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Feb

2024

Women and Retirement: Insight Into the Gender Divide

By Pam O’Brien | invest, Life & Career | Comments Off

Retirement is supposed to be a time for enjoying life after decades of work. Yet many women are in a financially precarious situation when it comes to the so-called “golden years.” In a 2023 SoFi survey, 57% of women said they aren’t saving for retirement. Similarly, 50% have no personal retirement savings according to a 2022 Census Bureau Report.

Given that women now outlive men by approximately six years, according to a recent study in JAMA, they need to save for an even longer retirement than their male counterparts. That makes the fact that they have fewer funds earmarked for retirement even more troubling.

Why aren’t women saving for the future? And how can they start financially preparing for retirement? Read on to learn about the retirement gender divide, why it exists, and some possible solutions for overcoming it.

A Look at Retirement Trends for Women and Men

There has long been a disparity in retirement savings for men and women. According to the U.S. Department of Labor, as women get older, their chances of living in poverty increase, a trend that has persisted for at least 50 years, when such data collection started.

Consider the current retirement savings divide between women and men today, as reported by respondents to the SoFi 2023 Ambitions Survey:

Retirement Savings for Women and Men in US

According to the survey of Americans ages 18 to 75, men have a median retirement savings that’s about $40,000 to $60,000 higher than women’s savings. In addition, 11% more women than men aren’t saving for retirement, and likewise 11% more women don’t know how much is in their retirement savings. In fact, 33% of women have less than $5,000 in retirement savings, the survey found.

	Men	Women
Median Retirement Savings	$70,001-$80,000	$20,001-$30,000
% Not Saving for Retirement	46%	57%
% Who Don’t Know What Their Retirement Savings Is	45%	56%
*Source: SoFi Ambition Survey, 2023

This savings disparity typically begins early in adult life and accumulates over time. Employment, marriage, and motherhood all play a role.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

How Marriage and Children Impact Retirement

Women aged 55 to 66 who have been married once tend to have more retirement savings than women who have never been married, or those who have been married two or more times. According to a recent income survey from the U.S. Census Bureau, close to 37% of women married once have no retirement savings, compared to 41% of women married two or more times and 55% who never married.

Women, Marriage and Retirement Savings*
Women Married Once	Women Married Two or More Times	Women Who Never Married
36.7% have no retirement savings	40.9% have no retirement savings	54.5% have no retirement savings
11.8% have $1 to $24,999	11.8% have $1 to $24,999	11.7% have $1 to $24,999
14.9% have $25,000 to $99,999	13.6% have $25,000 to $99,999	13.6% have $25,000 to $99,999
36.6% have $100,000 or more	33.7% have $100,000 or more	20.2% have $100,000 or more
*Source: U.S. Census Bureau, Survey of Income and Program Participation

In a divorce, some couples may be required to split their retirement savings or one may need to transfer some of their retirement funds to the other, which could be one of the reasons why the percentage of those without retirement savings is lower among women married two or more times than those who never married.

Motherhood and Money

When women have children, they often take time off from the workforce and/or may work part-time, which can have an impact on their earnings. According to an analysis by the Pew Research Center, among people 35 to 44, 94% of fathers are active in the workforce while 75% of mothers are.

Motherhood is also a time when the wage gap comes into play. In 2022, mothers 25 to 34 earned 85% of what fathers the same age did, while women without children at home earned 97% of what fathers earned, the Pew analysis found. The less money women make, the less they have to save for retirement.

Earnings for Mothers 25-34	85% of what fathers earned
Earnings for Women 25-34 Without Children at Home	97% of what fathers earned
*Source: Pew Research Center, 2023

Earning less also affects the Social Security benefits women get in retirement. While men got $1,838 a month on average in Social Security in 2022, women received on average $1,484, according to the Social Security Administration.

Retirement Is a Top Priority for Women and a Bigger Concern

While saving for retirement is the top goal for women, they are also focused on, and perhaps feeling stress about, paying off credit card and student loan debt, according to the SoFi Ambitions Survey.

Overall, women tend to perceive financial goals and success quite differently than men do. Two-thirds of female survey respondents said their marker of success is being able to feed their families. By comparison, one-third of men said their marker of success is being seen as successful, while another one-third say it’s reaching a certain income bracket.

That divergence may help explain why men are far more likely than women to consider investing a top financial goal, which could help them build retirement savings. For women, investing is at the bottom of the list of their financial priorities, perhaps out of necessity.

Women’s Financial Goals vs. Men’s Financial Goals
Women’s Financial Goals	Men’s Financial Goals
Saving for retirement: 45% Paying down credit card debt: 41% Paying down student loans: 39% Continue Investing: 33%	Continue Investing: 52% Saving for retirement: 49% Paying down credit card debt: 33% Paying down student loans: 27%
*Source: SoFi Ambition Survey, 2023

Retirement is women’s number-one goal and it’s also one of their greatest worries. One in five female respondents to SoFi’s survey said they may not be able to retire.

Those Who Worry They Won’t Be Able to Retire
Women	Men
20%	15%
*Source: SoFi Ambition Survey, 2023

That means women are 33% more likely than men to believe that retirement may not happen for them.

Even if they can retire, there is no guarantee women’s savings will cover their expenses. In fact, women are approximately 10% more likely than men to say they are concerned about outliving their assets and having enough savings, according to a report from McKinsey Insights.

Recommended: When Can I Retire?

Why Are Women Facing a Retirement Gap?

In addition to the financial impact of marriage, motherhood, and lower earnings, women also experience some additional barriers to retirement saving.

For instance, a report from the Global Financial Literacy Excellence Center found that women tend to score lower in financial literacy than men do. And women with lower financial literacy are less likely to save and plan for retirement, according to the research.

