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.

[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.

[7 Mary 3]

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-Maste...s%2C129&sr=8-1