Category Archives: Investing

Investing, Retirement

Stock CEO

Gallery Leave a comment
Free Boss Executive photo and picture

Merriam-Webster definition: Rockstar: a famous and successful singer or performer of rock music.

Greenbacks Magnet definition: Stockstar: a successful investor of stocks and index funds.

I knew there were only six ways to get rich rich: marry money, inherit money, build a successful business, exploit a talent, get lucky i.e. win the lottery, and spend less than you make and invest your savings wisely over a long period of time. That is basically it. The rest are details.

There are many roads and paths to wealth, but all of them come down to six once you weed out all the details. Wealth has to be pursued. It will not just fall into your lap. You have to work for it. The result of hard work is success. The success is measured in dollars. Even though money is just a tool and one barometer for measuring success it is the yardstick that lets you keep tabs on how far you can come in a job done well.

But as we all know building wealth is easier said than done.

It can be as elusive as getting those Taylor Swift Eras tour concert tickets! And like her, I have a blank space and I’ll plan to write millionaire after my name. Ha!

Blank space GIF - Find on GIFER
click!!!!!!] taylor swift gif | WiffleGif

After reading books like The Automatic Millionaire, The Simple Path to Wealth, Your Money or Your Life and a ton of celebrity autobiographies, it occurred to me that even on a modest income, you can rise out of the poverty ashes and rise like the phoenix to wealth.

Rise-like-a-phoenix GIFs - Get the best GIF on GIPHY

You just need a plan. If you tried your hand at the first five ways to wealth and failed, you could always be working on the sixth path of saving and investing your way there simultaneously.

If I could not be a ballplayer, rapper, or business owner, I could always invest my money and be the CEO of my stock portfolio. I could be a stock CEO. I could be a stockstar. No college diploma required.

There are 5.3 million millionaires and 770 billionaires living in the United States. Millionaires make up about 2% of the U.S. adult population. Therefore, if you make it to $1 million in investable assets, you are wealthier than 98% of the U.S. population.

Statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich. Having $1 million will put you in a very exclusive club. The double comma club.

Although, the top 1% can earn as much as $955,000. Those annual earnings can seem far out of reach in a country where less than 10% of all households earn more than $200,000, according to the U.S. Census Bureau.

Working toward $1 million is still a lofty and worthy goal. Forbes reported in 2022 that the bracket’s minimum net worth is much higher — a cool $11.1 million. That would mean to be in the top 10% would be a minimum net worth of $1.1 million. This is an achievable goal. See some of my investments below.

My index funds are shown in dollar and my individual stocks are shown in shares.

Stock Portfolio

Investments2012201820202022/23
VTSAX$20,000$100,000$158,000$220,000
Amazon102
Apple2050100
Google330

Over time, I have increased my exposure in individual stocks while also investing in my index funds. I also decided to open up four different retirement accounts: Traditional IRA (Rollover from a previous job), Roth IRA, 401k and Roth 401k. I was able to get both the Roth and regular 401k from my employer(s) over the years. The IRA’s are what just happened over time.

Each retirement vehicle offers different benefits. In order to have more flexibility with my money I have two of each IRA and 401k. See below for definitions and pros and cons or the Roth 401k and IRA and more her from Empower.

What is a Roth 401k?
A Roth 401k is an employer-sponsored retirement plan. But unlike a traditional 401k, contributions are made with after-tax dollars.

The Roth 401k was introduced in 2006 to give Americans a new type of retirement savings vehicle to complement the popular Roth IRA, which was introduced in 1997. Roth IRAs and Roth 401ks are similar, but there are some pretty significant differences you should understand when deciding which one is right for you.

Pros and cons of a Roth 401k
A big advantage that the Roth 401k has over the Roth IRA is the possibility of an employer matching your contributions up to a certain percentage. Employer matches are the closest thing there is to “free money,” so if you’re deciding between a Roth 401k vs. a Roth IRA — keep this in mind. It’s also important to note here, though, that if you receive an employer Roth 401k match, the matching funds could also go into a traditional 401k.

A con, however, is that a Roth 401k account can sometimes have fewer investment options than a Roth IRA.

