Isn’t The Goal To Get Out?

To have the freedom to work when we want to work, and to play when we want to play; to see all the awe-inspiring wonders of the world, and to help the people we care about most. It’s not how much money or time we have, but what we do with those dollars and hours that counts. Invest them wisely, and the poorest of men have become the richest. Invest poorly, and the opposite is assured. I told a friend of mine recently about two make-believe 30-year-olds in my head. One guy was a software engineer making $200k a year; the other, a security manager making $40k. The engineer invested 10% of his income into a retirement account. At a 6% return, he ends up with about $1.85M at age 60. The security manager made a significant amount less but invested half of his income by living well below his means. He, too, invests $20k/year and ends up with the same $1.85M at age 60.

It’s not about how much you make but how much you save. How much you invest. I’m glad I realized this at the young age of 32, and I feel so grateful for the benefits that reading books like The Richest Man In Babylon gave me. So I am leaving this message here, in this brand new piece of virtual real estate, for anyone who serendipitously stumbles upon it. I’ve opened up my Roth IRA and implemented my investment strategy. I recommend Money: Master The Game, and even though I haven’t read it yet, Unbreakable by Tony Robbins. The latter is supposed to have condensed the former, but I appreciated the breadth and detail in Money: Master The Game. It sure helped keep me busy during those long nights in retail way back when. One of the big pieces of value were all of the allocations some of the top players suggest. Ray Dalio was one.

Ray Dalio Investment Plan:

• 30% in stocks (S&P 500 or other indexes for further diversification — mutual funds and institutional investing are bad)
• 15% in intermediate term bonds [7–10 year treasuries]
• 40% in long term bonds [20–25 year treasuries]
• 7.5% in gold and 7.5% in commodities

Now take this with a grain of salt, as investors like Ray Dalio are playing a whole different ballgame. I’m not sure at my age and income level I’d want to buy low-yielding bonds such as these. But again, I am also learning and growing as an investor with every new day, like you.

As far as buying stocks goes, and since I still consider myself young enough, I might allocate a small piece of my portfolio to risky stocks with potential (I would have loved to be on the $40,000 upside of a few hundred bitcoin). But I call that gambling and I stick to the Rule of Warren with 95%.

It’s a simple rule. Don’t lose money. Not on bad stocks. Not on junk bonds. Not on junk food. Invest money. Make sure that your money is either creating you an unforgettable and priceless memory or it’s making you more money. Invest in the companies you know and the sectors you are familiar with and hold for the long term.

Also, I still don’t understand why Grant Cardone advises against buying homes (from what I’ve seen). Buying my townhome, then later selling it and buying a bigger house has been the best income-generating investment I’ve made. I doubled my income by owning real estate that at times rose in value faster than I earned money.

The only thing I would have done differently, had I known, was not buy turnkey. I would have bought fixer-uppers and then renovated them to create value, refinanced them at the higher price, and then get well-paying tenants in them. I probably could have leveraged the down payment I put into my home into buying and fixing up at least one or two fixer homes and we may have been able to live in one ourselves. A great goal (not for everyone of course, but for myself and others who choose to be so ambitious) is to have ten properties fully paid off, netting you about $2.5k/month. That’s $25k/month. That’s not pocket change.

If you were to get there and then take that and invest 50–90%, where might you end up one day? The point — invest.