Thomas Rood is convinced that the average American can live comfortably without ever having to worry about that weekly paycheck again. Rood, a software engineer by training, had worked steadily as a contractor for various companies but in 2008 he stopped receiving job offers. Rood found himself unemployed for the first time in 30 years. He applied his engineering skills to managing money and devised a financial plan that he refers to as the "Paycheck Independence Day Money Management System." The ultimate goal was to create a system that would be "economy proof," he says in the video above. Individuals can follow Rood's advice by reading his new book Paycheck Independence Day.
Rood says the system will allow people to become more financially secure. Everyday bills like car payments, cellphone charges and mortgages can be accounted for by investment income.
"My wife and I took four vacations, paid all of our bills on time and we did not hurt our financial position during the 10 months I was out of work," Rood says.
Rood's recommendations are not novel: spend less than what you take in; contribute to retirement accounts; put money aside each month for emergency expenses. He also suggests financing a car over leasing and investing in stocks that offer a 4% to 5% yield.
He maintains that his money management system can be used by people at all income levels.
"It's not about how much money you make," he argues. "It's about your money gap."
About one-third of U.S. households, or 38 million families, are currently living paycheck to paycheck, according to a recent Brookings study.
Follow The Daily Ticker on Facebook and Twitter (@DailyTicker)!
More from The Daily Ticker