I want financial freedom by the time I'm 21

[Reiki]

Cavedweller makes a good point, invest your money in some save bonds or something that can yield 10% interest over a year, and watch the money compound. Of course its best if you invest and let your backup money compound.

 

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Re: tip.....

Originally posted by cave dweller
longwood,

I am 58 years old and I will give you a tip.

Pay yourself first.

ie.

When you get a pay check 'peel' 10% to 20% off of the top, put it in the bank, invest it and never touch it.

In a few years you will be rich........

Take my word on this one.

cave dweller

While a CD or a bond will give you some return, (and makes a decent side investment) you will never be rich by making it your only investment.
To get a serious return, you have to look at larger investments like real estate. Real estate investing isn't 100% safe and carries a signifigant ammount of risk, but real wealth is never generated without risk.

 

[cave dweller]

rule of 72........

longwood,

So, where do you put your savings? You ask the cave dweller.

You spread it around, the cave dweller says:

bank CD's
IRA's
stocks
bonds
mutual funds
real estate
raw land

Tip: Learn the 'rule of 72'.

cave dweller

 

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Re: rule of 72........

Originally posted by cave dweller
longwood,

So, where do you put your savings? You ask the cave dweller.

You spread it around, the cave dweller says:


bank CD's
IRA's
stocks
bonds
mutual funds
real estate
raw land

Tip: Learn the 'rule of 72'.

cave dweller

that's too much diversification. You want your investments more concentrated, b/c if you overdiversify, your money is too spead out and your gains are minimal.

Plus, I wouldn't touch raw land right now. It gives you nothing unless you plan to automatically resell, and only a developer would want to buy it most of the time.

Mutual funds are only good for people that can't be bothered to learn how to invest. You would be better off learning how to choose your own stocks wisely instead of letting someone else do it for you like how it is with mutual funds.

bonds, IRAs, and bank cds are good side investments, but don't expect them to generate most of your retirement income.

 

[RedPill]

Longwood, I am you seven years later! The difference is, I had my head up my a** at 17. It wasn't until I was 20 that it occured to me that I was light years off the path to wealth and success. I gave up a lot of things in college to study. Like partying and a social life. Seemed like a terrible sacrifice at the time, but I am so much better off for it in the long run.

Wealth is going to take longer than you think. You're more reasonable to aspire to being in an initial stage of financial independence at 30 instead of 21. Even that is a lofty goal.

Here are some things that I really wish someone would have told me at your age.

- DO NOT do what everyone else does!! Let me repeat that in case you didn't get the message. Do not imitate or take the advice of 90%+ of the population. They may mean well but if you do as everyone else does you will end up like them. The best example I can give you is all the f***tards that I went to business school with who think wealth is how it's displayed on tv, the movies, and people magazine.

- don't watch mtv. it will set you back tremendously. i'm not joking! look at the masses of youth who watch it and think it's an accurate depiction of reality

- learn the quantitative side of things well, but have the understanding that true wealth is found in the qualitative aspects of life

- read, read, read, and then read some more. Read about law and economics and subjects that actually make the world go round. Study the great minds throughout history.

- THE BIGGEST MISTAKE that I made from your age on was not getting practical experience. I worked at restaurants, in construction, in factories, you name it. Get school loans if you need to and get a job in SALES. 100% commission if possible. If I could have learned sales before the end of college life would be a lot easier right now. You wanna be rich? You better learn how to produce and not get addicted to that paycheck.

- Sales is a lot harder than people think, but once you master this skill it will feed you for life. I'm still working on it right now.

- Most people have the whole passion thing backward. They say do what you're passionate about and the money will follow. It's more like, find something that makes money and you will become passionate at it! When you are wealthy, then you can take your less profitable hobbies and make a business out of it.

- In school take the classes that you want to take to further your knowledge base, as much as the school will let you. It will make you less employable but get you to understand how to be a business owner

- Realize that if you are not attending a wealthy person's business school, the cirriculum is generally designed to make you a better employee. Employees don't get rich. The education is still beneficial, just understand this when you are instructed.

- Have the work ethic and heart of a champion. Read up on the words of Vince Lombardi, the dude has brilliant things to say on this subject.

- Capitalism is the name of the game, and by far the hardest part is starting off with no capital. Understand you likely may have to be an employee for several years before you enter the stage of capitalism where you no longer rely on a job for wealth.

