Post Your Lessons Learned

[TexasHusker]

True.

So when someone says, "TexasHusker, how much debt do you have?" do you include your outstanding credit card bills in your answer? I don't. I don't think most people do.

Actually that is on my personal financial statement as required by my bankers. So that answer in my case is "yes."

Any debt that has not been repaid, regardless of the amount or term, is a liability on a balance sheet.

[disneysteve]

Actually that is on my personal financial statement as required by my bankers. So that answer in my case is "yes."

Any debt that has not been repaid, regardless of the amount or term, is a liability on a balance sheet.

Who is asking for that info, and how often do you have to provide it? When preparing that report, do you have to check the current balance on all credit cards and report that? What about other outstanding bills like utilities, taxes, insurance, etc? It's not always so simple to give an exact number when you only get a monthly or even quarterly statement for certain bills.

[TexasHusker]

Once per year, my bank asks for a complete personal financial statement that lists all assets and liabilities. Utility bills - and any other similar bills - count as accounts payable.

Credit cards count as either consumer or business debt, and whatever the balance is on the day of the PFS is considered debt.

[~bs]

god, I didn't realize there's another debt conversation in another thread. lol

husker is correct, the financial statement is a snapshot as of a certain point in time, like 12/31/16. anything you owe up to that point would be included.

stuff that's billed quarterly or yearly or whatever can be included prorata. But that part kinda depends on how specific they want the statement to be, and how accurate you want it to be.

----

It's kinda like if you're figuring out your budget for December. You wouldn't exclude the December cell phone bill just because you haven't received it, right? You'd either put in an estimate or wait until the bill comes, then put in the exact figure. Regardless of if you received the bill for it or not, it is something you owe for the month.

[disneysteve]

It's kinda like if you're figuring out your budget for December. You wouldn't exclude the December cell phone bill just because you haven't received it, right? You'd either put in an estimate or wait until the bill comes, then put in the exact figure. Regardless of if you received the bill for it or not, it is something you owe for the month.

This actually raises an interesting point. Since we pay everything we can with a credit card, most of what is on our monthly credit card bill is things that would appear elsewhere on our budget if we prepared a formal budget: gas, auto insurance, land line, cell phone, cable/internet, alarm fee, groceries, dining out, Netflix, newspaper subscription, auto maintenance and registration, household supplies, travel, college expenses, clothing, etc.

If I were making a budget, I wouldn't list all of those things individually and then also list the credit card bill or else I'd be double counting everything.

[~bs]

yeah, there's various ways to handle it. It probably is better to split it out rather than as 1 line item as a credit card payment. You definitely wouldn't want to include it twice in 2 different formats.

also to make it easier, for recurring monthly expenses, you could just use the previous month's bill (received this month) as this months expense since you're paying it out this month. you'll be treating the budget more on a cash basis, the spending for the month is only recorded when cash leaves your wallet. This way there's less adjusting and timing consideration.

[clatoden99]

The best lesson that I learned is the "Mutiply by 25" rule. If you take your annual spending on any item (books, car repair, rent, etc.), you can multiply by 25 to know how much you need to save to have this item covered for life (eg, if you spend $300 per year on books, a fund of $7500 will generate enough income each year to cover your book spending no matter how long you live -- this assumes a 4 percent real return on the money saved). This gave me a way to know how much my current spending was delaying my retirement and how much I could speed up my retirement by making changes to my current spending.

[amarowsky]

NEVER buy whole life insurance (or any variation of whole life).

If you need life insurance, buy term and only term.

Life insurance is NOT an investment and any policy that contains an "investment" or "savings" component should be avoided at all costs.

I took your advice to heart and didn't pursue a full time job offer from my Northwestern Mutual internship.

My lesson learned is that I no longer wanted to become a financial adviser. Being pushed/brainwashed to try and sell whole life was an uncomfortable situation.

Even more uncomfortable, was going to the few people who I had convinced to buy policies from me. And then convincing them that it was NOT a good idea and surrendering their policies. Really ****ty situation to be put into on both sides.

Now I'm happily working at a automotive engineering company.