Women also lack confidence when it comes to investing. Only 33% see themselves as investors, according to a 2022 SoFi Women and Investing Insights analysis, and 71% of their assets are in cash, rather than in investments or a retirement account, where their funds might have the potential to grow.

Minding and Mending the Gap

So how can women and society at large move forward and start closing the retirement gap?

The first step is for everyone, across all genders and ages, to build confidence in their financial skills by learning about money, saving, and investing. Knowledge helps create strength and belief in oneself, and it’s never too early or too late to start learning.

There are numerous good resources on retirement planning, to help individuals determine how much they may need to save for retirement and strategies that could help them get there. They can also sign up for financial classes and courses, and they might even want to consult a financial advisor.

At work, employees can participate in their employer’s 401(k) plan or any other retirement savings plan offered. Because money is automatically deducted from their paychecks and placed in their 401(k) account, saving may be easier to accomplish.

💡 Quick Tip: Did you know that a traditional Individual Retirement Account, or IRA, is a tax-deferred account? That means you don’t pay taxes on the money you put in it (up to an annual limit) or the gains you earn, until you retire and start making withdrawals.

How to Start Saving for Retirement

No matter what your age, the time to kick off your retirement savings is now. Here’s how to begin.

Figure out your retirement budget.

To determine the amount you’ll need for retirement, think about what you want your life after work to look like. Do you want to move to a smaller, less expensive home? Do you hope to travel as much as possible? Having a clear picture of your goals can help you calculate how much you might need.

You can also consider the 4% rule, which suggests withdrawing 4% of your retirement savings each year of retirement so that you don’t outlive your savings. That could give you a ballpark to aim for.

Cut back on current expenses.

Take an honest look at what you’re spending right now on everything from rent or your mortgage to car payments, groceries, clothing, and entertainment. Find things to cut or trim — for example, do you really need three streaming services? — and put that money into your retirement savings instead.

Some savvy belt tightening now could help give you a more financially secure future.

Contribute as much as you can to your 401(k).

If you can max out your 401(k), go for it. You’re allowed (per IRS rules) to contribute up to $23,000 in 2024. If that much isn’t possible, contribute at least enough to get your employer’s matching contribution. That’s essentially “free money” that can help build your retirement savings.

Consider opening an IRA.

If you’ve contributed the max to your workplace retirement plan, a traditional or Roth IRA could help you save even more for retirement. You can contribute up to $7,000 in an IRA for 2024, or $8,000 if you’re 50 or older. IRAs offer certain tax advantages that may help you save money as well by lowering your taxable income the year you contribute (traditional IRA), or allowing you to withdraw your money tax-free in retirement (Roth IRA).

Diversify your portfolio.

Whatever type of retirement account you have, including a brokerage account, diversifying your portfolio — which means investing your money across a variety of different asset classes — may help mitigate (though not eliminate) risk, rather than concentrating your funds all in one area.

Just make sure that the way you allocate your assets matches your retirement goals and your risk tolerance.

The Takeaway

Women are far behind men when it comes to retirement savings, due to a number of factors, including earning lower wages, and motherhood, which can mean time away from work, costing them in lost earnings. There’s also an emotional component involved: Women are less confident about investing overall.

However, building financial strength, and educating themselves about retirement planning is a good way for women to start saving for their future. Cutting expenses and directing that money into savings instead, participating in their workplace retirement plan, and opening an IRA or investment account are some of the ways women can take charge of their finances and help position themselves for a happy and secure retirement.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), mutual funds, alternative funds, and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Invest with as little as $5 with a SoFi Active Investing account.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOIN0224029

Feb

2024

Margin Account: What It Is and How It Works

By Kate Ashford | Growing Wealth, invest, Investing | Comments Off

Margin accounts give investors the ability to borrow money from a brokerage to make bigger trades or investments than they would have been able to make otherwise. Just as you can borrow money against the equity in your home, you can also borrow money against the value of certain investments in your portfolio.

This is called margin lending, and it happens within a margin account, which is a type of account you can get at a brokerage. Most brokerages offer the option of making a taxable account a margin account. Tax-advantaged retirement accounts, such as traditional IRAs or Roth IRAs, generally are not eligible for margin trading.

What Is a Margin Account?

As mentioned, a margin account is used for margin trading, which involves borrowing money from a brokerage to fund trades or investments.A margin account allows you to borrow from the brokerage to purchase securities that are worth more than the cash you have on hand. In this case, the cash or securities already in your account act as your collateral.

Margin accounts are generally considered to be more appropriate for experienced investors, since trading on margin means taking on additional costs and risks.

When defining a margin account, it helps to understand its counterpart — the cash account. With a cash brokerage account, you can only buy as many investments as you can cover with cash. If you have $10,000 in your account, you can buy $10,000 of stock.

Margin Account Rules and Regulations

When it comes to margin accounts, the Securities and Exchange Commission (SEC), FINRA, and other bodies have set some rules:

• Minimum margin: There is a minimum margin requirement before you can start trading on margin. FINRA requires that you deposit the lesser of $2,000 or 100% of the purchase price of the stocks you plan to purchase on margin.

• Initial margin: Your margin buying power has limits — generally you can borrow up to 50% of the cost of the securities you plan to buy. This means, for example, that if you have $10,000 in your margin account, you can effectively purchase up to $20,000 of securities on margin. You would spend $10,000 of your own money and borrow the other 50% from the brokerage. (You can also borrow much less than this.) Your buying power varies, depending on the value of your portfolio on any given day.

