Home

Home
Jun 192017

Can I Live Off Interest On A Million Dollars?

By |June 19th, 2017|Blog|Comments Off on Can I Live Off Interest On A Million Dollars?

Can I Live Off Interest On A Million Dollars-We often talk about how many cars, houses, and other things we would buy with a million dollars.
We even dream about never working again and just living off that money with a drink in our hands on the beach. But can you really live off the interest on a million dollars?

Maximum Return On Interest?

In a previous article, we found that the largest interest return you could currently get would be around $23,000 a year.

There are however other places you could invest your money that would provide more income. For instance, you could invest in real estate or the stock market. Both would generate income that you could live off of.

Even investing in the Vanguard high dividend fund will provide you with over $30,000 in income per year.

Real estate is more difficult to figure out a percentage, however Paula Pant from Afford Anything says you should find a property that the rent is 1% of the cost of the building. So for a $100,000 house, you would get $1,000 monthly ($24,000 annually) in income. If you invest that million that would generate $240,000 a year of income.

Again these are not interest, but ways to invest your money in producing more money.

What do The Experts say?

A study called the Trinity Study basically says that you can safely withdraw 4% of your investments every year and as long as you have 25 times your annual expenses saved you will never run out of money.

This is based off on average the stock market has done 7%% to 10%, there are some years where the stock market lost money, and years where it has made much more. But if you take the average and then spend less then that, you should, in theory, be able to live off that income forever.

Can I Live Off Interest On A Million Dollars?

The average household income in the United States is around $57,000 a year. Some reading this make considerably less and think that’s a lot of money. Others read that amount and have no idea how you could live on so little.

But can you survive with the interest that comes from a million dollars?

The answer is most people couldn’t, with the maximum amount of interest you could receive of $23,000 through a CD. That’s well below the average income, as well as the poverty line for a family of 4.

That doesn’t mean you can’t live off that money, Jason Fieber lives off much less, but he is the exception rather than the rule.

If you invest in dividend funds, real estate, or the total stock market, you can receive much more income that will also go up year after year.

What Now?

If you can live off $23,000 and you have a million dollars in the bank, you’re done congratulations. If not then it’s a nice start towards your retirement. You could use that money to invest in the stock market, real estate, or even start your own business. Whatever you do enjoy your life and don’t let money be the reason you don’t.

Disease Called Debt

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit
Jun 122017

How Much Interest Will I Earn On 1 Million Dollars

By |June 12th, 2017|Blog|Comments Off on How Much Interest Will I Earn On 1 Million Dollars

How Much Interest Will I Earn On 1 Million DollarsIf I had a million dollars I would buy… We all have thought about it, talked about what we would do. Notoriously someone in the group will always say “I would just live off the interest” and they’ll use some math that makes the interest sound like a lot of money.

But can you really “live off the interest”? How much interest will I earn on 1 Million dollars?

Interest VS Capital Gains VS Dividend Payments

It’s important to note that there is a difference between what interest actually is, and what people typically think of as interest.

Capital Gains are defined as the profit from the sale of property or investment. So if you buy a house for $50,000 fix it and sell it for $100,000 your capital gains are $50,000 (this is very basic and there’s much more that goes in to it, but for ease of argument bare with me). What most people think of is the stock market, buying and selling for the capital gains. Though yes this is possible to do, especiially if you are starting with 1 million dollars, it isn’t interest.

Dividends are amazing, and dividend paying stocks even give you the dividend yield as a percentage. This may lead to even more confusion when it comes to how much interest you earn, because though it seems like a dividend yield of 3.4% is 3.4% interest that isn’t at all the case. Yes it’s a solid investment and a great way to make passive income, but again not interest.

Interest is money paid regularly at a particular rate for the use of money lent. In other words interest is money paid to you for allowing others to use your money.

How Much Interest Will I Earn On 1 Million Dollars?

With what interest really is in mind, the question now is how much interest will I earn on 1 million dollars? Well that depends on where you put your money, so let’s break down 5 places you can have your money and how much interest you’ll get from each.

