Missed life lessons - making your money work for you

[apamburn]

Years ago in a discussion here on warriortalk Gabe made a comment that has stuck with me.

I honestly don't remember the actual words he said. But it was something along the lines of "I made sure to teach my children how to make their money work for them". It may have been "I taught my children to turn $1000 to $10,000" or something like that.

What a brilliant lesson. And one I'm missing.

My parents were upper middle class - in the early 2000s as a software engineer for the defense industry my dad was making 6 figures. Good money.

They are in no way ready for retirement. They have failed to build their own wealth. And since they didn't know how to do so, they didn't teach me.

Today I'm also a software engineer. I make 6 figures. I have a chunk of money saved. I'm a fairly intelligent person.

But I have no idea how to make it work for me: how to use it to build wealth.

Nothing is free, I know. Not knowledge and not wealth.

Tribe, educate me. How do you build wealth? And I'm not just talking about end of life retirement wealth with a 401k or IRA.

I'm asking about now - using my money to make me money. What would you do with $10k? $20k? $50k?

Gabe maybe you need to start a "Suarez Financial" venture.

[jesselp]

This is what I do for a living. I'm a financial planner.

Think of it like fitness - make small changes to produce big results over time.

Happy to have a chat offline, but the regulators get upset if I say anything too specific on a forum.

[Gabriel Suarez]

Years ago in a discussion here on warriortalk Gabe made a comment that has stuck with me.

I honestly don't remember the actual words he said. But it was something along the lines of "I made sure to teach my children how to make their money work for them". It may have been "I taught my children to turn $1000 to $10,000" or something like that.

What a brilliant lesson. And one I'm missing.

My parents were upper middle class - in the early 2000s as a software engineer for the defense industry my dad was making 6 figures. Good money.

They are in no way ready for retirement. They have failed to build their own wealth. And since they didn't know how to do so, they didn't teach me.

Today I'm also a software engineer. I make 6 figures. I have a chunk of money saved. I'm a fairly intelligent person.

But I have no idea how to make it work for me: how to use it to build wealth.

Nothing is free, I know. Not knowledge and not wealth.

Tribe, educate me. How do you build wealth? And I'm not just talking about end of life retirement wealth with a 401k or IRA.

I'm asking about now - using my money to make me money. What would you do with $10k? $20k? $50k?

Gabe maybe you need to start a "Suarez Financial" venture.


Well...financial advice is like advice on what kind of socks are best and whether red heads are sexier than blonds. Everyone has an opinion and there are rarely articles that are not ads for something. And the moment you divulge what you are doing, ten money trolls will pop out and tell you that is not right.

Today, after the Chicom/Democrat dick fucked America (and yeah...those are he words I am using because of my disgust with the nation, its docile people and their incessant lean toward communism) the ideas of the past are not as applicable. Neither is the "hoard of gold/debt free always" mindset of the preppers. So IDK...go talk to someone you can trust about that...I surely do not have the energy to argue about fiat currencies and national debt and all those things the managers of Dairy Queen like to discuss.

I am personally good financially with multiple streams of income and if I never lifted a finger I could live fine...frugally, but fine. My new business venture in the fitness realms are proving to be easy money...really easy money. I do believe many industries will die in the next few years and many business models will simply end if America doesn't do a hard right turn in November.

All I am going to say.

[apamburn]

Well...financial advice is like advice on what kind of socks are best and whether red heads are sexier than blonds. Everyone has an opinion and there are rarely articles that are not ads for something. And the moment you divulge what you are doing, ten money trolls will pop out and tell you that is not right.

Today, after the Chicom/Democrat dick fucked America (and yeah...those are he words I am using because of my disgust with the nation, its docile people and their incessant lean toward communism) the ideas of the past are not as applicable. Neither is the "hoard of gold/debt free always" mindset of the preppers. So IDK...go talk to someone you can trust about that...I surely do not have the energy to argue about fiat currencies and national debt and all those things the managers of Dairy Queen like to discuss.

I am personally good financially with multiple streams of income and if I never lifted a finger I could live fine...frugally, but fine. My new business venture in the fitness realms are proving to be easy money...really easy money. I do believe many industries will die in the next few years and many business models will simply end if America doesn't do a hard right turn in November.

All I am going to say.

I get it. As I've looked for ideas I found that about 99% of everything I read is just BS.

I've looked into everything from app development given my skill set to real estate to retail.