• Maintenance margin: Once you’ve bought investments on margin, regulators require that you keep a specific balance in your margin account. Under FINRA rules, your equity in the account must not fall below 25% of the current market value of the securities in the account. If your equity drops below this level, either because you withdrew money or because your investments have fallen in value, you may get a margin call from your brokerage.

Example of a Margin Account

An example of using a margin account could look like this: Say you have a margin account with $5,000 in cash in it. This allows you to use 50% more in margin, so you actually have $10,000 in purchasing power – you are able to actually make a trade for $10,000 in securities, using $5,000 in margin.

In effect, margin extends your purchasing power as an investor, and you’re not obligated to use it all.

💡 Quick Tip: When you’re actively investing in stocks, it’s important to ask what types of fees you might have to pay. For example, brokers may charge a flat fee for trading stocks, or require some commission for every trade. Taking the time to manage investment costs can be beneficial over the long term.

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Benefits of a Margin Account

For an experienced investor who enjoys day trading, having a margin account and trading on margin can have some advantages:

• More purchase power. A margin account allows an investor to buy more investments than they could with cash. That might lead to higher returns, since they’re buying more securities and may be able to diversify their investments in different ways.

• A safety net. Just as an emergency fund offers access to cash when you need it, so does a margin account. If you need funds but you don’t want to sell investments at their current price point, you can take a margin loan for short-term cash needs.

• You can leave your losers alone. In another scenario, if you need cash but your investments aren’t doing so well, taking a margin loan allows you to keep your securities where they are instead of selling them right now at a loss.

• No loan repayment schedule. There is no repayment schedule for a margin loan, so you can repay it at any rate you please, as long as your equity in the account maintains the proper threshold. Monthly interest will accrue, however, and be added to your account.

• Potentially deductible interest. There may be tax situations in which the interest in a margin loan can be used to offset taxable income. A tax professional will tell you whether this is a move you can consider.

Drawbacks of a Margin Account

Despite the advantages, using a margin account has risks. Here are some things to consider before trading on margin:

• You could lose substantially. While it’s possible that trading on margin can help realize greater returns if an investment does well, you will also see greater losses if an investment takes a dive. And even if an investment you’ve purchased on margin loses all of its value, you’ll still owe the margin loan back to the brokerage — plus interest.

• There may be a margin call. If your investments tank, it’s possible that you’ll have to sell securities or deposit additional funds to bring your account back up to the required margin threshold. It’s also possible for a brokerage to sell securities from your account without alerting you.

How to Open a Margin Account

Opening a margin account is as simple as opening a cash account, but you’ll likely need to sign a margin agreement with your brokerage. You may also need to request margin for your account, depending on the brokerage.

But there are some other things to keep in mind.

If you’re a beginner investor, a cash account gives you an opportunity to learn how to trade and invest, and there’s a low level of risk. If you’re a more experienced investor and fully understand the risks of trading on margin, a margin account may offer the opportunity to expand and diversify your investments.

Some financial advisors suggest that clients open margin accounts in case they need cash in a hurry. For instance, if you need money quickly, it takes time to sell investments and for the money to be deposited in your account. If you have a margin account, you can take a margin loan while your securities are being sold. Typically, margin accounts don’t carry any additional fees as long as you aren’t borrowing on margin.

You also need a margin account for short selling. With short selling, you borrow a stock in your brokerage account and sell it for its current price. If the price of the stock falls — which you’re betting will happen — you repurchase shares of the stock and return it to the original owner, pocketing the difference in price.

Like trading on margin, short selling is a strategy for experienced investors and comes with a large amount of risk.

Things to Know About Margin Accounts

Here are a few other things to keep in mind about margin accounts.

Margin Calls

Margin calls are a risk. If the equity in your margin account drops below a certain threshold, you may get an alert from your brokerage, called a margin call. This is meant to spur you to either deposit more money into your account or sell some securities to bolster the equity that’s acting as collateral for your margin loan.

It’s worth noting that if your investment value drops quickly or significantly, you may find that your brokerage has sold some of your securities without notifying you. Commonly, investors are forced by a margin call to sell investments at an inopportune time — such as when the investment is priced at less than you paid for it. This is an inherent risk of trading on margin.

Margin Costs

Investors should also know about relevant margin costs. When you borrow money from the brokerage to buy securities, you are essentially taking out a loan, and the brokerage will charge interest. Margin interest rates are different from company to company, and may be somewhat higher than rates on other kinds of loans.

Consider interest costs when you’re thinking about your margin trading plan. If you use margin for long-term investing, interest costs can affect your returns. And holding investments on margin means the value of your securities must hold steady.

💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

How to Manage Margin Account Risk

If you decide to open a margin account, there are steps you can take to try to minimize the amount of risk you’re taking by leveraging your trading:

• Skip the dodgy investments. Trading on margin works if you’re earning more than you’re paying in margin interest. Speculative investments can be a risky portfolio move, since a swift loss in value can result in a margin call.

• Watch your interest costs. Although there is no formal repayment schedule for a margin loan, you’re still accruing interest and you are responsible for paying it back over time. Regular payments on interest can help you stay on track.

• Maintain some emergency cash. Having a cushion of cash in your margin account gives you a little wiggle room to keep from facing a margin call.

The Takeaway

A margin account is an account that lets you borrow against the cash or securities you own, to invest in more securities. As with other lending vehicles, margin accounts do charge interest.

While margin accounts do come with risk — including the risk of losing more money than you originally had, plus interest on what you borrowed — they also offer benefits including more purchasing power and a safety net for short-term cash needs. If you’re unsure about using a margin account, it may be worthwhile to discuss it with a financial professional.

For a limited time, opening and funding an Active Invest account gives you the opportunity to get up to $1,000 in the stock of your choice.