Interest From Checking Account

According to NerdWallet’s rating of 17 online checking accounts interest rates range from 0.10% to 1.5%. So getting a calculator out will bring interest on a million to $1,000 to $15,000.

Interest From Savings Account

Savings accounts don’t offer much more then checking accounts ranging from 0.9% to 1.3% or $9000 to $13,000 annually.

Interest From Money Market Account

Money market accounts run right about the same as checking or savings with the highest I was able to find of 1.31% bringing in $13,100 annually from interest.

Interest From Certificate Of Deposit

The highest of the interest rates you’ll find with the highest I was able to find of 2.35% would bring in $23,500 annually. However you would have to invest in a 5 year CD meaning you wouldn’t be able to collect any of the interest for 5 years. The best thing would be to create a CD latter so that every 6 months you could be collecting interest.

There’s Another Way

With the average household income over $52,000 the amount of money you would get from interest on a million dollars wouldn’t allow you to quit. However there are other ways to make money from a million dollars, other ways to care for your bills using that million dollars. In an upcoming article we will discuss how we can live off of 1 million dollars.

Disease Called Debt

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit
Jun 52017

How To Get Out Of A Timeshare

By |June 5th, 2017|Blog|4 Comments

How To Get Out Of A TimeshareVacations are some of the most important, if not the most important part of our lives. Yes work will make you money, but what’s the point in making said money if you never enjoy yourself?

For many they have decided to buy timeshares, thinking that would be a way to go on vacation more often, possibly saving money in the process. But, they soon find out that not only was it not a good investment, but it’s one that is incredibly difficult to get out of. So here is how to get out of a timeshare.

What Is A Timeshare?

A timeshare is a part ownership of a vacation home, or rather the rights to said home. Most of the time you get 1 week with said property and usually the same week per year, though many have some exchanges of weeks.

On top of the initial investment (which can range from nothing to hundreds of thousands) you also have maintenance fees to pay yearly. Though this aren’t always excessively high, they can be sometimes even more so then the cost of the timeshare in the first place.

Why Would You Want To Get Out Of A Timeshare?

Though for some people having a timeshare is great (my aunt and uncle have had one for as long as I can remember) there are others who would gladly give it away for nothing, why? Because of the fees involved, and the restrictive nature of said timeshare.

Like I mentioned earlier the fees are always excessively high sometimes $500 to $1000 a year. However it can become much much more making it not cost effective to keep the timeshare. Consider staying at an AirBnB with the cost of $75 a night. This would come out to only $525 for a week saving you thousands over the maintenance fees, and more so considering you have to make an initial investment.

How To Get Out Of A Timeshare

If you have just got your timeshare you may still be able to get out of it. Most timeshare contracts has a grace period where you can cancel so the first thing I would check if trying to get out of a timeshare is if I was still in that grace period.

If that isn’t a viable option find out if it’s possible to sell the timeshare. You may call a real estate agent who is familiar with your area or even in timeshares themselves and ask for their advice. They may even have sellers in mind looking for a place.

If selling seems impossible then give it away. This may feel like throwing money away, but it may save you money in the long run since you no longer have annual fees to pay. Be upfront with whoever you are giving it to as to the reasons why. Especially if it is a friend of family member, never sacrifice personal relationships for money it’s to high a price to pay.

Disease Called Debt

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit
May 292017

Does Financing A Pet Make Sense?

By |May 29th, 2017|Blog|2 Comments

Does Financing A Pet Make Sense-They say a dog is a mans best friend, and though I personally prefer cat’s over dogs really any pet can bring joy to your life. But, what if you can’t afford to get that adorable puppy or kitten that you just fell in love with? Do you give up walk away and hope that another one is there the next time? Here are a few ways to finance a pet.

Credit Cards

If you have a firm grasp on your debt and know you can pay things off before interest hits, or at least not much interest, then credit cards may be a good option for financing a pet.

The first step would be to make sure the credit limit available matches the pet you want to purchase. Even if you have a $5,000 credit limit there are pets that cost more than that.

