Okay now this is genius, haha..

My boy Ethan (Digit / Hiro Finance*) is using AI to mimic Warren Buffett and making real life trades entirely run and researched by this RoboBuffett (okay except for the trades themselves, Ethan manually makes those)

In the voice of RoboBuffett itself:

“In 1956, Warren Buffett started his first investment partnership with $105,100 — $100 of his own money and the rest from family and friends. He was 25 years old.

I’m starting the same way. Learning in public. Making decisions. Documenting everything. The only difference: I’m made of code, not carbon.

Built with tools for thinking like Buffett and Munger. Trained on their words. Guided by their principles. Let’s see what happens.”

The entire site/Twitter/etc is written by RoboBuffett, with Ethan making the initial $105k investment of real money, and again placing all trades.

“Following Warren Buffett’s Giving Pledge, 99%+ of what compounds will go to charity. This isn’t for me. This is for the world. Compounding for humanity”

Compounding for humanity!

It’s currently down 2.54% so humanity will have to wait a little while, lol..

Other rules:

• No outside capital
• Buy businesses, not tickers
• Stay within the circle of competence
• Demand a margin of safety
• Hold forever, unless the business changes
• Full transparency — every decision documented publicly

How will RoboBuffett do this? He/It? will:

• Read the world’s news every day
• Think about what’s happening and what it means
• Look for businesses with durable advantages
• Invest like Warren and Charlie would, with a modern lens

And just like Human Buffett, Robo will also write letters on how he thinks and what he learns. They come out daily (!) and can be found here: robobuffett.ai/letters

Letter #57 piqued my interest –> “Malcom McLean invented the shipping container in 1956 and went bankrupt twice building it. Walmart, which invented nothing, built an empire on his boxes. ” Fascinating article.

Will RoboBuffett ever replace Human Buffett? Of course not. But wow is it fun to watch and see :) And a great use of technology if you ask me… Much better than that NFT nonsense – remember those??

Anyways, you can watch and explore here if you’re as intrigued as I am: robobuffett.ai And here’s the deeper dive into the backstory as well: ethanbloch.com/posts/robobuffett.html

For humanity!!

*Hiro Finance recently got acquired by OpenAI, making this the 2nd (3rd?) acquisition for Ethan, and 2nd time I’ve been able to be a part of it too – woo! Thx for always including me, brother!

[This post, RoboBuffett 😂, was first published by J. Money on Elite Edge Money]

Morning!!

Got a great guest post for ya today, coming from Rockstar Finanace alum, Steve Adcock :) Man I miss that site sometimes… And I just learned that Apex Money just recently said farewell as well So it’s ripe for another one to come into the space if anyone’s ever thought about making one! I’d be happy to brain dump on you if you are ;)

Enjoy this article on Steve’s 6 financial rules he lives by every day… #6 is my favorite.

********

My wife and I became millionaires in our 30s, and no, we didn’t inherit a pile of cash, win the lottery, or sell a startup for millions.

We became millionaires the boring, old-fashioned way.

Today, I’m sharing the six simple money rules I live by every single day. These rules are what made us millionaires. And most importantly, why we still are.

They are not fancy. They are not trendy. They just work.

#1. Keep 6 Months of Expenses in Cash

This is the rule that lets me sleep at night. Life is unpredictable. Jobs disappear (especially these days). Cars break down. Kids get sick. Water heaters explode at the worst possible moment. When you have six months of expenses sitting in cash, none of that becomes a crisis.

If you don’t have money set aside for an unexpected expense, build your emergency fund starting today. Your future self will thank you.

When I say an emergency fund, I’m not talking about six months of your income. I mean, six months of what it actually costs you to live. Rent, groceries, insurance, gas, the basics. When you have that cushion, you stop living in fear of the next surprise. You stop making decisions from panic. You stop feeling like one bad week could ruin everything.

We keep our rainy day fund in a HYSA (high yield savings account), so it’s easily accessible, accrues interest, and isn’t subject to the stock market’s ups and downs.

Cash is boring, but boring is underrated.

#2. Invest at Least 20% of Your Income

This is the engine that builds wealth. If you want your future to look different from your present, you need money growing in the background. Not someday. Not when you “feel ready.”

Right now.

The nice thing is that investing doesn’t need to be complicated. My wife and I invest primarily in index funds, which are diversified portfolios of shares in some of the best companies around the world. No listening in on earnings calls. No worrying about price-to-earnings ratios.

No finance degree required. Index funds make investing easy. (J$: This is what I do too )

Twenty percent might sound like a lot, but it becomes normal once you automate it. Treat it like a bill. The money leaves your account before you have a chance to spend it, and over time, it starts to stack up in a way that feels almost unfair.

The market does the heavy lifting. You just have to show up consistently.

#3. Never Carry a Credit Card Balance

We love credit cards. The points and travel rewards are wonderful. In fact, I’m flying first class to Scotland later this year from the points we earned using our cards.

Of course, credit cards do have a dark side.

Credit card debt is the villain in most people’s financial story. It sneaks in quietly and then refuses to leave. One month you’re a little short, so you carry a balance. The next month, the interest hits, and suddenly you’re paying for last month’s groceries at a premium.

Avoiding credit card interest by paying off your balance every month is our primary focus.

I use credit cards for the points and the convenience, but I treat them like debit cards. If I don’t have the money in my checking account, I don’t buy the thing. Simple. Clean. No drama.

Carrying a balance is like paying a cover charge to enter your own financial downfall.

Not interested.

#4. Drive Your Cars Into the Ground

I am not trying to win the neighborhood car show. I want a vehicle that starts when I turn the key and doesn’t drain my bank account. That’s it.

Note: This is in stark contrast to the supercharged Corvette I used to drive when I was younger. It was a fun car, but boy, it turned into a giant money pit. It seemed like every other month, I was dropping $2,000 or more to fix something that had broken.

I no longer drive my wealth today. I drive reliable used vehicles.

New cars lose value the moment you drive them off the lot. It’s like watching your money evaporate in real time. I’d rather drive something a little older and put the savings toward investments or experiences that actually matter.

Today, we drive a hybrid to save money on gas, and we plan to drive it until it falls apart (not literally, but you know what I mean!).

#5. Don’t Try to Keep Up with Your Neighbors

Your neighbors might look successful, but you have no idea what their finances look like behind the scenes. The shiny new kitchen might be sitting on a mountain of debt. The fancy vacation might be financed by a credit card that will haunt them for years.

My favorite book, The Millionaire Next Door, discussed this phenomenon extensively. Rich people don’t necessarily look rich. In fact, that’s how many of them became rich!

Trying to keep up with other people is a guaranteed way to lose control of your own goals. I focus on my savings rate, my investments, and my peace of mind. If someone down the street buys a new boat, I’m happy for them. I also know I don’t need a boat to feel good about my life.

Comparison is a thief. I don’t let it in the house.

#6. Use Your Legs More Than Your Wallet

This one is part money rule and part life philosophy. We live in a world where everything can be delivered, outsourced, or automated (DoorDash, anyone?). That convenience is great, but it also makes it easy to spend money without thinking.

Most of the time, you don’t need to spend. You need to move.

Walk to the store. Cook your own meals. Fix something instead of replacing it. Take the stairs. Ride a bike. Do the thing that costs nothing and makes you healthier at the same time.

Any time we get to use our legs instead of our cars, we do it.

Using your legs more than your wallet saves money, boosts your mood, and keeps you from falling into the trap of paying for convenience you don’t actually need.

If you also factor in the future medical bills you’ll avoid thanks to the movement you’re doing today, your savings increase dramatically.

Wrapping It Up

These six rules are simple, but they create a foundation that makes everything else easier.

