Get Your Debt Under Control in 30 Minutes or Less with 3 Easy Steps

Note: There is nothing revolutionary in this post, just good, solid information that will help those of you living with debt. If you aren’t living with debt, then this is not for you.

The average American household has over $15,000 in credit card debt.

I’ll let that sink in for a second.


We want to get that number trending toward $0.

Too many Americans have Credit Card Debt!
The average American Household has more than $15k in Credit Card Debt


But how in the world do you get the debt under control? It’s a self-feeding problem, and for most people, it’s a problem they’ll never truly solve. This means that we have an entire generation that will be going into retirement with gobs of credit card debt. Not for Padorec readers – we take control of our lives, which means man-handling our debt, too.

So, how is it done? Like any good solution, it’s a 3 step process.


The Debt Control Planning Process

  1. Write down your debt
  2. Highest = First, Lowest = Last
  3. Start paying it off

The whole process is a bit more complicated than that…but not much.


1. Write Down Your Debt

The first step to controlling your debt is to understand what exactly your debt is. So take out a sheet of paper and a pen.

Write out your Debt
Write out your Debt

Next, write down all of your debt, and what the interest rate on that debt is. It might look something like this

So here we have a total of  $205,217 in debt, but at very different interest rates.

Step 1 is complete!!! Now let’s do something with the list

2. Highest = First, Lowest = Last

Now that we have our list, we need to figure out where to focus our efforts. We must follow two rules.

  1. We always pay at least the minimum balance due on every card
  2. Any extra money we have goes towards the highest interest rate debt

So, in the example above: Let’s say we have about $45 per month left over each month after we pay all of the minimum balances. That leftover $45 goes toward our highest interest debt – in this case, that would be our Bank of America Credit Card.

You must identify your highest interest card
Identify your highest interest card

Once the BOA credit card is paid off, then we start focusing our extra funds on the next highest interest rate. In this case, that’s the Delta American Express Card, at 14.4%

If you haven’t figured it out on your own, the reason we focus on the high interest rate cards is to minimize the amount of money spent on interest. Each month, interest is added to your balance based on your outstanding debt. A 15% interest rate means that for every $1 in debt, you pay an extra $0.15. But with a 4.4% interest rate, for every $1 in debt, you pay an extra $0.044.

Higher Interest = Higher Cost. We get rid of high interest debt first in order to save money.


3. Start Paying it Off

Now we get to the most important step in the process – paying off your debt. This is where all of the hard work of steps 1 and 2 really start to…pay off. (Pun absolutely intended) Once again, there are two steps.

  1. Set up automatic monthly payments for every card which pays off the minimum payment due every single month. That way you don’t have to deal with late fees or the hassle of making the actual payment manually. It’s all automatic.
  2. At the end of each month, take the money you have left over and apply it to your highest interest debt. Set a reminder on your phone to go off each month so you don’t forget.

It’s as simple as that.


How Much Should You Pay?

The obvious answer is: “As much as you can afford”. When you pay off credit card debt that is costing 15%, you are basically earning money.By paying off $100 of debt that would have charged 15% interest, you’ve essentially just made $15. That’s totally worth it, and more than you would have made by having your money in the bank.

By following that logic, it makes more sense to put your money toward paying off debt than putting it in a savings account. The obvious exception being that you do still need to have some sort of emergency buffer to cover emergencies. Beyond the emergency money, though, you should be putting everything toward paying off high interest debt.

CNN Money has created a handy calculator you can use to figure out how long it will take to pay off your credit card debt.

Within the CNN calculator, you can also choose a time frame, and it will tell you how much money to pay off every month to pay it off in that amount of time.

So you could enter “six months”, and it will tell you how much you need to pay every month to pay it all off in six months.

CNN Money Debt Calculator


Taking it off, and Keeping it off

Once you have paid off your debt, it’s time to work on keeping yourself from accumulating new debt! While there are some “needs” that we have to accumulate debt to afford, you should avoid those “wants” (like fancy new shoes, a new car, gaming systems, etc).

If you choose to use credit cards for everyday spend (the rewards can be great) just make sure you pay off your balance in full every single month.


Still have Questions?

Then e-mail me. I answer every single e-mail, and I’m happy to provide help and guidance for you, just like I have for many others.

e-mail Paul:

What do You Really Want Out of Life? Find Your Passion

I write a lot on this blog about how to get what you want – through productivity, personal development, and of course, Health, Wealth, and Love.

However, what if you don’t know what you want? So many people I talk to are just adrift – floating from job to job, girlfriend to girlfriend, video game to video game. They have no idea what they want, so what is the point of taking control? So they can more efficiently drift? No, that doesn’t make any sense.

This is a difficult topic for many folks to understand – they have always known what they want, and know what to pursue. Others haven’t known exactly what they want, but they have a general idea. If this is you, then stop reading this post now – you won’t get much out of it.

Perhaps I can help you to find what you really want out of life by telling my story. Keep in mind, however, that just because you know what you want, doesn’t mean that you’ll know how to get there, or that you’ll ever get there. However, Padorec readers are self actualized individuals who have control of their lives, and find a way to get what they want. You are one of these individuals. But know that just knowing what you want won’t be a magic pill.

My Story

I am not one of those people that has always known exactly what I want. Deep down, I have known, but I didn’t understand what I wanted for years. My Dad is fond of telling a story about when I was a kid. Apparently, I turned to him at one point and declared, very matter-of-factly, “Dad, I know what I want to be when I grow up.”
“What’s that?” He inquired, excited to hear what his only son had decided his fate should be.
“I’m going to be a Millionaire. I’m not sure how I’ll make it there, but I will be a Millionaire,” said I. Such a precocious little kid.

The reason I wanted the Million dollars was that I realized from a young age that being rich isn’t about having things (though many people use their money for that.) It’s about having the ability to control where the resources of the world go. If you are altruistic, then you can direct the resources to projects that help humanity. If you are a spoiled little brat, then you direct the resources to a luxury home builder, a Lamborghini dealership, and, maybe, to Gulf Stream. No matter how you spend it, having money gives you options.

