Saturday Success Series: Volume 7
Making life & money work for you.
Welcome back to the Saturday Success Series email!
In this edition we’ll have:
Five to Focus On: A quote, stock, book, show & a beer.
Master Yourself: Hard work.
Master Your Money: Savings accounts.
And of course…
The Weekly Special: 3 Levels of Wealth Creation.
The goal here is maximum value, so let’s get to it.
Oh, by the way, if you’re feeling generous, please share this newsletter with a friend.
Five to Focus on:
In a noisy world, it’s hard to know what’s good out there. Let me help.
Quote to ponder: “Find joy in everything you choose to do. Every job, relationship, home…it’s your responsibility to love it, or change it.” - Chuck Palahniuk
Stock to consider: ICLN (iShares Global Clean Energy ETF) seeks to track the investment results of an index composed of global equities in the clean energy sector. Disclaimer- this is not financial advice, I am not a financial advisor, and you should always do your own research.
Book to read: The Ride of a Lifetime by Robert Iger. I’m usually not interested in biographies, but I am interested in reading “lessons from my successful life” stories. My favorite parts were how he convinced a board that considered him suspect, to appoint him CEO, and the fascinating look at he and Steve Job’s relationship.
Show to enjoy: The Americans on Prime Video. “At the height of the Cold War two Russian agents pose as your average American couple, complete with family.” Some great performances across the entire cast. If you never watched this show you really should.
Beer to sip: Hopshow from Beer Zombies. Juice bomb beers are delicious. It’s fruity and juicy with just a hint of sweetness. And the can art is cool. At this ABV (8.3%) though I’m sticking to one pounder and calling it a night.
Master Yourself
Hard work is overrated. Yes, it had to be said.
Minor correction: hard work in the typical way you hear of it and think of it is overrated.
Many poor people, many miserable people, work hard as hell. They have 2–3 jobs, they run around constantly. They work 12–16 hour days. They’re working hard. But it’s not getting them ahead.
We to learn and understand the power of deep, smart work. We need to learn about money- how to make it, save it, invest it, spend it, etc. And we need to learn how to rest while our money grows and works for us. Understand how your habits and choices will dictate your entire life.
Robin Sharma talks about how 5 smart, deep hours of work per day will garner you all the results you need. Sprint with work and then marathon rest/leisure.
I can get behind that. I’ll bet you can too.
Master Your Money
Understand that savings accounts are losing you money.
Their interest rate isn’t even close to keeping up with inflation.
But, there’s also peace of mind in having cash on hand.
Find ways to build a savings cushion for the inevitable punches in the mouth life delivers. Then find ways to invest additional funds to build long-term wealth.
We have a 6 month emergency fund on hand. What does that mean? We have enough to cover our outgoing costs for 6 months if we had no incoming money.
Some people have 3 month funds, some have 12 month ones. Do what feels right for you. But don’t go overboard. Your savings accounts are losing you money, that’s a fact.
Weekly Special:
The 3 Levels of Wealth Creation
This one is kind of long, but bear with me. It’s a worthwhile read.
Level 1- Thousandaire.
Make saving a habit.
If you’re ever going to build any kind of wealth, you have to master this part. You must learn to cut costs to the point that you can save a portion of your income. 10% is the minimum. I’m currently saving anywhere from 30–50% of my monthly income and splitting it between a high-yield savings account and a stock investment account.
I don’t care if you have to live with your parents, a roommate, own only 2 pairs of shoes, skip happy hours, do your own hair, whatever you have to do. There are ways to trim your cost of living so that you can save. We’ll get to the addition part of monthly income, but right now, learn to subtract monthly costs until you can save.
Master compound interest.
Learn about, and come to understand how compound interest works, so you can make it work for you. Warren Buffet calls it the 8th Wonder of the World and that should be reason enough for you to want to understand it.
Save your money, invest it, reinvest what you earn into additional assets, repeat. Start doing that as early as possible. That’s the basic gist. Also, learn how this same compound interest eats away at your money when you’re in debt.
Build your credit.
Get credit cards, preferably ones with rewards (love those points so I can buy discount gift cards!), and pay them off in full every month. I actually pay mine off in full every 2 weeks to keep the utilization very low.
