As I write this, the Biden Administration has extended the payment pause on borrowers enrolled in the SAVE plan for another 6 months.
Might I offer a suggestion: take that money and put it into a rainy day fund or invest it in an index fund (VTSAX) or individual stocks (The Trillion-Dollar Club such as MSFT or META).
Now that I have offered my savings and investment advice, let’s talk about how I got to my first $400K.
They say the first $100K is the hardest. I remember from years ago a time when Drake tweeted that. Don’t remember? That’s cool. I have a copy of his tweet for you to see below.
Well, my money target was higher since I figured I’d go big or go home.
I made my target $400K.
I totally borrowed that title from Her First 100K blog, but I am sure Tori Dunlap will not mind if I borrow it if it helps motivate people to become financial independent.
Although I have a six-figure compensation package now (salary + benefits), it did not start off that way.
You will not believe some of the jobs I have had on my path to becoming a self-made woman millionaire. Let me share 4 of them with you here.
1. Waitress ($2.65 per hour + tips) – Back when I was still in high school I did a summer job as a teenage waitress at Shoney’s. It wasn’t glamourous, but the tips were pretty good. Some days I could clear $50-$100 bucks a night! That’s some good money to a teenager. And the menu there was huge. There was no way I could remember it all. I mean who do they think I am. Sheldon Cooper. I do not have a photographic memory. However, lucky for me, this restaurant had a buffet so it basically sold itself. I was mostly there to bring drinks and the check. It was physically demanding though as it required you to stand virtually all-day. I did get 50% off any food I wanted and the cooks in the back were great. This is my foundation on what it takes to earn a $1. Like Britney Spears says, “work b*tch!”
2. File Clerk/Loan Analyst ($28,000/year) – I was still working my way through college when I got this job. I answered an ad and went in for an on-the-spot job interview and got the job! Essentially, I helped maintain loan documents and helped manage bank customer accounts at a credit union. This job would set me up for what was to come, which was my foray into lending and finance.
3. Night Auditor ($20 an hour + tips) – This was another job I got from answering an ad on Indeed. They were offering $18 but I negotiated $20. Never underestimate the power of negotiation ladies! And the funny thing is when I actually started doing the job, I did so much work that I really should have been making $25 at least! You have answer phones, check-in guests, keep the hotel lobby clean, manage guest complaints and do point-of-sale transactions for the hotel market by the front desk. Then there was the lounge at the hotel that was a mini nightclub that was open until 2am! We did have a few celebrities come through, but I mostly just stayed at the front desk. And did I mention I worked overnight from 11pm – 7am! However, it was fun overall because I had a great coworker. I even had a guest tip me $100 for calling him a cab. Sweet!
4. Associate Director (over $80,000k+/ year) – After college, I applied for another job in lending. Basically, counseling families on how to navigate the financial minefield that is financial aid. I also completed two Master’s degrees and started this blog on the side while doing my job. This blog is my side hustle and it did start to generate some income eventually. However, when asked by Business Insider for the article they published on me, I declined to go into details.
All these jobs helped put me on the path to where I am today, which is female millionaire.
Every time I earned more, I invested more.
I started with a fistful of dollars and turned a small $5,000 investment in Apple into an investment portfolio over $400,000!
Testing…1, 2, 3. Can you hear me out there? You listening? Good. Ah yes, I remember it like it was yesterday.
One of the FIRE (Financial Independence, Retire Early) Bloggers that I had been reading was featured in Forbes. I remember thinking how did he do that. Well, when you go from $0 to $400,000 in seven years that does tend to get people’s attention.
The thing that really stood out to me was that he actually got to $400,000. I just knew if he could get there, then he could get to $1 million.
That blog was called Budgets are Sexy.
I had the pleasure to not only meet J. Money, or J$ for short, in-person just a few years after that article, but also got to interview him on this blog. He’s one of the most coolest and down-to-earth finance dudes you will ever meet.
Over the years, he has given his advice on how he basically went from nothing to something.
He regularly talks about his net worth on his blog and does not shy away from telling you about the highs and the lows of building wealth.
His transparency is why people gravitate towards him. He tells it like it is. He walks it like he talks it.
