\u00a0“Being financially rich and having the ability to live like a millionaire are fundamentally two very different things.”<\/p>\n
Tim Ferriss The 4 Hour Workweek<\/p>\n<\/blockquote>\n
The above statement is what sold me on the idea of the 4 Hour Workweek.<\/p>\n
Tim’s recognition of the “New Rich” as a value of time over money resonated with me in 2007 and means even more to me 6 years later.<\/p>\n
With each year comes a greater appreciation of the passing of time and the value of a life lived passionately.<\/p>\n
In Tim’s second book: The 4 Hour Body he focuses on physical\u00a0fitness. He dedicates an entire chapter to setting goals and measuring progress.<\/p>\n
Today, I am going to talk a bit about something equally\u00a0important:<\/p>\n
Financial Fitness\u00a0<\/span><\/strong><\/h2>\nAs I was eluding to above, to be rich we do not need to be millionaires, but we do need to maximize our income, insure against the unkown and have the resources available to make good financial decisions.<\/p>\n
Just like\u00a0defining our goals for a healthy weight<\/a>,\u00a0we must also define our goals for healthy finances. \u00a0We need “financial fat calipers” to take measurements. We also need good standard metrics against which we may\u00a0gauge\u00a0our progress.<\/p>\nIn the way we use\u00a0myfitnesspal<\/a>\u00a0to determine the calories we must consume to maintain a desired weight, we need a tool to define the money we must invest, the maximum debt we can incur, the appropriate insurance we may need, to reach a desired financial and\/or lifestyle goal.<\/p>\nEven more\u00a0importantly, \u00a0we need to simplify and eliminate barriers that stand in our way:<\/p>\n
In the Words of Tim Ferriss “A” is for Automation<\/h2>\n
There are a million different sources of investment information and everyone claims to have the right answer.<\/p>\n
Prior to the recent recession I invested rather blindly. I relied on others to help guide my financial decisions.<\/p>\n
We purchased our house in 2007 because\u00a0my well-meaning parents claimed “owning is always better than renting”… Some lessons are learned the hard way!<\/p>\n
Like many, I saw my retirement account dwindle to 1\/4 of it’s\u00a0initial\u00a0value, I felt the unbelievable sting of a negative home equity, my job put a freeze on all employee salaries and eliminated retirement contributions, our healthcare expenditures grew as did our family.<\/p>\n
I am sad, not because of the financial loss, but because 4 years later I feel I failed to appreciate the first year of life of my daughter. I was frozen by fear and uncertainty.<\/p>\n
I will never get that time back!<\/p>\n
It’s funny that at the very same time I was reading the 4 Hour Workweek. It taught me little about investing, but a lot about minimizing the obstacles that separate us from the life we truly desire.<\/p>\n
I decided to stop lamenting my misfortune, and started reading every financial blog, book and magazine I could get my eyes on.<\/p>\n
The Only Financial Tool You Will Ever Need (kind Of)<\/h2>\nThe following table may be all you ever need to determine your money ratios at every stage of life.<\/span><\/h3>\nThe\u00a0following\u00a0table was adapted from a wonderful book titled “Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage of Life<\/a>![\"\"](\"http:\/\/www.assoc-amazon.com\/e\/ir?t=4hourlife00-20&l=as2&o=1&a=B0057D9SLC&camp=217145&creative=399373\")
” by Charles Farrell.<\/p>\nThe book is easy to understand and a must read for anybody seeking financial security at all stages of life. “Money Ratios” are simply dollar amounts based on your age that help determine if you are on track to reach your financial goals.<\/p>\n
The\u00a0author\u00a0spends the entirety of the book outlining the concepts of money ratios and the table below. \u00a0What was missing is this excel spreadsheet. So I made it.<\/p>\n
This covers your\u00a0capital to income ratio, annual savings, suggested mortgage debt, education debt, retirement investments, disability insurance and life insurance AT EVERY STAGE OF LIFE<\/strong>.<\/p>\nJust press the “Click to Edit”<\/strong><\/em> button above the\u00a0embedded\u00a0excel spreadsheet then enter your annual income in the green box labeled as such<\/span><\/strong>.<\/p>\nEach field will then automatically update to reflect your income and the appropriate values based on that. This is a wonderful tool that should be the foundation for building and maintaining wealth through all stages of life. The left hand\u00a0column\u00a0reflects your age from 25-65 at five year intervals. Use the horizontal scroll bar to see all available fields.<\/p>\n