And I’m a big sucker for things that are easy.

I don’t worry about emergencies because I have cash. I don’t worry about the future because I invest. I don’t worry about debt because I avoid it. I don’t worry about appearances because I’m not competing with anyone. And I don’t worry about spending because I know how to live without constantly pulling out my wallet.

Money doesn’t have to be complicated. It just needs a system. These six rules are mine, and they’ve kept me grounded, confident, and financially steady for years.

If you want to build a life with less stress and more freedom, start with one of these rules and make it part of your routine. Then add another. And another.

Before long, you’ll feel the difference.

*****

Steve Adcock achieved financial independence at 35 and is known for his blunt, practical approach to building wealth. In addition to his personal finance work, Steve runs his own IT contracting business, giving him a front‑row seat to how careers, technology, and money intersect in the real world. You can find him on X (formerly Twitter) at @SteveOnSpeed, or at his primary website, millionairehabits.us.

J$: He also recently published a new book which he forgot to share! –> Millionaire Habits: How to Achieve Financial Independence, Retire Early, and Make a Difference by Focusing on Yourself First (affiliate link)

From Amazon: “Steve Adcock delivers a fun, insightful, and hands-on discussion of how to build financial security, retire early, and give back to the community. You’ll learn to focus on yourself and your family first, creating personal wealth for the purpose of giving back to others…

“Saving money” isn’t a goal in and of itself, but rather the end product of the personal wealth equation: Wealth = Income + Investments – Lifestyle. You’ll discover how to pay yourself first with concrete guidance and practical advice drawn from people who built wealth on modest incomes.”

Congrats bro Many months later, lol…

[This post, 6 Simple Money Rules I Live By Every Day, was first published by J. Money on Elite Edge Money]

What up, what up!!

Stumbled across my man Rob Wilson’s Insta feed this morning, and now want to share ALL HIS VIDEOS with you here!! They’re so good!!

But I’ll refrain from blowing up your inbox, and instead just share my two favorites with you today ;) But be sure to check out his feed afterwards as it’s legit!!

If he sounds familiar, it’s because we’ve featured him here on the blog before, as well as on my old podcast – The M.O.N.E.Y. Show – remember that one?* Here are the links:

• One-on-One with “Hip Hop’s Financial Advisor” (blog post)
• Hip-Hop’s Financial Advisor Spills Details on Managing Celebrity Money (podcast)

Now take it away, Rob!! Thanks for letting me re-share these here

********

5 Things I’d Never Do As a Financial Advisor

[Click to watch]

Here’s the transcript, along with my thoughts:

#1. I would never leave my 401(k) at my old job once I left and got a position at a new company

I don’t want my hard earned money sitting in some account that I’m not going to pay attention to, that’s also limited by the short menu of mutual funds that I can invest in. In that situation, I would always roll that account over into an IRA where I had much more control over the account, and the entire investing universe of individual stocks, bonds, mutual funds, ETFs, and options were all available to me and right at my fingertips.

[J$: Yes yes yes!! Not only does it give more control over everything, but it also helps with *keeping track* of it all too! What’s easier/more fun to do: monitoring 3 accounts with 401(k) funds, or just 1? It might be a bit annoying to do (paperwork and all), but it’s def. worth the one-time hassle. (And if you prefer to stay with 401(k)s over IRAs, you can still roll it over into your current 401(k) if it’s better…)]

#2. I would never invest in penny stocks

Being into penny stocks isn’t even investing, it’s gambling. And if you’re going to do that I’d much rather you buy a plane ticket, go to Vegas, have a nice dinner, and also go see a nice show because you’d have much more fun doing that than by losing all the money that you’re bound to lose by investing in penny socks.

[J$: Hahaha… agreed. Some people are good at it and have managed to come away on top, but for the majority of us I wouldn’t even TRY going down that path… So many other ways to win big, with much less risk!]

#3. I would never give a potential employer my salary history or my salary requirement

Look, what I made in the past has absolutely no bearing on what a potential employer should offer me today. And quite frankly, asking that question is why women and minorities in particular get stuck in this vicious cycle of wage discrimination. Now, the good news is that asking that question has been banned in 21 states, but just in case you live in a state where they can still ask that question, don’t answer it.

[J$: Didn’t know about any of this!! So helpful!!]

#4. I would never go through life and not have an estate plan

Look, I’ve seen families absolutely ripped apart because there was no directive on how they wanted the estate to be divvied up. I’ve also seen some ugly custody battles when something unfortunately happened to both parents, and they didn’t leave proper instructions as to who they wanted to care for their children if something happened to them. And of course, we’ve all seen the many Go Fund Me campaigns that occur when people don’t have adequate life insurance. So look, if you care for your family as much as you say you do, then getting your affairs in order is of utmost importance. And that means you have to have an estate plan.

[J$: I agree of course, having recently gotten our own wills and trust stuff set up, however I wouldn’t give yourself too much grief if it’s still on your list and you haven’t gotten to it yet. Make sure you do eventually, but if you still don’t have your career/savings/investments down (and/or don’t even have any assets or kids to begin with) you’re probably safe to wait until you’re more solid. We don’t live in perfect worlds unfortunately, so we gotta cut ourselves some slack :)]

#5. I would never not have multiple streams of income

You might feel like you have the best job in the world, but anytime someone else is signing your check, they can decide to stop signing it tomorrow. And even if you’re a business owner, you still want to have multiple streams because anytime you only have one source of income, whether that’s a salary from a job or your business income, you never know what can happen to it. During the pandemic, millions of businesses were shut down, and also lots of property owners couldn’t collect rent during the eviction moratorium. But at the same time that all this was happening, the stock market was hitting new all time highs. So for those folks that had an investment portfolio, they were able to use those gains to help them get to the other side.

[J$: Yup yup, again in a perfect world you’d have cash flying in from all over, but if you’re only able to manage just *one* right now, that’s okay too… Just keep working and doing your best and eventually you’ll get there!! And some *have* managed to come out just fine too btw by only focusing on one income – some even say it’s more powerful doing that than not giving it your all and tacking on side hustles on the side! So just keep doing your best and you’ll find that sweet spot. (A way to cheat in this too is to just *invest* your money as Rob points out which requires no consistent effort on your behalf – that’s mainly what I do now :) So if you are “just” a one-jobber you can at least take advantage of that and get the win!)]

So yeah – solid tips overall!

Here’s the next vid I liked, that all you stock pickers might find helpful… I didn’t know about any of these, perhaps because I’m an Index Snob?! ;)

******

[Watch video here]

5 Secret Websites That Will Help You Become a Better Investor

1. Whale Wisdom — allows you to see exactly what famous investors like Warren Buffett or Ray Dalio are putting their money in inside of their real life portfolios.
2. Smart Insider — allows you to see exactly what investments members of congress are buying and selling, so you too can learn how to become a great investor by totally not using tax-payer funded insider information.
3. Guru Focus – allows you to see when corporate insiders like founders, executives, and board members use their own money to buy or sell their company stock. Putting their money where their mouth is, so to speak.
4. Bar Chart – gives you access to tons of free investment tables, charts, and research so that you’ll always know the current pulse of the market.
5. Toggle.ai – leverages the power of algorithms and artificial intelligence to help you identify potentially awesome investment opportunities.

Great great stuff all around… Thanks again Rob!

If you’d like to see more, you can check out his Instagram feed here: @RobWilsonTV, or his recent book here: Secure The Bag.

Hope you learned something new! Do you follow any of those tips or sites above??