Pros and cons of a Roth IRA
On the flip side, Roth IRAs generally offer more investment options than Roth 401ks. With a Roth IRA, you generally have a large number of investments to choose from, including stocks, bonds, cash alternatives, and alternative investments. With a Roth 401k, you are limited to the investment options offered by your employer’s 401k plan.

However, one con of a Roth IRA is the income limit associated with this type of account. If you earn too much money, you won’t be able to contribute to this option. Roth IRAs also aren’t sponsored by an employer, which means that there is no employee contribution match.

The most distinguishing characteristic of 401(k)s, whether Roth or traditional, is the high contribution limit, allowing employees to save up to $22,500 per year in 2023. For workers over age 50, the ceiling is $30,000.

Meanwhile, annual IRA contribution limits are $6,500, while workers over 50 years old may contribute up to $7,500 per year.

A Roth 401(k) has a required minimum distribution beginning at age 73, but starting in 2024, the minimum distribution requirement will be eliminated entirely for Roth 401(k)s thanks to the SECURE Act 2.0, which was passed at the end of 2022. Previously, Roth 401(k) account holders could roll their plans into a Roth IRA and avoid the requirement entirely.

That means if you are one of the lucky ones with access to the Roth 401k, then you can essentially put money away for retirement with after-tax dollars and pay nothing on the earnings when you begin your withdrawals and no tax period in your retirement.

I knew that if I could make sure to always focus on investing a portion of my income that I could build wealth no matter what.

My definition of a stockstar is listed above. However, I have a barometer to measure my goal as well.

In order to be a Stock CEO and be one of the big boys, I looked at the compensation packages of CEOs in America. And CEOs are paid! The average salary of a Fortune 500 CEO is $15.9 million per year. The highest-paid Fortune 500 CEO is Elon Musk. In 2021, Musk saw compensation worth around $23.5 billion. He achieved this by exercising Tesla stock options given in a 2018 multiyear moonshot grant.

CEO pay has skyrocketed 1,460% since 1978.

CEOs were paid 399 times as much as a typical worker in 2021; that is up from 366-to-1 in 2020 and a big increase from 20-to-1 in 1965 and 59-to-1 in 1989.

The average CEO salary in the United States is $821,100 as of May 25, 2023, but the range typically falls between $620,600 and $1,057,900.

However, some CEOs like Warren Buffet accept a salary of $100,000. Some have gone so far as to take a salary of $1. For example, in 2010–11 Oracle’s founder and CEO Larry Ellison made only $1 in salary, but earned over $77 million in other forms of compensation. In some cases, in lieu of a salary, the executives receive stock options. Top CEOs like Elon Musk & Mark Zuckerberg take 1 dollar salary. and know the history of a $1 salary & perks that comes with a one-dollar salary.

Why do CEOs make $1?

The CEOs can afford to earn $1 as they make money through other ways like stocks and equity. This also helps them in avoiding taxes.

Who are the CEOs in the $1 salary club?

Some of the CEOs who take a $1 dollar salary are: Elon Musk (Tesla), Mark Zuckerberg (Meta formerly Facebook), Meg Whitman (Quibi), Larry Page Sergey Brin (Google).

Once I did my homework, I decided that I was going to be a stock CEO.

I may not be running a billion-dollar Fortune 500 company, but could manage a million-dollar stock portfolio.

Every dollar I invest would be my employee.

I would unleash these little worker bees to do their thing and help me build wealth with the power of compounding. That would be my equity pay package and golden parachute when I left work behind.

For example, Presidents / CEOs at companies that have raised Over 30M typically get between 250K and 5M+ shares. However, smaller companies that have raised Under 1M are more generous with their stock compensation as it ranges between 2 and 40%+ for Presidents / CEOs.

Therefore, I could reckon that a CEO of a small firm could get around 100K and between 10K-200K shares. Let’s say a small cap company like Ethan Allen, which has a share rice of $26.40 and a market cap of $667M, then a CEO would have between $263K and $5.28M in stock.

This image has an empty alt attribute; its file name is image-1.png

Therefore, if I had bewteen1K and 10K in stocks or index funds such as GOOGL at $125 a share or the VTSAX at $101 a share, I would have $100K to 1.25M in investments. This is a CEO stock equity level right there. Having 10K in shares or $100K-1M in investments means you are a stockstar.

