Slicing Through Money's Mysteries
The average credit card debt is on the rise and the U.S. average household owes a crippling amount. According to Transunion, the average credit card debt per U.S. adult is $5,525 in 2021. And for US households, the average credit card debt balance is $7,938 per Wallethub.
Another interesting stat on the average credit card debt is that over 7 million Americans have access to a credit card. In addition, the total US credit card debt outstanding is a whopping $934.8B, nearly 1 trillion dollars!
Here are the best credit cards today if you are looking for an awesome rewards credit card. There are so many great offers, so how do you decide which ones to get? Let’s how many credit cards you should have until it’s too late.
One day I was having lunch with a buddy of mine when he whipped out his foot long man wallet to pay the bill. “Whoah!” I said. “Where do you keep that thing?”
“In my man bag, of course!” he replied with pride. Todd lifted up his soft leather Bally bag that probably cost a thousand dollars. “Have a touch,” he said as he tossed it over. Todd’s bag was as supple as a baby’s bum.
The reason why Todd’s wallet is so big is because he has 10 credit cards all nicely color coordinated from top to bottom. The most prestigious cards – the black ones of course – were at the top. But as I looked closer at his collection, every one of his said “Preferred,” “Platinum” or “Elite.”
One could call Todd a credit card connoisseur. “I’ve got a card for every purpose,” told mentioned proudly. “Never leave home unprepared!”
Despite what is probably hundreds of thousands in credit at his disposal, Todd still rents a one bedroom apartment and has less than $80,000 his 401(k) at 35 years old because he’s spending all his money!
In fact, he admitted to having around $18,000 in revolving credit card debt spread across seven accounts. At least he’s got a nice BMW 650i coupe on lease for $899 a month.
So I got to thinking, maybe the reason why Todd has so little assets for a man making six figures a year is because of temptation from all his credit cards. When there are no cookies in front of me, I never eat desert. As soon as you put out a tray of gooey white chocolate chip cookies at my disposal, it’s game over!
Some people are completely against credit cards because they’ve gotten themselves into debt troubles before. How many credit cards should those folks with debt problems have? None. Alcoholics should not hang around in bars.
By only using a debit card or cash, such anti-credit card users help minimize themselves from relapsing into debt. I commend their cold turkey approach, but it’s not for me.
I recommend everyone have at least one credit card to build their credit score, use as an emergency, borrow money for free for 30 days, earn rewards points, and minimize the pain of losing cash when you lose your wallet.
The question is, how many credit cards are ideal for optimal financial health. Let’s discuss!
The most I’ve ever had was between the ages of 22-24 when I had five. I thought it was so smart to open up new accounts with 12+ month long 0% introductory APR rates, pay the minimum for the full term and then transfer the balance to another 0% APR credit card. Borrowing money for free is always a splendid thing to do when you are young, poor, and have a lot of time on your hands.
Unfortunately, there’s a point where the “spend more, save more” mentality runs out. Notably when it becomes absolutely backwards to keep spending just because the interest rate is cheap. More than anything it felt annoying to always have a revolving balance so I decided to quit the shenanigans and just focus on better spending habits.
From 2001 to 2013 I only had two main credit cards: 1) my American Express corporate card and a 2) Citibank ThankYou credit card because I’ve been a long time banking client.
The reason why I only had two was both physical and mental. On the physical front, I can’t stand having a thick wallet. The wallet is always in my right butt pocket for all you pickpockets out there and it’s uncomfortable to sit down when things are uneven. The second reason for having only two credit cards is due to record keeping.
By only having one personal card, I was able to comfortably keep track of all my expenses online and make sure I was not going over budget. For example, if I had a $2,000 a month credit card budget, I didn’t have to stay on top of numerous credit card balances.
My expenses for the month were essentially my credit card bill + the amount of cash withdrawn from my checking account. Having only one made it much easier to SAVE money.
Now that I have a third credit card to earn points for travel, I’ve got to be a little more diligent about my spending. With a 0% introductory APR, 40,000 bonus points, and the first year’s fee waived, I’m reminded of the times when I had multiple credit cards once again.
Now I’m tempted to take advantage of new credit card offers with bonus points. It feels a little like going into relapse!
Just imagine, if I can earn 40,000 rewards points just by signing up and use a credit card to buy a $100,000 Range Rover to earn a total of 240,000 points, why wouldn’t I? That’s five or six round-trip flights from San Francisco to Hawaii.
Unfortunately, car dealerships usually only allow for a maximum of $3,000 to be charged due to fees they have to pay which cuts into their margins.