FAQ

Is a margin account right for me?

A margin account may be a good tool for a specific investor if they’re comfortable taking on additional risks and investment costs, but also want to extend their purchasing power.

How much money do you need to open a margin account?

Before opening a trading account, investors will need a minimum of $2,000 in their brokerage account, per regulator rules.

Is a margin account taxable?

Any capital gains earned by using a margin account will be subject to capital gains tax, and the ultimate rate will depend on a few factors.

Should a beginner use a margin account?

It may be best for a beginner to stick to a cash account until they learn the ropes in the markets, as using a margin account can incur additional risks and costs.

Who qualifies for a margin account?

Most investors qualify for a margin account, granted they can reach the minimum margin requirements set forth by regulators, such as having $2,000 in their brokerage account.

What’s the difference between a cash account and a margin account?

A cash account only contains an investor’s funds, while a margin account offers investors additional purchasing power by giving them the ability to borrow money from their brokerage to make bigger trades.

Feb

2024

How to Achieve Financial Freedom

By Sulaiman Abdur-Rahman | Budgeting & Goals, Financial Independence, Growing Wealth, Investing, Terminology | No Comments

Ever dream of leaving your job to pursue a project you’ve always been passionate about, like starting your own business? Or going back to school without taking out student loans? What about the option to retire at age 50 instead of 65 without having to worry about money?

Any of these opportunities could happen if you’re able to achieve financial freedom — having the money and resources to afford the lifestyle you want.

Intrigued by the idea of being financially free? Read on to find out what financial freedom means and how it works, plus 12 ways to help make it a reality.

What Is Financial Freedom?

Financial freedom is being in a financial position that allows you to afford the lifestyle you want. It’s typically achieved by having enough income, savings, or investments so you can live comfortably without the constant stress of having to earn a certain amount of money.

For instance, you might attain financial freedom by saving and investing in such a way that allows you to build wealth, or by growing your income so you’re able to save more for the future. Eventually, you may become financially independent and live off your savings and investments.

There are a number of different ways to work toward financial freedom so that you can stop living paycheck-to-paycheck, get out of debt, save and invest, and prepare for retirement.

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*Customer must fund their Active Invest account with at least $25 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.

12 Ways to Help You Reach Financial Freedom

The following strategies can help start you on the path to financial freedom.

Determine Your Needs
Reduce Debt
Set Up an Emergency Fund
Seek Higher Wages
Consider a Side Gig
Explore New Income Streams
Open a High-Yield Savings Account
Make Contributions to Your 401(k)
Consider Other Investments
Stay Up to Date on Financial Issues
Reduce Your Expenses
Live Within Your Means

1. Determine Your Needs

A good first step toward financial freedom is figuring out what kind of lifestyle you want to have once you reach financial independence, and how much it will cost you to sustain it. Think about what will make you happy in your post-work life and then create a budget to help you get there.

As a bonus, living on — and sticking to — a budget now will allow you to meet your current expenses, pay your bills, and save for the future.

2. Reduce Debt

Debt can make it very hard, if not impossible, to become financially free. Debt not only reduces your overall net worth by the amount you’ve got in loans or lines of outstanding credit, but it increases your monthly expenses.

To pay off debt, you may want to focus on the avalanche method, which prioritizes the payment of high-interest debt like credit cards.

You might also try to see if you can get a lower interest rate on some of your debts. For instance, with credit card debt, it may be possible to lower your interest rate by calling your credit card company and negotiating better terms.

And be sure to pay all your other bills on time, including loan payments, to avoid going into even more debt.

3. Set Up an Emergency Fund

Having an emergency fund in place to cover at least three to six months’ worth of expenses when something unexpected happens can help prevent you from taking on more debt.

With an emergency fund, if you lose your job, or your car breaks down and needs expensive repairs, you’ll have the funds on hand to cover it, rather than having to put it on your credit card. That emergency cushion is a type of financial freedom in itself.

4. Seek Higher Wages

If you’re not earning enough to cover your bills, you aren’t going to be able to save enough to retire early and pursue your passions. For many people, figuring out how to make more money in order to increase savings is another crucial step in the journey toward financial freedom.

There are different ways to increase your income. First, think about ways to get paid more for the job that you’re already doing.

For instance, ask for a raise at work, or have a conversation with your manager about establishing a path toward a higher salary. Earning more now can help you save more for your future needs.

5. Consider a Side Gig

Another way to increase your earnings is to take on a side hustle outside of your full-time job. For instance, you could do pet-sitting or tutoring on evenings and weekends to generate supplemental income. You could then save or invest the extra money.

6. Explore New Income Streams

You can get creative and brainstorm opportunities to create new sources of income. One idea: Any property you own, including real estate, cars, and tools, might potentially serve as money-making assets. You may sell these items, or explore opportunities to rent them out.

7. Open a High-Yield Savings Account

A savings account gives you a designated place to put your money so that it can grow as you keep adding to it. And a high-yield savings account typically allows you to earn a lot more in interest than a traditional savings account. As of February 2024, some high-yield savings accounts offered annual percentage yields (APYs) of 4.5% compared to the 0.46% APY of traditional savings accounts.

You can even automate your savings by having your paychecks directly deposited into your account. That makes it even easier to save.

8. Make Contributions to Your 401(k)

At work, contribute to your 401(k) if such a plan is offered. Contribute the maximum amount to this tax-deferred retirement account if you can — in 2024, that’s $23,000, or $30,500 if you’re age 50 or older — to help build a nest egg.

If you can’t max out your 401(k), contribute at least enough to get matching funds (if applicable) from your employer. This is essentially “free” or extra money that will go toward your retirement.

