The Lifestyle Changes That Lead To Financial Independence

There are many tips on saving money and investing it in the right places on this blog. But, ultimately, if you are seeking financial independence, it’s a simple question of making an overall change to your lifestyle. Some will be dramatic, others less so. But make no mistake about it – they will change your life for the better. Let’s take a look at some of the changes you will need to make if you want to secure your future, and enjoy stress-free finances.

Talk about money

It’s amazing that money is so important to every household, yet so few can speak about it without the situation escalating into argument territory. With this in mind, it’s no surprise that the number one reason for divorce is always down to finances. The trouble is, it is critical that you can talk with your partner – and your children – about money in a grown-up, adult way. And it’s all down to you – if you don’t talk about money, your problems won’t resolve themselves.

Move home

OK, so this is a biggy – but moving home can often cut significant costs if you play your cards right. Whether you are thinking of downsizing from houses to apartments or moving to cheaper areas, it’s worth your consideration. It’s not like you have to go far, either. Sure, everyone loves having the exclusive, high-end zip code. But when you can access all the same services a mile down the road – for significantly less – why pay more than you can afford? It’s a big step, of course – but imagine your lifestyle improvement if you could shave off $100-200 from your rental or mortgage each month.

Learn to cook

Cooking food yourself is far, far cheaper than buying pre-packaged meals or ordering takeouts every other night. I know it can be tough, as we are all working increasingly long hours and look for the convenient option. But you can cook up a few large meals and freeze them in advance for those busy days, and there are plenty of recipes for fifteen-minute dishes that are tasty, nutritious, and cost you next to nothing.

Get groceries delivered

Grocery stores are smart, and there is a lot of psychology at play from the second you walk through their doors. When you go shopping, there is a good chance that you will end up spending way more than you were planning, on products that you don’t need – or, maybe, want. The good news is that if you live in an area where you can get your groceries delivered, you will never have to deal with all that temptation. Just draw up your shopping list, and reorder when you need it. It will save you a lot of wasted money – and wasted food.

Ditch the brands

We all have our favorite brands – of course. But the truth is that there are cheaper alternatives for almost every product you can imagine. Favorite brands come with a kind of ‘tax’ – you pay for the brand name nearly as much as the product itself. But if you can find alternatives you will often find they are the same, bar the packaging. Again, it’s simple psychology at play, but looking elsewhere can save you thousands of dollars over the course of a year.


Why New York Is Not The Place To Invest In Real Estate

When it comes to investing in real estate, inner-city areas like New York can seem like prime pickings. When you take a closer look, you’ll come to see that locations like these are jammed full of rented apartments and properties. Most investors just can’t get enough of them, and it’s easy to see why.

There are some apparent benefits to investing in areas like these. New York especially has seen a steady increase in value over time. In fact, New York real estate hasn’t dropped in value since way back in the 1950s. That’s not a situation you’ll find in many areas. It means that an investment here brings a pretty safe chance of decent returns.

And, house prices aren’t the only thing which rise on a regular basis here. New York’s population has also been steadily creeping upwards for years by this point. What’s more, the varied cultures and lifestyles in areas like this mean that rental opportunities here have a pretty broad reach. You can bet there will be at least someone looking for what you’re offering, in the price range you’re asking for.

But, we aren’t here to sing the praises of New York investments. In fact, we’re here to tell you why this could be a bad idea. While inner-city investments make sense in many ways, this is a double-sided issue. On the one hand, you can experience all the benefits mentioned above and more. On the other, there are plenty of New York landlords who are struggling to so much as cover their mortgage costs. As if that weren’t warning enough, we’re going to look at a few of the reasons you might want to steer well clear of New York and invest in a more rural area.

The New York market is pretty saturated

There may be high rental demand in New York, but there are also a whole load of investors operating there. Too many people believe that popular cities win the real estate lottery. That means you’re going to be competing against competitors for each tenant. Sometimes, that battle just isn’t worth fighting. Bear in mind, too, that finding a niche is as crucial in real estate as it is in any business enterprise. And, a niche isn’t something you’ll be able to settle upon when you’re operating in the same New York suburbs as everyone else. So, you’ll be competing in a drowning market, trying to sell the same thing as all those people around you. When you look at it like that, it seems like an impossible task. It’s no wonder, then, that many people struggle to achieve it. To do away with that competition, you may find it better to look at investments in more rural areas. Not only does this give you the pick of the market, but it also provides a unique selling point for you. Potential tenants are far more liable to look your way if renting with you means living around Yellowstone National Park than a typical city setting. Even just being able to promise a decent amount of land could see you winning through over all those other property investors. And, these are benefits you would never be able to find if you were looking in those busy city areas.