So far about the only thing I've determined is that retail is for the birds. Profits on almost anything that's being sold are frankly razor thin even with dealer discounts.

And based on that it also seems money is really in services or selling things you create. In other words, selling the things you know how to do and selling the things you know how to make.

Alternatively I believe real estate to be a good income source but it has a relatively high cost of entry and in the short experience I have with it can be as unprofitable as it can be profitable.

I have a rather pessimistic view of the stock market in general. I trust it about as much as I trust sleepy Joe.

But then again I'm not well versed in these things by my own admittance. Perhaps I'm simply wrong on all of this.

[7 Mary 3]

https://www.youtube.com/watch?v=ebajv8mjPTo

Sorry its just too funny.

You need a "money guy". People with wealth have "money" guys.

When I say that I dont mean someone who picks stocks.

My boss gave me the name of his guy and the first visit is free. After that its like $300 every next visit.

He will give you a laundry list of stuff to bring and spill on the table. Everything from stock holding, IRA's, insurance policies, mortgage info, car payments etc etc. The whole shebang. He takes a wide angle view of this and makes recommendations to get all those things into primal position.

If you know some people who seem to do well and aren't burning through cash as fast as they make it Id start there asking them. If they are a true capitalist they will be happy to help.

Id also consider managing that stuff like a business. I schedule quarterly calls with my investment person just to see whats up and talk. That stuff is not for day traders. Years ago I let stuff run on auto pilot and all that person done was skim off the profits and didnt do jack. Never again if I can help it.

7M3

[LawDog]

I am a good worker bee, but I do not have a head for finance. Fortunately, I married well and my wife is a financial genius. She does not sell real estate, but she works in real estate. Several years ago, she convinced me of the wisdom of buying rental properties. I was reluctant to become a landlord, and all of the Covid you-can't-evict-anyone edicts caused me some consternation. But we never had any difficulty collecting through Covid, or at any other time. Rental properties should be viewed solely as an investment; not from the point of view of whether you would want to live there. We own a postage-stamp-sized condo in a sketchy area, where I would not really want to live. It's not what I would want, but it makes money. We are in the process of purchasing a rental that is bigger and more expensive than the home we live in. It would be too extravagant for our own tastes, but it promises to reap a profit.

You need cash to play, but you don't want to go all-in with cash. Say you've got $200k cash to invest. You could buy a house that costs $200k and then begin collecting rent. Or you could put $40k down, finance the rest, and begin collecting rent...and then do that four more times. It's expensive to buy in, but once you are up and running the units pay for themselves. To be safe, don't own any single rental that could drown you if it all fell apart. With multiple smaller units, you can be fairly confident that you won't have problems with all of them simultaneously.

I know that you are in Tennessee (because I've got a bag of coffee waiting for a day that I have time to go go the post office), but I don't know exactly where. If you are near Chattanooga, I know that my wife has some strong contacts in that area who are savvy to this stuff. PM me if you've got some scratch and are looking for an introduction.


whether red heads are sexier than blonds. Poor analogy. Redheads are definitely the sexiest. That is an objectively true fact.

[62-10]

...Redheads are definitely the most expensive. That is an objectively true fact.

Fixed it for ya...& please don't ask how I know...

The above said, the mechanics of building wealth are really not difficult, provided one starts early enough, is self-motivated, reasonably intelligent, and has sufficient discipline. Notwithstanding redheads, of course.

[Red Ryder]

Lawdog , as always, had some sage advice on rentals.

My personal successes have come from being self employed for over 30 years and selling the services of my company for more than it costs me to run it.
No physical products. Built a good client list who pay me monthly and have a good reputation with vendors.

Many people are essentially contractors, providing a service that they get paid for, but they can never get past the $ amount that comes from the hours they are willing to work. Delegate the stuff that does not ABSOLUTELY require you to do it, take care of your clients and life can be good. Plenty of other things to worry about, but that gets us past being a single earner with no control over our destiny.

Next thing I learned was how to leverage my position as an owner. Paying client bills with company credit cards that pay ME 2% a month on top of what I charge clients.
This money is not taxed and can be used for anything.
COmpany cars, company trips, company meals, company computers and wi-fi, etc. Everything related to the business is a write off.

Then, I bought a building for my company and leased it to my corporation at more than I paid for the mortgage. Company paid off building, and I sold it at top of market and rolled money into 1031 real estate that pays monthly dividend and is 80% depreciated on my taxes. In 5-7 years when we sell it, the gains roll into another to avoid the capital gains but I still get checks every month. Currently, that money alone would cover my monthly nut and I do not touch my paycheck.

