About the The Investing and Saving Calculators section

Unlike other websites that offer free online personal finance investing calculators, I have no vested interest in pretending or claiming to know the best ways to invest money.

This means that I am completely free to create online investment calculators that hold your best interests at heart, not the best interests of brokerage firms who are trying to earn commissions and account management fees from your investments.

The Real Time Value of Money

As I've said elsewhere on this website, money is simply a receipt for the time you invest serving the wants and needs of others. These receipts can then be exchanged for other people's time (the time others invest in serving your wants needs). In other words, money is simply Time -- which means that your time is really the only value you have in your life that you can exchange for happiness.

Of course, much of your time (money) will need to be exchanged for life's basic necessities, such as food, clothing, health care, and shelter. What's left after the essentials are covered is what's known as discretionary income, which is the only portion of your income that should ever be put at risk.

If you do a good job of budgeting your income to the point of creating discretionary income, you then have a vast array of choices when it comes to exchanging that income (time receipts) for something you consider to be of equal or greater value. Most of these choices can be boiled down to the following four basic types of exchanges.

  1. You can exchange the discretionary income for the good feeling that comes from making a charitable contribution to a worthy cause.
  2. You can exchange the discretionary income for a non-essential product or service for which the value diminishes with time and use.
  3. You can exchange the discretionary income for taking time off from work (purchasing essentials that you won't have to earn additional income to pay for).
  4. You can exchange the discretionary income for something for which the value is expected to grow -- for the purpose of increasing your discretionary income without having to increase your work-hours.

Choice #4 is what is commonly referred to as an "investment."

What is an Investment?

In it's simplest form, an investment is an accepted form of gambling. When you invest money (time receipts), you are accepting an element of risk (odds of losing all or part of the funds you invest) in exchange for the chance at getting back more than what you put in.

Generally speaking, the more risk you accept, the higher the potential return on investment (ROI). Conversely, the lower the risk you accept, the lower the potential return on investment (ROI). Of course, the more discretionary income you have, the higher the risk you can afford to accept, and visa versa. This is yet another reason why the rich get richer while the poor and middle class get poorer -- because only the rich can afford to accept the high risk that comes with high yield investment opportunities.

Common Ways to Invest Your Money (Time)

The most common types of investments include savings accounts, certificates of deposit, money market funds, mutual funds, real estate, bonds, stocks, and commodities (I will be writing about each on their respected personal finance investing calculators pages). If you were to ask an investment guru which of these types of investments you should choose, you would likely hear something like, "that depends on your financial goals, your current age, your current financial situation, and on your risk tolerance."

Well, considering the average family has no savings and is struggling just to meet their current living expenses and debt payments, I would say that the average person's risk tolerance is (or should be) near zero -- regardless of their age or their financial goals. And since risk-bearing investments should only be invested in with discretionary income, the average person does not have funds to "invest" in the first place. So does this mean the average person should give up on investing? No. It simply means that the average person needs to make other types of investments -- for the purpose of creating discretionary income and risk tolerance.

So Where Should You Invest Your Money (Time)?

If you are among those who have little or no discretionary income (no money to invest or investing with little money), the first order of business is to invest your time (money) into activities and actions that will create discretionary income. Here are some suggested methods for creating discretionary income:

1. Invest cash instead of borrowing time from your future.
You must adopt the attitude that if you can't afford to pay cash for something, you can't afford it. Exchanging future income for interest charges is a surefire way to lower or eliminate your discretionary income. Borrowing from tomorrow to pay for today is the opposite of investing (you become someone else's investment).

2. Invest time finding ways to lower your living expenses.
For most people, it's much easier to create discretionary income by reducing their spending and downsizing their lifestyles than it is to try to increase their take-home pay. Increasing your income usually comes with more stress, higher expectations, and a higher income tax bracket. In other words, the harder you work, the less each additional dollar you earn will contribute to your overall level of happiness and well-being (the law of diminishing returns).

3. Invest in yourself.
If you want to increase your income, then you need to improve the product (your talents, skills, and abilities) that you are selling to others. This means you need to look for inexpensive ways to improve your talents, skills, and abilities. If you dread the thought of using your discretionary time to study your profession, then you are probably in the wrong profession and should begin to study a profession that you won't need to be prodded into studying.

4. Invest in your debt.
If you have debt, then you really have no discretionary income -- because your income is spoken for and, as seen in 2009, its full repayment can be demanded at any time. Therefore, if you want a low-risk, tax-free, guaranteed return on investment, and you can only invest small amounts of money, use the rollover method to pay off all of your debts in the shortest time possible. If you are looking for high yield safe investments, paying off high-interest debt ahead of schedule is the only safe, high yield investment that I'm aware of.

"Outside-the-Box" Ways to Invest Your Money (Time)

Once you have managed to create discretionary income, the next step is to think outside of the box when it comes to choosing where you will invest your time (money). By "think outside the box," I mean to stop believing that anyone wearing a suit and tie is qualified to tell you the best ways to invest money. Instead, seriously question everything you're told no matter who it comes from -- myself included -- and realize that if no one is advising you to choose a non-traditional type of investment (invest in your debt), it probably only means that nobody stands to gain from you choosing to invest in it. At the very least, visit the personal finance investing calculators before investing just to get a different perspective from the one your brokerage firm is offering you.

As for me personally, I prefer investments that allow me to have a direct influence on the return on investment (especially after 2001, 2009, and 2020). This explains why I invest the bulk of my discretionary income into my business ventures. This does not guarantee a high return on investment, but at least I know that if I lose money, it was my own shortcomings that caused me to lose my capital, and not because some cowardly nut jobs decided to take innocent human lives in the name of their God, not because some wall street morons decide to destroy the lives of innocent working families for the mere sake of their insatiable greed, or not because some foreign country unleashes a virus on the rest of the world.

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