One of the best pieces of advice he gave me on the road to $1 million was to max out your retirement accounts. All of them. And if you can’t do that, then save as much as you can.
What J$ didn’t know is that his blog lit a spark for me.
If he started with nothing and could go to almost half a million dollars, then I could too.
We like to call J. Money the Godfather of FIRE blogging because he started back when it was just a small niche in 2008. There is even a joke on his site where he is called the Miley Cyrus of Finance! Ha!
All jokes aside, I was paying attention. Budgets are Sexy is the personal finance blog in which it is Greenback’s Magnet yardstick for building wealth. Like Visa, his blog is everywhere my blog wants to be.
Therefore, after reading that Forbes article, I decided at that moment that I wanted to get to $400,000 too!
So I put my head down and went to work. At one point, I was investing 25 percent of my income. I lived off rice and kale. No avocado toast for me. I wanted that sweet taste of freedom.
Every spare dime was put to work in my brokerage account.
This blog is also how I keep myself accountable to reach my financial goals. It didn’t matter if I had holes in my shoes, I kept walking in then until they literally fell apart. Nothing went to waste. I was reading 10 to 20 books on personal finance a year.
I paid off my car $450 payment in 2009. Then my personal loan that was costing me $333 a month. All the hard work and sacrifices paid off when I saw that my balance had grown from $50,000 to $375,000. Then within a few months, I was at over $402,000!
It also got picked up by some other sites like Yahoo and AOL.com.
I am still increasing my annual contributions every year. I won’t stop until I reach my target: $1 million dollars!
The one crazy thing I noticed in the comments section is that there were many folks saying that $1 million will not be enough to retire.
I couldn’t believe what I was reading. I simply was sharing how I set a goal and was working on reaching it. Man, that really knocked me over. Nevertheless, I recovered quickly. You have to have thick skin once you decide to put your name or work out there.
Unlike George McFly, I can handle rejection. The point of the story was to help and inspire not to hurt and discourage.
I felt like 50 Cent on that interview he recently did on the Million Dollaz Worth of Game podcast where he says his first record deal with Shady Aftermath netted him $1 million and Dame Dash says that ain’t no money. Huh? When you go from nothing to $1 million, you bet your a$$ that is a sh*t ton of money.
50 Cent says Dame Dash has no money now and calls Dame Dash out for telling him that the $1 million he received from signing with Eminem's Shady Records was no money.
However, I digress. I just put my head down and went back to work.
No wonder people practice stealth wealth! Regardless of all the naysayers, I am still working toward my goal. Next stop on the million-dollar tour is $500,000. After that, it is $750,000. And of course, $1 million.
If being on Business Insider taught me anything, it’s not to let anything or anyone trip you up on the road to your dreams. It’s great to be acknowledged and to talk about your goals, but it’s even better to actually live out your dreams.
As I write this, Deadpool & Wolverine just hit theaters mere days ago on July 26, 2024. It destroyed the weekend box office and broke records with an eye-popping $441 million-dollar opening weekend. That is just massive!
Not too surprising though for a movie that had the backing of one of the biggest movie and production companies in the world, Disney Studios and Marvel Productions. It was reported that Disney dropped $200 million as the budget and another $100 million for marketing.
The movie even went as far as to market to the first 100 ticket holders to receive the movie poster pendant as a way to sell tickets.
Genius in my POV!
What I am here to talk to you about today is what I learned from both actors, not in front of the camera, but what they do on their off time. Namely, investing.
Long before Ryan Reynolds went from party pimp in 2002’s Van Wilder to merc with a mouth in 2016’s Deadpool, he started putting his money to work investing in startups and these companies can be disruptive. The biggest by far was in Mint Mobile.
It was reported that T-Mobile struck a deal with Mint Mobile to purchase it for $1.35 Billion in 2023.
Reynolds, as a 25% owner, his stake would net him $300 Million. That’s probably more money than he’s made from his entire acting career! And his catalogue is pretty huge as he’s been starring in television and film for 30 years.