9. Consider Other Investments

After contributing to your workplace retirement plan, you may want to consider opening another investment retirement account, such as an IRA, or an investment account like a brokerage account. You might choose to explore different investment asset classes, such as mutual funds, stocks, bonds, or rate of return, stocks are notoriously volatile. If you’re thinking about investing, be sure to learn about the stock market first, and do research to find what kind of investments might work best for you.

It’s also extremely important to determine your risk tolerance to help settle on an investment strategy and asset type you’re comfortable with. For instance, you may be more comfortable investing in mutual funds rather than individual stocks.

10. Stay Up to Date on Financial Issues

Practicing “financial literacy,” which means being knowledgeable about financial topics, can help you manage your money. Keep tabs on financial news and changes in the tax laws or requirements that might pertain to you. Reassess your investment portfolio at regular intervals to make sure it continues to be in line with your goals and priorities. And go over your budget and expenses frequently to check that they accurately reflect your current situation.

11. Reduce Your Expenses

Maximize your savings by minimizing your costs. Analyze what you spend monthly and look for things to trim or cut. Bring lunch from home instead of buying it out during the work week. Cancel the gym membership you’re not using. Eat out less frequently. These things won’t impact your quality of life, and they will help you save more.

12. Live Within Your Means

And finally, avoid lifestyle creep: Don’t buy expensive things you don’t need. A luxury car or fancy vacation may sound appealing, but these “wants” can set back your savings goals and lead to new debt if you have to finance them. Borrowing money makes sense when it advances your goals, but if it doesn’t, skip it and save your money instead.

The Takeaway

Financial freedom can allow you to live the kind of life you’ve always wanted without the stress of having to earn a certain amount of money. To help achieve financial freedom, follow strategies like making a budget, paying your bills on time, paying down debt, living within your means, and contributing to your 401(k).

Saving and investing your money are other ways to potentially help build wealth over time. Do your research to find the best types of accounts and investments for your current situation and future aspirations.

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

How can I get financial freedom before 30?

Achieving financial freedom before age 30 is an ambitious goal that will require discipline and careful planning. To pursue it, you may want to follow strategies of the FIRE (Financial Independence Retire Early) movement. This approach entails setting a budget, living below your means in order to save a significant portion of your money, and establishing multiple streams of income, such as having a second job in addition to your primary job.

What is the most important first step towards achieving financial freedom?

The most important first step to achieving financial freedom is to figure out what kind of lifestyle you want to have and how much money you will need to sustain it. Once you know what your goals are, you can create a budget to help reach them.

What’s the difference between financial freedom and financial independence?

Financial freedom is being able to live the kind of lifestyle you want without financial strain or stress. Financial independence is having enough income, savings, or investments, to cover your needs without having to rely on a job or paycheck.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected]. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

SOIN0124028

Feb

2024

Aiming to Become a Millionaire? These Steps Could Help

By Samuel Becker | Financial Independence, Growing Wealth, invest, Investing, Preparing for Retirement | Comments Off

Do you find yourself dreaming about what you would do if you were a millionaire? Maybe you fantasize about retiring early and traveling the world. Or perhaps what excites you is the thought of being able to donate to causes you care about.

But, you might be wondering, how to become a millionaire? You may suspect the only way you’ll ever be that rich is if you win the lottery.

Fortunately, the road to wealth isn’t that narrow — there are many ways to become a millionaire. For instance, some individuals retire with over a million dollars in savings because they made good financial decisions.

Others may have started businesses that brought them success, advanced their careers so that they made enough to save seven figures, or made smart investments.

Read on to learn more about how to become a millionaire, and strategies that could help get you there.

Introduction to the Millionaire Mindset and Goals

You may have a certain image of a millionaire in your mind. Maybe it’s a jetsetter or a celebrity. But many millionaires are not born into wealthy families or individuals who suddenly struck it rich. In fact, many millionaires are people who work for a living every day. In general, what tends to set them apart is that they have a millionaire mindset. They are smart and disciplined when it comes to their money. And they stay focused on their financial goals.

Defining What it Means to be a Millionaire

The true definition of a millionaire is someone with a net worth of at least $1 million. That means that their assets, minus any debt, is $1 million or more.

So, if you have $500,000 in savings and investments, plus a house that’s worth at least $500,000, are you a millionaire? Yes, if you own the house outright and don’t have a lot of debt such as car loans, student loans, or credit cards to pay off. But if you still owe money on your house and you’ve got a fair amount of debt to repay, you probably aren’t a millionaire. At least, not yet.

To do the math for your situation, total up your assets. Then subtract your debts from that amount. This will show you how close you are to reaching millionaire status, and possibly give you a sense of what you might have to do to get there.

Following these eight strategies can help when it comes to how to become a millionaire.

💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.

Step 1: Stay Away From Debt

As we just saw in the example above, one thing that could be holding you back from becoming a millionaire is debt — especially if that debt is “bad debt,” a term often used for high-interest debt. Eliminating your debt is key because it’s difficult to build wealth if you’re paying a significant portion of your income toward interest.

Paying off debt could help free up money to invest and build wealth. One way to repay debt is to use the debt avalanche method. With this technique, you pay off your debts with the highest interest rates first and then focus on debts with the next highest interest rates (while still making minimum payments on all of your debt, of course).

Eliminating debt isn’t just about paying off existing debt, though, it’s also about avoiding the chances of going into debt in the future. Part of a debt payoff strategy could involve spending less so that you don’t need to rely on credit. You can also set a strict budget and pay with cash whenever possible.

In addition, you may want to create an emergency fund by setting aside a certain amount of money every month. That way, if you have a financial setback, you don’t have to go into credit card debt.

