Why I don’t max out my 401k and other secrets to building wealth
When I first started my adult life, I believed the standard middle-class narrative that a good job, a house, and a 401k were the secret to a good life. I worked long, hard hours at my job trying to get a promotion and a raise, I had a big house because I believed it was an investment, and I maxed out my 401k every year hoping I would have enough to retire by sixty-five.
The reality was, however, that even though I had a good job, I wasn’t building wealth. After I realized that what I was doing wasn’t working…
What mainstream financial advice won’t teach you about financial security
Like most people, when I started my adult life, I had no concept of what it took to be financially secure. I assumed that having a good job and socking away money in my 401k was all I needed to be safe. I planned to keep my head down and work hard to ensure that I was valuable to my company and hope for the best.
Then the layoffs came.
What a stressful time. To not know if you will have a job, a salary or medical insurance for your family is tough.
I was fortunate enough to stay employed…
Learn how to make the market work for you
I used to believe that the stock market was primarily an investment for appreciation, rather than cash flow. I would put my money in low-cost index funds and watch the value increase over time, hoping that I would have enough to live on by retirement.
Since the S&P 500 (or pretty much any other index) doesn’t provide much of a dividend (currently 1.51% as per multpl.com), I assumed I would have to start selling off my stocks to capture my equity gains and have money to live.
A $1 million account in the S&P 500 would currently provide only $15,100…
4 common problems and how to handle them
Real estate is a great way to build wealth. I have been a real estate investor for the past decade and have used it to grow my net worth at high rates of return and receive monthly cash flow from my tenants.
It is easy to imagine that this path to riches is paved with gold. However, the reality is that the road to wealth is mostly paved with hard work and problems that require your tenacity and ingenuity to overcome.
Investing in real estate is not a “get rich quick scheme”. It can take years to build up enough…
And how to apply them
Learning how to build wealth is about more than just calculations. It isn’t only about how to invest in the stock market, how to buy real estate, or how to build a successful YouTube channel.
Learning to invest is as much about your behavior as it is about your knowledge.
Did you know that most investors in index funds earn a lower return than the index in which they invest? As shown in this research paper by Wealth Watch Advisors, the return of the average index fund investor trailed the S&P 500 by almost 3% in 2019. …
Think like the bank
If you are like me, then you are looking for ways to build passive income so that you can one day leave your day job. You may already own some rental properties, or you may be thinking about buying some, but you have an idea about how to generate income as a landlord. The tenants pay your rent, and you have to take care of everything else (insurance, taxes, repairs, maintenance, management fees, etc).
But what if I told you that there is a way to make money on real estate without being a landlord?
No toilets to fix, no…
How and when to value growth
Until recently, I’ve always been mystified by the stock market. People are always buying and selling all kinds of individual stocks, but I couldn’t understand what they were doing or how to make money. It always seemed more like gambling than investing, and I don’t like to gamble (seems I always lose money when I gamble!).
I knew that the market over-reacted and people could profit from that, but I couldn’t understand how.
I stuck to buying low-cost index funds as I didn’t know how to select individual securities. …
The story of Warren Buffett and the $300,000 haircut
Warren Buffett knew that he wanted to be rich from a very young age. He started reading and thinking about making money as a child and soon mastered some important concepts to help him get there.
As reported in this article from Inc.com, it is said that a young Buffett, when thinking about going out to buy something or spend money on something, would say things like:
“Do I really want to spend $300,000 on a haircut?”
Many people didn’t immediately understand what he meant. Obviously, a haircut doesn’t cost $300,000, right?
The Power of Earnings
Until recently, I’ve always been mystified by the stock market. People are always buying and selling all kinds of individual stocks, but I couldn’t understand what they were doing or how to make money. It always seemed more like gambling than investing, and I don’t like to gamble (seems I always lose money when I gamble!).
I knew that the market over-reacted and people could profit from that, but I couldn’t understand how.
I stuck to buying low-cost index funds as I didn’t know how to select individual securities. …
The Power of Assets
Until recently, I’ve always been mystified by the stock market. People are always buying and selling all kinds of individual stocks, but I couldn’t understand what they were doing or how to make money. It always seemed more like gambling than investing, and I don’t like to gamble (seems I always lose money when I gamble!).
I knew that the market over-reacted and people could profit from that, but I couldn’t understand how.
I stuck to buying low-cost index funds as I didn’t know how to select individual securities. It wasn’t until the crash last year…
Building Arks with Jason Clendenen
Self-taught investor helping busy professionals learn how to ignore mainstream advice and build real wealth. Build your ark today!
