Forgotten 401ks, Frugal Hobbies & The Rule Of 100 🏆

Happy Tuesday, money tribe!

I recently came across the “Rule of 100” recently… Have you heard of it?

The rule states that if you spend 100 hours per year studying any discipline (which is just 18 minutes per day) you will become better than 95% of the world in that discipline.

Hmmm…. 🤔 Think you can carve out 18 minutes per day to master a new study, trade, or skill?

Something to think about this week. Greatness starts small. And consistency creates champions.

OK, onto the money stuff 👇👇👇

TO DO

Turn Up Your Thermostat 1°

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I know, I know… It’s getting unbearably hot and you want your house to be an icy oasis this Summer.

But, did you know that the cost of adjusting your thermostat just 1 degree equals about 3% of your AC bill? If you set your temperature 2 degrees higher than you normally would, that’s a 6% savings!

Turn on your ceiling fan and use that AC a little less. (And here are a few other ways to save money on electricity while you’re at it!)

LIFESTYLE

Cheap (and FUN!) Hobbies to Try 🏸

The average person watches 141 hours of TV a month! Imagine what else you could spend your time doing in life…

Yes, stepping outside sometimes means spending money. But not all activities have to be expensive or cost much of anything at all.

Here are a few cheap and free hobbies you may want to give a whirl this summer…

• Community theater 🎭: Whether it’s acting on the stage or working behind the scenes, there are so many different jobs to do at theaters, mostly run by volunteers. Local theaters are also great places to find out about other fun live events going on in town.

• Join an intramural sports team ⚽️: Kickball, dodgeball, ultimate frisbee… you google it, there’s probably a local group that plays it! Or use apps like Meetup or Reclub to check out the social groups in your city that are having fun while staying fit.

• Learn a new language 🤟: Try free sign language classes at ASL University! Or the popular Duolingo App is great for learning new languages in just a few minutes per day.

• Budget baking & cooking 🍞: You’ll have to pay for ingredients, but cooking at home is always cheaper than eating out! BudgetBytes & StruggleMeals are great sites to peruse as you get started.

• Smartphone photography 📲: You don’t need expensive cameras or lenses to have a photography hobby. Learn some basic tips and you can upload your pics to free image sites that can help you build a portfolio that others can use and enjoy.

• Coding, AI, or career courses 🤖: Google has a free Elements of AI course right now (30 hours). And here is their entire range of free learning courses for coding, career advancement, digital marketing, etc. (Also here’s a free 6-week Managing Happiness course from Harvard we’ve been wanting to check out – if you give it a go let us know how it is!)

Discovering new hobbies can have significant impacts on your financial health and overall well-being. They’re also super important as you approach the end of your working career!

Related:

• 🪙 HTM Blog: 12 Cheap Hobbies to Try This Summer

• 🎧 HTM Ep 111: Why you need a new hobby!

TOGETHER WITH YNAB**

Rule #1: Give Every Dollar a Job

With YNAB, every single dollar that enters your life works for YOU.

Some dollars get assigned the job of paying rent. Some are sent to savings or investments where their job is to recruit new dollars. Other dollars have a job of just being “ready” in case of emergencies.

New budgeters, on average, save $600 in their first two months with YNAB! (And more than $6,000 after one year!).

If you struggle to manage and control your money, check out YNAB. At least try the 34 day free trial — it may just change your life. 💪

RETIREMENT

$1.65 Trillion in Forgotten 401k Accounts 🤯

Today’s chart comes from a recent Capitalize study which shows the growing number of forgotten 401k accounts, and the massive fortune inside of them… 👇👇👇

“Forgetting” about your investments isn’t always bad since the longer you leave your money untouched, the more it compounds and grows.

But here’s the bigger issue… 401k plans are notorious for hidden fees and limited investment choices, which can cost you hundreds of thousands of dollars before retirement.

Notes from the report:

• Average forgotten 401k balance: $56,616
• Median 401k fee: 0.79%!!! (that adds up to over $100k paid in fees if you left a $56k account for 30 years with 8% growth)
• Many forgotten accounts under $5k are transferred to “safe harbor IRAs” (basically they are invested in money-market or cash-like equivalents with low or no returns)
• The problem is getting worse as more companies auto-enroll new hires into a 401k, but folks are switching jobs faster and aren’t coached on best practices when they leave.

What YOU can do:

• Track all your accounts and investments. Keep a spreadsheet or use a NW tracking app to make sure you never forget about accounts.

• When you leave an employer, roll over your 401k (either into your new employer’s plan, or over to an IRA account).
• Always watch your fees! IRAs give you the best options typically. You can choose free accounts with Fidelity or Vanguard and pay extremely low expense ratios for index funds.

All in all, we love a tax-advantaged 401k and strongly encourage folks to utilize them while working. But after you leave your employer, it’s worth assessing your rollover options and moving to a more efficient retirement vehicle.

Related stuff:

• 👨‍💻 HTM Blog: Avoiding all the fees in your life

• ⚒️ Capitalize: Free 401k Rollover Help 

• 🤷‍♂️ Still invest?: Should you invest in a 401k if it has high fees?

ICYMI

News and Fun Finds…

Relationships > Money 👯 
Schwab surveyed 1,000 people on what it means to feel wealthy… and most folks (62%) believe that enjoying healthy relationships with loved ones better describes wealth than having money.

Welcome to Miami 🌴
A super interesting study via SmartAsset details the cost of living savings one can make by moving to Miami from other expensive cities like SF or NYC. Tax savings play a huge part for high income earners. (Also, Kiplinger’s 25 cheapest US cities to live in if you’re interested in moving, but not to Miami!)

Is Crypto Dead? 💸
A compelling read from The Atlantic… “Dozens of firms had failed, millions of individual investors had plunged into the red or cashed out, and billions of dollars of institutional investment had moved on. Beset by long-standing problems of its own invention, the industry now faces not just a regulatory crisis but an existential one too: Is crypto down, or is it dead?”

Tax Holidays 💻
Depending on your home state, you could have an upcoming sales tax holiday (most happen around July or Aug for back to school shopping). Could be a good time to plan ahead for clothing and electronics spending.

Class Action 🔍
If you used Google Search and clicked on a link between Oct 2006 and Sep 2013, you can claim part in their class action law suit and nab a share of the $23M settlement. Here is how to file a claim (takes 2 mins) and the estimated payout is about $7.70 😉

FRIENDS OF HTM

Naseema McElroy @ Financially Intentional

By day, Naseema is a Labor & Delivery RN. But outside of the hospital she’s a personal finance enthusiast who helps thousands of folks learn to become financially independent.

Naseema went from almost $1M in debt —> nearly $1M positive net worth in 7 years! Check out her website, follow on Insta, or listen back to Ep 493 to hear her money management secrets.

That’s it for now! Have a great day ahead. And don’t forget to spend 18 minutes today doing something your future self will thank you for! 💪

Best friends out 🍻