I have a traditional 401k through my company and again, leverage that with matching contributions that put me way over what I could contribute myself. Also have profit sharing plan that is stacked in my favor.

Also, engaged to a very successful younger woman who will take care of me in my old age (and I am redhead, not her!)

YMMV...

[Allen]

Stay away from Dave Ramsey. Doesn't encourage critical thinking and pushes some crap products. It's good for people who need a 100% rote do and don't think system. I'm sure that jesselp will tell you the same, but structured products or anything with a large upfront fee or commission is going to bite you.

With the caveat that everything Tony does is a marketing funnel ( in this case both for some structured products he has a stake in and for his financial planning co), his book does a good job of explaining what most of the options out there are, how they work and, where the product, salesperson or broker are going to get you. It's IMO worth the $20, coming from a guy who's in finance, and who grew up with two parents who both worked in finance.

https://smile.amazon.com/MONEY-Master-Game-Tony-Robbins-audiobook/dp/B00OPAJZGG/ref=sr_1_1?crid=SB3ZUCL01PUX&keywords=tony+robins+money&qid=1663879667&sprefix=tony+robins+money%2Caps%2C129&sr=8-1

[henri]

As the professional you are, be it engineer, attorney, CPA, MD, etc perhaps setting up some type of consulting business on the side of your corporate job ? And attorney friend set up several title companies which he employs paralegals to run in addition to his law practice. My CPA has three bookkeeping/accounting practices that he oversees, which generate income in addition to his private practice. In medicine, its relatively easy, given the fairly high initial salary, if one saves/invests, lives below one means for a bit, and then expands to various office locations, labs, expands to niche markets like aesthetics, for example, one has multiple income streams generating a significant income, all which can be reviewed online and an occasional visit. Also, for lack off a better term, pure dumb luck, living in an area where one can say purchase condos in the early 2000's for 300-600k, collecting substantial rent, and re-sell some in the recent past for literally 20x that amount gives one a feeling of comfort. Simple advice, branch out from your corporate job, start your own business, I was salaried for 10 years before having enough capital to branch out on my own.

[Gabriel Suarez]

Mine


I get it. As I've looked for ideas I found that about 99% of everything I read is just BS.

I've looked into everything from app development given my skill set to real estate to retail.

So far about the only thing I've determined is that retail is for the birds. Profits on almost anything that's being sold are frankly razor thin even with dealer discounts.

Amazon destroyed retail. If others can get what you sell elsewhere, they will spendcan hour to getca dime off the price

And based on that it also seems money is really in services or selling things you create. In other words, selling the things you know how to do and selling the things you know how to make.

Yes...but. I suggest reading Purple Cow. Look at the Glock market. We werecthe first withbred dots, slides, triggers, and just about everything else. Fact of history. Now everyone is doing it and making money on Glock is like trying to make money on ARs.

In business you always need to be moving, innovating, abandoning, and grasping and moving

Alternatively I believe real estate to be a good income source but it has a relatively high cost of entry and in the short experience I have with it can be as unprofitable as it can be profitable.

I have a rather pessimistic view of the stock market in general. I trust it about as much as I trust sleepy Joe.

Depends how you do it.

But then again I'm not well versed in these things by my own admittance. Perhaps I'm simply wrong on all of this.

[Gabriel Suarez]

Agree 100% on Ramsey



Stay away from Dave Ramsey. Doesn't encourage critical thinking and pushes some crap products. It's good for people who need a 100% rote do and don't think system. I'm sure that jesselp will tell you the same, but structured products or anything with a large upfront fee or commission is going to bite you.

With the caveat that everything Tony does is a marketing funnel ( in this case both for some structured products he has a stake in and for his financial planning co), his book does a good job of explaining what most of the options out there are, how they work and, where the product, salesperson or broker are going to get you. It's IMO worth the $20, coming from a guy who's in finance, and who grew up with two parents who both worked in finance.

https://smile.amazon.com/MONEY-Master-Game-Tony-Robbins-audiobook/dp/B00OPAJZGG/ref=sr_1_1?crid=SB3ZUCL01PUX&keywords=tony+robins+money&qid=1663879667&sprefix=tony+robins+money%2Caps%2C129&sr=8-1

[BB82]

