Tag Archives: Your Money or Your Life

Investing, Retirement

Stock CEO

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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!

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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.

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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.

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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!

Retirement, Wealth

Frugality begets wealth: Why It Pays To Be A Mustachian

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Disguise, Eye Glasses, Hat, Man

If you are part of the financial blog-sphere, then you have heard of a personal finance blogger by the name of Mr. Money Mustache (MMM for short).

He retired early with a net worth of $800,000.

He his famous for his no nonsense approach to cutting out buying crap and not being a Sucka Consumer. I’ll give you an example.

Physical health FIRST: whole system will only perform well if you place its wellbeing first, before anything else. Salads and barbells every day, no goddamned excuses.

– Mr. Money Mustache, The FIRE Movement blog post

Being frugal and fit, as MMM shows, has its advantages. Let’s explore this further.

1. Being frugal could turn you into a millionaire sooner than you think

While reading up on real estate, I came a cross the website Bigger Pockets and also wrote a blog post on them.

One of the co-hosts on Bigger Pockets is Brandon Turner, is an active real estate investor and entrepreneur, stated he brown bagged his lunch to work for 10 years and was able to become a millionaire by putting all his discretionary cash to work investing in real estate instead of happy hours.

2. Simple MATH is the answer

If you can add and subtract, then basically you have the skills to manage your money. Do some million-dollar math. What will it take to make the Almighty Dollar one million times? Sell 100,000 books at $10 a pop. Boom. One million.

Invest $100,000 in an index fund and let it ride for 30 years at an 8 percent return you’ve got your million bucks right there.

Basically, MMM puts it best.

And dozens of ten-dollar bills start to add up to real money pretty quickly, which is something most people don’t realize. The vast majority of wealthy people are the ones who have figured out that a millionaire is made ten bucks at a time.

-Mr. Money Mustache

3. Incomes are not as important as spending habits

Most people are pretty bad at math, even simple math unfortunately.

That partially why so many people are in debt up to their necks. If a credit card company gives you a $35,000 credit line and you are only pulling down $40,000 a year, then you can start to see right there that if you max that sucker out, you will have given away 88 percent of your income. Screw that!

On the opposite end of the income spectrum, an Amazon engineer making $175,000 a year or a Goldman Sachs investment banker making $350,000 a year that likes to tip strippers in $100’s and order $1500 bottle service could blow through a wade of cash in a few months of partying. A coke head with a nasty drug habit could snort millions and lose everything in one crazy summer.

When Google engineers are crying on the news about not being able to afford housing in San Francisco while making $200,000 a year, then something is seriously wrong out here.

They then must decide HOW FRUGAL they are willing to be to change their situation. Living in shared housing with 8 other people, living inside of a moving van, or renting a garage apartment to invest upwards of 60 percent of your income are just a few of the things you will have to consider.

It is not the size of you paycheck that matters, it is what you do with it that counts.

If you ever read that book, Your Money Or Your Life, then you know one of the authors favorite lines was yelling, “how big is yours?” He was talking about your paycheck. This guy worked on Wall St. and still managed to retire early while many folks he saw making millions were living paycheck-to-paycheck.

If you make a million, but spend one million and one dollar, sorry to break this to you, but you are still broke. It is not enough to live at your means, you must live below your means in order to have money to save and invest.

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.

-Mr. Money Mustache

Therefore, I urge you to slash expenses, take stock of what you have and be grateful.

Focus more on the giving than getting.

Aim at saving 20 percent or more of your income.

If you want to retire early, you are going to have to aim at saving 50-70 percent or more.

Live like it will all end tomorrow, but save like you are going to live forever. You got that? You have to save.

Who wants to be the guy living in a $500,000 home that can only afford to fill it with Christmas trees because he can’t afford furniture?

So get out there and save!!! no goddamned excuses.

Cause living in a rat infested motel is not an option because when the lights go out its a roach motel and their lease is permanent.

All I am asking is for you to do what most people won’t: Save money instead of spending it.

Blogger Interviews, Financial Freedom

A Blogger’s Tale: An Interview with Bitches Get Riches

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It’s almost Halloween! So, I will start this post like the Crypt-Keeper would on the show Tales from the Crypt on the heels of this upcoming All Hallows Eve.