Step 2: Invest Early and Consistently

Investing successfully doesn’t happen overnight. It takes time. That’s why you need to start early. There are a few rules to know that could help you improve your chances of becoming a millionaire.

Benefits of Compounding Returns

First, compounding returns can make all the difference. They can help your money grow, as long as the returns are reinvested.

Here’s how they work: Compounding returns depend on how much an investment gains or loses over time, which is known as the rate of return. The longer your money is invested, the more compounding it can do. That’s why some individuals start saving aggressively when they’re young.

Saving $100,000 by the time you’re 30 might not be possible for everyone, but the more you save early on, the greater impact it could have on your net worth.

And here’s the thing: Even if you’re in your 30s, 40s, or 50s now, it’s never too late to start saving. The important thing is that you start, period. And that you keep saving.

There are other investing strategies that could help as you work on how to become a millionaire. For instance, you could reduce the amount you spend on investment fees. High investment fees can have a big impact on your returns, so you might want to look into low-fee investments.

Also, you should make sure that you invest in a way that’s right for you throughout your life. That may mean investing more aggressively when you’re younger and gradually becoming more conservative in your investments as you get older and closer to retirement.

Step 3: Make Saving a Priority

Your savings is the amount of money you have left after paying taxes and spending money.

Many Americans aren’t saving enough to become a millionaire — in October 2023, the average personal savings rate was 3.8%, according to the Bureau of Economic Analysis. You’ll likely need to save more than three times that amount to become a millionaire.

Effective Saving Strategies for Long-term Wealth

To save for your goals, start by investing in your company’s 401(k). Max out your 401(k) if you can. At the very least, invest at least enough to earn the employer match, if there is one. That way your employer is contributing to your savings.

In addition, consider opening a traditional IRA or a Roth IRA and contribute as much as possible — up to the limit set by the IRS. These IRAs are tax-advantaged, so they’ll help with your tax bill, too.

And investigate other savings options as well. For instance, you could open a high-yield savings account rather than a regular savings account for a higher return.

Step 4: Increase Your Income

You can’t join the ranks of millionaires if you’re not bringing in more money than you need for your basic necessities. The more money you make, the more you can save and invest.

Tips for Boosting Earnings and Maximizing Income

Some ways to boost your income include asking for a raise or looking for a new higher-paying job. You could also go back to school to earn an advanced degree that could lead to a position with a higher income. Your current employer might even help you cover the cost; check with your HR department.

Another one of the ways to earn extra money is to take on a side hustle. You could tutor students on evenings or weekends, do freelance writing, or dog sit. And those are just some of the options to consider.

Step 5: Cut Unnecessary Expenses

Getting control of your spending is critical to building wealth. That doesn’t mean you have to cut back on everything that gives you pleasure, but you could consider the happiness return on investment you get from the money that you spend. How big of an apartment or home do you truly need to be content? What kind of car do you need? Do you have to buy lunch out every day or could you bring your own lunch from home?

Identifying and Eliminating Non-Essential Spending

You could find ways to cut back on the things that don’t matter so much, but not skimping to the point that you miss out on things you love. For example, maybe you need your gym sessions (and there are plenty of low-cost gyms out there), but you can do without a $5 latte every morning.

Also, you could focus on cutting back on big expenses instead of those that won’t have a huge impact on your budget. For example, dining out only once a month, adjusting your thermostat higher or lower depending on the season, or finding a less expensive, smaller home could help you save a significant amount of money over time.

💡 Quick Tip: Distributing your money across a range of assets — also known as diversification — can be beneficial for long-term investors. When you put your eggs in many baskets, it may be beneficial if a single asset class goes down.

Step 6: Keep Your Financial Goals in Focus

To become a millionaire, you’ll need to stay laser-focused on your financial goals. When everyone else around you is spending money, going on fancy vacations, and buying expensive cars, remind yourself what’s truly important to you. Keep your spending in check, continue to save and invest, and avoid taking on debt.

It takes discipline. But instead of thinking about the stuff you don’t have, appreciate all the good things in your life, like your family and friends. Remember that you’re saving for your future. You’ll be able to enjoy yourself then if you have the money you need to live comfortably and happily.

Think of it this way: You’re making yourself and your financial security the priority. Make that your mantra.

Step 7: Consult with Investment Professionals

Investing can be complicated because there are so many options to choose from. If you need help figuring out what investments are right for you, consider working with a qualified financial advisor.

Leveraging Advice for Wealth Building

A good financial advisor could help you select the right investments and the best investing strategies for your situation. They can also help you plan and budget to reach your goals. But be sure to be an active participant in the process. Ask questions, be involved. Why are they suggesting a specific investment? And if you don’t feel comfortable with something, say so.

Finally, be sure to check your investment performance regularly. Know what you are investing in, how much, and why.

Step 8: Repeat and Refine Your Financial Plan

The final step to becoming a millionaire is to stay committed to your goal and your plan. Keep saving and investing your money. Stay out of debt. Let time and the power of compounding returns kick in. Be patient.

But also, don’t be afraid to refine or change your plan if need be. For instance, as you get closer to retirement, you will likely want to choose safer, less aggressive investments. You can keep saving and growing money throughout different ages and stages, but your method for doing so can evolve to make sense for where you are in your life.

Additional Tips for Wealth Building

In addition to all of the strategies above, there are a few other techniques that may help you reach millionaire status.

Lifestyle Considerations and Spending Habits

As you work your way up the ladder and earn more money throughout your career, you may be tempted to increase your lifestyle spending, too. After all, you have more money now, so you may feel the urge to spend it.