A basic life money lesson starts with understanding income.
There are three types: earned, portfolio, and passive.
Earned is what you make at a job...doctor, construction worker, etc.
Portfolio are capital gains made on stocks and investments.
Passive income is income that is recurring such as having rental properties (notice not neccessarily "owning"), or royalty payments, or anything that has people sending you money on a regular basis.
Understanding the tax system as applied to your prefferred type of income is essential. Understanding that you dont typically pay tax on borrowed money, and using that money to make money is a smart concept as well.
Multiple streams of revenue define most successful people that I know, but I also know a handful of single-stream multi-millionaires who just beat every dollar out of their 'cash donkey'.
Equally as important as making money is keeping that money. With exceptions, many of my filthy rich friends live middle class lifestyles. They wear clothing from Target and drive Toyotas and vacation a couple of times a year at the beach. Nothing wrong with enjoying the finer things in life, but keeping an eye on the bottom line is essential to maintaining your comfort levels until your last heartbeat. I know several people who ran out of money before they ran out of life. That scenario circles back to how you make your income. Having a passive income stream always working for you is a time-tested preventative to running out of money.

[UNO]

Years ago in a discussion here on warriortalk Gabe made a comment that has stuck with me.

I honestly don't remember the actual words he said. But it was something along the lines of "I made sure to teach my children how to make their money work for them". It may have been "I taught my children to turn $1000 to $10,000" or something like that.

What a brilliant lesson. And one I'm missing.

My parents were upper middle class - in the early 2000s as a software engineer for the defense industry my dad was making 6 figures. Good money.

They are in no way ready for retirement. They have failed to build their own wealth. And since they didn't know how to do so, they didn't teach me.

Today I'm also a software engineer. I make 6 figures. I have a chunk of money saved. I'm a fairly intelligent person.

But I have no idea how to make it work for me: how to use it to build wealth.

Nothing is free, I know. Not knowledge and not wealth.

Tribe, educate me. How do you build wealth? And I'm not just talking about end of life retirement wealth with a 401k or IRA.

I'm asking about now - using my money to make me money. What would you do with $10k? $20k? $50k?

Gabe maybe you need to start a "Suarez Financial" venture.

I have dabbled some in the stock market. That's what I do when I want to "make my money work for me". I don't really know what I'm doing with it though, is the issue. I would seek out a solid financial/stock advisor, personally. I've only put a few thousand in to play with. Took some out, put some in, etc.

You can see I stayed out for some time, after my initial go at it, but have since put $1000 in to play with some more.

Back in the beginning of this graph, a friend had $10K and I told him to invest with me. He refused. I put in $2800 and pulled out $9200 a year later, so he would have been quite happy, had he done it, I believe.

The main thing I do is just turn money into assets, because land and so forth tends to be a solid investment even if you're dumb to those things somewhat.

63609

I used it to buy myself some night vision, got it for about $2800, lol! (2650+ fom L3 filmless w/0.5 and 0.7ebi and clean tubes, custom speced)

63610


Also...all of my rich friends recommend a tax sheltered investment. Vanguard total market, etc.

[Winchester67]

My parents drummed into me to stay out of debt. Of course, you will have to borrow sometimes, like for a house, but avoid anything that has a monthly payment. I lived like I was still in college when I graduated and got a suit and tie job. All my friends bought a new car. Not me. By the time I was 22 I bought a new house. Driving a "classic" car was much cheaper than buying a new car, so the 1967 Fastback Mustang I drove was actually saving me money. (this was the late 80's, probably tough to do that now) And I didn't look like a hobo schlepping around in a junker car. Live modestly and most importantly, marry the right woman. The wrong woman can spend it faster than you can make it, no matter how rich you are.

[LawDog]

marry the right woman. The wrong woman can spend it faster than you can make it, no matter how rich you are.That lesson goes way beyond money. The only decision in life more important than your wife is choosing Christ. Your wife will make you or break you. Whether it was luck or brilliance, I am fortunate to have chosen wisely. Left to make my financial investments alone, I would have an impressive arsenal but a poor portfolio. But I realized early on that I was better served by delegating a lot of the financial decisions to her, and she has far exceeded any expectations that I had.

When you are a lawyer, everybody assumes that you are raking in the dough. The reality is that my income is pretty modest. I do fine, but lawyering in my area is still working for a living. My wife--working in real estate--has made more than me through most of our marriage. She has also had the opportunity to work with a lot of people who are making LOTS of money, and to learn from the things that they do.