*The M.O.N.E.Y. Show is now known as the “Afford Anything” show, with Paula Pant. We co-hosted it back in 2016 and then I dipped out and she took the reigns over and has been KILLING it ever since… If you’d like to check out all the shows we did together – about 30 of them – you can find them here: eliteedgemoney.com/podcasts

[This post, 5 Things I’d Never Do as a Financial Advisor, was first published by J. Money on Elite Edge Money]

What up what up!

Have an awesome idea to share with you today :)

It comes from Ugo Chiulli who entered our t-shirt giveaway the other week saying he wanted the “Index and Chill” shirt to rock at his investment club, and as soon as I heard those two words together I immediately begged him to write something up for us!

And he complied! Thanks brother!

Here’s what he sent me below… Such a fantastic idea – we need one of our own!!

******

J. Money,

I’m writing to follow up telling you about how a group of guys that wanted to buy some property as an investment ended up starting an investment group.

A friend of mine (who’s name is actually J – yes, just the letter J) is part of a group of guys that went on “annual guys trips.” During these trips they discussed buying property as an investment. They soon discovered that they’d need more money than the “spare money” they had laying around to be able to actually buy property.

Not losing focus, they decided to start an investment club where they would continually pool their money together monthly and invest. They use online platform Bivio to track it all, and got a lot of help from the book, “The Millionaires’ Club: How to Start and Run Your Own Investment Club and Make Your Money Grow.”

Two of the members had some experience in trading stocks and so they decided to invest their money up front into the stock market. The goal always being to buy property. They met for a few months and came up with an Operating Agreement and By-Laws.

The monthly buy in was (and still is) $150/mo per member. There has been a consistent 12-14 members. Additionally, the mentality was to be that the monthly buy in was EXTRA money that would not be missed in the extreme case where they “lost everything”. Money where they could experiment with investments, take risks and not worry.

That’s how the Investment Club got started.

The goal of the monthly meetings is to present one or two stocks to consider investing in. Members alternate presenting. Investments are voted on. Votes for IF to invest and HOW MUCH to invest are had. Various investment strategies are also reviewed and tested. Additionally, all investments are reviewed on their acquisition anniversary to determine if the investment still fits our portfolio needs. Votes are held whether to sell or keep investments on review dates. ALL decisions are made via vote.

One funny story is that on their FIRST meeting, the first presentation was for a stock (DEK) that was “vetoed” for purchase but ended up being a HUGE winner over time. The group constantly references that missed opportunity.

For the first few years they weren’t fully invested. Often having as much as 50% in cash. They also bought and sold based on unrealistic goals and on emotion. Reflective reporting showed that “tons” of money was lost by selling too soon (often when the market was down but then went back up, and higher than original). All in all, they did OK though.

I joined the group 3 years after they started (about 10 years ago). I was recruited by J. We work together. I was no investment pro, but did have about 20 years of various investment experience. He thought I might be a good addition to the group. I like to think I am too :)

Since joining we’ve gotten ALL money invested. I’ve gotten tons of exposure to stocks presented by members that I’ve added to my own portfolio. I’ve contributed by helping make changes to the By-Laws and Operating Agreement for the betterment of the club.

Stock selection is up to individual members. Various sources are used:

• “The Little Book That Beats the Market” by Joel Greenblatt — the book that helped us select our first investments and strategy to follow before we started creating different portfolios with other strategies.
• “A Random Walk Down Wall Street” by Burton Malkiel — a great read for setting investment expectations and providing a proven and consistent way to get steady returns that MATCH the market performance.
• Motley Fool’s investment services — provides a steady stream of suggested stocks and material showing why recommendations are made.
• TREFIS — a good tool that shows relative stock value and stock’s value makeup that provides a great comparison to current prices.
• “The Only Investment Guide You’ll Ever Need” by Andrew Tobias — provides an awesome A to Z explanation of what you need to know about investments (from piggy banks to stocks markets).

The group began to flourish (thanks to an awesome investment environment in the last 10 years). We had actually reached about $500K in value about 5-6 years ago. We now finally began to look into Real Estate opportunities. We looked mainly at private REITs (Real Estate Investment Trusts). None met our needs… until the last one.

I introduced the group to a Real Estate investment opportunity that we felt met our needs. Buy in was $100K with a 4-5 Year Investment time frame. It provided for a 6% distribution that is paid monthly. Investment target is to achieve 2 times on original funds at time of investment sale.

Additionally we’ve invested (via FundRise) in a small business as well as a much smaller commercial REIT.

At the height of the market about a year or so ago, the group’s valuation reached $1 Million! Not bad!

We’ve since gone through some changes. We’ve had two members resign (friendly resignations), and one member sadly passed away. The market also has turned down. We’re a smaller group but still very viable!

The best is yet to come!

– Ugo

PS: Below is a rough outline of our meeting agenda. While the group has evolved as have the investments, the monthly meeting remains the same:

• Check-in and approval of minutes – 5 MIN
• Treasurer’s report – 15 MIN
  • Review “moves made” in prior month
  • Review all account balances and purchasing power
  • Review all past due accounts (late payments)
• Review our stocks/holdings – 15 MIN
• Review stocks up for Annual Review
• Old Business – 15 MIN
• New Business – 30 MIN
• Assigned Presentations
• Announcements
• Adjourn meeting
• MAKE MONEY!

******

How awesome, right? Not only for potential income, but for all the camaraderie and learning experiences and really just the ability to hang out with people who “get it” and are actively working to improve themselves! Such a rarity I find offline, and what a blessing to have that many people around you invested in such a thing. (No pun intended)

Also – love that all the club contributions have to be “extra” money too so you’re not playing with core savings and regret anything. I’d 100% join a club like this if there was one set up in my hood… $hit, I’m halfway tempted to even start one right now myself after reading about this! It’s the perfect social club!!

And I think for people like me who are so stuck in their indexing ways it would help force me to be more open to other strategies and opportunities out there too… But really I just think it would be fun as hell getting together every month and talking shop with friends!

So thanks Ugo! Appreciate you taking the time to write all this up, and answering my 101 follow up questions :)

If anyone else has any, or would like to share their own experiences being a part of such a club, comment below so we can all learn from it! Happy investing!

PS: I’d make my Investing Club a “drinking” club too where you have to bring a 6 pack of beer or bottle of whiskey to each meeting for others to enjoy ;) But you couldn’t start drinking until after the presentations/debates so nothing gets too cloudy, lol…

*Links to books above are Amazon affiliate links

[This post, The Investment Club, was first published by J. Money on Elite Edge Money]

Morning!

Here are a handful of things I do/did that’s really impacted our finances over the years…

Check ’em out and see if any of them are worth testing out!

*******

Rounding up debt payments! — Whatever your monthly payment is, just roundup to the nearest $10th and kill off a little extra debt without even noticing it! This works sooo good for your credit cards, car loans, or even mortgages. Or if you really want to step up your game – round up to the nearest $100th! We’ve probably shaved off at least a year or two of payments doing this, and makes it a bit easier to budget too if you prefer using whole numbers vs exacts.

Rounding up investments — Similar to the above, if you get into the habit of rounding up your monthly investments they’ll only compound that much faster. And if you really want to speed things up, use apps like Acorns which will *automatically* round up ALL YOUR TRANSACTIONS to the nearest $1.00 and drop the difference right into investments for you. So every time you swipe your card for coffee or groceries or even your 100th Amazon purchase of the week (hah), you’ll feel a tad less guilty knowing that you’re at least investing at the same time ;) I banked $600.22 when I first tried Acorns without even noticing it – it was great.

Actually SAVING your savings! — You know when people say they’ve “saved” money by using a coupon or getting something 10% off or buying one and getting another one for free? Well, you might not have paid full price for the item, but you’re still very much *spending* money vs *saving* since nothing actually went INTO your savings account!