Hello Boils and Ghouls! Tonight’s tale is one of money, sophistication, and women.

Topic du jour: Women who talk money. Who are the ladies behind the riches?

Before I get into the interview, I just want to start by saying this:

Thanks for coming out tonight. You could’ve been anywhere in the world. But you’re here with me, I appreciate that. – Jay Z

So, like Nas says, “Yo sit back, relax, sip your cog-ni-ac” and I hope you enjoy this blog post!

INTRODUCTIONS ARE IN ORDER

Much like Chaucer did, in A Knight’s Tale, I want to make an introduction.

Welcome Ladies and Gents!

And everybody else here NOT sitting on a financial cushion:

Today, you find yourself equals.

For you will all equally receive the same knowledge.

I have privilege, nay pleasure, of introducing you to bloggers, like no others,

Bloggers that can trace their lineage back to 2015.

I first met them at a dinner table near Orlando, Florida,

Waiting for our drinks,

Hoping that our meals would be arriving soon,

As the chips and salsa, were not enough to satisfy our hunger.

Next, Kitty amazed me still further

With her sign language skills and by telling jokes for an hour

Helping us forget we were ravenous

And to not walk across the street to the Shake Shack.

Three hours later, both ladies entertained us with stories

So, that we did not spend dinner in uncomfortable silence.

And so, without further gilding the lily,

And with no more ado,

I give you the Seekers of Financial Independence,

The Protectors of ending uncomfortable silence,

The Enforcers of Getting Rich,

The Ones —

The Only –

Bitches Get Riches!!!

MEET THE BI*CHES

GBM Miriam: It was an absolute pleasure meeting you ladies at FINCON 18 this year! Congrats, on winning the PLUTUS Award for funniest financial blog for Bitches Get Riches. Thank you for stopping by Greenbacks Magnet.

This blog is to help folks learn all things money.

I asked Kitty and Piggy to share their knowledge by answering a few questions and they so kindly said yes.

And thankfully so, I need all the help I can get because I don’t want to have to live in the forest, eat off the land, and use roots as medicine due to lack of money and financial literacy.

After the Dow dropped 800 points, I was strongly considering it, but then, like my sister, I thought if only I didn’t need tampons and to watch Supernatural…

So, here they are dropping gems right here for all to see. In the illustrious words of Sailor Moon, “And that means you!”

Fast Fact: The hand signs that Sailor Moon makes while she says her famous line, “In the name of the moon, I will punish you” means “I love you” in sign language.

Let’s get right into the interview.

BI*CHES START A BLOG

  1. What prompted you ladies to start a blog about money? 

BGR Kitty: We were the first among our group of friends to hit the classic major life milestones–marriage, buying a home, selling our souls in big girl corporate jobs. Our parents and grandparents, bless them, they meant well, but their advice was from another century. So we were always texting each other for advice. We needed help from a peer who’d been there recently. Eventually we realized there was a wealth of valuable information just sitting in our text convos, and we thought, “Hey, why not publish it?”

BGR Piggy: What Kitty said. 

  1. What are your favorite finance books? How come? 

BGR Kitty: Piggy is The Good Child and will give you real answers. But I’ll tell you that I get more out of reading advice that I don’t agree with. Bad advice fires me up. For that reason I have to say The Four Hour Workweek is my current favorite. I haaaaaaaate that book. Myopic, exploitative, and smug. Just thinking about it gets me excited!

BGR Piggy: Oh yeah this is definitely my area of expertise. I am currently reading Brynne Conroy’s “The Feminist Financial Handbook” and loving it. Like, when’s the last time you read a book on money that started with a definition of intersectional feminism? I also can’t recommend enough the classic “Your Money Or Your Life” by Vicki Robin, which is an essential read for anyone pursuing financial independence or just a better life. Then for beginners, I really enjoyed “The Financial Diet” by the brilliant Chelsea Fagan. Last but not least, I am counting down the days until Tanja Hester’s “Work Optional” is released!

  1. What are you reading right now? What’s on your night stand? 

BGR Kitty: I’m currently rereading Y the Last Man. It’s one of my absolute favorite graphic novels. It’s the story of what happens to the world when everyone with a Y chromosome dies suddenly, with the exception of one guy and his pet monkey. A fantastic piece of sci-fi that’s I mean, I love any story with roving bands of crazed misandrists. I also just started White Trash: The 400-Year Untold History of Class in America.