Publicly traded U.S. telco T-Mobile announced the deal today to acquire Mint’s privately held parent, Ka’ena Corporation, which also houses the Ultra Mobile and Plum brands https://t.co/4jsvBVdGCnpic.twitter.com/Qy2n7hxsXl
His involvement as a celebrity spokesmen caused a huge spike in customer interest and gained the company 12x the customers it had prior. That is more traction and eyeballs gained on them than they got with a $5 Million dollar Super Bowl ad.
He put Mint Mobile on the map and gave them access to a bigger audience just through his 45+ million followers on social media platforms alone.
And Hugh Jackman is no slouch either. Over his decades long career, he had made large paychecks in film, most notably as his Marvel character, Wolverine. He reportedly went from making $500,000 to over $20 Million playing the X-men fan favorite.
However, he did not just let that money sit in the bank. He invested a gobsmacking amount in real estate. Celebrities can actually make more money from endorsements than sheer talent alone. According to publications like the New York Times and New York Post, he is speculated to own approximately $50 Million in real estate in America and Australia.
Although talent has gotten them where they are, their investments keeping working for them long after the camera stops rolling.
Investments don’t need to take a 15-minute smoke break, drink water, go on vacations or sleep. They are working around the clock. Making you money while you sleep.
Learning that is when I put a ton of my focus into investing. I have looked into both entrepreneurial pursuits and being an avid investor. The truth is being an entrepreneur can make you rich, but investing is how you stay rich.
I figured even if any business I ever starts fails, I would still have my investments.
I chose to work on having $1 Million in investable assets so that if I ever choose to walk away from work one day, then I would have the option to.
That’s why I started investing in Google, Apple and more recently AI stocks.
I am closing in on $400,000 in investments. At this rate, the earning are becoming quite considerable and I could hit my target of $1M in less than a decade. If I can get a 10% return on that, I could cross into the multi-millionaire territory in an additional 7 years.
Having $2 Million in investable assets is no small feat.
Since, it’s reported that only 9% of Americans achieve a $1 Million Dollar stock portfolio. You know how many make it to $2-3 Million or more…around 3%.
You would be in the small minority of Americans with a million in investable assets.
One of the tips and tricks I used to build my stock portfolio was to trim 10% of the top of all major purchases and invest the difference in the stock market.
If you budget $3,000 for a European trip, take $300 off the top and invest that in Google or the VTSAX.
Need a new washing machine.
Instead of spending $1,000, trim $100 off the budget and redirect that to your Roth IRA.
Considering that only around 26% of households have saved $100,000 for retirement, means you can definitely aim for this goal and likely reach it. That’s one in four households. Great odds.
However, once you get to $500,000 in retirement savings, this number of households goes down to 9%. You are now in a small minority. Going from a rather large majority of 26% to 9% is the difference of $400,000.
There are now more folks than ever that owe that in mortgages than they have saved for retirement.
I aim to be different. I want the elusive brass ring…to be a millionaire.
I won’t stop until I become part of the double comma club.
It’s a sorority that I have been pledging to become a member of for years.
I figure with enough time, grit and determination I could become that card carrying member. It is an elite club. The barrier to entry remains strict, but not impossible.
You have better odds of getting into this club than you do of being accepted into Harvard with its super low 3.2% acceptance rate.
You can do.
It’s like rapper and actor Master P said; “product outweighs talent.”
When it comes to monetizing your talents, having a product is key 🔑 You can watch the full Assets Over Liabilities interview feat. Master P on Revolt TV’s YouTube Channel. #masterp#talentisoverrated#businesstips
“One minute of patience, ten years of peace.” – Greek Proverb
“Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.” —John Quincy
It was a hot summer day. Same as any other. I was busy working as usual.
I have been working so hard since I was like 5 years old. That was the age that I decided I was going to be rich.
I used to go outside and play on the playground every day. Those were some of the most important days of my life. I learned so much on the playground. The virtue in helping others, sharing, caring, making friends, solving conflicts and exercise.
Nothing came easy. You had to earn every inch when playing sports with other kids whether it was jumping rope or running. You played to win.
I was always pretty good at academics so I put a lot of my energy into that. I figured that could be my path to riches. It turns out I was right.
I was working 8-hour days and studying up to 8 hours a day in college. At one point, just a couple years ago I was reading 25-50 books a year.
I had a hunger for knowledge; especially, personal finance.