At 550K in investable assets, you are in the top 20% in net worth. At $1.1M, you are in the top 10% of net worth individuals. Think of it like this, if you can’t be a rap star, baller, or Rockstar, you can be a financial Rockstar. Just keep investing.

Like Rihanna, said:

To be what you wish
You gotta be what you are
Only thing I’m missin’
Is a black guitar index fund

hey baby I’m a Rockstar stockstar!

Financial Freedom, Investing

$700 monthly new car payment now costs as much as one semester of room and board at college

Gallery Leave a comment
Mustang, Gt, Red, Usa, Car, Auto

Sheer driving pleasure. – BMW slogan

The automakers at BMW has been using this slogan since 1973 and it is featured on all advertising for BMW automobiles and motorcycles.

Their tagline explicitly uses the word pleasure to describe driving. And if you want that pleasure its’s going to cost you, at a premium.

New cars are now averaging $700 per month.

The University of Maryland College Park (UMD) has an annual Room and Board that is about this cost of $700 per month for that new car: Room (Standard 2-person w/AC, includes Telecom fee) $8,860.

Department of Resident Life | University of Maryland logo
https://reslife.umd.edu/

For some perspective, keep in mind that $700 times 12 months = $8,400.

A mere $260 more will keep you housed and fed on a university campus at the UMD, which is considered a Public Ivy, for an entire year.

Penn State and other public and private colleges are even higher.

This image has an empty alt attribute; its file name is image.png

When looking at these new car prices, you may see why some Facebook engineers chose to live in their cars rather than pay $3,000 rent on top of that car payment.

Most folks just do not have $3,000 per month to shell out on just rent and car payments, let alone $3,700.

I spill all the tea on my new car story here.

Therefore, before you decide to start writing that check out for $700 every month, I want you to stop and consider this. Gas prices are topping $3 per gallon. Insurance keeps on moving on up like The Jefferson’s!

Expenses for the average joe in the middles class keeps on going higher and seems never ending.

Instead of paying $8,400 a year to floss in a new BMW, you can invest that money instead.

Let’s say the car payment will last you seven years. During that time if you put that money into stocks you could have a nice head start on your retirement savings. That sounds real good considering the average portfolio is worth about $30,000 for folks under 30.

Please also take note that I said to invest in stocks and not cryptocurrency. No Dogecoin, Bitcoin, Ethereum, Tether or Binance USD. After the FTX bankruptcy, no one can call these investments safe.

A great story on the FTX fallout was written on White Coat Investor and can be read at this link. Sam Bankman-Fried’s (SBF) net worth peaked at $26 billion and then sank to $100,000. This fallout was one of the worst destroyers of wealth in all of human history.

Nevertheless, I digress.

Going back to the new car payment being invested instead, over a seven-year period with a rate of return (ROI) of 10%, you could have $87,661 in your 401(k).

Please note that the ROI of 10% is doable as that is what the stock market has averaged. The historical average yearly return of the S&P 500 is 10.356% over the last 100 years, as of end of November 2022. This assumes dividends are reinvested.

If you decide not to invest another penny, over 26 years, you would have 1,044,764. Not buying a new car can literally make you a millionaire.

Maybe that is why Jim Cramer decided to keep investing in stocks even though he couldn’t afford rent and had to live in his car. He knew what it could mean for his future. By the age of 45, he had amassed a $1.5 million dollar nest egg in his brokerage accounts.

Remember those people on Pimp my ride from the MTV show. Wonder if they still even have those cars from back in 2008.

With all the money they spent on custom rims and tricked out this and that, if even one car was repossessed, it was all for naught! #*k cars!!

YARN | It's gone, man. Gone. | The Sandlot (1993) | Video gifs by quotes | b8fa0daa | 紗

Buy the product. Own the business. Get the stock. Let those dividends pay for your future car with cold hard cash.

Take a lesson straight out of South Park’s playbook.

South-Park-Gifs — for marissa-mars
South-Park-Gifs — for marissa-mars

However, instead of foreign stocks, I prefer to just stick with domestic, as most companies are international and provide you with global exposure.

You just have to decide which one you want more: a new car or financial freedom sooner rather than later.