- This one is the one I'm currently struggling with. Observe that the majority of the world will never see eye to eye with you on things because they make decisions with their emotions, not logic. Even wealthy folks do this. However, wealthy folks are in control of themselves and able to temper their emotions with logic. This is the basis of most sales.

- Learn the art of articulating your thoughts and expressions through excellent verbal and written communication.

- The world is much dirtier, harsh, judgmental, cut-throat, and competitive than most people will ever know. Experience will teach you this so I'd recommend associating with some people who live in "the real world." You'll meet kids who will live immersed in the college beer/playstation/weed/chaos lifestyle until they knock a girl up or hit their 30s and realize they've wasted years of their life.

- Time is all we have. Remember that, and become a master of time management.

- Numbers don't lie. Learn how to manage data and proper methods of accounting.

Okay that's all for now. This stuff gets me fired up! I wish someone would have shared the above info with me when I was 10 years old. So there you have it. Some free life advice. Enjoy.

 

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Originally posted by RedPill
stuff

I completely agree.

In my first summer out of high School I learned sales from Vector Marketing, where I had to sell kitchen knives of all things. I figure that since I sold over $6000 worth of knives in 6 months, I can sell pretty much anything. I know that the skills that I learned from Vector are very valuable because I use them every time I make a business deal. Every time I make a deal, I am literally selling my offer, and if I convince the guy to accept, I get the deal. Sales Skills are Critical.

I also agree that working for a paycheck is habit forming. Pretty soon, you become desperate to get one of those damn checks every month and it becomes harder for you to think of life without it. I'm trying to avoid that habit by doing odd jobs and various types of business deals. Since I'm nearly always strapped for cash as a result of that decision, I had to learn how to use my head to get money, and I believe that it has benefitted me more than a steady job ever would b/c having no fixed income every month forced me to be creative regarding ways to get money. At this point, I wouldn't have it any other way.

 

[sifer]

RedPill I'm disappointed, why haven't you made it?

My friend is in New Mexico and going to Europe next week and he's exactly 24, and he's financially independent.

It's never too early to retire.

Originally posted by RedPill
Wealth is going to take longer than you think.
Becoming wealthy is a mindset. If you think that the more money you have in your pocket, the more wealthier you are, you are still going to be in the current state you are. Perhaps a bit more financially educated than the rest of the people.

You're more reasonable to aspire to being in an initial stage of financial independence at 30 instead of 21. Even that is a lofty goal.
Never lower your standard or waste your time. That's like telling him to wait until he's 30 to decide and plan on how to get rich or wealthy. Do it NOW!

- THE BIGGEST MISTAKE that I made from your age on was not getting practical experience. I worked at restaurants, in construction, in factories, you name it. Get school loans if you need to and get a job in SALES. 100% commission if possible. If I could have learned sales before the end of college life would be a lot easier right now. You wanna be rich? You better learn how to produce and not get addicted to that paycheck.
It isn't only sales that makes you rich itself alone. You should've learned something from all the work experience you have gone into.

For example, in your time in the construction company, what did you learn? Pros and cons? Then work on that cons when you start a business, "why should we choose you?"

You can say something like "because I fill in [XXX] that this company cannot fill."

If you must depend on this, stay as a salesman. I am a real estate investor full-time and I'm not even a full-time salesman. Most investors and landlord would tell you this: "salesman? I'm no salesman."

And 90% of the riches comes from real estate.

What I'm trying to say is, don't get addicted to one thing that you lose your sight of your goal.

Your goal is to become rich and wealthy, not become a salesman.

- Most people have the whole passion thing backward. They say do what you're passionate about and the money will follow. It's more like, find something that makes money and you will become passionate at it! When you are wealthy, then you can take your less profitable hobbies and make a business out of it.
If you feel that's the way it is, good but for me, I've always chased something I loved to do and will keep at it no matter how hard it gets.

Passion first then the work in it. Otherwise no dough.

Again, if you're going to settle for one thing, you will settle and lower your standard for other things. DON'T! "Pay" yourself first, respect yourself first, and treat your passion with love. You will get there!

- In school take the classes that you want to take to further your knowledge base, as much as the school will let you. It will make you less employable but get you to understand how to be a business owner
Owning a business is a on-the-job process, I have never heard of a single course or book that teaches you to become a businessman. You just go out and work on it, whatever it is that you want to do.

Yes, do read and attend courses, but here's the thing, give yourself 6 month !!!ONLY!!! to study, NO MORE, NO LESS! Then go out and do it.