Once I learned what compound interest was, I knew I found my road to wealth. I would save and invest money consistently until interest would do the rest for me on my journey to $1 million dollars.
I had been grinding it out so long that sometimes the days blurred and I feel asleep at night from pure exhaustion. Then one day I looked up and realized I had made it to Coast FIRE.
Coast FI refers to saving enough to “coast” to financial independence. This allows participants in this version of FIRE (financial independence, retire early) to take jobs with less stress or pay due to reaching a certain amount of money needed to retire earlier than age 65.
Coast FIRE is a sub-genre of this early retirement movement. This version calls for having enough invested or saved so that without adding another penny of contributions to your retirement portfolio it will still grow to fully support retiring at a traditional retirement age. Your nest egg, simply put, has reached a tipping point so that it will “coast” to the target amount needed for retirement.
People who have successfully achieved their Coast FIRE (like me) still need to work, but they only work to cover current living expenses – not to build up their savings or investments for a future retirement.
The thing about Coasting to FI is that you must first do this before you can get to any of the other versions of complete financial independence; never having to work again – such as Fat FIRE, Lean FIRE, or Barista FIRE. Where compounding does the heavy lifting for you.
FIRE requires you to save up at least 25 times your anticipated annual spending and you have got a 97% or better chance of that money lasting at least thirty years.
Fat FIRE typically means a budget of $100,000 a year, which requires a retirement savings of $2.5 million.
Lean FIRE typically involves being frugal and living in a lower-cost area, or even other countries with a lower cost of living with a budget of $30,000-$50,000 a year, which can require a retirement savings of a minimum $500,000 to $750,000.
Barista FIRE is a hybrid between Fat FIRE And Lean FIRE. Barista FIRE is being able to retire before the conventional age of 60+, but taking on a part-time job for supplemental income and potentially health insurance. You will need to have at least $1 million in retirement accounts.
Coast FIRE requires you to save a certain dollar amount that will allow you to coast to FI such as saving $200,00, which will allow you to coast to $1 million in 15 years with a 10% rate of return.
Coast FIRE formula for determining how large the participant’s nest egg must grow would begin with a regular FIRE number (estimated in the example below at 25 times annual spending of $50,000). In the formula below, note that “Years to grow” is an exponent.
25 x $50,000 / (1 + annual growth rate)Years to grow = Coast FIRE number
Suppose someone estimates they need 30 years to reach their Coast FIRE number and an average annual growth rate over those 30 years of 7%. The calculation would then be:
$1,250,000 / (1 + 0.07)30 years = $164,209
In this example, the Coast FIRE number would be $164,209, which would grow over 30 years (given the above-stated estimates) to the target figure (or regular FIRE number) of $1,250,000.
I like to use the $1,000,000 target for my estimate. The calculation would then be:
$1,000,000 / (1 + 0.07)30 years = $131,367
If you want to retire sooner, then just see what a different target number will do or by shortening the number of years.
For example, $1,000,000 / (1 + 0.07)20 years = $258,419. That means your Coast FIRE number would be $258,419.
Once you reach this dollar amount, you could stop investing in your retirement accounts and reach $1 million in 20 years. The higher the compound interest rate, the quicker you are able to get out of the rat race.
Once I hit $300,000 in cash and investments, I knew that with a 10% rate of return that it could turn into $1 million in 12.5 years.
$1,000,000 / (1 + 0.10)12.5 years = $303,802.
Paying off debt faster and more aggressively plus investing those funds and more could allow folks like me to get to $1 million in less than a decade.
I can now put on my eye mask, kick back and coast to $1 million. If I can do it, then anyone can.
I started with $0 in retirement savings. I started stashing money into my 401(k) and then opened a Roth IRA to start saving even more.
If you want to coast to FI, then let compound interest do the heavy lifting for you, save $100k because the first $100k is the hardest, and allow it to coast you to $1M in 30 years.
Here is Suze Orman’s FIRE protection gear: $5 million dollars to retire early. Really? Do tell. Care to elaborate. Absolutely.
It was around late 2018 that I heard talk of Suze Orman’s thoughts on the FIRE movement.