Again, this table compliments the book<\/a>\u00a0and will be most effective if you understand the principles that drive it. \u00a0The author has a\u00a0calculator<\/a>\u00a0on his website\u00a0which can be accessed by entering this code\u00a0778811<\/strong>. \u00a0It is a good companion to the Excel spreadsheet.<\/p>\nTO START CHOOSE “CLICK TO EDIT” THEN ENTER YOUR ANNUAL INCOME IN THE FIELD BELOW<\/span><\/h4>\n
In the way we use\u00a0myfitnesspal<\/a>\u00a0to determine the calories we must consume to maintain a desired weight, we need a tool to define the money we must invest, the maximum debt we can incur, the appropriate insurance we may need, to reach a desired financial and\/or lifestyle goal.<\/p>\n Even more\u00a0importantly, \u00a0we need to simplify and eliminate barriers that stand in our way:<\/p>\n There are a million different sources of investment information and everyone claims to have the right answer.<\/p>\n Prior to the recent recession I invested rather blindly. I relied on others to help guide my financial decisions.<\/p>\n We purchased our house in 2007 because\u00a0my well-meaning parents claimed “owning is always better than renting”… Some lessons are learned the hard way!<\/p>\n Like many, I saw my retirement account dwindle to 1\/4 of it’s\u00a0initial\u00a0value, I felt the unbelievable sting of a negative home equity, my job put a freeze on all employee salaries and eliminated retirement contributions, our healthcare expenditures grew as did our family.<\/p>\n I am sad, not because of the financial loss, but because 4 years later I feel I failed to appreciate the first year of life of my daughter. I was frozen by fear and uncertainty.<\/p>\n I will never get that time back!<\/p>\n It’s funny that at the very same time I was reading the 4 Hour Workweek. It taught me little about investing, but a lot about minimizing the obstacles that separate us from the life we truly desire.<\/p>\n I decided to stop lamenting my misfortune, and started reading every financial blog, book and magazine I could get my eyes on.<\/p>\n The\u00a0following\u00a0table was adapted from a wonderful book titled “Your Money Ratios: 8 Simple Tools for Financial Security at Every Stage of Life<\/a> The book is easy to understand and a must read for anybody seeking financial security at all stages of life. “Money Ratios” are simply dollar amounts based on your age that help determine if you are on track to reach your financial goals.<\/p>\n The\u00a0author\u00a0spends the entirety of the book outlining the concepts of money ratios and the table below. \u00a0What was missing is this excel spreadsheet. So I made it.<\/p>\n This covers your\u00a0capital to income ratio, annual savings, suggested mortgage debt, education debt, retirement investments, disability insurance and life insurance AT EVERY STAGE OF LIFE<\/strong>.<\/p>\n Just press the “Click to Edit”<\/strong><\/em> button above the\u00a0embedded\u00a0excel spreadsheet then enter your annual income in the green box labeled as such<\/span><\/strong>.<\/p>\n Each field will then automatically update to reflect your income and the appropriate values based on that. This is a wonderful tool that should be the foundation for building and maintaining wealth through all stages of life. The left hand\u00a0column\u00a0reflects your age from 25-65 at five year intervals. Use the horizontal scroll bar to see all available fields.<\/p>\n Again, this table compliments the book<\/a>\u00a0and will be most effective if you understand the principles that drive it. \u00a0The author has a\u00a0calculator<\/a>\u00a0on his website\u00a0which can be accessed by entering this code\u00a0778811<\/strong>. \u00a0It is a good companion to the Excel spreadsheet.<\/p>\nIn the Words of Tim Ferriss “A” is for Automation<\/h2>\n
The Only Financial Tool You Will Ever Need (kind Of)<\/h2>\n
The following table may be all you ever need to determine your money ratios at every stage of life.<\/span><\/h3>\n
TO START CHOOSE “CLICK TO EDIT” THEN ENTER YOUR ANNUAL INCOME IN THE FIELD BELOW<\/span><\/h4>\n