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For the most part, people have no idea what they spend money on. That is a scary position to be in.
I once met someone who made a pretty good income, yet they had no money. They literally spent everything that they made. I asked them to write out how much they spend a month and in what category. They did as asked, but when I looked at their expenses, something was not adding up. When I added up their monthly expenses, the money they spent per month was far lower than their after-tax income. If the numbers they gave me were true, they would be saving quite a bit of money. Yet... They weren't. As I said, this was if the numbers they gave me were true. Obviously, they were not. I needed to see what they were really spending their money on. I had them download the app Mint which tracks people's spending. I personally use Mint to track what I spend. This isn't a sponsor by any means; I just actually like them. Anyways, this gave us the real numbers. They had told me they spend around $300 bucks a month on food. Mint told a different story. They said they spent around $200 a month on entertainment and activities. Again, Mint told a very different story. This person had no idea how much they were actually spending per month. That's not good. There are two ways to increase the amount of money one has at the end of every month. First, they can make more money. This can be hard to do. Second, they can increase the amount of money that they save. This can still be hard, but this is doable for a lot of people. I encourage everyone to get a good idea of how much they actually spend per month and try and find ways they can spend less in certain categories. Follow us on any social platform @financebycwt Check out Acorns. They're an investing app that invests your money for you. Everyone knows that they need to be investing, but not many know what to actually invest in. That's why I like Acorns because they manage your money for you. Download them through my link and get $5 - Redeem your $5 investment! (acorns.com) Become a member of Finance by CWT - patreon.com/financebycwt
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Most "finance professionals" say that credit cards are a bad thing. They have high interest rates. They lead many people to get in serious, unrecoverable debt.
This definitely can be true, but it doesn't have to be. Credit cards can actually be one of the most important financial tools out there. It's true that a lot of people can't handle a credit card, but I believe that credit cards are a skill one can learn. Here's how I have used credit cards to increase my net worth. 1. Never pay the interest. I use my credit card like most use a debit card. I pay the credit card off every week, and I have never paid a dime of interest in my life. I even have it set up where it'll automatically pay itself off every month before interest starts just in case I forget to pay it. I don't buy something if I don't have the money to pay for it in my bank account. 2. I use the cash back from my credit card to invest. My credit card has 2% cash back. I use that 2% to invest into an S&P 500 Index Fund. Now, my 2% is going to compound over the next several decades. Because I don't pay any interest, I basically get a 2% discount on everything that I buy that I can use to build my financial future. Follow us on all social platforms @financebycwt Check out Acorns. They're an investing app that invests your money for you. Everyone knows that they need to be investing, but not many know what to actually invest in. That's why I like Acorns because they manage your money for you. Download them through my link and get $5 - Redeem your $5 investment! (acorns.com) Become a member of Finance by CWT at www.patreon.com/financebycwt
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Disclaimer: This is not financial advice. While I believe this is a good portfolio for most people, the type of portfolio that one should have really depends on age. Older folks might want to add more bonds to the portfolio for less volatility. This is for entertainment purposes only.
This portfolio is one that I believe is good for a lot of people. 1. S&P 500 ETF (Exchange Traded Fund) example VOO - 70% When Warren Buffett was asked what people should invest in, he recommended straight S&P. Most active investors do not beat the S&P. The S&P 500 is the 500 largest companies in the U.S. 2. Dividend ETF SCHD - 10% This is an ETF from Schwab that invests into dividend stocks. I recommend reinvesting the dividends until retirement. I also prefer this ETF in a retirement account like a ROTH IRA. 3. International Company Stocks Example IXUS - 10% I recommend this ETF because it can be good to get some exposure to companies outside the U.S. as well. 4. For the last part of the portfolio, I would put the last 10% into either individual stocks that one believes in or a split between a small cap ETF like IJR and a medium cap ETF like IJH Follow us on any social platform @financebycwt to never miss an article! Check out Acorns. They're an investing app that invests your money for you. Everyone knows that they need to be investing, but not many know what to actually invest in. That's why I like Acorns. They manage your money for you! Download them through my link and get $5 - Redeem your $5 investment! (acorns.com) Become a member of Finance by CWT here- patreon.com/financebycwt
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Toy Rich vs Asset Rich8/14/2023 
There's a big difference between being toy rich and asset rich. I came to this realization after meeting two people that both made an insane amount of money. I went to the first one's house, and it was beautiful. It was a huge place and inside had every item that had ever been created. This person had everything. The issue was that they also had a lot of debt and hardly any savings at all, so they could barely pay their bills. With nothing in savings, they had no plans at all to retire. They were very high income, but they were paycheck to paycheck with no plans to ever not be.
I also was invited to go to the second high income person's house as well. This house wasn't a bad house or anything, but it was smaller than most. Didn't really have many items inside. No super nice cars or anything like that. This person chose to live a very normal life. When we started talking about finance, I quickly learned that he basically found out how much he was spending, and he put all of his paycheck besides that amount into investments. The first person in the story was toy rich. They had a lot of material items but that's it. The second person was asset rich. They didn't spend much money on toys, but they chose to buy assets. Some people are happier owning the toys. Some people are happier owning assets. It depends on the person, but it is important to find out which one one is. Follow us on social media @financebycwt Check out Acorns. They're an investing app that invests your money for you. Everyone knows that they need to be investing, but not many know what to actually invest in. That's why I like Acorns cause they manage your money for you. Download them through my link and get $5 - Redeem your $5 investment! (acorns.com) |
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