Category Archives: Wealth

Investing, Saving, Video Games Reviews, Wealth

How To Collect Dividends Like Pac-Man Collects Power Pellets

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The air is crisp, summer is now in our rear-view.

Like Aesop’s The Ants and the Grasshopper, we must prepare our bank accounts as winter is coming.

When I woke up this morning, it was 44 degrees. Sweater weather indeed my friends. You know what also needs shelter from being left out in the cold, your money! Affluence is your duty.

Affluence Defined

I will define an affluent person as any adult that is saving and investing more than 25% of their income; with more money coming in than going out.

When you have enough income to pay your bills, save, and invest the difference, then you are rich compared to the rest of the world as most are living check to check.

Once you are able to save and invest more than 50% of your income, have more than $2 million in assets and receiving dividend income of $100,000 or more you are fairly wealthy.

When you make more in capital gains than you would from W-2 wage work, then you can kiss the working world goodbye after hitting a goal of $50,000 or more in income.

A salaried adult makes on average $40,000-$50,000 annually. Getting your investment income to this level means, you have created a passive income source large enough to replace a paycheck.

Good for you.

The bigger the gap between income and expenses is the difference between being rich and poor

Recently, I read two books; Evicted and $2.00 a Day: Living on Almost Nothing in America.

The premise is that welfare is dead and families no longer have access to cash assistance.

Those that do eke out a meager existence on modicum amounts of cash, SSI benefits and food stamps.

Within the book it also discusses how landlords were making a mint off the dregs of society, “the poor,” with one making $447,000 a year after expenses meaning he is part of the 1%.

Another landlord had an estimated net worth of $2 million.

The differences in their lifestyles versus their tenants were stark.

The difference between eating everyday or going hungry was just one of many. If this doesn’t scare and motivate you to save more money, then like Poncho’s owner in 101 Dalmations said, “no evil thing will.”

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Evictions are on the rise all across America. Why? The reason is that there is no rent cap.

Rents are going up about as fast as a four-year college degree.

Having more than 50% of your income going out in rent leads to one word: Despair.

You must have cash in the bank.

I know that the price of everything feels like it has shot up overnight.

You are in the red and bleeding out money faster than a corpse does on The Walking Dead. However, you must save. The possibilities of something requiring your immediate cash assistance are endless!

All of the sudden Aunt Edna needs a new roof, the dog needs his shots, the basement flooded (for the third time this year) or junior needs braces.

I once had a Harvard educated orthodontist quote me almost $8,000 for treatment. And that was just for my teeth!

The human body has 206 bones and not any of them are receiving service from this guy. After, watching or hearing more stories of outrageous prices from car loans to purses (a Louis Vuitton handbag could set you back $400 or more), I knew that having liquid savings was the answer.

I’m as serious about saving money as Sarah Connor is about eliminating Terminators!

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Cash. There is no substitute.

I refuse to lock up all my money in investments, but I know better than to just have all my cash sitting around earning no compound interest or dividends.

Pac-Man shows us how to get the job done

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If you have ever played Pac-Man, then you know how the game is played. The player navigates Pac-Man through a maze with no dead ends.

Pac-Man’s favorite snack pellets — the tiny dots he munches as he moves around the video game board — were originally cookies. The “power cookies” are now the larger pellets he uses to eat the ghosts. The maze is filled with Pac-Dots, and includes four roving multi-colored ghosts: Blinky, Pinky, Inky, and Clyde.

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The game was not designed with an ending.

You know what that tells me, that your money too should be looked upon as having no ending. You should save as if you are going to live forever.

I hope that last statements lights the fire you need to start saving this paper.

Using Pac-Man as an example, I want you to imagine the four ghosts are the following: debt, despair, denial and broke.

Your job is to eat as many power pellets “dividends” as you possibly can. The only way to do this is by investing your money.

You may be unsure where to start. I want you to start by opening up a brokerage account with a discount broker such as Vanguard, Fidelity, E-Trade or Charles Schwab.