- Realize that if you are not attending a wealthy person's business school, the cirriculum is generally designed to make you a better employee. Employees don't get rich. The education is still beneficial, just understand this when you are instructed.
Many have gotten rich without even going to school let alone some "wealthy person's business school". This is not a need. If this is your experience, great. My experience taught me that school itself isn't even needed. It won't teach you to get up early in the morning and get to work after breakfast and the "usual". It won't teach you to manage your time or become a self-starter. Only you can make that change.

- Capitalism is the name of the game, and by far the hardest part is starting off with no capital. Understand you likely may have to be an employee for several years before you enter the stage of capitalism where you no longer rely on a job for wealth.
You're depending on something too much. I started with absolutely no capital OR credit OR "credential" of any sort. This is my first year and I'm already sliding. There's ALWAYS a way out of the box, don't settle or lower yourself that "oh I need a job... this is it, gonna get a job, then start the business". Start that business you want to start now!

- Experience will teach you this so I'd recommend associating with some people who live in "the real world."
That's the way life is. Don't become a cynic please, not for my sake and those around you, but for yourself! There are people who "live in the real world" are also extremely negative and most of them are unsuccessful people. Guess what? Adults are oftentimes the "living in the real world" people and most of them are negative and aren't there. Just be careful not to fall in that hole.

 

[al77]

Re: rule of 72........

Originally posted by cave dweller


You spread it around:

bank CD's
IRA's
stocks
bonds
mutual funds
real estate

I'd like to get more specifics abour real estate: how do you do it?

You buy a house with almost zero down, ok, find renters who will pay your mortgage for this house. All right. So ideally after 20-30 years the house is yours.
Basically what you are getting is appreciation of the house at any given point of time, may I right?

But what happens if you can't find renters for some months? you lose money. need repairs? lose money again. if you can't find renters for 2-3 month in a year, you almost lose the appreciate of teh house. So where is teh profit from real estate investment?
It seems tough thing to do.

 

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Originally posted by al77
I'd like to get more specifics abour real estate: how do you do it?

You buy a house with almost zero down, ok, find renters who will pay your mortgage for this house. All right. So ideally after 20-30 years the house is yours.
Basically what you are getting is appreciation of the house at any given point of time, may I right?

But what happens if you can't find renters for some months? you lose money. need repairs? lose money again. if you can't find renters for 2-3 month in a year, you almost lose the appreciate of teh house. So where is teh profit from real estate investment?
It seems tough thing to do.

I think you misunderstand appreciation.
the building appreciates in value whether you are getting a postitive cashflow or not. This happens automatically over time, as long as the area stays nice and the other homes nearby are in good condition.

Houses tend to appreciate faster than multiplexes, but multiplexes are not as likely to be totally vacant like an unoccupied house would be at any given time (so in the case of a multiplex you would still make money on the occupied units, just not as much as you would if your occupancy was 100%, but in the case of a house, your occupancy rate is either 0% or 100%, with no inbetween) so it's sort of a tradeoff: Faster appreciation vs. lower vacancy carrying costs.

The problem is that that the new equity you get from appreciation isn't money you can actually use without going to a lot of hassle. It isn't liquid like cash is.

If you have an empty building on your hands, you are not going to make positive cashflow on it until you fill that vacancy. Those carrying costs have a way of sneaking up on you, so you have to be ready for them. Make it a common practice to have an emegency fund available to cover carrying costs in the beginning until you get more assets. Once you have more assets, you won't need the emergency fund because the money you get from the other assets will help absorb the damage you are taking from that vacancy if it lasts more than a few months.

However, here's a few things you can do to help minimize the duration of vacancies:

1. Keep your building in immaculate shape. Keep everything well painted and in good repair. People want to live in a good building, not some broken down shythole.

2. landscape. Good plants and a nice lawn will do wonders for the appearance of your place, and they cost next to nothing. Once the plants take off and start growing, it won't even feel like the same building. You can even hire someone in the building to water them if your building happens to be a multiplex.

 

[RedPill]

Originally posted by sifer
RedPill I'm disappointed, why haven't you made it?

My friend is in New Mexico and going to Europe next week and he's exactly 24, and he's financially independent.

It's never too early to retire.

Sifer, that's great that your friend has made it and all. Certainly it can be done, and I'm not advocating procrastination of getting wealthy at all. I was simply giving the original poster advice based on the fact that he was 17 and talking about going to college soon.

