Living healthy can help reduce debt, increase investments
There are so many good side effects to living a healthy life, it’s worth writing an article about it. This article outlines the monthly savings this author encountered as a side effect of changing his lifestyle. In more or less words, changing your lifestyle to a healthier one could help you kick start your own retirement planning and or help increase the amount you will be able to contribute to savings and or reducing debt. Not to mention, you’ll live a happier, more fulfilled life.
Sooner or later, we all have to grow up and face those daunting bad habits we’ve developed over the years, when we didn’t care and or even understand the harm we were doing to our bodies (and after we did understand, some felt it was too late, or the addictions were too hard to break). Remember when, smoking was cool, drinking was a right of passage, and playing video games was a duty to oneself? Well, many people do, and if you don’t this article is probably not gonna help you – but it may help a friend or two. Suddenly, you wake up 30 years old, with a beer belly, a pack a day cigarette addiction, holes in your lungs, yellow teeth stained from tar, hardened sickly gum’s, an inability to walk two blocks without becoming winded, and so on. What’s more? You’ve got our 4th kid on the way, and the 3 walking and talking look to you and wonder why you do such nasty things. Why you can have soda, yet they can’t. Not to mention, even if you don’t do those things around them, you still carry the scent (of cigarettes and alcohol) with you on your lips when you kiss them, and that stench from your body smothers their precious and soft skin, tainting it with chemicals from your nasty addictions. Moreover, your co-workers look at you like your the most despicable human being. Ah, the life of the persecuted smoker, something I will miss no more.
Well, I decided once in for all, enough is enough. To be honest it was a several month process of acclimating myself to no longer purchase soda, and other junk foods, and to look for help with my nicotine addiction that I tried to break so many times on my own (and I tried everything under the sun). Finally, I went to the doctor, and asked for a prescription of the much heralded Chantix pill. The cost was $50 with my insurance for a two month supply, and I didn’t even have to quit smoking right away. Nothing had worked before, but somehow, for some reason, I started losing my desire to smoke. It was as if I had just had a cigarette, and I didn’t need one. I found myself missing my usual breaks without even noticing. Finally, after a couple of weeks taking the pill, I decided I would see how long I could go without smoking, and I haven’t looked back. I quit the pills shortly thereafter (even though it’s not recommended as they advise use for 3-6 months or there is a higher rate of relapse). I wanted no addictions, so the same went for alcohol. No alcohol, at least for several months, until I felt I had better control of myself.
A typical month before I quit drinking alcohol and smoking:
2 Cases of Beer a month: $50
1 Bottle of Vodka: $30
Monster or Red Bull: $20
Social drinking at bars a couple of times a month: $100
30 packs of cigs a month: $120
Instant monthly savings from quitting alcohol and cigs: $320
Annual Savings = $3,840
Food savings:
A typical month of eating crappy/greasy food during lunch from places such as Rallies, White Castle, and other fast food joints in essence canceled out by eating salads from the work cafeteria, subway, and or other healthier alternatives. Rather than driving to buy fast food (in which I save a few bucks a week in gas), I’ve learned to walk everywhere for lunch, you begin to learn things about your surroundings you never paid attention to, in many instances it is quite awesome. Instead of buying potato chips and fruit snacks and such for ourselves and the kids, we substituted for blueberries, strawberries, raspberries, bananas, cantaloupe, and other fruit as well as various vegetables like celery with peanut butter, carrots, and various canned veggies. Most important was cutting out the sugar drinks and simply drinking some ice cold water. I would go through a 2 liter of soda at home at least once a week, and would buy at least a couple of sodas from the vending machine at work. My next mission is to cut out as much red meat and cold sugar cereal as possible, but we’ll take one step at a time.
Although it may seem like I saved nothing on food besides a few dollars on gas, and maybe $20 a month in soda, my teeth and skin have improved dramatically (I know this is partially a result of not smoking too, but eating definitely helps too). I will certainly see future savings when I require less dental work because I’m not eating half of the sugar laced foods we previously were (even though you have to be careful with fruit, as it is high in sugar too).
Total savings from not driving to lunch every day per month = $5 per week or $260 per year. Total savings from not drinking soda = $5 per week or $260 per year. $520 total per year for cutting out sugar drinks and walking at lunch or eating in is nice savings.
Total savings from less future dental work = unknown, but it could end up being thousands saved.
Now, some of the above items have been offset by buying items such as sugar free gum when I originally quit smoking (which I rarely buy now) and also alternative drinks such as tea. At most these things cost me $50 for a year.
In summary, I have an additional $4,310 per year ($359.16 per month), for as many years as I live, of additional funds to be invested (or to help reduce debt income) all while helping me live a longer, happier, healthier life.