But here’s the thing: Giving in to these temptations can be a slippery slope. It might start with a bigger house in a nice neighborhood, and then grow to taking extravagant vacations and driving a luxury car. Before you know it, you could be spending way more than you’re saving.

Try to avoid lifestyle splurging if you want to be a millionaire. Instead, take the extra money and save and invest it. That way, you’ll be able to reach your goal even faster.

The Takeaway

Becoming a millionaire is possible if you take the right approach. It involves saving and investing your money, spending wisely, and avoiding debt. You need to be disciplined and focused, and it won’t always be easy. But staying committed to your goals can reward you with financial security and success.

Invest with as little as $5 with a SoFi Active Investing account.

Photo credit: iStock/pixelfit

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOIN1023169

Feb

2024

What Is the Rule of 55? How It Works for Early Retirement

By Rebecca Lake | Growing Wealth, invest, Investing | Comments Off

The rule of 55 is a provision in the Internal Revenue Code that allows workers to withdraw money from their employer-sponsored retirement plan without a penalty once they reach age 55. Distributions are still taxable as income but there’s no additional 10% early withdrawal penalty.

The IRS rule of 55 applies to 401(k) and 403(b) plans. If you have either of these types of retirement accounts through your employer, it’s important to understand how this rule works when taking retirement plan distributions.

What Is the Rule of 55?

The rule of 55 is an exception to standard IRS withdrawal rules for qualified workplace plans, including 401(k) and 403(b) plans. Normally, you can’t withdraw money from these plans before age 59 ½ without paying a 10% early withdrawal penalty. This penalty is only waived for certain allowed exceptions, of which the rule of 55 is one.

Specifically, the rule of 55 applies to “distributions made to you after you separated from service with your employer after attainment of age 55,” per the IRS. It doesn’t matter whether you quit, get laid off or retired — you can still withdraw money from your retirement plan penalty-free. If you’re a qualified public safety employee, this exception kicks in at age 50 instead of 55.

💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.

How Does the Rule of 55 Work?

The rule of 55 for 401(k) and 403(b) plans allows workers to access money in their retirement plans without a 10% early withdrawal penalty. This rule applies to current workplace retirement plans only.

You can’t use the rule of 55 to take money from a 401(k) or 401(b) you had with a previous employer penalty-free unless you first roll over those account balances into your current plan before separating from service.

This rule doesn’t apply to individual retirement accounts (IRA) either. So, you can’t use the rule of 55 to tap into an IRA before age 59 ½ without a tax penalty. There are, however, some exclusions that might allow you to do so. For example, you could take money penalty-free from an IRA if you’re using it for the purchase of a first home.

Rule of 55 Requirements

To qualify for a rule of 55 401(k) or 403(b) withdrawal, you’ll need to:

• Be age 55 or older

• Separate from your employer at age 55 or older

• Leave the money in your employer’s plan (rule of 55 benefits are lost if you roll funds over to an IRA)

You also need to have a 401(k) or 403(b) plan that allows for rule of 55 withdrawals. If your plan doesn’t permit early withdrawals before age 59 ½ , then you won’t be able to take advantage of this rule.

Also keep in mind that IRS rules require a 20% tax withholding on early withdrawals from a 401(k) or similar plan. This applies even if you plan to roll the money over later to another qualified plan or IRA. So you’ll need to consider how that withholding will affect what you receive from the plan and how much you may still owe in taxes on your 401(k) later when reporting the distribution on your return.

Example of the Rule of 55

Here’s how the rule of 55 works. Say you lose your job or decide to retire early at age 55, and you need money to help pay your bills and cover lifestyle expenses. Under the rule of 55, you can take distributions from the 401(k) or 403(b) plan you were contributing to up until the time you left your job. You will not be charged the typical 10% early withdrawal penalty in this instance.

Also worth noting: If you decide to go back to work a year or two later at age 56 or 57, say, you can still continue to take distributions from that same 401(k) or 403(b) plan, as long as you have not rolled it over into another employer-sponsored plan or IRA.

Should You Use the Rule of 55?

The IRS rule of 55 is designed to benefit people who may need or want to withdraw money from their retirement plan early for a variety of reasons. For example, you might consider using this rule if you:

• Decide to retire early and need your 401(k) to close the income gap until you’re eligible for Social Security benefits

• Are taking time away from work to act as a caregiver for a spouse or family member and need money from your retirement plan to cover basic living expenses

• Want to take some of the money in your 401(k) early to help minimize required minimum distributions (RMDs) later

In those scenarios, it could make sense to apply the rule of 55 in order to access your retirement savings penalty-free. On the other hand, there are some situations where you may be better off letting the money in your employer’s plan continue to grow.

For instance, if your employer’s plan requires you to take a lump sum payment, this could push you into a substantially higher tax bracket. Having to pay taxes on all of the money at once could diminish your account balance more so than spreading out distributions — and the associated tax liability — over a longer period of time.

You may also reconsider taking money from your 401(k) early if you still plan to work in some capacity. If you have income from a new full-time job or part-time job, for instance, you may not need to withdraw funds from your 401(k) at all. But if you change your mind later and decide to return to work, you can continue to take withdrawals from the same retirement plan penalty-free.

Other Ways to Withdraw From a 401(k) Penalty-Free

Aside from the rule of 55, there are other exceptions that could allow you to take money from your 401(k) penalty-free. The IRS allows you to do so if you:

• Reach age 59 ½

• Pass away (for distributions made to your plan beneficiary)

• Become totally and permanently disabled

• Need the money to pay for unreimbursed medical expenses exceeding 10% of your adjusted gross income (AGI)

• Need the money to pay health insurance premiums while unemployed

• Are a qualified reservist called to active duty

You can also avoid the 10% early withdrawal penalty by taking a series of substantially equal periodic payments. This IRS rule allows you to sidestep the penalty if you agree to take a series of equal payments based on your life expectancy. You must separate from service with the employer that maintains your 401(k) in order to be eligible under this rule. Additionally, you must commit to taking the payment amount that’s required by the IRS for a minimum of five years or until you reach age 59 ½, whichever occurs first.