I remember telling my Mom multiple times that I would get a bunch of money and find a cure for Diabetes. I wanted to ease her pain. I also told her I would find out why she can’t eat tomatoes, (she loves tomatoes, but can’t eat them because it causes arthritis flare ups) and then breed a tomato without that particular chemical compound. I wanted to ease her pain, and improve her quality of life.

I also have always loved learning. Every subject imaginable captures my interest. I never really accepted that it was impossible to know everything. I believed that we could find a way to cram the entirety of human knowledge into our brains. I realized, however, that this would take more time than one has in a single life, which is why I do not accept that we have to die. In fact, I do not plan on dying. For some, this is a bold statement, but the scientific research actually back this up quite well. (I would direct you to read Ray Kurzweil’s books for more information)

Ray Kurzweil is one cool dude
Ray Kurzweil says you can live forever

So, I want to learn everything ever – or at least be able to call up that knowledge. Great. But then I realized that Humanity will eventually no longer be able to live on this rock we call Earth. So we need to escape. But then I realized that due to the Entropy (and a couple of laws of thermodynamics), we will need to escape this Universe. Okay, that’s when I developed my own theory of the multi-verse (before I ever read a thing about the concept of a multiverse I might add). We need to figure out how to escape this universe.

Okay, so to learn everything, I have to not die. Additionally, we will need to know what exists outside of this Universe, so we have to escape this Universe. Additionally, I want humanity to live on, so to do that we will have to escape earth. Then, eventually, we will have to escape the Universe. That’s cool – we can do it. But I want to be around for it.

So, ultimately, what I want to do is to Leave Humanity off Better than I found it.

That is my mission. Me manifesto. That is what I strive for – what I want.

Right now, that mission takes the form of this blog. If I can help to create one self actualized individual because of this blog, then I have succeeded. I know I want to help humanity, and now I have a target.

How Does This Help You?

Telling stories about myself is fun. Now you can see just a little bit of what goes on in the – sometimes messed up – mind of Paul Recchia. But how does this apply to you?
If you are struggling to know what you want to do with your life, then ask yourself one question. What gets you excited? 
Is it your spouse? Your Kids? Maybe you are meant to be a family man or woman.
Your Job? Sales? Maybe you should be a career shark.
Tinkering in your garage? Maybe be a Mechanic, or inventor.
Money? (A lot of people seem to be driven by this, unfortunately) then follow my example above, and figure out why you are excited about money. Is it because of the things you can buy with it? Then ask yourself why those things excite you.
Reading? Learning? Then maybe you are meant to be a lifelong scholar.

Action Plan

I could keep listing examples, but the point is that you need to take some time, do some soul searching, and understand what really fires you up. If nothing fires you up, then it may be time to try something new. Take an art class. Go get a video camera and start making videos. Start blogging, take a course on business, go to a new bar. Whatever it is, try something new. If nothing you are doing right now gets you excited, then it’s time for you to go seek it out.
A lot of people struggle with this because of invisible scripts. They are full of self-doubt, and believe that they can’t pursue a passion because it wont’ pay well.
News flash, you don’t need lots of money if you are fulfilled. You need some money to pay bills, but not gobs of it. If you are enjoying your passion, then ask yourself, what is the point of having more money?
Pro Tip: if you are doing something you are passionate about, others will notice and you may even be able to turn that passion into an additional income (that’s for a wholly different post).
They think that they have to be “responsible” and follow the social norms. Screw social norms. If you love to travel, then find a way to quit your job and travel. If that’s too extreme, then go take a really great trip. Use up your vacation, use up a chunk of your bank account, but go do it.
Understand that you do not have to be drastic right now. There is no risk in finding out what you want to do – you don’t need to worry about quitting your job, or booking a trip around the world. Right now, you just need to find the thing you love to do. If you love it, and you’ve identified it, then you have accomplished your mission thus far. You still have to figure out the how, and Padorec will help with that, but at least the what is taken care of.

What does a Quarter-Century Mean to You?

Today, I am 9,131 days old.
That’s one quarter of a century.
Today, I turned twenty five years old.

I feel as if I’m supposed to have a birthday post here, since this is kind of a big milestone. So, what does a quarter of a century mean to me?

Today marks the last big milestone until I turn 65 and become a senior. As of today, I can rent a car without paying that stupid “young renters fee”. Now, I will save $14 – $25 every day that I rent a car. That’s a big deal for someone that travels as much as I do.

But besides this little victory, very little has changed.

Birthdays always make me chuckle. Kind of like when we celebrate the New Year. For some reason, we are supposed to feel completely different now that the clock has struck midnight, as if today is so different from yesterday.

However, to the Car Companies, the difference of two minutes between 11:59pm last night and 12:01am this morning means that I am suddenly responsible enough to no longer require insurance.

What I’ve Learned in 25 years

  • No one can give you a magical key to success. You are responsible for all of your successes. You are responsible for all of your failures. 
  • The point at which we are closest to success often feels like the point everything is about to fall apart. (This comes from an old friend)
  • If you want to change, figure out what you want to be, then plan out how you will get there. Having willpower is absolutely not enough.
  • Health + Wealth + Love = Happiness
  • Reading is amazing. It gives you the ability to peer into another person’s mind. Across centuries. Across Millennia. 

My favorite Books

I have read plenty of books. Here are my all-time favorites in no particular order (links are affiliate links)

How About You?

So that’s what this all means to me. I try very hard to focus on all of you, though. I absolutely love my readers, so I want to hear from you:
What does a quarter Century mean to you?
What will you do in the coming quarter century?
Do your birthdays have deep meaning for you?
Did you know that most of my best material doesn’t even make it to this blog? It goes out to my e-mail list. To subscribe to get these updates, and for a free chapter of Caffeine Free Energy, subscribe!