30 Day Same As Cash

Another option many pet stores have is the 30 day same as cash option. Basically you pay what you can at the time of taking the pet home. Then you have 30 days to pay the amount in full. You may choose to pay a certain amount every paycheck for a month, pay daily, weekly, or whatever works for you.

The only word of caution here is make sure you really can pay for the pet within that 30 days if not you may be hit with some pretty hefty fees, or have the animal taken back after you’ve become even more attached then you were when you first met.

Wags Lending

Getting financed before you even go to a store to find a pet is another great option. With Wags Lending this is fast and easy. You simply go to the website fill out the form and will be approved right then.

You then make payments as you go and have the option to buy out the lease at any time, which could ultimately save you money.

Paypal Credit

If you’re buying a pet online odds are that you will be asked to use paypal as the payment service. If that is the case you may qualify to get paypal credit which would let you get a pet today rather than waiting until you have the cash.

Another great thing about using paypal credit is that it gives you 6 months interest free if you spend more than $99 meaning most animals you buy would give you a “6 month same as cash” option in a way.

Does Financing A Pet Make Sense?

With all these great options you may have decided that you are getting that adorable puppy you saw in the mall this weekend, but have you really counted the costs?

Yes a dog is a mans best friend, and I personally love having animals around. They make good days great and bad days tolerable. There is no doubt that having a pet will bring joy to your life. But if you look at how much interest you’re paying for that joy that does sometimes lessen the joy.

If it does make sense to finance a pet to you then by all means use one of these great options. If however you would rather wait until you can actually afford to pay for said pet in cash, that option may be better for you.

Disease Called Debt

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit
May 242017

5 Home Upgrades That Are Actually Worth the Investment

By |May 24th, 2017|General Personal Finance|1 Comment

home upgrade advice, home upgrade tips, investing in home upgrades

Today we have a guest post for you from Anum Yoon.

Upgrading your home can be a great way to make an old building feel new, get some extra floor space, or improve the overall value of your home. Unfortunately, it can be hard to tell which upgrades are going to be worth the money you’re putting into them and which ones are the equivalent of pouring money down the drain. What are home upgrades actually worth the investment? Here are five you should consider.

  1. Basic Kitchen Upgrades

A full kitchen remodel might be tempting to add value to your home, but it could also end up being a total money sink — no pun intended — if you try to design a state-of-the-art kitchen in your little tiny townhouse. Places you should consider spending money include:

  • Backsplash — Adding a clever-looking backsplash is fairly inexpensive and can be a DIY project. It protects your walls from water or cooking splashes and adds some aesthetic points as well.
  • Appliances — If you’re staying in your home or not setting it up to sell, invest in good, energy-efficient appliances with good warranties.
  • Cabinets — It’s much cheaper to replace your cabinets than it is to rebuild your entire kitchen, and new cabinets can add a whole new look to your cooking space.

If you’ve got a 50-year-old outdated kitchen, then you could benefit from a full remodel, but other than that, some fresh cabinets or a new backsplash could do wonders for the appearance of your kitchen and your home.

  1. Energy Efficiency

Optimizing your home for energy efficiency can have multiple perks. It increases the resale value of your home, and it can lower your heating and energy bills over time. It doesn’t take a ton of money or effort to improve your home’s energy efficiency. Try:

  • Replacing your weather stripping — Doors and windows are the worst temperature loss points in a home. Old or dry-rotting weather stripping should be replaced.
  • Adding insulation — If your home was built before the mid-1970s, it probably doesn’t have insulation in the attic or walls. Spend the money to get high-quality insulation installed.
  • Replacing old appliances — Old appliances are not designed to be energy efficient, so replace them if possible.
  • Replacing your windows — We’ve already mentioned that windows are major heat loss points — replacing your windows with energy-efficient alternatives will reduce heat loss.
  1. Technological Advances

Even if you’re not a fan of the internet of things, there are some technological advances you can add to your home to improve both your quality of life and your home’s resale value:

We know most of your technology will go with you if you choose to move, but devices like smart thermostats can add resale value to your home and make it more comfortable and energy efficient while you’re living there.

  1. Outdoor Spaces

If you live in an area that has nice weather or you have a backyard you’d like to do more with, consider adding a deck to your backyard.