I’m 30 years old, and if I were to take that money and invest it in the market (with average lifetime returns of 10%) until I retire at say age 60, I would have accumulated an additional $708,969 in retirement savings – inflation adjusted would equal around $285,000). That’s quite spectacular when you think about it.
Why don’t you figure out the savings you could make for yourself and what kind of dollars that would calculate into?
How buy stock
With the markets hovering around 8,000, many could argue this is an excellent time in the market to buy stock. But what to buy? Well, if you’re asking that question, I hope you’ve considered the basics of investing before you think you can just pick a stock and watch it grow. That would be senseless. Want an analogy? Too bad, you’re gonna get one anyway. Simply picking stocks at random and without a reason is akin to throwing money on a craps table and hoping you will make money for your future. Sure, you might walk out of there every once in a while with a chunk of cash, but more often that not you’re gonna lose your ass. There’s a reason the casino is in business, and that’s because they have a plan to take your money. Why don’t you devise a plan, then decide what to buy? You’ll make a much more informed decision.
Best investment companies today and after the economic collapse
With the recent collapse we witnessed several major investment company giants collapse, or get swallowed up by other banks or investment companies. Having said that, a few of the big dogs that survived the crisis include State Street, Fidelity, and Vanguard in the United States. Companies such as Merill Lynch (they own Black Rock too) whom was recently acquired by Bank of America is still operating, but only because the government more or less forced BOA to acquire them with TARP funds. So, when considering who you want to work with – or whom you want handling your money – deeply consider their history, as some are much better than others. Below is a list of many more (including those above) you may be interested to research further in order of their size of assets (in millions) managed (not all are mentioned here, for example T. Rowe Price), rather the largest across the globe.
1. UBS AG – according to its website (31.03.09) 2059 Switzerland
2. Barclays Global Investors 1,400 UK
3. State Street Global Advisors 1,367 US
4. Fidelity Investments 1,299 US
5. The Vanguard Group 852 US
6. JPMorgan Chase 782 US
7. Capital Group 757 US
8. Deutsche Bank 723 Germany
9. Northern Trust 598 US
10. AllianceBernstein 516 US
11. Wellington Management Company 484 US
12. Merrill Lynch & Co. 473 US
13. Credit Agricole 461 France
14. Goldman Sachs 452 US
15. Citigroup
An investment company is a company whose main business is holding securities of other companies purely for investment purposes. The investment company invests money on behalf of its shareholders who in turn share in the profits and losses.
In United States securities law, there are at least three types of investment companies [1]:
* Open-End Management Investment Companies (mutual funds)
* Closed-End Management Investment Companies (closed-end funds)
* UITs (unit investment trusts)
A fourth and lesser-known type of investment company under the Investment Company Act of 1940 is a Face-Amount Certificate Company.
What is a Coverdell Education Savings Account? What’s the difference between this and a 529 plan?
A Coverdell Education Savings account is simply what it says it is. A savings account aimed at a special outcome, namely to help people under 18 to pay for education. The account has special incentives to encourage parents to save for the education of their children. This means ALL children, including those with special educational needs.
There is an annual cap on the amount that can be saved in a Coverdell Education savings account, in any one-year and that is $2000. The cap is the same no matter how many accounts parents open. The deposits are NOT tax deductible but the withdrawals are, as are the interest payments. The distributions have to be fully spent on eligible education items in order to attract the tax deductions. The benefit lasts until the young person is 30 but can then be rolled over for a younger family member.
The Coverdell Education Savings account is a federal initiative while the 529 plan for educational saving are state based plans aimed at encouraging saving for education too. 529 plans also give good state income tax breaks. Just like your contributions to the Coverdell plans the 529 deposits are not deductible on your federal tax return, your interest earnings are tax-deferred at both state and federal levels, and withdrawals to pay for the beneficiary’s college fees are not subject to state taxes.
The 529 plan contributions just like the Coverdell education savings plan, is not deductible from your federal tax return. You, the parent of the educational beneficiary have more control over the 529 account than the Coverdell education savings account. There are just a few circumstances where the nominated young person has rights to the deposits. The parent has the sole say when deciding over when to withdraw and what the withdrawals can be spent on. Most 529 plans will let you reclaim the money on your own behalf at any time you wish without problem.
Both savings plans are national. In other words, even thought the 529 is a state initiative the saver can spend the money in any state in the country. Both plans are ‘set up and forget’ until you need them. Establishing the plans is an easy enrollment process with automatic deposits. During the lifetime of the plan you do not have to do anything with it. The money management of both accounts is done by both the 529 plan and the Coverdell and not by the depositor. Plan funds are professionally invested. So the question is not which plan you should take up but rather what stops you doing both.