Free Updates from Padorec

3 Steps to Gather Wisdom from Your Future Self

This post will take you ~5 minutes to read.

Sometimes, usually after I have an epiphany, I wish I could talk to future me (maybe…10 years from now), and ask him for advice and guidance. He’s already done all of this, he knows so much more than I do, and has gathered so much wisdom! Unfortunately, time travel is not yet possible; we can’t talk to our future selves, and thus, we are stuck.

How many times have you said to yourself one of the following: “Man, if only I knew then what I know now,” or “If I could only talk to my teenage self,” or “What was I thinking? I wish I could slap that guy!”

Usually, this happens after we’ve just realized that we made a huge, or costly, yet avoidable mistake. We wish we had the knowledge then that we have now, so we could have avoided that mistake.

There’s nothing wrong with making mistakes, though. Without mistakes, we would never ever learn. Did you ever notice in school how you would retain what you learned much better after missing it on an exam versus those questions you got right? It’s because we naturally learn from our mistakes. We can’t avoid it – it’s human nature.

Mistakes are the portals of discovery
-James Joyce

So having the knowledge to avoid mistakes is not what we want. But what if we had a guide not about where not to step, but on where we should step. Continuing the idea of talking to our future selves, that’s the difference between hearing:

“You shouldn’t move to California…it’s not going to work out well for you”
“You should go and learn how to write computer code now. I know it’s boring, but you’ll need to learn it at some point, and it will make your life so much easier”

Do you see how one is guiding you against a decision, and another draws you toward an action? That’s what we’re looking for. That’s what I wish I had – a means of expediting the journey.

You can Talk to your Future Self

It’s entirely possible to talk to yourself from 10 years from now. What’s the secret? Talk to someone who has already done it. Someone who has 10 years on you. They can mentor you, and provide the feedback you need to help you on your journey. They have the wisdom of 10 extra years doing what you want to do. 
It’s brilliant in its simplicity, no?

Here’s How to do it:

  1. Figure out (roughly) what you want to be doing in 10 years. (5 years if it’s in the tech arena)
  2. Identify 5 people who are where you want to be
    1. Someone you know
    2. Someone you have met
    3. Someone who is successful but not well known
    4. Someone who is known in the community
    5. Someone who is famous
  3. Target each of them with one simple, yet poignant question
The reason for the five hero approach is that you need diversity of opinion, experience, and personality. Plus, you might will not get them all to reply and develop a rapport with you.

Your Question

It should be simple. 
It should be something they can answer. 
It should be unique. (not the “what’s the one biggest thing you’d recommend” crap)
It should be useful for you.
It should not take them more than 30 seconds to answer.
Now, gather their contact information, and either call them (preferred), or e-mail them.

Script (Phone)

You: Hi, Mr/Ms. (Hero)?
Them: Yes?
You: My name is [Your name]. I’m an aspiring [Your desired field of excellence]. I was wondering if you have time to answer one quick question for me. It won’t take more than 30 seconds.
Them: Sure, go ahead.
You: [Question]
Them: That’s a great question. You see…
Now, if they seem hurried, thank them politely and bid them adieu. If they are chatty, or have asked you a question in return, you’re in. Now you can talk to them more freely, but always be aware that they are giving up their time for you, and don’t go on for too long. At the end be very gracious, and thank them for their time.

Script (Email)

Subject 1: 30 Seconds for an aspiring [Field of excellence]
Subject 2: (30 seconds) [Your question]?
Mr/Ms. [Hero]

My name is [Your name]. I’m an aspiring [Your desired field of excellence].

Could you take 30 seconds to answer the following question? It would mean the world to me.


Thank you so much for your time,

[Your name]
[Contact information]

Follow Up

The follow up is the most important step in the process. There are a few tactics you must follow.


If you know what your hero is in to, consider sending them something they’ll like. Are they a starving artist? Send a Gift card to their favorite restaurant. A wealthy tycoon? Try their favorite chocolates, or a cool high-end shaving it, or something that will help you stand out. This should arrive no later than 2 weeks after your meeting.
It is mandatory that you include a personal note (preferably hand written) thanking them, and reminding them of what you spoke about.

Update on your Progress

You must send an update on your progress.

If you cannot afford a gift, that’s fine, but updating them on your progress is absolutely mandatory.

When people give advice, they want to know that it has been followed. Follow up via a hand-written note, a phone call, an e-mail,  or perhaps even over coffee. You want to tell them what their advice was (busy people forget) and how you have put it to use. Ideally, you should include results. (“I have already increased my customers by 40% thanks to your advice!”) People are often willing to help once, but if they hear that you followed their advice then they are much more likely to help you in the future. Beyond advice and mentorship, this relationship could open doors that would have taken years for you to open without their help (introductions, marketing, a mention in a tweet, etc.)

You must send an update on your progress

3 Notes About Email

  1. A phone call is better because it leaves the door open for further discussion but if a phone call is not possible, then e-mail will suffice
  2. If you don’t have a signature in your e-mails, write one (Name and contact info at least)
  3. Keep the single line format above. Busy people prefer this format because it is easy to read
The secret final step: GO DO IT!!!

There you go. If you have any questions, post them in the comments, and I’ll be happy to answer them.

T-Minus 10 days. Haven’t Started Your Taxes? No Problem

Who doesn’t love Taxes?

A lot of folks think that taxes are this big, scary monster. They aren’t.

Here’s why: Unless you have a lot of complex investments and run your own small holding company which holds businesses that you also own shares of, but not 100% of…then there are many easy to use tools.

You could do this all by hand, and technically it would be cheaper, but for the amount of time it would take (seriously, have you ever actually tried to do taxes by hand? It sucks), I’d rather just pay the $55 to use a tool to make it easier for me.

My personal recommendation is: TurboTax

There are really just two major players in the market that is tax software: TurboTax, and H&R Block.

TurboTax is proven, and it is easy. You import your documents (you do still have your W-2, don’t you?) and then answer some simple questions. If you transact online, you can actually provide your login information, and TurboTax will import all of your documents. If you use, you can link up and they will import from all of your accounts. Most W-2’s can be imported as well. It’s very smooth.

