It wasn’t until I saw a Kiplinger magazine on the boyfriends table and read it that I started to understand what it meant to manage money. Like a lot of folks I did not grow up learning about finances. It was not taught in school. And it was not talked about much at home.
Pretty much everywhere I went money was a taboo subject. I learned so much about money in that one article that I was hooked. I went to the library and checked out about five books on personal finance.
I know in the beginning it was a lot of Suze Orman and people I saw on television like celebrities whose books I read. Then I moved on to money experts like Peter Lynch, Warren Buffet and John Bogle. I also found books by money bloggers.
I remember over time going from $5,000 to $150,000. I increased my 401k contributions every year and eventually got to saving over 25% of my income! I knew that it was not enough to just open an investment account. I had to also invest that money.
A huge misconception is that if you open a brokerage account for Roth IRA then you are investing. Wrong. You have to tell the money where to go. If you don’t, its like putting popcorn in the microwave, shutting the door, and then saying to the microwave now pop without setting the timer telling it how long to actually cook the food.
I didn’t know this either. I just did what my 401k told me to do. Pick a fund. And that’s okay. You are just getting started.
What really helped me go from $0 saved to slowly making my way to over $250,000 in investments was watching a show on CNBC it was called…The Suze Orman show.
They say every journey begins with a single step. Well this one also began with just $1. Actually $5 whole dollars!
It’s like one of my favorite comedians said (Martin Lawrence for those folks wondering), “I got a dollar and a dream to make myself some cream.”
The first thing I needed was a J-O-B! After, I found one with a good match, I picked the ultimate goal of a one million dollar net worth.
However, its a marathon and not a sprint. I’m doing the long-play of investing my money over time. Money not quickly acquired tends not to be easily lost.
I’m going to take you from my early days growing up with my siblings in a two-bedroom apartment to buying a condo with the Roth IRA!
I started off as a telephone operator and waitress making $2.38 plus tips as a teen to getting a job at one of the most prestigious and richest universities in the world.
I’ve gone from wearing holes in my shoes to staying at the Ritz Carlton and shopping at Prada (however, I did not but that $1,000 cashmere scarf!).
I went from reading about blogs, to writing my own and riding shotgun to dinner with none other than JD Roth of Get Rich Slowly. Sound interesting. Do you want to know more? You just have to keep on reading or listening to my videos on Tiktok to find out.
My earliest memories with money was watching my father go to the local liquor store to cash his paycheck. He would always give me a few dollars to buy some snacks.
I thought money is wonderful. It allows you to buy things.
That was my first taste of sweet, sweet freedom. The freedom to buy the things you want. I learned how to save to buy the things I wanted, but I needed to learn how to earn money.
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!
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.
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
Investments
2012
2018
2020
2022/23
VTSAX
$20,000
$100,000
$158,000
$220,000
Amazon
102
Apple
20
50
100
Google
330
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.
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
The House of Representatives and Senate voted to pass the bill and President Biden signed it into law today.
The market has been on a tear once the debt-ceiling bill passed.
The Dow went up 700 points on Friday and Google is up, way up!
As of 30 May, GOOGL stock price was up almost 40% year-to-date. That is great news for investors in the stock. GOOGL opened 2020 at $67.42 on 2 January 2020 and would close at $86.81 on 31 December, a 28% rise.
In its Q4 2021 earnings report, Alphabet announced its decision of a 20-for-1 stock split by way of a one-time special dividend on each share of the company’s Class A, Class B and Class C stock. Stockholders recorded in the company’s books at the close of business on 1 July 2022 received 19 additional shares of the same class of stock that they already held by the close of 15 July 2022.
Keep in mind that GOOGL was trading at $2,200 a share just before the split. The stock closed at $2,255.34 on 15 July 2022 and opened at a split-adjusted price of $112.64 on 18 July.
The reason they proposed the 20-for-1 was to make shares more accessible. If you invested $10,000 in Google’s IPO is more than $300,000!
Although, that much exposure to one stock can be pretty risky as anything over 10% of your portfolio can result in more losses than an investor would like.
That would mean you would need to have a $3 million-dollar portfolio to have this type of exposure to one stock. You may likely want to diversity in index funds such as the VTSAX or VFIAX to keep things more level.
My suggestion is now that we have averted a financial meltdown is to go and buy some stock. The upside can be tremendous if the market continues its upward trajectory.
The easiest method to increase your stock holdings and limit the risk is to invest in a total stock market fund like the VTSAX. It has a market cap of over $1 trillion.
For those investors that could not afford to buy GOOGL or Amazon at their peak price of over $2,000, this is your moment.