Other lessons learned:
1) Pay off all debts
2) index invest
3) Found out I may have the ability to retire as early as age 40 (10 years from now)

[disneysteve]

Even more uncomfortable, was going to the few people who I had convinced to buy policies from me.

This has got to be the worst part of the whole life insurance scam - pushing the product to your friends and family. What a sleazy way to do business.

[amarowsky]

The best lesson that I learned is the "Mutiply by 25" rule. If you take your annual spending on any item (books, car repair, rent, etc.), you can multiply by 25 to know how much you need to save to have this item covered for life (eg, if you spend $300 per year on books, a fund of $7500 will generate enough income each year to cover your book spending no matter how long you live -- this assumes a 4 percent real return on the money saved). This gave me a way to know how much my current spending was delaying my retirement and how much I could speed up my retirement by making changes to my current spending.

Are you a Mr. Money Moustacher' too?!

[amarowsky]

This has got to be the worst part of the whole life insurance scam - pushing the product to your friends and family. What a sleazy way to do business.

Absolutely... It was an overall uncomfortable experience.

My associate at work got offered the same internship. But immediately turned it down because of that "warm market (family+friends" pitch. I wish I had the same insight. Unfortunately I was constrained with my full time job + school at the time, and that internship was the only one that offered the flexibility I needed.

I don't regret doing it, because I learned a lot of what NOT to do. I do however, wish I could have learned more about what TO do with my internship time spent.

[AJ444]

Absolutely... It was an overall uncomfortable experience.

My associate at work got offered the same internship. But immediately turned it down because of that "warm market (family+friends" pitch. I wish I had the same insight. Unfortunately I was constrained with my full time job + school at the time, and that internship was the only one that offered the flexibility I needed.

I don't regret doing it, because I learned a lot of what NOT to do. I do however, wish I could have learned more about what TO do with my internship time spent.

I have a buddy that got a job with a major insurance company and started a practice back in my hometown. They train them to become active in churches, local groups and sponsoring little league teams all to make it easier to prey on folks (especially the elderly) and sell them high fee financial products that do not serve their best interests. They are literally a wolf in sheeps clothing. They really brainwash their agents to actually think they are good for their clients and not robbing them blind.

[snafu]

Lessons learned...

* Keep it simple, work primarily with net income, give every dollar a job

* Research income for chosen career. SL total no more than 1st, 5 yrs
income

* Talk to beloved; know each other's financial history & priorities before
marriage

* Pay yourself 1st, divert 20% income, whatever the source, to savings

* Don't live beyond your means; 50% to 'needs,' 30% to 'wants.'

* Create an Emergency Fund, minimum $ 1,000.; 3 months basic expenses

* Buy an affordable vehicle; 20% DP/trade-in, no more than 4 years payments,
payments no more than 10% income, plan to drive it 10 yrs.

* Buy a home you can afford; 20% DP, no more than 3 x annual income,
expect to live there a minimum of 5 yrs. to ameliorate closing costs

* Contribute a minimum of 10% eligible income to retirement; 1st capture any
employer contribution, add a low cost, Index retirement. Add ROTH

* Challenge yourself to s-t-r-e-t-c-h dollars, HACKS, DIY tasks, meal plan, buy
used/depreciated auto, garden equipment, tools, sports equipment, baby
layette, shelter pet, try one frugal choice each month.

[TexasHusker]

I have a buddy that got a job with a major insurance company and started a practice back in my hometown. They train them to become active in churches, local groups and sponsoring little league teams all to make it easier to prey on folks (especially the elderly) and sell them high fee financial products that do not serve their best interests. They are literally a wolf in sheeps clothing. They really brainwash their agents to actually think they are good for their clients and not robbing them blind.

This is the Edward Jones model.

[torea]

My simple lesson: only drink water. You'll be much healthier and much happier.

I used to live on soda. I drank at least two cans a day, often more, and would get it every time I went out to eat without even thinking about it. I spent about $40 a month on cans alone, and that was with every "buy one get two" type deal I could find.

Then one day I realized that I was drinking a full meal's calories every day. So I quit it. I bought a water bottle with a filter that I replace every three or so months, and I carry it with me everywhere. I save so much money in my grocery budget, and when I eat out my meals are always cheaper than my friends'.

The only thing I drink aside from water is milk.