With my fairly complex Taxes, it took me just one hour from start to finish to complete my taxes.

How much does it cost? Well, if you are in a no-income tax state, like Alaska, Florida, Nevada, South Dakota (do people live there?), Texas, Washington, or Wyoming, then you are looking at a $0.00 cost to file your taxes, if they are simple.

If you have to file state taxes, then you are looking at a cost of $39.99 if you use the online version. Ouch!

However, if you use SnapTax (the TurboTax App) then you’ll pay just $24.99.

Okay, is your head spinning yet?

How to finish your taxes, in 168 words

State Taxes:

If you made under $57,000 this year, then use Not quite as simple as TurboTax, though, so if you value simplicity, see the next option.
If you made over $57,000 this year, or you value simplicity, use TurboTax. It’ll be $24.99 if you had simple taxes, or $39.99 if you have complex taxes. If you made over $57,000, you can afford $40.

Federal Taxes:

If you had super basic taxes – a W-2, maybe a 1099-INT (Interest Form) – Then download Snap Tax
Cost: $24.99
If you are active duty military, are in the military reserves, own a home, have lots of deductions, or have education expenses, use TurboTax Deluxe
Cost: $34.99
If you sold stocks, bonds, or mutual funds, or you own a rental property, use TurboTax Premier
Cost: $74.99
If you own a small business, or have a lot of business deductions, you’ll want to use TurboTax Home & Business, (or, more realistically, it may be time to get an accountant)
Cost: $99.99

Save Money on your Taxes

Now, you don’t honestly think I’d have you paying full price to do your taxes, do you? That would be silly.
For example, this year, I need to use TurboTax Premier, since I had investments (though as a Texas Resident, I have no Income Taxes – yippee!). I marked it as $74.99 above, but since I went through fidelity, I got $20 off. As near as I can tell, you don’t need to be an actual fidelity customer to use this coupon.
If you are unable to use that coupon for some reason, however, try this Discount Code for TurboTax
Last, but not least. If both of those fail you, then just try searching RetailMeNot for some coupon codes (in fact, that’s a good idea any time you’re going to spend money online.

Should you wait until October 15th to pay your taxes?

If you are getting a refund, you should have already filed and gotten that money back (and saved it, right?) 
If, however, you have to pay taxes, why not wait until October? “Tax Deadline is April 15th, Paul. Duh, Everybody knows that”
There is a little known tool that you can use to give yourself extra time. It’s called an Extension. The IRS will let you file a form 4868 (where do you think these numbers come from, anyway?) which basically says “Hey, IRS…I’m not ready – but I swear I’ll have the money to you by October 15th”
Pretty much anyone can file an extension and get until October 15th to file. Here’s why you shouldn’t:
According to the IRS:

An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due. You will owe interest on any amount not paid by the April [15] deadline, plus you may owe penalties. 

There you go – I wanted to keep this one short, since you don’t have enough time to think through all of your options. It’s time to go ahead and file your taxes.

And of course, if you get a refund, you should invest it wisely…perhaps in a retirement fund? Yes, yes you should invest it in your retirement fund.

Disclosure: I don’t get a single penny if you buy anything through any of the links I provided. Fidelity may get a cut if you go through their link, however.

Don’t Let Yourself Lose $125,000

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Word to the wise: This post is long, and details how to set up an IRA to help you be rich when you are old. If that does not interest you, I would recommend not bothering to read this post.

My Old Roommate

Recently, I got a text from my old College Roommate. He was looking for some investment advice (no doubt he came to me based on my awesome previous post: How to Get Free Money and Retire a Millionnaire)

Kris: “Who do you have/who would you recommend for an IRA? I’m finally gonna start one”

Me: “Congratulations! That’s a good move. I use fidelity because they are so easy to use. They are 100% online except for a few physical stores. The other one I’ve heard good things about is Charles Schwab”

Then, he dropped the bombshell that made me realize I don’t know as much about opening retirement accounts as I should. I can tell you what to do once you have one open, but I’m a bit clueless beforehand, apparently.

Kris: “Any thoughts on Ameritrade? It looks like fidelity and Schwab both have a minimum investment that I’d rather not spare right now”

That’s fair, right? After all, you absolutely, positively should not wait until you have $2500 to invest in your future, which is what we thought Fidelity required. Hell, you shouldn’t even wait until you have the $1,000 that Charles Schwab requires. How much should you start investing with?

I’ve spoken in the past about the power of the 401(k), but now I’m going to talk about the IRA (Individual Retirement Account). Kris works in a profession where he might not be with the same company for 5 years, or even 1 year. It makes sense for him to start an IRA – 401(k)’s are only useful if you get an employer match. So, if your employer doesn’t match (give you free money) your investments in a 401(k), your best bet is an IRA.

You should start your retirement account with any amount of money you can spare. Shoot for $50.

That’s right. Start your account with $50. That’s it. Seriously.

  • Next time you want to drive 300 miles. Don’t. (You will save $50 in gas)
  • Next time you want a video game, rent one instead. (You will save $50 on a game)
  • Next time your friends want to go out for the night, decline, or suggest a party at home (Your savings will vary based on your typical consumption of Alcohol and Food)
  • Ask your parents for $50 to open a retirement account. Seriously. They will appreciate your forethought. 
You get the point.

Who Do You Send your Money To?

