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May 152017

Danny Willett’s Net Worth And Career

By |May 15th, 2017|Blog|Comments Off on Danny Willett’s Net Worth And Career

Danny Willett's Net Worth And CareerDanny Willett’s net worth is $2 million dollars, but how did he get there? How did he make his money? And, what sacrifices did he have to make to get there?

Danny Willett’s Personal Life

Danny Willett was born in Sheffield England on October 3, 1987. He started playing golf at a very young age and never stopped.

In 2013 he married Nicole Harris and 3 years later, just days before the Masters he would ultimately win, they had his first son Zachariah Willett.

The Early Years of Danny Willett

In 2005 Danny won a scholarship and played for JSU (Jacksonville State University). Which lead to winning the 2006 Troy Invitational. The following year he won both the Mission Inn Collegiate Classic and, the Ohio Valley conference championship making him the number 1 amateur in the world.

Danny Willett’s Pro Years

Danny Willett went Pro in May of 2008. Though he played well his first year finishing 5th in the Riverwood Open, 10th at the Spanish open, 13th at the French Open and 12th at the Russian, it wasn’t enough to earn his tour card. However in 2009 he came in at 4th place at Qualifying school earning him the coveted touring card for the season.

In 2010 he came in fifth at the BMW Championship which moved him in to the top 100 World Golfers. His first professional win would come 2 years later at that same BMW Championship.

In 2014 he won the Nedbank Golf Challeng and in 2015 the Omega European Masters, even still his greatest win was no doubt the 2016 Masters Tournament at Augusta national shooting 5 under par.

Before winning the Masters Danny Willett’s net worth wasn’t even $1 million. However, the prize of winning the masters was $1.8 million. That, along with the winnings he had won (totaling $880,000) brought his net worth over $2 million dollars.

How Danny Willett’s Net Worth Affects You!

We can’t all win $1.8 million dollars in a day, nor should we. It took years of hard work that didn’t pay off for Danny Willett before he made that money.

Think about it, he has been playing Golf since he could walk almost. He has dedicated blood, sweat, and tears, not to mention money into learning and perfecting his game. And yes he did receive a good ROI however, that doesn’t belittle the work he put in.

Likewise we need to put in hard work if we want to reach our goals. Sometimes we don’t see the benefit right away, it may take weeks, months, or even YEARS, before the real benefit comes out. It may be starting a side hustle, which if your very very good you may make enough to operate your first year.

Most people spend a lot of time, energy, and money starting and continuing such a side hustle and only see the benefits years later. Which isn’t that how Danny Willet’s net worth got so high?

We may never win $1.8 million like Danny Willet, but if we focus, work hard and take steps towards our future selves we can become not just thousandaires, but millionaires.

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Apr 102017

Merchant Cash Advances: What You Need to Know

By |April 10th, 2017|Blog|1 Comment

merchant cash advance tips, types of cash advances, merchant cash advance tips

As you explore various business funding options, chances are you have (or soon will) come across something called a merchant cash advance. Below is a basic overview of this increasingly popular alternative to conventional bank loans and 401(k) loans; especially for startups and small businesses.

What is a Merchant Cash Advance?

A merchant cash advance is a type of business funding that is suitable if you conduct most of the transactions by credit card (e.g. retail, restaurants, car repair, etc.). The loan amount can be anywhere from under $10,000 to over $100,000, and the term duration ranges as well from a few months to over a year. Generally, it’s a good idea to obtain a smaller amount than you anticipate, and then re-apply for additional funding later if your forecast turns out to be correct.

How do they work?

Now that we know what they are, you may be asking how do merchant cash advances work? With a conventional bank loan, a prescribed amount is paid back on a scheduled basis (usually monthly, but sometimes bi-monthly or weekly). However, a merchant cash advance handles repayment quite differently. Instead of a fixed amount, you’ll pay back a small percentage of your daily credit card sales.

For example, if the repayment amount is 2% and on a particular day you generate $400 in credit card sales, you would pay back $8. Or more specifically, $8 would automatically be transferred from your bank account to the lender. This is an important aspect because it’s one less administrative task for you to do (or as is often the case, forget to do since you’re so busy trying to get other things done!).

