budget determines if you can afford to invest at all. Is your debt balance greater than $25,000? Even at low interest rates, large debt balances are expensive. If your debt balance rivals your annual salary, you want to get it below the threshold of $25,000 before you […]

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4 insights from earning a six-figure income

For many, a six-figure salary is a pie-in-the-sky dream — a life of lavish homes, luxury services, and being able to order guac at Chipotle without worrying about the extra cost.

But is that what earning a six-figure income is REALLY like? Or does life pretty much stay the same when you add that extra zero to your paycheck?

I decided to put the question to my readers: How many of you earn over $100,000 a year?

The responses I got back were fascinating and provide a lot of insight into what it’s really like to earn six figures a year.

That’s why I want to share a few of them with you today — as well as give you some actionable steps for you to take in order to start earning six figures yourself.

Six-figure income insight #1: It’s no more “happier” than when you earn less.

The phrase “Money doesn’t buy happiness” might be cliché — but that’s only because it’s true.

In fact, a survey found that there was no discernable difference in the happiness levels of Forbes 400 executives and Maasai herdsmen in Africa.

In my opinion, what factors DO actually impact your happiness:

1. Your psychology
2. Your career
3. Your relationships

That’s it. Those are the “Big 3” when it comes to happiness. When you’re able to take control of those three areas of your life, you’ll find happiness.

If you want to learn how exactly you can best focus on all of these areas and increase your happiness, be sure to check out my article on how to be happy.

Six-figure income insight #2: When you really want something, you let yourself get it.

I’m a big believer in the idea that you shouldn’t have to sacrifice the things you love in order to live the life you want. That’s why I love to hear whenever a reader is:

1. Investing money in big future purchases (more on that later)
2. Spending money to buy things they love

What’s the point in making money if you’re not going to use it?

The best part: It doesn’t even have to be for yourself. Give money to charity. Buy a nice gift for your parents. Do whatever it is with that money as long as it helps you truly live a Rich Life.

Speaking of which…

Six-figure income insight #3: Sometimes you can fly your friends to Vegas.

At first glance, this seems like a HUGE waste of money.

Why would you pay for your friend’s plane ticket with your hard-earned cash? Why can’t they pay for it themselves?

However, once you have a process in place that lets you painlessly save money while knowing exactly how much you get to spend each month, this kind of spending becomes a benefit of living a Rich Life.

It’s just a question of having the right systems in place to attain it. That’s why I want to let you in on one of the systems now: The Conscious Spending Plan.

This is the exact same system that my friend uses to spend $21,000 going out to the bars, clubs, and having a good time with friends.

I’ve written about it in detail before, but the quick run down of it is simple. It’s all about:

1. Automating your finances
2. Knowing where your money goes so you’re in complete control of the situation

Automating your finances allows your system to work for you and passively save money for whatever you want — like flying your buddies to Vegas — instead of you constantly wondering if you have enough money to spend.

At the beginning of the month, when you receive your paycheck, the money is immediately sent to where it needs to go through automatic systems that you have set up already.

Some spending recommendations for your system:

• 50% – 60% Fixed Costs: This includes things like utilities, rent, internet, and debt.
• 10% Investments: This includes your Roth IRA and 401k plan.
• 5% – 10% Savings: Here’s where you’re going to put money that goes towards things like engagement rings, weddings, vacations, and unexpected expenses.
• 20% – 35% Guilt-Free Spending: Fun money! Spend this on anything you want from nice dinners to movies.

If you want to learn more on how to automate your finances, check out this 12-minute video of me explaining the exact process I use below.

Six-figure income insight #4: Nothing really changes — but you get to invest more.

Just because you start earning six figures doesn’t mean you have to start living a crazy, lavish lifestyle.

In fact, it’d be smart to start being even more financially conscious than you were before, which is why it makes me so happy that Nick decided to aggressively invest his money.

If I were to add to it though, I’d say this: There’s more ways to invest your money than in the stock market. People have this misconception that investing is a bunch of day traders screaming on the floor of the New York Stock Exchange and somehow making millions — when that couldn’t be further from the truth.

That’s why I suggest investing money in 4 different ways:

1. Eliminating debt. Debt is easily the biggest barrier to living a Rich Life. That’s why it should be your first priority if you ever plan on making more money or freeing yourself of the financial and psychological burden of owing money to creditors.  
2. Retirement. Putting money into a Roth IRA and 401k account through your employer is one of the easiest and best ways to start earning money for retirement. The money you put in might not seem like a lot now, but when you’re ready to take it out decades down the road, you’ll be very happy you decided to start early.
3. Big purchases Remember the Conscious Spending Plan? This is where it comes in. When you’re willing to be mindful of how you save money for big purchases like a down payment on a house or a wedding, you won’t have to sacrifice the things you love to do it like your morning lattes.
4. Education. Your thirst for education should be constant and voracious. I don’t care if you’re reading this in your twenties or your sixties. There’s always something new to learn that you can add to your well of knowledge to draw upon. So take that improv class you’ve been thinking about or buy that course you’re interested in. It’s always worth it if you learn just one thing from it.

I go into the exact actionable steps you can use to approach investing in all four of these areas in my article on the best ways to invest in your 20s. Check it out.