Got your $50? Good. Now we’re going to send it to someone. This person will safeguard it, and watch it grow, every year, until you are a rich old man, then they’ll give it back to you. 
This person is known as a “broker”. You’ve probably heard of a lot of them: Charles Schwab, Fidelity, TD Ameritrade, Scottrade, E-Trade, and about a zillion others.
To save you some time, I did the research for you and broke it down. If you don’t want to read through the details: The Winner is Scottrade, with Fidelity in a close second place.
I looked at 5 factors for each brokerage house.
  1. Minimum Amount to Open a Roth IRA – this is very important
  2. NTF Mutual Funds
  3. NTF ETF’s
  4. Stock Trade Commission
  5. SmartMoney Customer Service Rating


  • IRA: Individual Retirement Account. This is an account you open that lets you save towards retirement. There are two types of IRA Account: Traditional, and Roth
    • Traditional: You put money in your account. You don’t have to pay taxes on this money. However, when you pull money out (when you’re an old rich guy), you pay taxes on it then.
    • Roth: You put money in your account. You pay taxes on the money before you put it in. However, when you pull money out (…old rich guy), you don’t pay any tax. This is what we’ll focus on.
  • Mutual Fund: Your best friend. Mutual funds (and their cousins the Index Fund) invest in a whole bunch of stocks, bonds, currencies, and sometimes other investments. You buy into the fund, and you get a share of the gains, losses, and dividends. This is a great way to “diversify” your portfolio without buying 50+ individual stocks
  • ETF: Exchange Traded Fund – this is like a mutual fund, but they made a stock out of a bunch of stocks. You may by one share of an ETF, but it’s kind of like investing in 2,000+ stocks at the same time. They do the work for you.
  • NTF: stands for No Transaction Fee. Usually, there is a fee to invest in a mutual fund or ETF. NTF funds don’t charge this fee up front (which can be $75 or more!)

How do they Stack Up?


Minimum to Open an Account: $0
NTF Mutual Funds: >3,100
NTF ETF’s: None
Stock Trades: $7
SmartMoney Customer Service Rating: 4/5


Minimum to Open an Account: $0
NTF Mutual Funds: 1,300
NTF ETF’s: 80
Stock Trades: $9.99
SmartMoney Customer Service Rating: 4/5

TD Ameritrade

Minimum to Open an Account: $0
NTF Mutual Funds: <1,000 
NTF ETF’s: >100
Stock Trades: $9.99
SmartMoney Customer Service Rating: 3/5


Minimum to Open an Account: $0
NTF Mutual Funds: 2847 (as of 3/19/2013)
NTF ETF’s: 65
Stock Trades: 7.95
SmartMoney Customer Service Rating: 3/5

Charles Schwab

Minimum to Open an Account: $1,000
NTF Mutual Funds: >1,000
NTF ETF’s: >100
Stock Trades: $8.95
SmartMoney Customer Service Rating: 3/5
Those are the big brokerage houses – in some cases, your bank may offer a Roth IRA. I do not recommend this, as you can usually only invest in a very limited number of places. You want flexibility here.

The Winner is: Scottrade
Though Fidelity comes in a close second
Honestly, it’s hard to go wrong with one of these brokers. Go to their websites, see which one feels best for you (personally, I found Schwab’s website to be painfully difficult to navigate) and go with it. If you hate it later on, you can switch it up (though for simplicity’s sake, you shouldn’t)

How to Start the Investment

Open an Account

Go to the website of your preferred broker.
Click on “Roth IRA” – usually tucked under a section called “retirement”
Click on “Open an Account”
They’ll take it from there.
I know I I’m holding your hand through that process, but I want to make sure you have EVERYTHING you need.

Choose a “funding source”

When they ask for a source of funds-this just means where will your money come from – you should enter your bank account information – account number and routing number. You should have your account number…and your routing number can usually be obtained from your bank website, or from the bottom of your checks if you have check writing available.

Choose your base investment

I want to make this easy for you, so the simple option is what I’ll present first. If you want to make more complex investments, then I’ll provide some resources for you, but you’ll have to do your own homework. E-mail and let me know if you’d like a more in depth view of complex investments done here.

The Simple Option: Buy into a Target Date Fund. You take 65 minus your age, then add that number to this year. So, for me, I would say:

Now, a quiz. If you were presented with the following options for funds, which is correct for me:

  1. Target Date Fund 2035
  2. Target Date Fund 2040
  3. Target Date Fund 2045
  4. Target Date Fund 2050
  5. Target Date Fund 2055

Correct Answer: Target Date Fund 2050. You could say 2055, but 2050 (earlier) is more conservative.

Try it for yourself, now!
YUR + 2013 = Target Date Fund for You

Got your date? Good. Now go find the fund that is just for you.

Investing like a Pro (Not Recommended for most)
For a more detailed primer on how to invest your money, I have 4 sources for you:

Growing Your Investment

You’ve done the hard part! Yay!
Now comes the easy part. Figure out how to automatically deposit more money into your account. This can be via direct deposit from your employer, or via a monthly draw from your bank account. Find a way to make it automatic, though. That way, the computers will keep investing for you, and you won’t have to rely on yourself to remember. 
$50, $25, $10, whatever you can afford – you should invest it.
You’ll set up two moves, actually:
  1. $50 automatically transferred (or, ideally, direct deposited) into your account at the start of every month (right after pay day)
  2. $50 automatically invested into your fund of choice

A Word of Caution about Automatic Investing

You need to ensure that your fund allows automatic investing (most target date funds should), and confirm a second time that there is no fee for investing. It’s pointless to invest $50 in your fund if it will charge $75 to do so. A little homework here goes a long way.

When you look at your fund, look for a section called “fees”, and ensure there are no transaction fees. There will also usually be a section marked “automatic investment allowed?” and “automatic investment minimum”. Confirm that automatic investing is allowed, and that the minimum is not too high (again, it will usually be $0)

My Favorite Fidelity Fund has a $0 minimum
for the “Automatic Account Builder”

What are you Waiting For?

If you truly don’t have the $50 to spare right now, then find a way to save it. But if you do (and don’t try to fool me, most of you have way more than $50 to spare right now), then now is the time to start your IRA. 
You don’t want to be Poor When You Get Old, so now is the time to start investing.
Being poor as an old man sucks

 If you wait 5 years (based on investing $50/month for 10 years, $6,000 total), then you are missing out on $50,000

$50,000 can buy a lot of Viagra and prune juice!