We have also seen a lot of bad decision making. She audited one guy's business to help him identify areas where he could cut expenses. She discovered that he was spending over one-hundred dollars a day on alcohol (as a business expense, of course), and he tried to justify it. In his mind, taking clients out for drinks was part of the job, and it would be poor form to not pick up their tab. That is idiocy. She finally put it in terms he could understand: if he stopped buying everyone's drinks, he could use the same amount of money to hire a full-time assistant.

In my own field, I see lots of guys who always wear the slickest suits, and they have the fancy watch and the newest Audi. They convince themselves that you need to do all of that in order to get clients. I am very aware of the reality of the image game, but I also know that a fit physique in a Men's Warehouse suit will beat a fat belly in an Armani every day of the weak. And I'm confident that I've never lost a client because I drive an aging pick-up truck.

In order of importance, I would say the simple financial rules are these:
1) Choose your wife well.
2) Tithe.
3) Don't go into debt for non-essentials.
4) Own your home.
5) Save for retirement. (Current wisdom is 7%.)

Those are the basics. The question posed in the OP is about more advanced strategies, once you've got these covered. But it is worth pausing for a moment and reflecting, to ensure that we are genuinely covering all of the basics first.

[Herbert West]

In reference to Lawdogs' comment, an old joke comes to mind. I became a millionaire after marrying my first wife. What were you before? A multimillionaire. In retrospect, I made money fairly easily, I worked hard for a few years mind you, but I went from worker bee to dept chairman, then obtained contracts at other hospital departments, eventually selling my corporate group of several departments to a large investment firm and never had to worry about money ever again, in this lifetime and generations to come.

[UNO]

Being unmarried has definitely afforded me many benefits and advantages. ^^^^

[BillyOblivion]

The first thing is to pay off *any* credit cards, and don't carry a balance unless it's an emergency.

There's nothing wrong with credit, it's useful, but the credit card rates are absolutely usurious.

Have enough money for a month or two in a savings account, then start to pile cash in some sort of account/instrument where you can get to it in a week or so if needed. Money market, certificates of deposit, anything that makes more interest than a savings account, but is relatively easy to get at if things go south. Having 6 months + worth of expenses in the bank eases the hell out of the mind. All my cars are old and paid off. If one of them blows up and burns down I can buy a similar car on my credit card and pay it off on the next statement.

There's tactical reasons for having cash ready to hand as well, but we won't go there in this post. Just consider, things have gone pear shaped and you have to do something you don't want easily traced back to you. How could 10 or 15k in cash make that easier?

As a software engineer you are probably working for a company that does 401k matching. This is the first thing you should investigate, as the money you put into a 401k is tax deferred, and if your company matches it that's an immediate gain. One cannot predict the future, but over *decades* the stock market beats inflation. This isn't how you become "rich", but 30 years of putting 20k a year in means you have at least peace of mind when you retire.

Then buy a house. Doesn't have to be much of one, but if you rent you lose 100 percent of that money every month AND your rent goes up. When you have a mortgage a certain percentage of that stays as equity, and the longer you live in the house the more equity it is. Don't jump homes every couple years like some people do, unless you can buy "distressed" properties and fix them up. The goal, as I see it, is to hit retirement age with either NO house payment, or a very low one. Then you have a property that you can either sell if you want to move into a "retirement home", or you can rent the house out while you move into a smaller (more easily cleaned/maintained) residence.

The rest of it is dependent on your personality and how you want to live. Some people want to live 100 percent for the future, shopping at Aldi, living in a tiny home and squirreling away money like mad. Others want to live ENTIRELY for the present, and if you've done those things above (6 months expenses, 20.5k a year into a 401k, buying a reasonable home) then you've got *some* decent retirement, live how you want to. Even at today's interest rates you're saving *some* money.

I am not temperamentally suited to "flipping" houses, I don't want to spend my nights and weekends doing maintenance work or building cabinets. Some people are, if you like working with your hands and fixing s*t, save up 50 or 60k, buy a "distressed" house (get it THOROUGHLY inspected so you know what is wrong), fix it up and sell it or rent it out. Done right, this is a great way to pile up cash.

Other people like to "play" the stock market. A couple of my relatives did, and continue to do very well. One of my cousins has done well, but he spends a lot of time on it, and it sort of eats at him.

I just stuff my 401k money in no-load mutual funds and keep half an eye on them. Rebalance occasionally.