Just FYI: Interactive Brokers (NASDAQ:IBKR) and Schwab (NYSE:SCHW) got rid of stock trading commissions, creating a major shake-up in the brokerage industry, and competitors TD Ameritrade (NASDAQ:AMTD) and E*Trade (NASDAQ:ETFC) quickly followed suit. Robinhood had already been offering this service, but now the big boys are getting in on the action.

Once you open up your account, you can purchase any 500 index or index fund that owns all shares in Mr. Market. If using Vanguard, that would be the VTSAX.

You put in enough money in Mr. Market and he starts to pay you for showing up in class everyday 365 days a year.

You earn money just for raising your hand and saying present.

How compound interest works

Compound interest is the difference between the cash you contribute to an investment and the actual future value of the investment.

In this case, by contributing just $8,000 per year with the annual contribution being increased by 1% per year (cumulative contributions of $278,779) you are able to accumulate $1,080,688 over 30 years. Compound interest makes up $801,908 of your future balance.

If you start saving $8,000 a year and earn 8% on those earnings, look what happens. You will notice in the beginning you earn only $680 bucks, but by year 30 you are earning $80k a year!

You must chomp away at collecting money to invest it and start collecting dividends.

YearBeginning BalanceSavings @ 1%Interest @ 8%Ending Balance
1$500$8,000$680$9,180
29,1808,0801,38118,641
318,6418,1612,14428,946
428,9468,2422,97540,163
540,1638,3253,87952,367
652,3678,4084,86265,637
765,6378,4925,93080,060
880,0608,5777,09195,728
995,7288,6638,351112,742
10112,7428,7499,719131,211
11131,2118,83711,204151,251
12151,2518,92512,814172,991
13172,9919,01514,560196,566
14196,5669,10516,454222,124
15222,1249,19618,506249,826
16249,8269,28820,729279,842
17279,8429,38123,138312,361
18312,3619,47425,747347,582
19347,5829,56928,572385,724
20385,7249,66531,631427,019
21427,0199,76234,942471,723
23520,1099,95842,405572,472
24572,47210,05746,602629,132
25629,13210,15851,143690,433
26690,43310,25956,055756,748
27756,74810,36261,369828,479
28828,47910,46667,116906,060
29906,06010,57073,330989,961
30989,96110,67680,0511,080,688

Playing for keeps and dividends

Let’s say you start a Roth IRA at 20 and save $6000 annually, thereby maxing it out.

And please if you are going to max out anything, let it be a IRA and not a credit card.

Earning 10% interest, you would have $105,187.

Then you decide to stop investing and let it ride.

After about 23.5 years, you would have over $1M.

After 24 additional years of parking your money on the financial equivalent of Park Place with a hotel, you are sitting pretty on $1,036,063.83.

Investing your money for only 10 years would allow you to stop and not have to worry about your golden years.

Just some food, I mean power pellets, for thought.

Financial Independence, Investing, Saving, Self-Made Millionaires, Wealth

Beware Of Financial Vampires

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Nosferatu, Dracula, Moon, Moonlight

Well hello there boys and ghouls.

Happy Greenbacksween.

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.

Coins are wonderful but paper folds so nicely.

Banking, Financial Independence, Investing, Philanthropy, Retirement, Saving, Self-Made Millionaires, Television Shows and Money, Wealth

Don’t Trust The Commission-Based Advisor In Wall St Cubicle 23

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If you remember this fun, quirky, and often brutally honest show on ABC called Don’t Trust The B- in Apt 23, then you know exactly where this post gets its title.

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The show aired from April 11, 2012 to May 11, 2013. It only lasted for a short two seasons, but it packed a lot into that one year.

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For those unfamiliar with the show let me bring you up to speed.

June’s (Dreama Walker) plans of moving to Manhattan for her dream job and perfect apartment are ruined when the company that hired her goes bust. Broke and homeless, her luck turns around when she finds a job at a coffee shop and a roommate, Chloe (Krysten Ritter).  The show also starred James Van Der Beek (from Dawson’s Creek fame) as himself.

