Financial Freedom Milestone: A Major Step in Making a Million from Nothing

It’s been quite a journey thus far. Starting small with “Making a Million Dollars from Nothing: part 1” and “Part 2.” We’ve been working our 9 to 5. Blogging our butts off. Side Hustling until coach calls for a water break. We’ve established a Mutual Fund, and like kids on Christmas Morning, we eagerly open our monthly earnings report when it arrives in the mail. For some of us, we have reached Financial Freedom with the help of financial gurus like Dave Ramsey or even your favorite internet shaman like frugaldad.com

Even if you haven’t, you still have a large chunk of change and maybe you want to celebrate (atleast do it Frugally!) or you are ready to take the next step and take a risk!

Now, more than ever before, is an amazing time to invest the stock market. While I was in New York for the QUINNEPIEC GAME Forum, one of the Wall Street workers gave an amazing speech but one tid bit I remember him saying was that market trend analysis shows that it is safer than ever to invest, yet companies and people are still scared because of the 2008 financial crisis. With the Eurozone crisis how it is, this fear is undoubtedly grounded in well-reasoned fear based logic. For others, the logic may not be there but the fear of the impending December 21, 2012 apocalypse might be just enough to keep your neighbor from taking the risk. I’d still go with the longer term option of selecting a few mutual funds for the long term and using whatever you deem as disposable income into a stock portfolio. (You are keeping atleast a simple excel spreadsheet, right?)

I’m thinking of something even more long term though, something that could be turned into a business if you so pleased to. But for now, should be a side-hustle, or atleast a very, very long-term investment.

I’m talking real estate.[url= http://money.cnn.com/2012/11/19/real_estate/existing-home-sales/index.html] Home prices are starting to rise [/url] and I know you keep hearing that real estate interest rates are “Lower than Ever!” atleast I did, on the radio ad the other day. But a quick google search shows that, as of November 29^th, 2012, a 15-year fixed rate is 2.84% (Uh… yeah I’d love to have my house paid off in 15 years at under a 3% interest rate!)

So why not bust out the rusty old Texas Instruments business calculator you had to use for that college level economics course and run a few Payment equations [VGC1] to find out if you can afford it?

So what do you do if you can afford it? If you’re willing to take the risk, I’d say take the plunge, but of course, be frugal and do your research. This isn’t a get rich quick scheme.

Find a property that is either right for you and your family (or your future family) or one that could be easily fixed up in a few months and flipped for a profit, if you are banking on the real estate market to bounce back. Which it will, it will reach an equilibrium. You’ll turn quite a tidy-profit. This same strategy can be used in the future too. Higher education is on the same path as the Tech Bubble and Real Estate bubble took. The key is studying the past to capitalize on the future.

Or, for the Side Hustle fanatic, buying a small property near a college town or somewhere nearby your humble abode and turning it into a rental property is a wonderful way to stay busy on the weekends while earning a nice chunk of income each month.

Real Estate is never a bad investment, especially if you finance the correct loan and never exceed 25% of your take home pay for house payments.

Good luck and stay Frugal!

I would love to hear your feedback about renting properties and your experiences. Tell me about your good and bad tenants! Or have you ever owned more than one house? What were they used for? How did you balance the budget?

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Defining the Frugal Lifestyle

Frugality is more than just buying cheap stuff or being a penny-pincher. Sure, I may always pick up a penny off the ground if it happens to catch my eye because I can still hear my Grandmother, Mimi, saying “A penny saved is a penny earned” but that doesn’t mean I’m constantly scouring the parking lot for loose change. Like everything, frugality is a way of life that extends far beyond that of just physical money.

Frugality and leading a frugal lifestyle can be found in every aspect of your life from diet, exercise, work, family, future, time management, and even your hobbies. Behavioral studies show that people who are Frugal have the tendency to acquire economic goods or services in a patient manner in order to achieve a long term goal. While I wholeheartedly agree this is true, we love to save money for that nice new shiny trinket we’ve wanted since we were 7 years old, be it a laptop, car, house, massage, cruise vacation, or whatever your amazing mind can dream up, I believe that frugality is a mindset that transcends mere economic and spending tendencies.

We can extend our frugal tendencies into our diets, for example. Being frugal is what defines us. We can forego the McDonald’s $5 Big Mac and settle with two $1 McChickens instead. But why even stop there? Why not skip the drive-through entirely and benefit from a fast?

 We have the ability to wait a week or a month, maybe even years and go without a T.V. in order to buy the biggest and best. But we don’t stop there, no, we research our big purchase, we wait… Until just the right time and we pounce. We chase what we want with such fervor that nothing can get in our way. If I were an animal, I’d be a Cheetah, waiting, watching, enjoying the sun, then at just the exact right moment a chance to get nice big juicy antelope would present itself.

We feast.

We love getting the biggest bang for our buck. We are disciplined. Frugal folks and families like us don’t follow the crowd. We don’t mind hanging on to that old suit we had when we were fat or stopping to look at the dining room chair on the side of the road, so what if it has a tear in the fabric? I don’t care that someone shot me a funny look or grimaced.

It’s the end of the month and it’s your uncle’s birthday at the Ritzy Restaurant where you can only choose between Filet Mignon and Pan Seared-Salmon none of the main courses are under $25. It’s ok, I’ll settle for the house salad, soup, or split a plate with my brother, we’ve got bigger plans in the works.

We are contemplating and calculating but not devious or mischievous, that would not make us frugal. We do not need to lie to get a better deal. We will happily tip the waiter more because he gave us outstanding service. We don’t complain or argue because this would be a senseless waste of energy.

Whether or not we believe in a higher power, one entity or many, we find happiness in our way of life and we feel more virtuous for it.

Frugal philosophy extends into our work life. We make great managers and leaders. We are patient and forward-looking. We help cut costs and save the company money, but we aren’t brutal or cold. For us, just like any corporation, maximizing shareholder wealth is important. We are the shareholder’s in the happiness of our lives and the lives of those around us.

We are frugal and we are happy. We are free. We care about money and it is important, yes, but it is not main focus of every second of our lives. Because hey, we are Frugal, and we’ve already researched this and know that spending too much time on any one thing will ultimately lead us to failure.

For us, frugality comes naturally, even though we sometimes have to work at it. Check out [url=http://thepathtofrugality.blogspot.com.es/] The Path to Frugality [/url] if you are interested in more ways on making the lifestyle change to that of a more frugal one.

What do you think? I want to hear your comments about what being frugal means to you.