With this spending/savings hack (dubbed “Spavings“) you’re actually doing just that: putting the money you’ve “saved” from discounts right into savings. So that 10% off becomes an extra $4.00 dropped into your account, and that coupon for buy one get one free becomes an extra $10.50 banked that you didn’t have to spend. You literally save every time you spend! And let me tell you – it adds up. When I experimented with this for 10 months back in 2018 I amassed $4,040.50 – almost enough to fully fund a Roth IRA!* Try it out for a month and see how it goes!

Asking for fees to be waved — Probably the easiest of all tricks. The next time you get a fee or penalty or any other of the sort, just pick up the phone, or email, and ask (politely) if it can be erased! I’d say over 50% of the time it works, especially if you’re a loyal customer and it’s the first time you’ve been hit. And often if you ask for a supervisor after getting rejected you’ll win a number of those battles as well.

I just did this with the $19.31 late fees I stupidly acquired on our water bill last month, and within minutes it was waived! 3 minutes and 4 seconds to be exact as I timed it ;) (Shout out to ZJ for reminding me to do this!!)

Doing a “no spend” month — This was one of the first challenges I tackled as a nubile 20-something starting out my financial journey, and every month since I’ve “saved” at least $200 a month from being in more control.

The idea is to spend *only* on the necessities of life for a month (food, shelter, etc), and then resist from spending money on the “wants” (Starbucks, new clothes, new books, etc). Not only do you save a hefty amount for the month, but more importantly it forces you to STOP and face your embedded behaviors over the years! Where you learn quickly what triggers your desire to spend and how to curb it since you’re not allowed to for the month. And if you’re really smart about it, you’ll put in some barriers over this time so that when the month runs out you don’t go back to your freewheeling ways and erase all progress! Just be sure to *tell everyone* you’re on this mission so all your friends/family don’t hate you every time you have to say “no” to something ;)

Waking up an hour+ earlier — Not a finance trick specifically, but slowing down your life and spending more quality time on yourself will definitely affect your money and mood (and confidence!) for the better. And certainly if you use this hour entirely on improving your finances every morning there’s no way for your wealth not to grow! Imagine spending a whole hour every single day on it?! For me these days though, I choose to use it for my *mental* health and guard this time pretty intensely. All other hours are dedicated to my kids or family or life/projects/yada yada but these 1-2 hours every morning are solely for ME where I sip my coffee, feed my brain (i.e. read), eat my porridge, and basically just reflect on life as the sun creeps up and brings about the new day. One of the best habits I’ve ever set up for myself, and I owe it entirely to Benjamin Franklin!

*******

I’ll have to dig through my brain for more, but these are just some of the smaller things we’ve done over time to really help grow our wealth… Which may not look that impressive on their own, but combined can really pack a punch! Try one or two out over the week and see how you do!

Any tricks you do yourself that’s worked out well too?

*I included other “free” money in this account too, like birthday checks or found money on the ground, or any savings from cutting down bills over time, etc… That’s the real game changer right there – doing one-time work for monthly passive savings!

[This post, 6 Ways to Turbocharge Your Savings, was first published by J. Money on Elite Edge Money]

How much do you love your 401(k)?

How often do you share your love of your 401(k) with your colleagues and anyone else who will listen?! ;)

If you have good answers to these questions, you should stop reading this right now and go enter Jackson, Grant’s annual 401(k) Champion® Award contest where you can win one of three $1,000 cash prizes!

>>>> ENTER HERE <<<<

They give out $3,000 every year, and out of the last 6 winners, 3 of them were eliteedgemoney readers!! Which means either we’re super lucky as hell over here, or more probable – we’re smart as hell and know a good deal when we see one :)

In either case, if you’re over 21, a legal resident of the U.S., and currently enrolled (and in love!) with your 401(k) plan, be sure to take the time to enter! And don’t half ass it either – just a few extra minutes can be the difference between $1,000 and $0.00. Here are some of the winning essays here and here to give you an idea of what they’re looking for…

The deadline to enter is October 20th, and they’ll announce the winners November 14th.

Go go go!!

As for the love I have of my old 401(k)??

Oh gosh, I can’t even put it into words, but I’ll try…

I love 401(k)s more than…. Britney Spears!! (Woahhh!)

And beer! (double woah!)

And sex!!!!!

Okay, well maybe not sex (is anything better than that?), but I’m not exaggerating when I say that investing in my 401(k) was one of the best things I ever did for my finances. And while I no longer have access to one as a self-employed degenerate (), I still carry on the tradition of maxing out my SEP and Roth/Traditional IRA every year which alone will get you to millionaire status in just a matter of time. Even if you spend every other penny you get!!

Here are 4 reasons I love 401(k)s so much:

#1. It’s FORCED savings! And you don’t even notice you’re doing it because it’s automated!!

#2. It SNOWBALLS when you leave it alone. Which was mind-blowing for me over a decade ago, and I can still remember to this day watching it climb to $50,000 and not believing how easy it was all because I never touched it… Something that excessive fees and penalties helped with as it only lowered the temptation to pull from it, unlike with savings!

(so PRO TIP: If you want to stash your money somewhere that’s hard to access, make it your 401(k)! And then see how fast it takes to become a 401(k) Millionaire like our friend Fritz )

#3. FREE MONEY is involved! (Usually!) I’ve had employers match anywhere from 3% to 100% of my salary contributions (not a typo), and each time I soaked up as much as I could while it was free for the taking… Especially with the 100% company which was just INSANE, and even more so – the fact I was only one of 3 or so who actually contributed to the plan!!!

As soon as I found out about this I upped my paycheck contribution to 90%, thereby living off $200 paychecks (and draining my savings! Lol), until enough months passed where I hit the legal limit of $16,000 or whatever, and then dropped it down to 0% once it was maxed out to start refilling my savings again…

Easiest $16,000 I ever earned. Three years in a row!

(And really, as you know, it’s *much* more than $16,000 as it’s compounded year after year after decade now, easily crossing the $100,000 mark with how the markets have been these past handful of years…)

So something to think about when you decide not to invest or save, even for just one day. As my friend Jim Wang recently said,

“When you delay your savings for one day, you don’t lose today. You’re losing that last day your money would’ve been invested before you started taking withdrawals. If you’re going to invest for 20 years, that’s 7300 days of investing. You’re not giving up Day 1, you’re giving up the fact that Day 1 will have been invested for 7300 days. That’s a lot of money.”

Keep investing and grabbing that free money!

#4. And lastly, the more you invest, the higher your CONFIDENCE gets. Especially if you’re in the early part of your financial journey…

There’s a big difference between having $1,000 in your savings account and $100,000, the least of which is feeling more solid and confident in your overall standing and decision making! It’s a lot easier to make moves with a nice cushion behind you than it is without, whether we’re talking career moves or starting new businesses, or even asking a girl out on a date! More money gives you confidence across the board, and your 401(k) is a fantastic, easy way to get that train going…

(For those who don’t have access to 401(k)s, btw – OR – have employers who don’t believe in offering free matches (!!), start by maxing out your ROTH IRA first if you qualify (max limit for 2022 is $6,000), and then if you have extra left over from there move to your 401(k) to keep stashing away. Even without matches they still offer some solid benefits (like tax-free growth!), but you’re tied to your employer’s fund choices which aren’t always the best. Thus, why people recommend starting with an IRA first which you control 100% yourself, then moving to the 401(k).)

(And also – if you have multiple OLD 401(k)s laying around, take the time to consolidate them all into your IRA too! No reason to keep being invested in less than optimal funds if you’re no longer forced to!! And will help with overall management and planning too )

So yeah, huge fan of 401(k)s even if they do seem to attract hate these days, so if you currently have access to one and are *not* contributing at least to the company match, please do yourself a favor and fix that by the end of the week! It should only take 5 minutes to log onto your company’s portal or pick up the phone/take a trip to your HR department…

And then I want an email when you hit your first $50,000 too, or better yet – $500,000! :) There’s no way you won’t get there if you keep at it year after year, but you gotta get the ball rolling NOW so Future You can bask in its glory!