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In one of the funniest pilot episodes I have ever seen of a television show, it really gives you a sense of how quickly one life can change within less than 24 hours.

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June loses her job and apartment within a few hours once the company she was hired to work for goes down in an FBI raid due to the head of the company embezzling billions from clients in an Enron type take down, which reminds you of the glory days of yesteryear of Wall Street darlings such as the likes of Bear Stearns and Lehman Brothers; the latter of which was in business for 150 years having started operations in 1850.

Some media outlets such as CNBC did an article on what happened to former Lehman Brothers employees after the collapse and some still had not recovered from the company shutting down in 2008 some 10 years later including those not being able to find full-time employment.

This show and the acquisitions or closures of places like Merrill Lynch, Bearn Stearns, which opened in 1923, and Lehman Brothers are reasons why you should be your own financial advisor.

Unlike how JP Morgan bailed out Bear Stearns in March 2008 or Bank of America did Merrill Lynch, you are on your own like Lehman’s when they filed for bankruptcy as no one came to save them because if you fail to manage your money, then no one is coming to bail you out.

Let’s go back to 2008. Banks were failing. Many were found to be a part of the subprime mortgage crisis, but like the scandal at Wells Fargo nobody went to jail. You think your money is locked up tight like Fort Knox until you realize it isn’t. That is why Roosevelt created the FDIC insurance for banks as without the $250,000 deposit insurance after the 1929 crash many no longer believed in the banking institution.

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Just because someone is wearing a suit does not mean they know what they are doing. Many of the analysts and associates that start work for their prestigious firms such as Goldman Sachs are straight out of college and still wet behind the ears. Even though I once read that the average salary of a Goldman employee was around $622,000, that does not equate to financial smarts or riches. Many of these employees still blow money like you wouldn’t believe. Instead of saving stacks they are blowing them.

Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway. – Warren Buffett

I have read enough accounts of high paying professionals and tons of the employees would blow off steam in a place called Scores in New York or buying million dollar homes, private school educations for the kiddies and exotic vacations costing $5,000 a pop.

Look, to each their own. Just understand that you are your best line of defense when it comes to your money. Read every book you can on the subject. Save as much as you can.

I even overheard a 2nd year law associate say that you can make a lot of money in New York, but it costs too much for too little. You have to be a millionaire to afford an apartment or buy a home.

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Part of the reason so many people are bad with money is because they do not learn about how money works. Please do not be one of those people. You must learn how money works. Learn the rules of the money game. Here are a few things you can do to save yourself the commission fee and invest those dollars instead.

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Use a three-part investing strategy.

Part I. Automate your savings and investments. Decide on a number you can live with, set it, and forget it.

Part II. Determine where to invest. Go with anyplace that offer fees that are less than one percent such as Trowe Price, Vanguard, Schwab or Fidelity.

Part III. Invest your money. I prefer to go with several index funds so I can be diversified in case one sector goes crashing down then others are usually going up. You could do a mix of 20 percent real estate or REIT’s, 15 percent in International Funds, 10 percent cash liquid savings in a high yield savings account, 10 percent in a bond fund and the remaining 45 percent in a stock equity fund like the VTSAX at Vanguard. This is similar to the Yale’s investment manager David Swensen’s model. He has been able to get a return on investment of billions into Yale’s coffers making them one of the larhgest college endowments on earth with $29.4 billion USD. Only Harvard has a bigger endowment war chest with $38 billion USD.

Who is David Swensen?

According to the Yale Daily News, “David Swensen of the Yale University endowment is the doyen of endowment investing. Imitation, of course, is the sincerest form of flattery. Today, the Stanford, MIT and the Princeton endowments all boast former Swensen deputies at their helm. Each also has adopted the “Yale model” of investing pioneered by Swensen in the 1980s.”