[UNO]

One trick I utilize is cash-back CC's. I have all of my bills except house and car note coming off of a "desk drawer" card. It lives in my desk, and ONLY is used for recurring bills. Instead of my checking account. This automatically applies what amounts to 1.5% off of every bill I pay, from the gym to jujitsu to my internet. Also, if anything happens to me, I have a long run-way before things start getting shut off, and hopefully by that time whatever happened has un-happened, or I'm dead and don't care.

[golucky]

To the OP, many great advice on this thread. I don't have much to add except to validate what others have already stated with my experience to these very same advice I've received over the years from others or read from literature. Apologies if this post is a long read, but I wanted to include the other's post to validate my own experiences.

1. Your plan will be different from others, find what best fit for you, your skillset, and adjust accordingly especially for major life events. E.g. Marriage, having kids, new job, etc. When each of our kids were born, about 3 months after we started $50 biweekly auto-deposit into their college fund. As Jesselp stated, "Think of it like fitness - make small changes to produce big results over time". Over time, as our income increased, so too did the kid's college fund deposit from $50 to now $200 biweekly based on percentage of what we earned. Today, each kid has a full college-ride and that's before any scholarship, etc.
2. Apamburn stated, "...99% of everything I read is just BS". Yes, I too have read/heard a bunch of BS. I absorbed as much as possible, especially in the beginning to get the necessary foundation. Many big time names out there, Orman, Ramzy, Cramer, Buffet; while very good speakers, actually see what they are truly trying to sell and only use what is best for you without getting raked over. As Allend stated, "Stay away from Ramsey" and about Tony Robbins "his book does a good job of explaining what most of the options out there are....It's IMO worth the 20...." Fully agree. However, there's a wealth of SI members on here who can both talk and walk, with actual results of their financial decisions.
3. Real Estate: My father did real estate, all rentals. I watched, listen, fixed-up properties, and even did security with him. I learned my skillset is not construction, minor-work is fine for me. Going to court to evict sucks and drains your time and $$. Today, I do have rental properties, do some minor work when time permits, but I have a management company that does not all the major work from application process, background checks, property inspection, changing locks, going to court, etc. I avoid those 2 a.m. calls when something breaks. Yes, I pay them as percentage, but for the amount of time I save, its used to generate money elsewhere. All my properties are either near a medical center or college. I check the HOA rules before buying to ensure short-term leases are allowed such as Air Bnb, etc. When the Superbowl was in town, I lease one of my properties for 6 days at $400 a night which equated to 3 months of regular income for that same property. As Apamburn stated, "...real estate to be a good income source but it has relatively high cost of entry and in the short experience I have with it can be unprofitable as it can be profitable". Sound advice here. My current read is "30 Properties Before 30" by Eddie Dilleen just to find out if there is anything to add to my current situation/toolbox.
As LawDog stated, "Rental properties should be viewed solely as an investment; not from the point of view of whether you would want to live there". The same here. This includes LawDog's purchasing a more costly rental property with the potential for bigger profit. I too purchased up. Recently bought our 1st tourist area condo in Florida which cost more than my own home but its short-term leases during the summer, right on the beach, can have bigger returns. renting it for half a month will pay for the full month's expenses. And during the winter, snowbirds will rent out for a whole month but at a lower price point but not by much. Your deposit should be enough to avoid PMI (typically 20% down) which is insurance you're paying for the mortgage company in case you faulter. Buy why pay $$ for someone else?
Red Ryder proof and golden nugget, " Company paid off building, and I sold it at top of market and rolled money into 1031 real estate that pays monthly dividend and is 80% depreciated on my taxes. In 5-7 years when we sell it, the gains roll into another to avoid the capital gains, but I still get checks every month. Currently, that money alone would cover my monthly nut and I do not touch my paycheck." Same here, I roll the gains too to avoid capital gains tax.
My friend doesn't do rental, instead he flips properties because he doesn't want to deal with tenants. At times, he needs investments partners to buy higher end properties. I invest with him after looking into his "books" on said property before deciding.
4. As 7 Mary 3 stated, "You need a "money guy". Yes, I too have a money guy. Again, bring everything to the table for that needed advice. He did and since then, he has both save me $$ on taxes just by moving my funds into different types of account, consolidated a few, and witnessed my portfolio increased significantly. I see him as part of a team including the management company, the handyman, the construction/remodeling crew, lawyer, etc. As they a part, view them as temporary. They are not family. Once they can't serve my purpose or no longer beneficial to me and mine; move on and replace them with someone who can. It's not personal, its strictly business. I tell each one upfront.
5. Stock Market. Personally, I'm not very good at daily investing. Mostly, I've broken even and when I did daily investing, it ate too much of my time (as said by BillyOblivion). As my $$ guy said, it's for my play $$, my Vegas $$. If you have some extra, sure why not. Or choose something else (training and gear from S.I.)
6. Winchester67 example of driving a vehicle that does the job you want, paid off, live modestly, and marry the right woman. Gold! As also said by LawDog. Another is BB82 statements of the rich friends living middle class life, driving Toyotas, clothes from Target, etc. My friends say I fall within this category or "the millionaire next door". My Ford150 is paid off, 12 years old, been reliable, and the $$ I save is invested. All our vehicles are paid off and we run them until they fall apart or no longer financial sense to fix them. Before you retire, buy and pay off a reliable vehicle as you might be on a fixed income during retirement.
7. Retirement accounts - my company has 401K. I max it out at 14% as they also match it $1 to $1 at %14 ! BillyOblivion mentions "30 years of putting 20K a year in means you have at least peace of mind when you retire". Another golden nugget as I too ensure I put away at least this amount. As I maxed out my 401K, I find other places for the retirement fund. I too have a tax sheltered investment or no-load mutual funds as both Uno & BillyObilvion suggested.
8. Home - paid off, been here for 20 years. BillyOblivion posted advice which I've also done. We've builded up over the years a "rainy-day" fund, just in case. initially our goal was 3 months’ worth, then 6 months to 1 years’ worth. An now has built way past this. Also, in an account generating interest.
9. As UNO stated, "One trick I utilize is cash-back CC's." Ensure you look at what they are charging for this. Many will charge a yearly fee. If you hardly using the card that the rewards are less than the annual fee, you are wasting $$. I use both cash-back and air mileage CC's. E.g. Our air milage CC's generate so much miles that we fly every year for free to a vacation destination including Hawaii. Sometimes the mileage is used for rental cars and hotels. Our last trip to Florida, we only used $$ for food and entertainment. Ensure your air milage doesn't expire. Our CC is tied to Southwest airlines. The CC is paid off before their interest kicks in.
Best,