And why haven't I made it? Because like I said before at 17 I had my head up my a**. You're right on about college not being necessary, although it's not a bad thing. Really getting rich for most of us has to do with deconstructing the middle class habits and mindsets. For some that takes longer than others to figure out. I think it's never too late to figure it out, but for most as long as you get with the program in your youth you'll be alright.

Let's clarify the bits about passion and "the real world." What I meant by passion is don't have delusions of grandeur. It's not a good investment to go out there and take your punk rock act and think you will make millions of dollars and be famous from it. Do that stuff for fun, not money. And as far as my "real world" comment, that was referring to all the dips*** stoner slackers that you meet in college.

As for 90% of the wealth is in real estate... dubious statement. Wealth is everywhere, spread across many different industries.

I'm not trying to get into a debate here, just supporting my positions. The bottom line above all is just to PLAN for stuff instead of letting it happen to you.

 

[cave dweller]

real estate license?

longwood,

my 2 cents here.........

Do not get a real estate license!

You don't need one or want one to make good money in real estate.

Check out---wwwww.creonline.com

cave dweller

 

[longwood]

What I think sifer was saying was that 90% of wealthy people have at least some of their money in real esate.

But neway I've been saving as much as i can as of recently but its been hard with this little ass paycheck i get every two weeks. I'm trying to save a least $2,500 before I really start to invest in stocks. I've been reading a lot of books on investing in the stock market and the one I like best so far is "Real Money" by Jim Crammer. He's the guy with the tv show, Mad Money. I got my uncle to buy me 5 shares of goole for a graduation present back when it's price was 277 somthin.

I said I want financial freedom by the time i"m 21, let me clarify what i meant was i want to be worth at least a million dollars by the time i'm 21. that gives me 3 years and 3 months. That way I can a book entitled how i made a million by the time i was 21.

Right now I'm reading as much as I can and telling as many people as i can about my future goals.

 

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I would wait on stocks for the time being. The way to really make money in stocks is to

1. buy a company on their IPO, watch the stock go up, and sell before it drops.

2. get in when the market is down and the stocks you want are less. Most people sit tight during this time and don't buy, but you have to remember that the market moves in cycles and what goes down will probably go up again. It makes no sense to buy a stock when it's high.

 

[longwood]

There's always a bull market somewhere

 

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Originally posted by longwood
There's always a bull market somewhere

what, you're thinking about doing international stocks already? Start small and work your way up, you're going to need the experience. Do you actually own anything besides google?

 

[longwood]

Originally posted by Page
what, you're thinking about doing international stocks already? Start small and work your way up, you're going to need the experience.

Naw, It's just a saying. It means that if you search around and look hard enough you'll find something that's about to go up

 

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Originally posted by longwood
Naw, It's just a saying. It means that if you search around and look hard enough you'll find something that's about to go up

Whoever has the most current information has the power, remember that.

To do exceptionally well in the market, you are going to need connections that will let you know about various things that will cause a stock to go up-- information from inside the company is best. Even doing business with a company for awhile will expose you to internal rumours--- keep your eyes and ears open. If you are ever in a position that lets you hear about a new product or service that a company is providing before they take the information public, jump on the stock while it's still low and wait for it to go up -- and it will, stock tends to rise when a company announces progress-- but you have to get in before it is announced.

Most people hear about a stock going up, and when they decide to buy, they're already too late. They can only make a fraction of what they could have made if they got in early.

 

[longwood]

Insider information huh Page? I said I wanted to be rich like Martha Stewart, not go to jail like she did. lol

Naw i'm just playin but seriously i understand what your saying

What I'm really trying to do right now is accomplish one of my short term goals. Which is to start an investment club with a couple of my business minded friends. That way we could pool our money together and have a better diversified portfolio than we could have on our own. Also it would be a way for us to learn the stock market and real estate together with less of our own money at risk.

 

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Originally posted by longwood
Insider information huh Page? I said I wanted to be rich like Martha Stewart, not go to jail like she did. lol

I'm not saying you should break the law, but definitely check the law and see what you can get away with.

 

[skumface]

you guys are all suggesting houses and duplexes, what about vacant property?

Ive heard stories about land values going up by $1,000's of dollars per acre in a matter of years. What is the market like for selling land to say franchises like Wal-Mart or McDonalds which i know for a fact pay good money.

Land is of course cheaper to buy without anything on it so it could possibly be a good starting point when money is tight.
What are your insights on it??