So what is Yale’s “secret sauce”?

“Until 1985, Yale had invested in mainstream U.S. stocks and bonds with a smidgen of foreign stocks and real estate.”

“Swensen was the first to apply modern portfolio theory to sizeable multi-billion-dollar endowments. He understood that “asset allocation” explains over 90% of a portfolio’s investment returns.”

“The decision whether to invest in specific asset classes matters much more than picking the right stocks. Over the past 30 years, Yale has shifted the bulk of its investments into “alternative assets” like natural resources, venture capital, real estate and foreign stocks.”

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When the market goes down, buy more. That is where the bargains are. That is how Sir Templeton made his millions. Sir John Marks Templeton was an American-born British investor, banker, fund manager, and philanthropist. In 1954, he entered the mutual fund market and created the Templeton Growth Fund. In 1999, Money magazine named him “arguably the greatest global stock picker of the century.” He purchased tons of stocks during the stock market crash when everyone else was getting out.

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So do not let fear take over how you manage and invest your money.

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Fortunes are made in recessions.

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Celebrities and Money, Financial Freedom, Financial Independence, Retirement, Saving, Self-Made Millionaires, Wealth

Fiscal Age Ain’t Nothing But A Number

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I want people to remember me as a full on entertainer and a good person. – Aaliyah

In case you have not already heard the news, the late superstar Aaliyah has her very own Madame Tussauds Wax Figure in her likeness from the Try Again Era.

Aaliyah wax figure Madame Tussauds
Madame Tussauds for VIBE
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Although, Aaliyah is gone she is not forgotten.

Therefore, this next post is titled in her honor. This post is named after her first ever record, Age Ain’t Nothing but a Number which is the debut studio album by American singer Aaliyah. It was released under Jive and Blackground Records on May 24, 1994, in the United States.

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I learned a lot from watching Aaliyah work so hard in her youth.

Like her, I want to be remembered as well, although as a full on financial blogger and a good person.

So let’s get right to it and start talking money.

When in doubt: save.

Don’t ever let anyone tell you what you cannot do or accomplish.

People have said to me the following:

You’ve been in school forever. Are you ever going to graduate?

Are you in school finishing your associate degree, because I know the bachelor’s takes a long time so you are probably only halfway done right?

You should write a book or something? Are you ever going to do that?

It is impossible to save any money. Is it possible to save thousands?

Winning the lottery is a great way to get rich. Do you play?

You should go for the Master’s degree. Why a second bachelor’s?

Why get a 2nd Master’s degree? Why not go for the doctorate?

You really have no car payment?

You’ve gained a little weight.

You’ve lost weight.

You have been saving forever, you are not ever going to buy a home.

I laughed at all these questions and comments.

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This is my life. I set the pace. No one else. I control my destiny and the outcome of my life. I control the narrative.

And just to set the record straight, I did finish my bachelor’s and Master’s degrees. So take that haters. In addition, I also bought a home, started a daily exercise routine, a health and wellness regimen, started a blog in 2016, wrote an eBook in 2019, paid off my car in 2009, don’t play the lottery, and learned to save thousands by not shopping or taking fancy vacations.

And after I paid off my car, this is how I felt. Just like Katelyn Ohashi at the ESPYs. And like in her acceptance speech that night, I too had made a reference about Cardi B.

Paying off debt and saving. This all took many years. Like over a decade to accomplish. I know folks are out there retiring at like 27. But guess what? Life is full of ups and downs, but I never let my goals be far from my mind and kept them in sight because whether you retire at 22 or 62, fiscal age ain’t nothing but a number.

Safe to say, I set out to conquer every mountain or hill that was put in front of me. Yea baby!! I feel like dancing!!!

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Life is complex. No one has all the answers. No one has a crystal ball to see the future. But reading up on the past has let me make some great predictions on what I think will happen.