Let Your Money Work For You Money Deal GIF - Let Your Money Work For You Money Deal Dealing - Discover & Share GIFs
Financial Independence, Investing, Real Estate

Reading the Stock Market Tea Leaves

Gallery Leave a comment
Tea, Cup, Pot, Tea Leaves, Pour, Pouring

“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” —John Quincy Adams

Stocks are down and housing prices are up. We have seen a shift in way consumers are spending. Mortgages are in. High-priced stocks are out.

Although the stock market has had an astounding run since the Pandemic began in March 2020, it is the acquisition of housing has most Americans chomping at the bit.

The US has minted more than half the world’s new millionaires over the last few years as investments in equities and tech stocks propelled assets higher. Real estate, is generally considered to be a more stable investment than volatile stocks or fluctuation cryptocurrencies and is a tangible asset. Real estate investing has also created 90% of the world’s millionaires.

However, not too far behind is stocks as nearly 70% of their wealth gains over the past year and a half have come from market gains. The wealthiest 1% know this. That is why they own 89% of all US stocks.

Those at the top of the economic food chain know the wealth comes from the owning of assets. The top 1% own a lot of stock my friends. And those at the bottom of the economic pyramid own so little. Meaning they are not keeping up with the rise of inflation and their purchasing power is steadily decreasing.

The dollar in their pocket is worth less now than it was yesterday. This means you are able to afford less at the grocery market and to purchase other consumer goods. For example, the cost of a pound of brisket was listed as $9 a pound. My sister sent me a screenshot of a 9.67 pound of brisket in her grocery store. The cost: $87.

I am sure somewhere my grandmother is looking down upon us and thinking that the family may very well have to turn vegetarian or severely cut back on meat consumption. I know grandma, I know.

According to Pew Research, the Consumer Price Index, the most widely followed inflation gauge, increased 7.0% from December 2020 to December 2021 – its highest rate in nearly 40 years. Families are spending $30 more per week at the local grocery store or farmer’s market. An increase in prices also mean less that is being invested and saved.

The price of lumber has increased by 288% making the cost of homes go up by an average of $36,000. The average new car price is now $47,000. As of 2021, the average monthly car payment in the US is $575 for new vehicles and $430 for used vehicles.

newcarprice

When I put these numbers in my compound interest calculator, it informs me that if I can invest either one of these amounts monthly for 30 years, I can become a millionaire. Therefore, I have come to the conclusion that new cars are wealth stealers and must be avoided at all costs. Rejecting new cars has made me richer. Things have gotten so far out of whack for the average household that people have begun to put groceries and gas on credit! This an absolute no-no. Building wealth requires cash.

Even if using OPM – other people’s money – you still have to bring some cash to the table to invest in index funds or put a down payment on a home. You must have capital to work with if you want to build wealth.

And companies are all too happy to part you from this wealth whether you have some or not. Case in point, I recently looked up the Kelley Blue Book value of my car. I just wanted to know what it was worth. Little did I know that this information gets sent over to local car dealerships who within mere seconds of me inquiring started sending me a barrage of solicitations for my business to put me into a new car.

I know very well that the average car payment is over $500.

These salespeople are looking to increase their monthly sales quota. I continue to get offers to get me into a new car by email, phone and text over the next week.

At this point, my Spider-sense is tingling. Why are folks still calling me after a week? I get it. Business is all about sales. They make fat commissions of us folks once we sign on the dotted line.

I prefer to keep my money where it is; in my pocket.

Just for kicks, I decide to look up the cost of food, housing and cars from the last 30 years.

Solved: Cost of Living The table at the right shows the average pr... | Chegg.com

After doing all of this research, I have come to the conclusion that the future is going to be expensive.

THE COST OF BUYING A HOUSE OVER 30 YEARS | Bike Friday

Therefore, it is unwise to use credit for present consumption with yet unearned future dollars.

We can prepare for the increases in living expenses by investing our dollars today. Don’t believe me. Just take a look at all the charts I provide in this article.

Numbers don’t lie.

The constant outflow of discretionary dollars on basic cost of living has consistently gone up. The cost of homes, education, cars, gas, and food are going through the roof!

I truly feel that incomes have not kept pace with the cost of homes and education. Equity may have increased, but so has the cost of homes.

In 1976, the cost of Harvard University tuition was $3,740. In 2019, it was $54,002. How can they justify it? It is almost like that owl in the how do we get to the center of a Tootsie Pop commercial: the world may never know.

r/Damnthatsinteresting - 1976 cost of living.