The exact system to start earning a six-figure income

“Yeah, yeah. It’s awesome to earn a six-figure salary — but how do I get there??”

Many of my readers started earning six figures after leveraging the exact systems I provide on my site.

And they did it through one of my favorite ways to earn more money: Freelancing.

In fact, if you’re already making a salary of $50,000/year, you can easily double that money through freelancing your skills — if you’re a Top Performer that is.

Top Performers know how to find problems that keep their bosses up at night, and work like guided missiles to solve them. As a result, they can easily command double, or even triple, what everyone else earns.

Top Performers can take those skills and earn HUGE rates as freelancers — even up to six figures.

That’s why I want to show you exactly how to use those skills to start earning you money.

And the first two steps are simple:

1. Find a profitable idea
2. Get your first 3 paying clients

Once you’ve done that, it’s easy to scale your business.

To help you get started, I’m going to give you my proven system that’s helped thousands of students earn tens of thousands of dollars a month — for FREE.

You’ll discover:

• The 3 fears you MUST overcome if you want to make it as a 6-figure freelancer
• How to become a highly sought after expert (Hint: It has nothing to do with credentials or degrees)
• How to figure out if an idea is profitable before investing time and effort
• The 6 parts to an email pitch that clients can’t refuse
• The Briefcase Technique that’ll make potential clients choose you over anyone else
• And much more!

Enter your name and email below to get the free handbook.

4 insights from earning a six-figure income is a post from: I Will Teach You To Be Rich.

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CDIC Deposit Protection For Your Child’s RESP

One of my first tasks as a new mom is setting up an account to save and invest for my daughter’s post-secondary education. When I attended university, I couldn’t afford to pay my tuition without borrowing tens of thousands of dollars of student loans. This left me deeply in debt at graduation, and paying those loans off got in the way of saving for other financial goals like travel, retirement, and home ownership. What is the RESP? The Registered Education Savings Plan or RESP is yet another awesome tax-advantaged savings vehicle available to Canadians, much like the Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). The RESP is designed to help and encourage parents to save for their child’s post-secondary education. One of the biggest advantages of the RESP is the eligibility for government grants that match up 20% of your contributions, to a maximum of $500 per […]

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Financial Freedom Is Time Freedom

For the past month, my entire life seems to have revolved around repairs and maintenance on the new house.

Some days, I’m the one doing the work: shoveling level ground for a planned writing shed, crawling under the house to check for leaks, pruning the overgrown hedges. Most days, however, I’m meeting with other folks: roofing contractors, siding contractors, HVAC contractors, plumbing contractors, pest control contractors. For the past thirty days, this has almost been a full-time job!

“You know, you’re lucky,” a friend said to me a few days ago.

“What do you mean?” I asked.

“Most people don’t have the freedom you have,” he said. “It seems like you’re able to just press ‘pause’ on life to focus on your new home. You can shift your time and attention. Most people have to go to work every day. They can’t get eight roofing contractors out to bid on the project because they can’t take time off to meet with eight different companies.”

My friend has a point.

Because I’m financially independent, I’m able to structure my life in such a way that I have tremendous flexibility with how I spend my days. I guess this is somewhat obvious, isn’t it? I mean, I’ve written before about how frugality buys freedom, about how, in a very real sense, time is money — and money is time.

But our conversation made me consider this concept in a new way. It made me realize that what I value most about my financial situation is that it gives me the luxury to do what I want — when I want to do it.

I’ve written before about the six stages of financial freedom. The more money you save, the more freedom you have, and the greater risks you can take.

I feel like a similar set of stages exists for time independence. They don’t line up perfectly with the milestones on the road to financial freedom — somebody who gets financial support from his family might have plenty of free time, for instance — but there’s a lot of overlap.

• When you’re in debt, for example, your time is not your own. “Debt is slavery,” writes Michael Mihalik in his book of the same name. When you owe money, your freedom is restricted. When you work, the money you earn (from your time on the job) belongs to somebody else.
• Once you’re debt-free, your time becomes yours again. Your wages go into your pocket and fund your future. But what you can do with your time is still limited by your ongoing expenses. If you don’t have anything saved, you can’t afford the time and money to pack up and travel the world. You can’t afford to stay home with your family. If you’re spending exactly what you earn, you’re essentially treading water with time.
• When you begin to earn a personal profit — when you begin to earn more than you spend — then you begin to bank time. Sure, you’re actually banking money, but that money represents future freedom, future minutes and hours that you can use to do whatever you choose.
• With good fortune and hard work, you’ll eventually reach the latter levels of financial independence. At these stages, how you spend your time is dictated almost exclusively by your goals and your personal mission statement. All of the weeks and months and years you worked hard to save money come to fruition. Your days belong to you.

In my case, financial independence has allowed me to structure my days so that I can pursue my priorities. Instead of having to drive to the box factory at 6:30 every morning (as I did for many years), I can get out of bed and drink my coffee while checking email. I can take the dog for a walk. I can go to the gym. I can sit in the living room and read. When I feel moved to write, I can write. And if I feel like I need to spend an entire month working with contractors, I can spend an entire month working with contractors.

Money gives you freedom not just to have the things you want, but also to do the things you want. Financial independence is temporal independence. Financial freedom is time freedom.

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