The Personal Finance Cookbook E-Book

Nick Meyer

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 365

Veröffentlichungsjahr: 2024

Beschreibung

A fun and straightforward approach to learning personal finance and budgeting

In The Personal Finance Cookbook, Certified Financial Planner™ certificant and celebrated social media creator Nick Meyer delivers a fun and engaging toolkit for a variety of personal finance tasks, including budgeting, investing, and buying a house. In the book, you'll find a cookbook-style collection of “recipes” detailing the steps you need to take to complete various common and important money-related tasks.

You'll learn how to avoid the “paralysis by analysis” that often traps people into doing very little about their personal finances before it's too late. You'll also discover how to take meaningful, concrete steps toward change and positive action.

The book includes:

• Strategies for household budgeting and how to start investing your money
• The best ways to start saving for your first home and your first car
• The steps you should take before and while applying for your first credit card and strategies for building your credit rating

An invaluable resource for young families, new professionals just beginning their career journeys, and people starting to get ready for retirement, The Personal Finance Cookbook is the perfect book for everyone hoping to get a strong grip of their money situation once and for all.

Leseprobe

Table of Contents

Cover

Table of Contents

Title Page

Copyright

Dedication

About the Author

Introduction

The Problem

The Solution: Your Personal Finance Cookbook

Chapter 1: The Basics

1.1 How to Open a Checking Account

1.2 How to Open a High‐Yield Savings Account

1.3 How to Build an Emergency Fund

1.4 How to Build a Bulletproof Budget

1.5 How to Calculate Your Net Worth

1.6 How to Calculate Your Financial Independence “Number”

1.7 How to Choose a Savings Rate Based on When You Want to Retire

Chapter 2: Investing in the Stock Market

2.1 How to Open a Brokerage Account

2.2 How to Open Roth and Traditional IRAs

2.3 How to Open a 401(k)

2.4 How to Change Brokers

2.5 How to Choose What to Invest In

2.6 How to Buy Your First Stock

2.7 How to Invest as a Kid (or for Your Kids)

Chapter 3: Credit

3.1 How to Decide When to Use a Debit Card vs a Credit Card

3.2 How to Open Your First Credit Card

3.3 How to Open Your Next Credit Card

3.4 How to Build Your Credit Score

3.5 How to Build Your Kid's Credit Score Before They Can Even Walk

3.6 Travel Hacking: How to Use Credit Card Rewards to Travel for Free (or at a Steep Discount)

Chapter 4: Debt

4.1 How to Differentiate Between “Good” and “Bad” Debt

4.2 The Debt Snowball Method: The Best Way (Behaviorally) to Pay Off Debt

4.3 The Debt Avalanche Method: The Best Way (Logically) to Pay Off Debt

4.4 How to Lower Your Interest Rate by Consolidating Debt

4.5 How to Qualify for a Debt Management Plan

Chapter 5: Big Purchases

5.1 How to Not Get Scr*wed When Buying a Car

5.2 How to Decide Between Leasing and Buying a Car

5.3 How to Ensure Your Wedding Doesn't Set You Back Years Financially

5.4 Pets: How Much They Cost and How to Save Money on Common Expenses

Chapter 6: College

6.1 How to Save Money on College While You're Still in High School

6.2 How to Apply for Grants

6.3 How to Apply for Scholarships

6.4 How to Make College a Good Investment

6.5 How to Use a 529 Plan to Save for Your Kid's College

6.6 How to Pay Off Your Student Loans

Chapter 7: Housing

7.1 Is It Better for You to Rent or Buy a House?

7.2 How to Tell If Rent/Your Mortgage Payment Is Too Expensive for Your Income Level

7.3 How to Buy Your First House

7.4 How to Decide Between a 15‐Year vs 30‐Year Mortgage

7.5 How to Reduce Your Living Expenses by House Hacking

Chapter 8: How to Make More Money

8.1 How to Negotiate Your Starting Salary and Signing Bonus

8.2 How to Ask for a Raise

8.3 How to Maximize Your Employee Benefits

8.4 How to Raise Your Salary by Job‐Hopping without Ruining Your Reputation

8.5 How to Start a Side Hustle

Chapter 9: Taxes

9.1 How to Pay Taxes If You Have a Normal Job

9.2 How to Pay Taxes as a Business Owner, Independent Contractor, or Freelancer

9.3 How Investments Are Taxed

9.4 How Tax Extensions Work and How to File Them

9.5 How Amended Tax Returns Work and How to File Them

Chapter 10: Retirement

10.1 How to Begin Drawing Your Social Security Benefits

10.2 How and When You're Required to Draw from Your Retirement Accounts

10.3 How to Determine How Much You Should Spend Each Year in Retirement

10.4 How to Roll Over Old 401(k)s to an IRA

Chapter 11: Charitable Giving

11.1 How to Report Charitable Donations on Your Tax Return

11.2 How to Open a Donor‐Advised Fund for Tax‐Advantaged Giving

Chapter 12: Insurance