The rumblings in the financial blogsphere was that when Suze was asked her opinion about the FIRE movement on the Paula Pant podcast Afford Anything and she says, “I hate it, I hate it, I hate it.”
Suze told Paula Pant that $2 million isn’t enough for early retirement. At a 4 percent withdrawal rate, that’s $80,000 per year, which she says isn’t enough to protect you “when the floods come.”
“If you only have a few hundred thousand, or a million, or two million dollars, I’m here to tell you … if a catastrophe happens, if something happens, what are you going to do? You are going to burn up alive.”
The “Suze Slapdown” of ’18 was coined. And I thought watching WWE Smackdown was tough. Whew! They ain’t got nothing on Suze when it comes to laying the smackdown on finances.
She made headlines for saying that people who buy a daily latte are “peeing $1 million down the drain as you are drinking that coffee.” On Suze’s watch, spending at Starbucks SBUX is a no-no.
Let’s not drop out of corporate America on a whim and stop working. Get back to work.
Check out the tweet below that 2020 Democratic Presidential candidate Bernie Sanders tweeted out last year to see what I mean.
Wealthy TV "experts" are shaming millennials for buying coffee and avocado toast. But young people are broke because they’re drowning in debt and low wages.
The ruling class wants to divide the young and old to distract us from an economy that’s rigged for the richest 1%. pic.twitter.com/v4LCNpoExU
Suze Orman’s the sky is falling attitude about retiring early is not so far-fetched now during the coronavirus.
For anyone who isn’t up to speed on the FIRE acronym, it stands for Financial Independence, Retire Early. I am all for Financial Independence (FI).
This is me. Financial Independence: count me in!
Retire Early: slow down tito!
The focus of FIRE is to retire early by stopping the corporate grind and ending the rat race in your 30s or 40s, and not 55 or 65.
However, I am not yet ready to be put out to pasture. Luckily, other leaders in the FIRE movement gave some clarification and said that FIRE is not about stopping work, but finding your passion and earning passive income streams that keeps the money flowing.
The goal is to live life On. Your. Terms. So, I thought to myself okay. I can live with that.
Saving 25 times your current income and then retiring before age 40 without continuing to make money is risky.
The notion is that you can then afford to live off of your savings by limiting your withdrawals to just 4% of your assets each year.
Meaning if you earn $75,000 a year, then you need to save about $1.9 million before walking away from work. Money that was supposed to last starting from age 65, now has to starting from age 35.
The millennial had caught the FIRE bug and she was looking to hang it up within two years.
“Well, how much money do you have?” Orman asked. “Two or three million?”
No.
“A million?”
No.
“$250,000?”
Yes, but with some debt.
“Really?” Orman could only shake her head.
“Don’t talk to me about it. If that’s what you want to do, go ahead. But 40 years from now, I hope you remember everything I’ve said.”— Suze Orman, on retiring in your 20s
According to Suze, “time is the most important ingredient in your financial recipe.”
As financial blogger Mr. Money Mustache put it bluntly: “In the interview, Suze Orman goes on and on about what might go wrong, and how you need an incredible amount of money saved to protect you, just in case. But this thinking is completely backwards – money will not cure your fear, as megamillionaire Suze proves so clearly. Most high-income people are still within just a few paychecks of insolvency, because it is possible to blow almost any paycheck, simply by adding or upgrading more cars, houses, and vacations. Physical health FIRST: Salads and barbells every day, no goddamned excuses.”
Real estate financial expert and FIRE member Coach Carson posted some great advice on Suze’s opinion: “As Paula said after the interview, we should all make a practice of listening deeply to others (especially if you disagree). If you can reserve judgment temporarily, you can always learn something.”
Coach Carson says time not money is the most precious thing we have. The biggest regret is time wasted when people are on their deathbed. People do not wish they worked more or spent more time in that cubicle or corner office.
Very true. Washington Post financial columnist, Michelle Singletary, also weighed in on the interview. She says “let’s also put this debate in perspective. Many people aren’t saving enough to retire at all – early or late.”
I remember when my portfolio hit $100,000. It took half the time to get the next $100,000 and zoom to $200,000. Next stop, $250,000. That’s right a quarter of a million.
