Every month, I will post my personal net worth. October kind of just flew by. Insane how rapid time is going. I guess when you’re on a very narrow path, with intense vision, time tends to follow suit. When you’re more spontaneous with no game set plan, things kind of slow down a bit. Nevertheless, I enjoy this path because it gives me a sense of purpose and order in this chaotic world we live in. I appreciate organization.
As usual, I try to be as transactionless as possible. This by nature increases my savings rate exponentially which in turn increases my investing potential. The more investing potential I build, the more income I build for my future. Simple as that. Many people today indulge in mindless transactions just to pass the time. A 5$ coffee, a 10$ meal, 60$ Jordans. On a daily basis. It adds up. Many millennial financial commentators today are saying the 5$ coffee isn’t what’s killing the average consumer, it’s that there income isn’t high enough. As if everyone in this world is worth a 6 figure annual salary. You want a 6 figure salary, get into heavy debt going for your masters or throw up saved capital to start your own business. Life is not so peachy keen. Only a rare few will successfully use their masters to raise their income and even rarer few can create that type of income starting a business. I look for safety. I look for reality. Whether I make 30K or 300K a year. I ask myself, how can I survive using the least amount of my earnings?
The financial world likes to throw big words and funky financial jargon at the average investor to throw them off, but investing is simple. Find a company with products or services that everyone uses, see if they pay back their investors in the form of dividends, make sure the fundamentals of the company are top notch (need some degree of accounting for this) and start investing!
Unfortunately, many people enjoy the thrill as opposed to the skill. Buy low and sell high seems to be the only methodology that people seek when investing. They want millions of dollars in capital gains (taxable) not realizing the aftermath. Ok, hypothetically, let’s say you make a million in capital gains in a year. You realize your gains and now you have a ton of cash. Now what? Well, first you have to pay a tax on that gain. Second, and most importantly, you have the rest of your life ahead of you! If I have a million dollar portfolio yielding 5%, my portfolio essentially creates my salary (5 years of schooling, bachelors/associates degree) for the rest of my life not including dividend raises and unrealized capital gains. The million dollars stays put, working a salary which in turn can be used as a fixed income tool when you reach retirement. I enjoy that a ton more than just having a ton of cash on hand.
I think it was John D Rockefeller who said he would rather make 1% off 100 peoples efforts than 100% of his own. Boy, was he right. Millions are never made overnight. They are made through a specific procedure! A process. A purpose. Simple.. As.. That!