Dynamic Repayment

Aside from being easy to administer, merchant cash advances are unique in that (as noted in the example above) the repayment amount is dynamic and adjusts based on actual daily sales. As such, when sales are high and cash flow is ample, a bit more is paid towards your loan — and the needle moves closer to full repayment. Alternatively, when sales are slow and sluggish, a bit less is paid towards the loan – which means there’s more cash-on-hand for you to pay bills, and allocate towards revenue-generating activities and projects such as advertising, running promotions, extending business hours, and so on.

No Collateral or Long Credit History 

In addition, merchant cash advances typically don’t need to be secured with collateral, and you don’t need a long, virtually flawless credit history. Many lenders only need to see a few months of operational history. As long as they think your business has a future and are confident in your leadership abilities, there’s a very good chance that your application will be approved. Even a past bankruptcy typically isn’t a deal-breaker, provided that it’s discharged at the time of application.

Is a Merchant Cash Advance Right for You?

Naturally, it’s beyond the scope of this (or any other) article to confirm or conclude that a merchant cash advance is the right business funding option for you. However, if you do conduct most of your transactions through credit card, then it could indeed be a favorable option that helps your business survive, and thrive.

Disease Called Debt

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Apr 52017

Are There Alternatives to Logbook Loans?

By |April 5th, 2017|General Personal Finance|Comments Off on Are There Alternatives to Logbook Loans?

logbook loans, alternative to logbook loans, other options for logbook loans, different types of loans

Nowadays, the thing that troubles a lot of families in the UK is overcoming their financial difficulties. Paying your monthly bills and covering all your needed expenses and purchases has definitely become more burdensome than it used to be. The rise and fall of the economic situation has wrecked the ship that carries many individuals to the shore of financial stability.

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Mar 312017

Improving on the Safe Withdrawal Rate

By |March 31st, 2017|Blog|2 Comments

investment tips, investment advice, stock market tipsOne important concept in personal finance is financial independence.  You are financially independent when you no longer need to work for a wage in order to support your standard of living. 

Sound awesome?

How do you get it?

Well, you save enough money to create a portfolio of stocks and bonds which you can live off of instead of your wage. Turns out the money required to replace working for a living is quite substantial…

According to the trinity study withdrawing 4% of your starting portfolio and adjusting the figure upward for inflation every year would result in a hypothetical starting portfolio lasting at least 30 years in 95% of cases.  In most of those cases, the portfolio ends up larger in real terms than you started with, ready for another 30-year stint.

For this reason, you are generally considered to be financially independent once your portfolio is 25x as big as your annual living expenses.  This is to say you are financially independent when you could choose to retire and not have to change your standard of living.  I confirmed the trinity studies numbers by taking Robert Shiller’s inflation adjusted S&P 500 data (going back to 1870) and adjusting a hypothetical portfolio on a monthly basis for withdrawals and dividends as well as portfolio growth over a 30 year period.  I repeated this, starting the hypothetical portfolio at each year starting at 1870. This gave me over 100 runs which I plot below:

Portfolio-Based-Retirement

These are all of the portfolios runs just plotted on top of each other. I found a 98% success rate with the 4% rule.  I’m not quite sure what results in the discrepancy.  You can see that on the left side of the graph each portfolio starts at $1,000,000. On the right side, you can see that results are very different.  Sometimes you end up with $20,000,000, sometimes you go bust and end up with nothing.  As a prospective retiree, this chart looks pretty scary.

You have to save $1,000,000 just to be able to spend $40,000, and then you still go bust a bunch!

Sure sometimes you end up with way more money, but you’ll probably feel pretty stupid sticking hard to that $40,000 budget, then dying with $20 million in the bank.  The number of busts are scary, many prospective early retiree’s try to be conservative they switch over to a 3% rule.  This means that to spend $40,000 they’ll have to save over $1.3 million!  This could mean adding a substantial amount of years to your working life.  It could possibly mean that you don’t mind earning an extra house worth of money before retirement, but hey, then you don’t really need to worry about most of this.

