TRP, lets talk finances.

_social_caterpillar · 2014-03-05T03:52:57+00:00

22 years old here. $67k net worth. $0 debt. Here are some of my tips.

Apply for scholarships. You'd be surprised how many people like to give out money. You can also get more scholarship money than tuition. I literally got paid to go to college.
Be wary of recurring costs. Anything that costs monthly adds up.
Be very reluctant to spend money you don't have (unless of course major purchases like a car or a home).
Don't be cheap, but be frugal. If you use headphones a lot, research your options and treat yourself to a solid $100 pair. Don't buy a bunch of crappy cheap ones instead. And again research. I check Amazon or other online reviews before any big purchase I make.
When buying something, consider the following: Can I do without this? Would this be considered an impulse buy? Will this be of any long term benefit for me aside from some momentary pleasure? Are there any cheaper/free alternatives? Am I overpaying for the brand when a competitor is just as good? Can I afford to skimp or is quality important?
Allocate some portion of your savings as spending money based on your income. I currently have a $500/month budget that I let myself spend however I want, no questions asked, and no self-judgment. I actually end up not using it a lot. Bought a bicycle a couple months back. Booked a trip to Denver this month.
If your employer offers you a 401k match, DO IT. It's literally free money.
As far as jobs go, be practical. Research what skills are in demand. Do something that provides value to others. Value is what gets you paid. Sure follow your dreams, but understand the underlying risk to this, and if you're willing to go through with it. For the 1% of start ups that succeed, 99% fail. And many have some of the smartest and brightest people working their butt off. They just didn't get lucky. Society and Hollywood might feed you romantic ideas that the only way to be special is to be different, be an independent maverick, and follow your dreams, but consider this: if someone is telling you that you must be independent to be cool and you listen, are you really even being independent?
Research. You have the internet at your fingertips. You have access to a wealth of other people's trial and errors, feedback, and wisdom. Use it.

TytalusWarden · 2014-03-05T06:54:31+00:00

I think reddit gets too obsessed with frugality and forgets that in your 20s especially, increasing your net income is way, way more important. So spend the money if it is rewarding you and motivating you to keep crushing it. Put aside 20%, 30% if you can during your 20s of what you earn into diversified investments / accounts. Do your companies 401k matching, it is amazing.

And then beyond that, use your money to enrich your life. A expensive, but superior diet will improve your mental and physical state. A home gym might change your life. A nice car (that you can afford) will help you project the high status image that could make the difference depending on your career. Those who accumulate massive funds are the ones who understand how to create positivity feedback loops with their money. Attend your favorite speakers seminars, get good quality products that save time. This is so key - USE the money to save time if you have the means to do so.

Beyond that, these are good times and I agree EXCEPT for the hard cash point. (Which has been addressed in this thread).

Understand that you need mental pressure and discipline, as well as motivation, to keep advancing in your career and get independence in your job. Some people won't need to spend a dime on themselves and can live as misers while they give 100% to climbing the ladder. Most people, however, will start to lose motivation as they eek out enough of a living to be comfortable.

This is also when these guys turn fat, beta, and their wives quit fucking them. They lose their edge. It's not a sin to want the benz and the big ass crib. If that motivates you, then you need to grind to get it, and when you can get it, you need to reward yourself for the grind. That is how you will keep motivating yourself to reach new heights.

Ultimately, putting 15k away of your 30k per year salary because you're living like a miser is inferior to spending that money on education, hell even programming classes, a decent set of clothes to look profession, maybe even speech classes if you have some social issues. Network, throw work parties to meet high level people. Eat healthy, go out to clubs, get yourself a nice suit.

TytalusWarden · 2014-03-05T05:17:24+00:00

[permanently deleted]

rokr1292 · 2014-03-05T07:09:31+00:00

Here's a tip for saving money a lot of people I know don't understand. Don't smoke.

papadop · 2014-03-05T03:50:57+00:00

I disagree firmly on paying with cash. There is no advantage to it over credit card in todays world. If you can be responsible enough with cash and controlling spending, you can be responsible enough with your credit card as well. Responsible credit card use trumps all because you get some form of cash or cash value back and its buying power in your wallet that can't be lost or stolen.