12.1 How to Use an HSA as an Extra Retirement Account

12.2 How to Obtain Health Insurance When It Isn't Provided by Your Employer (When Turning 26)

12.3 How to Use an HSA as an Extra Retirement Account

12.4 How to Obtain Homeowner's Insurance

12.5 How to Obtain Renter's Insurance

12.6 How to Obtain and Save Money on Car Insurance

12.7 How to Determine When You Need Life Insurance

Chapter 13: Passive Income

13.1 Why Passive Income Is the Best Form of Income

13.2 How to Earn Passive Income from the Stock Market

13.3 How to Earn Passive Income from Real Estate Investing

13.4 How to Earn Passive Income from Digital Products

13.5 How to Earn Passive Income from Affiliate Marketing

Index

End User License Agreement

Guide

Cover Page

Title Page

Copyright

Dedication

About the Author

Introduction

Table of Contents

Begin Reading

Index

Wiley End User License Agreement

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The Personal Finance Cookbook

Easy‐to‐Follow Recipes to Remedy Your Financial Problems

Nick Meyer, CFP®

Copyright © 2024 by John Wiley & Sons Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per‐copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750‐8400, fax (978) 750‐4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748‐6011, fax (201) 748‐6008, or online at http://www.wiley.com/go/permission.

Trademarks: Wiley and the Wiley logo are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries and may not be used without written permission. All other trademarks are the property of their respective owners. John Wiley & Sons, Inc. is not associated with any product or vendor mentioned in this book.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Further, readers should be aware that websites listed in this work may have changed or disappeared between when this work was written and when it is read. Neither the publisher nor authors shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging‐in‐Publication Data is Available:

ISBN 9781394210299 (Paperback)

ISBN 9781394210312 (ePDF)

ISBN 9781394210305 (ePub)

Cover Design: Jon Boylon/Wiley

Cover Image: © ugurhan/Getty Images

Author Photo: Courtesy of the Author

This book is dedicated to you, the reader, for taking decisive action to improve one of the most intimidating and confusing aspects of your life: your finances.Future you will thank you.

About the Author

Nick Meyer, CFP®, also known as “NickTalksMoney” to his 1,500,000+ followers (at the time of this writing) across the major social media platforms, is an expert in a wide spectrum of personal financial topics. From taxes, to investing, to budgeting, it's hard to find a financial topic Nick can't teach you a thing or two about.

His interest in personal finance started at a young age. As the child of two postal workers, paychecks were consistent but didn't afford any room for error. Whenever an unexpected expense came up (car repairs, medical bills, or he and his brother begging for the latest Xbox), arguments and stress soon followed.

Nick was determined to learn the “money secrets” that seemingly worry‐free, wealthier families knew, so his future family wouldn't grow up with the same financial stress that he did.

So he earned a bachelor's degree in finance from the University of Minnesota, started work as a financial and tax advisor for high net worth individuals (aka multimillionaires), and earned both the CERTIFIED FINANCIAL PLANNER™ and the Enrolled Agent professional designations.

After earning these professional designations and four years of working with multimillionaires, Nick realized that most of the smart financial decisions the rich make can be made by anyone regardless of income level or net worth.

So why isn't everyone making great financial decisions? Nick believes it's a lack of access to knowledge more than anything. Neither school nor his parents taught him about investing, credit building, or budgeting, and there's very little chance he ever would've learned these skills if he hadn't pursued the career path he did.

In order to democratize access to this information, Nick decided to leave his job to teach the world, not just those who could afford high‐priced financial planners, how to win with money. He did so by posting videos that are both entertaining and educational on TikTok, YouTube, Instagram, and Facebook under the handle @nicktalksmoney.

Fast forward three years, and his videos have been viewed over 100 million times, he has accrued over 1,500,000 followers, he has appeared on nationally syndicated TV shows NBC Evening News and Bloomberg Quicktake, and he has been featured in publications like CBS, Yahoo Finance, and Bloomberg.

Learn more about Nick at www.nicktalksmoney.com or @nicktalksmoney on social media, and join his email newsletter at www.nicktalksmoney.com/newsletter.