Skip the Resolutions, 2013 is a year for Goals

The view from 30,000 feet as I write this
It’s that time. Blogers everywhere have taken to their respective podiums to tell you about their year, and about “what’s coming in 2013”
This phenomenon often takes different forms:
  • Some bloggers talk about, and give links to their favorite posts (all too often, their favorites posts just happen to have links to their courses or e-books)
  • Some will talk about their personal finances and success factors of their businesses.
  • Others still will look forward to 2013, and will issue their intentions for the new year.

I don’t have any favorite posts (well, that’s a lie – I do)
I don’t share my personal finance stats (I might in the future, but that’s not the focus of this blog)
I haven’t set any goals for 2013
So what do I have to talk about, then?
I know! Let’s talk about you!

All About You

Did you have a favorite post last year? If so, help me out by sharing it on Facebook, twitter, or Google+…okay, you don’t really have to share it, but I’d love to hear about it in the comments. That will help me to deliver even better content that you want in 2013.
How were your goals for 2012 met? Was your goal to spend all your money and live life to the fullest because of the Mayan doomsday? If so…I’m sorry for your loss, but I bet it was one hell of a year! There is something to be said for living every year like it is your last year ever (though you probably shouldn’t give everything away every year)
What are your goals for 2013?  Do you have New Years Resolutions? (I hate these – more on that later) or do you have hard and fast goals for 2013? You should use Strategic goals, instead of tactical ones.

How to Set a Goal

An example of a strategic goal for a blogger might be “Increase my subscribers by 200 during the year”. That’s a good one because it has a lot of sub goals attached to it. 
  1. How can you get 200 subscribers without getting 200 regular readers? In fact, you need a lot more readers than that, so now you are also increasing your readership. 
  2. This may mean you are trying to raise your Search Engine Rank. 
  3. To do this, you may need to focus the direction of your blog. 
  4. You also need to work on conversion and retention of subscribers. 

This is the difference between strategic and tactical. Your strategic goal is to increase subscribers by 200. All the other stuff is tactical – it’s the “how” of the goal.

Note: Some may argue that 200 subscribers is simply a tactical goal as part of a larger strategic goal like “to be a dominant blog [top 5] in the personal development space”. That’s a bit vague for me for a one year goal. That is more of a mission than a goal. 
Whatever level you set your goal at, however, just make sure it is something you can act upon, and it will be considered a good goal. Notice that I didn’t say “achieve”. A goal doesn’t have to be something you know you can achieve – it is something you should be able to work towards. Odds are, if you set a goal that you know you can achieve, then you will achieve it by around March, and not have anything else to work on.

Why I hate New Years Resolutions

Ever since I can remember, I have despised the idea of New Years Resolutions. (it should be pronounced New Year Resolution, by the way – bad grammar…what a shame) Even when I was in Kindergarten, I remember making a resolution to give up New Year Resolutions. For whatever reason, I have a distinct memory of being in Mrs. Wagner’s class, and making that statement. I was a weird kid, though – I also was doing simple algebra and figured out how to steal all of the fireman stickers from atop the cabinet. Man I would hate to have had to teach me.
Anywho, why have I always hated New Year Resolutions? I think it’s because of the subtext that comes with setting them. 41% of New Year Resolutions this year are slanted toward Money (specifically, handling it better) That means that in 2012, you are stating that you handled your money poorly. However, it’s not like on January 1, you realized “Holy Shit, I handled my money poorly!” No, you absolutely realized that during 2012 – but you didn’t make the change then. It’s like saying “I’m going to start my diet on Monday.” I have always hated that this arbitrary day on an invented calendar seems to have such a huge effect on everyone. This is why this post is coming out on January 2nd, instead of December 31st. This way, you are not setting a New Year Resolution – you are setting a goal for 2013.
My thought has always been “well, the Universe doesn’t give a hoot that it’s now 2013, so why should I?”
I understand the power of goal setting, however.

Why I give you permission to set Goals for 2013

Even though I hate the resolutions – I realize that the concept of a new beginning is very powerful for most people. It’s one of the benefits of the cyclical nature of our society. It is also beneficial to put a time frame to our goals. However, I ask one favor. Don’t make a resolution. Resolutions are usually made to be broken. In fact, come March – tell people you are still keeping a New Year resolution. They will be absolutely shocked. Our society expects people to give up on their resolutions. So, if you already made one, start ignoring it today – as opposed to January 4th where I suspect most people give up on their resolutions. 
Instead, set a goal for 2013, or even multiple goals. Be specific, though!
Examples of Bad Goals:
  • I’m going to [eat healthier, work out more, drink less, etc.] this year
  • I’m going to manage my money better this year
  • I’m going to be nicer to people I meet this year
  • I’m going to finally find a job I love this year
Did you notice how vague those are?
Examples of Good goals:
  • To lose 30 pounds this year
  • To work out 3 times per week this year
  • To limit myself to 2 drinks per night, twice per week
  • To track my finances using (or any other method – define it!) and reduce my spending on [food, bars, gas, clothes] by 15%
  • To compliment at least one person every day
  • To get a job working on alternative energy projects which I am proud to tell my family about
Did you notice how ultra specific those are? Also, did you notice that instead of using the format “I’m going to”, I changed it to “To….”. This is a subtle change, but it gives our goals more a feeling of a mission, instead of being something we’d like to do…if we get around to it. Lastly, those are actionable – you can work to ensure you compliment one person per day. “Being nicer” is hard to act upon, because it is so vague.

I also like to set a margin of error on those weekly/daily goals. I used to set a goal (working out every day was one) and then when I missed a day, I was a failure. Now, I set in a margin of error so that I can still be successful. For example, I would now say “To work out 3 times per week this year, for at least 45 weeks”. Now, if I miss a week, I’m still within the reach of my goal.