This is a mystery that I do not even think Scooby-Doo and the gang could solve no matter how many Scooby snacks Velma has in her back pocket.

Scoobydoo Whereareyou GIF - Scoobydoo Whereareyou Thegang - Discover & Share GIFs

I do not say these things to scare you. I am merely your jedi money guide on this journey. I want you to invest.

Own your primary residence and buy those index funds.

As the stock market goes down, buy the dip. Buy low. Get those high returns to sell high.

I did this back in 2013 when I bought shares of Apple (AAPL) for $258. The stock went on to split twice. Once for a 4-for-1 basis on August 28, 2020, a 7-for-1 basis on June 9, 2014. Prior to each split the stock was trading well over $500. It was $656 in 2014 and $656 in 2020.

It went from a billion-dollar company to a $2 trillion-dollar one. At the time of this writing, it is hovering around a $3 trillion-dollar market cap. Off a small one-time investment, I made tens of thousands of dollars.

And that small home that was purchased years ago. It has increased in value over $100k. The equity has gone up by over $100,000 and counting. That is why we invest my friends. So we can keep earning money in our sleep. Our money can work without taking vacations or sick leave. We can’t.

So here is your homework for this evening. I want you to find a home you would like to buy and a stock you would like to purchase. Figure out how much of a down payment or initial but in you will need. Divide this amount by how long you think it will take you to save up these funds.

For example, the VTSAX has a minimum initial investment of $3k. You decide you want to but this investment in a year. Therefore, you divide $3,000/12 months = $250. That is how much you must save every month to but this index fund. Doing the math will allow you to slowly build your dreams.

Let us not forget the wisdom of one of the greatest investors of all time: Warren Buffet. He reminded us that American living standards advanced seven fold in the 1900s, while the Dow rose from 66 to over 11,000. The Dow now stands at 34,934.27 today in 2022. “The model has worked well for America. If you look at all these disparate businesses, such as if you looked at the Dow Jones as a single entity… (though it rotated)… but going from 66 to 11,000 is doing something right. Owning a group of good business isn’t a bad plan.” Yes, owning is good for your pocketbook in the long run. Now I want you to go out and get some assets.

But before you do here is some more Buffet wisdom, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” And lastly, “The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch.” Patience is key. It will take you to the promised land of financial independence.

When I read the tea leaves on the stock market, I see it rising to 100,000.

Why you ask? A little research.

The Dow Jones industrial average index (DJIA) opened in 2018 just shy of 25,000 on Jan. 2, and a little over two weeks later it already had topped 26,000. The DJIA would need to rise by 20% to hit 30,000. We did that. As reported by Kigplinger, the DJIA has enjoyed an annualized increase of 7.33% since 1950, based on Yahoo Finance historical data. Therefore, the DJIA will double every 10 years (9.82 years, to be exact). If we continue at our 1950-2017 pace, the DJIA index will double, or hit 50,000, in 10 years.

If a $100,000 in the market at a 10% return will net you $1,000,000 in 30 years, then you can become a multi-millionaire with help of the stock market. And that excludes housing equity. So get out there and start putting your dollars to work.

Millionaires know that you get rich by saving $20 bucks at a time.

Financial Freedom, Financial Independence, Investing, Retirement, Wealth

Flip of a Coin: How I Decided to Own A $250K 401(K) Vs A $250k Mortgage

Gallery 4 Comments
House, Garage, Driveway, Architecture

This is not a post for the faint of heart. So some of you out there may need to do what you did when the nurse swabbed your arm with alcohol right before she gave you the Covid-19 shot, turn your head away and close your eyes!

It was years ago, but I had to make a call. I had to make an executive decision. Would I like to buy a $250,000 home or become a 401(k) Quarter of a Millionaire.

It was almost like flipping a coin. Do you choose heads or tails?

Heads and be a $250k homeowner.

By the way, home values over 30 years have risen about 4% on average but stocks have been able to return 10% over that same time period.

Now back to the coin toss.

Tails and have $250k, that’s right a quarter of a million bucks, in your 401(k).

I chose not to go with the path of least resistance, which is the American dream of being a homeowner, and to put my money in stocks. Best decision I ever made.