With a points/credit card or cash back for all of your expenses possible and you'll accrue 1-2% savings on all your expenses, without any effort. For me that's a couple hundred a year that I'd never see if I paid in cash. Many of the cash back ones don't require fees anymore either.
Ability to track and review all your expenses in online reports every month; as well as having permanent records of them. This in return allows you to plan and budget better as well.
No money wasted on ATM fees (sometimes the nearest ATM isn't your bank)
Security - your credit card can be lost, broken, stolen, hacked etc --- but it's not hard cash you are losing. The credit card is lost? Bank will send you a new one. False or Stolen charges? Bank won't hold you liable if you report it. The modern era of CC's is basically risk free. Where as if you leave or lose a wallet full of cash, that's money down the drain.
It's easy to manage in the internet era. Seriously it's pretty easy, and main banks make it really easy to setup email alerts, text alerts etc for varieties of activity or status on your card.
Billing cycle ; you only pay it off once a month.
You build a better credit rating.
Not dealing with endless pockets full of coins. Personally I can't stand jingling when I walk from all the coins in my jacket pocket if I don't empty out my jacket after a few days. American currency and sales taxes added on breaks into way too much change and way too many single dollar bills.

Obviously don't buy shit or volumes you can't afford and end up paying interest. If you don't have that much sense or discipline --- get that first, then worry about your payments and financial tools.

redpillacct · 2014-03-05T01:38:57+00:00

I too would vouch for learning and understanding finance/investments as a core pillar of being a man.

From this article

Her husband, equally successful, said the adviser didn't impress him much. With the market up about 30 percent in 2013, how could his wife's portfolio have returned only 10 percent? My friend said that her returns were find, and, even more important, that the adviser understood her goals. Yes, her husband said, but goals require this thing called "money".

Ormild · 2014-03-05T09:42:15+00:00

This is the one thing video games taught me (oh god all that wasted time spent on my youth. Money management.
Never spend more than you have. I once took a trip when I had no money left in my bank and put the entire thing on my credit card. It was a dumb mistake and it took me forever to pay off.
NEVER EVER lend anyone money. If you do decide to lend it, don't expect it back. If someone asks you to borrow money, just simply tell them, "I don't lend out money to anyone anymore. I've had bad experiences with it." Money can end friendships. Don't be frugal though, treat your friends out once in a while.
Never borrow money. Pay that shit off yourself. If you're taking out a huge loan for something, make sure you budget and plan for it.
Don't be excessive in your purchases. Do you really need that brand new TV? Or is your computer with Netflix good enough? Want to get yourself a ps4/XBoxOne? Why not a gym membership instead or weights for your home gym?
See what stuff you can cut out of your life that you would consider non-essential. I don't watch TV as I get all my shows from my computer so I cancelled my cable. I don't need a house phone since a cell phone is good enough.
Don't eat out everyday. I'd say an average lunch is about $10 a day; that comes to $50 a week, about $2400 a year. I could make a whole day's meal for less than $10 dollars a day and it'd be healthier too.
Get yourself a good job. I wasted a lot of time going to University for a useless degree. Now I'm back in school for something useful and expect to make decent money when I get out; coupled with my good spending habits, my standard of living will increase dramatically once I'm done.

RedSpectrum · 2014-03-05T02:24:02+00:00

Investopedia is a great way to learn about investing, finances, the stock market, and money in general.

One tip I would suggest: have $500 somewhere accessible (a thousand if you can afford it) that no one knows about. Not your girl, not your wife, not your parents, no one but you. Whether you want to keep this in a fireproof safe in your room, a shoebox under your bed, in a savings account somewhere, buried in your backyard, that's up to you.

$500 or a grand hidden away no one else knows about could save your ass big time in a thousand different ways. This should be separate from any other weekly or monthly savings you do. Get laid off? You can feed yourself. Lose your job completely? Same thing. This can solve, or help solve, minor legal troubles. If your roof starts leaking or your furnace breaks, you don't have to eat noodles for the next 6 months to pay for the damages.

I'm also a fan of a coin jar, which is a common way to save money. Any silver whatsoever you have goes in the jar, and only bills stay in you wallet.

2014-03-05T04:37:25+00:00

My retirement plan is death.

Drvibe · 2014-03-05T02:06:13+00:00

I have five letters of advice.

VFIAX

Don't bother with anything else. Dump as much as you can into index funds in your 20's and 30's and leave it there.

Exactly_what_I_think · 2014-03-05T01:40:20+00:00

Avoid contract jobs like the plague. The more you can get a W2 instead of a 1099 the better. I'm currently owing the good ol' US of A around $3K because I didn't put money aside for taxes (if you're a contractor, more likely than not that the company will not take taxes out for you). Save 33% of your paychecks to cover it. If your taxes end up being less than 33% then great, you have more money.

2014-03-05T02:11:12+00:00

I just bought a condo recently, in cash.

I have never bought a new car or new furniture in my life. I stopped having car payments as early in life as possible. I use credit cards to get airline miles, but pay them off monthly. Only eat out with someone, not alone, and sparingly. I had roommates for as long as I could possibly stomach it to save money. I will only change jobs for a 25% raise, which forces me to avoid job-hopping, but still keeps me actively looking to benefit from spikes in the job market (not many).

papadop · 2014-03-05T04:20:46+00:00

I believe a responsible man should learn how to invest and grow money, rather than relying on just cutting and scaling back.