Then I was looking to moving on up like The Jeffersons to the tune of $300,000, $400,000, $500,000 and beyond. I only move forwards. I never look backwards. I could still work for another 30 years if I want to. Without putting in another penny, if I let this money ride I could have between $1 million and $2.6 million dollars. And that is if I stop investing. There is no way I am doing that.
I live for today. I live in the moment. I stop and smell the roses. I enjoy the present, but save like I am going to live forever.
Stop worrying about the world ending today. It’s already tomorrow in Australia. – Charles M. Schulz, creator of the Peanuts
I like to plan in advance. I have a plan to create a plan.
“If plan A doesn’t work, the alphabet has 25 more letters – 204 if you’re in Japan.”― Claire Cook, Seven Year Switch
If I want something, then I go get if. I get off my duff and go make it happen. Don’t complain. Go do something about it. To quote Mindy Kaling, “We are all just a treadmill and six laser hair removal treatments from being Ryan Reynolds and Blake Lively.”
Ask for credit when you don’t need it. Credit dries up like tears in a recession. That’s just my two cents. Back in the 2008-09 recession, they cut my credit lines in half. Overnight *poof* half my credit limits were gone. Like a puff of smoke.
The thing is that work gives us something to do. It lets humans be productive.
If you have $1.5 million at age 65, you have a much shorter retirement to spend on versus at 37.
What really makes the difference is that by age 55-60 many people are empty nesters, own a home, and already own most of their possessions.
You have a lot less things to buy because you have what you need already.
When you are 35, you may still have no kids, are just starting, or have a young family. You have costs that are still rising like inflation.
Empty nesters are not worried about paying for college. Its paid for. That’s in their rear-view. Juniors 529 is spent.
If you are still raising kids, it is likely you will need a decent income and a job. Kids cost…a lot. Most people are still buying homes, cars and having kids well into their 40s these days.
One of the biggest expenses that a job helps subsidize is healthcare.
Financial blogger Financial Samurai puts this into perspective: “Just know that once you get to your target number, you might find that your needs have changed. Life is unpredictable. A job helps you subsidize health care costs that are increasingly becoming a racket IMO, but it would help reduce our $2,380/month health care bill. However, I am grateful for every day.”
You want to retire early. Here is what Suze has to say.
Orman: “It would have to be in the millions . . . You need at least $5 million, $6 million.” (She later says $10 million to account for taxes.)
FIRE proponents fired back at Orman that she has it all wrong.
Really? When a government shutdown causes people to be in soup kitchen lines, then I beg to differ. Here were some of the things I read online during the 35-day government shutdown last year:
“I only have $1.06 in my bank account. I don’t know what I am going to do.”
“I can’t pay my bills.”
“I can’t afford groceries.”
“I’m scared I won’t be able to pay my rent or mortgage.”
“I can’t miss one paycheck.”
Not even one check? Even I try to keep a minimum of $10,000 in the bank at all times in savings. Just in case sh*t happens. I need that rainy day fund because when it rains it pours. Keeping a 3-6 month rainy day fund is what helps me sleep at night.
My 1-tweet financial plan government #shutdown edition. 😉
1. Save a 9-month emergency fund 2. Instead of maxing Roth IRA use extra funds for your rainy day fund 3. Do not get any student loans 4. Do not buy a new car, home, or go on vacation until rainy day acct 100% funded pic.twitter.com/Xmslbml3qC
Now to be fair, the FIRE movement is about saving and investing your money. The more, the better. If you are practicing FIRE, then, in theory, you should be able to weather any storm.
Meanwhile, Orman isn’t sweating her emergence as somewhat of a villain in the FIRE community.
Now that COVID-19 has swept across the globe, it looks as if Suze may have been on to something when she always says, “hope for the best, but always plan for the worst.”
On one of her most recent podcasts she stated that a lot of her advice on saving that eight-month emergency fund has come to roost. She now thinks you need a 3-year emergency fund.
I have always been more about FI than RE because no matter what happens in this world, I know one thing to be sure; you will always need money in the bank.
Now I’m going to sign off on this post the same way Suze Orman ended her show on CNBC every night, “now you stay safe.”
Hey if Geoico can have Geicoween, then surely so can we.