After watching the housing crash or 2008-09, it dawned on me to put some money into businesses that pay you dividends instead of a mortgage that you have to pay. Missing even a single payment on a mortgage and never being able to catch up could put you on the short list to foreclosure. Nobody wants that.

Fast forward 10 years later and Covid-19 is not only derailing retirement savings but also increasing the likelihood that many renters will be evicted.

According to CNBC, 20% of renters in America are behind on rent and owe an astounding $57.3 billion. The average amount owed by each renter is $6,000 and they are a minimum of three months behind.

This image has an empty alt attribute; its file name is image.png

Once you get that far in arrears, rental companies and landlords are quick to start the eviction process.

Especially, mom and pop landlords that cannot afford the losses. They depend on this income to pay their own bills and fund their retirements. I knew after watching millions of Americans lose their homes to foreclosure in 2009 that I did not want to be in that predicament.

Therefore, I made the conscious decision to keep fixed low housing costs and to put my money into stocks. I put my money into index funds because they consist of thousands of stocks. All those businesses are not going to go bankrupt at the same time so it gives your money some security as opposed to putting all your money in one stock and then you lose everything.

The S&P 500 and other indexes will remove any stock that is not meeting its standards. Therefore, you do not have to do this on your own with stock picking. This also insures that your money stays invested in firms with a good balance sheet as the ones that are not pulling their weight are dropped from the index. Thus, you do not lose all your money as you would being invested with only one stock or placing your bets in speculative investments like cryptocurrency and bitcoin.

I actually know someone who says they invested all their money in bitcoin and lost all of their money! What were they thinking? If you are going to invest in bitcoin, then it with money, you can afford to lose and only invest more than 5% of your savings. That is all the risk that is adequate with bitcoin, in my opinion.

Not enough to money to become a bitcoin millionaire, but also not enough to lose your life savings, your home and all your possession in case you bet the farm on a losing investment.

Let us learn from the recently deceased creator of McAfee software founder who invested $25 million in Lehman Brothers bonds and lost every penny after they collapsed and went bankrupt in 2008.

You can read more about the demise of Lehman Brothers in my post called Don’t Trust the Commission-Based Advisor in Wall St Cubicle 23

I decided to just put my money into the VTSAX because it includes the total stock market. Want some Tesla stock? Drop some money in the VTSAX. It will only cost you $107.

This image has an empty alt attribute; its file name is image-1.png

Instead of buying stocks one by one, you can just get them all for one price. That way you do not have to pay $685 for one share of Tesla.

This image has an empty alt attribute; its file name is image-2.png

Don’t even get me started on the S&P 500. One share in this stock will set you back $4,267.

This image has an empty alt attribute; its file name is image-3.png

If you have that kind of money just burning a hole in your pocket, then be my guest and buy some. However, if you want a piece of the whole market then just start buying the VTSAX.

I sleep like a baby knowing that my money just can’t fall to zero because the every stock in the fund will not blow up overnight. Even if businesses tank, the fund will correct this by replacing them with a better stock, and I still keep making my money.

I think of it like this, a home you have to feed but your 401(k) feeds you.

As a homeowner, you cannot realize gains until you sell. Therefore, you must feed the beast until you do!

take my money gif - Flywheel Coworking

Considering that most American homeowners only stay in their homes for an average of 9 years, all the money spent on maintenance and repairs is burnt if you are foreclosed on. However, according to Fidelity, many 401(k) millionaires keep their accounts for open for 20-30 years to amass that type of fortune. That means people are holding on to stocks longer than homes!

Therefore, on my path to millionaire status, I decided to go for stocks over real estate. Don’t get me wrong, you can make a fortune in real estate, but you have to maintain the property until you sell. I can make my fortune in index funds simply by breathing and automatic investing.

Seeing and listening to the stress of homeownership versus the ease of index investing I think I made a good choice going with stocks. My low housing costs allow me to invest more. This also allows you to pay off debt faster and travel more. However, it is always your call. This is just my 2 cents.

I mean who wouldn’t want to be a Quarter of a Millionaire. I’ll take that any day of the week over being broke!

And just so you know, if you let that money sit and ride it out in the market, you would have $1,000,000 in 14.5 years with a 10% return. That is without adding another cent.

How many homes that were bought for $250k do you think will be worth one million in the same amount of time? None.

I have no problem at all with being a 401(k) millionaire. None whatsoever!