Stocks are one of the best way to grow your finances over the long term. Every man should hav e some stocks in his portfolio. Especially if you are young and have money just sitting in a savings account depreciating and making pennies of interest every year.

It does however take a serious amount of reading, understanding before you can just jump right in. Understand that investing and gambling aren't the same things, and understand WHY they are not the same things. Too many (especially younger) people are ignorant stocks and just assume it's all some sort of scam or roulette game on Wall Street. In the end it's a great thing to learn and get into, as this is really the only few investments you can make with little or a lot of cash and work on in the long term, and it's widely accessible to all.

2014-03-05T03:31:53+00:00

Bust your ass in your 20s and make $100,000 or more a year by the time you're 30. Solves all aforementioned financial problems unless you're careless.

_social_caterpillar · 2014-03-05T02:37:05+00:00

[permanently deleted]

itsmehobnob · 2014-03-05T17:18:23+00:00

I'll take a differing opinion than many in this thread. I got downvoted for my stance in a previous thread so I'll attempt to be clearer here.

Do not just "put a portion of your pay cheque aside" for emergencies or any other reason. Money sitting is money dying. Invest that money. If an emergency strikes use credit. Often the interest you pay on credit is less than the interest you gain on investments.

Debt is not a bad thing. If you are X in debt, but you have X + Y in assets you are ahead. How big you are comfortable letting X get is personal preference. If you can borrow money at x% interest and invest that money at (x+y)% interest you are also ahead.

Simple example: you buy a house at 2.5% interest. The housing market is increasing at 4% annually. You are coming out ahead each year.

TL;DR it takes money to make money

TytalusWarden · 2014-03-05T17:39:25+00:00

Regarding "Pay with hard cash", my adjustment to that rule: "Use credit cards for any and every purchase, and sign up for a rewards card that offers generous bonuses. ONLY pay for something if you could have paid cash/debit for the item that day." I live by this rule and I have 90,000 reward points (~$900 I can apply to my credit card bill) sitting on my account right now.

I also look differently on the "If you don't need it" mentality. There's a middle ground where happiness gives way to sanity. I'm pretty sure there's no rational argument for a NEED of alcohol, yet going home and grabbing a beer would never be looked down upon by any in TRP.

The "Never let anyone borrow money" mentality is solid advice I live by, but I do sometimes give/gift money. The list of people I am willing to give/gift money to fits comfortably on a single typewritten line.

I make enough money that I don't have to "save" (in the traditional, Dave Ramsey, rainy-day fund-type of savings) money. I don't even keep a ledger of my expenses and I haven't balanced a checkbook in over a decade. "Budget" for me is whatever arbitrary value I decide I'm willing to spend on something I want, and is usually not constrained by the current amount in my bank account (exceptions for large real property purchases, of course--I don't have $200,000 sitting in a checking account!) That said I still do a 365-Day Challenge, mostly just to see if I can follow through with it. Here's a link that can describe it--I like the concept enough that I took one of those large, cylindrical peanut containers from Sams Club (after consuming the peanuts, of course) and cut a slit in the top so I can make my deposit each day.

2014-03-05T05:05:43+00:00

buying everything with cash is one of the dumbest things i have ever heard in my life.

General_Fear · 2014-03-05T10:15:29+00:00

Stay away from careers that can be outsourced to India. Only take careers that require an immediate physical presence. Like medicine. Or management.

Consider a career in government. If you become a cop, 20 years later you are retired. My friend did this and he is 40 years old and retired with a pension. I on the other hand have to continue working into my 60's.

mikelovesvegas · 2014-03-05T03:35:15+00:00

[permanently deleted]

Exactly_what_I_think · 2014-03-05T02:54:09+00:00

Pay with hard cash as often as possible.

You would end up with no credit record. Can't get a bank account, can't get a CC, can't get a house loan, possible job issues.

Pay for everything with CC's pay off the CC's every week.

2014-03-05T01:39:35+00:00

So what you're saying is don't buy stuff you can't afford?

2014-03-05T06:48:19+00:00

The marriage/family plan:

Have separate accounts and a joint account Each pays an equal percentage of earnings toward bills, childcare, and groceries The remainder is yours to spend on yourself and save

This is an improvement for me since we only had a joint account until this year. It's harder to save money when there are no clear boundaries between mine and hers. It's easier for both of us to save now since we feel more ownership over our incomes. Works a little better for me making 2x her income, but she also uses my military BAH and benefits so she can't possibly feel like she's getting shafted.