If you get a car loan, mortgage, school loans- pay them off every month, try to pay a little extra each time. It adds up! My last car payment was 196 a month, and I paid 200, yes, just 4 dollars more. After about a year, I noticed they told me I only owed them like 33 dollars a month!
Anyway, a good credit score will save you a lot of money over the life of large loans such as mortgages. You also may need it to start that business we’ll discuss in Level 3.
Your credit score is made up of:
Payment history (35%). Pay off cards and loans on time, every single month.
Credit utilization aka how much you owe (30%). Pay in full every month or every 2 weeks if possible and do not max out your cards. Keep the balance to 30% or less your total credit line. I keep mine at 2% or less, but that might be kind of crazy. I’m a nut because I absolutely destroyed my credit in my 20s.
Length of credit history (15%). Just keep plugging along with your good habits. Nothing to do here but let time pass, as it always does.
New credit (10%). Don’t open a bunch of cards at once. That’s it.
Credit mix (10%). A blend of credit- credit cards, car loan, mortgage, etc.
Level 2- Hundred Thousandaire.
You HAVE to Invest.
Don’t get fancy here. Your employer’s 401k match is a great place to start. Or a Roth IRA. I’m in a Roth 401k match, so you can imagine my delight. ETFs, mutual funds, and things of that nature will suffice for private stock accounts. If you want to pick individual stocks, be my guest, but you’re not going to be good at picking them. You’ll have some winners, yes, but you’ll have losers too. A lot.
But, your money is losing value just sitting in a standard savings account. At the very least, look for high-yield savings accounts. I have quite a bit parked in a high-yield savings account right now because I want cash on hand for a home purchase. But anything extra, I put right into my stock account.
Maintain a Stable Job.
This is important due to that pesky saving habit you need to keep up with. Keeping a stable paycheck coming in is paramount while you’re building wealth. So, be good at your job. Be employable. Don’t quit too soon.
You better have a stable business in place prior to quitting that 9 to 5. There’s something to be said for day jobs, aside from the steady paycheck. Paid time off, health insurance, a set schedule, etc. Those are all things you have to cover yourself or give up entirely when you’re your own boss.
Create Multiple Income Streams.
Whether it’s writing/blogging, online courses, e-books, selling apparel/merch, driving for Uber, renting a room for Airbnb, consulting, whatever. Just find a way(s) to add to your incoming money stream every month.
Currently, mine are: my job, stock dividends, and writing. I’m always looking for ways to monetize more things though. You should be too. For example, I can monetize writing by getting paid on Medium, being a ghost writer, and doing copy for websites. There are 3 ways to get paid using one talent.
Level 3- Millionaire.
Get into Real Estate.
Real estate is one of the few ways to get very wealthy. Flipping houses is great if you know what you’re doing, but it’s very competitive. Owning a property that you rent out is ideal. It will likely be easier to purchase a home that you can rent and then leverage that into another home. But if you really like the idea of flipping, consider joining a real estate partnership/group where you can fund flips with other partners.
Also, if someone in your family passes away and leaves a house to you…don’t sell it. Rent it out. Keep it in the family. You could also do what some have done, very successfully- purchase a duplex, live on the one side, and rent the other side. The renters will pay your mortgage and you get to live for free while paying down your mortgage on a nice property. Once you’re comfortable, move out and rent both sides.
Side note…while rental property is an asset, your own home is not. It takes money from you constantly- mortgage interest, taxes, repairs, utilities, etc.
Own a business.
And finally, the other way Americans get millionaire rich- they own a business. Notice I didn’t say start a business. You don’t have to start it, you could buy a business that already exists. My girlfriend and I are discussing buying her current boss’s insurance business upon her retirement for example.
I would also really like to purchase a car wash within the next decade. I have no desire to start anything from scratch. But if you do, do it! Start small and keep it cheap. The tax breaks are great too!
Fun fact: You can combine the benefits of business ownership and real estate by being a landlord.
Thanks for reading and if you found this valuable, please share with someone who could use it. See you next Saturday!
Join me on Twitter: https://twitter.com/caitmackcs
Join me on Medium: https://caitmack.medium.com/