On today’s spooktacular blog post, we are talking about why you should avoid the black cat of investing: fees.
They come in all shapes and sizes. From front-load, back-load and even fees you pay to trade stocks.
However, one of the most overlooked of all fees come from commission based salesmen disguised as your friendly neighborhood financial advisors.
They wear the greatest costumes 365/24/7: a suit.
And we are not just talking any suits my friends, but the kind you drop a month’s wages on; think more John Wick and less death of a salesman, as to portray a sense of wealth that make you feel like you be anyone or can do anything and believing you want to run up and kick that football that Lucy is holding.
You are unstoppable.
Then it happens.
You get that investor statement in the mail. You are so excited that you rip the envelope open to see how well you are doing. The market is firing off dividends and capital gains the likes of which you have never seen before. You just know you are making a killing in Mr. Market, right?
Then you see that 2% of your portfolio goes to the fund managers and realize that you just got punked!
You look to your left, you look to your right, but Ashton is nowhere to be found.
Why you must be your own financial advisor
I hate to be the bearer of bad news, but I must confess that being a DYI investor is best.
While reading a plethora of books on the subject of personal finance, I have learned the following:
Don’t invest in anything you don’t understand. It is not enough to buy the product. You must research the company behind the brand.
Know if a company has a competitive edge. For example, once digital cameras came on the market Kodak fell off the face of the earth. The last time I had a Kodak moment was right before Apple unveiled the iphone.
Don’t time the market. If you have money to invest, then do it!
Don’t invest in anything you can’t draw with a crayon.
Invest in index funds instead of individual stocks.
Only invest in funds with an expense ratio of less than 1%.
You can do exchanges between index funds you already own without paying any fees. This is pretty sweet!
Most millionaires are worth between $1 million and $5 million dollars.
90% of millionaires over the last 200 years achieved wealth by investing in real estate.
Forget buying the product and own the stock. Millionaires collect assets – stocks, bonds, real estate, and intellectual property – like monopoly pieces. The poor collect consumer liabilities like big houses, boats, and cars. An asset pays you. Collect assets.
No one cares about your money more than you do
Although self-explanatory let us dig deeper children.
Would you hand over all the passwords to your bank, credit card, and investment accounts over to strangers?
Of course not.
However, in an essence that is what we do when people hand over the financial reins to business partners, financial advisors, and handlers.
Instead of working through the struggles of figuring out how money works, many just give up the responsibility to someone else. Nothing screams “just take some” more than giving people free range access to your money. Nothing attracts grifters more.
Just pick up a few free library books on investing and get started right there.
Heck you can even search online for podcasts or website that talk about money! That is how I got started.
Why you want to have $100,000 in investments
It is simple. If Mr. Market does what he has over the last 90 years, then you can turn $100k into $1M in 30 years. Not bad for a kid that gets picked last to play dodge ball.
Once you hit this number, then the money starts finding you.
Depending on your rate of return you could double your money to $200k in less than 8 years. It took me about 2 to 3 additional years to get that next $50k after the first $100k.
Do you want chocolate Halloween candy or a rock?
If any of you out there have seen The Great Pumpkin Charlie Brown, then you know what I’m taking about.
The reason many of us invest is the same reason kids trick-or-treat because we want the treat, that is something that gives us great pleasure.
You go from house to house looking for a reward for putting together that perfect costume.
Investors buy investment after investment looking for the same thing.
Nobody wants a rock!
I remember a time in school that I sold so much for a fundraiser that I got a chance to go in the money machine (where you stuff money into your pockets for like 60 seconds). I wanted that reward!
But guess what? The night before the big event I stayed up late and overslept the next morning! I missed the whole thing. That could have been my seed money to start this blog! That could have helped me start a Roth IRA at 17! The funny thing about rewards is that you may earn them, but you still have to go and pick them up.
Now I write down everything in a journal so that I do not miss a thing!
I wanted to one day be able to have ‘F everyone’ money like Mark Cuban said: “‘F everyone’ money means you can have your favorite band in your backyard, not care how much it costs, and lend them your jet to get there.” You should invest for your future self to have that option.
If you take nothing else from this post, at least remember this: we like the kind of money that jingles, but we invest so that we can have the kind that folds.