Investing, Taxes and Insurance, Wealth

Taco Tuesdays and Capital Gains Wednesdays

Gallery Leave a comment
Taco, Time, Again, Taco, Taco, Taco

“I am going to keep having fun every day I have left, because there is no other way of life. You just have to decide whether you are a Tigger or an Eeyore.” – Randy Pausch

One thing most people know about me is that I like to have fun. I am constantly telling jokes and laughing. Life is too short feel bad. Therefore, I choose to be happy.

I make sure to always stop and smell the roses and live life to the fullest with the time I have on earth.

I also like the silly things that are all around us like fried Twinkies, s’mores, or drinking Pina coladas and getting caught in the rain. I mean come on what’s life without a little whimsy.

I also like things that have themes.

There are two reasons why I like Taco Tuesdays: 1. the free tacos and; 2. how festive the day is.

Tacos, Mexican, Eat, Delicious, Lunch

What is Taco Tuesday? Taco Tuesday is a custom in many US cities of going out to eat tacos or in some cases select Mexican dishes typically served in a tortilla on Tuesday nights. Restaurants will often offer special prices, for example, “$1 fish tacos every Tuesday night”. Places like California Tortilla even have specials for BOGO (buy one, get one).

Mango Catfish Taco, Taco, Cooking

You just can’t beat free food and saving money. And whenever I save money, I invest money.

I know lots of folks like to build wealth in real estate, but the problem with that is that you have to sell the home in order to get access to the gains. Even though stocks are the same way, I do like the fact that they involve no maintenance, repairs, or cleaning.

Indexing is also the best form of stocks investing, as they are self-cleansing. Meaning that if company goes out of business the stock is removed from the index and automatically replaced with a company with a stronger balance sheet that is not bankrupt.

You could lose your home to foreclosure, but not index funds. They go on to make money long after other companies have perished and even if you lose or have a decrease in your income. Stocks keep working for you 365/24/7.

Independence-Budgeting Make It Rain GIF - PDiddy Money Dollars - Discover & Share GIFs | Make it rain money, Make it rain gif, Raining money

Capital gains make me happy.

They don’t stop coming in unless you sell your index fund. So as long as you are invested, the money keeps on rolling in.

Thinking back on the quote at the start of this blog post, I have always felt like I am like Tigger from Winnie the Pooh. Even Tigger likes Tuesdays! He is known for saying have a Tiggerific Tuesday and Happy Tuesday rise and shine, put a smile on your face and love in your heart.

Eeyore, on the other hand, will mention things like he was so upset that he forgot to be happy. Let’s not do that.

I always take some time out to be happy and grateful. I believe in helping my fellow man. That’s one of the reasons I started this blog; to help people improve the quality of their fiscal lives. For example, let’s discuss what capital gains are.

Capital gains are the profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income. How much of these gains are taxed depends on how long you held the asset before selling.

In 2020 the capital gains tax rates are either 0%, 15% or 20% for most assets held for more than a year. Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%). Therefore, you have incentive to invest for the long-term.

Short-Term And Long-Term Capital Gains Tax Rates By Income

The government charges less for capital gains than they do on ordinary income. That is why you must invest because inflation erodes the dollar over time. What cost $1.00 10 years ago, now cost $1.30 today.

If you hold on to a stock for over a year, then you can possibly pay just 15% in taxes on the gain after you sell. In contrast, income taxes are much higher on wages.

2021 Capital Gains Tax Rates: How They Apply, Tips to Minimize What You Owe

This lets you know that America rewards capital not labor.

I even heard rapper and entrepreneur Master P talking about this on a podcast. He said that he realized “product outweighs talent.” You got that right.

A business can keep making money long after a basketball player retires and stops earning those million-dollar paychecks. A shoe deal with Nike can pay you more than the physical hard work you put in on the court over years!

My way of building up my portfolio is to invest. I may not have a shoe deal, but I can own stock in Nike.

Therefore, what I do occasionally is do a BOGO somewhere like a Taco Tuesday and then the next day buy some stock. I call that my Capital Gains Wednesdays.

I try to keep at least $10,000 in my brokerage account just so that at any moment or Wednesday, I can buy stock in any company I want within a certain cap. I may give myself a $2,500 cap for the day or even $25. Doesn’t really matter. The point is to keep me motivated toward my goals and to get in the habit of investing.