For instance, after reading books on history, finance and biographies such as Arnold Schwarzenegger, Daymond John, Bruce Lee, Dale Carnegie, Pat Benatar, Sean “Puffy” Combs, Warren Buffet, Ben Stein, Tony Robbins, Jennifer Lopez, Rihanna, Dave Grohl, Kevin O’Leary, Barbara Corcoran, Dwayne “The Rock” Johnson, and countless others, it is safe to assume the following:

  • Financial markets are cyclical. About every 10-20- years the market corrects itself and there is a recession. Plan accordingly.
  • When stocks go down, buy more.
  • Save until it hurts. Something like 50% or more of your income.
  • Things will get more expensive in the future.
  • You can expect inflation to average at least 2-3% a year.
  • Investing in real estate tends to yield good results over many years.
  • If you do nothing else in real estate, at least purchase your primary residence.
  • Buying franchises is expensive.
  • Find your talent and exploit it for profit. If you are a good mechanic, then charge a good and fair price for your work.
  • Never undervalue yourself.

I truly believe optimism is the key to happiness. I am always in a good mood. Laughter is always a part of my day and life.

My mind is always full of ideas, my eyes are clear and my heart is full.

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I can’t hear you!!! Say it with me now!! Louder!!! Say it like you are in a stadium full of screaming football fans and Antonio Brown is out there running drills and scoring like he did on an episode of HardKnocks! So say it loud for me! One more time for the cheap seats in the back!!!

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When people start complaining, I always feel that they should also provide solutions to their problems. I believe in being solution-based.

One of the greatest joys of my life is speaking my mind. I have done this since I was a little girl. I hold nothing in or back. I am always respectful, but I set clear boundaries on how I let people treat me. I respect others so I expect the same treatment in return. Instead of holding back, I dive in. Speaking your heart is a great way to free yourself from the constraints of life. You have to tell people what you want if you ever expect to get anything. SO SPEAK UP!!

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In this life, you have to keep going. There is no time to rest on your laurels. No pity parties here. If you want financial independence, then you must fight for it. You have to work your butt off for it. Even if it takes, 10, 20, 30, or 40 years. My goal is to have at least $2 million in assets before I retire. Over 10 years later, I am still working on that goal. NEVER GIVE UP ON YOUR DREAMS AND YOUR GOALS!!! If you fall down, get up! You get up, dust yourself off and like Aaliyah said, “try again.”

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Best of luck to you all in your fiscal adventures.

Celebrities and Money, Financial Freedom, Financial Independence, Saving, Wealth

The Secret To Wealth Building: Avoiding Debt

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Debt is like any other trap, easy enough to get into, but hard enough to get out of.  – Josh Billings

That’s right. Avoid debt like the plague. Well there you go. The secret to building wealth is wide open. Cat’s out.

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I will give you some great insight here. You cannot go bankrupt if you are debt free. When you owe $0, then you are truly free my friends.

Nothing puts people in a financial fiasco quicker than leverage.

Debt, we’ve learned, is the match that lights the fire of every crisis. Every crisis has its own set of villains – pick your favorite: bankers, regulators, central bankers, politicians, overzealous consumers, credit rating agencies – but all require one similar ingredient to create a true crisis: too much leverage. – Andrew Ross Sorkin

Let me provide you with some cautionary tales. They are truly scary. So please avert the kids eyes when you are reading this.

Okay, here it goes. I am no Chaucer, but I will do my best to make this plot jump right out to you. Hopefully it will inspire you to action. Please be forewarned. STAY. AWAY. FROM. DEBT. It has the ability to turn happy people into bitter human beings. People are more likely to tell you about their political, romantic, or extracurricular actives than they are the amount of credit card debt they are in.

Cautionary tale numero uno: Adrian Peterson. According to CNBC, NFL star Adrian Peterson made close to $100 million but apparently can’t pay his debts. The star running back is in court against a McAdoo, Pennsylvania-based creditor over failure to pay a $5.2 million loan. With interest and legal fees, the sum claimed is about $6.6 million.