Inner-city prices are through the roof

The reality of today’s housing market is harsh, and prices are high. While many cite this as a reason to invest in cities, it also works as a downside. Steady increases in value will undeniably come back to benefit you later down the line. But, you will need to have more cash in your pocket to buy a New York property in the first place. What’s more, your money may well only stretch to a small apartment. The moment you step outside of those city confines, though, you may come to find that you can afford four-bedroom ranches with acres of land to their name. And, with rural areas growing in popularity of late, you still stand to see a sizeable return from an investment like this down the line. Admittedly, rent in city areas does tend to be higher. But, the increased size of your rural rental could still see you charging the same amount each month. And, given how much less you paid in the first place, that could see you pulling a profit a whole load faster. Speaking of speed, you’ll be able to make an investment like this a lot sooner in your journey. Those saving up for New York real estate may need to work towards the goal for a few years. But, your willingness to look outside the city could see you with a property to your name in six months or less. By the time you would have been able to buy your New York apartment, you could already have earnt a hefty sum in rent.

New York offers little freedom for growth

While city house prices do tend to rise over time, properties here offer little room for growth. In fact, the majority of New York investment properties are based in someone else’s building. As such, you stand no chance to expand or extend your property. You may even find that there are restrictions on simple things, like your ability to renovate. That means you’re stuck with the general price increases, with little room for extras. By comparison, there are next to no restrictions on most rural properties. This means you would be free to extend properties up, down, and outwards. You could build outhouses on your land, or incorporate swimming pools into a property’s yard. You could even renovate the kitchen or bathroom spaces. If you get things like this right, you could stand to double the value of your property. Not only does that make up for slower rural increases, but it also leaves city prices in the dust. If you’re willing to put a little work in, then, New York definitely isn’t the place you should invest.

Your Own Business: The Financial Side

Money is stress. Well, for most of us it is, or to be precise, those that don’t have it. We will struggle with our finances most of our lives, and we will feel the pinch of being poor however we look at our situation, and one of those situations is when we make the change from being employed to being self-employed, or going into business for yourself. It is a given that when you first make the tentative leap to being a freelancer or going into business with a partner or as a sole trader, the first 6 to 12 months are hard, financially or emotionally. Here is what to expect…

You will be operating without a safety net… and this is a lot for people to get their heads around, especially when making the transition from a job with security and a pension. Financially speaking, you need to plan ahead for the times where work may be dry, or you may not be making much profit. A lot of people making that change can feel vastly put-off by the notion of earning hand to mouth. And while the pay can be low, there will be times that you earn more money than normal in the space of a month. It is impossible to predict your pay in this situation, not until your company or line of work starts to even out and you know how much you will earn at the bare minimum each month. Things like pension plans are easy to put off, and people have that “we’ll cross that bridge when we come to it” attitude. But what about if you are unable to work due to injury? Do you have people that depend on you to earn an income? If so, then you need to find a system whereby you can put some money aside for an unplanned event.

You will learn a lot…  about everything! You will learn how to do your taxes properly (well, to the best of your ability) and you will learn about what you are really capable of. By going self-employed you are, in essence, wearing many hats. You will devise a system of keeping track of business expenses, and you will work many late nights to balance the books and chase payments, possibly while juggling work as a full-time parent! You will learn a lot from your mistakes. For those that freelance, make sure that you set up a business account in your name, it is easier to keep track of work finances against the outgoings from your personal spending. When it comes to doing your tax return, it is much easier to see a bank statement from one account that shows your business outgoings and expenses rather than having to cross-check everything from your personal bank account, which is time and effort you don’t have!  

You will have help from the unlikeliest sources… really! There are government advice lines and sites at your disposal, so you don’t need to feel like you are on your own in the process. A common mistake people make at the start of their self-employment is to not claim expenses, which is mainly a hangover from being employed. You are plowing a lot of your finances into making your business or freelance work profitable, and you shouldn’t have to pay tax on it. There are things like the Uniform Tax Rebate, that help people to claim back the costs of their work uniforms as well as their work tools, and a lot of people are unaware of what exactly they can claim on. This is why a lot of people have accountants to do their work, but if you are unable to afford one at this point in time, you can find help online, and you can claim on unexpected items. For example, if you work from a home office, you claim part of your utility bills for the energy used in that room, which, if you use a computer 12 hours a day, it can eat into your energy bill so having a portion of your electricity bill back will be a big help!

As more and more people choose the route of self-employment as a way to earn money, it is something that needs to be communicated, your finances are more important than ever, and you need to think long-term in how you look after yourself and your dependents. With careful planning and constant assessment of your outgoings, it will help you survive those first sticky months.