I’m a big advocate of less is more when it comes to credit cards. Let me explain why I recommend keeping the number of credit cards you have to three or less.
If you have a budget of $1,000 a month to spend on your credit card(s), it’s much easier to limit spending on one card compared to limiting spending with five.
Your mind automatically starts thinking about the various custom rewards points for each card and you charge accordingly just a little more than you should. If you charge even $100 more on average between your five credit cards, you’ve gone 5% over budget for the month.
Compound the over budget amount over the year and just like that you’ve got $1,200 more in credit card expenses or debt that needs to be paid off. We can’t help but think of each credit card as one powerful spending tool with its own APR rate, fantastic benefits, and multi-thousand dollar credit limits.
Derivative Explanation: I threw a potluck at my house for 20 confirmed guests one year. One of my good friends said she’d make enough spaghetti for 20 people. I told her to just make full portions enough for five people. She looked at me stubbornly and said, “Well what about the other 15 guests?”
I proceeded to explain to her that if all 20 guests made enough full-size portions for 20 people we’d have enough to feed 400 people! She didn’t get it and insisted to bring massive pots of sauce and pasta. At the end of the party, she had to lug both massive pots still full of pasta and sauce home. The lesson here is that we get confused with how much we can spend the more spending vehicles we have.
Unless you are a billionaire, you only have so much money to spend a month. Let’s say your budget is $3,000 a month and you go from one rewards credit card to three: one for travel, one for entertainment, and another for online shopping.
You must now calculate the incremental rewards you’ll earn, given you would have received rewards if you put everything on your one and only credit card anyway. Once you calculate the incremental rewards received, you realize the benefits aren’t that much at all since you are not spending 3X more by have 3X more cards. And if you are spending above your $3,000 budget that’s no good either.
Derivative Explanation: One friend started bragging about how his investment portfolio was up 18% in 2013. That’s a great return for anyone, but guess what? The S&P 500 index is up 18% as well! In other words, my friend created no alpha.
All the time he spend researching and picking stocks was a waste since he could have just bought the S&P 500 ETF SPY and kicked back all year. To maximize your rewards from each card you’ve got to meticulously deploy your usage. Otherwise, you’re weighing down your finances with distractions. Real investors create alpha. Otherwise, you’re just a saver. Read: Are You A Real Investor If You Create No Alpha?)
Credit cards have the highest interest rates for mass consumer lending other than payday loans. With the 10-year interest rate at 3%, the average credit card interest rate is roughly 15%. A 5X spread is enormous! No wonder why millions of credit cards are issued annually.
When you have more temptation to spend with more credit cards in your wallet, you will inevitably increase your chance of accumulating credit card debt.
Just like how we don’t bring alcoholics to bars, we shouldn’t arm consumers who have a proclivity to overindulge on anything with more credit cards. Undisciplined spending and high interest rates compounded over time have a devastating effect on your wealth. (Read: The Reality Of How People Get Into Debt – It Just Creeps Up!)
Derivative Explanation: There’s a great study that showed a 30% increase in spending per customer once McDonald’s started accepting credit cards. One frugal friend I know went from buying two $1 McDoubles for lunch twice a week in cash to buying two $4 Filet O’Fish sandwiches and a large Coke three times a week for the next two years. He no longer plays singles because he went from a svelte 165 lbs to 200 lbs and admitted he’s got revolving credit card debt attributed to his fast food addiction.
We learned in my article on how to get a 800 credit score or higher that the Amount Owed accounts for 30% of your credit score calculation, while New Credit accounts for 10% of your credit score calculation.
Nobody knows exactly how many credit cards is too many, but one can imagine that after five credit cards, opening up another credit card at the margin will likely hurt your credit score, or at least not help your credit score. Sure there are plenty of examples of people who have eight credit cards and still have good credit scores. But perhaps they would have even better credit scores if they only had three credit cards.
Derivative Explanation: After three gin and tonics, I’m feeling good. After 10 gin and tonics, please dial 911 and pump my stomach before I die.
Applying for multiple credit cards all the time is an unhealthy use of time. It’s like the person who always focuses on the emergency fund and not on ways to make more money. They never take their personal finances higher because they’re focused on kindergarten basics.
Everyone should have at least one rewards card given the benefits of travel insurance, rewards points, ease of use, and free interest for 30 days. My Citicard of nine years is now gathering dust given I want double points on everything with my Barclaycard. If I didn’t have a business, I wouldn’t have a third credit card. However many credit cards you have, be careful not to get caught in a negative debt cycle or damage your credit score.