Get Goal Reminders Monthly

Take ten to thirty minutes right now, if you haven’t already, and define your goals. I’d recommend you keep it in the 1-3 range. That way you will not lose focus.
Tips for setting your goal:
  • Make it specific
  • Make it actionable (something you can work on)
  • Make it meaningful (setting a goal to work out 3 times a week is pointless if you don’t actually want to work out)
Next, fill out the form below. Once a month, I’ll send you a reminder that you should be working toward your goal. Since you don’t have to worry about remembering your goal, you can focus on achieving it! Don’t worry – the only e-mails you get as a result of signing up for this will be reminders to work toward your goals. 


Get a Monthly Goal Reminder

* indicates required

Additional Reading

Goal setting is nothing new – below is a list of some good reading regarding goal setting

Amazon: The Greatest Gift Giver of All

Looking for the next in the series of Rut Busters? Well, my laptop has died, so I’m delaying the next post. A preview of the title though: “Rut Busters: Preventing the Rut”

This is a longer post. My recommendation: Use Amazon Wish List for your Christmas list. 
Read below for some more specifics, and for details of how I evaluate new tools like Amazon Wish List.

Have you ever dealt with everyone in your family, and maybe even your friends, pestering you for a Christmas list, or a Birthday list?

Well, just in time for Black Friday (I hate that day, by the way)

Every year, it’s a constant flow, starting around mid-November for me.
“Can you send a list”
“What do you want for Christmas”
“Do you have a list yet”
“I’m going shopping tomorrow, what do you want?”

I always dreaded these questions, because I never knew what I wanted. Usually, I would pull together a combination of DVD’s I kind of wanted, a couple of books, and some gift cards. This was always nice, but it never captured what I truly wanted.

Solutions for Christmas (or other Holiday) Lists
I think there are a few criteria for a good Gift list. Whether for Birthday, Christmas, Hanukkah, Mother’s day, Father’s day, or any other day on which social protocol dictates that you exchange gifts.

The criteria for a good gift capture device is:

  1. The ability to capture the gifts you want (duh)
  2. The ability to access the list from multiple devices (sometimes you need it on your phone, sometimes your computer)
  3. Easy to send off to family members
  4. Easy for family members to read
  5. Easy to capture where the item can be purchased

There are, of course, a few solutions for this problem. So, like any good nerd, I have a chart!

Typo: The “Note on your Phone” only scores a 2
As you can see, Evernote comes close. You can capture what you want, access it from wherever you have an Evernote account set up. You can e-mail a note from Evernote easily, and it’s fairly easy to read. However, to capture where it can be purchased is a completely manual step, and if you make updates, you have to send out the note again. 
Close, but not perfect.
Enter Amazon Wish List
Amazon has a service which has been available for a long time, but just recently has caught my attention. It allows you to capture a list of items you want, and you can easily send them out to your family and friends (or even Facebook and Twitter) This way, you capture everything you want, all year long. If you decide you want something from your list at some point during the year, you can just buy it. Anything you don’t buy is on your list for your Birthday, Christmas, etc.
When your friend or family member orders something from the list, it actually removes it from your list! It works just like a wedding registry. In order to maintain the surprise, though, when you log in, it will still appear in your list for a few weeks, to maintain the surprise. 
But Paul, what if what I want isn’t on Amazon?
That’s fine! There are widgets (extensions, widgets, etc.) for each of the browsers that let you add items from any online store to your list. Additionally, you can add any item to your list manually, even if you don’t have a link! To get these widgets (available for: Chrome, Firefox, IE, Safari, and iPod) go to this link.
But Paul, what if someone buys a gift from another website?
Amazon can still be updated. However, it does require someone to click “buy it somewhere else”, and then they can mark the item as purchased.
This gets your friends and family an up-to-date list all the time. Also, as the season moves along, you can make updates to the list, and they will automatically have those changes when they go to check it out. It really is the best solution available!
What does it look like?
Simple enough, my link is below, so you can see what I am wishing for, and also to see how it works.
There you have it – the newest in my arsenal of tools!

Entrepreneurs vs. Small Business Owners

I’d like to clarify something that is a small pet peeve of mine. It’s the difference between Entrepreneurs, and Small Business Owners.

Some people obsess over they’re, their, and there. For others, it’s to, too, and two. For others still, it’s where, we’re, and were. For me, it’s Entrepreneur and Small Business Owner.
An Entrepreneur is someone who uses his innovative nature, ingenuity, and creativity to effect major change in business.
A Small Business Owner is someone who owns a small business
Sometimes, an entrepreneur is a small business owner. Sometimes, a small business owner is an entrepreneur. They are not one in the same.
By this logic:
  • A McDonalds owner is a Small Business Owner
  • The founder of is an entrepreneur
  • An employee at Exxon who finds a new way to sell oil in a more effective and clean way is an entrepreneur
See, you don’t have to be a small business owner to be an entrepreneur!
The reason I bring this up is that I just saw this video:
This video annoys the hell out of me, because it does not make any distinction on the terminology. 
Remember, just because you work in a corporate environment doesn’t mean that you can’t be entrepreneurial. Being entrepreneurial in a corporation is how you get big promotions, and ultimately how you end up running one. Those “big whigs” didn’t get there by playing by the rules and following the status-quo.
Note that I am not bashing small business owners here. Small business owners are greatly helpful to our economy as well, and there is a place for them. Just because you use a model that has been tested to work in the past doesn’t mean you are doing anything wrong! Just call yourself the right thing – you are a small business owner.
So, a recap:
  • Convenience Store Owner = Small Business Owner
  • Convenience Store Owner who offers an innovative new loyalty program = Entrepreneur
  • Google employee who thought up gmail = Entrepreneur
Got it? Good. 
Knowledge is power!

How to Get Free Money and Retire a Millionnaire

This is a follow-up to the post Don’t be Poor When You Get Old.

I gave an outcry in the previous post. In case you missed it, here is the gist of it:

Invest in your retirement account, right now. No matter what. Even if you can get $50 a month into your account, you’ll turn that into hundreds of thousands by the time you retire.