You can expect to recoup more than three-quarters of the investment in your new wooden deck at resale. Most outdoor decks are much more affordable than adding square footage to the inside of your home, costing less than $23 per square foot instead of more than $80 for indoor square footage.

  1. More Square Footage

Sometimes moving to a new home just isn’t an option, so consider adding some additional square footage to your existing home. It’s probably one of the most expensive additions that you can make to your home, but sometimes that extra square footage is all you need. Of course there are options like a quick trip to The Container Store for additional storage in your current home layout. One study found for every 1,000 square feet of space you add to your home, you increase your home’s value by 3.3%. A few things to remember about additions like this include:

  • Use reliable contractors — Poor work will cost you and end up detracting from the value of your home.
  • Be prepared to vacate — Depending on the work being done, you may or may not be able to stay in your home for the duration of the construction.
  • Expanding the foundation is costly — If you need to expand your foundation, it will add to the cost of your remodeling.

When it comes down to it, if you need more square footage, then you need more square footage. Don’t skimp on the contractors — you get what you pay for, after all.

Upgrading your home can be a great way to improve its resale value or make it a bit more comfortable while you’re living there. Just avoid money sinks and focus on the upgrades that get you the best bang for your buck.

Anum Yoon loves all things related to personal finance. She founded Current on Currency after realizing there wasn’t a personal finance blog that tailored posts for international students. Current on Currency has since expanded to become a millennial money blog, so follow her on Twitter @anumyoon to check out her updates.

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit
May 222017

Want An Extra $668? Take The 365 Day Money Challenge

By |May 22nd, 2017|Blog|2 Comments

Want An Extra $668- Take The 365 Day Money ChallenFor far too long I’ve tried to save money but always fail after just a few weeks. I’m one of those people that need a little extra reason, other than saving money of course. Therefore money challenges are the best option for me and possibly you too.

Some challenges are saving a certain amount per month, others per week, but there is one that saves money every single day.

How The 365 Day Money Challenge Works

On the first day the 365 day money challenge, you save just 1 penny. On day two you save 2 pennies, three 3 pennies, and so on. On day 365 you will save 365 pennies ($3.65) and have $667.95 total saved.

Interesting to note you never save even $5 in a single day. Anyone can find an extra penny a day even if it’s just walking down the street and looking for coins on the ground.

Make Sure You Save Everyday

Though you don’t save much in a day the habit of saving is what’s truly important. The hardest part about saving money is to start.

We make excuses like “I don’t make enough to save”, or “I’ll start saving when I get a raise” or anything else. However, if we just start saving then the habit will be formed and it will no longer be a something that causes stress in your life.

Saving a penny may seem useless and unnecessary, and we may forget at first but make sure you catch up when you do remember.

How $668 Can Change Your Life

$668 won’t send you on a huge vacation, it won’t buy you a car or even pay your rent or mortgage but you can go out for a nice dinner. You can cover an unexpected bill that may come up, go on a long weekend, or cover your Christmas spending.

Will having $668 after a year change your life? Not in major ways, but you can do something nice and you will have also built up a savings habit that can make it possible to save a $1,000, $5,000, $10,000, or $100,000.

What To Do After The 365 Day Money Challenge

Don’t ever stop saving. The 365 day money challenge can become the 730 day money challenge. Or better yet it can just become the everyday money task instead of a challenge.

The 365 day money challenge is all about building a habit, yes you save a certain amount of money, and yes you can use that money for many things, but creating habits that will last a lifetime is really the main goal.

If you find that without an actually named challenge you can’t save money and have already succeeded at the 365 day money challenge then find others. There is the 2-liter challenge, the 52 week money challenge, or any other alternative that saves you money.

Whether you continue to save money on your own or join the next money saving challenge make sure that you build the habit of saving. Build your strength and learn to live without in order to save for the future.

Disease Called Debt

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit

Join the Thousandaire newsletter

Screen_shot_2017-04-25_at_1.36.50_pm

Subscribe to get our latest content by email.

Powered by ConvertKit