[apamburn]

I genuinely appreciate everyone's input here. There is a treasure trove of information, as is typically the case here at WarriorTalk.

My approach at the moment is to move into rentals. I am working on acquiring a few different properties here locally that I think will work out. I will eventually put these and any other properties I end up with under management for the reasons cited by others.

I'm also doing some sidework in the software realm as that is my skillset but like a 9-5, it requires babysitting.

[Mike OTDP]

WRT money, I'm a fan of the Motley Fools. They have advice suited to the common man, as opposed to the wealthy investor. Short form:
1. Pay off the credit cards. They're charging you 18-20%, with 100% certainty of collecting. There's no investment you can make that pays that much with 100% chance of working.
2. Take advantage of retirement products such as IRAs and 401Ks. If your employer does matching, put at least that amount in. Whether to do a Traditional or Roth IRA depends on where you are in your career, how much money you are making, and whether you figure on retiring at a higher or lower tax bracket. I'd suggest doing a Roth IRA until you are 35-40, then switch to a Traditional. But run the numbers for YOU.
3. A 10% increase in the house payment can get you a 15-year mortgage. You get a lower interest rate, build equity a lot faster.
4. If you're going into the stock market, it's hard to find a mutual fund that can beat the S&P 500 index...and that index fund has a lot lower overhead.
5. If you're going into the stock market, have courage. Most small investors panic when the market drops, lock in their losses, and lose their shirts. If anything, it's when the market drops and people are panicking that you buy. I shoveled every dime I could spare into the market in March-April of 2020...made a hefty profit.
6. Buy quality goods, make them last. I expect my cars to go 150K miles...my Miata was retired at 243K.

[UNO]

Fees matter as stated. One CC I have is no fees, one is $39/year. I make way more than that on the cash back.

[Oscar01]

Mike OTDP and golucky did an excellent job summarizing.


One thing I didn't see mentioned is cashflow.


How much are you making each month and how much are you spending each month. There might be some frivolous expenses that can be reduced or eliminated.

[apamburn]

Well, I ended up moving on an investment property here and I'm currently under contract.

40 acres, all but 2 or so acres wooded, about 15 minutes from my house, within the county near the city but outside the city limits. There is already a house on it that needs to be renovated.

My plan is to put a few mobile homes on it since two to three mobile homes will cost me as much as it would to renovate the house and each will rent for as much as the house would, and will be faster to get cashflowing.