You can literally turn $6,000 into $150k!
(See to run your own numbers)

But how do you get your 401(k) set up? What should you do?
Well, there are a few simple steps. This is a long, informative post. If you don’t want to read all of it, here’s the steps in a nutshell.
1. Figure out if you have a 401(k) available, and whether your employer offers a match
2. Sign up and take full advantage of the employer match
3. Invest in a target retirement date fund, or do more research and build your own portfolio
4. Retire in style

1. Figure out if you have a 401(k) available, and ask how to sign up

Contact your HR representative or Manager, and ask if your company has a 401(k) available.
You can use the following e-mail or script:


Dear [Insert HR Rep or Manager Name],

I have recently been thinking about my financial future, and would like to begin investing for my future. I have heard that I may have access to a 401(k) through [Your Company], and would like to ask a couple of questions.

1. Does [Your Company] offer a 401(k) program to employees
2. If so, do I qualify to participate?
3. What are the necessary steps to set up my account, and begin having automatic withdrawals sent to the account? 

Lastly, I have heard that some companies offer some sort of match as part of their 401(k) programs – does [Your Company] offer this benefit? If so, I would love to hear more about the options available to employees. 

Thank you in advance for your help.
Kind Regards,

[Your Name]

Phone Script

HR Rep: Good Afternoon, this is Pat

You: Hi Pat, this is [Your Name]. How are you doing today? 

Pat: I’m fine, how are you? 

You: Just Dandy! Pat, I have a couple of questions about some of the benefits available to employees, and wondered if you might be able to help me out. 

Pat: That’s what I’m here for! 

You: I have recently been thinking about my financial future, and I was wondering if [Your Company] offers any sort of 401(k) program for employees. 

Pat: Why yes we do! We have a 401(k) set up with a generous match for all employees who work at least 30 hours per week. 

You: Well that is great. What would I need to do to get my account set up?  

Pat: Well, there is a form we will need you to fill out, which will authorize us to begin deducting 401(k) deposits from your paycheck. Once your account is set up, though, the account can be fully managed online. 

You: Perfect! Could you send me a copy of the form, or even better yet, is there a website where I can print it out myself? 

Pat: Well, I can certainly send you one, but the easiest way is to download the form from Once you have it filled out, you can send it in to the address on the form, and we’ll get you all set up. 

You: Great, I’ll do that right away. I have one last question – you mentioned a match for employees who work more than 30 hours. Currently, I work 32 hours a week – could you tell me more about the match? 

Pat: Certainly – [Your Company] understands how important saving for retirement is, so we will match 100% of your contribution, up to 2%, and another 50% for the next 4% [Don’t worry about what this means – I’ll explain a little later in this post] 

You: Well that certainly is generous! Thanks so much for the information Pat. Is there anything else I should know about the 401(k) 

Pat: Nope, that’s it, just get the form in to our office and we’ll get you set up. And make sure to contribute at least 6% if you want the full match! 

You: Well thank you for your help, I’ll get that in to you right away. Have a great day Pat!

Now, if your employer doesn’t offer a 401(k), then you’ll want to set up a Roth IRA. The simplest way is to walk into your bank and say “I’d like to open a Roth IRA”. They’ll take it from there. If you want to have a little more control, understand what a Roth IRA is, and how to handle it yourself, here is a great post from Get Rich Slowly: How to Start a Roth IRA (and Where to Do It)

If they do have a 401(k)…

Step 2: Sign up for your bloody 401(k)

This is an easy one – if you followed the instructions in step 1, then you know exactly how to sign up. Don’t do it tomorrow, don’t do it next week, just take the 5 minutes and do it today. This is not a thought provoking exercise, so you should not wait to complete it – just get it done already!

You should contribute at least enough to get any employer match that you have available. So what is this employer match, and how do you interpret it. In a few words, an employer match is free money.

If your employer offers 50% on up to 6%, what does that mean? That means that for every dollar you put into your 401(k), up to 6% of your salary, your employer will put another 50 cents in there for free. What does this mean for you? In 40 years, it can mean an extra $400,000 to retire on!

If you get a 100% match instead of the 50%, then it’s even better – it means you get a dollar for dollar match. For every dollar you contribute, your employer will give you a dollar. Isn’t that incredible!

I recommend contributing enough to get the full employer match, but remember, if you can only contribute $50, or even $10, it’s a good start. Begin with that, and then make it a goal to increase by a little bit whenever you can (an extra 5 dollar every month until you are getting the full match, perhaps?)

Step 3: Invest the Money Wisely
Okay, you have a retirement account set up. For starters, you can brag to your friends, and even be a bit snobby. “Well, my retirement portfolio is already shaping up quite nicely” They’ll be jealous…trust me.

But now that you have money in there, you can invest it in a number of mutual funds – exciting, right? Scary? Horrifying? Making you wish you had just kept spending that money on video games and beer?

Okay, here’s your trick – find the target date fund (this can go by a few different names) that coincides with your age. This is the simplest way to invest, and works for 85% of the population.

Basically, you put your money in a specific fund based on when you want to retire. Since I was born in 1988, then 1988 + 65 years = 2053. I would invest in the 2050 target date fund. Don’t pull the “I plan on retiring at 40” crap, just take your birth year + 65, and be done.

What this does is it has the company that runs the fund take your money, along with billions of other dollars, and invest them the way that someone your age should. This means they will invest in a proper mix of domestic equities, international equities, t-bills, muni’s, REIT’s, TIPS, etc.
If that last sentence made your head spin, then a target date fund is right for you.

If you want to create your own portfolio, then that is beyond the scope of this post, and you will need to do your own research.
Here’s a start:
Rebalancing & asset allocation: Critical for investing. So why don’t you do it? by Ramit Sethi
Retire Earlier by rebalancing your 401(k) with the Swensen asset model by Steve Mz

If you’re lazy…go with the target fund.

Step 4: Retire in style

Need I say more?

Disclaimer: I am not a financial planner. This post is for informational purposes only. You are responsible for any financial decisions you make.