Spend your efforts instead on building passive income streams and making more money. If you don’t have a highly addictive personality, one to three credit cards is the ideal number for optimal financial health!
In order to optimize your finances, you’ve first got to track your finances. I recommend signing up for Personal Capital’s free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.
Those who are on top of their finances build much greater wealth longer term than those who don’t. I’ve used Personal Capital since 2012. It’s the best free financial app out there to manage your money.
If you don’t have enough cash, getting a personal loan from Credible is a good place to start.
Personal loan rates have come down significantly in comparison to the average credit card interest rate. Thus, if you have expensive credit card debt, consider consolidating your debt into a lower interest-rate personal loan.
Credible has the most comprehensive marketplace for personal loans. Up to 11 lenders compete for your business to get you the best rate. Get real personal loan quotes in just two minutes after you fill out an application. Check out Credible today and see how much you could save.
For further suggestions on saving money and growing wealth, check out my Top Financial Products page.
In addition, if you enjoyed this article and want to get more personal finance insights and tips, please sign up for the free Financial Samurai newsletter. You’ll get access to exclusive content only available to subscribers.
Updated for 2021 and beyond.
The average interest rate by debt type is important to know to utilize debt more efficiently. This article will look at the average interest rate for auto loans, credit cards, and mortgages.
We are an indebted nation thanks to our desire for more and our financial system’s ability to grant us more. When used appropriately, debt can help provide for a better life and make us wealthier. When used indiscriminately, however, debt can destroy our financial dreams.
Below is a list of the most indebted nations according to Trading Economics. Currently, America is at ~106% debt-to-GDP and historically ranged from a low of 31.7% to a high of 122%.
Whenever your country’s debt is greater than its GDP, it’s probably a good idea to encourage your politicians to exercise fiscal restraint lest they take your country to hell during the next financial crisis.
Notice how many of the most indebted countries such as Greece, Italy, and Portugal continue to struggle since the 2008-2009 financial crisis.
Let’s review the following types of consumer related debt and rank them from worst to best. We’ll also take a look at the latest interest rate by debt type.
Here are the best rewards credit cards for your review. I’ve spent dozens of hours analyzing the best cash back and sign-up bonuses today.
There once was a time I was rich, but never famous as I traveled internationally four times a year for business. Each destination hosted loads of other folks who wanted to learn about the next money making idea in the global financial markets.
With me was an American Express corporate card where I could expense relatively freely to the tune of ~$50,000 a year. The card provided travel insurance, access to airport lounges, concierge services, and more. 50K may sound like a lot, but that’s nothing compared to the hundreds of thousands in expenses I hear from some Black Card spenders!
I don’t have as much coming in anymore given I’m just a personal finance blogger, but I do have a lot of freedom. It’s a tradeoff many will take at some point in their lives. Given my desire to simplify things, I’ve only got one personal credit card, which is the Citi ThankYou Card. There’s no annual fee and all my spending is concentrated here to maximize my rewards points.
Since we live in the land of consumerism where we want things and we want them now, I thought it’d be a good idea to do a post for all you Black Card aspirees out there. Some get Black Cards just for its status symbol. Meanwhile, other people are a little less vain and use their Black Card for better access and service. Whatever the case, I’d like to introduce my guidelines for those who can and should not get a Black Card.
These are the best rewards credit cards today. They have the best cash back credit card rewards and the highest sign-up bonuses. I used to receive a ton of credit card solicitations in the mail until I finally put my address on the do not spam list.
Some of the credit card rewards offers really tried to suck people in, such as 6% cash back on groceries, or 3% on gas.
Gas and groceries are the two unavoidable expenses for almost everyone. So it is brilliant for credit card companies to target these two items for credit card rewards.
Even though I have a small monthly grocery bill and only drive about 6,500 miles a year, I was tempted to sign up. The “spend more save more” mentality started taking hold!
Then I read the fine print about the 29.99% APR, the limitation on how much I could get back, and the late penalty fee and decided not to sign up. The credit card rewards program didn’t match my lifestyle.
If you are a family of five who spends $1,000+ a month on grocery and commutes 50 miles to work everyday, you probably will benefit the most from a 6% cash back on groceries, 3% on gas rewards credit card vs. a single city dweller with no dependents. You just have to look at the fine print and see what COSTS are associated with the card.
One late payment can kill your credit score. Therefore, it is very important for you to be diligent and pay all your bills one time.