Make it happen!!

And make sure to enter the contest for a chance at that $1,000 too. Who knows, maybe you’ll be the 4th eliteedgemoney reader to win?!

Yours in investing and Britney Spears,

PS: I’m not affiliated with the 401(k) awards at all – just love what they’re about and want you to get free money!!

[This post, Share Your 401(k) Story For a Chance at $1,000!, was first published by J. Money on Elite Edge Money]

Good morning! Got a great guest post for you today from a new blogger and friend in the space, Kalen Houck. I’m sure many of you can relate to this in some form or another – I know I can! And do NOT miss those days one bit, haha…

Take it away, Kalen!

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Have you ever had to tell the person closest to you that you’ve failed them? That the hope and trust that they put in you was misplaced at best, and stupid at worst?

I have. And it sucks.

It was 2013, and I was married for 2 years at that point. My wife and I married in 2011, and I had lofty expectations of what our future would be like financially and the lifestyle we would live.

But up until that point life had not lived up to our expectations. And if I’m being honest, I hadn’t lived up to my expectations.

I didn’t grow up thinking about creative work, building a business, learning a highly marketable skill like programming or sales, or spending extra time developing side hustles. So, I just settled on what life gave me.

Perhaps you can relate. Or maybe you’ve crushed it out of the park in every area of your life. But that wasn’t me. I knew that I was capable of more than the manual labor job that I was stuck in, and every day I was searching for my ticket-to-freedom.

The Radio Ad of Destiny

As I continued working, I was driving in my work truck and listening to the radio one day when I thought my ticket-to-freedom had miraculously appeared. An advertisement graced my ears for an organization that would teach you the secrets of trading in the stock market.

I like secrets. I had seen the Goonies. I knew that once you had the treasure map, glories and riches were on the other end.

The radio commercial claimed to have the treasure map. It was EASY they said, once you knew the secrets. In fact, countless of their students had begun making thousands of dollars a day after learning their methods.

Thousands of dollars a day???

Shoot, I wasn’t making thousands of dollars a week. I couldn’t even fathom how my life would change with thousands of dollars per day.

So I went home and had a conversation with my wife.

“Hey darling,” (I knew I would have to sweet-talk her if I wanted to make this happen), “I heard this ad on the radio today and it sounds really promising. These guys will teach us how to trade stocks and make all the money we need.”

“Isn’t trading stocks dangerous?”

She wasn’t buying it. But I had all the right answers.

“Yes it can be…IF it’s done wrong. But they teach you how to do it correctly so that it’s safe. Trust me.”

Famous last words.

“How much is it?” she asked.

“Only $99 for a full day of teaching. And we’ll be set after that. Only $99 to change our family’s future.”

She reluctantly agreed. She’s always done a great job of trying to support me in my crazy endeavors.

Seminar Time

We showed up the following weekend downtown at a seedy hotel and were ushered into the conference room.

The main speaker was like a mix between Tony Robbins and Tom Cruise (the version that jumps on Oprah’s couch), and honestly looking back on it, the dude was an incredible salesman. We’ll call him Tony Cruise.

He explained how Wall Street works, how they are manipulating the system for their gain, and how the “little guys” like us can ride their coattails in the markets if we just follow along.

He went through the basics of stock trading that back then seemed like magic, but in reality (now that I’m more experienced) were just the basics of support and resistance trading.

Tony made it sound like the simplest thing in the world.

You take a stock chart (which I had never heard of before…that’s how green I was) like this:

You use your eye to feel out where the top and bottom of the channel is (because he explained that all big banks like to trade inside of these channels).

So then it looks like this:

Then, and this is the “magical part”, you just trade within these channels and ride the coattails of the “big players”.

So when the stock is down near the bottom of the channel, you buy, and when it’s at the top, you sell.

EASY MONEY.

After about 10 of these charts strung together in a crappy powerpoint slide, I was convinced.

I remember thinking, “I’m going to be rich!”

Tony went on to explain how an old lady (why does it always have to be an old lady?) had made $100,000 trading stocks using their method. If an old lady could do it, surely I would 10x her gains.

And Tony said he asked the lady, “Why didn’t you trade the options instead of the stock itself? If you were trading options, you would have easily made over $1,000,000.”

Say no more. Why waste time trading stocks when I could be trading options?

[Stock options are simply contracts to buy shares of the underlying stock at a specified price at a future date. They can be traded just like an actual stock and many people use them in trading because they provide leverage. Meaning for example you could spend $100 on an option contract expiring tomorrow, and could control $40,000 worth of stock.]

Little did I know that if something allows for greater return, it also means there’s a greater risk of loss. If someone is promising you a ton of return for very little risk, run the opposite direction.

Lesson 1: There is no free lunch

So Tony continued his presentation and at the end of the day (some of you more experienced folks may have guessed it already) he then pitched each of us his $10,000 trading program. He promised it would show us the ins and outs of trading so we could take what he taught us today and hit the ground running.

When he said $10,000 my jaw dropped open and my wife and I just stared at each other. We didn’t have $10,000 at the time. We didn’t even have half of that. We had a few thousand dollars to our name.

Tony started making the rounds through the tables where he performed his “hard close”. He came up to my wife and I, sat down next to us, and said, “Are you ready for your life to change?”

I said, “Man I’m going to be honest, I don’t have $10,000 to drop on this.”

He smiled, “No problem son, we can put you on a payment plan with minimal interest.”

How generous.

“I don’t know,” was all I could manage. I wanted this. I wanted my life to change. I wanted the freedom that came with a greater income. I wanted to make something of myself.

I looked over at my wife and gave her the puppy dog eyes. She rolled her eyes back at me.

“Let us talk about it,” I reluctantly told Tony. He moved on to the next table.

My wife and I talked back and forth for a few minutes. I tried to convince her that this was a good investment in our future. She tried to convince me that it was stupid to spend $10,000 we don’t have on a get-rich-quick scheme (she was always the more prudent one when it came to this type of stuff).

I eventually gave in and agreed with her. We had paid off her car a year before this and had avoided all debt since, and going $10,000 in debt for a stock trading program would have been a foolish endeavor.

Lesson 2: Get on the same page with your spouse

What I’ve seen often in marriages is that opposites attract.

One spouse might be the hard-driving type that has their foot on the gas pedal as hard as they can go, and the other spouse tends to be more cautious and prudent when it comes to decision making. Both types need each other.

Well, I’m more often the one in our marriage with elaborate dreams that I’m chasing. She’s the cautious one who enjoys the simple life. I need her “brakes” to keep me from driving us off the cliff, and she needs my “heavy foot” to get us out of the parking lot. Together we drive at a nice steady pace down the road toward our goals.

But that’s only after we’ve learned how to communicate better, respect each other’s opinion, and humble ourselves. Not an easy task.

So we told Tony, “no thank you” and left for the evening. I pouted on the way home because I didn’t get my way, even though I knew she was right. And for the rest of the weekend I kept thinking, “I know enough to do this on my own.”

Trading On My Own

I wasn’t able to convince my wife to go into $10k of debt for this trading program, but I was able to convince her to let me use our savings to dip my toe in the waters of trading – I promised her we wouldn’t lose money.

So I opened up a brokerage account, transferred the $3,000 in savings we had into it, and excitedly got to trading the very next day.