Both AMZN and GOOGL are poised to go higher with more people online than ever.
What makes GOOGL special is their powerful search engine. GOOGL handles over 90% of all search queries worldwide, Google is dominating the global search engine market share.
There are 8 billion people on the planet. An estimated 37 per cent of the world’s population – or 2.9 billion people – have still never, ever used the Internet. Therefore, GOOGL has no where to go but up. Get a ticket to this ride as fast as you can.
Personally, I feel the stock is undervalued.
Maybe that is why the company board of directors just approved a $70 billion-dollar buyback in April of this year. What that spells for investors…Cha Ching!
GOOGL also owns YouTube, which just closed on an NFL Sunday ticket access deal worth $2.5 billion. They are making money hand over fist.
Their balance sheet is so healthy because they are flush with cash and so little debt. Alphabet had $12.9 billion in debt in December 2022; about the same as the year before. However, it does have $113.8billion in cash offsetting this, leading to net cash of $100.9 billion.
That is why they can afford a $70 billion dollar stock buyback. Typically, when this occurs the stock price goes up in value due to less shares being available.
Your girl has got in on this by buying shares throughout the last year. Even with a modest stock split in the future, I would own thousands of shares.
At that point, I would likely diversify some this into index funds to limit my exposure to losses in case the market does a swan dive.
As of 30 May, according to Coin Price Forecast, Alphabet price could hit $155 by the end of 2023 and then might reach $163 by the end of 2024. Analysts estimate it could rise to $219 within the year of 2025, and was anticipated to reach $252 in 2026, $302 in 2029 and $362 in 2033.
GOOGL is minting millionaires.
GOOGL can help facilitate the American Dream.
Instead of hoop dreams or being a movie star or Rockstar, you can be a financial Rockstar. You can be a stockstar!
Therefore, if you have champagne wishes and caviar dreams, then this is the place to be.
It has been a long road to get to a point where wearing a facial mask is now optional.
Like most of the world, I too am suffering from pandemic fatigue. After watching the stock market drop 20%, housing prices skyrocket, inflation go through the roof, new car price sticker shock and the cost of food and college tuition go up, it would be great to go to a live concert as a way to unwind.
Alas, this too seems to have priced people out.
In February, Beyoncé announced her fist World Tour in six years. There was only one catch: you had to be a Beehive member or a Citi credit card holder in order to get your tickets through Ticketmaster in the presale, if you wanted a chance to secure your spot.
If you were not previously a Beehive fan club member prior to tickets going on sale, then you were out of luck as you could not sign up just to get in on the presale.
However, you could apply and get approved for Citibank credit card, but there are no guarantees there.
Basically, you had to be a person of considerable means to get concert tickets. Either through internet access or good credit.
According to the United Nations, an estimated 37 per cent of the world’s population – or 2.9 billion people – have still never, ever used the Internet.
And then there are those that are not the best off financially and lack good credit scores.
According to the FDIC, an estimated 4.5 percent of U.S. households (approximately 5.9 million) were “unbanked” in 2021, meaning that no one in the household had a checking or savings account at a bank or credit union.
There are many people who do not have credit cards, let alone with just one issuer. This means that billions of people had no way to buy concert tickets. Only those with means were able to do so in the presale.
And for those with means, you would not believe the lengths they were willing to go through to get them. Some even bought tickets out of the state or even the country to get access to them cheaper.
It is also hard to get tickets after the presale as the Beyoncé concert had a lottery system. If you did not get an access code, after winning the lottery, then you were sh*t out of luck.
Getting concert tickets are starting to be harder than getting into college.
If you wait until after the presale, most tickets are gone.
Snatched up by the folks that could get access and then resold for a higher price. There were tickets going for as high as $9,800 on sites like StubHub and Vivid Seats.
I can’t even imagine paying anywhere close to $10,000 to go to a three-hour concert. That’s just insane! This is a one-night only event.
There were even tickets that were ranging for $500 all the way up to $3,500 for VIP. That is more than many folks are even paying for their mortgages across the country. There is no way to justify spending that type of money on one item or experience, if you truly do not have the resources.
ticetmaster.com
Money like that could be used for down payments or closing costs on houses.
It is becoming more expensive to go see your favorite artist. Concert tickets are starting to become another status symbol and only for millionaires.
My suggestion is to create a fun savings account so that you have funds readily available when you do want to go to concerts, sporting events or travel. Do not put this on credit. You could wind up paying for this expense for years just to have fun for a few hours.
My advice: skip anything that puts you into debt, even concerts. Better to have your financial house in order than having fun. The fun will come after the money is in your bank account and not when its on empty.
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.
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.
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.
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.
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!!
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.
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.
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