I can never say I have no money to invest, if I keep money in my brokerage account at all times.

You should put money in there when times are flush. That way when they aren’t, you can still be purchasing stock no matter what.

This is how I stay happy. I plan and create my own happiness myself.

Now you all go out there and have a Tiggerific Tuesday!!!

Investing, Saving

Stimmy Alert: $1400 Stimulus coming to a bank account near you

Gallery Leave a comment
Flying, Dollars, Currency, Business

As of this writing, over 100 million stimulus checks have gone out.

Predator Self Destruct GIFs | Tenor

According to CNN, 90% of American households will be eligible for stimulus checks. Individuals earning below $75,000 annually can receive the full amount. You can also receive an additional $1400 per dependent.

This money is set to start hitting bank accounts across American on March 17. That money could go toward living expenses such as rent, food, and utilities.

My top five ways to spend your stimmy could help middle-class families start looking ahead to a time when 100 million American households finally are vaccinated.

First, if you can save it, then do it.

Save, Piggy Bank, Money, Economical

Funding an emergency fund can be a lifeline in times of hardship, as many well know during these challenging times. A flat tire or broken water heater can be an unexpected expense that could put someone in credit card debt.

A friend of mine recently joked that the next unexpected bill or expense will probably be estimated at $1399, right after the stimulus checks go out!

If you are one of the eligible Americans due to get a stimulus, then be sure you have a rainy day fund set up. This stimulus check could be your starting seed money toward a 3-month emergency fund.

Money, Grow, Interest, Save, Invest

Second, pay for the roof over your head.

Paying for any back rent or missed mortgage payments is a must. You need housing. Working out a payment arrangement with a landlord or lender is in your best interest.

This stimmy could help keep you housed and your family safe.

Third, put food on the table.

Basket, Vegetables, Food, Fresh, Organic

Food pantries such as Feeding America are seeing 200% increases in food assistance requests. That is happening across the country. Some folks are lining up at the crack of dawn and standing in lines for hours to get free meals.

This would be a good time to put this money to use stocking up your cupboards with non-perishables.

Food insecurity is severely affecting the elderly and the 10 million children in American living in poverty.

Stockpiling canned goods, cereal, grains, and nut butters is a good way to spend this money.

Fourth, pay up the utilities.

Power Lines, Cables, Tower

Seeing news media discuss $5,000 electricity and heating bills in Texas due to cold storm was enough to make me want to set up a savings account just for utility bills.

The New York Times reported how one man owes a whopping $16,752 energy bill! Although this is not common, utility bills are a necessary expense that households must manage.

Many Texans may get some of these skyrocketing energy bills forgiven or decreased as a winter storm ravaged last month that was completely out of their control. Due to not being on a fixed electricity pricing plan. However, until that happens, bills got to be paid.

Therefore, it is a good idea to have a savings bucket just for keeping the lights on, literally!

If you get these bills reduced, then you can simply pay yourself back any refund you may receive. Those funds will go straight back into the savings pot and are not to be spent.

Trust me, you may need them again someday.

It seems like every 10 years, we are in some sort of major crisis. Plan accordingly.

See my post Suze Orman’s FIRE protection plan during COVID-19

Lastly, start a Roth IRA.

Piggybank, Dollar, Savings, Banknote

You heard me. That account you have been waiting to open for the last few years, do it. If you have all the above covered, then you can afford it.

Honestly, you can’t afford not to.

The easiest way to do this is by opening a brokerage account with a company that will allow you to start with something like $100 monthly automatic investments.

Start building wealth for your future. I started a Roth with $50 a month.

Tens of thousands of dollars later, I do not regret that decision one bit.

So there you have it. My top five stimmy alert spending tips. It will only cost you $1399.99. Ha! Just kidding.

I know some of you may think this is mission impossible, but I am here to tell you that anything is possible.

Because if this was truly a mission impossible, then this blog post will self-destruct in five seconds so memorize the above or take a picture on your smartphone!

Amazon.com: Inspector Gadget Wowzers Self Destruct Message Vintage Funny Humor Sticker Decal Vinyl Bumper Sticker Decal Waterproof 5": Automotive
Inspector Gadget trademark of DHX Media.

So until the next time we meet again, stay safe!