BGR Piggy: I just finished reading “Dietland” by Sarai Walker. It’s a total mindfuck of a book, all about body positivity, subversive feminism, rape culture, and a literal feminist terrorist cell that assassinates rapists and blackmails corporations into eliminating sexist products. If your reaction to that description was “… wut?” then hey, me too!

  1. One thing people may not know about each of you?

BGR Kitty: I don’t get hangovers. (I try not to rub it in the morning after a long night of drinking, but it definitely came up at FinCon.) I also have a genetic mutation that makes my body not process cannabinoids. Finally, I can open ANY jar. Seriously, ANY jar. Given this body of evidence, it’s entirely possible that I am Bruce Willis’s character from Unbreakable.

BGR Piggy: I hate chocolate. Refuse to eat it. When I was a kid my brother and I would divide the Halloween candy between us: he’d get all the chocolate, I’d get all the non-chocolate. He also got all the cavities which I’m sure is unrelated. I also love playing blues covers of pop songs at open mics! Just learned Ariana Grande’s “Dangerous Woman.”

  1. What’s in your wallet? How did you start getting your riches? 

BGR Kitty: I have a net worth of a quarter million. I find that beyond amazing, considering I’m a working artist. Every single lucky break I’ve had in my career has been because someone believed in me and advocated for me. If I were trying to make it in the big city with just my brains and my work ethic, I’d be straight fucked. I’ve had help, lots and lots of help. That’s why I like helping other people! It both feels good and is the only karmically sensible reaction.

BGR Piggy: I love this question, but I feel like Kitty’s question is perfect. Also, the Capital One Venture card is LITERALLY in my wallet. My husband and I paid for a vacation to Portugal for our fifth anniversary using the travel points for that card. It took us about two years of earning the points, which isn’t bad for a free vacation.

BONUS ROUND

Bonus Questions (pick any of the questions from the top or below that you want to answer) 

  1. Any life or money lessons from a favorite movie or TV show you would like to share?

BGR Piggy: According to my favorite movie, The Princess Bride, you should never get involved in a land war in Asia, nor should you go in against a Sicilian when death is on the line.

  1. If you could have dinner with anyone in history, who would it be? Why?

BGR Kitty: Malcolm X, especially towards the very end of his life. He’s a personal hero, and an incredibly complex figure. I’d be so interested to hear his thoughts on the state of America right now. Also, he doesn’t eat pork, and neither do I, so it would be super easy meal planning.

GBM Miriam: On your About Page it states: Who are Kitty and Piggy?

Some people wonder which of us is the Bebop, and which one’s the Rocksteady. But that question is an illusion. We are both Krangs.

So, here is my question.

  1. Why not Bebop and Rocksteady? Why 2 Krangs? Inquiring minds want to know! You said I could ask you anything. Please, no judgment.

BGR Kitty: If we’re going by the 1987 animated series, Bebop and Rocksteady–though lovable–are bunglers of the highest order. We’re strictly bunglers of the second-highest order. Like Krang, we are very goal-oriented. We too have platform dependencies (us, Patreon; him, Shredder). And most of all, we share Krang’s personality: sarcastic and demanding, with an almost admirable abiding pettiness.

  1. If you found a lottery ticket that ends up winning $1 million. What would you do? 

BGR Kitty: I would drive my van to Empire City and stay at Le Hotel with my son in the hopes that I could convince my dead wife’s possessive lesbian ex-servant to chill the fuck out. Hashtag reference! All the kids got it!

The End.

This is where the screen fades to black and the curtain closes. Please ladies take a bow!

Well, we have now come to the end of this interview. That was not only interesting, but also entertaining to say the least. I feel like I just walked out of an amateur comedy night,  open-mic contest!

BGR: Thanks Miriam!!!

GBM Miriam: Thank you Kitty and Piggy for coming aboard!! The next time we see each other the Patreon is on me!

Want more financial and life gems, from the comedy stylings of the dynamo duo of Bitches Get Riches?

Find them on them on their website and connect with them on Twitter at @BitchesGetRich