Improving on the 4% rule

What if, rather than viewing our portfolio as a pile of money, we viewed it as ownership of operating businesses?  If you owned a car wash chain, and every year the chain earned $60,000 in profit, how would you calculate the amount that you could spend year to year?

Would you think, “well I could sell the car wash for $1,000,000 and 4% of $1 million is…”

NO!

NO!

You’d probably just say, “I earn $60,000 annually, I should save some to grow the chain, and provide some cushion against bad years.  I can probably spend like two-thirds of this. So I can spend $40,000 annually.”

You should look at your stock portfolio the same way!

Why?

When you own a stock you are really just a fractional owner of an underlying business.  You should act like it.  Don’t base your retirement on the size of your portfolio, base it on the accounting earnings of the underlying businesses!

Introducing the 2/3rds rule:

Let’s assume you have a portfolio consisting only of the S&P 500.  To apply our above rule, we decide that we’re financially independent once we hit a specific dollar value of accounting earnings.  Since we want to spend $40,000, we need $60,000 of accounting earnings from the S&P 500. (2/3rds of $60,000 is $40,000).

One “share” of the S&P 500 earned ~$16 in 1985.  Therefore, in order to have $60,000 in earnings from the S&P 500 we’d need 3750 “shares” of the S&P 500.  This isn’t necessarily easy as it sounds, as one of these “shares” cost $180 at the 1985 index level, this means that you’d need about $675,000 to retire based on this rule.  That’s a substantial difference than the 4% rule which would require $1,000,000.

It isn’t a free lunch, however, because when the price per dollar of earnings is higher you would need more to retire than the 4% rule would indicate.  If you decided to retire in January of 1999, S&P earnings were $38, thus in order to have $60,000 in earnings you’d need 1579 shares of the S&P 500.  Given that the index level at that time was 1,280 that would imply that you’d need a portfolio over $2,000,000, twice the level that the 4% rule would predict.

So how well does the 2/3rd’s rule actually perform?  I repeated the same study, only initial portfolio levels were set for constant accounting earnings ($60,000) of the S&P 500.

Earnings-Based-Retirement

There is more spread in the starting portfolio values (on the left) compared to the previous plot.  This is to be expected, the original plot started each run at $1,000,000, in this case, we start each run at a variable portfolio size based on the trailing earnings of the S&P 500 for that month.

What’s more interesting is that there is less spread on the right end of the plot!  The highs are lower and the lows are higher.  This indicates that the result for the prospective retiree is somewhat less random if they base their retirement on accounting earnings rather than portfolio size.  The success rate using this method of retirement, 1% better than the 4% rule.  While I’ve been unable to reproduce the trinity study values precisely, I conclude that somewhere between 20% and 50% of the portfolio failure events that would have happened if you followed the 4% rule in a random month sometime over the last 130 years would not have happened if you were following the 2/3rds accounting earnings rule.

This isn’t the only benefit.  By applying this rule, not only does your portfolio fail to carry you through a 30-year retirement more rarely, you also need less money on average to retire.  Following the 4% rule requires a starting portfolio size of $1,000,000 every time, regardless of the underlying earnings of the S&P 500.  Following the 2/3rds rule required only $800,000 on average.  Sometimes, you do have to accumulate more money, because valuations are high and each dollar invested doesn’t buy you much in the way of earnings (like in 1998, or present day), but on average you can accumulate substantially less money and still retire with a greater level of safety.

Disease Called Debt

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Mar 242017

Your Emergency Fund Helps Your Credit Score

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

helping your credit score, credit score tips, emergency fund advantagesYour three-digit FICO credit score is a key number, one that lenders use to determine who qualifies for loans and at what interest rates.

How often you miss payments, how much debt you owe on your credit cards and how much of your credit you are using all help determine how high this score is. But, the amount of money in your savings account, though, has no impact on your score.

That doesn’t mean, though, that having money stocked away to cover the cost of unexpected emergencies won’t have a positive impact on your credit score.