He currently owes a total of $10 million in debt obligations, but recently signed an NFL contract for a two-year extension for $5 million.

Now I’m no mathematician, but if I subtract 10 from 5 that would equal 5. Meaning he is $5 million dollars short of being able to pay what he owes. This does not include any other cost of living expenses he has. In addition, Mr. Peterson is in his twilight years.

Just investing 1 percent of his $100 million in earnings, $1 million, could have netted him another cool million in investment returns if he earned 8 percent. That is without catching another pass, running an interception, or even showing up for work. He LITERALLY would have only had to keep breathing to make that money.

Losing $100 million is my worst nightmare. This is one of the worst horror tales I have ever read and that is because this is reality: Pure fact and not fiction.

Cautionary tale numero dos: Pamela Anderson. One of the most recognizable female celebrities in the world as she has graced the covers of hundreds of magazines including having the distinction of being the most photographed Playboy Playmate 1989-2016, with a record 14 Playboy magazine covers.

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She too had a run in with Mister Debt. At one point, she was in $1 million of debt due to housing costs. She stated at the time that it happened to a lot of people in Hollywood. Although, she stated that she is now okay, she did state that was a very stressful couple of years.

My suggestion is this: stay away from buying huge homes. Mansions costs tons of money to upkeep.

For example, a $3.6 million-dollar mansion will likely cost you $100,000 annually for maintenance, utilities, property taxes and upkeep. Over 10 years, you would have paid $1 million dollars just to have a place to put those $500 Manolo’s.

Let’s think for a second. A $90 million-dollar mansion in Beverly Hills could cost you $2.5 million annually. Over a decade that is $25 million dollars! I am starting to see how people like Charlie Sheen, who famously once earned over $1 million per episode of Two and a half men, could end up in court stating he is in dire financial straits less than 10 years later. With expenses like these, who can save! I am also starting to see how Nicolas Cage ended up owing $6.2 million to the IRS! My last tale will surely leave you shaking in your financial boots (hopefully paid for with cash).

Cautionary tale numero dos: Johnny Depp. After earning $20 million-dollar paychecks with Pirates of the Caribbean (Disney fired him from this role in 2019), and estimated lifetime career earnings of $650 million, it was revealed that Captain Jack had a spending and debt problem.

According to CNBC, this is what Mr. Depp spent every month:

  • $30,000 on wine
  • $300,000 on staff, including 40 full-time employees
  • $150,000 on security for himself and his family
  • $200,000 for a private jet

You could support small countries on what he is spending!

For $30,000 a month on wine, it better heal the sick, make the blind see again, and wash away all sins!

This last fiscal tale truly has me quaking in my paid for running shoes.

In every story I have ever heard or read, people built their wealth by living on less than they earn.

That is how I was able to pay off $50,000 of debt and then begin saving and investing over 40 percent of my income. I did it by earning and saving one dollar at a time.

Ditch the plastic and embrace cash my friends. It seems the folks in Hollywood all have humongous mortgages that are handcuffing their wallets and keeping their financials in a tailspin. Please do the opposite and keep low fixed expenses. Thank you for listening. I’ll be here all week.

Celebrities and Money, Financial Freedom, Financial Independence, Saving, Self-Made Millionaires, Wealth

I Like To Write Big Fat Checks Just Like Cardi B

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American, Bills, Business, Cheque

Big fat checks, big large bills.  – Cardi B

I’m a lot like Cardi B in that song Money and I like it because like her, Now I like dollars, I like diamonds! However, in order to fund that lifestyle you have to have money in the bank.

Image result for cardi b i like it gif

I want deep-pockets; therefore, I avoid debt, save and invest.

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And between you and me, I can’t stand debt. That’s no secret if you have been reading my blog. It just weighs you down.

I figured out a way to make myself feel better about paying off debt. I tend to use the debt-snowball method. I like small wins. And you should too, if it helps you continue to work on paying off your debt over several years, which can be 2-5 years.