FICO gave a small peek behind the curtain at how their scoring model works and showed just how much mortgage delinquencies affect your credit score.
The example they gave drew attention to three different FICO scores on the higher end of the spectrum (680, 720, and 780) and how one late payment of 30 days affected each score.
According to FICO, the impact of a 30-day late payment on a consumer’s mortgage varies greatly depending on how high the consumer’s credit score already was.
Patch Homes has rebranded to Noah in 2020 and has raised more funding. This post is a Patch Homes / Noah review.
I’ve got around $1,800,000 in home equity locked up in one property. The property was originally purchased for $1,520,000 at the end of 2004 with $305,000 down and a $1,217,000 mortgage. The property is now worth an estimated $2,600,000 with a remaining $800,000 mortgage at 2.375%.
Although it’s nice to have $1,800,000 of home equity (31% LTV), it’s essentially “dead money” that’s doing little to improve my net worth or lifestyle. I controlled this property when my equity was only $305,000 after the initial downpayment, so the leverage power is no longer as strong.
Because roughly 67% of the average homeowner’s wealth is trapped in home equity, being “house rich, cash poor” is a common situation. As a result, homeowners have traditionally turned to home equity lines of credit (HELOC) to extract equity to pay for life’s many expenses.
One look online and you’ll find that HELOC rates are generally 1% – 2% higher than your current mortgage rate e.g. 3.75% for a 30-year-fixed vs. 5% for a HELOC. In addition to higher interest rates, using a home like an ATM machine may get homeowners who lack discipline in trouble down the road.
If only there was a better way to extra home equity at a lower cost. Enter Patch Homes.
SoFi started in 2011 and is a lending company that recently surpassed $15B in funded loans as of 2017. They have 225,000+ customers, 240 employees and have raised $1.9 B in equity funding after raising $500M led by Silver Lake in February 2017. Here is my SoFi review.
The company was founded by Mike Cagney, Dan Macklin, James Finnigan and Ian Brady, four students who met at the Stanford Graduate School of Business. They got together because they wanted to make lending and refinancing easier for borrowers using social lending.
The gist of their business is that lenders are willing to lend at a lower rate to people similar to themselves versus complete strangers. In other words, alumni should be more willing to lend to students and fellow grads of their alma matter because they share the same educational qualifications and should have a strong likelihood of repaying their loans.
SoFi is considered the largest and most successful fintech lender today. They are based right here in San Francisco, and I’ve met many of their employees. It’s worth checking to see if you can get a lower student loan rate with SoFi. The cost is free.
Everybody needs to borrow money some time. Peer-to-peer lending is a good alternative if you don’t want to pay usurious rates from loan sharks, if you’ve been denied a loan by your local bank or credit union, or if you are just too embarrassed to ask someone you know for help. From $1,000 for an emergency medical bill to $15,000 to pay for an engagement ring, some reasons are more legit than others!
As an investor in P2P lending with LendingClub, it’s always a good idea to set parameters on what type of person you plan to lend to. As P2P lending is primarily going to replace my low risk CD income that’s coming due, I intend to focus on low risk borrowers with high ratings between C to AA. They’ll probably pay rates of 6.59% to 15% so I can make a 4-10% return. An important part of understanding a borrower’s risk profile is to therefore understand what they plan to borrow money for!
I highlight all the main reasons why people borrow money through peer-to-peer lending. These are actually selections for borrowers to choose from on Prosper.com. I bucket the reasons into four categories (Great, Good, Borderline, Suspect) and analyze each reason from a borrower’s point of view. As a potential borrower in P2P lending, you can then decide whether you want to go forward with borrowing based on my rationale. The same goes for lenders when selecting loans to fund.
Here are all the reasons to borrow money through peer-to-peer.
Debt Consolidation – Debt consolidation is by far the best reason to borrow via P2P lending. If you have a loan shark charging you 20% interest a month, or if you have stubbornly high credit card debt at 29.99% a year, borrowing money through Prosper.com to consolidate your debt is a financially good idea.
Let’s say you’ve racked up $50,000 in credit card debt at a 29.99% annual interest. Your credit card company loves you, but you’re just falling farther and farther behind if you only pay the minimum $1,500 a month. Let’s say you have a job, a good profile, and decent credit rating of around 680. You can likely cut your interest expense down by 10-15%, thereby saving $5,000-$7,500 in interest expense alone. Lower interest expense will in turn help you pay off your debt faster. Meanwhile, the more reliable you are in paying off your debt, the better your profile, and the lower the rate you could get on Prosper.