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Mar 162017

Relocating Abroad? How to Prepare Financially

By |March 16th, 2017|General Personal Finance|2 Comments

 

preparations for relocating abroad, financial tips for relocating abroad, financial advice for relocating abroadThis is a guest post from Pauline of InvestmentZen.com

In the past 12 years, I have lived in four foreign countries, on three continents. While it has been amazing for the most part, there are also things I wish I had known before relocating, and that is why today I would like to share my tips with anyone who is thinking about taking the leap and moving to another country.

Relocating abroad is an amazing experience. So much is involved in terms of logistics, finding a new place, learning the language, making friends, … that it is easy to forget about money matters. But if you are not careful, that international experience can cost you a lot. Here are a few tips.

Research the country you are moving to

I would suggest before relocating abroad that you spend at least a couple of weeks in the country you want to move to. You know, just to make sure you really like it before moving all your belongings and pets to the other side of the world. The romantic idea you may have of Thailand might not be what you’d experience in reality. Paris is a city of lights, but also of air contamination and traffic jams!

Join expats forums on Facebook and dedicated sites to make sure you can afford to live there, and that your expectations match people’s experience on site. Finding expats from your country will be easier to know what they miss from home and how they deal with it.

Talk to a tax lawyer

There are many tax benefits on relocating abroad. Talking to an international tax lawyer should pay for itself the first year. You might be eligible for the Income Tax exemption if you spend less than 35 days in the US each year. Ask them how you should handle your US investing accounts, your 401k, Roth IRA, and rental property if you are renting your house while you are away.

US citizens are required to pay taxes to the IRS even if they live abroad, but nothing prevents you from opening a company in your new country, which will be taxed locally. Again, these are just a few examples of things you should consider, and only a professional can give you advise fitting your precise needs.

Master international banking

One of the main concerns of expats is how to send money home or bring money to their new country. It can be tricky if you are unprepared. On the US side, I would not recommend closing any account you own. Even if they stay a bit dormant while you live abroad, re-opening them when you come back will be complicated. Same thing for your lines of credit, brokering accounts, and credit cards. It’s more, you can apply for a travel credit card to start earning free miles and hotel nights, as well as a credit card that doesn’t charge you a transaction fee when you use ATMs or buy things abroad. Expat forums are again a good place to ask for the latest cards and their perks.

Your local bank may have branches in your new country, so that might make things easier to talk to your branch manager and explain your plans of relocating abroad. Otherwise expect to have only a savings account in the new country, with a debit card at most, and plan accordingly.

Many companies have emerged lately offering affordable international money transfers, but if you have an account in US dollars in your new country, you can simply deposit a check from home and bring your money free of charge. There might be a delay of a few weeks for them to confirm the check though.

Live like a local

When I first moved to the UK, I though everything was so amazingly expensive, I got concerned my salary wouldn’t allow me to live well. Then, I talked to my coworkers who had lived there for years. They told me about the loyalty card at the supermarket, and the reduced meat you can buy after 5pm. They gave me the dates of the farmers’ market, and the URL of a money saving site that always sends tips and special offers. By month 2, I was living large on less than when I arrived.

Living like a local may also mean that instead of having milk and cereals in the morning, that are expensive goods, you could try the local breakfast. Splurge once in a while on the things you miss from home, but if you expect to live exactly like you do in the US, maybe relocating abroad wasn’t such a good idea.

Finding accommodation

If you are relocating abroad and have little information on your new city, renting a furnished place for a month might save you a lot of problems compared to directly signing a one year lease. Yes, it will be a bit expensive. But it gives you a month to get to know the city, the best neighborhoods, where your new friends live, where you’d like to go to the gym, and so on.

I have generally found that for stays over three months, getting a long term lease and buying furniture is worth it. Just get basic things until you’re sure you are going to stay. You can always donate it to charity if it won’t sell.

Relocating abroad is a wonderful way to experience new things, and if you are careful with your finances, it can also be a great move, allowing you to live cheaper and save a lot!

 

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