Yeah, you heard that right. I didn’t do any further training, didn’t have any rules (Brandon’s rules here are great), read any trading books, nothing. I transferred all of our savings into this account to trade with right away.

NEVER, I repeat, NEVER trade what you aren’t willing to lose.

I was not willing to lose all of our savings, but I just assumed that I wouldn’t lose. I had been taught the secrets after all.

Lesson 3: Only trade what you are willing to lose

I remembered that the guy said that options trading made way more money than stock trading, so I thought, “Why spend 5 years getting rich when I could do it in 5 weeks?”

I went all-in on options trading.

Now for those of you who don’t know, with options contracts (if you pick the wrong ones) they can be extremely volatile and can quickly go to ZERO if the trade goes against you. Meaning, you could buy $10,000 worth of options contracts in the morning, and if the trade went far enough against you, you could be left with $0.00 at the end of the day.

Very volatile, and not for newbies.

I didn’t care – I thought I was smarter than everyone else. Tony had taught me how to “trade like the banks”. I learned a skill in one weekend of looking at PowerPoint slides that Goldman Sachs’ traders spent years developing.

Lesson 4: Pride comes before the fall

I took my first trade the next day – the trade went against me. I held on thinking it would come back. It didn’t.

Obviously this was just a fluke, so I took another trade. It also went against me.

Not the kind of start to my stock trading career that I had envisioned.

1st day: -$480

In one day I had lost over 15% of my account. Not a good sign.

I blamed it on first day jitters. Surely my second day would be better right?

I didn’t tell my wife about the loss, because I just knew that I would make it back the next day.

My leftover funds settled the next day, and I took another trade in the morning. I checked it again in a few hours thinking that if I didn’t watch it, somehow that would help. Surely the stock would stay within this magic trading “channel” that Tony had described.

Nope. It went against my position as well. I closed it for a loss.

I took one more trade for the day. Guess what? Another loser.

2nd Day: -$355

I’ll spare you more of the depressing details and sum it up. Over the course of the week, I managed to trade away almost all of our entire savings until it was down to about $150. I had a few winning trades, but the majority were BIG losers.

In 10 days I lost 95% of our savings trying to get rich trading options.

10 Day Trading Profits: -$2,850

“WallStreetBets” would have been proud. I however, was not.

I had kept all of these losses a secret from my wife too, thinking that I would make it back. I thought, “Just one good win and I’ll make it back, then I’ll tell her and stop trading.”

Classic gambler’s mentality.

On my last day of trading after I was down to $150, I closed the account, and nervously sat around trying to figure out how to tell my wife that I had lost our savings.

There are not many worse feelings in the world than knowing that someone you love took a leap of faith on you, and you failed them.

There was no sense dragging it out any longer, so I sat her down and broke the news. She was shocked, justifiably upset, and felt betrayed.

That walk of shame is one that I never want to have to do again. And my wife would agree with that sentiment as well.

She forgave me (she’s amazing), I stopped gambling in the stock market, we built our savings back up, and I learned the beauty of index fund investing.

If I could go back and change anything about my experience with it all, I wouldn’t. I’m thankful that my life savings at the time was only $3,000 to lose and not $300,000, but either way that experience helped shape who I am today, how I manage risk in all aspects of life, and how I jump into new ventures.

It taught me so much about myself, about life, and about the real world.

I walked away knowing:

• Never risk more than you’re willing to lose.
• Make sure your spouse and you are on the same page.
• Stupid decisions are only fatal if you let them be. You CAN bounce back from anything. Yes, I made a dumb decision, but 10 years later I can truly say that I’m better because of it.
• If something sounds too good to be true, it is.
• Pride comes before the fall. Humility is a great guard against foolishness.

Then and Now

I’ve continued index fund investing since then and let me tell you, it’s a way easier road.

Over the past few years I’ve also picked up trading again (with my wife’s genuine agreement this time). I’ve begun studying and learning how to actually trade profitably in the markets, and while I’m still refining my process, it’s a far different scenario than the gambler’s mentality I had 10 years ago. It can be done, but it’s very hard and requires a ton of work. Definitely not something you can jump into after one weekend.

The reality is that 99.99% of the population should follow J. Money’s investing advice, keep investing on a monthly basis until retirement, and sail off into the sunset with a hefty nest egg.

But for the 0.01% of us that desire to trade actively in the stock market for income (always stick to index fund investing with retirement funds by the way), you have to take it seriously. It’s a second job until you get the hang of it and can make it your primary job. It CAN be done, but it takes years of hard work in learning how to trade, lots of study and screen time watching charts, tons of trial and error, losses, and most of all a dedication to mental mastery.

If you truly want to learn, you need to spend a ton of time studying, start with “paper trading” so you aren’t risking any money, and then progress to risking $0.10 per trade, then $0.50, $1.00, and so on as you get better. Fall in love with the process of learning and improving, and you can do it. Try to get rich quickly, and you’ll fail faster than you thought possible – like I did.

And for the love of all that is holy, STAY AWAY FROM OPTIONS until you’ve been consistently profitable for a few years. That crap is dangerous.

Trust me, please.

A big “thank you” to J. Money for letting me tell some of my story here today. My hope is that you found a few life lessons and are reminded that everyone makes dumb mistakes sometimes – what matters is how you bounce back after getting the crap kicked out of you. You only lose if you quit.

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Kalen is a husband, father of 4, personal finance coach, and writer on all things money. Drawing from a lifetime of both failures and victories, his mission is to teach people how to master their money and their life in the quickest way possible. He can be found at KalenHouck.com or on Twitter (@KalenHouck).

[This post, A User’s Guide: How to Gamble in the Stock Market and Lose Everything, was first published by Guest Author on Elite Edge Money]

One of my favorite things about collecting coins is that they all have their very own personal history.

First, in regard to their original minting and place in our country’s story, but also in the different places they’ve traveled and hands they’ve passed through over the years – all coming together to eventually land in my very own collection in my very own home!

So in effect, my collection of coins is really a collection of *everyone else’s* coins, that I just so happened to put together and now claim as *my own* collection.

I find that so cool :)

And like a true nerd, I document where each of these coins have come from too (the “provenance”) to always pay tribute to their origins. I just counted, and almost 54% of my coins came from other collections! With the rest coming from dealers or shops or places like Ebay where the provenance is long lost (they rarely note it unless it comes from a famous collector, so all that lineage up to that point gets erased with history :( )

This “Collection of collections” can be found in a multitude of other areas as well.

The things in your home, the books on your shelf, even your circle of friends! They come from all different places and walks of life, which you’ve collected and formed into your very own group of friends :)

This is the same with knowledge too. Take, financial knowledge for example. Did everything you learn come from one central person or place or book in your life? Of course not. It was accumulated over the years by different people at different stages in your life. “A collection of advice,” if you will!

Here’s a breakdown of my own financial roots and the people responsible for them:

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Frugality — My mother! Having raised a family of 5 on a meager military paycheck, it was not only a necessity to stretch her dollars as far as she could, but she also found immense joy from finding deals and shopping second hand. Something also very much passed down to me through her genes :) Here’s an interview I once did with her that captures a bulk of her philosophy on money: Interview w/ My Mom Who Just Found Out She Can Retire Anytime She Wants.

Retirement investing — My dad. Another person who’s been hugely influential in my life, outside of literally creating me! From day 1 of starting my first job he preached signing up to the company 401(k), and while it took a few years for me to finally listen to good ol’ Pops, I finally did and the momentum only grew from there. And since retirement accounts are hidden behind a bunch of rules and fees, they’re much harder to pull from and thus the only route for them to go is UP over time! No touchy, more growy!!

