Are you an inexperienced investor? That was me eight weeks ago.
Since then, I’ve grown my investment portfolio from nothing to over $3 billion. WOW!
That’s not true. But I have grown my portfolio substantially over the last several weeks.
You don’t need to suck at the teat of the government or insurance companies or loan sharks or anybody else. Follow my tips and you’ll be sucking your own teat.
These tips aren’t for getting rich quick. They’re for getting financially independent slowly, over 15 years or more. (But you’ll be 15 years and hundreds of thousands of dollars ahead of your friends!)
1. Get a Credit Card
So many people think of credit cards as scams. They’re wrong. A credit card is a many-spendlored gift as long as you’re disciplined in your spending and payment habits.
My biggest tips for first-time credit card users is treat it like a debit card proxy. Every transaction you put on the credit card, immediately pay it off with your debit card (within a few days is fine.)
2. Get on Stash Invest
Apps like Stash take the headache out of first-time investing. Sign up for Stash. Pick your investment strategy (this is very simple to do). My boss David (also my unofficial financial advisor) suggests setting Stash to auto-transfer $25 per month, then doubling that amount every year.
3. Get on Acorns
This app tracks your non-cash transactions, rounds each transaction up to the nearest dollar, and invests that money for you.
So if you buy a meal for $7.63 with your debit card, Acorns takes $0.37 out of your bank account and invests it for you.
If you’re someone that has several transactions per month (more than one per day, let’s say), this app is a brilliant investing option for you.
There’s also the added benefit of illuminating for you just how much you can save by investing “spare change.” (Compound interest really is the most powerful force in the universe!)
NOTE: Acorns charges a flat monthly fee of $1 for accounts under $5,000, but college students can have this fee waived for up to 4 years.
4. Learn to cook (and invest the money you save)
This one skill will save you tens of thousands of dollars over your lifetime.
Let’s do some hypothetical budgeting.
Friend who can’t cook: estimated $16 per day on food * 30 days = $480 per month.
Me: $1.30 for breakfast per day + $3.00 for lunch + $5.00 for dinner * 30 days = approximately $280 per month (these numbers are extremely conservative).
I can still go out to a moderately-priced restaurant like Olive Garden 6 times per month and still save $100 compared to my friend.
If I invest that $100 each month at a conservative 5% ROI for 20 years, I’ll have more than $33,000. It shoots up to $76,000 if I can get 10% ROI.
If I’m a homebody and invest the full $200 in savings each month, here are the numbers in 20 years:
10% ROI – nearly $153,000
5% ROI – nearly $84,000
Learn 15 recipes. That’s all I’m asking. And learn to buy certain foods in bulk. And take advantage of your grocery store’s coupons/sales.
Cooking at home will typically be healthier than eating out, thus saving you money in healthcare costs in the long run as well.
5. Don’t be an impulsive buyer.
This is the hardest one on the list. Like Taekwondo, this takes years to master, and there’s always room for improvement.
Plan things out. There are a million ways to help you learn this discipline.
Going to the grocery store? Make a list and stick to it.
Are you big into fashion? Plan your outfits months in advance (buying clothes out of season can save you more than 50%!)
You get the idea—question every purchase decision you make before you make it.
Follow these tips and you’ll be so rich you’ll have a somewhat respectable portfolio income by the time you’re 40 (assuming you start when you’re 20.)