2014-03-05T18:16:54+00:00

I use Bill me later on large purchases and set my payments up accordingly. No one I know does this.

ButterMyBiscuit · 2014-03-05T18:58:29+00:00

I take issue with a few of these points:

If you don't need it, but it would be 'nice' to have, don't buy it.

This is only true if you're barely making enough to survive and put a bit away. If you're living comfortably and have a decent amount of excess money, buying luxury items can improve your happiness. I'm not saying buy everything you want on a whim, but if you've had your eye on something, or you want a nice new saw for your woodworking hobby or a new aquarium for example, go for it if it makes you happy and isn't financially irresponsible.

If it breaks, fix it, if it breaks again fix it again.

Sometimes replacing is better. You can spend far more keeping a junker car running for a year than you would have spent on a reliable new (to you) car that is both more modern and will last you five years.

Never let anyone borrow money, ever.

Never let anyone borrow money, ever, that you don't trust. My roommate had a string of awful luck involving a car accident that wasn't his fault, then an unrelated injury that required him to move out of state and home with his parents for months, get decently intensive surgery, and quit his job. He's a hard worker, a good person, one of my best friends, and I trust him. I paid his rent a few months so he didn't have to move home permanently. Now he's back, got a better job than he had before, and is working on paying me back.

ChocolateMilkOFDOOM · 2014-03-05T19:03:10+00:00

i will be applying many if not all of the advice here. thank you!

TRPtruth · 2014-03-05T19:16:05+00:00

If you can handle consistently making a credit card payment every month and not charge more than you make, use a discover card or rewards card. Why use cash when you can get a percent of every transaction back. If u can handle it, that is.

widec · 2014-03-05T02:51:05+00:00

[permanently deleted]

2014-03-05T03:33:22+00:00

It would be better to pay with a credit card and pay off immediately after. Gotta get them American express reward and build a credit history.

darklogic420 · 2014-03-05T21:03:45+00:00

Coming up on age 32. Net worth is over $900k.

Do a lot of what u/_social_caterpiller, but we'll tweak it to focus on earning more income passively.

To do that, do the following:

Buy real estate if you can. Avoid renting if possible. If you are scraping by renting where you are, then downsize so you can save up more money. Or better yet, sublet space to someone else at a slightly higher per square foot rate than you are paying.
If you absolutely must, find someone (or several someones) who can split a real estate purchase with you and buy it together in an LLC. Multiplexes are ideal for this, but not completely necessary. Record who pays what on the mortgage from that point on, and have in writing an LLC Operating Agreement that apportions equity among you based on who pays how much going forward. This will prevent people from slacking off. Condominium-ize the space amongst yourselves. Have a buy-out clause so that if someone slacks off on the mortgage you can refinance and take over the remaining space. Congratulations, now you are no longer renting and have a mortgage building up your credit score.
If you are at this point then you are building up equity. Now it's time to increase your income further. Save money or rent extra space in whatever combination you can to prepare for the next step.
Buy a second location (or second shared location as above if necessary at your economic level) so you can live in one and rent out the other. In each location you rent out attempt to achieve a debt service ratio of 1.25, where your income is 1.25 times as large or larger than your debt payments. Do not expand further until all of your property is producing income at this level. Put every property in a separate LLC so that if a tenant sues the owner only the specific property is exposed to liability.
Rinse. Repeat. Experiment. Find what works for you.
Find a way to incorporate your day job. Are you a plumber? Great, you can fix problems for your tenants yourself. Are you an electrician? Great, you can install solar panels and sell power to your tenants. Are you a doctor? Great, you should buy a small office with your practice and build equity so it can act as your retirement. Are you a college lecturer? Great, you have a free advertising pool by posting "space available" outside your own lecture hall. Think logically about opportunities your profession gives you that you might not be taking advantage of. Take those advantages.

Edit:

Get comfortable with debt. Debt can be your friend, but also it can rule over you. Use debt to make smart purchases such as property, and keep a credit line for true emergencies.
Don't flip houses. Just don't do it.

2014-03-05T07:47:41+00:00

This post sounds like you're 22 years old in your first job out of college.

2014-03-05T02:22:02+00:00

[permanently deleted]

Title	TRP, lets talk finances.
Author	[deleted]
Upvotes	70
Comments	120
Date	March 5, 2014 1:24 AM UTC (12 years ago)
Subreddit	Posted in /r/TheRedPill
Original Link	https://old.reddit.com/r/TheRedPill/comments/1zl294/trp_lets_talk_finances/
Archive Link	https://theredarchive.com/r/TheRedPill/trp-lets-talk-finances.12152 https://theredarchive.com/post/12152

Comments