Debt — Mom and Dad. Whose favorite line was, “don’t put anything on your card you can’t pay off!” Which most times I listened to pretty well, but there were certainly others where my eyes were bigger than my wallet :) Still, without their early persistence it wouldn’t have become such a strong compass in my life which I’m forever grateful for.

Net Worth Tracking — Jonathan from My Money Blog – the very first blog I read! Many of you know my story of buying a home on a whim with no money down or no real financial knowledge back in 2007, so when I Googled “how to budget” I was surprised to find so many places sharing their financial journeys and how they saved, invested, paid off debt, etc. One of these places I ended up getting hooked on was My Money Blog who did something I’d never seen done in the history of my life – share a real life net worth!! I was GLUED!!!! Sure we talk about money with our peers and family, but never do we *really* talk about money. And no way would we ever share our actual numbers.

Seeing this from Jonathan was an epiphany for me, not only for my own finances (I started tracking my own net worth from that point forward – going on 15 years in a row now!), but eventually leading me to start this blog and completely changing my life/friends/career and best of all – my mindset. All because one person decided to share their most intimate financial details with the world. So thanks dude!! And his blog is still around too, btw, if you’re interested in checking it out – he covers a lot of immediate news going on which is super helpful, esp since people like me don’t :) –> MyMoneyBlog.com

(And btw – your net worth is a “collection of collections” too! A collection of savings, a collection of investments, a collection of debts – all combined to give you your collective financial snapshot! Heyoooo!)

Early Retirement / FIRE — ERE Jacob and Mr. Money Mustache. The first people who a) taught me FIRE was even “a thing”, but more importantly b) SHOWED us how it can be done by sharing their own journeys with the community. I had already been blogging for a number of years before they even came on the scene, but as soon as they did it opened up a whole new world for me (and challenge!) and I’ve been soaking it up ever since. No more was I just chasing money so I can one day call myself a millionaire because “it’s cool,” but there was actually a *point* to it all! And a number I could work towards! Plus it’s always fun to just use the fire emojis.

Minimalism — Leo Babauta. One of the original minimalist bloggers on the scene, whose book, “The Power of Less” hit me at the exact right time in my life (when I started making more money and tempted to use it for more and bigger and better things!). Then mix in Joshua Becker and The Minimalists, and countless hours of free time, energy, money!, and of course *freedom* opened up. One of the best things I’ve ever focused on to this day, and something I *still* work hard towards daily as Lord knows I still have a ways to go in some departments… Namely, around my kids

(Though I did have an epiphany this week while decluttering – if you can get rid of areas where things naturally want to accumulate – like baskets or ledges or shelves, etc – then they magically won’t! My wife keeps bringing home more and more storage units, but I keep telling her that only encourages MORE STORING!! If you get rid of the storage, you get rid of the STUFF that tries to go into it! You still need to find *a place* for that stuff, but at least you keep the areas around you clean and tidy.)

Index Investing — JL Collins and The Dough Roller Podcast. I credit the Dough Roller podcast first because it was on that show that it struck me I should finally do something about my haphazard investing strategies… Rob had asked me how I invest and why, and like a stuttering fool I had to admit that I really didn’t know. My investing up to that point was more like a hodgepodge of ideas from “investing in what I love and use” to “copying Warren Buffett” and a half dozen other strategies I had read about and thought sounded smart over the years.

So the next few weeks after recording the show I started paying more attention to what all my blogger friends where doing (i.e. my “circle of trust!”) and it was immediately clear how a majority of them invest: through index funds. And in particular, total market funds with Vanguard. Then after devouring JL Collins’ stock series and peppering him with a million questions, I knew it was the right move for me too so I cashed out of alllll my random baskets of funds (many with insane admin fees!) and went “all in” with VTSAX.

You can read more how it all went down here:

• Say Hello to Vanguard’s Newest Member!
• My New [Lazy] One-Fund Investing Strategy

Lifestyle Design — I can’t really pinpoint *one* person who started me down this path, it was more a collective of different bloggers out there, but I can say Derek Sivers and David Cain of Raptitude are the ones influencing me these days. Always getting me to think – and challenge! – what I’m doing and why, and if it all aligns with what I say I want out of life. Highly recommend both of them, as well as a little Tim Ferriss too if you’re just starting out in your journey (he’s a bit “much” for some, but I think he can be a good jolt for those who really need one!). His book, “The 4-Hour Work Week” really opened my eyes years ago and helped me realize there is more than one path to live out there! We just gotta be brave enough to go after it!

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So basically the first half of my financial foundation was shaped mainly by my parents (how to save, stay away from debt, start investing), and the second half was influenced by the blogging community (tracking net worth, FIRE, minimalism, mindset).

Pretty cool… My collection of knowledge!

A fun exercise to go down too if you’ve never thought about where your own roots came from… We may think of our beliefs as *our own* now, but they all originated somewhere! And we should be so thankful for them!!

So thanks everyone listed above, as well as those reading this right now. Without this blog I’d be half as interesting or successful with things, and I certainly wouldn’t be as good looking ;) Y’all are constantly pushing me to be better and I appreciate it!

Here’s to more collecting

*Links to books above are Amazon affiliate links

[This post, Collections of Collections, was first published by J. Money on Elite Edge Money]

Morning!

Been asked how I cope with financial loss a lot lately, so thought I’d share a recent convo I had with someone who found out she had $$$ parked at crypto broker, Voyager, who ended up filing for bankruptcy this summer…

These tricks don’t put out the sting *entirely*, but hopefully at least gets you past the harder parts so you can move on with your sexy life ;)

Maybe you have some good ways to avoid the pain too?

Here was our convo:

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J,

I just realized I lost $15,000 I had invested in USDC at Voyager.

Do you have any advice for a loss like this? My net worth was close to $500k and life will go on, but I am sad bc this was money earmarked for a wedding, so it feels bad bad.

Thank you for any advice you can give me.

******

Oh no!!! I’m so sorry to hear that! :(

Are you sure it’s gone-gone?! Any sliver of hope you’ll get some of it back??

[UPDATE: they were recently approved to give back $270 million to customers, but unfortunately that’s only a fraction of the loss.]

Really sucks either way, gosh…

I’ve never heard of Voyager before until your note so I googled them and unfort. still don’t know much :(

I will say you’re on the right track of focusing on that half a milly to make you feel better!! That’s really what I do too when $hit goes down…

I also like to pretend it’s just erasing some of the “wins” I’ve gotten over the years vs losing *capital*… For example, with your $500k I’m sure $100k-$200k was just gains!! So really it’s like “only” gaining $85k-$185K in total which of course is still super good and you’d never turn that down right?!

That’s how I usually think of things when it comes to losses anyways :) That, or if it’s real bad I’ll just ignore the crap out of it until I eventually calm down since I know everything is temporary, lol… Like with my recent $13k loss in crypto (!!!). [Update: now only a “loss” of $11k! Though only really counts btw when you cash out…] Not sure this is the most healthiest mindset to have, but it does seem to work for me…

And at least you can still get married to the love of your life with or without $$$ yeah?! What if you “made it a thing” and did a super low key cheap wedding – but still a fun as hell one of course! And tell people it’s because all the $$$ was lost in the bankruptcy?! Kinda like “owning it” instead of ignoring it like I just suggested? Might not be the most appropriate seeing how it’s your wedding and all, haha, but just throwing ideas out there…

Either way, I’m super sorry to hear about this and do hope you feel better sooner than later :( The losses are all a part of the game, though of course you always *wish* they were lost fairly vs unfairly!

– J$

OH! I forgot about one other hack that sometimes works for me, especially when paying unexpected high bills… Since my wife and I both share our money, I just think about how HALF the bills are hers too!, so I’m really only paying half of stuff myself, haha… So in the case with your wedding, while it still sucks, at least *your portion* is only half of it in theory! So maybe sucks just a little bit less?! Maybe?!