Baby & Adoption Loans – I’m a big believer in adoption. The world has over 140 million orphans who could use some help! The government currently gives an adoption credit of around $12,150 per child. Sounds like a decent amount, but that’s a one time credit and raising kids can be expensive.
If the choice is between letting your baby suffer and borrowing money at a reasonable rate to survive, then clearly it’s better to borrow money. Investors will likely be much more sympathetic to baby & adoption reasons. As a borrower, please be honorable in your use of funds and spend the money on your baby or adoption.
Medical / Dental – Goodness forbid nothing major ever happens to us, but statistics show from long-term care insurance studies that one in five will have some sort of major medical issue. No matter how healthy you eat or how much you exercise, genetics do not discriminate between rich or poor, and accidents do happen.
Dental work is also somewhat of a crapshoot. I grew up wearing braces for a couple years as a kid. I also went to the orthodontist to also get all four wisdom teeth pulled as well as a couple random teeth that weren’t supposed to be there! Going to the orthodontist was routine torture, but I’m extremely glad my jaw and teeth are fine now. It might sound shallow, but crooked teeth and a major overbite may have lessened my chances of getting a job or having a good love life. Such dental expenses must have cost my parents over $3,000 dollars.
Taxes – If you don’t pay your taxes, you incur penalties and interest. If you don’t pay your taxes long enough, the government will come after your other assets and make your life difficult. And if you never pay your taxes, you will go to jail! Taxes are inevitable and the government’s way of imprisoning us all. If for some reason you haven’t kept up with your taxes, borrowing money is often times the only way to go.
Business – I believe in the American dream, which is why I quit the corporate world at the age of 35 to work on my own business. I highly recommend everybody start a business at least on the side by starting their own website. Once you have your online platform, you have exposure to potentially 3 billion+ people in the world! I started Financial Samurai on the side in 2009, and it’s since grown to make more than my day job as an Executive Director at an investment bank, with 90% less work and 100% more fun! You can start your own website with Bluehost for less than $4/month and get a free domain name for a year.
Home Improvement – This one is borderline good and suspect for me. Many people took out Home Equity Lines Of Credit (HELOCs) during the housing bubble and went crazy. The bubble burst and these folks lost their shirts. If you live in an area where land and the price per square foot selling cost is high, then it makes sense to expand and remodel. For example, my area in San Francisco has an average selling price of around $800/sqft. I can do a high quality buildout for $300/sqft or less, meaning I’ll get a 160% return on my investment!
The only remodels I recommend are kitchens, bathrooms, and necessary infrastructure upgrades for security purposes. Getting new double-paned windows are also nice, but costly. Everything else, I’d be hesitant to borrow money. You will very rarely ever get more than 80 cents on the dollar back on your remodeling expenditure.
Auto – Unless your car is an absolute necessity to earn money and survive, borrowing money to buy a depreciating asset is not a good idea. I happily drive a 12 year old, $5,000 automobile, and girls still give me the time of day. If you already have a high auto loan, then paying off your auto loan with a lower interest rate loan through P2P lending is a good idea. I know it’s tempting to get a sweet ride (I bought 8 cars in 10 years myself), but if you’re spending more than 20% of your income on the value of your car, then I would focus on making more money first.
Motorcycle – I’m a fan of motorcycles and have my M1 license. They are cheaper, get great gas mileage, and can be parked anywhere. The problem is, they are also much riskier than driving a car. You can get a great motorcycle for under $5,000. Scooters are around $3,500 for example and those are used the world over for long mileages. Getting a loan to buy a motorcycle is better than getting a loan to buy a car simply for the fact that you’ll borrow less and spend less money to maintain your motorcycle. Just make sure to go to M1 school, not run yellow lights, look both ways, avoid weaving between cars, and not brake too heavily on turns!
RV – This could be good or this could be bad. RVs are not cheap, but if the RV is going to be your main home for an extended period of time, getting a Prosper loan is just like getting a mortgage, but you can’t write the interest off your income. Taking the great American roadtrip sounds like a blast!
Green Loans – This is a tricky one because it is a little vague. A green loan can range from buying enough trees to plant around your house, to starting an organic food eatery. Borrowing money for solar panel systems to heat your home is a noble cause, especially since many states provide credit to the homeowner. I’ve upgraded my heating system in Hawaii with solar panels and so far so good. You’ve got to really think about the returns aspect of your green loan first. I notice some borrowers using Green Loans and Adoption Loans as a way to gain sympathy from investors.