Introduction

The Problem

If there is one thing you should reasonably expect to learn about in school, it's money—how to manage it, make more of it, avoid losing it, and properly give it. Money impacts our relationships, stress levels, emotions, comfortability, social standing, and the legacy we leave for our children, but, as of June of 2023, only 21 US states have a fully implemented, statewide requirement that high school students take a personal finance class before they graduate. Makes sense, right?

For something that impacts literally everybody's lives, why doesn't school even teach us the basics: how to open a bank account, how and why we should build a good credit score, and how to invest in the stock market? According to Affirm, the average American worries about their finances six times per day. Wouldn't we be much better off if this brain power was instead directed toward solving the big problems of the world, or spending quality time with friends and family?

I sure think so, which is why, after spending four years as a financial advisor to the wealthy, I went all‐in on creating approachable, entertaining, yet still educational, personal finance content on TikTok, Instagram, and YouTube under the handle NickTalksMoney. My ultimate goal is to increase financial literacy rates by making the usually bland, intimidating, but important topic of personal finance as fun and easily digestible as possible! That's exactly what this book aims to do as well.

The Solution: Your Personal Finance Cookbook

Listen, if this is the first money‐related book you ever read, I wouldn't blame you. Who has the time to thumb through 300 pages of a “normal” personal finance book where 1) it almost feels like the author is talking down to you the whole time, and 2) they write at such a high level the average person could never hope to understand their message? Let's be honest, who even sets aside the time to read any type of book when you could instead sit down on the couch and get instant access to millions of movies, TV shows, and internet videos with the click of a button?

All of this is to say that I'm well aware that most people would rather not spend the fleeting couple of hours of free time they have each week, after putting their nose to the grindstone at work or school, to dedicate brain power to learn anything, let alone something as seemingly complex as personal finance. So in this book, I've taken out all the fluff (save for this intro), industry jargon, and complexity. In the same way that you don't need to know exactly how sugar and flour chemically bond to create cookies, you don't necessarily need to have an advanced knowledge of modern portfolio theory, tax code, or credit risk premiums to successfully manage your personal finances.

I built my following by providing short, actionable, entertaining finance tips: a cookbook‐style format is the most efficient way to provide this same value in print.

A cookbook isn't something you sit down and read cover‐to‐cover. It's designed for short, yet very valuable, interactions. If you're looking for a recipe on how to make a specific Greek salad, you find the page numbers for the recipe in the table of contents, turn to those pages, and then read the complete ingredient list and cooking instructions for that dish. If you want to make a salad but are unsure of what type of salad you want to make, you can flip through the salad section of the cookbook until you find one that catches your eye. If you have no idea what you want to cook but know you want to cook something, you could flip through the entire book and find the recipes you want to try in the future.

That's exactly how I want this book to work. If there's a specific topic you could use help with, like getting started with investing, all you need to do is navigate to pages 19–41 and you'll find exactly what you need. Or, if you could use help with investing as a whole, you can browse every recipe in Chapter 1 and follow the ones that pertain to you, while skipping over sections (like credit, for example) that you feel more well‐versed in. If you don't know what specifically you need help with but know that your finances as a whole could use a facelift, you could thumb through each page and find the recipes that would be most helpful for you.

This cookbook is full of easily digestible, standalone “recipes” for life's most common personal finance topics from investing, to credit, to buying a home, and much, much more. Each recipe generally includes:

Setup Time

: How much time you have to devote to completing the task up front

Maintenance Time

: How much time you have to dedicate each month/year to the task

Function

: What the recipe helps you do (make money, save money, pay the debt, etc.)

Essential Terminology

: A list of all terminology you need to know to complete and understand the task explained as simply as possible

Ingredient List

: A list of items you need to complete the task (computer, phone, spreadsheet, apps, bank account, money, etc.)

Recipe

: A step‐by‐step walk‐through of how to complete the task

Recap

: A overview and list of important ideas to keep in mind

Don't get me wrong—reading this entire book from cover to cover would be a great use of your time. However, I realize that your time is valuable, so this book is just as useful as a guide you can pick up and reference when your situation calls for it. Need to know the smartest way to buy a car? Turn to page 79. Need to know how to open your first credit card? Turn to page 47. Need to know how to pay taxes? Turn to page 149.

For far too long, this sort of financial knowledge has been gatekept by society's elite: if you didn't have parents who were financially literate and willing to openly speak about finances, you were out of luck because school wouldn't teach you this stuff. Now, all the financial knowledge you could ever need is right at your fingertips; it's just up to you to put forth the small amount of effort required to start learning about it. This cookbook is designed to make that as easy as possible for you by breaking the most common personal finance topics down to their simplest forms.

Let's start cooking!