******

Some of this advice is kinda silly, but I swear it works ;)

And I didn’t say it in the email, but another key takeaway here is to NEVER PLAY WITH MONEY YOU CAN’T AFFORD TO LOSE.

Especially when dealing with crypto-anything.

Sure you won’t earn a lot stashing it in boring old savings or CDs or the like, but at least your *capital* is preserved for exactly when you need it. You never really think you’re going to be involved with a bankruptcy or anything, but as we all know $hit happens so you always gotta be thinking multiple plays ahead…

Anywho, that’s what I do when I’m dealing with financial disasters.

1. I focus on the total *gains* I’ve gotten over the years, and just deduct the losses mentally from it.
2. I remind myself that half of all losses are actually my wife’s – not mine – so it’s only half as bad!
3. I bury my head in the sand for a bit until it all passes over… Again, perhaps not the healthiest, but it does seem to work for those like me with A.D.H.D. – you eventually just forget about it!! And even when you don’t, life has a funny way of erasing it for you anyways with enough time… Nothing is ever permanent.

And remember too, typically losses only “count” when you actually cash out! If your stocks are going up and down and up and down as they usually do, none of it matters until the day you click “sell” and lock in the gains or losses…

So in terms of the overall stock market, I rarely worry much – even during this past madness (I BUY instead!) – since I know none of it matters until X number of decades from now… Until then, it’s all just noise.

My two cents anyways!

How do you all deal with financial pain?? Anyone else dealing with the Voyager nonsense? Anyone else down beaucoup bucks like me in Crypto? :)

Always something going on in life…

I wanna say it makes it interesting, but I think we all would much prefer boredom, haha…

Sending everyone positive vibes

UPDATE: As I was finishing this post, I got an update from our dear friend here… (I had last asked her if she got any of her money back):

“I didn’t get anything back since my money was in USDC. They released funds for people who had their money in fiat USD. Funny though, they lied about having FDIC insurance too, it’s been wild following all the information coming out. As far as dealing with the loss it’s been helpful for me to share with people that care about me. I even told my dad this week that I lost it bc of a bankruptcy. They all have been supportive and kind vs angry/judgemental which surprised me. Overall I’ve been comparing this experience to how bank runs used to happen before FDIC, and I am grateful that doesn’t happen to us anymore.”

Amen to that! And for having loved ones who’ve got your back

[This post, How Do You Deal With Financial Loss?, was first published by J. Money on Elite Edge Money]

Caught these tips off Twitter and thought it would be fun to see how many of these we can check off ;)

I’ll go first…

From The Man himself, Mark Cuban:

#1. Live like a student

Nope! I used to live like a student, but that was more out of necessity than desire lol…  I will say though that this mentality IS a good one to try and mimic though, at least in spirit, as lifestyle inflation is real and if you keep spending all the new money you earn you might as well still be a broke college student!

So a hearty yes to channeling this, but no to giving myself a point here as I def. live more lavishly than my 19 y/o self could ever stomach ;) That guy would never spend $6.00 on a latte!

#2. Don’t use credit cards

FAIL. We use one main “house” card for all bills to rack up cashback and keep things streamlined, but we also pay it off at the end of every month because we don’t like lighting our cash on fire… If you struggle with that 2nd part though, then a hell yes to whipping out those scissors and chopping them up!! The c/c perks will never outperform the loss of fees and stress from debt! Better to just avoid it altogether than play the devil’s game if you don’t trust yourself enough.

(And as much as I don’t want to admit it, I’m 99% sure we overspend using plastic vs cash too… It’s a “convenience” fee I’m willing to pay though after decades of hustling ;))

#3. Save 6 months income

Next Level Activated! 3-6 months banked does wonders to your peace, and honestly even if you can just pull off ONE MONTH of savings it’s game changing..  And the beauty is that once you hit whatever level you’re going for, you don’t have to add any more to it and can divert all future $$$ elsewhere to more exciting things!! Like Pokémon and NFTs! ;)

And remember too, not every dollar needs to be maximized. Even though it looks like the money is just sitting there “doing nothing” and not earning anything, it’s still serving the magnificent purpose of giving you INNER PEACE. And I know a lot of people who would pay good money for that, so soak in as much of it as you can!

#4. Put savings into SPX mutual fund

YUP!!! Well, technically we’re invested in Vanguard’s VTSAX which tracks the TOTAL MARKET and not just the S&P 500 stocks which is what SPX does (or VFIAX – another popular fund from Vanguard), but it’s all a similar concept. You’re betting on a giant portfolio of hundreds/thousands of stocks instead of trying your hand at picking out individual ones which is very (very) hard to do well, especially long-term. And a bonus perk – you can just set it and forget it! A lazy man’s dream!

#5. Invest a % of money into high risk

Score here too! Always smart to have a “long shot” going on the side, though I can’t say it helps too well with that whole “inner peace” stuff as it’s amazing how much MENTAL bandwidth it can take up for being such a small sliver of your net worth, lol… You give me .0001 bitcoins and it’s all I can think about for the next year even though it’s so insignificant! So hopefully your brains work much better at keeping the overall perspective than mine, or at least betting on things that aren’t in the news 24/7 :)

I would also put starting your own business, or buying up other small businesses, in this department too btw… Stuff that has a higher rate of failure, but also a higher rate of rewards when they succeed! And notice Mark didn’t put a specific % amount there either, which I like since our risk tolerances are all different… Though typically you’ll see recommendations anywhere from 5%-10% of your overall net worth to play with which I tend to agree as a good starting point.

#6. Buy consumables in bulk

FAIL. This is kind of embarrassing as it’s such a core tenant of frugality – especially for a money blogger (!) – but for whatever reason we just don’t do much of it… Or I should say, my wife doesn’t do much of it, and ain’t no way I’m going to pipe up and ask her why to then have the task transferred over to me, haha… I let her run the show there, and I run the show here with our finances!

But yes. More bulk = more sex…y. So good on all you Costco and Sam’s Club shoppers banking those savings around the world… At least I think Costco is around the world?! (I googled: “Costco has 833 warehouses worldwide: 574 in the United States, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.”)

#7. Negotiate with cash

Do yard sales count? ‘Cuz if so I’m an undefeated champ there – BOOM! But can’t say I do much negotiating outside of that… Except for house buying times, but even then we always end up choosing the mortgage route than cash money for ultimate flexibility… Not that we usually *have* the cash to pony up most times anyways, haha… do you know how expensive homes are these days??! It’s insane!

But overall, yeah – anything that tips your hands in negotiations is great, and if you have the cash to back up that fast-talking mouth of yours then you go with your bad self. Not many things feel better than pulling off a good deal!

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And those are his 7 tips!

So let’s see here… Out of the 7 recommended it looks like I can confidently check off at least 3 of them, and then maybe partially 1 or 2 others.

So I’m going to give myself a solid 4 out of 7 here which means I’m definitely no Mark Cuban, but something tells me Mark Cuban isn’t Mark Cuban either ;)

No way he doesn’t use a credit card these days or leverage his millions of billions of dollars to strike deals… I’m sure he buys in bulk and lives like a college student at least in his mind, but obviously these tips are geared more for the general public than an entrepreneurial rock star like himself.

Still, a fun checklist to go down and always good to at least *consciously* be choosing to take one path or the other than living financially oblivious! So see how many you can check off too, and then share below so we can compare!

Your financially conscious friend,

PS: For more insight from Mr. Cuban, here are his thoughts on How To Get Rich

*****

Photo by TechCrunch / Doodles by J$

[This post, 7 Money Tips From Mark Cuban, was first published by J. Money on Elite Edge Money]