Cosmetic Procedures – When we look good, we feel good. I get it. But, beauty is only skin deep unless you need major orthodontic surgery like me as a kid! You’d best use the borrowed money to improve your education or communication skills rather than your looks. Eat healthier, eat less, and go exercise 3X a week are obvious low cost alternatives. Although, if you want to get into an industry which emphasizes looks, then borrowing for cosmetic procedures seems more appropriate.
Boat – They say the two happiest moments of a boat owner’s life is when he gets the keys and returns the keys. Getting a boat is a true luxury. Maintenance costs are high depending on the size of the boat and you’ve got to pay a monthly docking fee if you live in a big city by the water.
Vacation – Everybody deserves a nice vacation. But, if you need to borrow money to go on vacation, consider a staycation instead. Vacations usually last two weeks or less, while your debt repayments could last months or years. Focus on doing fun things locally like hiking, biking, exploring free museums and parks during the weekdays and so forth. You’ll surprise yourself.
Engagement Ring Financing – You probably don’t want to start your marriage off with debt, or more debt. If your bride to be loves you, she’ll understand if you can’t get that big rock she’s always wanted. Instead, consider getting her a diamond alternative ring, and tell her that as soon as you make enough money, you’ll “upgrade” her wedding ring to something else. She should be touched with your transparency and intent. If she’s not, reconsider your proposal!
Wedding Loans – The average American cost of $25,000 is somewhat absurd given the median household income is around $50,000. I guess if you guys and both sets of parents pitch in, that’s “only” $8,350 each for one day worth of happiness, but still. $8,350 is a lot! Think about all the better things you can use $25,000 on: paying off student loans, a downpayment, travel, a kid’s education and more. A wedding is special. I don’t think folks should borrow more than $5,000.
Borrowing money via P2P lending is best for those who want to lower their existing interest rates through consolidation. Thanks to the economic downturn, many people have been shutout from commercial bank borrowing despite being good people. P2P lending offers a second chance for millions of folks to get back on track. For P2P investors, we have a chance to increase our returns in this pitiful low interest rate environment while doing some good at the same time.
Borrowing money via P2P lending at ~6.5%-10% is way cheaper than borrowing with a credit card which often charges well over 15-20%. Debt consolidation via P2P lending is also a smart move. Just remember that if you borrow money, you must pay your lender back.
If you want to invest in the notes, you can sign up with LendingClub. LendingClub is the best P2P platform today. They are a publicly traded company that is regulated by the SEC. Proper is still a private company and struggling.
Alternative, you can borrow money through a personal loan. Check out Credible Personal Loans where you can get a free, no-obligation quote from competing lenders.
Just make sure not to borrow too much money. Also, realize there are different quality levels of debt.
Manage Your Finances In One Place: One of the best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize your money. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances on an Excel spreadsheet. Now, I can just log into Personal Capital to see how all my accounts are doing, including my net worth. I can also see how much I’m spending and saving every month through their cash flow tool.
A great feature is their Portfolio Fee Analyzer, which runs your investment portfolio(s) through its software in a click of a button to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was hemorrhaging! There is no better financial tool online that has helped me more to achieve financial freedom. It only takes a minute to sign up.
Finally, they recently launched their amazing Retirement Planning Calculator that pulls in your real data and runs a Monte Carlo simulation to give you deep insights into your financial future. Personal Capital is free, and less than one minute to sign up. It’s one of the most valuable tools I’ve found to help achieve financial freedom.
About the Author: Sam began investing his own money ever since he first opened a Charles Schwab brokerage account online in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college on Wall Street. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. He also became Series 7 and Series 63 registered. In 2012, Sam was able to retire at the age of 35 largely due to his investments that now generate over six figures a year in passive income. Sam now spends his time playing tennis, spending time with family, and writing online to help others achieve financial freedom.
During my New York trip, I stopped by Princeton, New Jersey to attend a college friend’s wedding. We were Spanish House housemates who used to flip on CNBC before class and dream of one day making it on Wall Street. This was back in 1998 when working in finance was all the rage.
Although he never made it into finance, he did something better. He became a cardiologist and married an opthalmologist. In terms of finances, their household is set for life. After all those years of training, I wouldn’t expect anything less.
According to the Association of American Medical Colleges, 84% of all 2014 medical students graduate with debt, and the median debt level is $180,000. That is a ton of money to be paying back. Or is it? Let’s look at why the “student loan crisis” the media harps on and on about is overblown.