The debt–snowball method is a debt reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balances first, while paying the minimum payment on larger debts. You typically use this method when paying off revolving credit card debt.

Dave Ramsey discusses this and the debt avalanche, paying off debt with highest interest rate first, both are good methods of paying off debt.

But my favorite is the debt-snowball method. This strategy is where you pay off debt in order of smallest to largest, gaining momentum as you knock out each balance.

When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance. You get a chance to celebrate your hard work by knocking out small debts and slowly working your way toward paying them all off.

For example, I have done the following:

Paying off my payday loan in the early 2000’s, I wrote the final check for $333.

Paying off my car note in 2009, once it got down to under $2,000, I wrote the final check for $1,500 and paid that sucker off!

Paying off my personal loan for $20,000, once I got down to the end, I wrote the final check for $3,500.

Paying off my credit card I got in 2005, once I got it down under $15,000, I wrote the final check (electronic) payment for $14,745, so then I could continue to live my best life.

I did this by saving up my money, paying the minimums on all my accounts until I saved up a certain dollar amount and then I wrote big fat checks to pay off what I owe. I like to pay in lump sums and pay off huge chunks of debt at a time. It makes me feel better. I call it the debt-chunk method. I like to see big results.

I got this idea from reading personal finance blogs like Millennial Money and books like I Will Teach You To Be Rich and Set For Life. In addition to studying the self-made. I combined my knowledge of reading about the money habits of Grammy-winner John Legend and Millennial Money founder Grant Sabatier.

See my posts How Millennial Money Inspired Me To Start Saving $13,333.06 A Year

Money Advice I Got From John Legend

Basically, I combined two different philosophies on saving and debt.

From John Legend I learned that once you have money in your hand you should pay off your debt IMMEDIATELY. If you have the full amount, then pay it all off. Thereby, paying off debt in huge chunks!

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From Millennial Money I learned to save huge amounts of money over time by making small increases in may savings rate. I also make sure to take other good advice as well.

For instance, over the years, I have learned to listen to the following:

My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies and leverage – Warren Buffett

Find ways to advertise for less or free. Leverage what you know by thinking outside the box. – Daymond John, The Power Of Broke

Find ways to start or build a business for less, cheaper alternatives out there or for $0 to start. – Zac Bissonnette, Debt Free U

There has never been a time when reading a book has not helped me. Work 10X harder, get 10X the results. – Grant Cardone, The 10X Rule

Work out. Have Discipline. Save and invest your money. I started in real estate and built wealth that allowed me to devote more time to the things I wanted to do. – Arnold Schwarzenegger

See my post How Arnold Schwarzenegger Totally Recalls Making $20-Million-Dollar Paychecks

Try to save $5 a day. And increase your savings by 1% a month or more. Network. I bought coffee for those I wanted to learn from every week! – Grant Sabatier, Millennial Money

Save $25,000 to stop living paycheck-to-paycheck. Spend more on fun not less. Spend money on the things you care about and cut spending on the things you don’t. – Scott Trench. Set For Life, Bigger Pockets podcast

Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t. – Ramit Sethi

Focus your energy on the big wins!

If you can cut your housing and car costs, your stand a chance to save $500 or more per month. That is a nice amount to start stashing away in your 401k.

Cutting out $5 lattes and couponing alone are not going to get you to amassing a fortune. But first, before you do anything, you must save!

It is far easier to control and cut your spending than it is to go out and earn more.

Besides, the more you make the more Uncle Sam takes! I am all for people earning more money, but it will make no difference if you spend every last dime.

Therefore, start focusing on slashing expenses, cutting costs, saving an emergency fund (for big expenses), a rainy day fund (for short-term expenses i.e. a flat tire) and paying off ALL YOUR DEBT!!! Doing those five things can start you on the path from broke millennial to millionaire.

And that is because all millionaires know you get there by saving $10 bucks at a time. – Mr. Money Mustache

Therefore, if you want to get rich, just start by saving $10 bucks at a time.