A 401(k) loan might be another option for withdrawing money from your retirement account without a tax penalty. You might consider this if you’re not planning to retire but need to take money from your retirement plan.

With a 401(k) loan, you’ll have to pay the money back with interest. Your employer may stop you from making new contributions to the plan until the loan is repaid, generally over a five-year term. If you leave your job where you have your 401(k) before the loan is repaid, any remaining amount becomes payable in full. If you can’t pay the loan off, the whole amount is treated as a taxable distribution and the 10% early withdrawal penalty also may apply if you’re under age 59 ½.

The Takeaway

Early retirement may be one of your financial goals, and achieving it requires some planning. Maxing out your 401(k) or 403(b) can help you save the money you’ll need to retire early, and you may be able to access the funds early with the rule of 55.

You may also consider investing in an IRA or a taxable brokerage account to save for retirement. A brokerage account doesn’t have age restrictions, so there are no penalties for early withdrawals before age 59 ½. You’ll have to pay capital gains tax on any profits realized from selling investments, but you can allow the balances in your 401(k) or IRA to continue to grow on a tax-advantaged basis.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Easily manage your retirement savings with a SoFi IRA.

FAQ

Can I use the rule of 55 if I get another job?

Yes, you can use the rule of 55 to keep withdrawing from your 401(k) if you get another job. As long as it’s the same 401(k) you were contributing to when you left your job and you haven’t rolled it over into an IRA or another plan, you can still continue to take distributions from it whether you get a full-time or part-time job.

How do I know if I qualify for Rule of 55?

First, find out if your employer allows for the rule 55 withdrawals. Check with your HR or benefits department. If they do, and you are 55 or older (or age 50 or older if you are a public safety worker), you should qualify for the rule of 55 and be able to take distributions from your most recent employer’s plan. You cannot take penalty-free distributions from 401(k) plans with previous employers.

How do I claim the rule of 55?

To start taking rule of 55 withdrawals, typically all you need to do is reach out to your plan’s administrator and prove that you qualify — meaning that you are age 55 or older and that you’re leaving your job.

What is the rule of 55 lump sum?

Some 401(k) plans may require you to take a lump sum payment if you are using the rule of 55. That could create a big tax liability since you will need to pay income tax on the money you withdraw. In this case you might want to explore other alternatives to the rule of 55. It may also be helpful to speak with a tax professional.

Photo credit: iStock/bagi1998

Women and Retirement: Insight Into the Gender Divide

A Look at Retirement Trends for Women and Men

Retirement Savings for Women and Men in US

How Marriage and Children Impact Retirement

Women, Marriage and Retirement Savings*

Motherhood and Money

Retirement Is a Top Priority for Women and a Bigger Concern

Women’s Financial Goals vs. Men’s Financial Goals

Those Who Worry They Won’t Be Able to Retire

Why Are Women Facing a Retirement Gap?

Minding and Mending the Gap

How to Start Saving for Retirement

Figure out your retirement budget.

Cut back on current expenses.

Contribute as much as you can to your 401(k).

Consider opening an IRA.

Diversify your portfolio.

The Takeaway

Margin Account: What It Is and How It Works

What Is a Margin Account?

Margin Account Rules and Regulations

Example of a Margin Account

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Benefits of a Margin Account

Drawbacks of a Margin Account

How to Open a Margin Account

Things to Know About Margin Accounts

Margin Calls

Margin Costs

How to Manage Margin Account Risk

The Takeaway

FAQ

Is a margin account right for me?

How much money do you need to open a margin account?

Is a margin account taxable?

Should a beginner use a margin account?

Who qualifies for a margin account?

What’s the difference between a cash account and a margin account?

How to Achieve Financial Freedom

What Is Financial Freedom?

Get up to $1,000 in stock when you fund a new Active Invest account.*

Access stock trading, options, auto investing, IRAs, and more. Get started in just a few minutes.

12 Ways to Help You Reach Financial Freedom

1. Determine Your Needs

2. Reduce Debt

3. Set Up an Emergency Fund

4. Seek Higher Wages

5. Consider a Side Gig

6. Explore New Income Streams

7. Open a High-Yield Savings Account

8. Make Contributions to Your 401(k)

9. Consider Other Investments

10. Stay Up to Date on Financial Issues

11. Reduce Your Expenses

12. Live Within Your Means

The Takeaway

FAQ

How can I get financial freedom before 30?

What is the most important first step towards achieving financial freedom?

What’s the difference between financial freedom and financial independence?

Aiming to Become a Millionaire? These Steps Could Help

Introduction to the Millionaire Mindset and Goals

Defining What it Means to be a Millionaire

Step 1: Stay Away From Debt

Step 2: Invest Early and Consistently

Benefits of Compounding Returns

Step 3: Make Saving a Priority

Effective Saving Strategies for Long-term Wealth

Tips for Boosting Earnings and Maximizing Income

Step 5: Cut Unnecessary Expenses

Identifying and Eliminating Non-Essential Spending

Step 6: Keep Your Financial Goals in Focus

Step 7: Consult with Investment Professionals

Leveraging Advice for Wealth Building

Step 8: Repeat and Refine Your Financial Plan

Additional Tips for Wealth Building

Lifestyle Considerations and Spending Habits

The Takeaway

What Is the Rule of 55? How It Works for Early Retirement

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