The first mobile home, maybe the first two depending on how much I actually rent them for, will cover the loan. I'm going to roll the rest of the cashflow into rehabbing the house, then get that rented.

At that point $130,000 for 4 rentals that will net $2200 - $2500 per mo is already pretty good...

But I'll probably put more mobile homes on the land if I can.

The back part of the property may not be something I can develop due to incline though.

If not, and in the meantime, I have a place to shoot (already measured and I can get about 400 yds) and hunt.

Other monetization ideas floating around in my head include:

- selling some lumber to logging companies so I can clear some trails, set shooting lanes, or clear space for more trailers
- clearing campsites and renting them or cabins
- making the shooting range commercial
- hunting leases

Worst case eventually I can just peel off the back chunk of land and sell it on its own.

The bank is financing the purchase and whatever renovations I want. Initially I was only going to borrow enough to do maybe one mobile home and then use cash on hand to do the others; but after crunching the numbers, if I borrow enough money to install all of the mobile homes and renovate, the impact on my cashflow and downpayment is small, so I get to keep more of my cash....so I think I am leaning towards doing that.

I'm already approved for whatever I want to do, just have to decide. Will talk to loan officer some more now that he is back from vacation.

[LawDog]

My plan is to put a few mobile homes on it since two to three mobile homes will cost me as much as it would to renovate the house and each will rent for as much as the house would, and will be faster to get cashflowing.

The first mobile home, maybe the first two depending on how much I actually rent them for, will cover the loan. I'm going to roll the rest of the cashflow into rehabbing the house, then get that rented.1) Look into the concept of a “detached quadplex.” You may not need it. If you are zoned for multiple mobile homes, then you probably don’t. But learn the concept anyway.

2) When rehabbing the old house, keep in mind that it’s not for you. Also, the “industrial” style is both hip and cheap. Exposed plywood edges are in.

[bubba in c.a.]

The old paperback the Millionaire Next Door, which can probably be had cheap used, sums it up. Work because you have a passion for making money and know life can go downhill rapidly but Cash is King. Live frugally and marry somebody who acts the same. Raise kids who will see how hard you worked and will never become rich even with your help. They will become big earning, big spending yuppies, champions of the 9 to 5, fancy vacations and 401Ks.

My regret is not buying rental units and hiring professionals to run them. My goal in old age is to leave my current wife 2 units when I die. She can go live with her relatives and live off the unearned income from the rents.

[UNO]

The old paperback the Millionaire Next Door, which can probably be had cheap used, sums it up. Work because you have a passion for making money and know life can go downhill rapidly but Cash is King. Live frugally and marry somebody who acts the same. Raise kids who will see how hard you worked and will never become rich even with your help. They will become big earning, big spending yuppies, champions of the 9 to 5, fancy vacations and 401Ks.

My regret is not buying rental units and hiring professionals to run them. My goal in old age is to leave my current wife 2 units when I die. She can go live with her relatives and live off the unearned income from the rents.

I admit, I like to spend my money. Ive watched enough people die who didn't plan on it that my enjoyment, etc trumps a fat savings any day.

[Gabriel Suarez]

I admit, I like to spend my money. Ive watched enough people die who didn't plan on it that my enjoyment, etc trumps a fat savings any day.


Finally!

[apamburn]

I admit, I like to spend my money. Ive watched enough people die who didn't plan on it that my enjoyment, etc trumps a fat savings any day.

I want passive income precisely so that I have more free time and more income to *not* live frugally and enjoy my days.

[UNO]

I want passive income precisely so that I have more free time and more income to *not* live frugally and enjoy my days.

I wouldn't say I live frugally. This year I bought binocular nods, traded between a rav4 prime, rdx aspec advance, and volvo c40, and am ordering an ev6 gt as soon as orders open. Paid off all CCs for good. Just in general have been enjoying life. I typically work 3 days per week, but yeah, 0 days is THE goal!

[Mike OTDP]

I typically work 3 days per week, but yeah, 0 days is THE goal!
Don't be too sure of that. I retired in July of last year, and am now starting to look for another job. Mostly to stave off boredom (meaning that I can be fairly selective about what job I go with).

[UNO]

Don't be too sure of that. I retired in July of last year, and am now starting to look for another job. Mostly to stave off boredom (meaning that I can be fairly selective about what job I go with).

I have no desire to work, nor do I find myself bored. If I live long enough to retire, I'll embrace it.